National Economic Council Director Kevin Hassett issued a forceful critique of a New York Federal Reserve study that attributed the bulk of tariff costs to U.S. companies and consumers. Speaking on CNBC, Hassett described the paper as "an embarrassment" and went further, saying the study's authors should face discipline for their work.
During his television remarks, Hassett characterized the research as deeply flawed and partisan. He said: "What they’ve done is they put out a conclusion which has created a lot of news that’s highly partisan, based on analysis that wouldn’t be accepted in a first semester econ class." He also labeled the paper "the worst in Fed’s history," underscoring the severity of his critique.
The New York Fed analysis concluded that a significant portion of the economic costs associated with tariffs was shouldered by U.S. companies and consumers. That finding—central to the study—was the target of Hassett's comments, which questioned both the methodology and the broader implications of publishing the results.
Hassett's remarks underline a public dispute over how the economic incidence of tariffs is measured and communicated. While the study's conclusion assigns notable cost burdens to domestic firms and consumers, the director's remarks focus on the perceived analytical shortcomings and the potential for the findings to be interpreted through a partisan lens.
The exchange took place on national television, where Hassett explicitly tied the study's public impact to its methodological choices, asserting that the work had generated "a lot of news" with a partisan slant. He urged accountability for the researchers, repeating that the study represented a serious lapse in standards in his view.
This public rebuke highlights tensions between policymakers and central bank-affiliated research when analysis touches on politically sensitive topics like tariffs. The study's core claim about who bears tariff costs remains as reported by the New York Fed, while Hassett's comments frame the issue as one of research quality and public interpretation.