Fed's Kashkari Slams Hassett Comments on Tariff Analysis

Kashkari states that Hassett's comments suggesting researchers "should be punished" for their tariff analysis are "just another step to try to compromise the Fed's independence." He also notes a DOJ subpoena served to the Board of Governors. The public conflict between administration allies (Hassett) and the Fed suggests escalating friction between fiscal and monetary authorities. If the Fed feels its independence is under attack, it may rigidly adhere to hawkish data (to prove autonomy) rather than accommodating administration policies (like tariffs). This reduces the likelihood of a coordinated "easy money" environment and increases policy volatility risk for sovereign bonds. WATCH. The "Fed Put" may be constrained by the need to demonstrate political neutrality, potentially keeping rates higher if tariff-induced inflation appears. The Fed could eventually succumb to political pressure, or economic data could naturally soften, allowing for rate cuts without political appearance.