The appointment of Kevin Hassett, economic advisor to US President Donald Trump, as Federal Reserve (FRS) chairman, could change the regulator's policy, leading to higher inflation globally. This is reported by the European publication Politico, citing sources from the European Central Bank (ECB).
„If the market becomes convinced that the new Fed Chairman Hassett will be guided by fiscal or other considerations at the expense of the inflation target, this will lead to a capital outflow from the United States and a decline in the value of the dollar, which will have serious consequences globally, including higher inflation“, an ECB official told the newspaper.
Another ECB official believes that inflation could rise due to possible pressure from the Trump administration on Hassett to make decisions favorable to the White House. He noted that „there is a risk of an inflationary trend in the United States due to political interference“. A third official stressed that “Hassett would be the best choice for Trump“, as the potential candidate is close to the US administration. It is noted that with the departure of the current Federal Reserve Chairman Jerome Powell, the “trust relationship“ between the US regulator and the ECB “may end“.
Bloomberg earlier reportedthat Kevin Hassett, head of the White House National Economic Council, is seen by Trump allies as the best candidate for the post of Federal Reserve chairman. As noted, the White House believes that Hassett, in his new position, will be able to implement Trump's policy of lowering the key interest rate. However, the agency noted that the current head of the US administration is known for making unexpected personnel decisions, so Hassett's candidacy cannot yet be considered final.