THANK YOU, PETER, VERY MUCH.
PETER DOOCY AT THE WHITE HOUSE.
GO TO KEVIN HASSETT, FORM COINS
SIEVEECONOMIC ADVISORS CHAIRMAN
UNDER PRESIDENT DONALD TRUMP,
AUTHOR OF THE DRIFT.
KEVIN, GIVE US YOUR VIEW OF
THE DRIFT RIGHT NOW, MARKETS,
WHAT THEY’RE TELLING US?
YOUR OLD BOSS LIKED TO FOCUS ON
THEM BECAUSE THEY OFTEN TIMES
WERE HITTING RECORDS.
NOT SO RIGHT NOW BUT WE’RE TOLD
THIS PRESIDENT DOESN’T BOTHER
OBSESSING ABOUT THEM BUT NOW
THAT THEY’RE UNDER WATER IN HIS
PRESIDENCY, I WOULD IMAGINE HE
IS AT LEAST AWARE OF IT?
>> RIGHT, ONE WOULD HOPE BUT YOU
KNOW I’VE BEEN SURPRISED ABOUT
THE THINGS THAT PRESIDENT BIDEN
AND HIS TEAM ARE NOT AWARE OF.
THE FACT IS THAT A PRESIDENT
SHOULD FOCUS A LOT ON MARKETS.
THE REASON IS THAT MARKETS, AS
YOU GUYS JUST DISCUSSED ARE
FORWARD-LOOKING.
SO MARKETS, IF THEY SEE A
TURNING POINT COMING IF THEY SEE
A PIT OF DESPAIR COMING YOU SEE
IT IN THE MARKET TODAY.
RIGHT NOW THE MARKETS ARE DOWN
ENORMOUSLY.
I GUESS WE HAVEN’T SEEN TODAY
YET, ABOUT 23% FOR THE YEAR.
I DON’T THINK THAT IS ANYWHERE
CLOSE TO THE BOTTOM, BECAUSE THE
FED IS GOING TO CONTINUE TO
RAISE INTEREST RATES AND THE
WHITE HOUSE IS CONTINUED TO BE
IN DENIAL.
I ABSOLUTELY THINK THAT
PRESIDENT BIDEN SHOULD BE
LOOKING AT THE MARKETS.
HE SHOULD BE THINKING ABOUT WHY
THE MARKETS ARE REJECTING HIS
POLICIES.
THEN HE SHOULD THINK ABOUT
ADJUSTING THOSE POLICIES.
UNTIL HE DOES, I DON’T THINK
WE’LL REALLY SEE A BOTTOM.
NEIL: KEVIN, IF I COULD SWITCH
WHAT IS HAPPENING ABROAD, SKIP
ACROSS THE POND TO BRITAIN RIGHT
NOW WHERE THE BANK OF ENGLAND
WOULD NOT HESITATE TO CHANGE
INTEREST RATES BY AS MUCH AS
NEEDED TO BRING DOWN INFLATION
AND WHAT WAS RATTLING THE
BRITISH MARKETS TODAY AS WAS
RATTLING THEM LAST WEEK BUT
THESE LATEST PROPOSALSES ON THE
PART OF LIZ TRUSS, THE NEW PRIME
MINISTER, TO REIN IN, TRY TO
REIN IN WHAT IS HAPPENING ON THE
ENERGY FRONT WHERE UTILITY BILLS
OF 80% OF BRITS, SO OVERWHELMING
A LOT OF THEM CAN’T PAY THEM.
>> RIGHT.
NEIL: SHE IS OFFERING TAX CUTS
BUT THE TAX CUTS ARE BEING
DEEMED INFLATIONARY BY THE
MARKETS AND WOULD MAKE A BAD
THING EVEN WORSE.
IT WAS AN INTERESTING TAKE ON
THAT.
I WONDER WHAT YOURS IS?
>> RIGHT.
WELL I THINK THAT YOU KNOW, THE
FACT IS THAT YOU GET INFLATION
WHEN THERE IS A LOT OF DEMAND
LIKE WE MAILED CHECKS TO PEOPLE
AND SUPPLY IS CONSTRAINED AS IT
WAS HERE BOTH BECAUSE OF THE
PANDEMIC AND BECAUSE OF
JOE BIDEN’S EXCESSIVE REGULATION
AND TAX HIKES.
AND SEW, IF YOU LOOK AT THE WAY
RONALD REAGAN AND POLE VOLCKER
DEFEATED INFLATION THEY NOT ONLY
HAD HIGH INTEREST RATES BUT
SUPPLY-SIDE TAX CUTS AND A BIG
REDUCTION IN DISCRETIONARY
SPENDING T DROPPED MORE THAN 20%
AT THE BEGINNING OF THE REAGAN
ADMINISTRATION F YOU WANT TO
FIGHT INFLATION, YOU’RE SERIOUS
ABOUT IT, A STUDENT OF HISTORY,
SUPPLY-SIDE TAX CUTS BUT PAY FOR
THEM IN BIG REDUCTIONS IN
GOVERNMENT SPENDING AND HAVE THE
FED DOING WHAT THEY’RE DOING.
THE FED IS GOING ALONE.
ROWING WITH ONE OAR.
FISCAL POLICY IS IF DENIAL GOING
THE WRONG DIRECTION WITH THE
STUDENT DEBT FORGIVENESS N THE
U.S. WE’RE NOT ANYWHERE CLOSE.
IN THE UK I WOULD LIKE TO SEE
MORE FISCAL RESPONSIBILITY BUT I
THINK THE SUPPLY TAX CUTS ARE A
GOOD START, GOOD STEP I MEAN YOU
TO GET MORE SUPPLY AHEAD OF
INFLATION AND LIZ TRUSS IS
TRYING TO DO THAT.
NEIL: THE REAGAN DISTINCTION
NOTWITHSTANDING, DEFICITS DID
ALAN AS TIME WENT ON.
A LOT OF REVENUE CAME INTO
WASHINGTON AS YOU POINT OUT,
POLITICIANS PROVED ABLE TO KEEP
SPENDING REVENUE AND THEN SOME.
DO YOU WORRY IF REPUBLICANS
WOULD TAKE CHARGE, NOT THAT YOU
WOULD WORRY ABOUT THAT WE COULD
FACE A PROBLEM AFTER DIFFERENT
STRIPE HERE?
>> RIGHT.
WHAT WILL HAPPEN IF REPUBLICANS
TAKE CHARGE WE’RE GOING TO SEE,
IS JOE BIDEN ABLE TO WORK WITH
REPUBLICANS OR NOT?
IF HE IS, THERE ARE A LOT OF
SOUND THINGS THAT YOU KNOW
PERHAPS SPEAKER McCARTHY HAS
PLANNED FOR NEXT YEAR BECAUSE
THEY UNDERSTAND THAT IT IS TIME
TO ACT.
IT IS TIME TO MAKE SURE THAT THE
EXPIRING TRUMP TAX CUTS DON’T
EXPIRE.
AND TO GET MORE FISCALLY
RESPONSIBLE.
I COULD SAY AS AN ECONOMIST IF
YOU LOOK AT ECONOMIC HISTORY IT
TENDS TO BE THE TIMES WHEN WE
HAVE DIVIDED GOVERNMENT MARKETS
ARE HAPPIEST AND POLICY IS THE
MOST SENSIBLE BECAUSE IT IS ONLY
SORT OF SOUND IDEAS THAT CAN GET
BOTH SIDES TO GO THROUGH.
SO I WOULD ACTUALLY SAY THAT IF
REPUBLICANS CAPTURE THE HOUSE
THAT WITHIN A FEW DAYS OF THAT,
THAT WOULD BE WHEN THE STOCK
MARKET WOULD BOTTOM BUT OCTOBER
IS GOING TO BE VERY, VERY SCARY
AND MARKETS WILL BE A LOT OF
VOLATILITY BECAUSE PEOPLE WILL
BE WORRIED IT WILL GO THIS WAY
OR THAT WAY.
IF THERE IS A LITTLE BIT OF GOOD
NEWS FOR DEMOCRATS, PEOPLE THINK
THIS PROFLIGATE SPENDING ATTACKS
ON THE SUPPLIED SIDE IT WILL
CONTINUE FOR TWO MORE YEARS,
MARKET WILL THINK THE FED WILL
LEFT RATES TO 8 OR 9% BECAUSE
THEY’RE THE ONLY GAME IN TOWN.
I THINK WE’LL HAVE A REALLY
TERRIBLE OCTOBER.
WE’LL PROBABLY HIT BOTTOM IF
REPUBLICANS CAPTURE CONGRESS.
NEIL: SO DO YOU THINK PART OF
THIS SELLOFF THAT HAS BEEN
HAPPENING AND BUILDING MOMENTUM
HAS TO DO WITH THAT PROSPECT
THAT REPUBLICANS DON’T DO AS
WELL IN THE MIDTERMS?
THEY MIGHT TAKE THE HOUSE.
IT DOESN’T TAKE REAL LEAP FOR
THAT TO CHANGE BUT ANYTHING ELSE
BIG OR CERTAINLY LIKE A 1994
GINGRICH REVOLUTION WAVE DOESN’T
HAPPEN?
THAT IS BEING PARTLY REFLECTED
IN WHAT THE MARKETS HAVE BEEN
DOING?
>> RIGHT.
I THINK THE ABSOLUTELY YOU’RE
RIGHT.
THAT THE MARKET HAS BEEN
SURPRISED BY FED POLICY AND
MARKET HAS BEEN I THINK
SURPRISED BY THE COMEBACK OF
DEMOCRATS IN THE POLLS.
I THINK THAT IS PROBABLY
ATTRIBUTABLE TO BOTH THE SORT OF
SOAP OPERA OF PRESIDENT TRUMP,
ATTACKS ON HIM AND ALSO BECAUSE
OF YOU KNOW, ABORTION BEING SUCH
A HOT BUTTON ISSUE.
THIS ELECTION WILL BE ABOUT A
LOT OF ISSUES BUT AS AN
ECONOMIST I CAN SAY IF YOU WANT
THE ECONOMY TO TURN AROUND YOU
HAVE TO STOP THE SOCIALIST
NONSENSE THE BIDEN AND THE
DEMOCRATS HAVE BEEN DOING THE