Mounting GOP opposition torpedoed conservative commentator Stephen Moore’s candidacy as a Federal Reserve Board governor Thursday, the latest in a string of setbacks that reveal hardening limitations on President Trump’s attempts to intervene in the economy.
Despite his efforts, Trump has failed to arrest rising gasoline prices and demonstrated little influence over Senate Republicans and Fed officials when he has demanded leaders heed his directives for managing the global economy.
Moore is a longtime Trump ally who served as an economic adviser to Trump during the 2016 campaign. Trump recently revealed he wanted Moore to join the Fed’s seven-member Board of Governors, believing the loyalist would move to halt interest rate increases to speed up growth.
But the selection drew bipartisan criticism because of Moore’s past comments about women and controversial views he held on the economy, among other issues.
In recent days, Moore had attempted to distance himself from many of his past statements, and as recently as Thursday morning, he had insisted he was not withdrawing from consideration.
Just a few hours later, however, Trump wrote in a Twitter statement that Moore was in fact withdrawing from consideration.
“Steve Moore, a great pro-growth economist and a truly fine person, has decided to withdraw from the Fed process. Steve won the battle of ideas,” Trump wrote. “. . . I’ve asked Steve to work with me toward future economic growth in our Country.”
Trump’s effort to plant Moore on the Fed board was another in a string of attempts to use executive authority and the bully pulpit in ways that could goose the economy heading into the 2020 election.
In April, Trump loyalist Herman Cain announced he was also withdrawing from consideration for a spot on the Fed board following bipartisan blowback.
This week, Fed officials declined to slash interest rates despite demands from Trump just 24 hours before. They also appeared to ignore his call to restart a controversial Fed asset-buying program that was used during the recession and subsequent years to help economic growth.
And even though Trump has repeatedly sought to pressure the Organization of the Petroleum Exporting Countries into lowering energy prices, foreign leaders of oil exporters appear to be rebuffing his demands, and the cost of oil is hovering near its highest level since October.
“Everyone worries about overpromising and underdelivering, and he risks taking that to a new extreme,” said Jason Furman, a top economic adviser to President Barack Obama.
Trump has told advisers he believes the economy’s strength will be key to his reelection next year, and he has taken a hands-on approach to try to juice hiring and growth ahead of November 2020.
Many measurements of the economy are stronger than they were before he took office. The stock market is up, economic and wage growth have accelerated, and the unemployment rate has fallen. Many Republicans have cited the 2017 tax law as a key part of the economy’s success.
But Trump has faced criticism for focusing on short-term economic stimulus, including big tax cuts and government spending increases, to heat the economy up more than normal at this point in an economic cycle. The moves to spur growth have also come with long-term risks, including a ballooning federal deficit that would ordinarily be declining during a time of robust growth.
For its part, the Fed, which had been raising interest rates as the economy was improving, stopped doing so this year amid fears of a global slowdown. But amid signs of stronger performance in recent months, Fed Chair Jerome H. Powell made clear Wednesday he could not envision the type of rate cut Trump wants anytime soon.
“We do think our policy stance is appropriate right now,” he said at the conclusion of the Fed’s two-day policy meeting.
Trump’s problems corralling the Fed could be dwarfed by rising oil prices, which many presidents have fought in recent decades, particularly during election years.
Trump has jawboned foreign leaders for more than a year to intervene in oil markets in a way that he hoped would push down prices. Trump insisted as recently as last week that Saudi officials had promised him they would help.
“Spoke to Saudi Arabia and others about increasing oil flow. All are in agreement,” he wrote April 26 on Twitter.
On Saturday, though, his description of relations with Saudi leaders was less sanguine during a speech in Wisconsin.
“We defend them. We subsidize Saudi Arabia; they have nothing but cash,” Trump said. While acknowledging Saudi purchases of U.S. goods, Trump added that he had called the Saudi monarch. “I called the king. I like the king. I said, ‘King, we’re losing our ass defending you, king, and you have a lot of money.’ ”
These tensions come as oil prices are expected to move even higher in the coming weeks ahead of the summer driving season.
“Presidents do whatever they can to keep the economy strong, and it’s not the first time we’ve seen presidents jawbone oil prices and also try to work with the Saudis on boosting production,” said Andy Laperriere, head of U.S. policy research at Cornerstone Macro. “What’s different is normally the president would do that quietly rather than tweet it.”
And it appears that some foreign officials may not be taking Trump’s pressure lightly.
On Thursday, during a visit to Tehran, OPEC Secretary General Mohammad Barkindo was quoted as suggesting that political leaders should stop trying to influence oil prices to suit their own policies. Trump has been the most vocal political figure trying to urge lower oil prices, and he has taken particular aim at OPEC.
“I have told my colleagues at OPEC that you must leave your passports home when coming to this organization,” Barkindo said, according to several news reports.
Trump’s push has at times celebrated movements in oil prices, but he has also publicly fumed when he feels things are moving in the wrong direction, as they have in recent weeks.
Four months ago, he had reason to exult. The nationwide average price of gasoline had tumbled to $2.27 a gallon. That was down about 70 cents since summer 2018 and down 63 cents since October, pumping about an extra $275 million a day into consumers’ pockets through the holiday season.
Trump claimed credit.
“Do you think it’s just luck that gas prices are so low, and falling? Low gas prices are like another Tax Cut!” Trump exclaimed on Twitter on Jan. 1.
But since then the price of a barrel of the international benchmark Brent crude has jumped 44 percent. That’s because new restrictions on the sale of Iranian oil, imposed by the Trump administration, went into effect on Thursday.
Trump has tried to assure people that tighter sanctions would not have any effect on U.S. gasoline prices, but concern about what could happen has come up at several White House meetings, according to a person briefed on the discussions who spoke on the condition of anonymity because they weren’t authorized to disclose internal conversations.
Trump will have several other opportunities in the coming weeks to try to deliver on other economic promises, so these recent developments aren’t likely to sideline him for long.
This week Democrats said they had agreed with Trump to pursue a $2 trillion infrastructure package, but they need to begin negotiations later this month on how to finance it. The issue of financing large-scale road and bridge projects has proved divisive for decades, and neither side has revealed what it might do.
Trump is also in the final stages of trying to complete trade deals with China, Canada and Mexico. He and his team have made progress in the past year, but there are new signs of strain.
And Trump will still have an opportunity to nominate two governors for the Fed, but there weren’t immediate clues as to who those people might be.
With all these initiatives unresolved, Trump has tried to cast the economy in a positive light, a theme he is expected to continue hammering while he responds to economic events for the remainder of his first term.
“Fact is, every economic aspect of our Country is the best it has ever been!” Trump wrote Monday on Twitter.