Stephen Moore calls for Fed rate cut this year

Channel: Fox Business
Published: 05/21/2019 04:11 PM

The Heritage Foundation's Stephen Moore on the rise of socialism and argues for a Federal Reserve interest rate cut this year. FOX Business Network (FBN) is a financial news channel delivering real-time information across all platforms that impact both Main Street and Wall Street. Headquartered...

All right, let's bring in the aforementioned at stephen moore heritage foundation. Distinguished visiting fellow stephen, welcome back to the show, is good to see a man like you hi, stuart. Okay, am i right here? Socialism appears to be popular in that poll, but when you dig into it, real socialism is not that popular well. There is a lot of data in that poll by the way. What was the number you th ...
t people who want the government to control the economy? I think you said it was about three is 33 percent? Yes, so that you know even that's disturbing to me. One one out of three americans want to control our economy. Now the question iswhy. Is there this kind of infatuation with socialism? You know when i was friends with milton friedman up until the day he died, and i remember he used to say to me steve. You know the the most important lesson of the 20th century, and i think he was right about this - is that free market capitalism is generally success and socialism communism. These other isms are a failure and he used to see used to lament that for some reason, even though we know that's true, people say they want a little bit more socialism, and i think that's what's coming through in this poll, and i would say the thing That disturbs me, the most about thisstewart is. It is an incredible indictment of our education system in america that we're spending hundreds of thousands of dollars, djk kids from the time, they're four years old to the time, they're, 22 years old and they're coming out with these. You know dimly dim-witted ideas about socialism and and look as if you're a consumer can conservative like i am - and i think you are, we have ourselves to blame, we let the left run the school, and this is what they're teaching the kids.

That is absolutely true. You'Re right, they're, stephen now, atlanta's fed president says he doesn't expect a rate cut this year. What do you think? Do you think we should cut ratesthis year and, if so, why? I do? I think we should. We should cut by a quarter percentage point which would reverse the catastrophic ly bad rate increase that happened in december. Remember, i think it was on this show when, when the when the fed raised those rates, i said it's crazy. This is an act of malpractice. Remember in early january, the fed had to reverse course and say we're not going to raise rates throughout 2019. Now that was a start, but i would i would reverse the thing now. I want to tie this by the way if i may stuart, because i'm writing the column on this right now, so i'm going to giveyou a sneak preview of this look at what's happened to commodity prices, especially agriculture prices over the last year, they've fallen. I just looked at the numbers: they've fallen by an average of a little. Almost ten percent, now think about the problems that farmers are facing, everything. Oh it's because of the china trade situation, our farmers are struggling and and there's no question the trade war and the fact that the chinese are gon na buy less of our soybeans and wheat and cotton.

That does hurt our farmers, but i would make the case to you store it, and i want your reaction to this, and the big villain here has been the fed. They are tootight they're, causing a deflation, especially in commodity prices. That'S killing our farmers and if the fed were to raise rates, put some more money liquidity in the economy. Our farmers would be doing a lot better and say the fed is the bigger villain here than the chinese trade war. I'M not gon na get into a fight with you, okay, you know it wouldn't be a fight. It would be one-sided discussion because you know a lot more about this than i do and that's a fact, but i do want to ask a bit more about trade. If this trade fight drags on for a long time and i'm talking months and months, do you think that thebusiness will continue to give political support to the president? You mean that the business groups business community yeah? Well, i don't. I don't see him that them giving him support right now. Okay, what groups? What business groups are supporting trump on this and by the way you know i'm kind of agnostic. On this i mean i think trump is fighting a good fight. Here i mean, i think the chinese are their behavior is outrageous. Their trade practices are outrageous.

I think trump is exactly right to call them out on this. I'M not so sure the tariff is, is necessarily the right way to do it, but yeah i mean, i think, make a good pointif. This continues to roll on, and i think i said on your show a week or two ago. I expect that that before the end of this year, i think there's a high likelihood there will be a deal. I don't think it's gon na be a great deal. I think you know china will make some minor concessions, but once that happens, i think the economy goes back on its merry way and we've got a strong 2020. If that doesn't happen, though, if this trade fight continues to to go on, you know past the end of this year, i think it could depress the economic growth by a half a percentage point or so and that's alot yeah, that's a big number. I can't resist going back to the fed for just one shining moment. I know you're set me straight on this. If we, if the fed did cut rates now, yeah, you think we'd get 4 % growth in the third or fourth quarters of this year. Well, the trade, the trade war is a problem you know, so i think there's two problems right now in terms of the economy: who's you, if the fed were to lower rates and just get rid of this idea of there's no raise rates. I think that would be a very positive thing and, second of all, if we solved the trade crisis and we get somekind of deal with china, then yeah look go back to the summer of 2018 before the fed started raising rates and before we had this trade War, we did get to three and a half to four percent growth.

Remember that story. Yeah there was no inflation, that's my complaint about the fed. Why is that? Why were they raising rates when there was no hint of inflation, they say? Oh well, we had to normalize interest rates. I don't even know what that means. I don't. I have no idea what they're talking about raising rates to normalize interest rates, we're in a whole new environment right now. But yes, the answer is because remember you can lookit up on your tape. Stewart i mean remember three years ago on the show i said: 4 % growth to five years. If we get these policies in place and i'm sticking to it, okay, good man, stephen moore, don't be such a stranger, come and see us again real soon. Okay, okay, see you soon. Thanks,.

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