WASHINGTON -- President Donald Trump said Friday that he had offered a position on the Federal Reserve's Board of Governors to Stephen Moore, a conservative economic adviser who has become an outspoken critic of the Fed's interest-rate policy.
Moore has blamed the Fed's rate increases over the past year for slowing economic growth and recently began calling on the central bank to begin cutting rates. An economist at the conservative Heritage Foundation, Moore helped draft Trump's tax proposals in the 2016 campaign and has served as an informal adviser ever since.
As a nominee, Moore, 59, would face intense criticism in the Senate from Democrats, with whom he has clashed on several economic issues in his career as a commentator and policy advocate.
"I will be nominating Mr. Moore for the Fed," Trump told reporters after landing in Palm Beach, Fla. "He's going to be great on the Fed."
The president added in a post on Twitter that Moore "will be an outstanding choice!"
The move seeks to elevate a Trump loyalist to the Fed, an institution that the president has repeatedly blasted for raising interest rates, which he says have been a drag on the economy. Trump has repeatedly criticized his hand-picked Fed chairman, Jerome Powell, saying he does not agree with Powell's approach.
In recent public writings and private meetings with Trump, Moore has pushed for the Fed to reverse at least two of the four interest-rate increases that it approved last year. Moore blames those increases for a drop in commodity prices at the end of last year. He recently pushed the Fed to target commodity prices in setting interest rates, a view rarely advocated by economists and monetary policymakers.
"The Fed is sucking the oxygen out of the economy and has created an economically debilitating deflation," Moore said in an email this month. "Deflation shrinks the economy. The Fed should reverse its disastrous rate hikes" of September and December.
"The one guy who gets this is Trump," Moore added. "He told me in a meeting last month that the Fed is preventing us from staying on 3 to 4 percent growth path."
On Wednesday, The Wall Street Journal published an opinion piece in which Moore called the Fed the "last major obstacle" to a sustained economic boom.
"The deflation began with quarter-point interest-rate increases in September and December," Moore and a co-author wrote. "These hikes caused a severe dollar shortage, a fall in commodity prices and a rapid slowing of growth -- accompanied by wild swings in the stock market."
In an interview that the Fox Business Network aired Friday morning, Trump appeared to echo much of Moore's thinking, saying economic growth would have been higher last year if not for the Fed's rate increases and its effort to slim down its holdings of government-backed securities, which some call "quantitative tightening."
Trump has repeatedly criticized the choices being made by Powell. "Frankly, if we didn't have somebody that would raise interest rates and do quantitative tightening, we would have been at over 4 instead of a 3.1" percent growth, the president said.
The Fed had been on a steady campaign to raise rates and ushered in five consecutive quarters of increases in 2017 and 2018. The Fed has since paused and adopted a more "patient" approach amid signs of economic weakness both in the United States and abroad. On Wednesday, it signaled that it foresaw no interest- rate increases in 2019, a departure from December, when it forecast two rate increases this year.
After that December rate increase, Moore said Powell should resign as Fed chairman, calling the increase "one of the most remarkable Abbott and Costello routines in modern times."
Business on 03/23/2019