White House Advisor Slams Fed Study on Tariff Costs

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The White House has strongly criticized a recent Federal Reserve Bank of New York study that found American consumers and businesses bore the vast majority of the cost of tariffs imposed by the Trump administration. Kevin Hassett, a senior economic advisor to the White House, called the paper 'an embarrassment' and suggested the researchers responsible should be 'disciplined', raising concerns about potential political interference in the Fed's work.

Why it matters

The controversy highlights the ongoing debate over the economic impact of the Trump administration's trade policies. While the White House has argued that tariffs would protect American jobs, the New York Fed study appears to support the view that the costs were largely passed on to domestic consumers and businesses, contradicting the administration's claims.

The details

The New York Fed analysis, published in February 2026, found that approximately 90% of the tariff burden was shouldered domestically as of late 2025. Initially, 94% of the costs were absorbed by U.S. entities, dipping slightly to 86% by November 2025. Hassett criticized the study's methodology, arguing it focused solely on price effects and neglected potential shifts in import volumes and the impact on domestic production. However, the study's authors maintain their analysis is sound and reflects the observed pass-through rates of the tariffs.

• The New York Fed study was published on February 12, 2026.
• Hassett's criticism was made in an interview with CNBC on February 18, 2026.

What they’re saying

What’s next

The dispute highlights a fundamental disagreement over how to assess the economic consequences of trade policy, and further analysis will be needed to fully understand the long-term effects of the Trump administration's tariffs.