A large interest rate cut seems reasonable, but Hassett believes that the Federal Reserve is not as independent as it should be.

Trump's potential pick for Federal Reserve chairman defended the Fed's aggressive interest rate cut last month, despite Trump's accusations that the central bank's move was politically motivated.

Kevin Hassett, an economic adviser to the Trump administration, said in an interview that the Fed's move to cut its key interest rate by 50 basis points instead of 25 basis points was justified because data showed a weakening job market.

“It made sense to start cutting rates aggressively based on the data they had at the time, when it did look like economic growth was slowing sharply,” Hassett said in an interview.

Hassett's comments conflict with Trump's condemnation of the Fed's actions in a speech to the Detroit Economic Club earlier this month.

"The fact is, the Fed cut rates too fast," Trump said at the time. "It was too big, and everybody knows it was a political maneuver they were trying to make before the election," he added, suggesting the Fed was trying to lower borrowing costs to help his Democratic opponent, Harris.

Hassett, a fellow at Stanford University's Hoover Institution, has served as chairman of the Trump administration's Council of Economic Advisers since 2017. He has remained in Trump's orbit and is expected to move into leadership, including potentially running the Federal Reserve, if the Republican nominee defeats Harris next month.

Trump is expected to choose a new Fed chair after current Fed Chairman Jerome Powell's term ends in 2026.

Trump has been a sharp critic of Powell in the past for not cutting interest rates as aggressively as he did in 2019. Earlier this year, he warned Powell against cutting rates before the election.

Still, Hassett agreed with Trump that the Fed has taken "political actions" in recent years.

“I think it’s reasonable to argue that the Fed is not as independent as it should be,” he said. Hassett cited the Fed’s decision to raise interest rates in December 2016, before Trump took office as president, even though “the data didn’t support that.”

Later, he added, “when fiscal policy got out of control under the Democratic administration, the Fed did nothing.”

But Hassett dismissed concerns that Trump would try to undermine the Fed's independence in a second administration. "I believe President Trump supports an independent Fed, but he also wants his voice to be heard, and he wants to have truly independent people there," he said.

The Fed has consistently rejected any suggestion that U.S. monetary policy is set for political reasons. After cutting rates by 50 basis points last month, the Fed is expected to implement smaller 25 basis point cuts in November and December, especially after signs of recovery in the labor market. Hassett said:

“I wouldn’t give the Fed a low grade for their September action, although in hindsight they probably wish they hadn’t done so.”