Pence joins chorus: Fed should consider rate cuts
U.S. Vice President Mike Pence said on Friday the Federal Reserve should consider cutting interest rates given the absence of inflation in the economy, joining President Donald Trump and Trump`s top economic adviser in pressuring the central bank.
"There`s no inflation; the economy is roaring," Pence said in an interview with CNBC. "This is exactly the time, not only to not raise interest rates, but we ought to consider cutting them."
Pence made the remarks after the government released a report showing strong job growth last month and a drop in the unemployment rate to a more than 49-year low of 3.6 percent -- a performance he credited to the Trump administration`s tax- and regulatory-cutting policies. [nLNS3GEF3B]
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The independent central bank, whose policymakers pride themselves on standing above politics, held rates steady at a two-day meeting that wrapped up on Wednesday and signaled little appetite to adjust them any time soon. [nS0N21R01C]
Trump and the head of the White House National Economic Council, Larry Kudlow, have been calling for rate cuts from the Fed for weeks.
On Tuesday, Trump suggested in a tweet that the Fed, which normally adjusts rates in quarter-percentage point increments, should lower them by a hefty full point and buy bonds to drive borrowing costs lower. "We have the potential to go ... up like a rocket if we did some lowering of rates, like one point, and some quantitative easing," he wrote on Twitter.
The public calls for an easier monetary policy from the president and other top White House officials represent a break from the practice of other recent administrations, which had purposely steered clear from commenting on Fed policy.
Asked about the president`s remarks at a news conference on Wednesday, Fed Chairman Jerome Powell said the central bank was non-political and did not take them into account.
In an interview with Fox Business Network on Friday, Kudlow said he thought the Fed was mulling a rate reduction, even though Powell had said on Wednesday that the central bank did not see "a strong case" for moving rates in either direction.
"With these low inflation numbers, I think the Fed is actually looking at rate cuts," Kudlow said. "Our views right now intellectually are not really far apart from the Federal Reserve, best I can determine."
Trump had hoped to nominate businessman Herman Cain and economic commentator Stephen Moore for two open Fed board seats in an effort to shape the central bank more to his thinking. Moore had publicly advocated rate cuts and Cain was also widely believed to favor an easier monetary policy.
Both men withdrew from consideration, however, amid opposition in the Senate, which would have had to confirm them in the posts.
"I think the president is very interested in bringing fresh ideas to the Federal Reserve Board," Pence told CNBC.
One top Trump economic adviser, White House Council of Economic Advisers Chairman Kevin Hassett, told CNN on Friday he would not be among the nominees the president puts forward.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)