Fed Independence Under Attack: Kashkari Rebukes Hassett’s Criticism of NY Fed Study

Minneapolis Federal Reserve President Neel Kashkari accused a top White House economic advisor of attempting to undermine the central bank’s independence, following critical remarks about a New York Fed study on the impact of tariffs. Kashkari’s comments, made at an event in Fargo, North Dakota, directly addressed statements made by Kevin Hassett, Director of the National Economic Council.

Hassett reportedly described the New York Fed study – which found that U.S. Companies bore the brunt of costs associated with President Trump’s tariffs – as “shoddy” and suggested that the researchers involved should be “disciplined.” Kashkari characterized Hassett’s critique as “just another step to try to compromise the Fed’s independence,” according to reports.

Kashkari further noted that this criticism follows other recent attempts to challenge the Fed’s autonomy, citing a December incident where the Department of Justice issued a subpoena to the Board of Governors regarding building expenses. He emphasized the Fed’s commitment to basing economic assessments on data and analysis, stating, “We are doing our best to make the best assessment of the economy based on data and analysis.”

The Fed official underscored the importance of central bank independence for effective monetary policy, asserting that “every advanced economy in the world has an independent central bank.” He argued that decisions regarding monetary policy are most effective when “based on data and analysis, not on short-term political gains.”

Regarding the current monetary policy stance, Kashkari indicated that the Fed is “pretty close to neutral” after implementing several interest rate cuts over the past two years. This assessment suggests a potential pause in further rate adjustments, though it does not preclude future action based on evolving economic conditions.

The exchange between Kashkari and Hassett highlights a growing tension between the White House and the Federal Reserve, raising concerns about potential political interference in monetary policy decisions. As of Thursday, February 19, 2026, the White House has not responded to Kashkari’s accusations.