Top White House adviser suggests Fed officials are part of 'deep state'

• White House economic adviser Larry Kudlow on Thursday made a baseless claim that Federal Reserve officials were part of the so-called deep state.
• The comment was an escalation in a long-running pressure campaign the Trump administration has waged against the US central bank.
• "The deep state board staff, of course, has not been helpful," Kudlow said. "Oops, did I say that?"
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White House economic adviser Larry Kudlow on Thursday made a baseless claim that Federal Reserve officials were part of the so-called deep state. The comments escalated a long-running pressure campaign the Trump administration has waged against the US central bank.

"I don't want to get into a lot of Fed bashing," Kudlow told CNBC in an interview. "They do the best they can. Their models are highly flawed. The deep state board staff, of course, has not been helpful. Oops, did I say that?"

The White House declined to comment on the accusation. Even though experts warn that political pressure on a central bank can put an economy at risk, President Trump regularly calls for aggressive rate cuts and other stimulus measures.

Over the past year, the White House has separately sought to place political allies at the top of the central bank and even discussed ways to remove Fed Chairman Jerome Powell. Trump has increased verbal assaults on the central bank since the June start of his reelection campaign, which could be complicated by a recently launched impeachment inquiry and slower economic growth.

The policy-setting Federal Open Market Committee lowered its benchmark interest rate in September for the second time since the financial crisis a decade ago. As trade tensions threaten an otherwise solid economy, policymakers appear divided over whether to cut again at the end of the month.

Powell regularly underscores the central bank's commitment to independence from political interests but does not publicly comment on broadsides from the White House.

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