Stephen Moore: "We Do Not Have An Inflation Problem," We Need To Be Putting More Liquidity In The Economy

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Economist and conservative commentator Stephen Moore said Sunday that the Federal Reserve is "the swamp" and President Trump needs to drain it, even if it means exercising his power to remove Federal Reserve Chairman Jerome Powell.

In an interview with radio host John Catsimatidis on Sunday, Moore argued that Powell and the Fed are "wrecking our economy" by raising interest rates and unloading debt accumulated from quantitative easing. Moore, a fellow at the Heritage Foundation, said there is no inflation problem and called for more liquidity to be injected into the economy because "there's such a demand" for the U.S. dollar.

"We need to be putting more dollar liquidity into the economy because there's such a demand for dollars now all over the world," Moore declared. "Everybody wants to invest in the United States and at the same time, the world wants more dollars. The Fed is sucking them out of the economy and it has really hurt the stock market."





"Donald Trump wanted to drain the swamp," he said. "Well, John, the Fed is the swamp. The big question now that's been debated about is whether Donald Trump has the authority as president to replace the Federal Reserve Chairman. The law says he can replace the Federal Reserve Chairman for cause. I would say, well, the cause is that he's wrecking our economy."

Moore also blamed the Fed for the ongoing market selloff and for sucking the oxygen out of the "booming economy."

"I think the trigger for this massive sell off has been an absurd Federal Reserve Board policy that I believe the people on the Federal Reserve Board should be thrown out for economic malpractice," he said.

"There is no inflation in the economy right now," Moore declared. "They're sucking the oxygen out of this booming economy that Trump has created."

Moore said if anything we have a deflation problem. He also said the Fed has doubled-down on bad policies but does not predict a recession.

"We do not have an inflation problem in my mind. What we have right now is a deflation problem," Moore told Catsimatidis. "You can see that in housing. You can see that in commodities. The Fed has done exactly the wrong thing and Donald Trump is right. He criticized them the first time they raised rates back in September and he was right about that. And then they turned around and doubled-down on a bad policy. And it's really doing damage... I do not see a recession on the horizon."

From this week's broadcast of 'The Cats Roundtable' on WNYM-AM:

STEPHEN MOORE: I think the trigger for this massive sell off has been an absurd Federal Reserve Board policy that I believe the people on the Federal Reserve Board should be thrown out for economic malpractice. What they did on Wednesday when the Fed Chairman was speaking and telling the world that they were going to raise the interest rates – the stock markets, just in the 45 minutes he was speaking, dropped by 600 points.

And there is no inflation in the economy right now. They're sucking the oxygen out of this booming economy that Trump has created...

He was infuriated that the Fed, through very tight monetary policy, reversed the economic expansion. This has been the best year for the real economy: jobs, industrial production, manufacturing, construction, low unemployment rate, seven million more jobs than people to fill them. This is been the best year for the economy in at least 20 years.

The stock market is going in one direction, and the real economy is going in another direction...

We do not have an inflation problem in my mind. What we have right now is a deflation problem. You can see that in housing. You can see that in commodities. The Fed has done exactly the wrong thing and Donald Trump is right. He criticized them the first time they raised rates back in September and he was right about that. And then they turned around and doubled-down on a bad policy. And it's really doing damage... I do not see a recession on the horizon.

I don't understand why people are standing on the ledge ready to jump out the window. I just think it's irrational. Alan Greenspan once talked about irrational exuberance. We have irrational fear right now...

We need to be putting more dollar liquidity into the economy because there's such a demand for dollars now all over the world. Everybody wants to invest in the United States and at the same time, the world wants more dollars. The Fed is sucking them out of the economy and it has really hurt the stock market...

Donald Trump wanted to drain the swamp. Well, John, the Fed is the swamp.

People are taking out their wallet and are spending money. If only the Fed would loosen up a bit so that we don't have a recession. That's my only real worry right now...

There's a big question now that's being debated about whether Donald Trump has the authority as president to replace the Federal Reserve Chairman. As you know he was the one who put him in that position. What the law says, I believe, is he can replace the Federal Reserve Chairman for cause. And, you know, I would say, well, the cause is that he's wrecking our economy.

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