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The Fed: Here’s why Trump should like at least one of his Fed appointments

President Donald Trump shouldn’t have buyer’s remorse about appointing Richard Clarida to the Federal Reserve because he is enthusiastically making the case that the Trump tax cut may have raised the economy’s speed limit.

While Fed Chairman Jerome Powell and Vice Chairman for Supervision Randal Quarles both seem to share this supply-side view, Clarida is its “most enthusiastic supporter,” said Stephen Stanley, chief economist at Amherst Pierpont Securities.

At issue is how fast the economy can grow without spurring inflation pressures. The FOMC has pegged that rate at 1.8%.

In a speech last month and again Tuesday, Clarida said this growth rate may be supported by higher capital spending, in turn supported by the Trump tax cut.

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