Market Doubts Hassett Can Deliver at Fed, Says Investment Banker

Kevin Hassett may not have the ability to deliver the rapid pace of interest-rate cuts U.S. President Donald Trump would like, even if he is approved as the next Federal Reserve Chair, said Gregory Peters, co-chief investment officer at PGIM Fixed Income, Ruth Carson reported for Bloomberg News.

Since Fed rate decisions are ultimately made by committee — Hassett won’t have the power to deliver on his own. (Photo: Hoover Institution)

Peters made the remarks amid rising talk that Hassett, the White House National Economic Council director, may ease monetary policy aggressively to please Trump if he is picked to run the Fed.

But the PGIM fund manager suggested that — since Fed rate decisions are ultimately made by committee — Hassett won’t have the power to deliver on his own.

“Does he have the credibility within the committee to drive consensus?” said Peters, who is also a member of the Treasury Borrowing Advisory Committee, in an interview with Bloomberg TV.

“We don’t know that answer. I don’t think he has that credibility. I think that’s what the bond market is telling you.”

Peters’ remarks were in response to a Financial Times report that bond investors, including those on the borrowing advisory committee, have voiced concerns to the U.S. Treasury about Hassett’s potential appointment as Fed chief.