Larry Kudlow Joins Fellow Stooge Moore In Calling For ‘Immediate’ Rate Cuts To Rescue ‘Quite Healthy’ Economy

We’d say “you heard it from Larry first”, but that wouldn’t be true.

Because you actually heard it from Stephen Moore first.

Earlier this week, Donald Trump’s presumed Fed nominee (and man who owes the IRS $75,328.80) Stephen Moore told The New York Times that Jerome Powell and co. should cut rates by 50bps immediately in order to atone for last year’s “mistakes”. Those mistakes, Moore said, made him “very furious” with Powell, which explains why he (Stephen) felt the need to call for the Fed chair’s ouster in a comically absurd “column” published by “venerable” market tabloid Investor’s Business Daily.

“The Fed should immediately reverse course and cut rates by half a percentage point”, the Times quoted Moore as saying.

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Well, on Friday, Larry Kudlow – who reportedly showed Trump the Wall Street Journal Op-Ed which led to Moore being considered for a Fed board seat – is on the tape and guess what? He too thinks the Fed should “immediately” cut rates by 50bps.

That’s according to Axios, which is apparently now an outlet for breaking news on Fed policy as crafted, naturally, by the Trump White House. “I’d love to see [a 50bp cut]”, Kudlow reportedly said.

This latest trial balloon/implicit command from Trump to Powell comes at the tail-end of a week during which the fallout from the Fed’s dovish pivot conspired with ongoing global growth jitters to trigger (more) manic front-end moves and a massive bond rally, respectively.

Although the ferocity of the DM bond surge has unnerved equities, US stocks are of course set to log their best quarterly gain in nearly a decade thanks in no small part to the Fed’s January relent and March sequel.

That isn’t good enough for Trump, though, who is palpably concerned that without the Fed’s help, the US economy will slow, imperiling his reelection bid next year.

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Fed officials have been at pains to toe the line between pacifying Trump (who has doubled down on his Fed criticism this year despite the committee’s “epic” pivot) and not validating the market’s worst fears about the trajectory for the US economy by confirming that cuts are in the cards by year-end.

“I, for one, want to see more evidence that the economy is actually slowing before we would then go and cut rates; I think there’s a real cost to the Federal Reserve chasing noisy data because we can add to uncertainty,” Neel Kashkari said in an interview with Reuters on Friday. “There’s a cost to these pivots.”

Meanwhile, Quarles delivered an upbeat take on the economy at a Manhattan Institute monetary policy conference. While acknowledging that a patient approach is likely appropriate for the time being, Quarles said that if you ask him, his “sense is that further increases in the policy rate may be necessary at some point.”

Not according to Donald Trump, Stephen Moore and, now, Larry Kudlow, they’re not.

In addition to being yet another encroachment on Fed independence, Kudlow and Moore don’t seem to appreciate the extent to which essentially demanding that the Fed cut rates has the potential to create confusion and, potentially, a stock selloff, by raising questions about the viability of the “strong economy” story.

It is, simply put, wholly absurd for Larry to say that the Fed should “immediately” cut rates while simultaneously insisting that the US economy is humming along and is likely to expand at a 3% annual clip for the foreseeable future.

But that’s just what Larry did on Friday. In fact, just minutes after Axios reported that Kudlow is joining Moore in calling for an “immediate” 50bp rate cut, Larry told CNBC the following:

I don’t think the underlying economy is slowing. Looking at some of the indicators – I mean the economy looks fundamentally quite healthy, we just don’t want that threat.

Unfortunately, he elaborated. We’ll just leave you with a clip of the interview which, ultimately, was just supply-side nonsense infused with administration propaganda.