Ripping “absurd Federal Reserve Board policy” as the cause for the stock market selloff, economist Stephen Moore called for Federal Reserve Chairman Jerome Powell and his board to be “thrown out for economic malpractice” and “sucking the oxygen out of this booming economy President Donald Trump created.
“I think the trigger for this massive sell off has been an absurd Federal Reserve Board policy that I believe the people on the Federal Reserve Board should be thrown out for economic malpractice,” Moore told Sunday’s “The Cats Roundtable” on 970 AM-N.Y. “What they did on Wednesday when the Fed Chairman was speaking and telling the world that they were going to raise the interest rates – the stock markets, just in the 45 minutes he was speaking, dropped by 600 points.
“And there is no inflation in the economy right now. They’re sucking the oxygen out of this booming economy that Trump has created.”
After meeting with President Trump and economist Art Laffer last week, Moore told host John Catsimatidis that Trump is considering firing Powell as chairman of the Fed.
“He was infuriated that the Fed, through very tight monetary policy, reversed the economic expansion,” Moore told Catsimatidis. “This has been the best year for the real economy: jobs, industrial production, manufacturing, construction, low unemployment rate, seven million more jobs than people to fill them. This is been the best year for the economy in at least 20 years.
“The stock market is going in one direction, and the real economy is going in another direction.”
Moore is staying optimistic for 2019, adding a viable trade deal with China would overcome the Fed’s rate hikes and make for the biggest stock market rally in history, because there is “deflation” not inflation in a still strong growth economy, he said.
“We do not have an inflation problem in my mind,” Moore, the author of “Trumponomics: Inside the America First Plan to Revive Our Economy,” said. “What we have right now is a deflation problem. You can see that in housing. You can see that in commodities. The Fed has done exactly the wrong thing and Donald Trump is right. He criticized them the first time they raised rates back in September and he was right about that. And then they turned around and doubled-down on a bad policy. And it’s really doing damage. . . . I do not see a recession on the horizon.”
“. . . I don’t understand why people are standing on the ledge ready to jump out the window. I just think it’s irrational. Alan Greenspan once talked about irrational exuberance. We have irrational fear right now.”
As for the authority to actually fire Powell, a Fed chair the president had picked to replace Janet Yellen?
“Donald Trump wanted to drain the swamp,” Moore told Catsimatidis. “Well, John, the Fed is the swamp. The big question now that’s been debated about is whether Donald Trump has the authority as president to replace the Federal Reserve Chairman.
“The law says he can replace the Federal Reserve Chairman for cause. I would say, well, the cause is that he’s wrecking our economy.”