President Donald Trump has nominated Carnegie Mellon University professor Marvin Goodfriend to be a member of the Federal Reserve Board of Governors.
We reported back in June that Goodfriend was likely to be nominated. As a governor, Goodfriend leaves much to desired.
He has criticized the use of QE, but, as Bloomberg notes,
Goodfriend thought the impact of QE was questionable, at best. Instead he made a case for an even more unorthodox idea: negative interest rates. He conceded, however, that a sustained policy of negative rates might require abolishing paper currency, a step that would likely prove unpopular.
In other words, Goodfriend has problems with the radical policy of QE. The solution? The ultra-radical policy of negative interest rates.
As Tho Bishop has pointed out, multiple vacancies on the Fed board gives Donald Tump the opportunity to drastically move the Fed in a new direction. So far, though, we're just looking at more of the same.
Here's Bob Murphy on "The Nuttiness of Negative Interest Rates."
