If the Fed holds interest rates steady as a means of protecting against tariff-induced inflation, it risks a deeper slowdown of the labor market. On the other hand, if the Fed lowers rates to stimulate the economy in the face of a hiring slowdown, it threatens to boost spending and worsen inflation.

With Hassett, Trump would have a close ally whom the president knows well and trusts installed at the independent central bank, the people said, speaking on the condition of anonymity. Hassett is seen as someone who would bring the president’s approach to interest-rate cutting to the Fed,