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President Trump has two vacancies on the seven-member Federal Reserve Board to fill. President Trump previous appointment of Chairman Jerome Powell, a former investment banker, has been contentious. The President claims that Powell has repeatedly attempted to undercut by raising interest rates, which Trump says slows down the economy.
Powell has been able to build consensus with the existing board which includes Richard H. Clarida, Vice Chair, Randal K. Quarles, Vice Chair, Michelle W. Bowlman, and Laell Brainard. Board members are elected to a fourteen-year term. The Chairman and Vice Chairman serve a term of four years.
To date, the existing board as not issued a single dissenting vote to any policy decisions by Chairman Powell since he took the seat in February 2018.
President Trump is looking to appoint Herman Cain to the Federal Reserve Board. Herman Cain could bring much diversity of thought to the board. The President disagrees with how Powell has steered the central bank’s interest rate policy.
Famous for his “9-9-9” tax plan, Herman Cain ran for the 2012 Republican Presidential nomination. Cain is an American politician and author, business executive, radio host, syndicated columnist, and Tea Party activist from Georgia.
His presidential bid was cut after allegations that he sexually harassed women and cheated on his wife. Allegations Cain denied in 2011. Nonetheless, the former CEO of Godfather Pizza’s citing the desire to not drag his wife and family through the political mud bath, withdrew from the race.
Mr. Cain will need Senate Confirmation and there is some concern that the Democrats will bring out the past, never proved, allegations.
Previously Cain served on the board to the Kansas City Federal Reserve
President Trump’s announcement
Today President Trump tells the White House pool that he is recommending Mr. Cain to fill one of the seven seats on the Federal Reserve Board.
“I’ve recommended Herman Cain. A terrific man, a terrific person. He’s a friend of mine,” Trump told reporters in the Oval Office. “I’ve recommended him highly for the Fed. I’ve 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.”
Failed 2012 Presidential candidate now a Senator from Utah, Mitt Romney, does not see Mr. Cain on the Federal Reserve Board.
“If Herman Cain were on the Fed, you’d know the interest rate would soon be 9-9-9,” Romney said in an interview on Thursday afternoon.
Fed and the GDP
Mr. Trump has had a love-hate relationship with the Federal Reserve, saying their actions in late March stopped the 2018 Gross Domestic Product (GDP) from reaching 4%.
According to the Bureau of Economic Analysis, the Real gross domestic product increased 2.2 percent in the fourth quarter of 2018, according to the Bureau of Economic Analysis third-quarter estimate. The growth rate was revised down 0.4 percentage point from the “initial” estimate released in February.
In the third quarter, real GDP increased 3.4 percent
Also chosen for the board is Stephen Moore, a conservative economist, and commentator at the Heritage Foundation. Moore has drawn fire from those who say he’s overly partisan and lacks the economic credentials for a Fed post.