but when jerome paul hold hold on it s important you talked to the president you know what he is thinking. sure. if you got a call from the president today or tomorrow and side i m firing you with what would you do, powell, of course i would not do that. have you talked to the president about his reaction to that what he thinks about what jerome powell is saying. he basically told him to take a hike. my role from a policy point of view is to point out what the implications of jay powell raising interest rates by 100 basis points from march through december of 2018. it s going to cost us more than half a point of growth, close to 400,000 jobs. and it s going to spike our trade deficit. and what it does is it undoes all the good things we were doing in terms of trade policy, tax policy and regulatory policy. so we can t fight the fed. we don t want to fight the fed let s be encouraged by what jay powell said. clearly the market interpreted his remarks as the fed likely to
jobs. and what we need to do and what we think the fed will do based upon what jerome powell said today is start to lower interest rates. halfway through that, erin you know this well because you used to be a financial anchor. halfway through the fed s interest rate hike, the yield curve started to invert. you can see that clearly meaning for the viewers that the long bond interest rates began to decline signaling very clearly that powell had made the wrong decision. so, you know, my bottom line i run the office of trade and manufacturing policy. this is a president that created 5 million jobs, half a million manufacturing jobs got a million more people in the workforce. every day he gets up, lives and breathes putting american people back to work particularly those working with their hands. and we try so hard every day and when the fed. the there are some argue that reason he had to change course is because of the trade war. but to finish my point.
imports coming in annan the get the deficit up ancestor the fed s model says we lost half a point of growth over time because of this. we lost closed to 400,000 jobs and our trade deficit goes up by $170 billion. president trump. but here is what i m concerned you started to answer my question you used the words auditioned and promised. those sort of. he did. yeah. i think you make a lot of people nervous. the fed is supposed to be independent. when the fed kmarm. as the fed chief. when the fed chairman comes in when somebody comes in for the job they should be forthright about what they re going to do and what they say they re going to do they should do. but here is the point let me thin finish the point this is the point. what the right thing is today. we have a monetary policy that is going to cost the american people more than a half point of growth, a higher trade deficit and close to 400,000
reflect these kind of false dichotomies we are having. the reality is that politics and policy should absolutely be about the people. and be about lifting up the people. so all the policies you just rattled off, whether about helping people deal with crushing student debt, making sure that everybody mass health care, making sure the people get a fair shake, the real comparison here is about whether or not we re going to stand for the people or we re going to stand for corporate special interests. i think that that s the dichotomy. it s not socialism versus capitalism. elizabeth warren talks about the fact that snes a smart capitalist. she says that. and exactly i think some of the stuff turns into wedge sound bites. but at the end of the day if we focus on the people then the democrats win. but paul, providing all this stuff for free, it s not free. someone is paying for it. well, that s exactly right. and i think when when isha talks about focusing on the people i think that
assist to the president direct of the office and trade and manufacturing policy. great to have you with you. i appreciate having you back, peter. great to be here. what did you make of what jerome powell had to are leave. if president trump asked him to leave and he wouldn t do that. what i heard today from jerome powell that was meaningful was that he was going to lower interest rates this month. let me make the case as to why we in the white house are so disturbed by what powell has done. basically, jay powell when he auditioned for that job he promised the president that he would be dovish on interest rates. and starting in march of 2018 he did four interest rate hikes of 100 basis points. now if you use the fed model to basically determine what would happen with the 100 basis points, what we have was an 8% increase in the valve the dollar. what does that do? makes our exports for expensive.