President Trump was elected as a Washington outsider and a political and economic disruptor — someone to fight for the people, not his own political donors or Washington lifers.
However, when it comes to appointing a member to the Federal Reserve, congressional approval is required.
And it became clear early on that while many on Capitol Hill genuinely like and respect Stephen Moore and his economic and political philosophies, the Senate was going to have a hard time confirming him.
I am not a fan of Moore’s words on male and female pay. I feel all people are created equal, so equal pay for equal work only makes sense in a capitalistic economy. Economics knows no gender.
I do, however, believe his economic pro-growth rhetoric — while refreshing to many and validated in this recent expansionary economic ramp-up — would have shaken the lethargy at the Fed to its core.
And that would have been a good thing.
The Fed’s primary problem, and the US economy’s primary problem for quite some time, is that the Fed has gotten away from its dual mandate, which are maximum sustainable employment and price stability.
The Fed absolutely needs to stay away from discussing the stock markets, only commenting or acting in a real crisis.
It’s simply not its mandate, unless the market threatens financial stability, as it did in 2008.
In particular, it should avoid commenting on a rising stock market, during a Goldilocks-type economy.
On Wednesday, Fed chief Jerome Powell said stocks may be somewhat or slightly elevated.
I don’t care if Powell thinks 16 or 18 times earnings on the S&P 500 is appropriate. That’s what stock market analysts do.
Powell can comment on bonds if he must, as they are in the Fed’s toolbox and it is the single largest holder of US government debt.
Just leave stocks alone.