Peter Navarro Calls For Huge Fed Cut, Trashes WSJ In Bartiromo Interview

With the dust having settled on a~6% tariff-related stock selloff, Fox Business’s Maria Bartiromo welcomed Peter Navarro to the network on Thursday, and you’ll never guess what he said.

We jest. Peter parroted the usual talking points, which increasingly revolve around the notion that while China is a nefarious external force determined to impoverish US workers and steal American technology, the real problem for the US economy is the Fed.

See, despite their differences, Xi is a “good friend” of Trump’s, but Jay Powell – he’s a different story.

In any case, the administration is rolling out the damage control team to try and shore up market sentiment and reinforce Trump’s narrative.

“Our problem is not China, our problem is a Federal Reserve”, Trump declared on Wednesday, on the way to accusing Powell of being “too proud to admit [his] mistake of acting too fast and tightening too much”.

Navarro reiterated that on Thursday (his comments were carried on wires starting Wednesday evening).

“The Fed needs to cut rates to boost the US economy”, Peter said. He also referenced the rate differentials pillar that helps underpin dollar strength – Navarro wants Powell to help shrink the spread, which Peter calls “large”.

To her credit, Bartiromo repeatedly questioned Navarro on the extent to which the administration’s adversarial stance is contributing to the safe-haven bid which, depending on the day and circumstances, often creates demand for USD-denominated assets, thereby driving up the dollar and working at cross purposes with the tariffs in a self-defeating insanity loop.

Finally, after several attempts to deflect, Navarro said “I understand”, and his “solution” was to call for Fed cuts, “not because the economy is weak”, but because things are just so unfair for his boss.

(If the video does not load, please refresh your page – full interview)

As far as what Peter thinks is the “right” level for US rates, Navarro told Bartiromo he sees the Fed delivering between 75bp and 100bp of additional easing by the end of the year. That will just reinforce market expectations for three cuts, thereby backing the Fed further into a corner.

On Wednesday, The Wall Street Journal’s Trump-friendly editorial board ran an Op-Ed called “A Navarro Recession?“.

“Trade and currency mistakes are eroding economic growth”, the Journal said. Asked about that by Bartiromo, Navarro again claimed the Journal is somehow anti-Trump.

 

Last month (and again on Thursday), Navarro likened the Journal to The People’s Daily, an absurd contention given how many times the paper’s overtly biased editorial board has jeopardized their own reputation to defend the administration.

On Sunday, Fox’s Chris Wallace confronted Navarro with a chart that mirrored Goldman’s analysis of the affect tariffs have had on certain goods.

For those who missed it, the bank in May called the effect of the tariffs on consumer prices over the last 18 months “larger than… previously estimated”. As Goldman explained, that’s because “the costs of US tariffs have fallen entirely on US businesses and households, with no clear reduction in the prices charged by Chinese exporters” and also because “the effects of the tariffs have spilled over noticeably to the prices charged by US producers competing with tariff-affected goods”.

In other words, exporters are not eating any of the costs and other folks are opportunistically raising prices — imagine that. Here are the visuals:

(Goldman)

When Wallace pressed Peter on the incontrovertible facts (which were reproduced on the screen using the Labor department’s own data), Navarro became visibly upset.

(If the video does not load, please refresh your page)

As you can see, the administration’s default answer when presented with hard data produced by their own statisticians, is to blame the Powell Fed.

Thursday was no different. At least Bartiromo is a friendlier host than Wallace, who has somehow managed to retain some semblance of credibility despite his employer’s best efforts to transform the network into the US equivalent of state television.


 

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5 thoughts on “Peter Navarro Calls For Huge Fed Cut, Trashes WSJ In Bartiromo Interview

  1. About 6 months ago, great minds were all focused on not allowing the great trump recovery and massive economic explosion get too far out of control, with raging inflation — today we have a policy panic to embrace ZIRP, crash yields and the dollar and get America back to where it was 6 months ago, amazing bullshit! I assume this is all about trump manipulating his private investments, but of course the SEC would never look at insider trading and IRS can’t touch his taxes or ever see what’s going on.

    “International Monetary Fund director Olivier Blanchard has recently said that higher debt levels might not cost us as much as we thought. And the Federal Reserve has admitted that the trade-off between lower unemployment and higher inflation is so small right now that it can afford to raise rates at a much more measured pace than it had assumed.”

    https://www.washingtonpost.com/business/2019/01/25/everything-you-need-know-about-theory-that-deficits-dont-matter/?noredirect=on

  2. I’ve heard of towns having a “Village Idiot” but I didn’t know America now had a “National Idiot” in the White House.

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