Trump has been crafty and wise in dealing with the Fed: Eric Cantor

Channel: Fox Business
Published: 4 hours ago

Description
FBN’s Charlie Gasparino interviews former House Majority Leader Eric Cantor (R-Va.) about President Trump’s ongoing battle with the Fed. FOX Business Network (FBN) is a financial news channel delivering real-time information across all platforms that impact both Main Street and Wall Street. He...



Transcript
The feds actions or non-action they kept rates pat right, not moving, are reverberating all the way from the floor of the new york stock exchange to southern california, charlie gasps marino is in beverly hills at the milken conference, where i guess the president's criticisms of the federal Reserve, charlie and its ability to stay independent are taking center stage yeah, i mean there's a lot of ...
eople here that obviously they're part of the establishment. They do worry about a fed, the federal reserve and jerome powell and the board of the federal reserve being independent. They do worry about that trump, maybe appointing political types to the board like a steve, moore or herman cain, whose popout out as you know, but i did ask our cantor former gop house majority leader now an investment banker molson company, i said you know - is there Kind of an upside here i mean, and he basically said there is here's what he had to say to say what do you think about what he's doing with the federal reserve? You know: listen every president, going back forever. I remember the debate in the reagan administration, arms that paul, volcker was raising rates, reagan came out supporting him, but there's always been a political back-and-forth between the administration and the fed. But doesn't it seem his attacks on jerome powell and even his nominees herman cain? Who i thinkis a very nice guy, steve moore, is a friend of mine. They seem a little overly politicized. Don'T you agree with that? Well, i can only say that if you look at what the president did is is it was pretty crafty and wise if you want to see these rights come down and not go up whether they stay the same or go down to go in on public attack, It puts the federal reserve board in a position where one they don't want to be seen to be reacting to any political pressure, but they also as policy makers in the monetary realm. They don't want to not do something that needs to be done. Just becausethey don't want to appear political, so it's like a no-win for them either way and again, it looks like president got what he wanted. I mean, obviously with the rate staying where they are. We look and see what's going on in the markets and a lot of good economic data out today. Well, you know liz the markets are off today, a bit.

I don't think it's because of what the fed did. There'S a lot of reasons to take some profits right now, but if you look at it after that december, swoon that implosion that occurred, you know when the fed was raising rates. Doing reversing the quantitative easing is selling it there, their balance sheetinto the market. You know rates backed up stock sold off that has stopped and in a sense trump you know had a victory here i mean, i don't think we can underestimate this. I mean he basically got the federal reserve come back off the jaw jawbone them. Is it good or not? I mean you know long-term, i guess we can make a lot of. We can make the case that it's not good to have an anon, independent, fed, short-term, at least or medium-term. We got a market that keeps going up and it's going up because he backed he got the fed to back off the rate increases, particularly on the under the lows on theon, the short end and i'll. Tell you a cantor is a pretty savvy political guy. He knows the markets pretty well, as i said, he works in investment banking. You know and he was not like an unabashed trump supporter over the years. This is a this is a you know, part of that more globalist wing of the republican party gives the he gives that he gives victory to trump on this one.

It'S pretty amazing back to you. I would say this. President trump was right to flag the fed and say be careful here we are seeing a bit of a slowdown and the fed woke up and stopped raising rates. However, the fed has avery important mandate and that is to be ready to protect the country. If we do have some type of financial crisis the likes of what we saw before and to make sure that they have their toolkit ready, willing and able, if you get rid of all your tools, when you don't need them, and then you need them, that's a Problem, charlie yeah, no you're right, you know, listen we're it's! The fed funds right now is at a level that, if you need it to lower rates right on the short end anyway, i'm you know, because we have a recession, there's not much just not it's not that far you can go. You can go intothe market and do quantitative easing when we can discuss exactly what that is. That'S buying securities out of the bat markets. When you buy a bond out of the markets, the price goes up. The ield goes down it's very powerful, it's what they did right after the financial crisis. They still that have that in their quiver. I think the problem with your own powell - and i think you know trump - is not a trained economist by far what he did was, he said: listen he's looking at your own powell on the long end, unloading, the balance sheet and, on the short end, raising rates Both of those together had a very powerful impact on the marketsi. Don'T think he could do both it looks like powell has backed off.

Obviously he has backed off the short. The short end they're still unloading the balance sheet on the long end, and that's maybe the way that they should approach this thing safe journey back charlie. I guess i do from sunny california yeah i'm jealous thanks. So much.


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