By Nick Timiraos and Kate Davidson 

Former Trump campaign adviser Stephen Moore, the president's latest pick for a Federal Reserve Board seat, said the central bank's recent policy pivot shows that he was right to criticize its December interest-rate increase.

Shortly after that rate increase, Mr. Moore delivered a scathing assessment of Fed Chairman Jerome Powell in a December interview with The Wall Street Journal, calling him "totally incompetent" and saying he should resign.

Mr. Moore said in a Journal interview Monday that the Fed's rate increase was a mistake but that he could have chosen his words about Mr. Powell more carefully. "They made a mistake. Nobody's perfect. They've admitted they made a mistake," he said. "Was I harsh? Yes, and I wish I hadn't been."

Fed officials have significantly altered their policy path since the December meeting, though they haven't explicitly called the December rate increase a mistake. In early January, Mr. Powell signaled the Fed was moving to the sidelines after raising rates four times last year.

In new projections last week, most officials projected no rate increases this year if the economy performs as expected. Officials also announced they will end the runoff of their asset portfolio in October.

Mr. Powell attributed the change to greater worries that global growth could weaken amid recent market volatility and rising political uncertainty, partly the result of an increase in trade tensions.

The Fed's policy pivot is "an example of where I was right, and where my critics were wrong," said Mr. Moore Monday.

A Fed spokeswoman declined to comment.

Mr. Trump's decision to nominate a sharp critic of the Fed's current leadership represents his most concrete step to influence its policy following his monthslong criticism of its interest-rate increases.

Mr. Moore's impending nomination shows "the attacks on the Fed and Powell won't stop no matter what the Fed does," Ian Katz, a financial policy analyst at Capital Alpha Partners, said in a note to clients on Sunday. "It was never plausible that the pause in interest rate hikes would silence [Trump's] criticism of the Fed."

Because Republicans increased their Senate majority after last fall's elections, Mr. Moore faces better odds at being confirmed than two earlier White House picks whose nominations languished. The extra cushion -- Republicans how have 53 seats, up from 51 last year -- means Mr. Moore could win confirmation without any Democratic support and even a couple of GOP defections.

Until now, Mr. Trump's Fed nominees largely have been nonideological pragmatic policy experts who are well regarded within the central banking establishment.

Mr. Moore, who has a master's degree in economics from George Mason University and finished his undergraduate studies at the University of Illinois at Urbana-Champaign, breaks with that pattern because he has spent his career as a more partisan champion of lower taxes.

Mr. Moore founded the Club for Growth, the conservative advocacy group, is a former member of The Wall Street Journal's editorial board, and served as chief economist at the Heritage Foundation, a conservative think tank. Those bona fides enabled him to advocate for Mr. Trump's insurgent primary campaign in 2016 when many Republicans were skeptical.

Republican senators defended Mr. Moore's credentials on Monday. "Steve is a sunny optimist and a thoughtful economist," said Sen. Ben Sasse (R., Neb.). "Steve's nomination has thrown the card-carrying members of the Beltway establishment into a tizzy, and that says little about Steve and his belief in American ingenuity, but a lot about central planners' devotion to groupthink."

In a statement, Sen. Lamar Alexander (R., Tenn.) said he expected to support Mr. Moore's nomination.

Sen. David Perdue (R., Ga.) believes Mr. Moore is "highly qualified for the position on the Fed," a spokeswoman said Monday.

Still, Mr. Moore's confirmation fight could be bruising because it might animate concerns that Mr. Trump will be able to politicize the central bank, which has carefully defended its nonpartisan approach to policy-making.

"Steve is a perfectly amiable guy, but he does not have the intellectual gravitas for this important job," wrote Harvard University economist Greg Mankiw, a former adviser to President George W. Bush, on his blog Friday.

Mr. Moore could be pressed to explain to lawmakers why he went from criticizing the Fed's moves to support economic growth earlier this decade to calling for the Fed to halt its withdrawal of stimulus last year.

Anyone "who goes to the grocery store...knows our monetary policy is completely out of control, that inflation is here," Mr. Moore said in 2011 in an interview with Newsmax.com. "All of this easy money has become like a narcotic for the U.S. economy," he said.

In 2013, Mr. Moore said the Fed needed a chair with the "guts" to take away the proverbial punchbowl and in 2014, he advocated that the Fed ramp up sales of the long-term bonds it bought after the financial crisis to support growth.

On Monday, Mr. Moore said his worries about an inflation surge were mistaken. "The prediction that I and many made, that we would have an inflationary effect from these policies, was wrong," he said. "The proof is in the pudding. We didn't get inflation."

Mr. Moore said Monday the Fed should consider cutting interest rates to reverse two quarter-percentage point increases it made in September and December.

Still, Mr. Moore said he wasn't advocating for monetary stimulus. He said the Fed should instead seek to keep prices and the dollar stable, and he said recent declines in commodity prices raised concerns about deflationary forces in the broader global economy.

"I want to make this very clear: I'm not a dove at all. I'm an inflation hawk. I'm also a deflation hawk," he said. "The fundamental point of disagreement here is whether or not we are in a deflationary environment."

The Fed's preferred inflation gauge, the personal-consumption expenditures price index, rose 1.75% for the year ended December, below the Fed's 2% target. A separate measure that excludes volatile food and energy prices rose 1.9%.

Meanwhile, an index that measures the value of the dollar against a basket of foreign currency has been relatively stable over the past 10 months. It is up 7% over the last year but is still 7% below the recent highs seen after Mr. Trump's election in late 2016.

Mr. Moore couldn't easily shape policy as one of six Fed board members and one of 11 voters on the central bank's rate-setting committee. But he could still garner attention to his policy views by delivering speeches and dissenting on policy votes.

If Mr. Moore is ultimately confirmed and Mr. Trump wins reelection next year, Mr. Moore could become a candidate to succeed Mr. Powell when his term ends in February 2022, subject to Senate confirmation. Mr. Powell and his two predecessors, Ben Bernanke and Janet Yellen, had served as Fed governors before being named chair.

Mr. Moore on Monday disputed criticism that he would serve as a puppet for the president.

"I'm a big fan of the president, and I'm a big fan of what he's done for the economy," he said. But he pointed to his opposition to Mr. Trump's steel tariffs as counterproductive as an example of his independent thinking. "I'm not a sycophant for Trump," he said.

Write to Nick Timiraos at nick.timiraos@wsj.com and Kate Davidson at kate.davidson@wsj.com

(END) Dow Jones Newswires

March 25, 2019 17:55 ET (21:55 GMT)