Trump breaks precedent again with latest Fed pick
Most presidential nominees usually want to show off their expertise and qualifications when being considered for a federal appointment. But not Stephen Moore, President Donald Trump’s pick, to join the Federal Reserve.
Hours after Trump said last week that he plans to nominate Moore to the board of the world’s most powerful central bank, the former campaign adviser went on Bloomberg Television and openly acknowledged his unfamiliarity with monetary policy-making.
“I’m kind of new to this game, frankly, so I’m going to be on a steep learning curve myself about how the Fed operates, how the Federal Reserve makes its decisions,” Moore said Friday in an interview. “It’s hard for me to say even what my role will be there, assuming I get confirmed.”
Trump’s choice of Moore, a distinguished visiting fellow at the conservative Heritage Foundation, has raised eyebrows given his often colorful views of the Fed and his close relationship with the President, who has broken with precedent and directly criticized the Fed’s recent interest rate hikes.
In December, Moore blasted Fed chairman Jerome Powell and other members of the board for raising rates at the end of last year, saying they “should be thrown out for economic malpractice” and going so far as to suggest Powell — who was appointed by Trump — should resign from the role.
Moore told Bloomberg that his comment was most likely made “in anger” and that he would be willing to work with and learn from his colleagues on the board. But he said he still maintained his negative view of the Fed’s December rate hike, calling it “a very substantial mistake.”
“Everyone would now acknowledge that what they did in December with the rate increase — it was a very substantial mistake,” said Moore.
The Fed has a long-standing track record of remaining independent of political intrusions. More recently, Powell and other members of the Fed have refrained from addressing political attacks by Trump, who called his Fed chairman “crazy” and “loco” for raising rates four times in 2018. Instead, Powell has often side-stepped the issue in order to preserve the Fed’s independence and reinforce the message that policymakers are working in the best interests of the country.
Two previous nominees, Nellie Lang and Marvin Goodfriend, each failed to advance through the Senate last year. Lang, a former Fed economist who helped script post-financial crisis rules in 2010, was viewed as a threat to efforts to loosen bank regulations and ultimately withdrew her name.
Separately, Democrats questioned Goodfriend’s ability to accurately predict the economy’s path during his confirmation hearing. He is still under consideration by the White House for a seat on the board, White House economic adviser Larry Kudlow said in January.
Moore’s nomination, which requires Senate confirmation, drew immediate backlash from former policymakers.
“Moore is wholly unfit to serve in the office to which he is being nominated,” Bradford Delong, an economic historian and former deputy assistant secretary at the Treasury Department under the Clinton administration, wrote in an op-ed published by MarketWatch. “He has absolutely no business overseeing US monetary policy. The same is true of any president who would appoint him and any senator who would vote to confirm him.”
Members of the seven-member panel at the Fed are typically economists, financial industry executives and bank regulators. Moore is a former Wall Street Journal editorial board member and anti-tax activist.
He was also an analyst for CNN, though a spokesman said Friday that relationship had been terminated.
Trump is also considering former pizza executive and presidential candidate Herman Cain for a second open seat on the Fed board, though Cain was previously a director of the Federal Reserve Bank of Kansas City, one of the Fed’s regional arms.
In his interview, Moore tried to downplay his differing views with the current Fed chairman, stressing he wanted to be helpful in boosting the country’s economic growth.
“I don’t want to be a disruptor,” said Moore. “I want to be somebody who can really help Chairman Powell and the others on that Board to construct to the best pro-growth, stable price system that we can for this country.”
Moore added that he and Trump “think a lot alike” when it comes to economic policy. “I really believe we can have 3 to 4 percent growth for the next five to six years,” he said.
At their latest meeting in March, the Federal Reserve lowered their growth forecast for 2019 to 2.1%, suggesting they may be worried about slowing domestic and global growth.
Those estimates are in sharp contrast to the Trump administration, which has forecast the US economy will grow at an average of 3% each year over the next decade, including 3.2% this year.
Trump’s decision to appoint Moore to the job reportedly followed a recent editorial in the Wall Street Journal, in which he blamed the central bank for slowing the economy while touting Trump’s policies.
“Given the way Moore was reportedly chosen — by Trump seeing a Moore op-ed that he agreed with — Trump advisers might be well-advised to hold the vacancy like a card up their sleeve,” wrote Ian Katz, a financial policy analysts for Capital Alpha Partners wrote in a note to clients. “If the boss were to see an article or TV appearance and say ‘let’s hire that guy for the Fed,’ you wouldn’t want to be the person who has to tell Trump sorry, we already filled all the Fed jobs.”
Political analysts, however, suggested Moore’s confirmation would “very likely be close to a party-line tally” with a few senators’ vote up for grabs, like Republican Sen. Paul Rand of Kentucky.
Democrats are likely to put heat on Moore, a close ally of White House economic adviser Larry Kudlow, for having previously supported higher rates in 2015 under President Barack Obama.
Moore in 2015 described the Fed’s “zero-interest-rate policy … just as an addict craves crack cocaine” — a position he has since reversed as Trump has turned on the Fed’s efforts to dampen any potential inflationary pressure and keep the economy in check as it absorbs the Republican tax cut and other expansionary measures.
“We think it is probable Moore will be confirmed but his performance in a confirmation hearing would be very important, especially with his historically divergent views on interest rates,” wrote Brian Gardner, director of Washington Research at Keefe, Bruyette & Woods, in a note to clients. “Republicans have enough Senate seats to confirm him without Democratic help. It would just be a question of whether or not he would lose support from any Republicans, which would put his nomination in danger.”