June 25, 2019

Trump Says Fed Should Cut Rates and Lift Economy

“We are facing a worldwide slowdown. You know, recession, arguably,” Mr. Kudlow said. “Europe is not doing well. Germany itself may be in recession. That troubles us.”

Lawrence Summers, a former Treasury secretary under President Bill Clinton and the chairman of the National Economic Council under President Barack Obama, said Mr. Trump’s comments suggested the president’s “raw, total confusion” on monetary policy.

“The president publicly debating the Fed undermines confidence in our currency and our country,” Mr. Summers said in an interview. “Easing is probably premature. And if we were going to ease, the right way would be rate cuts, not bond buying.”

Mr. Trump’s selection of Mr. Moore and Mr. Cain for the Fed board is a marked shift from his previous nominations. The president has tended to tap largely conventional candidates for the seven-member Fed board, not loyalists or those with starkly contrarian views. His choice of Mr. Powell for chairman was seen as a vote for consistency on the Fed, given Mr. Powell’s approach was expected to be — and indeed has been — in line with his predecessor, Janet L. Yellen, who called for a moderate pace of rate hikes.

His three other Fed appointments have also been fairly unsurprising choices — Richard Clarida, whom he appointed as Fed vice chairman, was a Columbia University economist and a scholar in monetary policy. Randal K. Quarles, who oversees bank supervision, worked in the financial industry and at the Treasury Department in previous Republican administrations and Michelle W. Bowman was the state bank commissioner of Kansas.

Still, Mr. Trump has already faced some pushback on his Fed choices. Two of his original nominees failed to gain approval in the Senate. Nellie Liang, an economist and financial regulation expert, withdrew her name from consideration after Senate Republicans made clear they would not vote to confirm her. And Marvin Goodfriend, a professor at Carnegie Mellon University and a former monetary policy adviser to the Federal Reserve Bank of Richmond, Va., languished in the last Congress after lawmakers questioned his previous views on inflation.

Whether the Senate would confirm either Mr. Moore or Mr. Cain remains unclear. For now, most Senate Republicans have said they will wait for confirmation hearings before determining their vote.

Article source: https://www.nytimes.com/2019/04/05/business/economy/trump-fed-interest-rates.html?partner=rss&emc=rss

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