“The only thing that really worries me about the economy right now is what the Fed is doing,” said Moore, co-author with conservative economist Art Laffer of the book “Trumponomics.”
In a “Squawk Box” interview, Moore disputed the notion that the Fed needs to hike rates in order to create room for future cuts should a recession materialize. “The Fed is what’s going to put us in the next recession if they keep raising rates,” he warned.
The Fed holds its final policy meeting of the year next week, and it’s expected to raise rates for the fourth time in 2018. But with developing signs of pockets of weakness in the economy and the recent turmoil on Wall Street, the market puts low odds on any hikes next year. After its September rate hike, the Fed had projected three increases for 2019.
Moore said the Trump tax cut, which he helped craft, was designed to boost wages. “[But] as soon as we get the wages up, the Fed says, ‘Oh my God, that’s inflationary! We have to pull back on the money supply.’ How are we ever going to get wages up in this country if every time we have a wage increase the Fed is pulling it back?”
Last week, Moore’s “Trumponomics” co-author Laffer told CNBC he’s actually a “huge fan” Powell, who was appointed by Trump. “I think he’s done a great job in normalizing interest rates,” said Laffer, formerly an economic advisor to Trump and President Ronald Reagan.