Hassett Demands Discipline Over Fed Tariff Study
White House economist Kevin Hassett blasted a Feb. 12 New York Fed study finding U.S. firms and consumers bore most 2025 tariff costs and said the authors should be disciplined.
Overview
On Feb. 18 National Economic Council Director Kevin Hassett said the Feb. 12 New York Fed paper was "an embarrassment" and that its authors should be disciplined.
The Feb. 12 New York Fed analysis found 94% of import taxes fell on U.S. companies and consumers through August 2025 and 86% by November.
Hassett criticized the study's price-focused methodology, saying it ignored changes in import volumes and sourcing shifts and called the analysis flawed.
The Department of Justice has opened a criminal investigation into Fed Chair Jerome Powell and the administration has sought removal of a Fed governor, raising concerns about Fed independence.
The Supreme Court is weighing a legal challenge to the tariffs, and economists warned that greater pass-through of tariffs to consumers could lift inflation.
Analysis
Center-leaning sources present this coverage neutrally, juxtaposing Kevin Hassett’s strong, quoted criticisms with the New York Fed’s findings and corroborating research while noting counterarguments on inflation impact. Editorial choices favor balanced sourcing, reporting loaded language as direct quotes and supplying data and outside studies so no single narrative dominates.
Sources (10)
FAQ
The New York Federal Reserve study found that 94% of import taxes fell on U.S. companies and consumers through August 2025, and 86% by November 2025[1]. This contradicts President Trump's assertions that consumers have benefited from tariffs, with administration officials claiming prices have decreased and wages have increased[1]. The study's findings align with standard economic analysis, according to economists at the conservative Enterprise Institute[1].
The New York Federal Reserve operates independently from the White House, and its economists conduct autonomous research separate from the Federal Reserve's direct control[1]. The New York Fed has its own board of directors responsible for appointing its president, with approval from the Federal Reserve Board of Governors[1]. It remains unclear what Kevin Hassett meant by 'disciplined,' given these structural limitations on White House authority over the Fed[1].
Hassett criticized the study's price-focused methodology, arguing it ignored changes in import volumes and shifts in sourcing patterns[1]. He claimed the analysis was flawed in its approach, though economists from the Enterprise Institute noted that the study's conclusions are consistent with empirical data from similar research[1].
According to an economist from the conservative Enterprise Institute, when events occur that President Trump finds unfavorable or that oppose his political interests or narrative, he tends to attack them[1]. This pattern appears evident in Hassett's public condemnation of the New York Fed study as 'an embarrassment' and 'the worst paper' in the Federal Reserve's history[1].
The Department of Justice has opened a criminal investigation into Federal Reserve Chair Jerome Powell, and the administration has sought removal of a Fed governor, raising concerns about Fed independence[1]. These actions, combined with calls to discipline Fed researchers, create questions about the separation between executive and independent monetary policy institutions[1].
History
4 sources