Moore Breaks With Trump Over Call for Rate Cut Before Withdrawal
(Bloomberg) -- Stephen Moore, who had been picked by Donald Trump for a seat on the Federal Reserve Board, said he disagreed with the president’s call earlier this week for a sharp cut in interest rates, hours before pulling out of consideration for the post.
Trump, in a pair of tweets on Tuesday, called for a full percentage-point cut in interest rates and a resumption of bond buying to stimulate the economy just as the central bank was meeting to discuss monetary policy.
Prior to his withdrawal, Moore said Thursday in an interview on Bloomberg Television that “I’m not so sure I agree with the White House that we should cut rates by an entire percentage point,” adding that “I just don’t see the case for that right now.”
Moore continued, however, to characterize the Fed’s December rate hike as “economic malpractice” in a separate meeting with reporters and editors at Bloomberg News, adding that he had no objection with the Fed’s decision on Wednesday to leave rates unchanged. He also said he was “all in” on getting onto the Fed and gave no indication he was pulling out.
“What they did yesterday is fine,” he said. “But I do think the Fed has been too tight in the last six months.”
Moore, a Heritage Foundation fellow and a former Trump campaign adviser, had faced an uphill fight to secure enough support in the U.S. Senate to win a seat on the Fed’s Board of Governors. A handful of Republican senators voiced concern over his past comments on issues ranging from economics to women in the workplace.
Moore said he believed in the importance of Fed independence, but also said the president should be able to criticize the central bank if he thought officials had erred.
“The president is the CEO of our economy and when the Fed makes a mistake, I’m not so sure it’s inappropriate for the president to speak out,” he said.
“What happens when the Fed screws up?” he said. “Real people were really hurt by what happened in December. This isn’t a game -- two or three trillion dollars of wealth was just eviscerated because of the mistake that the Fed made. Who are they accountable to?”
Under the Federal Reserve Act the central bank is accountable to Congress, requiring it to report on monetary policy and its leaders to testify before lawmakers twice a year.
©2019 Bloomberg L.P.