Trump’s plans to nominate the two political allies followed his repeated criticism of the Fed for raising interest rates last year and his reported musings about whether he could fire Fed Chairman Jerome Powell.
USA Today reporters Paul Davidson Michael Collins break down why the potential nominations of Moore and Cain have caused such an uproar.
Trump has made many unorthodox picks for Cabinet and other posts. Why have these two generated such controversy?
Simply put, the Fed is a different species than, say, the Department of Education or Environmental Protection Agency. It’s an independent agency that has a long tradition of remaining insulated from politics so it can do what’s best for the economy. The Fed lowers interest rates to stimulate a sluggish economy and raises rates to head off excessive inflation. A hike in rates makes mortgages and other loans more expensive for consumers and businesses, crimping economic growth. But the goal is to prevent runaway inflation down the road that could plunge the economy into recession.