Tariff Study Claims Majority Burden Falls on U.S. Firms and Shoppers The New York Federal Reserve report calculated that roughly 90 % of the 2025 tariff costs were borne by American companies and consumers, a figure echoed by independent analyses from the Kiel Institute and the NBER that found near‑complete pass‑through to import prices [1][2]. Hassett highlighted the study’s implication that tariffs raised real wages by about $1,400 on average last year, arguing consumers benefited despite higher duties [1]. The Supreme Court is slated to issue a ruling on a legal challenge to the tariffs as early as Friday, intensifying scrutiny of the trade policy [1].

Hassett Labels Study ‘Worst Paper’ and Calls for Discipline Kevin Hassett, director of the National Economic Council, told CNBC the NY Fed paper was “the worst paper I’ve ever seen in the history of the Federal Reserve system” and urged that its authors be disciplined for partisan conclusions [1][2]. He criticized the study for focusing solely on price effects and allegedly ignoring import‑volume changes, though the report’s methodology does incorporate volume through a duty‑rate formula [2]. Both the New York Fed and the Federal Reserve Board declined to comment on Hassett’s remarks, maintaining standard non‑comment policy [2].

Warsh Nomination Signals Political Assault on Fed Independence President Donald Trump announced former Fed Governor Kevin Warsh, a known critic of the central bank, as his nominee to replace Jerome Powell, whose term ends in May [2]. The nomination arrives amid a criminal inquiry into Powell over a headquarters renovation and an effort to remove Governor Lisa Cook on alleged mortgage‑fraud charges, underscoring heightened political pressure on the Fed [2]. Warsh’s selection shifts the succession away from Hassett’s preferred candidate and deepens concerns about politicizing monetary policy [2].

Fed Holds Rates Steady While Inflation Cools The Federal Open Market Committee voted to keep interest rates unchanged in its January meeting, citing a slowdown in inflation reported by the Labor Department [1]. Officials noted the cooling price environment while debating the timing of any future rate cuts, a discussion complicated by the contentious tariff study and broader political attacks on the central bank [1]. The rate decision reflects the Fed’s cautious stance amid mixed signals from trade policy and economic data [1].