Fed Holds Steady on Interest Rates

White House adviser criticizes Fed study on tariff impact

Feb. 22, 2026 at 8:15pm

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Federal Reserve officials indicated they want to see further progress on inflation before considering any additional interest rate cuts, a process that could take months. Meanwhile, a White House adviser criticized a recent Fed study that found U.S. importers bore 94% of the cost of tariffs in the first eight months of 2025.

Why it matters

The Fed's decision to hold interest rates steady reflects its cautious approach to further monetary policy changes, as it seeks to balance controlling inflation with avoiding an economic downturn. The dispute over the Fed's tariff study highlights the ongoing political tensions around trade policy and its economic impacts.

The details

Minutes from the Federal Reserve's January meeting showed officials were hesitant to cut interest rates further, wanting to see more progress on inflation first. The central bank held its benchmark short-term rate steady in a range between 3.5% and 3.75% on a 10-2 vote. Separately, White House economic adviser Kevin Hassett criticized a recent New York Fed study that found U.S. importers bore 94% of the cost of tariffs in the first eight months of 2025, calling the report 'an embarrassment' and saying the authors should be 'disciplined'.

  • The Federal Reserve held its January meeting last month.
  • The New York Fed released its study on tariff costs last week.

The players

Federal Reserve

The central banking system of the United States that sets monetary policy, including interest rates.

Kevin Hassett

Director of the National Economic Council and a White House economic adviser.

New York Fed

The Federal Reserve Bank of New York, one of the 12 regional reserve banks that make up the Federal Reserve System.

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What they’re saying

“The report last week by the New York Fed found that U.S. importers bore 94% of the cost of tariffs in the first eight months of 2025. Kevin Hasset, director of the National Economic Council, said on CNBC the study 'was an embarrassment' and that its authors should be 'disciplined'.”

— Kevin Hassett, Director of the National Economic Council

The takeaway

The Federal Reserve's cautious approach to further interest rate changes and the political dispute over the impact of tariffs underscore the complex economic challenges facing policymakers as they seek to balance inflation, growth, and trade policy.