WASHINGTON (AP) — The withdrawal Thursday of Stephen Moore, President Donald Trump's choice for the Federal Reserve board, has thrown a spotlight on the tough task Trump has set for himself: Finding a rare conservative ally who both favors cutting interest rates and is respected enough to win Senate
Frustrated by the Fed's handling of rates under Jerome Powell — his own choice to be chairman — the president tapped two outspoken political boosters to fill a pair of vacancies on the Fed's board. One, Herman Cain, withdrew from consideration last week amid renewed scrutiny of sexual harassment and infidelity allegations that first surfaced during his 2012 presidential campaign.
The Fed can function normally with less than a full complement of members, although Trump appears to want to install perceived loyalists on the board to press for rate cuts. That effort puts him in conflict with the Fed's hard-won independence from political influence, which is widely regarded as vital to healthy markets and stable prices.
Many economists, both liberal and conservative, suggested that Moore was chosen mainly for his allegiance to Trump's priorities. He had long identified as an inflation"hawk" who favored keeping rates high enough to fight inflation, even when the economy was weak. Lately, he sounded much more like a"dove," aligned with Trump's demand for low rates even with the economy on solid footing.
Moore, who works at the conservative Heritage Foundation, has written ideological commentaries for more than two decades. He also founded the Club for Growth, a political group dedicated to pushing for tax cuts. That's a vastly different profile from most previous Fed officials, who typically come from the ranks of academia or business.
"You're drawing from the Republican ranks, and a lot of those individuals are going to have a history of being hawkish, particularly during the past decade," said Tim Duy, an economics professor at the University of Oregon.
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