JACK: INFLATION FEARS CAUSE
ANOTHER SHARP SWING AND THE FED
SLOWS THE ECONOMY WITHOUT A
RECESSION BUT WHAT CAN THE
BIDEN ADMINISTRATION DO TO
HELP?
JOINING ME IS CHAIRMAN JASON
FURMAN OF THE NATIONAL COUNCIL
OF ECONOMIC ADVISERS. JASON, THANKS FOR COMING ON.
JASON, THANKS FOR COMING ON.
>> THANKS FOR HAVING ME.
JACK: THERE’S NOT A GREAT TRACK
RECORD OF HIKING RATES WITHOUT
RECESSION.
INVESTORS FEAR WE ARE HEADED
THAT WAY.
WHAT’S YOUR TAKE?
>> THERE IS A LOT TO BE NERVOUS
ABOUT WHETHER WE ARE TALKING
ABOUT GLOBAL EVENTS, DOMESTIC
EVENTS OR HIGH INFLATION.
I AM NOT THAT OPTIMISTIC ABOUT
HOW THE FED CAN LAND THE PLANE
SOFTLY BUT OVER THE NEXT YEAR
THE ECONOMY HAS A LOT OF
STRENGTH SO MY NEAR-TERM
RECESSION WORRIES JUST AREN’T
THAT MUCH HIGHER THAN USUAL.
JACK: HOW HIGH WILL POWELL
RAISE RATES TO TAMP DOWN
INFLATION?
>> GROWTH IS GOING TO BE
STRONGER THAN THE CONSENSUS,
INFLATION IS HIGHER THAN THE
CONSENSUS RIGHT NOW.
AS RESULT I THINK YOU WILL NEED
TO RAISE THE FED FUNDS RATE TO
FOUR AND HIGHER BY THE END OF
NEXT YEAR.
JACK: THAT WILL BE A SHOT TO
THE MARKET, GOOD GROWTH COULD
BE A GOOD SIGN.
THAT IS THE FED WHICH IS THE
MAIN BATTLEGROUND IN THIS FRONT
AGAINST INFLATION.
WHAT CAN THE WHITE HOUSE DO?
WHAT WOULD YOU TELL PRESIDENT
BIDEN TO DO?
>> PRESIDENT BIDEN IS NOT A
GREAT PLACE BUT HE DOESN’T HAVE
A LOT OF TOOLS TO BRING THAT
INFLATION DOWN.
DONE SOME OF THE RIGHT THINGS
IN TERMS OF IMPROVING SUPPLY
CHAINS, SHIPPING, TRUCKING AND
THE LIKE, FROM THE STRATEGIC
PETROLEUM RESERVE WAS A GOOD
IDEA TOO.
ONE OF THE BIGGEST UNTURNED
STONES IS TO LIFT THE TRUMP
CHINA TARIFFS.
JACK: THE REASON FOR PUTTING
THOSE IN PLACE WAS TO PROTECT
US MANUFACTURERS AND
STEELMAKERS, WOULD IT HURT THE
DOMESTIC ECONOMY?
>> WE ARE AT A TIME OF RECORD
JOB OPENINGS WHEN ANY SINGLE
GOOD YOU CAN MAKE THERE IS
SOMEONE TO BUY.
I CAN’T THINK OF A BETTER TIME
ON THE EMPLOYMENT SIDE OR MORE
NECESSARY TIME FOR CONSUMERS.
JACK: ANOTHER STEP YOU
ADVOCATED IS TO END THE
PAZIENZA STUDENT LOAN PAYMENTS.
>> IT IS INJECTING MORE MONEY
TO THE ECONOMY, ENABLING PEOPLE
TO SPEND MORE MONEY BUT WE
CAN’T MAKE MORE STUFF, THE
RESULT IS PRICES GO UP.
WE COULD EASILY BE ADDING A
QUARTER TO HALF A POINT TO THE
INFLATION RATE.
THE UNEMPLOYMENT RATE FOR
COLLEGE EDUCATED WORKERS IS
LESS THAN 3%, SHOULD GO BACK TO
PAYING THAT INTEREST.
JACK: HARD TO ARGUE WITH THAT.
LET’S TALK ABOUT THE DEMOCRAT
POINT CORPORATE GREED IS
PUSHING INFLATION HIGHER, THE
RESULTS FROM TARGET AND WALMART
SUGGEST THAT IS NOT TRUE.
WHAT DO YOU THINK?
>> I THINK IT IS NOT TRUE.
CORPORATIONS ARE TRYING TO
MAXIMIZE PROFITS MEANING THEY
CAN CHARGE MORE OR THEY CAN’T
CHARGE MORE, THEY DON’T GET TO
CHOOSE WHEN CHARGING MORE.
CORPORATIONS ARE PAYING MORE IN
WAGES, PAYING MORE FOR THEIR
INPUT.
IN SOME WAYS THE GREED
HYPOTHESIS SEEMS STRIKINGLY
REFUTED BY WHAT IS HAPPENING.
JACK: I WILL TOSS YOU ANOTHER
POLITICAL HOT POTATO.
WHO’S TO BLAME FOR HIGHER GAS
PRICES?
IS IT BIDEN?
IS IT PRUDENT?
IS IT OIL COMPANIES THAT HAVE
CAPITAL DISCIPLINE THEY DIDN’T
HAVE BEFORE?
>> A LOT OF THE INFLATION IS
HOMEGROWN BUT ON TOP OF THAT
HOMEGROWN INFLATION IS HIGH OIL
PRICES DUE TO PRESIDENT PUTIN’S
INVASION OF UKRAINE, THAT
RAISED OIL PRICES GLOBALLY,
RELATIVELY LITTLE PRESIDENT
BIDEN CAN DO ABOUT THAT,
RELEASE FROM THE STRATEGIC
PETROLEUM RESERVE, THAT IS A
GOOD IDEA BUT GASOLINE PRICE IS
LARGELY PRESIDENT PUTIN’S
PRICE.
JACK: THIS TRIP JANET YELLEN
TOOK TO POLAND TO GET THAT
COUNTRY ON BOARD WITH A 15%
MINIMUM TAX.
AS AN ECONOMIST WHAT IS YOUR
VIEW OF THAT?
>> I’M SUPPORTIVE OF THE
MINIMUM TAX, SOMETHING THE
WHOLE WORLD AGREED TO THAT WILL
PUT COMPANIES ON A MORE
COMPETITIVE FOOTING BECAUSE
EVERYONE IS DOING IT.
IT WILL STOP A RACE TO THE
BOTTOM AND ENABLE US TO CUT
TAXES.
IT IS A VERY EFFICIENT WAY TO