May 14, 2021

The favorite candidate of Trump to the Federal Reserve, favorable to lower rates

The favorite candidate of Trump to the Federal Reserve, favorable to lower rates

The favorite candidate of the US president, Donald Trump, to join the Federal Reserve (Fed), the economist Stephen Moore, said in an interview published on Wednesday by The New York Times that the central bank should lower interest rates in half a percentage point.

Last Friday Trump said that Moore, associated with the conservative think tank Heritage Foundation, was his favorite to occupy a seat as governor in the Fed and, in the absence of official nomination, have focused national attention on his capabilities and ideas on monetary policy .

Moore, who has been very critical of the current Fed president, Jerome Powell, showed his disagreement with the current central bank policy by reiterating his disagreement with the interest rate hikes in September and December.

The economist, who in the past was part of the editorial board of the newspaper The Wall Street Journal, argued without going into detail because the Fed reversed its monetary approach and even urged the institution to cut half a percentage point in the rates.

Regarding the fourth and final increase of 2018, he retracted the rhetoric he used against Powell – he urged him to resign – but admitted that he was "furious" because the measure was "inexplicable", because "the prices of basic products and they were falling dramatically. "

Also, given his sympathy with Trump, also critical of the monetary policy of the Fed and Powell, Moore acknowledged that they have the same "economic philosophy" and that is why he has chosen him as an economic adviser, but ruled out that he is a "flatterer" of the president. .

"Do we think the president and I similarly in many things? Of course, that's one of the reasons why he chose me as an economic adviser and to be in the Fed, because we share much of the same economic philosophy," he explained. Moore

On the CNBC channel, the chief economist of the White House recalled that Moore has not been nominated by the president and affirmed that if he succeeds, "he will have explanations for his positions" on a cut in interest rates, but it will also have to be "more careful" about what he says.

The Federal Reserve is a decentralized system that has 12 regional branches or banks, whose mission is to implement decisions on monetary policy made by the Federal Open Market Committee at the local level.

According to Wall Street analysts, Moore's opinions have affected the course of the trading session, marked on Wednesday by the decline in yields on public debt to 10 years, days after this reference fell below interest rates. of 3-year securities, arousing fears of a recession.


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