Trump advisor Hassett tells CNBC Warsh a good pick to run central bank

By Michael S. Derby

Jan 30 (Reuters) - Top White House economic adviser Kevin Hassett on Friday said the Federal Reserve blundered in not cutting rates this week, in comments that also called for a swift approval of Kevin Warsh to be Fed ?Chair.

Hassett, speaking on CNBC, acknowledged the legal issues that surround the Fed that could gum ?up any approval process until they are resolved.

"That it is an ?issue that should get resolved quickly," Hassett said ?of a highly controversial ?Department of Justice investigation into the Fed over concerns about the cost of a ?large central bank building renovation project.

Current Fed ?Chair Jerome Powell, whose leadership term ends in May, has said the unprecedented legal moves are in effect punishment ?for the Fed not following ?commands from ?the White House. The investigation has been widely condemned and key Republican Senator Thom Tillis has said he will not move ?forward any Fed nominees until the matter is resolved.

"The White House is highly, highly confident that Kevin Warsh is a great nominee and that he should be confirmed as soon as possible, and every single resource we have at our disposal is behind him and ?behind that ?outcome," Hassett said in the interview.

Hassett was himself on the short-list for Fed chair and in the interview he said ?he was not concerned about being passed over. He deferred answering any questions about Warsh's policy views and said the nominee can address those himself.

Hassett also brushed off the market reaction to Warsh being named, and said broadly of government bonds that "one of the reasons why interest rates should be going ?down, you know, across all durations, is that we've reduced the year-over-year fiscal deficit."

Hassett also said that despite recent dollar weakness there are "a lot of good economic reasons... to ?want a strong dollar."

(Reporting by Michael S. Derby; Editing by Chizu Nomiyama)