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White House economic advisor Kevin Hassett said Wednesday that the authors of a recent New York Federal Reserve paper that found U.S. companies and consumers are shouldering most of the tariff burden should be \u201cdisciplined.\u201d<\/p>\n
In a CNBC interview, the National Economic Council director ripped the report, saying that central bank researchers ignored key aspects of how the duties worked and instead simply focused on prices. Hassett said the research also should have included the upward impact on wages and benefits that U.S. companies see by bringing more production onshore.<\/p>\n
\u201cI mean, the paper is an embarrassment,\u201d Hassett said during the \u201cSquawk Box\u201d<\/a> interview. \u201cIt\u2019s, I think, the worst paper I\u2019ve ever seen in the history of the Federal Reserve system. The people associated with this paper should presumably be disciplined, because what they\u2019ve done is they\u2019ve put out a conclusion which has created a lot of news that\u2019s highly partisan based on analysis that wouldn\u2019t be accepted in a first-semester econ class.\u201d<\/p>\n The paper in question<\/a> was published Feb. 12 on the New York Fed\u2019s website.<\/p>\n Essentially, the researchers looked at whether countries that export products to the U.S. were lowering their prices, or in effect eating the tariffs, or raising their prices and passing them onto consumers and companies. The paper found that some 90% of the added costs from tariffs were being passed on, though it noted that the impact waned slightly as the year progressed.<\/p>\n However, Hassett insisted that the tariffs had little impact on prices and were responsible for a better standard of living.<\/p>\n \u201cPrices have gone down. Inflation is down over time. Import prices dropped a lot in the first half of the year, that leveled off, and real wages were up $1,400 on average last year, which means that consumers were made better off by the tariffs,\u201d he said. \u201cSo consumers couldn\u2019t have been made better off by the tariffs, if this New York Fed analysis was correct. It\u2019s really just an embarrassment. I can\u2019t imagine who signed off on it.\u201d<\/p>\n The consumer price index<\/a> in January rose 2.4% from a year ago and is up nearly 2% from April 2025, when President Donald Trump<\/a> first announced the tariffs<\/a>. Core CPI, which excludes food and energy, was up 2.5% in January, its lowest annual gain since March 2021. Import prices<\/a> in December were flat from a year ago while export prices rose 3.1%, according to the Bureau of Labor Statistics.<\/p>\n