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Fed nominee Moore says December rate hike was a big mistake

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By Craig Torres and Rich Miller

Federal Reserve nominee Stephen Moore called the Feds December interest-rate hike “a very substantial mistake” while adding that he looks forward to working with Chairman Jerome Powell to help ensure the US economy continues to expand.

“Everyone would now acknowledge that what they did in December with the rate increase — it was a very substantial mistake,” Moore said in an interview Friday with Bloomberg Television. Asked about whether a rate cut is needed, he said “Im not sure about that — Id have to take a closer look at it.”

Hours earlier, President Donald Trump announced plans to nominate Moore for one of two vacancies on the Feds seven-seat board, confirming an earlier Bloomberg News report. The president later said in a tweet that Moore is “a very respected economist” and said he has “no doubt he will be an outstanding choice.” Nominees for the job are subject to Senate confirmation.

Moore, an economist at the conservative Heritage Foundation, said in the interview that he and Trump “think a lot alike” when it comes to economics. “I really believe we can have 3 to 4 per cent growth for next five to six years.”

Fed officials on Wednesday penciled in a long-term growth estimate of 1.9 per cent for the US economy.

“I dont want to be a disruptor,” Moore said. “I want to be somebody who can really help Chairman Powell and the others on that board to construct to the best pro-growth, stable price system that we can for this country.”

In a radio interview in December, Moore said that Powell and others members of the Fed board “should be thrown out for economic malpractice after raising rates that month.

Speaking to Bloomberg on Friday, Moore said that comment was probably made “in anger and he repeatedly emphasized his willingness to work with and learn from policy makers and officials at the Fed.

He argued that Trumps policies had created a global demand for dollars by increasing the attractiveness of the US as a place for investment and said the Fed had worked at cross purposes to that by tightening credit and withdrawing money from the economy.

Deflation Worries
As a result, “Im worried more on the deflation side right now than the inflation side, he said, pointing in particular to a broad-based fall in commodity pricRead More