A top Trump economic adviser is calling for Federal Reserve economists to face consequences for publishing research that shows Americans are paying the price for tariffs. The latest on fed economists disciplined is drawing significant attention.
Kevin Hassett, director of the National Economic Council, told CNBC that researchers behind a New York Federal Reserve study should be “disciplined” for what he called “the worst paper I’ve ever seen in the history of the Federal Reserve system.”
The study found that 90% of increased tariff costs fell on US companies and consumers last year. Related: Mississauga Declares ‘Significant Weather Event’ as Storm Hits
The controversial research: Fed Economists Disciplined Impact
The New York Fed’s paper came out while the Supreme Court considers a legal challenge to Trump’s global tariffs. This relates directly to fed economists disciplined developments across the country. The research concluded that “US firms and consumers continue to bear the bulk of the economic burden of the high tariffs imposed in 2025.”
“The people associated with this paper should presumably be disciplined, because what they’ve done is they’ve 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.”
Hassett pushed back against the findings. This relates directly to fed economists disciplined developments across the country. He claimed prices had fallen, inflation was lower, and “real wages were up $1,400 on average last year, which means that consumers were made better off by the tariffs.” Related: Canada Grabs Bronze in Olympic Short Track Relay
The New York Fed declined to comment on Hassett’s statements.
Other studies reach similar conclusions
But the Fed’s findings aren’t isolated. Multiple independent analyses have reached similar conclusions about who pays for tariffs. Related: Healthy Planet Opening Massive New Toronto Store This Year
The Kiel Institute for the World Economy, a German research firm, reported last month that it found “near-complete pass-through of tariffs to US import prices.” Translation? American companies and shoppers are footing the bill.
The National Bureau of Economic Research also determined that tariff pass-through was “almost 100%.” That means the US rather than exporting countries is absorbing the cost increases.
Pressure on the Fed intensifies
Hassett’s comments represent the latest Trump administration attack on the Federal Reserve. Until now, the pressure had focused mainly on interest rate policy. The president has been pushing for more aggressive borrowing cost cuts.
The pressure has escalated beyond economics. Federal prosecutors recently opened a criminal investigation into Fed chair Jerome Powell’s Senate testimony about building renovations. Trump has also targeted Fed governor Lisa Cook for removal.
At their January meeting, Fed officials held interest rates steady while citing signs the labour market was stabilizing. Inflation cooled last month according to the Department of Labor, with energy and used car prices dropping.
Supreme Court decision looms
The timing of this academic spat isn’t accidental.
The Supreme Court could rule on challenges to Trump’s tariff authority as early as this Friday. Small businesses and US states are arguing the president overstepped his authority with the sweeping trade measures. Trump has repeatedly expressed frustration with the legal battle over his trade strategy.
And what about the Fed’s actual work? Minutes from their January meeting, released Wednesday, showed division among officials about the path forward for interest rates this year. Some even warned about potential rate hikes if inflation pressures continue.
That’s quite a threat for supposedly partisan economists who should stick to their calculators.
