The president didn't explain why Moore withdrew, but this week several Republican senators voiced doubts about his ability to win enough votes for confirmation. In recent weeks, Moore had said he regretted the writings and said they were meant as humor columns. Shelley Moore Capito who expressed concerns over some of his writings about women.
Now, with Cain out of the picture and Moore's selection in trouble, Trump might end up having to leave two of the seven seats on the Fed's board unfilled.
"The difference here is that (previous) loyalists have almost always had a baseline of credible expertise that both Moore and Cain lack", said Peter Conti-Brown, a professor at the University of Pennsylvania's Wharton School and author of the 2016 book, "The Power and Independence of the Federal Reserve".
"Steve won the battle of ideas including Tax Cuts and deregulation which have produced non-inflationary prosperity for all Americans".
This is Trump's second nominee to the Federal Reserve Board of Governors who has withdrawn from consideration amid major scrutiny.
Asked what Mr Trump had told him, Mr Gou said: "He replied that (being a president) it's a tough job".
But on Tuesday, he said in a fresh interview that he believes the biggest problem in the United States economy is the decline in "male earnings".
The Institute for Supply Management, an association of purchasing managers, says that its manufacturing index fell to 52.8 last month, down from 55.3 in March. His nomination had revived old claims of sexual harassment that sank his 2012 Republican presidential candidacy.
"My friend Herman Cain, a truly wonderful man, has asked me not to nominate him for a seat on the Federal Reserve Board", Trump wrote on Twitter.
The Fed left its benchmark rate - which influences many consumer and business loans - in a range of 2.25% to 2.5%. In December 2018, he called for the firing of Chairman Jerome Powell after the Fed raised rates. Any, like Moore, who have reversed themselves to embrace the dovish approach favored by Trump might have a hard time winning Senate support.
"This is an example of the system working as it should", Jamieson said in an interview.
Moore has been an unabashed Trump loyalist, and some economists argued that he lacked the qualifications for the Fed position. Trump has also repeatedly criticized the Fed since previous year for increasing interest rates and tightening the money supply.
Earlier Thursday, however, Moore told The Wall Street Journal that he didn't plan to withdraw from Fed consideration and that a White House official had urged him to stay in the process.
Once an advocate for higher interest rates who anxious about runaway inflation, Moore now calls for low rates and, pointing to commodity prices, suggests the economy may be heading into deflation.