Trump’s Fed Pick Appears on Bloomberg TV, Then Is Gone

(Bloomberg Businessweek) -- This much we know about Stephen Moore, who is no longer President Trump's candidate for a seat on the Federal Reserve's Board of Governors:

1. Moore told Bloomberg News at a meeting with reporters over breakfast on Thursday morning that he had spoken to someone at the White House on Wednesday and had no indication he would not be nominated. “My biggest ally is the president,” he said. “He's full speed ahead.”

2. Right after the breakfast, which was at Bloomberg's Washington offices, Moore went on Bloomberg TV and said, “I'm not so sure I agree with the White House that we should cut rates by an entire percentage point.” He added, “I just don't see the case for that right now.” For those who didn't catch it live, Moore's statement appeared on the Bloomberg terminal at 10:44 a.m.

3. At 12:29 p.m., Trump tweeted that “Steve Moore, a great pro-growth economist and a truly fine person, has decided to withdraw from the Fed process.” He praised Moore for winning the “battle of ideas” over tax cuts and deregulation.

We may never know what happened between Moore and Trump, but here are two conflicting theories, both centered on Moore's disagreement with Trump over a rate cut.

One is that Moore knew his candidacy was fatally wounded over personal issues involving back taxes and accusations of sexism. So he tried to change the narrative by publicly disagreeing with the president, inviting his failure to be portrayed as a matter of principle.

An alternative theory is that Moore still thought he could get the Fed job but for some reason chose to be honest about his views on monetary policy. (As former Bloomberg View columnist Michael Kinsley said, a gaffe is when a politician tells the truth.) Trump caught wind of what Moore said and decided to ax him, because Trump brooks no disloyalty. 

Whatever happened, happened quickly. Bloomberg's Joshua Green tweeted at 12:32 p.m. that he had spoken with Moore half an hour earlier—that is, after the TV appearance and only half an hour before Trump's tweets—and Moore was continuing to say that his nomination was “full speed ahead.” 

Moore's explanation is that he withdrew for family reasons. “The unrelenting attacks on my character have become untenable for me and my family and 3 more months of this would be too hard on us,” he wrote in a letter to the president that was distributed to reporters by email. He added that “Trumponomics have been VINDICATED” and said, “I will continue to be a loud economic voice advocating for your policies,” followed by: “I am always at your disposal.” 

Trump nominated two toxic candidates—Moore and Herman Cain—to the Fed board, and now both candidacies have blown up on him. Trump may double down and nominate other candidates who are strongly pro-Trump. He might go more for apolitical technocrats in the model of Fed Chairman Jerome Powell and Vice Chairman Richard Clarida. Or he may just sit back and leave the two seats empty for a while. 

To contact the editor responsible for this story: Eric Gelman at egelman3@bloomberg.net

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