Trump’s Economic Policies Are Starting to Make Sense, Says Former Fed Board Member

Trump’s economic policies are in the spotlight again, but this time, they’re gaining a little praise from Minneapolis’ former Fed president Narayana Kocherlakota.

In an op-ed piece in Bloomberg View, Kocherlakota said that he was pleased to see Trump talking about issues related to the Federal Reserve during an interview with Fortune Magazine in late April. Kocherlakota says he urged presidential candidates a month ago to explain what “leadership” and “policies” they want to see from the Federal Reserve.

Kocherlakota was, of course, referring to Trump’s proposal of rebuilding infrastructure and the military, and reducing the nation’s debt. He referred to these points as “two forms of fiscal stimulus,” and noted that they could have a beneficial impact on the U.S. economy by boosting demand for services and goods. The success of such policies, however, would largely depend on whether the Fed raised rates or kept them as-is.

Kocherlakota believes that Trump is in favor of keeping rates as they are. But he does question Trump’s attitude towards inflation and whether he would be in favor of a higher inflation target.

While there are still questions to be answered, Kocherlakota praised Trump for starting to provide some answers. He urged people to ask Hillary Clinton how she feels about low taxation, high government spending and low interest rates.

Written by Andrew


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