Despite starting off shaky, Donald Trump’s latest economic proposals are starting to make sense, according to a former president of the Federal Reserve Bank of Minneapolis.
“About a month ago, I urged the presidential candidates to explain what policies and leadership they would like to see at the Federal Reserve,” Narayana Kocherlakota, president of the Federal Reserve Bank of Minneapolis from 2009 to 2015, said in a column for Bloomberg View published Thursday.
Kocherlakota, who said in his column last month he would like to see the presidential candidates comment on monetary policy or the Federal Reserve, said he was “glad to see” Trump address the latter in a recent Fortune magazine interview.
In that interview, Trump said he would like to rebuild the United States’ infrastructure and military, as well as reduce debt and keep the interest rates the same.
Trump’s ideas are “two forms of fiscal stimulus,” which Kocherlakota believes “could have a beneficial effect on the U.S. and global economy, creating the demand for goods and services needed to get inflation and employment back up to healthier levels.”
Kocherlakota added that he would like to know “a little more about his [Trump’s] attitude toward inflation” to better understand his economic proposals.
“Another question is whether Trump would be comfortable with the Fed pursuing an inflation target higher than 2 percent,” Kocherlakota wrote. “[I]t would also give the Fed more room to support fiscal stimulus of the kind suggested by Trump.”
Kocherlakota concluded “[i]t’s great that Trump, currently the leading contender for the Republican nomination, is starting to answer” economic questions. “Would Hillary Clinton, the leading contender for the Democratic nomination, be as willing to pursue a policy of low taxation, high government spending and low interest rates to address the country’s economic ills? Someone should ask her.”
