White House Adviser Slams Fed Report on Tariff Costs

Kevin Hassett claims researchers 'ignored key aspects' of how tariffs impact prices and wages

Feb. 23, 2026 at 10:55pm

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White House economic adviser Kevin Hassett criticized a recent New York Federal Reserve paper that found U.S. companies and consumers are shouldering most of the tariff burden imposed by the Trump administration. Hassett claimed the researchers failed to properly account for the positive impact of tariffs on wages, but experts say his claims are misleading and not supported by the data.

Why it matters

The debate over the economic impact of tariffs is a key political issue, with the Trump administration insisting they have not caused significant inflation, while independent analyses suggest otherwise. This clash highlights the ongoing tensions between the White House and the Federal Reserve over the effects of the administration's trade policies.

The details

The Fed researchers found that over 94% of tariff costs were absorbed by U.S. importers, rather than being passed on to foreign suppliers through lower prices. Hassett disputed this, claiming the researchers ignored the positive impact of tariffs on wages. However, experts say wage growth has actually decelerated under the Trump administration, and the $1,400 average annual increase Hassett cited is lower than in previous years.

  • The Fed paper was published on February 18, 2026.
  • Hassett criticized the paper in a CNBC interview on February 19, 2026.

The players

Kevin Hassett

The director of the National Economic Council and a senior economic adviser to President Trump.

New York Federal Reserve

The regional Federal Reserve bank that conducted the research paper on the impact of tariffs.

Mickey Levy

An economist who has expressed skepticism that rising productivity can continue to drive the U.S. economy without higher wages for workers.

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What they’re saying

“The paper is an embarrassment. It's, I think, the worst paper I've ever seen in the history of the Federal Reserve system. The people associated with this paper should presumably be disciplined.”

— Kevin Hassett, Director of the National Economic Council (CNBC)

“Economic growth will be slowing significantly to reflect the stagnant labor markets.”

— Mickey Levy, Economist (Bloomberg)

What’s next

The judge overseeing the case against the Fed researchers will decide on Tuesday whether to allow Hassett's request to discipline them.

The takeaway

This clash highlights the ongoing political debate over the economic impact of the Trump administration's trade policies, with the White House insisting tariffs have not caused significant harm, while independent analyses suggest otherwise. The dispute raises questions about the independence of government economic research and the ability of policymakers to objectively assess the effects of their own actions.