‘General Concern’
Earlier in the day, Representative Hakeem Jeffries of New York, a member of the Democratic House leadership, said that there’s “general concern” in the party about whether Trump understands the need for Fed independence, and whether he is trying to pressure the central bank for lower interest rates before the 2020 election.
Concerns about its independence have been exacerbated by Trump’s announcement that he planned to nominate political loyalists Moore and Cain, said House Speaker Nancy Pelosi.
“These two appointments to the Fed are the worst, ill-suited appointments that the president could come up with,” Pelosi told reporters, pointing out that Vice President Mike Pence said earlier Thursday that Cain and Moore share Trump’s views on the economy.
“If the vice president is saying that they share his view, does that mean meddling with the Fed? The Fed is an independent agency,” she said. “We as House Democrats have always said the Fed should be determining the rates, not politicians. That is a dangerous thing for the economy.”
The president has said privately he knows Cain will have trouble getting confirmed to the Federal Reserve Board, people familiar with the matter said Thursday.
Trump, who picked Powell as Fed chairman, has criticized the Federal Reserve’s rate increases as it tried to gradually move them to a level that neither brakes nor stimulates growth.
The hikes have slowed some segments of the economy, such as housing, but overall the expansion continues along with low unemployment and prices near the Fed’s 2 percent target. The Federal Reserve raised rates four times in 2018, but paused at its first two meetings in 2019 saying it will be “patient” as it assesses the need for any additional changes in the policy rate, now in a range of 2.25 percent to 2.5 percent.
Lately, Trump has urged the Fed to cut rates to turn the economy into a “rocket ship.’’
Challenging the Fed