Trump says nominating fierce Fed critic to Fed board

Published March 23, 2019, 9:29 AM

by AJ Siytangco

By Agence France-Presse

President Donald Trump said Friday he intends to nominate a fierce critic of the Federal Reserve — who has frequently been proven wrong in his dire predictions — to serve on the central bank’s board.

Controversial economist Stephen Moore, who in December called on Trump to fire Fed Chairman Jerome Powell for “wrecking the economy,” served as an economic adviser during Trump’s presidential campaign.

Two years into his controversial and combative presidency, experts say there is no doubt that all Democratic candidates will take potshots at Donald Trump (AFP Photo/NICHOLAS KAMM / MANILA BULLETIN)

“It is my pleasure to announce that @StephenMoore, a very respected economist, will be nominated to serve on the Fed Board,” Trump tweeted. “I have known Steve for a long time — and have no doubt he will be an outstanding choice!”

Moore will first have to be vetted and then confirmed by the US Senate before joining the Fed’s seven-seat board. He would fill one of two openings.

Fed governors serve a single 14-year term but the terms run independent of the individual, so nominees often have the opportunity to serve longer if they also fill out an unexpired term.

The nomination of a critic of the institution would be in line with Trump’s habit of putting agencies in the hands of people who either have no experience in the area or oppose the policies of the agency.

But it would be a dramatic departure for the independent and autonomous Federal Reserve. Trump has also veered sharply from recent tradition by openly criticizing the Fed’s policies.

He has called the central bank the biggest threat to the economy and in an interview with Fox Business Network on Friday he said US GDP growth “would have been over four (percent) if they didn’t do all of the interest rate hikes.”

The Commerce Department reported last month that the US economy grew at 2.9 percent, the fastest rate since 2015.

The Fed raised the benchmark interest rate four times last year, but since December has said clearly that it will remain on hold for the foreseeable future.

It also has been reducing the size of its massive holdings of securities built up during the aftermath of the financial crisis — something Trump also hammered.

Moore criticized the Fed’s purchases of securities — an untested policy known as quantitative easing — saying the US was on the verge of hyperinflation. In fact, inflation remained worryingly absent which caused the Fed to move very slowly until last year.

One Kansas newspaper stopped publishing Moore’s column, claiming it found major factual errors in a 2014 column.