Larry Kudlow says Trump is not interfering with the Fed

Larry Kudlow says Trump is not interfering with the Fed
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A top economic adviser to President Donald Trump defended the plan to nominate Stephen Moore and Herman Cain for spots on the Federal Reserve on CNN Sunday.

Larry Kudlow, director of the White House’s National Economic Council, told CNN’s Jake Tapper on “State of the Union” that Trump “has every right to put people on the Federal Reserve Board with a different point of view.”

Much like Trump, Moore has criticized the Fed — and Fed chair Jerome Powell in particular — for boosting interest rates several times last year.

The central bank has reversed course on rate hikes and sent signals that no rate hikes are likely this year. That’s boosted the stock market back near record levels.

But Moore has argued that the Fed should go further and lower rates.

Cain has not explicitly called for rate cuts as of late. But the 2012 Republican presidential candidate did say in an interview with Fox Business Network in February that the Fed should be more worried about deflation than inflation right now. The Fed typically raises rates to combat inflation.

Several economic and market experts — as well as business leaders — have expressed concerns that neither Moore nor Cain are the most qualified candidates to serve on the Fed.

JPMorgan Chase CEO Jamie Dimon said on Thursday that they are “not the right people” to be on the Fed’s board.

Cain, the former CEO of Godfather’s Pizza, has served on the Kansas City Fed’s board of directors though.

Moore was an adviser on Cain’s presidential bid and advised Trump for his 2016 campaign. (Moore joined CNN as a contributor in 2017 but the network said he would no longer appear on air following the news of his planned nomination to the Fed.)

Some worry that Trump is trying to sway the Fed with his picks. The central bank was established to be an apolitical entity whose job is to try and ensure maximum employment and price stability by setting interest rates.

Kudlow told Tapper Sunday that the president “wants people on the Fed who share his philosophy. This is not a political issue.”

But the president has expressed his unhappiness with Powell’s Fed decisions numerous times on Twitter and in media interviews.

Kudlow vehemently denied that this was the case though, telling Tapper that “we aren’t interfering with the Fed’s independence.”

Kudlow added that Cain, who dropped out of the 2012 presidential race following allegations of sexual harassment, was in the process of being vetted by the White House.