Tags: China | stephen moore | trump | fed | economy

Stephen Moore: 'Tight' Fed, China Trade Hampered Growth

By    |   Friday, 26 July 2019 02:32 PM

Economist Stephen Moore said Friday he's "relieved" that the economy is at 2.1% growth, but said the numbers aren't where they should be because of several factors, including the Federal Reserve's "tightness."

"I helped put that economic plan together for [President Donald] Trump," Moore told Fox Business' Maria Bartiromo, explaining that ideally, the growth rate would be at 3-4%.

"We are below where we should be," Moore, the chief economist at the Heritage Foundation, said. "The question is, why are we? If you look at the first half, you know the first six weeks or so of the second quarter, we were looking at 1.5% growth, a bit of momentum actually ... I think things are looking a lot better than a couple of months ago for the economy."

But, he added, the Fed has been "too tight" by refusing to cut rates, and that "knocked about a half-percent off of growth."

In addition, the trade war with China has also had a negative effect on the growth numbers, said Moore. 

"Without the Fed being too tight, and if we can resolve this trade war, I think we are back to 3% growth," said Moore.

Meanwhile, Moore thinks the conventional analysis of whether the Fed should cut or raise rates is wrong. 

"It is not that the Fed should cut rates or raise rates based on what the growth rate is," he said. "They should be looking at prices ... the Fed made two big mistakes, one in September, one in December, and raising rates when they didn't have to, should not have. We paid for that."

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Economist Stephen Moore said Friday he's "relieved" that the economy is at 2.1% growth, but said the numbers aren't where they should be because of several factors.
stephen moore, trump, fed, economy
268
2019-32-26
Friday, 26 July 2019 02:32 PM
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