Larry Kudlow thinks our economy is like the 1990s, says AEI's Pethokoukis

I think the context here is that the way Larry views this economy right now is it's kind of like the 1990s where you had this sort of beginning of an economic boom beginning of productivity growth and that Greenspan saw other people didn't see and then he let this economy run and didn't raise rates I think that's where Larry kind of thinks we are right now which is why he thinks Paul shouldn't be raising rates yeah I mean Steve he said that they should look at the inflation numbers not the growth of the economy right now if you're Jerome Powell well what are you thinking right now as you get ready to testify to Congress tomorrow on Thursday and have that meeting later this month with all this discussion going on around us well isn't it ironic that six months ago they were raising rates now we're talking about cutting them in the Conference Board projects that we should have a couple of rate cuts here as the economy as the growth in the economy tends to slow towards the end of the year we don't think it's going to happen this month however but that says to me you know you go from raising rates to cutting rates we're really just right I mean this is a Goldilocks economy you're in the longest expansion in history you've got unemployment at 50 year lows you've got inflation well under control you've got growth and wages you've got investment going on consumer confidence at 18 year highs it doesn't get any better than this the only spot that you need to watch is CEO confidence there we have a situation where CEOs are a little worried about the trade situation right and they get nervous when the expansion's go this long but that's the only spot that we need to watch right now Lindsay as you know few presidents enjoyed the Fed chairs decisions on interest rates we remember HW Bush blame Greenspan for his failure to get reelected in there but never was there a time when the Fed chair faced the possibility of actually being fired or demoted by a president how does that impact monetary policy do you think right now if at all well I think you're exactly right every administration that we can think of has been incredibly critical of the Federal Reserve it's just in today's social media-driven age that that criticism is much more in our face both as consumers as investors and of course as Fed officials but I do think that the Fed has been very clear that they're not going to cow to any type of pressure be that from political figures be that from the market they're going to take a longer-term view of how the economy is doing and how the economy is expected to do over the coming six to twelve months and that's what's going to drive policy so right now the Chairman is going to take every opportunity to try and walk back the markets expectations because if we look at what the Fed told us in June the majority of Fed officials still see rates unchanged through the end of the year which is a stark contrast to what the market is looking for that immediate rate cut in just a couple weeks time at the July FOMC meeting you


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