Trump adviser says Trump not trying to hurt Fed independence

Roman Schwartz
April 10, 2019

Former Republican presidential candidate Herman Cain said he will face a "cumbersome" process as he is vetted for a seat on the Federal Reserve Board.

"We have two open seats".

He then said that Trump "has every right in the world to nominate people who share his economic philosophy".

A leading economics advisor to President Donald Trump claims the administration isn't trying to damage the freedom of the Federal Reserve by appointing two of the close political allies of Trump into the Fed board.

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 past year was going faster than expected.

Since January, the Fed has switched course and signaled that it doesn't plan to raise rates this year and announced it will stop this season is program to reduce its bond holdings.

But "there is no inflation", Mr. Kudlow said.

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He said the administration is anxious "that the central bank is not taking account of a weak world economy, some financial tightening in the marketplace, and here is the key point - there is no inflation". Now he is even calling for interest rate cuts and further easing of monetary policy. "I've recommended him highly for the Fed".

That idea "has been disproven for decades", he said.

"We've seen - whether it's Supreme Court justices or many other things, we've seen a lot of charges here".

"President Trump has every right to put people on the Federal Reserve Board with a different point of view", Larry Kudlow, director of the National Economic Council, said on CNN's "State of the Union". "This is not a political issue".

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.

Cain made his fortune as chief executive of Godfather's Pizza before launching a bid for the Republican presidential nomination in 2012.

But his popularity slipped amid sexual harassment allegations from several women, which he denied as "completely false".

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