Kevin Hassett, the head of the National Economic Council, said on Wednesday that the academics at the New York Federal Reserve who wrote a report saying that American firms and consumers are paying 90% of the cost of President Donald Trump’s tariffs should be “disciplined.”
Hassett told CNBC, “I think it’s the worst paper I’ve ever seen in the history of the Federal Reserve system.”Hassett went on to say, “The people involved with this paper should probably be punished because they came to a conclusion that has gotten a lot of partisan news based on analysis that wouldn’t be accepted in a first-semester econ class.”
Neel Kashkari, president of the Minneapolis Fed, spoke out on Thursday. He remarked during a rally in Fargo, North Dakota, “This is just another step to try to undermine the Fed’s independence.”
Hassett’s main problem with the research, in his opinion, was that it only looked at how tariffs affected prices and not how they changed the amount of imports.
That isn’t completely accurate, though. The writers figure out the average duty rates throughout different time periods to figure out the tariff burdens. They say it means “the total monthly tariff revenue divided by the total value of imports in the month,” which means that the volume of imports is taken into account. In particular, they looked at how “global supply chains changed because of the higher tariffs.”
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