Trump Picks Cain For Fed Seat & Malpass For World Bank President. Too Little, Too Late To Thwart Recession (#GotBitcoin?)

President Trump said Thursday he intends to nominate Malpass for World Bank President and former GOP presidential candidate Herman Cain to the Federal Reserve’s board of governors, signaling his desire to remake the nation’s central bank after complaining about it for months. Trump Picks Cain For Fed Seat & Malpass For World Bank President. Too Little, Too Late To Thwart Recession (#GotBitcoin?)

Selection of Mr. Cain, along with proposed nomination of president’s former campaign adviser Stephen Moore, marks effort to install Fed critics on central bank’s seven-seat board.

The selection of Mr. Cain, following the president’s decision to nominate his former campaign adviser Stephen Moore, marks an effort to install two Fed critics and loyal Trump supporters on the central bank’s powerful seven-seat board.

While the nominations would be subject to Senate confirmation, they would underscore Mr. Trump’s growing unhappiness with Fed policy under Jerome Powell, whom the president tapped to lead the central bank.

While it has been rare in recent decades, it isn’t unprecedented for the White House to confront the Fed’s leadership through the appointment process. President Reagan reappointed Fed Chairman Paul Volcker but later packed the board with governors who outvoted him in 1986 to force a rate cut.

Mr. Cain’s name had previously been floated for a Fed board position. Axios reported Thursday that Mr. Cain was still being considered for the job.

Mr. Cain joined the board of directors for the Federal Reserve Bank of Kansas City in 1992 and served as the board’s chairman from 1995 to 1996. He had earlier served as a director of the Kansas City Fed’s Omaha, Neb., branch. Mr. Cain was chief executive of Godfather’s Pizza from 1986 until 1996, before leading the National Restaurant Association.

Mr. Cain was critical of the Fed during and after his campaign for the 2012 GOP presidential nomination. He said the central bank’s rate policy “manipulates the dollar” in a 2012 column in The Wall Street Journal.

The records of both Messrs. Cain and Moore could make for bruising confirmation fights.

Mr. Cain faced sexual-harassment accusations during his presidential campaign, which ended in 2011. The accusations, denied by Mr. Cain, resulted in settlements by the restaurant trade group, where he served for years as CEO.

Mr. Moore was asked Wednesday by two Senate Democrats to provide a full explanation for a $75,000 tax lien stemming from his 2014 federal income taxes and a 2012 contempt finding by a Virginia court after he failed to pay $300,000 owed to an ex-wife as part of a divorce settlement. Mr. Moore said that the Internal Revenue Service owes him money and that he and his wife have worked out their differences.

Attempts to reach Mr. Cain for comment Thursday were unsuccessful. But in an online broadcast on Feb. 8, he appeared tentative about his Fed prospects. Any appointment couldn’t be considered a “slam dunk” because “there’s too much Trump hate out there,” he said.

White House officials had previously said the nomination wasn’t being seriously considered, and some were caught off-guard by the announcement. One official cautioned Thursday that the White House was still interviewing candidates for the Fed board and hadn’t concluded its search.

Mr. Trump said at the White House Thursday that Mr. Cain was his choice: “I have recommended him highly for the Fed. I’ve told my folks, ‘That’s the man.’”

Several times over the past week, Mr. Trump has criticized the Fed and Mr. Powell in meetings. Mr. Trump recalled for one recent audience a phone conversation in which he told Mr. Powell, “I guess I’m stuck with you,” said one person who heard the remarks.Last week, White House economic adviser Lawrence Kudlow called on the central bank to cut its benchmark rate by half a percentage point, effectively undoing two rate increases late last year that the GOP president opposed.

Mr. Trump said on Twitter earlier Thursday the economy was performing well “despite the unnecessary and destructive actions taken by the Fed.”

Nominations to the Fed board are the primary way for the White House to influence monetary policy. The central bank’s policy-making committee includes all board governors and five of the regional Fed bank presidents.

Messrs. Cain and Moore both staked out positions quite critical of the Fed’s easy-money policies earlier this decade—stances that would appear to be at odds with Mr. Trump’s desire for rate cuts now. Messrs.

Cain and Moore have previously advocated, for example, a return to the gold standard. The gold standard periodically compels a central bank that is losing gold reserves to raise interest rates, even if that causes consumer-price deflation and recession. But both men are strong supporters of the president and have indicated they now favor positions in sync with his call for easier policy.

“Their past ideology and pronouncements about monetary policy have been beyond the fringe and would seem to fly in the face of what Trump wants,” said Mark Spindel, a Washington-based investment manager who co-wrote a history of the Fed. “They were either wrong or disingenuous then, or they’re overly political now by throwing all of that aside.”

In an interview last week, Mr. Moore said his views earlier this decade that easy-money policies would fuel unwanted inflation had been wrong.

Mr. Trump nominated four of the five sitting Fed governors to their current posts. All of those picks won backing from most Republican senators and at least a handful of Democrats. They were considered nonideological, pragmatic policy experts who are well-regarded within the central banking community.

The latest picks carry antielitist and anti-intellectual credentials that “could undermine the credibility of the institution by politicizing the appointment process,” said Mr. Spindel.

Mr. Kudlow on Wednesday disputed concerns that the White House would undercut the central bank either through its public criticism or appointments. The White House call for a rate cut is just a suggestion, he said. “The Fed is independent. We’re not trying to compromise that independence and never will.”

Mr. Moore “would be a breath of fresh air in the Fed,” Mr. Kudlow said.

Mr. Cain has been involved in Republican politics since his presidential campaign. In January, he formed a super PAC called America Fighting Back, which says on its website that its sole purpose is to combat negative media coverage of Mr. Trump. The super PAC spent almost $20,000 on pro-Trump TV ads this year, including as recently as early last month, according to Federal Election Commission reports.

The website urges Trump supporters “to work together to not allow the lies and misinformation of the leftist onslaught to destroy our great nation.” The PAC last month sent out an email calling 12 Republican senators “traitors” for their vote in favor of a resolution to reject Mr. Trump’s emergency declaration at the southern border.

While Mr. Trump initially passed on an opportunity to remake the Fed to his liking, now “he’s trying to make up for lost time,” said Ian Katz, a financial policy analyst at Capital Alpha Partners in a note to clients Thursday evening. “Trump has shifted to Trump mode.”

While it looked earlier like Mr. Moore could narrowly win confirmation, Mr. Katz said that Mr. Cain’s nomination could backfire by energizing critics of both picks. “We view it as an additional slight negative for Moore,” he said.

Senate Republicans were generally noncommittal Thursday on the prospect of Mr. Cain’s nomination. “It’d be interesting,” Sen. Richard Shelby (R., Ala.), a member of the Senate Banking Committee said of Mr. Cain’s selection. “Probably in all ways,” he said when asked to elaborate.

JPMorgan Chase & Co. Chief Executive James Dimon said he hoped senators would “do their homework” on Messrs. Moore and Cain. “I don’t think they are the right people,” he said at an event in New York. “They should put professional people on.”

The Fed has guarded its independence to set monetary policy ever since the 1970s, when President Nixon privately pressured Fed Chairman Arthur Burns to ease policy ahead of the 1972 election, according to Oval Office recordings. Mr. Burns acceded. Inflation later surged. Mr. Kudlow said the public shouldn’t worry about such an episode today because Mr. Powell wasn’t as likely to be influenced by White House pressure. “I don’t see this as a similar situation,” he told reporters Wednesday.

Mr. Trump’s frustration has been building since last summer, when the Fed prepared to lift its benchmark rate above 2%. His unhappiness boiled over in December, when market volatility accelerated in the days before and after the Fed raised its short-term rate for the fourth time last year, to a range between 2.25% and 2.5%. Mr. Trump had called on the Fed to stop raising rates and to halt the process of shrinking its bond portfolio.

Mr. Trump wondered aloud at the time about whether he could replace Mr. Powell, according to people familiar with the matter. His advisers later clarified that Mr. Powell’s job was safe because he couldn’t be dismissed over a policy disagreement.

In early January, Mr. Powell indicated the Fed was likely to pause from further rate increases, and at subsequent meetings, officials have finalized plans to end the portfolio runoff.

Officials have cited several reasons for the policy shift, including intense market volatility, a global growth slowdown and muted inflation pressures.

Whenever the topic of Mr. Trump’s complaints comes up in public, Mr. Powell has said political concerns don’t influence Fed deliberations. “People should know that the Fed has a very strong culture around nonpolitical activity,” Mr. Powell said in January. “We have a strong culture. It’s not a fragile one. It’s not subject to being disrupted. We will always do things that way.”

Mr. Powell said in an interview on CBS’s “60 Minutes” last month that he doesn’t believe the president has the authority to remove him over policy disagreements, and that he wouldn’t resign his post if asked to do so by the White House. Mr. Kudlow said Wednesday that Mr. Powell handled those questions well.

Trump Nominee Malpass Selected As Next World Bank President

The former undersecretary of the Treasury for international affairs has been a critic of the international development bank.

President Donald Trump’s choice to be the next World Bank president, David Malpass, was formally approved on Friday by a unanimous vote of the bank’s board of executive directors in Washington.

Mr. Malpass—previously the undersecretary of the Treasury for international affairs and a critic of the World Bank—will take office on April 9, just in time for a gathering of the world’s finance ministers and central bankers in Washington for the spring meetings of the bank and the International Monetary Fund.

The confirmation by the bank’s directors was all but assured as no other candidate emerged to challenge Mr. Malpass in the two months since the U.S. announced his candidacy.

The Washington-based World Bank is the world’s largest and most influential development bank. Its president is selected by a board of executive directors, made up of representatives from the bank’s 189 member countries. The U.S. is the bank’s largest shareholder and by tradition has selected the president, though that is not guaranteed.

Mr. Trump has been an avowed skeptic of multilateral institutions. But Mr. Malpass has sent strong signals that he doesn’t envision a shake-up of the organization in interviews since his nomination.

The day-to-day operations of the World Bank may see little initial change.

In recent years, the previous World Bank President Jim Yong Kim, relied heavily on the bank’s chief executive officer, Kristalina Georgieva, to run the day-to-day operations. Mr. Malpass intends to retain Ms. Georgieva in the role.

Ms. Georgieva and Mr. Malpass worked together closely last year negotiating a deal to increase funding for the bank. The two are said to work very well together; the U.S. had been the last holdout on the deal.

Mr. Malpass has drawn attention for his criticism of China’s relationship with the World Bank. Even as China has grown wealthier, it continues to draw heavily upon World Bank loans. In his prior job as Treasury undersecretary for international affairs, Mr. Malpass pushed for the bank to cut its lending to Beijing.

Mr. Malpass was never alone in this effort. Japan, the World Bank’s second-largest shareholder, for example, has publicly backed that initiative. Japan’s finance minister, Taro Aso, met with Mr. Malpass early in February and cited his desire to curtail Chinese lending as a reason to support his candidacy.

“We expect [the World Bank] to steadily scale down loans to high- and middle-income countries, especially China,” Mr. Aso later told reporters. He cited Mr. Malpassas saying he “will firmly carry out [the request] if he becomes president.”

Mr. Malpass’s critics highlight his time as the chief economist of Bear Stearns, the investment bank that collapsed early in the financial crisis. But Mr. Malpass also has a long track record with international development issues.

He twice held the title of deputy assistant secretary, once for the Treasury Department with a focus on developing nations, and once at the State Department, focused on Latin American economic affairs. He also served stints as a trade analyst for the Senate Budget Committee and a staff director of the Joint Economic Committee.

During his time in Ronald Reagan’s Treasury Department, Mr. Malpass worked to negotiate a 1987 funding increase for the World Bank; the deal, he noted, created the World Bank’s environmental division.

This history was an effective part of Mr. Malpass’s campaign for his candidacy to the World Bank’s member nations. One reason no other candidate emerged for the president’s job is that key shareholders were convinced the bank’s environmental work wasn’t in jeopardy.

In a meeting in Paris in February, Mr. Malpass secured the support of French Finance Minister Bruno Le Maire. Mr. Le Maire said Mr. Malpass was “a good candidate” adding that “the good candidate needs to support the poorest countries and must participate in the fight against global warming.”

The Trump administration has faced concerns over its lack of support for international efforts to combat climate change and reduce carbon emissions. Most prominently, Mr. Trump withdrew the U.S. from the 2015 Paris climate treaty.

But Mr. Malpass said he was committed to ensuring the bank remained a leader at incorporating environmental standards into its projects and that it would honor its current obligations to climate projects.

Meanwhile: U.S. Secret Service Director Randolph Alles Leaving Post

Move comes a day after Homeland Security Secretary Kirstjen Nielsen’s departure was announced; , whose agency oversees the Secret Service, is leaving her position.

Randolph Alles, the director of the U.S. Secret Service, is leaving his post, an administration official said.

Mr. Alles was appointed to the job in April 2017, having previously served as the acting deputy commissioner of U.S. Customs and Border Protection. The announcement of his departure comes a day after the White House said Homeland Security Secretary Kirstjen Nielsen, whose agency oversees the Secret Service, was leaving her post.

The Secret Service didn’t immediately respond to a request for comment.

His departure, first reported by CNN, also follows the arrest last week of a woman carrying two Chinese passports who entered President Trump’s Mar-a-Lago resort in Florida. She was carrying a thumb drive with malware and lied to federal agents about her plans, according to a criminal complaint filed last week.

The woman, Yujing Zhang, told a Secret Service agent she was going to the club’s pool, according to the complaint. The Secret Service agent said in his affidavit that Ms. Zhang became “verbally aggressive” during her questioning and was detained and transported to the Secret Service’s West Palm Beach office.

Mr. Trump was visiting Mar-a-Lago for the weekend, but was at the nearby Trump International Golf Club at the time Ms. Zhang entered the property.

The Secret Service said in a statement following the arrest that the agency “does not determine who is invited or welcome at Mar-a-Lago; this is the responsibility of the host entity.”

Mr. Trump—asked last week whether he would change any procedures at his resort following the security breach—said: “That’s really Secret Service. Secret Service is fantastic. These are fantastic people. And the end result is it was good.”

He added that he “could not be happier” with Secret Service.

Mr. Alles inherited an agency that in previous years had dealt with a slew of security and personnel issues. Among the problems: a month before his appointment, a man jumped the White House fence and spent 15 minutes walking around the property.

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