Federal Reserve, President Trump, China discussed on Here & Now
MSNBC anchor in economics correspondent co host. Adele, she enrolled joins us with more Halley, I Jerry. So we've got this fed meeting. But we've also got the ongoing trade war with China. What do you think has been behind such a terrible December in the stock market looked show? The context here is that we are almost ten years while we're in the tenth year of this expansion right without a recession. So statistically, we're due for a recession. Most economists say there's about a forty percent chance of one happening in the next two years. So that's going to happen. And as. Interest rates go up. They make other investments seem more interesting. So if you're in your fifties or sixties, you don't want the risk of the stock market for the last ten years, you haven't been able to get interest from a Bank account or savings account. So that's the way it's going to go. You're going to see stock market start to slow down. The question is does the fed continuing to raise interest rates as it's expected to do tomorrow. And the continuing trade war where we've heard from China to say, hey, we're in this for the long haul. We can we can keep going with you America. If you want do these two things increase, the likelihood of a recession increased likelihood of it happening sooner or increase, the likelihood of it being bad. And that's what investors are worried about. Well, why has adviser Peter Navarro is not blaming the trade war with China? He is firmly putting the blame on the Federal Reserve here. He is speaking on CNBC the predominant factor hands down. And at the top of the list is Federal Reserve policy. Donald Trump's instincts are always right on this. Months ago. He started pointing out that the fed was going too far too fast. That we spoke not too long ago with Alan Greenspan. The former fed chairman who said he'd never met a president who wanted him. Hike interest rates, but that's doing the question. I have is isn't the president kind of putting the fed in box here because if the fed decides it's not going to raise interest rates as expected, doesn't it? Look like, they're caving to the White House, which they're not supposed to do is a great conversation that I've been having with my co host Stephanie rule that that what if the fed just looks at the evidence and says, we don't need an extra rate hike tomorrow part of the the basis for central banks is that they're not governed by the you know, the the the administration the executive the president the prime minister. So that is putting the fed in a box. I will say it is worth our listeners knowing that Peter Navarro's, a big reason there is a trade war, right? His entire raise on Detroit for his entire existence has been pushing back on China. He thinks China's manipulating the whole world and Donald Trump and Peter Navarro Arsim paddock on that. And Alan Greenspan's point he faced that presidents always want interest rates to go down on their watch. I will say this. The fed rate is historically very low. We are close. To high rates rates that had been crushing under Alan Greenspan. We were in double digit interest rates. So I think everybody's a little too worried about the fed interest rates. The reality is when interest rates go up. It makes borrowing more expensive it slows spending down. It makes house prices come down and makes the stock market come down that sort of the nature of things it doesn't it's not indicative of crisis. What about the trade war with China? How much is that still weighing on the markets right now? I think it's bigger. I think that's the bigger issue. The market has has lurch downward every time there's been a failure to achieve something with respect to the trade war. That's the biggest concern we are a nation of consumers more than we are a nation of manufacturers. China is a nation of manufacturers more than they are a nation of consumers both of us would like to get a little bit more like each other. But in the midst of a trade war the country that that consumes you do end up paying more for the same goods that you paid less for in the past. So there's a way to achieve the goals some of them that the president wants to achieve. Are quite noble, and that presidents before him wanted to achieve a fairer trading relationship with China. There are a lot of people think the way this administration has got about it is going to be more destructive than productive. And that's what's got markets. Worried alley you mentioned that it has been ten years of growth in this country since the last recession now the last recession was an historically big recession of the strictly bad recession when we eventually do go into a recession again. And maybe it'll be in the coming year. It's not likely to be as bad as that one. Right. Never know it shouldn't be. I mean, the former fed chair Janet Yellen just made comments on that sale. We're going to have a recession recessions can be garden variety. Recessions when mismanage them they become juggle variety. Recessions like the last one that we had it doesn't have to be mismanaged. But you have to sort of understand the data and understand what it is. You're fighting one of the things that has to happen in a recession is the Federal Reserve or any central Bank has to have ammunition to to help the economy and that ammunition typically is interest rates that can be lowered one of the Fed's. Biggest concerns is what have we have recession and interest rates are too low to lower them enough to stimulate the economy, which is why the fed is building up. Putting gas in the tank if you will by raising interest rates, so the president fighting against that might not be in his interest because the likelihood of a recession during the remainder of Donald Trump's presidency is high not to do with him just that it's high statistically. And if the fed doesn't have the ability to raise interest Daloa interest rates when that happens that could be a problem Japan face that problem the economy slowed down and interest rates were too low to do anything about it. Let's just come back as we wrap up this conversation to what they call the most important economic indicator each month, which is the number of jobs that were created. And when you look at the unemployment right now, it's historically low three point seven percent. Should we be paying more attention to that than what's happening in the markets? Sort of normally an unemployment rate below five percent would mean full employment, and you'd see wage pressure increasing dramatically, we're not seeing that that's the problem because a lot of these jobs are low paying or they're multiple people working multiple jobs. So three point seven percent unemployment today. Doesn't mean the same thing as five percent unemployment did fifteen years ago, structurally, when you have such low unemployment people should be happy because their wages are higher than they are. And that's not what we're seeing. Now, what we are seeing is examples at target and WalMart and Amazon of minimum wage being increased. So there is we're starting to see that wage pressure, and that should start to equalize things in the course of the next few years people should actually feel like there's three point seven percent. Employment. That's alabel. She MSNBC anchor and economics. Correspondent ali. Thank you. My pleasure. Well today, a judge delayed sentencing for President Trump's former national security adviser Michael Flynn for lying to investigators about his contacts with Russians after Flint's lawyer said Flynn might need time to testify in another case involving two of Flynn's former business associates facing federal charges of violating foreign lobbying rules for trying to conceal a campaign approved and paid for by a high level. Turkish officials to smear cleric Fethullah Gulen who's living in exile in Pennsylvania Flynn's company Flynn, Intel received over half a million from the Turkish government in two thousand sixteen when he was advising the Trump campaign even wrote an op Ed attacking Golan, the BBC selene Garin is in Istanbul and selene influence up at he called Golan a radical Islamist delivering the line the Turkish government wanted delivered. They blame in for the failed two thousand sixteen coup. But is there any proof that cooling was behind that coup? Well, Turkey has repeatedly alleged that lack Ulan is a terrorist than he was behind the coup attempt. Start took place back in two thousand sixteen and Turkey has repeatedly requested Mr. Galanti the extract extradited back to Turkey and says they have provided eighty five boxes of evidence in support of their case and asking and demanding and Mr. glands extradition, but United States officials have said in the past that the Justice department agents had actually devoted our is going through the evidence that Turkey provided, but they couldn't come to the conclusion that Mr. Glenn had to be extradited as Ankara demanded well when Michael Flynn pled guilty last December two lying to the FBI about his Russian contacts. He also admitted that he had violated the laws requiring that his firm register for working on behalf of foreign clients like the Turkish government. So there is that. But meanwhile, the Turkish government says that the US is now considering their extradition request Turkey was very involved in exposing the Saudi Arabian story recently about ca- shows, you the journalist who was allegedly murdered in a Saudi embassy in Turkey. Is there a sense that there's some sort of quid pro quo here that, you know, the Trump administration might consider coolants extradition to pacify the Turks who are very angry about the Saudi Arabia story. Tensions rose between the US government and Ankara over half to respond to the killing of Jamal hush-up. Gene, the Saudi consulate in Istanbul. And there were ligations that Trump would actually be in favor of the extradition of fatal galanter Turkey in return for on Kara's, handling more swift approach to the Saudis involvement in the killing. However that is one on issues. There are other fault lines between Turkey and the United States and recently for minister to shoulder. For instance, said that Trump had told president reject type are Don during the meeting g twenty meeting in Vienna's IRAs, and that Washington administration was working on the extradition of fit like land. But a White House official who spoke on condition of anonymity denied that such a comment came from Donald Trump. So there is this ongoing tension between on Karan Washington over hawk she over over what's happening in Syria, the United States relationship with the Kurdish forces in Syria etcetera. So there are fault lines. But on camera is trying to play cards the best it can the BBC Celine. Garrett in Istanbul. Thank you..