By Paul Kiernan 

WASHINGTON -- President Trump said a second of his picks for a Federal Reserve position was out of consideration following resistance from Republican senators, a further setback to his efforts to place political allies at the central bank.

Mr. Trump tweeted Thursday that conservative commentator Stephen Moore "has decided to withdraw from the Fed process." The announcement came less than two hours after Mr. Moore told The Wall Street Journal and other news outlets that he would continue to seek the nomination.

A person close to the White House said opposition from several Republican senators and a concern that the public scrutiny about Mr. Moore would intensify were strong factors in his withdrawal. This person described Mr. Trump as annoyed at how the process had played out, but said the president believed the concerns about Mr. Moore had "some justification."

After Mr. Trump's tweet on Thursday, Mr. Moore told the Journal he had spoken Wednesday night with White House economic adviser Lawrence Kudlow about whether it was time to drop out.

"I was ready to pull out, and Larry said, 'Let me talk to the president about this and see what he thinks,'" Mr. Moore said. He added that he told several reporters, including for the Journal, on Thursday morning that he wouldn't withdraw and was still in the running because he wanted the president to make the announcement.

"You may think I misled you. But it is what it is," Mr. Moore said.

The withdrawal marks the end of a six-week period that began when Mr. Trump made clear he was seeking to place new members on the Fed board who shared his political views and agreed with him that the central bank had been too reluctant to lower interest rates to stimulate economic growth.

Mr. Trump also had wanted Herman Cain, a pizza-chain executive and 2012 presidential candidate, to join the board. Mr. Cain ultimately was forced to withdraw because he was viewed by GOP senators as too overtly political for the traditionally independent board and he had been accused of past sexual harassment, which he denied. Mr. Cain said he withdrew because he said the $183,100 salary wasn't enough.

Both candidates withdrew when it became clear that they wouldn't gain approval if nominated in the GOP-controlled Senate, where several senators cited the need for central bank independence in addition to misgivings about the candidates themselves.

Mr. Trump has criticized Fed Chairman Jerome Powell, whom he nominated, as favoring interest rates higher than the president would like. Critics viewed that as the precursor for interference by the White House in Fed affairs.

A public-relations firm representing Mr. Moore released a letter from him to Mr. Trump saying he was pulling out because, "The unrelenting attacks on my character have become untenable for me and my family and 3 more months of this would be too hard on us."

GOP senators said Thursday they believed Mr. Moore's withdrawal appeared inevitable as it became clear he couldn't win Senate confirmation.

"It got to the point where it was kind of obvious it was going to happen, " said Sen. Ron Johnson (R., Wis.)

More than a half-dozen GOP senators had expressed reservations about Mr. Moore's candidacy, citing his comments about women, personal financial issues and views of the Fed among the issues that could make it difficult for him to win confirmation if formally nominated. Sens. Joni Ernst (R., Iowa) and Lisa Murkowski (R., Alaska) said they were among the lawmakers who discussed Mr. Moore with the administration. Ms. Murkowksi said the White House would benefit by doing a "a very good, thorough vetting" of future Fed nominees.

Republican senators were blunt in their advice that the administration should consult with them before publicly announcing potential nominees.

"It would probably be useful to have a little bit more advanced notice and opportunity to bat some of these names around and talk with the leader and see if they're people who in the end we think are confirmable, " said Senate Majority Whip John Thune (R., S.D.).

The announcements that both men were in the running for the jobs -- though neither was formally nominated -- bypassed the normal White House process by coming before thorough background checks.

Mr. Moore hadn't sealed his ex-wife's 2010 divorce complaint before media outlets published details from the document, including allegations of adultery, emotional and psychological abuse, and unpaid child-support debts. It also emerged that he owed more than $75,000 in unpaid taxes, penalties and interest to the Internal Revenue Service.

Mr. Moore said last month that the divorce had been settled amicably. In an interview last week, he disputed the IRS's calculation of the tax debt but said he had paid it, and court records show the case is closed.

Mr. Moore also has faced criticism for columns he wrote for the National Review, reported by CNN, in the early 2000s seen as belittling to women athletes. "We are being force fed lady hoops. I have never in my life met anyone who actually liked watching women's basketball," Mr. Moore wrote in one of the columns. He called it a "travesty" that women were joining men in pickup games and recreational leagues.Mr. Moore told The Wall Street Journal that he "very much" regretted writing the articles and said the economic policies he had advocated for under Mr. Trump have resulted in the lowest female unemployment rate in decades.

Mr. Cain's chances at getting on the Fed board, meanwhile, were effectively dashed by opposition from several Republican senators stemming in part from sexual-harassment accusations that forced him to end a bid for the 2012 Republican presidential nomination.

Republicans also said that Messrs. Cain and Moore encountered Senate hurdles partly from fear they would steer the central bank in a more partisan direction, noting that both men had built careers largely around political punditry.

"I don't want the Fed to be a partisan entity in any way," said Sen. Mitt Romney (R., Utah) said Thursday.

The administration could still seek to nominate candidates who share the president's political and economic views without the kind of personal issues that doomed Messrs. Moore and Cain.

Messrs. Moore and Cain are both vocal supporters of Mr. Trump, who has angrily criticized the Fed over the past year for raising interest rates four times in 2018. The president sees higher borrowing costs as a threat to his economic agenda and re-election chances, people close to the White House have said.

After his four confirmed Fed nominees -- including Chairman Jerome Powell -- supported raising interest rates in 2018, Mr. Trump began looking for candidates who had the interests of his presidency in mind, a person close to the White House said.

Peter Conti-Brown, a professor at The Wharton School of the University of Pennsylvania who has written a history of Fed independence, said Republicans' response to Messrs. Cain and Moore sets a precedent for protecting the central bank from partisan interference.

The Fed declined to comment Thursday, but the withdrawals of Messrs. Moore and Cain are likely to be welcomed at the central bank, according to analysts and former Fed officials, because the institution prides itself on a culture that doesn't entertain partisan considerations in setting policy.

"The Cain-Moore episode shows that it won't be easy for the president to make the Fed more Trump-friendly," said Ian Katz, a financial policy analyst at Capital Alpha Partners in Washington in a note to clients earlier this week.

Rebecca Ballhaus and Siobhan Hughes contributed to this article.

Write to Paul Kiernan at paul.kiernan@wsj.com

(END) Dow Jones Newswires

May 02, 2019 19:00 ET (23:00 GMT)