Trump economic advisor blasts NY Fed report on tariff costs

Yahoo Finance Video

Fri, February 20, 2026 at 5:25 AM GMT+9

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Trump administration officials are speaking out against a report from the Federal Reserve Bank of New York that found US consumers and businesses to be carrying the majority of costs stemming from the president’s tariff policies imposed last year.

Yahoo Finance Senior Fed Reporter Jennifer Schonberger highlights the details of the New York Fed’s study and National Economic Council (NEC) director Kevin Hassett’s comments to CNBC in response to the findings.

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Video Transcript

00:00 Josh

The Trump administration slamming the Fed once again. This time, National Economic Council head, Kevin Hassett is criticizing some data out of the New York Fed. Our very own Jennifer Schonberger has all the details. Jen.

00:12 Jennifer Schonberger

That’s right, Josh. The Trump administration is disputing a new paper from the New York Federal Reserve, which asserts that US consumers and businesses are bearing the bulk of higher costs from tariffs that were imposed last year. National Economic Council Director Kevin Hassett called the paper, quote, an embarrassment, telling CNBC in an interview on Wednesday that he thought it’s quote, the worst paper I’ve ever seen in the history of the Federal Reserve system. He called for the authors of the paper to be disciplined for putting out what he called a partisan conclusion that he said wouldn’t have even been accepted in a first semester economics class.

01:00 Jennifer Schonberger

Now, three analysts within the New York Fed’s Research and Statistics Group analyzed the tariffs instituted last year and found that 94% were born by the US in the first eight months of 2025. Just 6% of those costs were absorbed by foreign exporters. The analysis covered 12-month changes from January 2024 through November 2025, noting how the pass through of costs changed over the course of the last year.

01:34 Jennifer Schonberger

By November, those pass through pass through costs born in the US had declined to 86% as more exporters were shouldering those costs of those tariffs. Now, the higher import prices, the authors say, caused the firms to reorganize their supply chains. Hassett for his part says the authors are only looking at changes in prices and that tariffs shift around based on consumer and producer surplus. He pointed to other measures like lower inflation and higher wages, which suggest that consumers are better off.

02:20 Jennifer Schonberger

Now, US Trade representative Jameson Greer insisted that tariffs are not regressive, that we admitted that consumers do pay them. As for the Federal Reserve, we heard from Minneapolis Fed President Neil Kashkari this morning, who said that he views Kevin Hassett’s comments as quote, just another step to try to compromise the Federal Reserve’s independence. Josh.

02:46 Josh

All right, Jen. Thank you. Appreciate it.

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