John Carney: We bought inflation below Biden

All right joining me now John Carney Breitbart economics editor and co-author of the Breitbart business digest welcome back John um we have an APB out for Steve Hilton but you know you and I will talk um one of your topics was going to be tariffs are not inflationary there's an interesting uh study from the one of the left-wing think tanks not that they.

Care about inflation but because Trump might raise tariffs or use tariffs as a tool to uh enforce reciprocity they're all up in arms tariffs will cause inflation but you say not no there's they they didn't cause inflation they screamed about inflation when Trump was President last time around and we didn't see it it did it just didn't happen I.

Tracked month after month these numbers everything you could imagine the only thing I found that actually went up in price were bicycles um and that may have actually been a Metals tariff uh phenomenon but for the most part television prices went down car prices went down we actually got inflation under Biden so it wasn't tariffs that.

Caus inflation it was an over accommodated monetary policy from the fed and overspending by the federal government absolutely 100 that's what costs it it's that tariffs by the way economists will tell you if you really pin them down and make them tell you the truth that tariffs can't cause inflation unless they raise the incomes of the.

Domestic population because where is the extra spending power going to come from to support a generally higher price level that's a good point I mean look you'd have If the Fed open Full Throttle and flooded the markets with liquidity and money and so forth that would cause inflation but that's independent of the Tariff Factor that's right so it's.

Important to isolate that look the other thing is economists I mean some economists will always panic over the word tariff but knowing Mr Trump as I do and having worked with him for three years he sees tariffs as a weapon to enforce reciprocity you deal with me I'll deal with you but if you raise your tariffs or your non-tariff barriers I'm.

Going to have to do something about it and I might use a tariff to enforce that the main tariff uh issue was China we made lower tariff moves with Japan and South Korea and Australia the main one was China and China had no reciprocity China was guilty of unfair trading and look we saw actually a lot of manufacturing shift out of China and.

China suffered there was a Wall Street Journal report that said China suffered three times as much as the US from those tariffs so and they're not friendly to tariffs by the way at the Wall Street Journal but they report but they reported that uh that it was far harsher on China China's economy suffer they are very worried about the next round of.

Tariffs because they did more or less stiff armed Trump the last time they said we're not giving in they were counting on the next president to come in and repeal those tariffs actually Biden didn't do that well we'll have to refresh I mean the phase one trade deal I I don't no one seems to know what what the results are uh it's all up in the.

Air uh let me move on the Cleveland fed inflation nowcast for the CPI which comes out next week I guess uh was looking for 0.4 CPI um annualized that's almost 5% if that's the case that would be the fourth straight month of um say four and a half to 5% inflation what does that mean that's that's not expected no it.

Was supposed to be coming down everybody said it was going to come down when when it was high in January they said that was just a fluke it's going to come down it hasn't come down it's not coming down there if you look at all the other indicators that would tell you that inflation is going to come down they're not telling you that message we still.

Have excess savings so people are still spending money I have a whole breit bar business digest tonight coming out about the continuation of excess savings the FED thinks those have been depleted they have not they're still there people are still spending corporate profits look at those those are way up and that's feeding demand so and then if you look.

At employment yeah we had a weak number last month but it's still very high unemployment is very low so that's not causing it look at the housing market house prices keep going up that was supposed to be the thing that was going to start subtracting from inflation instead rents are up house prices are up the New York fed just did a survey asked.

Renters and homeowners what do they think is going to happen to prices and rents in the future and both of them are at the second highest level ever only after the last big only after 202 so the fed's going to stay put actually one fed person Neil kashar said the first the next move could be a higher rate um but there's no question there's not going to.

Be rate Cuts now the only guy that may not know that John this is my last point is Joe Biden because Joe Biden has been hitting the FED to lower their target rate I mean people say Trump in inter years with the FED Joe Biden's interfering with the FED but he's not going to get his wish is he I think Joe Biden actually needs to call Janet Ellen.

On the phone she's meeting regularly with the with the FED chairman breakfast every Friday right and say hey what's he telling you because he's got to be saying hey look you know you got to get the president to stop saying we're going to cut interest rates we're not going to cut interest rates it's making him look foolish and out of touch with what's.

Happening in the economy and every time he says it I think the American people say that guy doesn't know what's happening in the economy so therefore he doesn't know what's happening with me and the the media gives him a free pet cuz when Trump had something to say about the fed the media went berserk Biden say three times he's attacked the.

FED for lower rates media doesn't even want to cover it John Carney a breit bar thank you very

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