Submitted by Taps Coogan on the 30th of July 2019 to The Sounding Line.

Enjoy The Sounding Line? Click here to subscribe.

CNBC’s Rick Santelli recently spoke with former CBO Director Douglas Holtz-Eakin about the Fed’s upcoming rate cut as well as allegations that other central banks, such as the ECB and Bank of Japan, are manipulating their currencies lower. Rick Santelli muses that if other countries are manipulating their currencies lower it sure doesn’t seem to be doing much good and cautions US policy makers and the Fed against following the lead of countries that are falling behind.

 

Rick Santelli:

“If there’s (currency) manipulation, two things: either go after it or maybe think about (the fact that) they’re not ending up any better. Their economies are suffering from whatever their doing. So, just leave it alone.”

Douglas Holtz-Eakin:

“I think they are making a mistake and they should just leave it alone. What (Larry Kudlow) said was they are going to get some short term temporary advantage and the notion that somehow those monetary authorities can do some fine tuning of their economies and guide them in a sophisticated way, we know that’s not possible. The same thing is true for this Fed. The idea that somehow a quarter point last December was a disaster, cutting a quarter point in July is going to save everything, that’s beyond the scope of reality. We need to get away from this idea that somehow growth begins with the monetary authority. Get back to doing the blocking and tackling on budgetary, regulatory, and other incentives.”

Rick Santelli:

“Absolutely. Our central bank is acting like a day trader. The way they move things around, it takes so long for these things to get into the market place. They’re moving around saying a rate hike was wrong (and that now) we need a rate cut, overlooking data… I loved today’s GDP number. Maybe it wasn’t 3%, but (it had) strong consumption (and) falling inventories…”

Douglas Holtz-Eakin:

“…Honestly, if you are the Fed and you are looking at these data, what’s to change? Let it go… I think the concern about soft inflation is really just an excuse to make the cut to satisfy the markets, satisfy the President. Both of those are mistakes. I think the Fed should stick to its guns and its long term monetary policy…”

Rick Santelli:

“Yeah, I think we should stop complaining about other countries’ economies and just hope they keep doing what they’re doing and have the capital flow here.”

There is more to the interview, so enjoy it above.

Would you like to be notified when we publish a new article on The Sounding Line? Click here to subscribe for free.