Fed ‘growth hawk’ Stephen Moore: Economists getting economy all wrong
Potential Fed Board candidate and economist Stephen Moore said if he is nominated he will call himself the Fed ‘growth hawk” and believes that his approach to the U.S. economy stands out.
“We want wage increases, I want workers to be better off but I’ve said repeatedly when I get at the Fed I’m going to be the growth hawk there,” he told FOX Business’ Maria Bartiromo on Wednesday. “I’m one of these people, I don’t believe in secular stagnation, it’s the stupidest idea I’ve ever heard.”
Moore said that he harshly criticized the Federal Reserve for hiking interest rates because the U.S. economy was growing, there were no signs of inflation, and employment was high with wage growth. In his opinion, they just didn’t make sense and he also rejected the idea that the U.S. economy can’t achieve high growth.
“A lot of economists just don’t understand this, this is why I think I’m threatening to a lot of the economists--- growth does not cause inflation,” he said. “I’ll say it again—growth does not cause inflation, in fact, growth reduces inflation and this is a fundamental difference between the way I look at things at the world and a lot of other economists.”
Moore said the recipe for 4 percent economic growth is capital investment, good tax policy and increased productivity and innovation.
So where is the growth in the U.S. economy?
Moore believes that capex and productivity is on the rise and employment is good but a trade deal with China could also be “incredibly pro-growth.”
Moore added since the Fed admitted that the December rate increase was a mistake, the economy and stock market have improved.
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When asked whether the Fed should cut rates again, he replied that he wanted to make an “educated decision and talk to Chairman Powell and get a sense of where things are at.”
Moore also vowed to make Powell “the most successful chairman ever.”