Trump says to nominate Stephen Moore to FED

Muriel Colon
March 26, 2019

President Trump says he will nominate Stephen Moore to serve on the Federal Reserve Board - and it may be because of a Wall Street Journal op-ed. The president later said in a tweet that Mr Moore is "a very respected economist" and said he has "no doubt he will be an outstanding choice".

The people on the Federal Reserve Board should be thrown out for economic malpractice, Moore said December 22 on Red Apple Group chairman and chief executive John Catsimatidiss radio show, blaming an end-of-the-year stock market swoon on the Feds rate hikes.

"Trust me, Steve knows absolutely nothing about the Federal Reserve or monetary policy", Bruce Bartlett, a supply-side economist who served in the Republican administrations of Ronald Reagan and George H.W. Bush, said on Twitter.

Moore will likely face heavy criticism from Senate Democrats, with whom he has clashed for years.

In a separate statement, the Fed said it intends to conclude the reduction of its aggregate securities holdings at the end of September.

In a TV interview, he called the Fed's decision to raise rates in December a "substantial mistake" while saying that he did not want to be a disruptor and "I want to be somebody who can really help chairman Powell".

There are now two vacancies on the seven-member Fed board, and nominations have to be approved by the Senate.

The Fed has since put its rate hikes on hold, citing slowing global and US growth and low inflation. In a speech in March 2019, he said the dot plot "has, on occasion, been a source of confusion", and he said he had asked an FOMC subcommittee "to explore ways in which we can more effectively communicate about the role of the rate projections".

Now, Bostic is emphasizing he hasn't ruled out possible rate hikes later in the year, citing inflation or labor market decline as two data points that could trigger rises.

But he later added that "over time, obviously, we want to reduce that balance sheet and not have these massive amounts of debt on the Fed balance sheet".

As a TV commentator, Moore has been an anti-tax conservative and fiscal hawk.

This approach, Moore has argued, would help spur economic growth in excess of 3 percent, instead of the longer-run average of 1.9 percent that Fed officials forecast. And they tightened, I mean, they did $50 billion a month.

In light of global economic and financial developments and muted inflation pressures, the committee said it would go slow on future adjustments to the target range for the federal funds rate and would take decisions at the appropriate time to support those outcomes.

Fed officials on Wednesday penciled in a long-term growth estimate of 1.9 per cent for the U.S. economy.

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