1
00:00:05,160 --> 00:00:10,760
Speaker 1: Lie from the Hartbiner and the Crossroads of America. It's

2
00:00:10,840 --> 00:00:11,960
Speaker 1: Tony Katz today.

3
00:00:13,119 --> 00:00:16,040
Speaker 2: So the information about the CPI, the Super Price Index

4
00:00:16,120 --> 00:00:18,479
Speaker 2: came out, and I said, Okay, this is it, this

5
00:00:18,600 --> 00:00:21,000
Speaker 2: is all. There's no more way to get around this.

6
00:00:21,200 --> 00:00:24,000
Speaker 2: There's gonna be a cut on the interest rates. Jerome

7
00:00:24,040 --> 00:00:27,480
Speaker 2: Powell already is feeling pressure here, there and everywhere. This

8
00:00:27,640 --> 00:00:30,360
Speaker 2: says that the inflation is no longer an issue, or

9
00:00:30,360 --> 00:00:33,080
Speaker 2: at least that's what's gonna signal to many point two.

10
00:00:33,520 --> 00:00:36,320
Speaker 2: It's done, it's over, it's complete, the tariff of seven

11
00:00:36,400 --> 00:00:39,760
Speaker 2: baked into the cake. Let's go. That's what it said.

12
00:00:40,280 --> 00:00:42,760
Speaker 2: And you could be rest assured that at the September meeting,

13
00:00:43,040 --> 00:00:45,680
Speaker 2: the pressure is gonna be insane. I would argue that's

14
00:00:45,680 --> 00:00:48,480
Speaker 2: gonna be at least a half a basis point cut,

15
00:00:48,640 --> 00:00:51,640
Speaker 2: fifty basis points half percent, we can call it there.

16
00:00:52,280 --> 00:00:55,080
Speaker 2: That's what was gonna happen. Now some people would want,

17
00:00:55,160 --> 00:00:57,800
Speaker 2: you know, far bigger, but I don't think that's gonna happen.

18
00:00:57,840 --> 00:01:01,040
Speaker 2: That's my take, Tony Katz, Tony cas that's today. Good

19
00:01:01,080 --> 00:01:04,160
Speaker 2: to be with you. Then the Producer Price Index came

20
00:01:04,160 --> 00:01:10,679
Speaker 2: out and the PPI wholesale inflation is almost a full percent.

21
00:01:10,720 --> 00:01:13,160
Speaker 2: It came in at point nine, and it came into

22
00:01:13,200 --> 00:01:16,039
Speaker 2: point nine not only in the overall, but came in

23
00:01:16,040 --> 00:01:21,120
Speaker 2: at point nine for the core that's excluding food and

24
00:01:21,360 --> 00:01:24,680
Speaker 2: energy prices. And I said the market was going to

25
00:01:24,760 --> 00:01:28,000
Speaker 2: react and negatively. The question is is it a negative number?

26
00:01:28,319 --> 00:01:30,960
Speaker 2: Because what do you make of all this? Doctor mattwill

27
00:01:31,080 --> 00:01:36,160
Speaker 2: joins us economist at the University of Indianapolis. We've talked

28
00:01:36,160 --> 00:01:39,759
Speaker 2: to manufacturing before the slow down in manufacturing. Now we're

29
00:01:39,760 --> 00:01:43,360
Speaker 2: seeing wholesale prices, which I question whether that's a tariff conversation.

30
00:01:44,240 --> 00:01:47,240
Speaker 2: You take us through it. You see this report, the

31
00:01:47,319 --> 00:01:49,520
Speaker 2: point nine, what does it say to you?

32
00:01:51,360 --> 00:01:54,040
Speaker 1: It tells me that I have to change my opinion

33
00:01:54,320 --> 00:01:57,040
Speaker 1: because last time we spoke, I was on the cut

34
00:01:57,120 --> 00:02:00,600
Speaker 1: rates bandwagon because all the data said cut rates. But

35
00:02:00,920 --> 00:02:03,440
Speaker 1: I have to change. I can't. We can't be cutting

36
00:02:03,520 --> 00:02:06,240
Speaker 1: rates at this time if that's the only thing they do,

37
00:02:06,480 --> 00:02:10,560
Speaker 1: because this report says inflation is not just here, it's massive.

38
00:02:11,040 --> 00:02:13,560
Speaker 1: We can't look at point nine. We have to multiply

39
00:02:13,600 --> 00:02:18,079
Speaker 1: it by twelve ten point eight percent. Let me say

40
00:02:18,120 --> 00:02:23,680
Speaker 1: that again, ten point eight percent annualized for the month

41
00:02:23,720 --> 00:02:27,520
Speaker 1: of July. That is massive. There's no getting around it.

42
00:02:27,720 --> 00:02:31,320
Speaker 1: Inflation is here, and it's in the PPI. The PPI,

43
00:02:31,600 --> 00:02:35,760
Speaker 1: which is the wholesalers, which is the manufacturers, it's the

44
00:02:35,800 --> 00:02:39,280
Speaker 1: retailers haven't passed it on along to us yet, and

45
00:02:39,320 --> 00:02:41,960
Speaker 1: that is something they're paying, and it's terriffs related.

46
00:02:42,120 --> 00:02:47,280
Speaker 2: And this is the whole conversation, Doctor Will, because I

47
00:02:47,400 --> 00:02:51,960
Speaker 2: can say, as I have, it's clear that so far

48
00:02:52,480 --> 00:02:55,520
Speaker 2: the terriffs have not affected the economy the way people thought.

49
00:02:55,880 --> 00:02:57,960
Speaker 2: And of course you'll see plenty of people saying, oh,

50
00:02:58,000 --> 00:03:02,520
Speaker 2: these economists who were all claiming the sky is falling. Whoa, whoa, whoa, whoa, whoa.

51
00:03:02,880 --> 00:03:05,480
Speaker 2: There's plenty of those people who hate President Trump and

52
00:03:05,520 --> 00:03:07,840
Speaker 2: anything he does, of course, is the wrong thing. The

53
00:03:08,000 --> 00:03:11,280
Speaker 2: argument we've made on this show is that if, for example,

54
00:03:11,280 --> 00:03:15,040
Speaker 2: as Toyota said, they're eating the tariff costs, other businesses

55
00:03:15,080 --> 00:03:17,960
Speaker 2: are eating the tariff costs, there is only so long

56
00:03:18,080 --> 00:03:22,280
Speaker 2: that can go on. Eventually the cost has to make

57
00:03:22,320 --> 00:03:26,320
Speaker 2: a move over to us. Is this this point nine,

58
00:03:27,080 --> 00:03:32,200
Speaker 2: Is that all contributable to businesses eating the costs of tariffs?

59
00:03:33,639 --> 00:03:37,119
Speaker 1: In my opinion, yes, but I have to go back

60
00:03:37,120 --> 00:03:39,240
Speaker 1: and correct One of the things you just said is

61
00:03:39,560 --> 00:03:42,760
Speaker 1: we haven't seen the impact yet we have. There's two

62
00:03:42,840 --> 00:03:46,000
Speaker 1: pieces of information I have to point out the point nine.

63
00:03:46,040 --> 00:03:48,840
Speaker 1: This is a big one. But go back just two

64
00:03:48,880 --> 00:03:53,480
Speaker 1: weeks ago to the PMI report. The manufacturing base of

65
00:03:53,520 --> 00:03:57,080
Speaker 1: the United States has shrunk for five months in a row.

66
00:03:57,520 --> 00:04:02,400
Speaker 1: It's contracting that is the byproduct of the tariffs. Trump

67
00:04:02,520 --> 00:04:08,360
Speaker 1: is doing everything right as far as domestic policy goes, regulation, taxes,

68
00:04:09,000 --> 00:04:13,880
Speaker 1: pro business, cutting, government, sizes the size of government. But

69
00:04:14,440 --> 00:04:17,120
Speaker 1: the tariffs are getting in his way. He's shrinking the

70
00:04:17,120 --> 00:04:20,960
Speaker 1: manufacturing base. Tariffs do the opposite of what they're intended

71
00:04:21,000 --> 00:04:23,440
Speaker 1: to do. And I gave you data before about Toyota.

72
00:04:23,640 --> 00:04:28,839
Speaker 1: I gave you data before about a whirlpool across the board.

73
00:04:29,640 --> 00:04:32,839
Speaker 1: Tariffs hurt manufacturing and we see it right now in

74
00:04:32,880 --> 00:04:34,280
Speaker 1: the wholesale numbers.

75
00:04:35,200 --> 00:04:39,200
Speaker 2: Talking to doctor Matt Will, economists at the University of Indianapolis,

76
00:04:39,839 --> 00:04:42,000
Speaker 2: tariffs were supposed to be the tactic in order to

77
00:04:42,040 --> 00:04:44,120
Speaker 2: get the trade deal. What we have seen is that

78
00:04:44,400 --> 00:04:47,159
Speaker 2: there are tariffs that are here to stay. And you

79
00:04:47,279 --> 00:04:51,480
Speaker 2: have discussed that it might for Wall Street create the idea,

80
00:04:51,680 --> 00:04:55,200
Speaker 2: not new normal, but here's the new basis. Here is

81
00:04:55,240 --> 00:04:58,520
Speaker 2: now the numbers that we have to work from. Have

82
00:04:58,720 --> 00:05:03,200
Speaker 2: these tariffs for Wall Street been greater than they assumed?

83
00:05:04,800 --> 00:05:07,159
Speaker 1: I don't think the tariffs have been greater than they've assumed.

84
00:05:07,320 --> 00:05:10,400
Speaker 1: I think we had the pause, so that delayed the pain.

85
00:05:10,880 --> 00:05:14,760
Speaker 1: The pauses have ended. We're now putting in place permanent tariffs,

86
00:05:15,360 --> 00:05:18,680
Speaker 1: and Wall Street now knows what they are. They can

87
00:05:18,720 --> 00:05:21,320
Speaker 1: now build it into their prices. We see it today,

88
00:05:21,560 --> 00:05:23,320
Speaker 1: They're going to build it into what they pass along

89
00:05:23,360 --> 00:05:25,440
Speaker 1: to the consumer. We will see that in the last

90
00:05:25,440 --> 00:05:27,520
Speaker 1: month's report, and we're going to see it in future reports.

91
00:05:28,080 --> 00:05:30,520
Speaker 1: Wall Street is not happy with this number. And let

92
00:05:30,520 --> 00:05:33,120
Speaker 1: me point out one other thing. If you dig into

93
00:05:33,160 --> 00:05:37,080
Speaker 1: the details of this report. Trade. That's right, Trade, the

94
00:05:37,120 --> 00:05:40,800
Speaker 1: thing that teriffs directly impact two percent for the month.

95
00:05:41,080 --> 00:05:45,160
Speaker 1: That's twenty four percent annualized. Let me say this very clearly.

96
00:05:45,960 --> 00:05:50,640
Speaker 1: Trade went up twenty four percent the inflation on trade.

97
00:05:50,960 --> 00:05:54,200
Speaker 1: That's almost identical to the Trump tariffs. So we see

98
00:05:54,200 --> 00:05:57,440
Speaker 1: his terriffs being directly in the data. This is not

99
00:05:57,520 --> 00:05:59,479
Speaker 1: something we can run away from.

100
00:06:00,040 --> 00:06:03,680
Speaker 2: But when you say that, what we got to go

101
00:06:03,720 --> 00:06:06,239
Speaker 2: a little bit deeper, or maybe a little bit clearer

102
00:06:06,279 --> 00:06:09,520
Speaker 2: into what that means when you see the trade being

103
00:06:09,560 --> 00:06:12,320
Speaker 2: twenty four percent, it's connected to the tariffs. Dig a

104
00:06:12,320 --> 00:06:14,159
Speaker 2: little deeper, tell us what that means.

105
00:06:15,680 --> 00:06:19,560
Speaker 1: Well, that means that people importing goods are paying a tariff,

106
00:06:20,160 --> 00:06:24,200
Speaker 1: and it's it's a tax, it's inflation, and they are

107
00:06:24,240 --> 00:06:27,280
Speaker 1: paying it. So Walmart goes to Oakland, they pick up

108
00:06:27,279 --> 00:06:29,880
Speaker 1: something off of a ship, they pay that twenty four

109
00:06:29,920 --> 00:06:33,599
Speaker 1: percent tax. Trump brags about that it's increasing the revenue

110
00:06:33,600 --> 00:06:36,279
Speaker 1: to the government. That's correct. We have a lot of

111
00:06:36,440 --> 00:06:40,520
Speaker 1: new revenue to the government based on the tariff. But

112
00:06:40,880 --> 00:06:44,120
Speaker 1: Walmart's paying that. We see it in today's point nine number.

113
00:06:44,279 --> 00:06:46,320
Speaker 1: We see it in the details of that point nine,

114
00:06:46,320 --> 00:06:50,760
Speaker 1: which is two percent this month alone that they're paying

115
00:06:50,839 --> 00:06:55,240
Speaker 1: on imported goods. And here's this is very important point.

116
00:06:55,839 --> 00:06:58,040
Speaker 1: We could get away with it, and Trump could get

117
00:06:58,080 --> 00:07:02,200
Speaker 1: away with it if the economy were boos. But manufacturing

118
00:07:02,240 --> 00:07:05,279
Speaker 1: has been contracting for five months in a row. We

119
00:07:05,400 --> 00:07:08,599
Speaker 1: don't have the juice economy that can get away with

120
00:07:08,720 --> 00:07:11,800
Speaker 1: a bad tariff policy. He's got to do something to

121
00:07:11,960 --> 00:07:14,320
Speaker 1: juice the economy if he's not going to get rid

122
00:07:14,360 --> 00:07:14,960
Speaker 1: of the tariffs.

123
00:07:15,160 --> 00:07:18,720
Speaker 2: Talking to doctor Matt Will, economists at the University of Indianapolis.

124
00:07:18,960 --> 00:07:22,720
Speaker 2: What does that look like juice to economy? Because he

125
00:07:22,800 --> 00:07:25,760
Speaker 2: did tariffs in the first term, and you could argue

126
00:07:25,800 --> 00:07:28,320
Speaker 2: we had that juice economy. What the bloody heck is

127
00:07:28,360 --> 00:07:29,440
Speaker 2: the difference.

128
00:07:31,000 --> 00:07:34,480
Speaker 1: The very important difference. The tax code that he put

129
00:07:34,560 --> 00:07:38,440
Speaker 1: in place in twenty seventeen was new. The tax code

130
00:07:38,440 --> 00:07:41,680
Speaker 1: that was extended just a couple of months ago was

131
00:07:41,720 --> 00:07:44,720
Speaker 1: a continuation. There was nothing new. Well, there was very

132
00:07:44,720 --> 00:07:46,840
Speaker 1: few things new in it, I should say, but there

133
00:07:46,920 --> 00:07:49,760
Speaker 1: wasn't a whole bunch of new stuff to juicy economy.

134
00:07:49,960 --> 00:07:53,120
Speaker 1: All he did was say, keep doing the good things now.

135
00:07:53,400 --> 00:07:56,080
Speaker 1: The pr machine out of the White House bragged about it,

136
00:07:56,120 --> 00:07:58,840
Speaker 1: and they should, but there wasn't a whole bunch of

137
00:07:58,920 --> 00:08:02,600
Speaker 1: new stuff to get the economy moving. It was just okay,

138
00:08:02,640 --> 00:08:05,880
Speaker 1: you can keep what you have. That's not juicing the economy.

139
00:08:05,920 --> 00:08:07,640
Speaker 1: That's just maintaining the status quo.

140
00:08:08,880 --> 00:08:12,360
Speaker 2: Now, I gotta now push back on that. If the

141
00:08:12,400 --> 00:08:15,760
Speaker 2: status quo was working, why wouldn't it keep working? And

142
00:08:15,760 --> 00:08:18,280
Speaker 2: I would also maybe argue it's not so much the

143
00:08:18,320 --> 00:08:23,080
Speaker 2: status quo if you are also working to bring trade

144
00:08:23,080 --> 00:08:26,360
Speaker 2: deals to the table, shouldn't we wait to see if

145
00:08:26,360 --> 00:08:29,400
Speaker 2: the trade deals, start working to see whether or not

146
00:08:29,480 --> 00:08:31,400
Speaker 2: the tariffs are still a problem.

147
00:08:32,679 --> 00:08:36,520
Speaker 1: Okay, the tariffs are a problem. They're not working. They

148
00:08:36,600 --> 00:08:40,160
Speaker 1: harm trade. We see it in the manufacturing data. It's

149
00:08:40,200 --> 00:08:43,040
Speaker 1: just basic math that when you put on a tariff,

150
00:08:43,040 --> 00:08:46,520
Speaker 1: you're going to harm the economy. And that's what's happening now.

151
00:08:46,880 --> 00:08:48,960
Speaker 1: On the good side, let me tell you where Trump's

152
00:08:48,960 --> 00:08:51,360
Speaker 1: to been doing some great things, and that's with the deregulation,

153
00:08:51,640 --> 00:08:55,920
Speaker 1: with the removal of DEI and government preferences and subsidies

154
00:08:56,280 --> 00:08:59,680
Speaker 1: and picking and choosing winners and losers. Okay, when the

155
00:08:59,679 --> 00:09:02,000
Speaker 1: government think it's out of running the economy, that's a

156
00:09:02,040 --> 00:09:05,320
Speaker 1: good thing. So he's done good there. But I don't

157
00:09:05,360 --> 00:09:08,800
Speaker 1: think the good at least in the data, it doesn't

158
00:09:08,800 --> 00:09:11,120
Speaker 1: look like the good that he's doing is outweighing the

159
00:09:11,160 --> 00:09:13,280
Speaker 1: negative from the tariff. And I'm not going to shy

160
00:09:13,320 --> 00:09:16,959
Speaker 1: away from saying how bad the tariffs are, and I'm

161
00:09:17,000 --> 00:09:19,679
Speaker 1: also not shy about saying what great policies Trump has.

162
00:09:19,679 --> 00:09:23,599
Speaker 1: But in place, this is simply one bad data or

163
00:09:23,679 --> 00:09:27,160
Speaker 1: bad tariff policy, and it's going to make matters worse.

164
00:09:27,240 --> 00:09:30,800
Speaker 2: Which brings us back to the conversation of the cuts

165
00:09:30,800 --> 00:09:34,839
Speaker 2: talking to doctor Matt Well, economist at the University of Indianapolis.

166
00:09:35,720 --> 00:09:38,840
Speaker 2: The pressure is on Jerome Powell, chairman of the Federal Reserve,

167
00:09:39,240 --> 00:09:41,320
Speaker 2: and who knows how long that's going to last in

168
00:09:41,400 --> 00:09:43,960
Speaker 2: terms of him being the chair of the Federal Reserve.

169
00:09:44,360 --> 00:09:48,000
Speaker 2: The pressure is on to engage the cuts. The CPI

170
00:09:48,400 --> 00:09:52,319
Speaker 2: says the cuts a Wall Street is demanding the cuts.

171
00:09:52,440 --> 00:09:55,080
Speaker 2: If you want to see housing get back to some

172
00:09:55,360 --> 00:09:58,360
Speaker 2: level of good place, you need the cuts to make

173
00:09:58,400 --> 00:10:01,880
Speaker 2: it easier for people to buy homes and therefore sell homes.

174
00:10:02,240 --> 00:10:05,360
Speaker 2: Now you've got this report, you're saying, this report says

175
00:10:05,400 --> 00:10:08,560
Speaker 2: no cuts are possible. Is that what Wall Street is

176
00:10:08,600 --> 00:10:10,040
Speaker 2: gonna say.

177
00:10:10,480 --> 00:10:13,040
Speaker 1: I didn't say no cuts are possible. I said the

178
00:10:13,200 --> 00:10:17,080
Speaker 1: data shows don't cut alone. But let me go back

179
00:10:17,080 --> 00:10:20,640
Speaker 1: to my own revised opinion from just a few weeks ago.

180
00:10:21,480 --> 00:10:24,960
Speaker 1: I believe that Jerome pal should now be fired. And

181
00:10:25,000 --> 00:10:27,520
Speaker 1: the reason is he needs to do what Kevin Warsh

182
00:10:27,600 --> 00:10:30,520
Speaker 1: has been recommending. He needs to cut those interest rates

183
00:10:30,800 --> 00:10:32,839
Speaker 1: so the short term rates can go down, and he

184
00:10:32,840 --> 00:10:36,520
Speaker 1: needs to start dumping and selling the Federal Reserve balance sheet.

185
00:10:37,200 --> 00:10:39,720
Speaker 1: I believe that you could still do both of those

186
00:10:39,760 --> 00:10:45,200
Speaker 1: things despite the inflation because dumping the balance sheet, selling

187
00:10:45,280 --> 00:10:48,280
Speaker 1: all of those assets owned by the Federal Reserve Board

188
00:10:48,800 --> 00:10:52,920
Speaker 1: will fight inflation. We can actually cut short term rates

189
00:10:53,040 --> 00:10:55,800
Speaker 1: and fight inflation at the same time. And I think

190
00:10:55,880 --> 00:10:58,000
Speaker 1: now's the time to do it. And Jerome pal has

191
00:10:58,080 --> 00:11:00,760
Speaker 1: said he will not do it, that's not his inclination

192
00:11:01,080 --> 00:11:03,959
Speaker 1: to get rid of the FED assets. He needs to

193
00:11:04,000 --> 00:11:05,880
Speaker 1: be fired. And we need to put someone in place

194
00:11:05,920 --> 00:11:09,480
Speaker 1: that's willing to fight inflation and bring down short term rates.

195
00:11:10,880 --> 00:11:16,040
Speaker 2: So this concept, this idea that was Kevin Walsh w

196
00:11:16,400 --> 00:11:19,920
Speaker 2: r SH had brought up. I haven't heard anybody else

197
00:11:19,960 --> 00:11:22,880
Speaker 2: talking about it. I haven't heard anybody else engaging it.

198
00:11:23,120 --> 00:11:25,120
Speaker 2: The only other person who I had heard talking about

199
00:11:25,320 --> 00:11:27,520
Speaker 2: the FED and some of the issues there with the

200
00:11:27,559 --> 00:11:31,320
Speaker 2: FED books was an economist E. J. Antoni, who has

201
00:11:31,360 --> 00:11:34,400
Speaker 2: now been nominated to run the Bureau of Labor Statistics,

202
00:11:34,400 --> 00:11:37,600
Speaker 2: who is a frequent guest on this show, talking about

203
00:11:37,800 --> 00:11:43,480
Speaker 2: the madness of what the Federal Reserve is doing. Is

204
00:11:43,520 --> 00:11:46,480
Speaker 2: that also part of your argument that in the end,

205
00:11:46,840 --> 00:11:48,839
Speaker 2: what the Federal Reserve has done over the past few

206
00:11:48,920 --> 00:11:53,120
Speaker 2: years has been detrimental to the United States.

207
00:11:54,000 --> 00:11:56,800
Speaker 1: Yes, it absolutely has. And let me tell you why.

208
00:11:56,840 --> 00:12:02,079
Speaker 1: You haven't heard it in other areas because Kevin ej myself,

209
00:12:02,559 --> 00:12:06,920
Speaker 1: you're talking about wonky nerds. Okay, we understand the three

210
00:12:06,960 --> 00:12:10,040
Speaker 1: tools that the Federal Reserve Board has to control the

211
00:12:10,040 --> 00:12:12,120
Speaker 1: money supply, and we start talking about M one and

212
00:12:12,280 --> 00:12:16,280
Speaker 1: M two and everyone's eyes glaze over. All they think

213
00:12:16,320 --> 00:12:18,800
Speaker 1: about is the FED cutting rates or the FED raising rates.

214
00:12:18,960 --> 00:12:22,040
Speaker 1: There's more tools in their toolbox, and they need to

215
00:12:22,080 --> 00:12:27,000
Speaker 1: reverse that quantitative easing in force. Not in a mild way,

216
00:12:27,120 --> 00:12:31,440
Speaker 1: they need to strongly reverse that quantitative easing that caused

217
00:12:31,440 --> 00:12:35,400
Speaker 1: this problem. And that's why Jerome Pal has to go.

218
00:12:35,480 --> 00:12:37,440
Speaker 1: He's just not doing the job. And I have not

219
00:12:37,640 --> 00:12:42,600
Speaker 1: been on the fire Jerome Pal bandwagon until now because

220
00:12:43,120 --> 00:12:45,080
Speaker 1: I look at this inflation data and you can't let

221
00:12:45,240 --> 00:12:48,400
Speaker 1: ignore it. You cannot ignore it. And to simply messed

222
00:12:48,440 --> 00:12:50,679
Speaker 1: around with the interest rates, that's not going to do it.

223
00:12:51,080 --> 00:12:53,320
Speaker 1: He's got to take boulder action. And apparently he didn't

224
00:12:53,320 --> 00:12:54,160
Speaker 1: know what the heck it is.

225
00:12:55,000 --> 00:12:58,040
Speaker 2: So let's say, because no one has discussed this, no one,

226
00:12:58,520 --> 00:13:03,400
Speaker 2: you fire Jerome. You now have a new fetchair. There

227
00:13:03,400 --> 00:13:05,160
Speaker 2: are a bunch of people in the running. That part

228
00:13:05,480 --> 00:13:09,240
Speaker 2: is nearing consequential for the sake in this conversation. Your

229
00:13:10,400 --> 00:13:16,280
Speaker 2: prescription is an interest rate cut coupled with this move

230
00:13:16,440 --> 00:13:21,440
Speaker 2: to clean up the books of the Feds, clean up

231
00:13:21,480 --> 00:13:26,160
Speaker 2: the balance sheet. Walk me through in sixty seconds. Here

232
00:13:26,200 --> 00:13:29,800
Speaker 2: are the three steps, and if these three steps are implemented,

233
00:13:30,320 --> 00:13:35,120
Speaker 2: the people us will experience X. Walk me through it.

234
00:13:36,360 --> 00:13:40,240
Speaker 1: If the Federal Reserve Board begins to sell its balance sheet,

235
00:13:40,520 --> 00:13:43,679
Speaker 1: sell the assets it owns, it will pull cash out

236
00:13:43,760 --> 00:13:48,080
Speaker 1: of the economy. That will fight inflation, That will push

237
00:13:48,160 --> 00:13:53,480
Speaker 1: inflation down. Step two cut short term rates, which would

238
00:13:53,520 --> 00:13:58,640
Speaker 1: cause and motivate investment in the economy. Step three is

239
00:13:58,840 --> 00:14:01,880
Speaker 1: that removes the at or Reserve Board from the equation

240
00:14:02,840 --> 00:14:06,440
Speaker 1: and it puts a positive economic environment in place for

241
00:14:06,520 --> 00:14:07,680
Speaker 1: companies to grow.

242
00:14:08,320 --> 00:14:11,480
Speaker 2: But the tariff still remain. How are the companies growing

243
00:14:11,559 --> 00:14:15,199
Speaker 2: if the tariffs still remain? Like I guess, maybe the

244
00:14:15,520 --> 00:14:18,360
Speaker 2: larger question is, Okay, you've walked through this, but you

245
00:14:18,440 --> 00:14:21,120
Speaker 2: still have this thing that you're saying is a massive problem.

246
00:14:21,400 --> 00:14:24,040
Speaker 2: If they're still there, how do these other things really

247
00:14:24,120 --> 00:14:25,440
Speaker 2: have an impact on business?

248
00:14:26,880 --> 00:14:30,800
Speaker 1: I know this will sound schizophrenic, and it is. The

249
00:14:30,840 --> 00:14:35,560
Speaker 1: Trump administration is economically schizophrenic. They're doing some things to

250
00:14:35,640 --> 00:14:38,240
Speaker 1: harm the economy, and some things to help the economy.

251
00:14:38,440 --> 00:14:40,560
Speaker 1: And what I just gave you in the three steps

252
00:14:40,600 --> 00:14:43,800
Speaker 1: you asked for is those things that will help the

253
00:14:43,840 --> 00:14:49,080
Speaker 1: economy and hopefully, let's cross our fingers, do more success

254
00:14:49,200 --> 00:14:52,120
Speaker 1: and more good than the damage done by the tariffs.

255
00:14:52,360 --> 00:14:55,680
Speaker 1: I'm operating under an assumption that Trump is going to

256
00:14:55,680 --> 00:14:59,080
Speaker 1: allow the teriffs to continue and that we've got to

257
00:14:59,120 --> 00:15:03,000
Speaker 1: just develop other policies to overcome that problem.

258
00:15:04,040 --> 00:15:07,320
Speaker 2: Yeah, we're gonna, We're gonna dig in more because I

259
00:15:07,360 --> 00:15:13,560
Speaker 2: think the schizophrenic part is really, really right. And yet

260
00:15:13,560 --> 00:15:16,720
Speaker 2: I wouldn't think that anybody in Magaville would ever think

261
00:15:16,960 --> 00:15:20,160
Speaker 2: that they're doing things to harm the economy. They see

262
00:15:20,200 --> 00:15:23,240
Speaker 2: this as long term effect to the trade deals. And

263
00:15:23,320 --> 00:15:26,720
Speaker 2: yet I have not seen the trade deals show any

264
00:15:26,840 --> 00:15:30,840
Speaker 2: fruits yet that help this economy out. And that, of course,

265
00:15:30,960 --> 00:15:32,760
Speaker 2: is the plan, is the hope, and the lowering of

266
00:15:32,800 --> 00:15:35,400
Speaker 2: interest rates is not only about juicing the economy, but

267
00:15:35,440 --> 00:15:38,320
Speaker 2: it's also about being able to refinance debt that we

268
00:15:38,440 --> 00:15:42,440
Speaker 2: have at a much much better rate, much better opportunity

269
00:15:42,640 --> 00:15:46,480
Speaker 2: and value for the US. Everything is connected, but will

270
00:15:46,960 --> 00:15:49,480
Speaker 2: we'll keep breaking it down, Doctor Matt Will, economist at

271
00:15:49,520 --> 00:15:52,520
Speaker 2: the University of Indianapolis. I appreciate you taking the time

272
00:15:52,560 --> 00:15:54,920
Speaker 2: to be with us. More is coming up on Tony Katz.

273
00:15:54,960 --> 00:15:56,280
Speaker 2: This is Tony Katz today