Washington Post columnist Catherine Rampell and pro-Trump economist Stephen Moore clashed on Friday over President Trump‘s connection to the fluctuating state of the national economy.
CNN New Day host Erica Hill began the conversation by pointing to the president’s recent antagonism of the Federal Reserve, along with the increased market volatility seen in the recent major swings of the Dow Jones Industrial Average.
Moore responded by defending Trump’s public fight with Fed Chairman Jerome Powell, claiming that the recent market downturn was triggered by Powell speaking of rate hikes in a recent press conference, which prompted Rampell to fire back with “that’s not true.”
“Both of the rate hikes were unnecessary and were a cause for deflation in the economy,” he said.
“Wait, wait, wait!” Rampell interjected. “There is no deflation!”
“Yeah there is,” Moore replied.
“No there is not,” she fired back. “Look at the Consumer Price Index!”
Moore countered by noting that some prices on the Commodities Price Index had fallen, but Rampell noted that much of that was due to Trump’s ongoing trade wars.
“Soy bean prices are falling because of the trade war,” she said.
Rawstory notes: “Rampell then nailed Moore for his false warnings during the Obama presidency that it was unwise for the Fed to keep interest rates low because it would lead to hyperinflation — despite the fact that the economy at the time was deeply depressed and much more in need of easy money.”
“I am old enough to remember when ten years ago, during an actual deflation, you went on TV on a rival network and said we were about to have hyperinflation and it was irresponsible for the Fed to keep rates low,” she said. “Deflation means prices are going down, and if you go to the supermarket, prices are not going down. When we have normal inflation, suddenly your hard-money ways have disappeared, and you’re claiming the Fed should pump money into the economy.”
Moore pushed back on the idea that he was making up numbers while defending Trump on the basis of disrupting international economics as much as politics. When Hill tried to take the conversation in a new direction by asking about Trump’s possible upcoming meeting with Powell, Rampell didn’t see that leading to anything good, saying “he fundamentally does not understand the central bank needs to be politically independent.”
As Rampell accused Moore of being “completely irresponsible” by urging Trump continues to pressure or fire the Fed chair, he argued that the Fed should be responsive to the president, and that led to a whole new fight over the organizations independence.