Conservative economics writer Stephen Moore told CNBC on Tuesday that the Federal Reserve needs to cut interest rates to boost persistently low inflation.
“If you do that, I think you will see a nice boom in the economy,” said Moore, who last month under pressure withdrew his name from consideration by President Donald Trump for a nomination to the Federal Reserve Board.
“The Fed has to cut rates because prices have been falling and once those prices stabilize you just stop cutting rates,” Moore added in a “Squawk Box ” interview.
However, as Moore was talking about the Fed needing to reduce rates to increase inflation, Trump tweeted Tuesday morning that “VERY LOW INFLATION” is a “beautiful thing.”
In a response to the president’s tweet, Moore initially laughed, saying that “he’s not supposed to put that up.” Then Moore said, “I agree with him. You’ve got a perfect picture right now: You’ve got very low inflation, low interest rates, the tax cut.” He added, “What’s not to like about this picture?”
Trump has repeatedly criticized the Fed for hiking interest rates.
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Central bankers increased the cost of borrowing money four times last year. Talk in the markets earlier this year about the Fed holding rates steady for a while has turned to calls for a cut or even multiple cuts.
The president also tweeted Tuesday morning: “The Euro and other currencies are devalued against the dollar, putting the U.S. at a big disadvantage.” He added the Fed doesn’t have “a clue.”