Political News

Bloomberg: Trump considering Cain for open Federal Reserve seat

Posted January 31, 2019 2:23 p.m. EST

— 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, according to a report from Bloomberg News.

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 source familiar with the search confirmed that Cain is under consideration.

The White House declined to comment on whether Cain is being considered. "The President has met with multiple candidates for the Federal Reserve Board," a White House official told CNN.

A spokesperson for Cain didn't immediately comment.

Larry Kudlow, the President's top economic adviser, has 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.