Trump taps a strident Powell critic for spot on Fed board
PALM BEACH, Fla. (Reuters) - President Donald Trump on Friday tapped Stephen Moore, a conservative economic commentator and fellow critic of Federal Reserve policy under Chairman Jerome Powell, to join the U.S. central bank’s board of governors, a move that would position a Trump loyalist inside the world’s most important financial institution.
Moore, who last year suggested in a radio interview that Trump had cause to fire Powell for “wrecking our economy,” would add a critical and unconventional voice to a collegial committee that unanimously backed Powell in keeping rate hikes on hold this month.
The group, many of them PhD economists, often reach policy decisions by consensus after debating the issues.
“I will be nominating Mr. Moore to the Fed,” Trump told reporters as he arrived in Florida for a weekend trip. “He’ll be great on the Fed.”
Before joining the conservative Heritage Foundation think tank, Moore had worked as an editorial page writer at the Wall Street Journal. He also was an adviser to Trump’s presidential campaign and holds a master’s degree in economics from George Mason University.
“I have known Steve for a long time – and have no doubt he will be an outstanding choice!” Trump wrote on Twitter on Friday.
Moore, whose nomination would require Senate approval, helped write Trump’s signature tax plan. The nomination could test just how successful Powell has been in his aggressive courting of lawmakers in his first year as Fed chair.
Moore will likely face heavy criticism from Senate Democrats, with whom he has clashed for years. The biggest question will be whether the Republicans who have regularly met with Powell agree to advance someone who has publicly chastised the head of the Fed and agreed that Trump has the power to fire him.
A spokeswoman for Republican Senator Crapo, who leads the Senate banking committee whose support is needed before a Fed governor can be appointed, declined to comment.
The position would give Moore a vote at the policy-setting table of an institution whose interest rate hikes last year were a frequent target of Trump’s ire.
Trump was so incensed by the Fed’s policies he is said to have sought advice late last year on whether he could fire Powell.
After raising rates four times last year, Powell this year has taken Fed policy in the direction that Trump wanted, putting rate hikes on hold and mapping out an end to reductions in the Fed’s balance sheet that Trump and others had complained were squeezing the economy.
Powell has said the Fed took those decisions without regard to politics but purely in response to slowing global and U.S. growth and low inflation.
Trump had made an offer to Moore this week after speaking with him to compliment him on an opinion article he co-authored in the Wall Street Journal, that newspaper reported earlier, citing a senior administration official.
In the Wall Street Journal article last week, Moore and a co-author argued that the Fed’s rate hikes promoted deflation and described the central bank as the “last major obstacle” to the United States staying on a good path.
The article also argued that the Fed should stabilize the dollar’s value and seek stable commodity prices.
The Fed already seeks to keep inflation moderate but policymakers mostly look past short-term food and energy price fluctuations. The article also disagreed with many economists’ assessments that economic growth potential is far lower than in past years.
There are two open positions on the Fed’s seven-seat board.
The White House is also continuing to consider one-time presidential candidate and pizza chain magnate Herman Cain for a spot, Bloomberg News reported late on Thursday, despite concerns that the accusations of sexual harassment that derailed Cain’s bid for president could complicate his Senate confirmation.
Additional reporting by Ann Saphir in San Francisco, David Alexander and Howard Schneider in Washington and Trevor Hunnicutt in New York; Editing by Kim Coghill and Meredith Mazzilli
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