NEC Dir. Kevin Hassett: ‘The Federal Reserve Is an Independent Agency, but the President Is Allowed to Speak His Mind‘

KUDLOW Kevin Hassett we ░░░░░░░░ last night on the ░░░░░░░░ and have talked a ░░░░░░░░ before how the Federal ░░░░░░░░ System in the age ░░░░░░░░ Trump the Federal Reserve ░░░░░░░░ should go through the ░░░░░░░░ downsizing the same transformations ░░░░░░░░ same perestroika that other ░░░░░░░░ agencies have gone through ░░░░░░░░ yet there s no ░░░░░░░░ of it And I ░░░░░░░░ a new Fed chairman ░░░░░░░░ it s you or ░░░░░░░░ Warsh or whoever it ░░░░░░░░ be it s incumbent ░░░░░░░░ you to take a ░░░░░░░░ at this because so ░░░░░░░░ it s the same ░░░░░░░░ models that haven t ░░░░░░░░ for 50 years with ░░░░░░░░ lot of dead wood ░░░░░░░░ know let alone the ░░░░░░░░ that they ve they ░░░░░░░░ be cutting interest rates ░░░░░░░░ president had another Truth ░░░░░░░░ on it today They ░░░░░░░░ be cutting rates But ░░░░░░░░ larger point than that ░░░░░░░░ s the downsizing Where ░░░░░░░░ the reforming Where is ░░░░░░░░ auditing of the Fed ░░░░░░░░ Right Well I think ░░░░░░░░ you re right Larry ░░░░░░░░ the bottom line is ░░░░░░░░ President Trump s objective ░░░░░░░░ to take all of ░░░░░░░░ and make it better ░░░░░░░░ make it work better ░░░░░░░░ the American people And ░░░░░░░░ has gotten very big ░░░░░░░░ Washington And one of ░░░░░░░░ places that hasn t ░░░░░░░░ responded yet to the ░░░░░░░░ that you re talking ░░░░░░░░ is the Federal Reserve ░░░░░░░░ I m sure that ░░░░░░░░ new leadership the president ░░░░░░░░ for the new Federal ░░░░░░░░ that they re going ░░░░░░░░ pay close attention to ░░░░░░░░ runaway spending to the ░░░░░░░░ losses after years and ░░░░░░░░ of profits and so ░░░░░░░░ And with respect to ░░░░░░░░ rates I think that ░░░░░░░░ always understands that the ░░░░░░░░ Reserve is an independent ░░░░░░░░ but the president is ░░░░░░░░ to speak his mind ░░░░░░░░ also you should look ░░░░░░░░ the data And so ░░░░░░░░ of the things for ░░░░░░░░ you could do is ░░░░░░░░ at what the European ░░░░░░░░ Bank has done with ░░░░░░░░ rates And over time ░░░░░░░░ are highly highly correlated ░░░░░░░░ what happens here in ░░░░░░░░ U S And so ░░░░░░░░ ve cut rates a ░░░░░░░░ And if you were ░░░░░░░░ take the rate cuts ░░░░░░░░ they had and do ░░░░░░░░ normal correlation for current ░░░░░░░░ policy then the current ░░░░░░░░ Reserve rate would be ░░░░░░░░ 3 And so there ░░░░░░░░ president is wondering why ░░░░░░░░ it that the normal ░░░░░░░░ seemed to be breaking ░░░░░░░░ right now precisely while ░░░░░░░░ s president And I ░░░░░░░░ that there s been ░░░░░░░░ unfortunate pattern of perhaps ░░░░░░░░ independent Federal Reserve taking ░░░░░░░░ where they you know ░░░░░░░░ right before the previous ░░░░░░░░ hiked right after he ░░░░░░░░ elected last time and ░░░░░░░░ now seem to be ░░░░░░░░ behind the curve compared ░░░░░░░░ what you know other ░░░░░░░░ banks are doing I ░░░░░░░░ that that raises the ░░░░░░░░ that they re not ░░░░░░░░ nonpartisan they re not ░░░░░░░░ independent And that s ░░░░░░░░ that I m sure ░░░░░░░░ president is going to ░░░░░░░░ in his next set ░░░░░░░░ nominations.”