Hassett Calls for Discipline of Fed Economists Over Tariff Research
By Daniel Perez, AchyNewsy.com
WASHINGTON – Kevin Hassett, director of the White House’s National Economic Council, has called for disciplinary action against economists at the Federal Reserve Bank of New York for research concluding that American companies and consumers are bearing the vast majority of the cost of President Donald Trump’s tariffs. The controversy highlights ongoing tensions between the Trump administration and the traditionally independent Federal Reserve.
White House Criticism of Fed Research
Hassett sharply criticized the New York Fed’s research, calling it “an embarrassment” and “the worst paper I’ve ever seen in the history of the Federal Reserve System.” He suggested that the economists involved should be “presumably disciplined,” according to a CNBC interview reported by Politico. This rebuke follows the release of a blog post last week titled “Who Is Paying for the 2025 U.S. Tariffs?”
Findings of the New York Fed Study
The New York Fed study, authored by Mary Amiti, Chris Flanagan, Sebastian Heise, and David E. Weinstein, found that over 90% of the economic burden from tariffs imposed in 2025 fell on U.S. Households, and businesses. This conclusion was reached after the average tariff rate increased from 2.6% to 13% as reported by Reuters. The researchers stated that “U.S. Firms and consumers continue to bear the bulk of the economic burden of the high tariffs imposed in 2025.”
Contradiction of Presidential Claims
Hassett’s comments directly contradict President Trump’s repeated assertions that foreign countries are paying for the tariffs. The president previously stated, in a Wall Street Journal op-ed, that “the data shows that the burden…has fallen overwhelmingly on foreign producers and middlemen” according to The Hill.
Broader Context of White House Pushback
This is not the first instance of the Trump administration challenging economic analyses that contradict its policies. Similar conclusions about the negative impact of tariffs have been reached by other institutions, including Goldman Sachs, the Kiel Institut, and the Congressional Budget Office as reported by the Associated Press. The administration has likewise previously attacked the Federal Reserve, even launching a criminal investigation into Fed Chair Jerome Powell last year.
Hassett’s Defense of Tariffs
Hassett defended the tariffs, arguing that prices have fallen, inflation is down, and real wages have increased. He claimed that real wages rose by $1,400 on average last year, benefiting consumers. However, the New York Fed analysis found that import prices increased by 11% more than prices not subject to tariffs by November of last year.