White House defends Trump’s Fed choices
WASHINGTON: A top White House adviser defended President Donald Trump’s controversial choices to fill two empty seats on the Federal Reserve, rejecting criticism that he is politicizing the central bank.
“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.
The Fed has traditionally been insulated from politics, but Trump has heaped pressure on its chairman Jerome Powell to ease interest rates to keep the US economy fired up.
Trump is banking on a strong economy as a chief selling point when he runs for re-election next year.
And in what some have seen as an attempt to bring pressure from the inside, Trump has put forward Herman Cain and Stephen Moore for seats on the Federal Reserve Board.
Cain is a controversial choice both for his economic philosophy and for his political baggage, having dropped a White House bid in 2011 amid accusations of sexual misconduct.
“We are going through a vetting process in the White House.
“I’m sure the Senate Banking Committee will do likewise,” Kudlow said of the allegations, which Cain denies.
“I’m not going to litigate that here.”
Cain, who served on the board of the Federal Reserve Bank of Kansas City in the 1980s and ‘90s, advocates a return to the gold standard and the imposition of a national sales tax.
Moore is an economic commentator with no previous experience with the Fed or its operations.
But Kudlow said Trump favours Cain and Moore because they share his view that, in the absence of inflation, the central bank should continue to stimulate the economy with low interest rates.
“You don’t have to rush pell-mell into tightened policy and raising rates just because the economy is growing.
“That’s President Trump’s key point,” Kudlow said.
He said the administration is worried “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.
“So look, I’m not here to buck that independence,” he said referring to the Fed.
“I’m saying we have two open seats on the board.
“The president has every right in the world to nominate people who share his economic philosophy.
“That is: more people working is a good thing, not a bad thing.” — AFP