David Stockman: Don’t use a tariff on a border control problem
Former Reagan Budget Director David Stockman on President Trump’s use of tariffs as a negotiating tool, the Federal Reserve and the mounting government debt.
Former Reagan Budget Director David Stockman on Wednesday said he thinks it would be a grave eorror on the part of the Federal Reserve to cut interest rates over trade concerns.
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"We've got the lowest unemployment rate in 50 years, we've got an 119 month-old expansion, which is now the longest in history, and they're going to cut rates even further after we've had rates so low for 10 years that they've been below the inflation rate?," he told FOX Business’ Neil Cavuto.
Federal Reserve Governor Lael Brainard said Wednesday she thinks trade policy is a negative issue for the U.S. economy’s outlook, and that she would be watching the upcoming data carefully to determine what the central bank’s next move.
“We’ll be prepared to adjust policy to sustain the expansion,” Brainard said.
Stockman thinks the markets have become "totally addicted to easy money from the Fed.”
"The Fed last fall said, 'finally we are going to normalize interest rates, get them above the inflation rate’…The market went into a hissy fit, we had the Christmas Eve selloff and what did the Fed do? They pivoted and basically capitulated to all the whiners and crybabies on Wall Street,” Stockman said.
When asked his thoughts on President Trump’s tariff threats, Stockman said he thinks the president has “gone off the deep end on trade” and "has basically declared himself the trade dictator.”
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"[Trump] is using these statutes for reasons that were never intended. You don't use a tariff on a border control problem, you don't investigate European automakers because they're sending BMWs and Porsches to the United States and calling it a national security problem. It's not a national security problem,” Stockman said.
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