FED, Central Bank, Cnbc discussed on Squawk Pod

Squawk Pod


It's a good lesson. The minutes from the fed's September meeting were released yesterday, and the headline there that policymakers have been surprised by persistently surging prices, even as they raise interest rates to cool off the economy. The Central Bank has raised benchmark rates three full percentage points since March. Let's get back to Becky. Stop me if you've heard this before, that Central Bank officials expect higher interest rates to remain in place until prices come down. This has been the chatter. This has been what everybody knows what everybody expects. And when we got that hotter than expected producer price index number yesterday, that made people that think that this could be a longer haul than even before. I just don't know, how do you know not that you're not going to overshoot? On raising rates? Yeah. How do you know that what they've done this point? How do we know that this isn't going to work? Do we really need to know? But if we go another three quarter, you may be. But if you are looking at inflation that is stubborn, it's so persistent. And if you can do it by continuing to keep, look, it's too terrible choices. Do you kill the economy with higher interest rates? Or do you let people's spending power get completely eaten away by inflation? We talk about Tina's dead. We talk about how attractive four point three, 4.4 is on the, how do we know this isn't enough right now? How do we know this is? Have you ever noticed anything you go further? You know you're going to overshoot and you'd argue that some people clearly people think it's not the fed thinks it's not enough because they look at numbers. Well that's also looking at some of the just look at just how tight the employment picture is. Just straight up feeling whiny. I stopped raising. You don't want them to raise today. No, I want them to go 50. I mean, that would be interesting. The problem is, is that the market would react as if that's the point. But look, they are trying to quell human behavior. And if they go 50 basis points, the markets will think they've broken them. And it will be off to the races again. This is what you watch with Bank of England right now. What's going to happen, right? Is the Bank of England going to actually close the window and say, no more guilt purchases, we're back to quantitative tightening, or they've got their own treasury secretary in effect, who's arguing against the central banker there. You said 2020, guests hold Barbara Walters. How old? 93. Good for her. Guess who doesn't look 80? Don't say me. Go to. Joy behar. Oh, she does not look 80. Did you see the president and First Lady? I hope on my birthday. Yeah. Not for nothing, but they did a long video that they played on that show yesterday. I mean, they love her. Well, you know, that's what you do. No, it's on. That's on Twitter and it was the person who sent it to me wasn't actually saying this is awesome. I mean, it was like, can you, I think they use the word cringe worthy. But yeah, it's a check it out. It's like a minute long. And they were really, really nice. Happy birthday. Yeah, not quite that. Doctor Biden didn't do that. Cheese will be next. Up next on squawk pod, red hot inflation, an aggressive Federal Reserve. It's the 2022 story, the markets can't shake, and we can't stop talking about. We're looking at the policies and the pain still to come, with former Speaker of the House, Paul Ryan. I think there are some things in the supply side you could do to try and mop up inflation, take pressure off the fed, and instead the fed's going to have to do it all on their own. And as a result, yeah, I think we're going to go into a recession. We'll be right back. The CNBC investing club gives you access to Jim Kramer like never before. Know what he's trading before he makes the trade. Get one year for two 9 9 9 9. Subscribe today at CNBC dot com slash join gym that CNBC dot com slash join Jim. Welcome back to squawk pod from CNBC. Up and enter. Q good morning and welcome back to squat box right here on CNBC we're live at the NASDAQ market site in Times Square. I'm interested working along with Joe kernan and Becky quick. This week, JPMorgan CEO Jamie Dimon, warning that the United States is likely to tip into a recession in the next 6 to 9 months. And now the latest warning from the IMF lowering its forecast for global growth, saying the worst is yet to come for many people 2023 will feel like a recession. In an interview on CNN, President Biden saying he does not anticipate a recession. It hadn't happened yet. It hadn't, there is no, there's no guarantee that they're going to, I don't think there will be a recession. If it is, it will be a very slight recession. That is, we'll move down slightly. Joining us now is Paul Ryan. He has former Speaker of the House, of course. Today he's a partner at solo mere capital and vice chair at teneo. And Paul, we can add to that. You're also an economics professor at Notre-Dame university. Irish. You are a perfect person to have on to talk about some of these issues right now. This back and forth about recession, is it here? Is it coming? How deep is it going to be? What are your thoughts? Nice to see you all by the way. I can't believe it. Look at you. You haven't changed one bit. Well, thank you, Joe. I'd like to say the same about you. And I touched it. I'm how good you look great. Thank you. I touched your bicep just by accident. And wow. Wow. What? When was this touching? You just grabbed me as I walked out of the cell. I thought it was a little weird for you. You're working out. Sometimes somebody on the back or something, you go, wow. All right. As opposed to the other way where you go, wow, that was mushy. So that has a lot to do with the recession that's coming. So, okay, Becky, you heard the question. I am in the Jamie Dimon camp, not the Joe Biden camp. I think look, the president is going to have to have you talk the economy. He's not going to say we're going into recession. It's going to be awful. He's the president of the United States. He's not going to say that. I think Jamie Dimon is just being a truth teller, seeing things as he sees it. He sits on a mountain of data so that he has a pretty good sense of where things are going. And the problem with the administration is, in my opinion, putting in place the exact wrong fiscal policy. Literally, they're doing the opposite of what they should be doing. In terms of what? They're talking up to action increases. They tried to pass monumental tax increases. They're over regulating their stimulating inflation. They're pumping demand when they should be focusing on the supply side. And they're not doing that. There's a lot more to talk about there. And the supply side is a very good point. Their talk of raising taxes is the opposite of what we've seen from England right now. From the UK, their talk of cutting taxes and the markets hated that too. So yeah. Without getting to the UK issue and Liz truss is internal problems in her caucus. I would say the idea that we're going to raise taxes on businesses is a really bad idea. If we want to have fiscal policy help with the inflation problem and help prevent a recession, it's telling all the businesses in the America, your taxes are going up, don't take risks, don't take investments. Is a bad idea. And that's exactly what the government's doing today. You have within two to three years, massive expiring provisions. We call it section we're not 9 a, all small businesses. Businesses that are not C corps, the vast majority of businesses have a giant tax increase coming. And the administration is preparing for that to happen. Expensing is going to be expiring. That is the most important policy you can put in place, full expensing, to increase productivity, increase jobs, soak up access demand, reduce inflation, take pressure off the Federal Reserve, and the administration is doing nothing about that. And I think there's some things they could do in labor force, frankly, on welfare reform to attach benefits to work for able bodied people. And frankly, I'd love to do immigration reform. That's the one that's gotten away from us for years. But I think there are some things in the supplies that you could do to try and mop up inflation. Take pressure off the fed, and instead the fed's going to have to do it all on their own. And as a result, yeah, I think we're

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