White House Slams New York Fed Study on 2025 Tariffs
Kevin Hassett, Director of the National Economic Council, launched a sharp attack on a recent study published by the Federal Reserve Bank of New York, escalating tensions between the White House and parts of the Federal Reserve system.
Key Takeaways
- Kevin Hassett sharply criticized a New York Fed study on the economic burden of 2025 tariffs.
- He called the research an “embarrassment” and suggested disciplinary action for its authors.
- The study found nearly 90 percent of tariff costs were borne by U.S. firms and consumers.
- The dispute unfolds after Hassett was passed over for Fed Chair in favor of Kevin Warsh.
Speaking on CNBC’s Squawk Box on February 18, 2026, Hassett dismissed the research as fundamentally flawed after it concluded that nearly 90 percent of the economic burden from the 2025 tariff measures was absorbed by U.S. businesses and consumers rather than foreign exporters.
Clash Over Tariff Impact Study
The study, issued by the Federal Reserve Bank of New York, challenges the administration’s long-standing argument that tariffs primarily shift costs onto foreign producers. Hassett called the paper “an embarrassment” and said it was the worst research he had seen in the history of the Federal Reserve System.
He went further, suggesting that those responsible for the analysis “should presumably be disciplined,” arguing that the methodology would not pass scrutiny in an introductory economics course. Hassett also accused the authors of political bias, describing the work as “highly partisan.”
The New York Fed, led by President John C. Williams, did not immediately respond to calls for disciplinary action.
Administration Defends Tariff Policy
Hassett reiterated the administration’s position that American households are ultimately better off under the 2025 tariff framework. According to his view, the measures strengthened domestic industry and improved long-term economic resilience, even if short-term price adjustments occurred.
The findings of the New York Fed study, however, suggest that most of the added costs were passed through to U.S. importers and consumers – a conclusion that aligns with several earlier academic analyses of tariff episodes.
The dispute adds another layer of friction between the White House and parts of the central banking system, at a time when trade and inflation remain politically sensitive topics.
Fed Leadership Context
Hassett had been widely viewed as a leading candidate to replace Jerome Powell as Chair of the Federal Reserve earlier this year. However, on January 30, 2026, President Donald Trump nominated Kevin Warsh for the role instead, saying he preferred to keep Hassett in his current White House position.
Despite his criticism of the New York Fed’s research and his support for a Justice Department review of renovation costs at Fed headquarters, Hassett has also publicly emphasized that the Federal Reserve Chair should remain independent.
The latest episode highlights the delicate balance between political leadership and central bank autonomy, especially as the economic impact of trade policy continues to be debated inside and outside Washington.
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