Trump considering Cain for open Federal Reserve seat

Posted at 5:29 PM, Jan 31, 2019

President Donald Trump is eyeing Herman Cain, a former pizza executive who dropped his bid for the 2012 Republican presidential nomination amid sexual harassment allegations, for a seat on the Federal Reserve Board.

Larry Kudlow, the President's top economic adviser, confirmed Cain was under consideration, which was first reported by Bloomberg News. Kudlow said there is "no rush" for Trump to make a final decision and that the list of possible contenders for the board is long.

Carnegie Mellon economist Marvin Goodfriend, who was nominated to one of the open Federal Reserve Board posts in 2017, is also a contender, though his nomination has not yet been resubmitted to Congress in this new term, according to Kudlow.

Since the start of his presidency, Trump has moved to reshape the world's most powerful central bank, appointing four people to the seven-member Fed Board so far. That includes Chairman Jerome Powell, a former investment banker, who the President has repeatedly accused of trying to undercut him politically by raising interest rates, which Trump believes will slow down the economy.

With two seats open, the President could seize the opportunity to appoint nominees who disagree with how Powell has steered the central bank's interest rate policy. So far, Powell has been able to build consensus with his existing board, with not a single dissenting vote on any policy decision since he took the helm in February 2018.

A White House official told CNN earlier that "The President has met with multiple candidates for the Federal Reserve Board."

A spokesperson for Cain didn't immediately comment.

Kudlow previously told reporters the White House is looking for Fed governors "who understand that you can have strong economic growth without higher inflation."

On Wednesday, the Fed agreed to throttle back its plans to raise rates this year amid rising economic uncertainty. Powell, who has carefully avoided addressing the political attacks from the President, rejected the idea that the Fed is caving to political pressure.

"My only motivation is to do the right thing for the economy and the American people. That's it," Powell told reporters at a news conference on Wednesday following the two-day interest-rate-setting meeting. "The situation calls for patience; I think it does. That stance of policy is appropriate. We see these uncertainties. We see a time where we have the luxury of being able to wait."

Cain's nomination, however, could thrust the institution yet again into the spotlight. The role requires Senate confirmation and any vetting process is likely to resurface allegations Cain faced over sexual harassment and infidelity that ended his bid for the Republican nomination.

At the time, Cain said the allegations were incorrect but acknowledged "he had made mistakes in my life," according to Bloomberg.

Trump has praised Cain, calling him "a great guy."

Cain, the former chief executive of Godfather's Pizza Inc., has some prior experience at the Fed. From 1992 to 1996, he served as a director of the Federal Reserve Bank of Kansas City. Each of the 12 regional Fed banks has a nine-person board that includes local executives.

Cain also built a campaign around policy proposals like the "9-9-9" tax plan, which would overhaul the US tax system with a flat 9% tax on business and income and a 9% national sales tax.