Potential Fed Chair Says U S Is Late Cutting Rates as Economy Speeds Up
A leading contender to become the next chair of the Federal Reserve says the U.S. is moving too slowly when it comes to cutting interest rates.
Kevin Hassett, director of the National Economic Council, told CNBC that the Federal Reserve is “way behind the curve” compared with other major central banks around the world. His comments come at a time when the U.S. economy is showing strong growth and inflation pressures appear to be easing.
Hassett is widely viewed as a top candidate to replace Jerome Powell, whose term as Fed chair ends in May. That has put extra attention on his views about where interest rates should be headed next.
New economic data adds fuel to the debate. The U.S. economy grew at a 4.3% annual pace in the third quarter, well above the 3.2% growth economists had expected. Hassett said part of that strength is coming from rapid gains in productivity, driven by advances in artificial intelligence. He argues that AI is helping boost output without pushing prices higher, reducing the need for tight monetary policy.
Hassett also pointed to trade policy as a factor behind the strong growth. He said tariffs implemented under the Trump administration helped narrow the trade deficit, contributing roughly 1.5 percentage points to third-quarter growth. According to Hassett, that improvement supports the case for lower interest rates.
The Federal Reserve has already cut rates three times in 2025, including a quarter-point cut earlier this month. But policymakers signaled that future cuts may come more slowly. The December decision was unusually divided, with three Fed governors voting against the cut. Powell later described the move as a close call, showing growing disagreement inside the central bank.
President Trump has repeatedly criticized the Fed for not cutting rates faster and has said he plans to announce his pick for the next Fed chair soon. He has made it clear he wants someone who supports much lower rates.
Hassett says that if nominated, he would respect the Fed’s independence. Still, who leads the central bank next could have a major impact on interest rates, housing costs, and overall economic confidence as the U.S. heads into 2026.For direct financing consultations or mortgage options for you visit 👉 Nadlan Capital Group.
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