Donald Trump says he is planning to nominate Herman Cain, a vocal political ally and former contender for the Republican presidential nomination, for a position on the Federal Reserve’s board of governors.
Mr Cain, whom the US president described as a “very terrific man”, has been under consideration by the White House since early this year. The decision, which is subject to White House background checks, will heighten concerns that Mr Trump is seeking to put political loyalists on the board following the president’s decision to nominate another supporter, Stephen Moore, for a Fed post.
Mr Trump has been openly campaigning for looser monetary policy and has expressed discontent with his decision to appoint Jay Powell to the Fed chairmanship. The US central bank this year shelved previous plans for interest rate increases, but Larry Kudlow, the director of the president’s National Economic Council, has recently called on the Fed to go further and push through a half-point rate cut.
Mr Cain, a former chief executive of Godfather’s Pizza who once served as chairman of the Kansas City Fed, was a contender for the Republican presidential nomination in the 2012 US election. However, he dropped out of the race following allegations of sexual harassment and infidelity, which he said were false. He would probably face intense questioning on the allegations as well as his policy views and experience if he ends up in front of a Senate confirmation hearing.
Mr Trump on Thursday called Mr Cain a “friend of mine”. He added: “I have told my folks that that’s the man. And he’s doing some pre-checking now and I would imagine he’d be in great shape.”
Mr Kudlow has said Mr Trump is searching for Fed candidates who share his views — meaning they do not believe economic growth lifts inflation. Mr Cain has taken hawkish positions in the past — advocating a return to the gold standard in a Wall Street Journal column in 2012, but more recently has suggested he is more worried about deflation than inflation.
Mr Kudlow insisted this week the White House was “not trying to compromise” the Fed’s independence. “The Fed will move when the Fed moves,” he said. “We can have our own views without breaking the independence of the Fed. That’s not our intent.”
However, some close Fed watchers immediately attacked the president’s proposed appointment. Tim Duy, a professor at the University of Oregon, said that both Mr Cain and Mr Moore were “clearly partisan figures”. The central bank was set up to be independent of politics, he said, but “if you start putting these people in, what is to stop a Democratic president from doing the same”.
Mitt Romney, the 2012 Republican presidential nominee and now a senator from Utah, said “I doubt that will be a nomination” when asked about Mr Cain’s candidacy. He told Politico that the president should be choosing people who are “economists first and not partisans”.
Mr Moore’s candidacy has recently been clouded by revelations that he owes tax-related debts exceeding $75,000 to the federal government. He was also held in contempt of court by a judge in Virginia for failing to pay $300,000 in spousal and child support to his former wife, according to a Guardian article.
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