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Trump calls Jerome Powell and Fed 'boneheads,' former economic adviser says he's right

Stephen Moore, a former economic adviser to President Trump, gives the Federal Reserve Board of Governors a failing grade, agreeing with his former boss.

“Every meeting I have with Donald Trump, he spends railing against Chairman Powell,” Moore told Yahoo Finance’s On the Move. Trump has frequently criticized the Fed and Chairman Jerome Powell for raising interest rates last year and for failing to lower rates to zero this year. Trump even recently called members of the Federal Reserve “boneheads.”

“They made two major mistakes in September and December” of last year when the Fed raised rates, Moore said. “It was a catastrophically bad decision,” that led to a big drop in stocks at the end of 2018.

The Fed has cut interest rates three times this year. The target range for the federal funds rate is now 1.5% to 1.75%. The FOMC is expected to pause when it issues its latest monetary policy statement Wednesday afternoon.

Earlier this year, right before Trump nominated Moore to fill one of the vacant seats on the Fed’s Board of Governors, Moore said: “They should all be fired and they should be replaced by good economists." His opinion was in sync with Trump at the time. “There's no bigger swamp in Washington than the Federal Reserve Board. It's filled with hundreds of economists who are worthless, who have the wrong model in their mind,” Moore had said.

Moore believes Trump got what he always wanted — lower rates. “I am a big believer president’s get the monetary policy that they want.” Moore said the performance of the U.S. economy this year is proof that Trump was correct about interest rates being too high last year.

“Now we’ve got the lowest inflation and the lowest unemployment rate in 50 years,” he said. “The Fed is in a lot better place today than it was a year ago.”

Trump’s ‘own people’

Moore, who withdrew from the Fed nomination after his controversial Fed comments and articles he wrote several years ago deriding women resurfaced, said Trump wants people who agree with his monetary policies inside the Fed.

Trump picked Judy Shelton last spring to be nominated to the Fed, but Republicans on the Senate banking committee have asked him to delay the nomination. Moore, who still frequently speaks to the president, thinks Shelton would be a good fit.

“Judy Shelton thinks like Trump does,” Moore said. “He wants to put his own footprint and fingerprint on the Fed and I think he wants his own people.”

Adam Shapiro is co-anchor of Yahoo Finance On the Move.

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