Top White House economic adviser Larry Kudlow told FOX Business that President Trump is not trying to “damage” the Federal Reserve’s independence but rather reshape their thinking of the American economy.
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“We have a point of view, the president has the point of view with which I concur, and that point of view is that [the] Fed went too far [with rate hikes] and we’re concerned not about the immediate [economy]. The immediate economy looks good,” he told FOX Business’ Stuart Varney on Friday.
“This is a precautionary view on our part,” he added. “We have not had a strong economy like this in several decades – I don’t want any threats to it if possible.”
Trump said that he intends to nominate former presidential candidate Herman Cain and Heritage Foundation economist Stephen Moore to serve on the Federal Reserve’s Board of Governors. When Varney asked whether Trump is politicizing the Fed with the proposal, Kudlow responded: “President Trump has every right in the world to make his appointment” and “this is a new era and you have new policies to rebuild the economy.”
“I believe more people working with productivity on the heels of supply side tax cuts and deregulation is actually going to increase growth and reduce the inflation rate,” he said. “And I think some of the old school thinking and some of the old econ metric models in the Central Bank could use a little fresh air, a little different opinion about that.”
Trump while speaking to reporters at the White House on Friday said despite a good economy, if the Fed dropped rates and got rid of quantitative tightening “you would see a rocket ship.”