Kevin Hassett questions why the Fed is raising rates, says it is due to an “unusually partisan Fed” and says the “market is worried, too,” about a Fed that is going to be “hiking unwisely”: “When I'm thinking about what future inflation is, then I look at the last three months of core.... When you annualize it, you know what the number is? 2%.... Right now I think that markets believe in future Fed credibility, but I think the argument that I would make if I were a governor is that if core is 2%, then why are we hiking?” “The other thing about the Fed, and you know how long I've been close friends with Kevin Warsh…, he's managing an unusually partisan Fed. That is a hard thing to do, but it can start with [Michael] Barr and Jay [Powell] not resigning. If you go back to 1913, when chairmen, when their term is up, they leave. The same has been true for vice chairs… So why are they sticking around if not to worry about what the future Fed is going to do?” “Geez, it seems like right now the data are saying we are heading in this forward direction and the Fed goes in the other direction, I'm worried about why they did that. I think the market is worried too because if you look today, then a lot of the people who weren't appointed by President Trump are giving speeches over the last couple of days saying we need a lot more hikes. And if they are going to be in control for two or three years, so if the short-term rate goes to 6% because they are hiking unwisely and then they keep it there for two or three years, the two-year rate, because of arbitrage conditions, it's going to be that. And so I think there is still some work to do to restore Fed independence. And I know that that is something that is high on the priority list for Kevin.” Source: Financial Markets Quality Conference at Georgetown's Psaros Center on 9/23: https://www.c-span.org/program/public-affairs-event/wh-economic-adviser-kevin-hassett-discusses-economic-policy/685613