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Trump to nominated Moore for Federal Reserve board

25 March 2019

The Federal Reserve's patient approach to monetary policy is no guarantee that it will leave interest rates where they are for the rest of the year, the president of the Atlanta Federal Reserve Bank, Raphael Bostic, said on Friday.

Federal Reserve's much more dovish-than-anticipated decisive statement earlier this week had already signaled that another interest rate-hike this year might have already been out of the questions, goading the USA citizens to purchase more in order to keep the wheels of its slowing economy whirling.

"The one guy who gets this is Trump", Moore told the Times. "He'll be great on the Fed".

Asked about what level of inflation would prompt a rate increase, he said he wasn't focused on an exact point estimate.

Moore served as an economic adviser to Mr. Trump during the 2016 presidential campaign and helped draft Trump's tax cut plan. Trump wrote on Twitter on Friday.

"What the law says, I believe, is (Trump) can replace the Federal Reserve Chairman for cause", Moore said during a December radio interview.

Powell also acknowledged that growth is slowing compared to a year ago and will likely continue slowing into 2020, "but we don't see a recession".

Mr Trump has gone from heckling Fed chairman Jerome Powell on Twitter to trying to give one of his allies a hand on the levers of USA monetary policy.

A spokeswoman for Republican Senator Crapo, who leads the Senate banking committee whose support is needed before a Fed governor can be appointed, declined to comment. He nominated four of the current five members. After months of the President's hectoring about interest-rate hikes, Powell in January put monetary policy on hold, then dined with him at the White House a few days later. Moore proposed that the Fed set short-term rates with the goal of stabilizing volatile commodity prices, rather than focusing on targeting overall inflation of 2 percent. The US is facing a slowdown, with February's job creation figures the worst since September 2017, and there are concerns on the horizon of the impact of Donald Trump's trade war with China.

In response to the news, Mike Fratantoni, chief economist of the Mortgage Banker's Associate, said that there were bigger takeaways from the Fed's announcement. But Trump can score points with his core supporters - and with the majority Republicans in the Senate - by embracing a conservative activist for a Fed role that would make him a watchdog over the economy.

Moore has often embraced a confrontational tone in his commentary on the Fed.

Trump picked Moore after speaking with him to compliment him on an opinion article he co-authored in the Wall Street Journal, that newspaper reported earlier, citing a senior administration official.

Trump in his first two years in office has been able to reshape the central bank. "And frankly, if we didn't have somebody that would raise interest rates and do quantitative tightening, we would have been at over 4 [percent] instead of at 3.1 [percent]".

The spread between yields on three-month Treasury bills and 10-year notes fell below zero for the first time since 2007 after US manufacturing data missed estimates.

Moore is a visiting fellow for Project for Economic Growth at The Heritage Foundation.

Moore if confirmed would fill one of two vacancies on the seven-member board.

Trump to nominated Moore for Federal Reserve board