This is a bad return to work for President Trump's National Economic Council Director Larry Kudlow after suffering a heart attack.
Before his heart attack, Kudlow had been defending Trump's mercantilist anti-trade positions. Of course, Kudlow knows better and understands tariffs suffocate an economy.
But his protection of Trump is now even more extreme.
He is now signaling the Fed to go slow on interest hikes.
Kudlow told Trump apparatchik, Maria Bartiromo, that more people working and the faster economic growth does not cause price inflation---which is true when the Federal Reserve is not manipulating the economy. But when the Fed is creating a business cycle environment the boom phase is followed by the bust phase--and before the bust price inflation does generally accelerate as it is now starting to do.
Kudlow is now publicly denying this.
He told Bartiromo, " I speak to [Federal Reserve Chairman] Jay Powell periodically and they understand that [growth does not mean price inflation] and will move slowly [on interest rate hikes.]
There you have it. Kudlow is jawboning the Fed to allow price inflation to "run hot." He is now officially an inflationist.
He also lied to Bartiromo about deficits, saying they were coming down.
Larry Kudlow is lying here. There's no other way to describe it. A guy with his background in biz & govt--he was at the WH budget office once, for god's sake--knows that annual federal deficits are going UP. Rapidly.https://t.co/qDLIznVyZ1 https://t.co/xUl3HYY5BD— Jackie Calmes (@jackiekcalmes) June 29, 2018
It appears Kudlow has been totally corrupted by being close to power.
-RW
UPDATE
Trump’s top economic adviser says deficit ‘is coming down rapidly,’ contradicting virtually all available data— Zeke Miller (@ZekeJMiller) June 29, 2018
https://t.co/eEFg6s3iJl
UPDATE 2
In a departure from precedent, a top White House official says the administration hopes the Fed will raise rates "very slowly."
— Nick Timiraos (@NickTimiraos) June 29, 2018
The White House, including under Gary Cohn, has generally refrained from commenting on monetary policy.
Here's the full exchange: pic.twitter.com/wqnypKpVGq
Cue Aretha Franklin:
ReplyDeleteRE- RE- RE- RE-
RE- RE- RE- RE-
RE-LAPSE!
(Just a little bit)