U.S. President Donald Trump nominated Herman Cain and Stephen Moore for the Federal Reserve Governing Board, a contentious move amid escalating tension between him and the central bank leadership, as Trump continues to ask for easy monetary policy while the Fed is opting for tightening the monetary policy.
“We have two open seats. The president has every right in the world to nominate people who share his economic philosophy,” said the White House Economic adviser Larry Kudlow in defense of Trump.
In a paper published last Friday, the Federal Reserve justified its policy position and tried to counter Trump's claims about "quantitative tightening." The president was reported saying the economy would turn into a "rocket ship" if the Fed opted for dropping the interest rates and that its current stance is thwarting economic growth.
Now his choice of nominees has fanned the flames of controversy, as he is accused of trying to hinder the central bank's independence. Worse, Trump’s nominees’ credentials are put on doubt by the members of his own political party.
“I think the administration is concerned about growth and has every right to weigh in on what they think our monetary policy should look like, but I would say I support an independent Fed and for the Fed to do what they see as appropriate,” said the Republican politician Sean Duffy.
Whether Moore or Cain will be approved by the United States Senate is still not clear, as many Senate Republicans have expressed their preference for waiting for confirmation hearings before determining their preferred choice.
Moore and Cain have held controversial positions in the past, like advocating for returning to a Gold Standard, a view that is overwhelmingly rejected by most modern economists. Besides this, Moore has been reported calling for abolishing the Federal Reserve and for tying the interest rates to commodity prices.
Trump's feud with the Federal Reserve is not a new phenomenon since Trump has been reported considering firing the Fed Chairman Jerome Powell in the past. However, the White House has declared that the president is currently not planning to do so.