policies on capitol hill this week. telling lawmakers the $1.9 trillion american rescue plan contributed only modestly to higher prices even as she acknowledged inflation levels are unacceptably high. 8% inflation is an unacceptable inflation rate in the united states and it is president biden s number one objected to get that out. paul: let s bring in cabot former chairman of the council of economic advisers at the white house and distinguished visiting fellow at the hoover institution. welcome kevin. so peak inflation. everyone has said it has picked it has picked looks like it is peaking or that peaking keeps going to higher peaks. what is everybody missing in the markets? everybody really isn t everybody. if you look at google searches for inflation then my friend joe sullivan did a really interesting piece where he correlated google search for inflation with the inflation rate. right now americans are searching at the rate they would do if inflation were 9% which is
interesting piece where he correlated google search for inflation with the inflation rate. right now americans are searching at the rate they would do if inflation were 9% which is probably the level we have it. the problem is we keep getting numbers that make a one 100% textbook sense. if you learn macroeconomics ever in your life you would expect these numbers. yet somehow everyone in washington is surprised by them. so really what happiness they change change the textbook they did not study macro economics. but it is really obvious what is going on they should not be surprised. and janet yellen has a really solid person i consider her a friend for many, many years she said 8% is unacceptable. that is true she s going to be lucky if she ever sees 8% again. because their policies are not doing anything to reduce inflation. it might be joe biden s number one priority but he is not doing anything about it. i guess being a priority does
107 degrees in phoenix and a whole lot of other spots they re climbing up into the 90s be 93 degrees in sacramento. a lot of heat and arthel unfortunately it is staying hot once again tomorrow. so get inside this weekend. so well, i don t thank you very much back at 4:00 p.m. please join us then. . paul: welcome to the journal editorial report. consumer prices reaching a new four decade high in may, dashing hopes inflation is peaking. labor department reporting friday the consumer price index rose higher than expected 8.6% driven by soaring gasoline and food prices. and, as americans continue to feel the pinch at the gas pump and grocery store treasury secretary janet yellen defended the biden administration s
that motivated his to go ransack he was impeached for, paul this has been hashed out it was bipartisan impeachment in u.s. history. i don t think there is a lot new to flesh out here which does need to get his critics saying of the hearing think this is about november. but democrats themselves have been saying this is about using this issue to help us in november. i do not know it will do that trick. i think for most on the mind of people is the economy, inflation, crime on the border and so for. they are going to try to change the subject or something like this. i think again minds have been made up already. paul: still had purchase continue this week outside the homes of supreme court justices following the arrest of an armed man has been charged with attempting to murder brett kavanaugh. spoon the house democrats take
the money supply is a factor some people think it s the only factor. but i would want to see it decline much, much more rapidly if we get inflation to slow down. the fact is the interest rate is so low the federal funds rate that unless the fed orders lenders not to lend there s inflationary pressure. the final thing is something i have been watching closely because the second quarter gdp number comes in negative everyone is going to say we are in recession for the white house and best economy ever, joe biden said that on a comedian show maybe that s the right place for it it s a joke. we have negative or escorted gdp were almost done with second-quarter per the key factor for the negative second-quarter is china. because china has these lockdowns was a lot fewer imports from china all the sudden. that might be the one thing that saves a biden so net exports are maybe going to keep second-quarter positive by