FLASH: Top White House officials Sunday defended President Trump’s plan to name 2 political loyalists to the Fed’s board of governors, brushing aside controversies over their personal lives and qualifications to help run the world’s most powerful central bank.
White House economic adviser Larry Kudlow and acting White House Chief of Staff Mick Mulvaney used appearances on Sunday morning talk shows to defend President Trump’s plan to nominate economic commentator Stephen Moore and businessman and former presidential candidate Herman Cain to fill open board seats at the Fed.
“The President stands behind both of those gentlemen right now,” Kudlow said on TV.
“We have 2 open seats. The President has every right in the world to nominate people who share his economic philosophy.”
President Trump has been highly critical of Fed Chairman, Powell, after a series of interest rate increases and other actions last year this President feels have held back an economy that would be otherwise growing like a “rocket ship.”
The rate increases have left the central bank’s target interest rate still low by historical standards, and among monetary policy officials were considered a cautious hedge against a return of inflation in an economy that last year was going faster than expected. Keeping inflation under control is a Key mission of the Fed, and higher rates help do so by discouraging borrowing and spending.
But “there is no inflation,” Larry Kudlow said. Instead there was “worry that the central bank is not taking account of a weak world economy, some financial tightening in the marketplace,” and made monetary policy too restrictive.
Messrs Cain and Moore have not yet been formally nominated, pending the completion of background checks, and would have to be confirmed by the US Senate.
On policy issues, the 2 men have been criticized as overtly political picks whose views of the economy have shifted based on the party in power, and who critics worry would try to shape monetary policy with President Trump’s political interests in mind.
Chief of Staff Mike Mulvaney said Herb Cain “would be a great member of the Fed.”
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