Hassett says market has confidence in new Fed chair, but Fed officials remain split on rates
The National Economic Council director's comment on Warsh follows weeks of open disagreement among sitting Fed officials over how much further to tighten policy.
Published
National Economic Council director Kevin Hassett said the market has confidence in the incoming Fed chair, Kevin Warsh.
The comment lands in the middle of a public argument among Fed officials themselves over where policy goes next. Cleveland Fed president Beth Hammack has repeatedly called for more tightening, saying the Fed's real question is how fast to raise rates, not whether to, and that business contacts describe conditions as strong to booming even as low-income households shift from trading down to deciding which bills to pay. She has also said inflation pressure is broadening beyond AI-related spending to other companies and consumers, and has backed smaller, more frequent rate moves alongside her push for further tightening.
Chicago Fed president Austan Goolsbee has staked out a different worry, saying the combination of tariffs and rising oil prices concerns him more than inflation on its own, and separately calling artificial intelligence itself an inflation problem. Fed Governor Philip Jefferson and New York Fed president John Williams have urged patience instead. Minutes from the Fed's September meeting showed unanimous support for that month's rate increase and a consensus leaning toward another by year-end, a split that a White House comment about market sentiment does not resolve.
The administration's pressure on the Fed has widened beyond messaging. The White House has formed a committee to investigate Fed Governor Lisa Cook, a separate front from its earlier push for Jerome Powell to resign, and Treasury Secretary Scott Bessent has hired Judy Shelton, whose own nomination to the Fed board had stalled, as an adviser. Long-dated Treasury yields have moved on those competing Fed statements and on data such as mortgage rates reaching 7.4%, not on White House comments about confidence in Warsh, leaving investors to weigh the Fed's internal split rather than the administration's reassurance.