Top Trump advisor furious about true cost of tariffs being revealed, vows to punish New York Fed for ‘worst paper ever in history’

After the New York Federal Reserve released a blog post last week that found Americans are eating the super-majority (90%) of the cost of President Donald Trump’s tariffs, White House National Economic Council Director Kevin Hassett condemned the findings and lambasted the researchers involved in the study.

“The paper is an embarrassment,” Hassett told CNBC on Wednesday. “It’s, I think, the worst paper I’ve ever seen in the history of the Federal Reserve System.”

He went as far as to suggest that the authors of the report should face repercussions for their work. “The people associated with this paper should presumably be disciplined,” he said.

Hassett’s comments add fresh fire to the White House’s pushback on a growing body of research that shows Trump’s tariffs are disproportionately hurting American consumers and businesses. Last August, Goldman Sachs stood by a tariff analysis that Trump attacked which came to a similar conclusion that of the New York Fed’s.

It’s also the most recent assault against the central bank by the Trump administration. The Department of Justice launched a criminal investigation into Fed chair Jerome Powell last year. The president has also repeatedly attacked Powell for refusing to cut interest rates.

The exact findings from the New York Fed show a dire scenario for Americans. In the blog post, titled “Who Is Paying for the 2025 U.S. Tariffs?” Fed researchers Mary Amiti, Chris Flanagan, Sebastian Heise, and David E. Weinstein found that more than 90% of the economic burden from tariffs fell on American households and businesses after the average tariff rate in 2025 spiked from 2.6% in the beginning of the year to 13%, according to customs data. “U.S. firms and consumers continue to bear the bulk of the economic burden of the high tariffs imposed in 2025,” the researchers wrote. 

The New York Fed declined to comment.

The results contrast the president’s incessant assertion that the brunt of the cost of tariffs are paid for by foreign countries. “The data shows that the burden, or ‘incidence,’ of the tariffs has fallen overwhelmingly on foreign producers and middlemen, including large corporations that are not from the U.S.,” the president said in a Wall Street Journal op-ed published last month.

A roundabout conclusion

Hassett built on that claim. He argued that prices have come down, inflation is down, and real wages are up. “Real wages were up $1,400 on average last year, which means that consumers were made better off by the tariffs,” Hassett said.

While some prices have fallen since Trump’s inauguration—including gas and egg prices—some tags, as found in the New York Fed study, remain high thanks to tariffs. The New York Fed analysis found that by November of last year, import prices had increased by 11% more than prices not subject to tariffs.

Still, Hassett called the report biased and unintelligent. “They’ve put out a conclusion which has created a lot of news that’s highly partisan, based on analysis that wouldn’t be accepted in a first semester econ class.”

He said he believes prices haven’t risen as much as the researchers suggest, dismissing the warnings of inflation as another example of false expert forecasts. “Everybody said that with these large tariffs that we’d have runaway inflation and stagflation,” he said. “We’ve had very strong economic growth and inflation going closer and closer to the target.”

Hassett is correct that inflation has slowed significantly, while GDP has consistently surprised to the upside. A weak spot in the economy—relatively low job creation numbers—is still being puzzled over by economists, with Goldman Sachs recently projecting that it’s due to a collapse in immigration of roughly 80% since Trump took office.