On February 18, 2026, National Economic Council Director Kevin Hassett demanded that researchers at the New York Federal Reserve be “disciplined” for publishing a study showing that American businesses and consumers bear 86% of the cost of Trump's tariffs — not foreign countries, as Trump repeatedly claims.
Hassett called it “the worst paper I've ever seen in the history of the Federal Reserve system” and said the researchers “should presumably be disciplined, because what they've done is 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.”
The study found that US businesses and consumers bore 86% of the tariff burden as of November 2025, with foreign exporters absorbing only 14%. Average tariff rates jumped from 2.6% at the start of 2025 to 13% by year-end, peaking around 16% after Trump's “Liberation Day” announcements. The nonpartisan Congressional Budget Office corroborated these findings — the CBO found that foreign exporters bear only about 5% of costs, with 95% falling on American firms and consumers. The CBO projected tariffs will increase consumer prices by 0.8 percentage points by the end of 2026.
Hassett's criticism was factually wrong. He claimed the study only looked at price effects and ignored import volume changes. In reality, the authors calculated tariff rates using “total monthly tariff revenue divided by the total value of imports” — meaning import volume was taken into account.
The Federal Reserve is an independent institution. Its researchers produce data to help officials make informed decisions. A White House economic adviser publicly demanding that researchers be punished for producing findings that contradict the president's claims is a direct attack on the independence of economic research — and part of the same pattern that saw the BLS Commissioner fired for an unfavorable jobs report and monthly employment data cancelled for the first time in 75 years.