President Donald Trump said Friday that he will nominate Stephen Moore, a conservative economic analyst, to fill a vacancy on the Federal Reserve’s seven-member board.
Moore, a well-known and often polarizing figure in Washington political circles, served as an economic adviser to Trump during the 2016 presidential campaign. In that role, he helped draft Trump’s tax cut plan.
Trump has been harshly critical of the Fed’s rate increases last year even after the central bank this week announced that it foresees no hikes this year. Moore, who has served as chief economist for the conservative Heritage Foundation, has also been critical of policy moves made by Chairman Jerome Powell, who was hand-picked by Trump to be Fed chairman.
An ardent defender of tax cuts, Moore is close to Larry Kudlow, head of the White House National Economic Council. The two collaborated in shaping the tax overhaul that Trump signed into law at the end of 2017, leading to changes that largely favored tax cuts for corporations and wealthier Americans with the idea of spurring investment and faster growth.
Reshaping Central Bank
Trump in his first two years in office has been able to reshape the central bank. He nominated four of the current five members. And he tapped Powell, a Republican who had been chosen for the Fed board by President Barack Obama, to succeed Janet Yellen as chairman. If confirmed by the Senate, Moore would fill one of two vacancies on the Fed’s board.
The selection of Moore marks a deviation from Trump’s previous selections for the Fed’s board to a highly visible public figure who has long pushed conservative economic ideology. In a March editorial in The Wall Street Journal, Moore estimated that Fed rate policies had reduced inflation-adjusted economic growth by as much as 1.5 percentage points in the past six months. Moore proposed that the Fed set short-term rates with an eye toward stabilizing commodity prices, rather than solely on overall inflation.
This approach, Moore has argued, would have prevented the Fed from raising rates as much as it has. And he contended that the approach, if adopted, would help accelerate economic growth above 3 percent, compared with the longer-run average of 1.9 percent that Fed officials have forecast.
Moore has frequently praised the administration on television, and he co-wrote the 2018 book “Trumponomics.” His partner on that book was Art Laffer, who pioneered the Republican doctrine that lower tax rates would accelerate economic growth in ways that could minimize debt. Federal debt has jumped since Trump’s overhaul to the tax code, surging nearly 77 percent through the first four months of fiscal 2019 compared with the previous year.