Home / US / Trump breaks precedent again with latest Fed pick

Trump breaks precedent again with latest Fed pick



Hours after Trump said last week that he plans to nominate Moore to the board of the world's most powerful central bank, the former campaign advisor joined Bloomberg Television and openly admitted his unknown to monetary policy.

I'm completely new to this game, frankly, so I'll be on a steep learning curve myself about how the Fed works, how the Federal Reserve makes its decisions, Moore said Friday in an interview. "It's hard for me to even say what my role will be there, provided I'm confirmed."

Trump's election of Moore, a prominent Conservative Heritage Foundation visitor, has raised eyebrows with his often-colorful views of the Fed and his close relationship with the president who have violated precedent and directly criticized Fed's recent interest rate hikes.

In December Moore blew Fed President Jerome Powell and other board members to raise prices at the end of last year and said they "would be thrown out for financial misconduct" and go as far as suggesting Powell ̵
1; appointed by Trump – should resign from the role.
Moore told Bloomberg that his comment was likely to be "in anger" and that he would be willing to work with and learn from his colleagues on the board. But he said he still kept his negative perception of the Fed's December rise, which calls "a very big mistake".

"Everyone would now admit that what they did in December with the course increase – it was a very big mistake," Moore said.

The Fed has a long-standing track record to remain independent of political intrusion. Later, Powell and other Fed members have refrained from addressing Trump's political attacks, which called their Fed chairman "crazy" and "loco" to raise interest rates four times in 2018. Instead, Powell has often settled the problem in order to preserve the independence of the Fed and strengthen the message that politicians work in the best interests of the country.
Two former nominees, Nellie Lang and Marvin Goodfriend, failed to go through the Senate last year. Lang, a former Fed economist who helped to postpone financial crisis rules in 2010, was seen as a threat to efforts to resolve bank rules and finally withdrew his name.

Separately, Democrats questioned Goodfriend's ability to accurately predict the path of the economy during his confirmation hearing. He is still under consideration by the White House for a seat on the board, said White House's financial advisor Larry Kudlow in January.

Moore's nomination, which requires Senate confirmation, drew immediate backlash from previous policy makers.

"Moore is completely incapable of earning in the office he was appointed to," wrote Bradford Delong, an economics historian and former deputy assistant secretary of the finance department during the Clinton administration, in a edition published by MarketWatch. "He has absolutely no business that monitors US monetary policy. The same goes for all presidents who would appoint him and any senator who would vote to confirm him."

The members of the seven Fed members are usually economists, financial management and bank regulators. Moore is a former Wall Street Journal editorial and anti-tax activist.

He was also an CNN analyst, but a spokesman said Friday that the relationship had ended.

Trump is also considering the former pizza chief and presidential candidate Herman Cain for a second open seat on the Fed Board, although Cain was previously head of the Federal Reserve Bank of Kansas City, one of the Fed's regional arms .

In his interview, Moore tried to show off his various views with the current Fed President and stressed that he wanted to be helpful in increasing the country's economic growth.

"I don't want to be a disorder," Moore said. "I want to be someone who can really help President Powell and the others on that board to design the best pro-growth, stable pricing system we can for this country."

Moore added that he and Trump "think of very similar" in terms of economic policy. "I really think we can get 3 to 4 percent growth over the next five to six years," he said.

At its last meeting in March, the Federal Reserve lowered its growth forecast for 2019 to 2.1%, suggesting that they may be worried about lowering domestic and global growth.
These estimates are in stark contrast to the Trump administration, which has predicted that the US economy will grow by an average of 3% annually over the next decade, including 3.2% this year.

Trump's decision to appoint Moore to work followed intentionally a recent editorial in the Wall Street Journal, blaming the central bank for slowing down the economy as he pushed Trump's policies.

"Given how Moore was told by Trump saw a Moore intent on agreeing, Trump adviser was happy to be advised to keep a watch in the sleeve," Ian Katz, a finance analyst for Capital Alpha, wrote. Partners wrote in a note to customers. "If the boss were to see an article or TV look and say" let's hire that guy for the Fed, "you wouldn't want to be the one to tell Trump, we've already filled all the Fed jobs."

However, political analysts suggested that Moore's confirmation would "very likely be near a party-line tally" with some Senator's voice, such as Republican since the Paul Rand of Kentucky.

Democrats are likely to warm up Moore, a close ally of White House's financial adviser, Larry Kudlow, to earlier support higher interest rates in 2015 under President Barack Obama.

In 2015, Moore described the Fed's "zero interest rate policy … just like an addict craving cocaine" – a position he has since reversed, as Trump has enabled Fed's efforts to curb any inflationary potential opportunities and keep the economy in check as it absorbs the republican tax cuts and other expansive measures.

"We think it is likely that Moore will be confirmed, but his results in a confirmation hearing would be very important, especially with his historically divergent views on interest rates," wrote Brian Gardner, head of Washington Research at Keefe, Bruyette & Woods, in a note to customers. "Republicans have enough Senate to confirm him without democratic help. It would only be a question of whether he would lose support from some Republicans, which would constitute his nomination in danger."


Source link