Washington: White House economic advisor Kevin Hassett has publicly criticized the authors of a recent New York Federal Reserve report, which claimed that U.S. companies and consumers are bearing the majority of the tariff burdens, suggesting that they should be ‘disciplined.’
According to Anadolu Agency, Hassett expressed his strong disapproval during an interview with CNBC, labeling the report as “an embarrassment” and “the worst paper” he has encountered in the Federal Reserve system’s history. He argued that the report’s authors should face disciplinary actions for drawing conclusions that he believes are highly partisan and not supported by sound economic analysis.
Hassett criticized the central bank researchers for focusing solely on pricing while ignoring other important factors influencing how tariffs operate. He emphasized that the study should have considered the impact of increased domestic production on salaries and benefits for American businesses.
The contentious paper, which was published on the New York Fed’s website on February 12, analyzed whether exporting countries raised their prices to pass on tariffs to U.S. businesses and consumers or absorbed the costs by dropping their prices. The report concluded that nearly 90% of the additional expenses from tariffs were being passed on to consumers and businesses.
Contrary to the report’s findings, Hassett asserted that tariffs have led to a higher standard of living without affecting prices. He highlighted that prices and inflation have decreased over time, with import prices dropping significantly in the first half of the year and real wages increasing by an average of $1,400 last year. Hassett contended that these factors indicate consumers have benefited from the tariffs, challenging the New York Fed’s analysis.
The annual inflation rate in the U.S. decreased to 2.4% in January but has risen by 2% since April, when President Donald Trump initially announced the tariffs.
