Trump Adviser Meets Fed Chair Regularly

It seems President Donald Trump is losing patience with Jerome Powell's cautious stance on interest rates. Will he seek to pressure the Fed into cutting interest rates as soon as possible?

Kevin Hassett, the top White House economic adviser under Trump, acknowledged that he regularly met with Fed Chairman Jerome Powell. This immediately raised the question: Is Trump seeking to influence the Fed's monetary policy?

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Kevin Hassett, director of the White House National Economic Council tells @margbrennan that he’s now arranged regular lunches with Federal Reserve Chairman Jay Powell and that the “Fed’s independence is respected.” When asked if the meetings are to influence policy, he says no,

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5:22 PM · Feb 16, 2025

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In principle, the FED is an independent agency and is not controlled by the government. But Hassett's continued meeting with Powell may be because the White House wants the Fed to lower interest rates to spur economic growth, giving Trump a political advantage after the election.

In the CBS interview, when asked if the meetings were intended to impact interest rates, Hassett did not deny it but only said:

“Jerome Powell is an independent. The independence of the Fed has always been respected. But Trump's views also need to be heard—he's the president of the United States.”

Hassett said on CBS

He also stressed that long-term interest rates have fallen since the Trump administration took office, with the yield on 10-year U.S. Treasury bonds dropping 40 basis points, suggesting markets believe inflation is slowly cooling.

Low interest rates are often a positive factor for crypto and other risky assets. Because cheap borrowing costs will promote investment in financial assets and business development.

Still, the Fed remains cautious about cutting interest rates. On February 11, Chairman Jerome Powell made a hearing before the U.S. Senate Banking Committee, where he insisted that there was no need to rush to adjust interest rates. This raises concerns the Fed may not cut interest rates early in 2025.

Federal Reserve Chairman Jerome Powell testifies before the Senate Banking Committee on Feb. 11. Source: Senate Banking Committee

Shortly thereafter, on February 12, according to the U.S. Bureau of Labor Statistics, the consumer price index (CPI) showed inflation higher than expected, at 3 percent, a 0.1 percent increase from expectations. The data sent markets into a panic, sending Bitcoin down below $95,000, as investors predicted the Fed could hold off on monetary tightening for longer.

In addition to inflation risks, the risk of trade wars and other macroeconomic uncertainties is also causing investors to become more cautious about risky assets such as crypto.

Interest rate expectations at the Fed's upcoming FOMC meeting. Source: FedWatch

According to data from the Chicago Exchange's FedWatch (CME), only 3 percent of investors believe the Fed will cut interest rates by 25 basis points at its next March meeting. Accordingly, the market is still not confident in the possibility of the Fed easing monetary policy in the near term.