Kevin Hassett, director of the White House National Economic Council, publicly questioned the necessity of the Federal Reserve's recent interest rate increase on Wednesday, while also criticizing some Fed policymakers who were not appointed by President Trump for advocating further monetary tightening despite relatively tame inflation. This move has once again highlighted the divide between the White House and certain Fed officials over interest rate policy.

Speaking at an event at Georgetown University, Hassett expressed confusion over the central bank's decision to raise rates given that the annualized core inflation rate is hovering around 2%. "Why are they raising rates?" Hassett asked. He also remarked that Fed Chair Christopher Waller is currently managing an "unusually politicized Federal Reserve." The Fed raised its benchmark rate by 25 basis points to a range of 3.75%-4.00% last week, marking its first hike since 2023. Hassett noted that based on his assessment of current economic data, he is troubled by the reasons behind the Fed's decision.

He also took aim at former Fed Chair Jerome Powell and former Vice Chair for Supervision Michael Barr. Hassett pointed out that historically, Fed chairs and vice chairs typically leave the central bank after their leadership terms conclude, but this precedent has not been upheld recently. Powell, who ended his term as chair earlier this year, has remained on the Board of Governors despite previously clashing with the Trump administration over the independence of monetary policy. Barr, who stepped down as the Fed's vice chair for bank supervision last year, has likewise continued to serve as a governor.

Furthermore, Hassett expressed dissatisfaction with Fed officials who were not appointed by Trump. "The market is also concerned because over the past few days, many officials who were not appointed by President Trump have been speaking out, saying we still need significant rate hikes," he said. He added that the Fed still has "a lot of work to do" in restoring its independence, calling this a top priority for Chair Waller.

Meanwhile, several other Fed officials have continued to signal a hawkish stance. Governor Michael Barr stated on Wednesday that further rate increases may still be necessary to bring inflation back down to the central bank's 2% target. Boston Fed President Susan Collins expressed her support for the most recent rate hike, while St. Louis Fed President Alberto Musalem indicated that additional increases might be required to further suppress price pressures. According to the Fed's latest economic projections, 16 officials anticipate at least one more rate hike this year, and market expectations for rates remaining elevated for a longer period have also intensified recently.