Bannon's War Room - Episode 5392： President Trump Swearing In Ceremony For Federal Reserve

00:00:00.000 this is the primal scream of a dying regime pray for our enemies because we're going medieval on

00:00:10.880 these people here's not got a free shot all these networks lying about the people the people have

00:00:17.480 had a belly full of it i know you don't like hearing that i know you try to do everything

00:00:21.240 the world to stop that but you're not going to stop it it's going to happen and where do people

00:00:24.820 like that go to share the big line? MAGA Media. I wish in my soul, I wish that any of these people

00:00:32.640 had a conscience. Ask yourself, what is my task and what is my purpose? If that answer is to save

00:00:40.300 my country, this country will be saved. War Room. Here's your host, Stephen K. Band. 0.62

00:00:47.780 hey in the year of our lord 2026 we had a fiery first hour i'm sure we're gonna have a fiery

00:00:55.540 second this is a very big event from the east room of the white house we're momentarily going

00:01:00.800 to go where president trump's his selection of uh kevin warsh as chairman of the federal reserve

00:01:06.820 now if you go back in time warsh was a guy i fought for they had three nominees back and

00:01:12.280 And really, they say three, I think it was two, between Kevin Warsh and Powell.

00:01:16.460 And Mnuchin just pushed Powell nonstop.

00:01:19.920 And he said this guy's a third-tier lawyer investment banker, not even a major firm.

00:01:25.500 Actually, it was over at Rubenstein's place with the soon-to-be governor of Virginia.

00:01:32.620 I just thought this guy was a non-event.

00:01:36.260 But Kevin Warsh, and Kevin Warsh was not selected.

00:01:39.160 I think it would have been perfect for President Trump in the first term.

00:01:42.280 Kevin Warsh is selected. Now, John Taylor was the other. That's one Dave Brat was talked about

00:01:46.300 at the time. John Taylor at Stanford. Jim Rickards, you join us. You've got that tweet

00:01:51.960 that Lisa Abramowitz is one of the smartest commentators. She's a she's an anchor over 0.95

00:01:56.840 Bloomberg TV. Very, very bright. And I think she put up something today that should remind people.

00:02:02.880 And well, here's one thing that struck me. Once you get interest rates up and you get into

00:02:07.400 stagflation, because you go back through Miller and Arthur Burns and, you know, getting off the

00:02:12.340 gold standard of Nixon, and you've got Volcker. That took, that was like 15 years, folks. Once

00:02:19.680 that gets into the system, what you have to do, and you have a Volcker and a Reagan, just doesn't

00:02:25.880 happen. So as we sit here momentarily to have a new era under President Trump and Kevin Walsh

00:02:32.580 Rickards, it's the perfect day for you. Where are we and what does this all mean, sir?

00:02:38.720 Thanks, Steve. That chart from Lisa Bromowitz, nice job. I did look at it. It's very helpful,

00:02:45.080 but it tells you almost nothing. Let me explain why. What she put up there, the data is absolutely

00:02:51.880 correct. Those are nominal rates, meaning if you buy the 10-year note, that's the coupon you get

00:02:56.660 it for Paul Volcker, August 79, you got 8.9%. But those are not real rates, meaning you have to

00:03:02.720 take those numbers and subtract inflation at the time to get to what's called the real rate that

00:03:07.260 you're actually paying. I borrowed money in 1981 at 13%. That was my first mortgage. I told my

00:03:13.120 mother she cried because her first mortgage was like 2%. But I said, Mom, yeah, it's 13%. But

00:03:18.420 inflation at the time was 15%. So my real rate was negative 2%. And it was tax deductible. I was in

00:03:24.640 a 50% bracket. So my real rate was like negative eight, which is better than free money. The bank's

00:03:30.100 paying me to be a borrower. And as you take those rates and adjust them for inflation, what you'll

00:03:33.980 find is that the eight or 9% in the Volcker days was actually negative four or five, depending on

00:03:39.880 the amount of inflation. Warsh has a completely different problem, which is that nominal rate of

00:03:44.500 4.6 today, and that's right. But inflation is about three and a half. So he has a positive

00:03:50.200 real rate. So interest real rates are actually higher under worse than they were under Volcker

00:03:54.800 when you adjust for inflation. That's a key thing, because people are, you don't need a PhD to figure

00:04:00.400 out nominal rate minus inflation is your real rate, and when you should be a borrower and when

00:04:04.680 not. And American people get that with or without economics degrees. So I think that's an important

00:04:10.000 point to make. By the way, under Volcker, yeah, 8.9% coming in, or approximately that number,

00:04:17.340 it got up to 15. I remember, well, throughout the early 80s, you could buy a 30-year Treasury note

00:04:23.500 that yielded 13% to 15% for 30 years. It didn't mature until 2016 for a 1986

00:04:31.340 Treasury bond. So that's an important point to make. Now, Warsh wants to cut rates. He's

00:04:40.420 kind of advertised as a hawk by nature. Maybe that's right, but he knows you got to cut rates.

00:04:45.440 He can't cut them. Jay Powell laid a total booby trap, and Morse knows it, but he's kind of walking right into it, which is the following.

00:04:53.420 Go back to the last Fed meeting. Remember, it's not the Board of Governors. It's the Federal Open Market Committee, which includes all seven governors, but also includes five regional Reserve Bank presidents on a rotating basis, except New York's permanent seat.

00:05:08.660 That vote was 8-4.

00:05:11.180 You had four dissents.

00:05:12.460 Now, Steve Moran was, he wants to cut rates, so put him in a separate category.

00:05:16.220 Three of the negative votes were from the regional Reserve Bank presidents who, you

00:05:20.000 know, they're important.

00:05:20.580 They get a vote, but they don't lead the way.

00:05:22.840 Why do you have three Reserve Bank presidents voting against the chair without the chair's

00:05:26.940 permission?

00:05:27.360 Well, Powell wanted that to happen.

00:05:29.100 He basically fired a shot across the bow at Warsh.

00:05:33.280 So you don't even think about raising rates. 0.98

00:05:35.500 Sorry, don't even think about cutting rates, because we've got basically a large group.

00:05:39.660 You're going to have a split board from day one, and Morse gets that.

00:05:42.740 So they're not going to raise rates.

00:05:44.580 But slow down, slow down, slow down.

00:05:47.000 I want to give context to this for the audience and maybe not capital markets experts.

00:05:51.980 The reason that's so extraordinary is normally these are unanimous.

00:05:55.840 They do that to also show the capital markets that the central bank is united in their thinking, correct?

00:06:01.500 To have an 8-4 vote on the Federal Open Market Committee is pretty extraordinary, correct?

00:06:06.640 Correct.

00:06:07.180 That's correct.

00:06:07.720 That rarely happens.

00:06:08.720 And it caused Volcker to resign in the 1980s.

00:06:11.980 It was, I think it was an 8-4, but he didn't lose the vote.

00:06:14.860 But he said, well, if you can't, as chair, if you can't do better than that, then it's time to go.

00:06:20.360 But here's the thing about Jay Powell.

00:06:22.520 People forget this.

00:06:23.540 Powell is poking a stick, two sticks in both of Trump's eyes.

00:06:27.300 Number one, he's still on the board.

00:06:28.680 He's not the chair.

00:06:29.440 Okay, Kevin Worsh is being sworn in as chair.

00:06:31.500 But Powell is keeping his seat on the board as a governor, and his term as governor does not expire until 2028.

00:06:38.140 The chair is a four-year term, but a governor is a 14-year term.

00:06:43.480 So Powell still has over two years to go until 2028.

00:06:48.720 Hang on a second. Hang on. Slow down. That's also extraordinary.

00:06:52.540 I don't believe that's – has that ever happened?

00:06:54.220 It might have happened back in the old days, but has that happened since Nixon?

00:06:58.740 Has that happened since the 1970s, where an actual former chairman would actually stick around?

00:07:04.560 It hasn't happened since the 1940s.

00:07:07.480 In 1949, Mariner Echols, the chair, stayed on, passed his term until 1951.

00:07:15.300 So he stayed on two or three years.

00:07:16.820 But that was the last time it happened.

00:07:18.160 We're talking 78 years ago.

00:07:20.840 OK, so the short answer is no.

00:07:22.480 It hasn't happened since the 1940s. 1.00

00:07:24.840 And Powell gets it.

00:07:26.280 So think about what he's doing.

00:07:27.960 He's depriving Trump of a vacancy, because if Powell left, as all the other chairs have

00:07:33.680 done since the 1940s, there'd be a vacancy, and Trump would get another appointment.

00:07:37.560 So Trump does not get that, because Powell's sitting there.

00:07:40.220 And number two, OK, Kevin Warsh is the chairman.

00:07:43.180 He's going to walk into the boardroom.

00:07:44.740 I've been in the boardroom with the Fed.

00:07:46.100 He's going to look around.

00:07:47.040 There's the guy who was chairman like two weeks ago, sitting right next to you.

00:07:51.280 Yeah, OK, Warsh is in charge.

00:07:52.780 Yeah, I get it.

00:07:54.100 But how are you going to blow off Powell?

00:07:56.660 It's kind of hard to do.

00:07:57.700 And Powell has a lot of loyalty.

00:07:59.020 But he's not going to be totally in charge because they're going to be leaking.

00:08:03.480 How many of those economists, you know, the staff of a thousand, they're building,

00:08:07.200 they've taken one of the most beautiful, iconic buildings in Washington, D.C.,

00:08:10.960 and they're building a behemoth.

00:08:12.200 This is why President Trump wanted an investigation of what's actually happening down the Fed

00:08:16.100 to build this huge office.

00:08:17.640 All of that staff has been hired by Powell.

00:08:22.100 I mean, this is like Saigon in 1968.

00:08:25.520 Kevin Warsh is the new head of the American Military Command

00:08:29.160 going into a place that's totally controlled by the enemy

00:08:32.100 because it is totally controlled by the enemy.

00:08:34.240 That's why Powell's sticking around for a reason.

00:08:36.480 He hates Trump.

00:08:37.620 He's trying to bring down President Trump.

00:08:39.240 He had a rate cut, unparalleled in history,

00:08:44.360 had a rate cut before the 2024 election

00:08:46.280 to try to boost Biden or Kamala Harris,

00:08:52.260 the illegitimate Biden regime at the end.

00:08:54.720 This is a guy that hates President Trump's economic program, hates the tariffs every time he testified to go out of his way.

00:09:01.540 Now you have a guy walking in, Warsh, who's an institutionalist, by the way.

00:09:05.380 It's one of the reasons that so many people in the Senate appointed him.

00:09:09.420 And the other thing you should know now, you have a Senate, an open revolt against President Trump, particularly the institutionalists, particularly the people on the banking committee, the finance committee.

00:09:18.280 These guys are adamantly opposed to Trump.

00:09:20.960 They're Powell supporters.

00:09:23.140 So Kevin Walsh is working in an increasingly complex and dangerous economic situation.

00:09:29.580 I keep saying we have a $300 trillion global debt, if you count everything up, right?

00:09:33.820 $300 trillion.

00:09:35.320 And we're about to have the world's largest margin call.

00:09:38.280 We're going to very, very, very treacherous waters here.

00:09:41.840 Rickards, I mean, you know it 10 times better than I do.

00:09:44.140 And now you've got a Federal Reserve that's not split.

00:09:46.660 But it's controlled by an enemy element that is adamantly opposed to President Trump, sir.

00:09:54.060 That's right. I work with Jay Powell 30 plus years ago when he was assistant secretary of the Treasury for federal finance.

00:10:02.240 By the way, he was appointed by George H.W. Bush. He's a Bushy.

00:10:06.180 And, you know, I have a lot of respect for Kevin Warsh. I think it'd be a great I think he's a great selection. 1.00

00:10:10.080 But, you know, don't discount his connections to the Bush family as well.

00:10:13.800 I'll just look at the Board of Trustees of the Bloomberg Foundation if you want to know who the power lead is, and you'll see there are worse connections all over there.

00:10:22.860 So what the Fed should do, they're not going to, to be clear, but they should cut rates and cut them as quickly as possible.

00:10:31.520 Moran's right about that.

00:10:32.660 That's not what they're going to do.

00:10:33.880 Powell is tied, worse his hands.

00:10:35.460 Hang on, hang on, hang on.

00:10:36.980 Whoa, whoa, whoa, whoa, whoa, whoa.

00:10:38.200 With interest rates exploding on the 30 and the 10, just walk me through the mathematical logic of how you say you cut rates.

00:10:50.040 We have inflation right now.

00:10:51.360 It's clear.

00:10:53.060 But it's being caused by higher energy prices, which feeds into everything, by the way.

00:10:57.300 There's nothing you buy that gets delivered to your house or you buy in the store that doesn't arrive by truck one way or the other.

00:11:05.020 So it's not just gas at the pump.

00:11:06.520 That's a very big deal.

00:11:08.200 And by the way, when people pay more for gas at the pump, it's not a freelance.

00:11:12.860 There's something else they're not spending money on.

00:11:16.300 The demand for gasoline is what's called inelastic.

00:11:18.540 And what that means is you have to buy it no matter what, because you got to take the

00:11:21.800 kids to school or go to work or whatever.

00:11:23.960 But that means you take it out of something else.

00:11:25.980 You don't go out for dinner.

00:11:27.100 You don't buy new clothes.

00:11:28.040 You don't go to a baseball game, whatever it might be.

00:11:31.360 And that's what drags the economy into a recession.

00:11:34.480 And then that's applied to everything because of transportation costs, because

00:11:38.140 everything moves by diesel. What you're setting up is a global recession, a bad one, that's going

00:11:44.700 to affect the United States. We need to get ahead of that with interest rate cuts. This inflation

00:11:51.140 comes from the supply side. Inflation, in the simplest terms, prices are going up. That's

00:11:56.480 inflation. That's the definition I use, a pretty simple one. There are two causes for that. One is

00:12:02.520 from the supply side, where either there's disruption or higher energy prices being the

00:12:07.880 main culprit or whatever. But that tends to extinguish itself, because when you have those

00:12:12.460 high prices for a long period of time, you cause a recession, unemployment goes up, and the prices

00:12:17.780 start to come back down. The other kind of inflation is called demand pull, which comes from

00:12:23.580 basically labor. So if prices are going up, people demand a wage increase, they demand raises. People

00:12:30.840 say, I was thinking about buying an appliance. Maybe the price is going to be higher in six

00:12:34.400 months. Maybe I better go out and buy it now. That's what happened in the late 70s. We don't

00:12:39.260 have that right now. Now, there's a danger that you tip from one to the other. It's a psychological

00:12:43.920 phenomenon that actually has nothing to do with the Fed. It's behavioral psychology. We could tip

00:12:48.800 into that, but we're not there yet. It's more likely, in my view, that the recession, which is

00:12:53.440 already hitting Japan and Europe and elsewhere in the world, even Russia had a down quarter.

00:12:59.980 Japan's getting there.

00:13:00.840 Europe's going into a recession.

00:13:02.040 The U.S. is not far behind.

00:13:03.680 To the extent that U.S. GDP looks pretty healthy, and it does.

00:13:08.100 I mean, we're not in a technical recession.

00:13:11.500 It's all the AI infrastructure spending.

00:13:14.120 So, okay, plant equipment, you know, NVIDIA is selling real chips,

00:13:17.720 and they're building real data centers.

00:13:19.680 Query whether any of that's going to be productive.

00:13:21.840 Query whether it's not just a bubble that's going to collapse.

00:13:24.540 But that's how we're talking about the economy.

00:13:25.980 You have a highly leveraged bet, highly leveraged on AI kicking as being real productivity gains.

00:13:35.940 And productivity is going to be defined.

00:13:37.420 A lot of it's going to be members of the audience, particularly your children under 30 coming out with those $100,000 of student loans and working their ass off since they were in the third grade to be a STEM, you know, to be an electroengineer or whatever.

00:13:50.920 They're the ones ain't getting the jobs.

00:13:52.960 So that's my point.

00:13:53.840 So I still don't get. Let me take a break. Here's the reason, Rickards, if you get this pitch down to like three minutes, if you got an Oval Office, trust me, President Trump is looking.

00:14:05.800 He's been waiting for you. OK, he's been waiting for you. He's waiting for somebody to come in and make the mathematic arguments.

00:14:11.760 Hey, Warsh, I know you're independent, but, you know, listen to Rickards. I'll say the clip from the War Room with Jim Rickards actually arguing for a rate cut.

00:14:21.100 This is why you come to war.

00:14:22.340 This is why you get strategic intelligence.

00:14:25.400 Rickardswarroom.com, that's the landing page.

00:14:27.400 You want to get this kind of outside-the-box thinking

00:14:29.640 from one of the smartest guys I know?

00:14:33.500 Go check it out now.

00:14:35.420 They throw in a free book, ChatGPT, or MoneyGPT.

00:14:39.440 It talks about fiat currency and artificial intelligence.

00:14:42.580 Read Chapter 4.

00:14:44.100 You want to stay up at night?

00:14:45.180 Read about the chain of command of letting off a nuclear weapon

00:14:48.020 with artificial intelligence in charge.

00:14:50.940 It's a little different coming from Rickard than Joe Allen.

00:14:52.840 This one will keep you up at night.

00:14:54.300 Rickards is with us.

00:14:55.180 We're going to the East Room.

00:14:56.360 There's a lot going on as we kick off Memorial Day weekend.

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00:16:23.000 Here's your host, Stephen K. Bannon.

00:16:27.180 Okay, birch gold, my favorite, ended the dollar empire.

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00:16:53.260 They talk to Philip Patrick and the team.

00:16:54.880 Also, we have the renowned Jim Rickards from Strategic Intelligence,

00:16:58.520 people throughout the world.

00:16:59.260 The C-suite reads them all the time because of predictive analytics.

00:17:04.160 Jim, here's what I want to do.

00:17:05.560 I want to go back.

00:17:06.820 I want to hit rewind because I'm going to get this in like a three-minute clip,

00:17:10.380 and we're going to send it to the president because he's been waiting for you

00:17:13.360 because he's cutting on CNBC and Bloomberg and the war.

00:17:17.640 You guys say, no, you can't cut rates now because of the mess that has happened

00:17:22.240 because of this war and where inflation is.

00:17:24.400 You take the exact opposite.

00:17:26.200 So I'm going to give the floor to you two or three minutes

00:17:28.560 and make the case to the president of why he's correct

00:17:32.540 and that the first thing that war should do is to cut rates, sir?

00:17:38.100 When you talk about interest rates, you have to talk about real rates, not nominal rates.

00:17:43.440 A 4% nominal rate with 3% inflation is a 1% real rate.

00:17:50.460 A 9% nominal rate with 13% inflation is a negative 4% real rate.

00:17:56.240 In other words, real rates were lower during hyperinflation under Volcker than they are today, because inflation is much lower.

00:18:04.340 Now, inflation is a problem, but it's a self-correcting problem.

00:18:07.720 The cure for high oil prices is high oil prices.

00:18:10.740 Leave them at these levels long enough, which I do expect, by the way.

00:18:13.680 They're not going to reopen the straight-up removes.

00:18:15.520 This is just going to get worse.

00:18:17.620 So inflation is going to start to fall, not for good reasons.

00:18:20.700 It's going to fall because people are unemployed.

00:18:22.640 If you're unemployed, you don't have to buy any gas.

00:18:24.180 You're just staying home.

00:18:24.820 You're saying demand, just to make sure people are, you're saying demand destruction is going to cause it to fall because you're going to have less people purchasing, correct?

00:18:32.460 Correct.

00:18:33.340 So when inflation comes down, which it will, real rates are going to go up unless you cut nominal rates.

00:18:39.100 The rate the Fed actually controls is a nominal rate.

00:18:41.740 You've got to cut it.

00:18:42.800 Well, why not get ahead of that?

00:18:43.900 What are we waiting for?

00:18:45.360 And that's, I think that's what's in, I can't read Warsh's heart, but I think that's what he knows he should do.

00:18:52.020 But you and I have talked, hang on.

00:18:53.660 You and I have talked, you know, we talk a lot behind the scenes.

00:18:56.760 I want you to make the case.

00:18:58.680 You say this to me all the time.

00:19:00.360 You say, hey, look, Trump understands capital markets and particularly the bond market because he was a major developer and these guys live or die by borrowed money.

00:19:08.880 They say he understands capital markets.

00:19:11.220 He particularly understands interest rates and he understands the bond market far better than many people on Wall Street and including most economists you see on TV.

00:19:21.240 Is that correct?

00:19:22.680 Yes.

00:19:23.120 When you put up a building, so Trump's a builder and they're building management and all that.

00:19:26.460 When you put up a building and it's fully leased, you have a steady stream of income

00:19:30.540 because all your tenants are paying rent.

00:19:32.260 You also have debt because you borrowed money to build a building.

00:19:35.220 You have to pay interest on that.

00:19:36.760 So it's just like a bond.

00:19:37.920 I mean, it's, and that's, by the way, that's how real estate people think about it.

00:19:41.740 They talk about internal rate of return, the different metrics, but a building, a fully

00:19:46.060 leased commercial building is basically a bond.

00:19:48.180 So, yeah, Trump's the real estate guy, but his intuitive understanding of interest rates,

00:19:53.460 what we're talking about, the difference between nominal and real, the spread between what

00:19:57.240 you're making, what you're paying, he gets all of that.

00:19:59.800 And so, like I say, you don't need a PhD in economics. 0.81

00:20:03.460 PhD is probably handicapped these days, but Trump gets it. 0.98

00:20:07.180 And that's why he picked Walsh. 0.87

00:20:08.960 And it was a good pick.

00:20:09.920 I think Walsh is a very good pick.

00:20:11.160 And I think Walsh wants to cut rates, but he can't because Powell has tied his hands

00:20:15.020 in two ways.

00:20:16.040 They lined up the regional reserve bank presidents as no votes and no one, no one, no one wants to walk into the first board meeting and get voted.

00:20:23.500 You know, you win eight to four. That's not a win. That's that's embarrassing.

00:20:26.780 And Warsh doesn't want that. And Powell's still on the board. So it's it's a problem.

00:20:33.140 Walk me through. How do you believe that? Give me your perspective on how you think Warsh is going to present himself today.

00:20:40.220 They'll say the president and Warsh will say a few words. I think it's very unlikely they take questions from the media.

00:20:45.540 but you never know president trump breaks precedent all the time uh i think they would

00:20:49.760 want wars to get into into the saddle a little bit uh but we'll see already i would just tell

00:20:55.100 you they're 20 minutes they're 20 minutes late that means the president's having a you know

00:20:58.640 they're having a uh a chat in the office i'm sure about all this um what do you think talk to me

00:21:05.800 about today uh wash uh what do you what do you believe he may say to the media or say to the

00:21:11.620 country, then his first day at the Fed, given the record she's going into, including massive

00:21:17.500 government investigations about, you've seen the building. I mean, they've taken the most beautiful,

00:21:21.620 really, I think, kind of art deco, I would say art deco structure from the New Deal,

00:21:29.340 from, you know, early 20th century United States and built this monstrosity next to it.

00:21:35.180 What do you think Kevin Warsh is going to say? And what do you think he's going to do

00:21:38.400 on his first day as Federal Reserve Chair?

00:21:41.620 Well, he has to talk about inflation.

00:21:43.600 It's too big to ignore.

00:21:45.560 It's real.

00:21:46.140 And again, every American sees this.

00:21:48.020 So there's no question about that.

00:21:49.580 He has to say we're going to do something about inflation.

00:21:53.140 But the problem is, going back to what I said earlier, if inflation is coming from the supply

00:21:57.960 side, it tends to be self-correcting.

00:22:00.240 But he cannot say that because you're back, remember, Powell, in 2022, he's using the

00:22:06.120 word transgen.

00:22:06.780 He said, transgen, transgen, and then it wasn't transgen.

00:22:09.260 In June 2022, inflation was 9.1%, the highest in 40 years, going back to the 1980s at the time.

00:22:19.100 So he can't get in the weeds that way.

00:22:22.920 He knows it, but he can't tell.

00:22:24.220 So his hands are tied.

00:22:26.360 So he'll say, we understand inflation.

00:22:28.420 It's part of the dual mandate.

00:22:30.520 The dual mandate, by the way, is nonsense.

00:22:32.460 Well, it's the law.

00:22:33.500 I mean, they have to respect the dual mandate because it's the law.

00:22:36.960 But it's actually two things.

00:22:40.820 Very important, because you've been hammered, the dual mandate that we have, the actual dual mandate is about employment and the cost of money, correct?

00:22:50.880 And you're saying they're mutual exclusive.

00:22:52.480 We should get rid of the employment part of the mandate.

00:22:56.160 Absolutely.

00:22:57.140 The idea, the theory of the dual mandate was that they're reciprocal.

00:23:00.260 In other words, if unemployment is high, interest rates are going to be low.

00:23:04.180 So we just focus on unemployment.

00:23:05.880 and if unemployment is low, interest rates might be going up,

00:23:09.660 so we need to focus on interest rates.

00:23:11.440 So it's kind of like a seesaw.

00:23:12.840 That's the theory.

00:23:13.740 It's actually expressed as something called the Phillips curve.

00:23:16.300 It's nonsense.

00:23:17.200 There is zero empirical proof that the Phillips curve even exists

00:23:20.760 and that those two things are reciprocal.

00:23:22.760 You can have high inflation and interest rates as we did in the 70s.

00:23:26.560 You can have low, sorry, high unemployment and interest rates.

00:23:30.280 What does dual mandate put up in the panic of high unemployment

00:23:33.960 and also high inflation, high interest rates.

00:23:36.760 They figured they had to do something,

00:23:38.380 so let's just give the Federal Reserve another mandate.

00:23:41.260 Yes, and it was sponsored by Hubert Humphrey of Minnesota.

00:23:45.800 I don't know what's up in the water in Minnesota,

00:23:47.620 but it was the Humphrey-Hawkins legislation

00:23:50.620 that created the dual mandate.

00:23:52.080 It's statutory.

00:23:53.260 Sounds good, except it doesn't work in the real world.

00:23:55.880 And again, Wush knows all this,

00:23:57.780 but you can't quite come out and say it.

00:24:00.020 So right now, the Fed has to focus on the inflation part

00:24:03.520 of the dual mandate, and not worry about unemployment for the time being.

00:24:08.440 What I'm saying is that inflation is going to take care of itself.

00:24:11.060 Unemployment will not take care of itself.

00:24:13.020 That's going to go higher, and that's going to be a problem.

00:24:15.460 And again, I respect Washington.

00:24:17.820 I think he knows what we're talking about, but his hands are tied both by the political 0.90

00:24:22.280 reality and by J-PAL. 0.83

00:24:25.160 Hang on one second.

00:24:26.220 Do we have the CNN?

00:24:27.500 Can we play that?

00:24:28.080 I'm going to shift artificial intelligence where I've got time in this thing.

00:24:30.620 Can we go and play it?

00:24:31.400 And we're going to go to break that.

00:24:32.500 And then Joe Allen's going to jump back in as we wait.

00:24:35.440 Jim Rickards, Rickards, hold on. Let's go and play it.

00:24:39.040 The idea is real. I mean, me looking at that, I'm getting anxious and I'm not in school like this.

00:24:42.860 This is a real concern for students who are graduating.

00:24:46.740 Young people really don't seem to like commencement speakers when it comes to A.I. 0.59

00:24:52.200 This tells you why, correct? This tells you a big reason why. 1.00

00:24:56.620 And in fact, you can see it in the numbers, right?

00:24:59.240 I mean, just take a look at those under the age of 30, among age 18 to 29, impact of AI and the number of jobs.

00:25:05.580 Just 27% believe that AI will increase the number of jobs.

00:25:08.960 Look at this number, 73%.

00:25:11.340 73% say, in fact, they believe that AI will decrease, will decrease the number of jobs.

00:25:17.980 This 73% looks an awful bit like this 70% on this side, on this screen, right?

00:25:24.180 So what you're seeing here is a lot of students are worried about the job market and what you can connect the dots, which is what I like to do.

00:25:31.200 A big reason why they are worried is because they believe that AI will, in fact, decrease the number of jobs.

00:25:36.180 And that is why you see those undergraduates really not liking those commencement speakers speaking about AI because they're worried for their livelihoods.

00:25:43.560 Yeah. And it's not just decreasing the number of jobs. That's one thing. But well-paying, quality jobs, the quality jobs.

00:25:50.060 there. So let me ask you about the overarching. How do Americans in general, not just the young,

00:25:54.600 not just the graduates, feel about AI? Yeah, this is one of those things where you get the

00:25:59.620 rare time in which Americans are really connecting on this issue from the left to the right. I mean,

00:26:05.740 say I will make it harder to get a good job. You see, among all adults, it's 63%. On the left side,

00:26:11.080 you get 68%. In the middle, 68%. And even on the right, you get the rare trifecta, the left,

00:26:18.100 right and middle the majority all agree that getting a good job will in fact become harder

00:26:24.940 because of AI and of course the students are the ones who don't currently have the jobs

00:26:30.240 and that is why there's all that apprehension right now. So this is how they feel but are they

00:26:35.860 right when you look at the numbers of the numbers of layoffs for example that companies have blamed

00:26:40.260 on AI? Yeah okay so you know you can take a look at the cash prediction market and what is the

00:26:44.280 chance that 2026 tech layoffs will exceed 2025, i.e. more than 447,000, you can see that it is a

00:26:52.440 very clear, we are approaching percentages, probabilities that we very rarely ever get.

00:26:58.540 And so to me, this is part of the picture where you got a lot of the fear and the fear in this

00:27:02.500 case is backed up by the numbers, at least initially. Of course, we're going to have to

00:27:06.680 wait and see as we go down the road with AI. A lot of the proponents of it believe that it will,

00:27:10.540 fact, create more quality jobs, up the number of jobs, just different types of jobs. But at least

00:27:15.660 in the immediacy, when it comes to tech layoffs, it looks like those are going to be higher than

00:27:20.300 they were a year ago, at least for the people who are putting their money where their mouths are.

00:27:23.780 Yeah, we're seeing companies dump large amounts of money into AI that does not necessarily equate

00:27:29.500 to more jobs or the jobs that they need. Correct. Okay, we're going to go to break. I'm going to

00:27:34.360 bring Rickert and Joe Allen both on this and tacking it from different angles. Rickert just

00:27:39.880 talk about unemployment. You see the booing off the stage of these oligarchs or the running dog

00:27:45.940 for the oligarchs because the people are not buying it. The reason they're not buying it,

00:27:50.180 they shouldn't buy it. They've been spoon-fed lies, and now they're seeing it reality.

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00:31:20.960 War Room. Here's your host, Stephen K. Mann.

00:31:25.620 Wow. Amazing poem just singing about Mike Lindell. Hopefully we'll get through that.

00:31:30.200 They're letting the press in now to the East Room, so we're going to momentarily be going there.

00:31:34.320 I want to get both Joe. So, Joe, what you just heard on CNN, the polling, you had Cochran on here the other day.

00:31:40.800 You've seen where the polling is. Now people are worried about AI and their jobs. Your thoughts?

00:31:46.240 You know, Steve, I call this the great demoralization. You have all of these students.

00:31:50.440 You have people who are in the workforce right now. They're being told that most or all of these jobs are going to disappear within, certainly within their lifetimes.

00:31:58.180 But then you have really aggressive predictions like Dario Amadei from Anthropic recently predicted that something like half of all white collar jobs gone in five years.

00:32:09.500 Right. Then you have guys like Mustafa Suleyman at Microsoft saying that within 18 months, any job that requires someone to sit at a computer will be evaporated.

00:32:20.020 Right. It's really aggressive.

00:32:21.720 Hit me that because it's important. Microsoft makes their money selling software to people that sit at computers.

00:32:29.500 Tell me. Sure. I mean, this is Mustafa Suleyman.

00:32:31.960 So this is not exactly a sober observer of all of this.

00:32:35.760 Right. He's talked a lot about AI as a species, all these sorts of things.

00:32:39.500 But he predicts that within 18 months, we will see all white-collar jobs at least being replaceable by AI.

00:32:48.740 That are people that sit at computers and bullpens.

00:32:51.860 I'm sure James Rickards probably has a much more measured view on this.

00:32:57.280 But these guys, by the way, these guys are trying to also signal to Wall Street where Microsoft, there's going to be big issues.

00:33:02.880 Sure.

00:33:03.820 These are credentialized people.

00:33:05.780 One way or the other.

00:33:06.700 To me, it's just a massive demoralization campaign.

00:33:10.020 When you've told everyone that their jobs can be replaced,

00:33:12.800 then you not only threaten that they have no leverage,

00:33:16.420 no negotiating power in the workplace,

00:33:19.120 but you give them the sense that they don't have any power,

00:33:22.920 that they're going to have to kowtow to their bosses.

00:33:25.120 Because if they believe that in five years or in 18 months,

00:33:29.340 their jobs are going to be replaced,

00:33:31.100 then they're not going to have as much backbone.

00:33:33.560 They're not going to feel as secure negotiating their wages.

00:33:36.020 And you also see that in the students that are incoming.

00:33:38.640 They hear all of this and they're like, oh, AI is nothing but a competitor to me.

00:33:43.540 I think, again, I'm not going to hazard any kind of definitive prediction on what the labor market is going to look like due to AI.

00:33:51.260 Certainly not in the presence of records.

00:33:53.720 But I do think that any approximation of it is going to be detrimental to human workers in the workforce.

00:34:00.740 And all of this messaging, all the messaging that you can and should be replaced is so anti-human.

00:34:08.960 It's amazing to me that these people aren't dragged away and put into padded rooms.

00:34:12.720 Wow. Jim Rickards, your thought on all this, sir?

00:34:16.480 Joe's exactly right about what people are saying, the forecasts and the fear factor.

00:34:21.680 So he's correct about that. But here's a little bit of good news.

00:34:25.280 How does AI work? AI trains on what's called a training set, which is basically the whole Internet.

00:34:30.740 But AI produces, yeah, it gets pretty good results, but then it produces what they call slop.

00:34:34.980 I'm going to come up with a better word, but that's the word.

00:34:37.160 Okay, but the slop output is now populating the internet.

00:34:41.040 So progressive iterations of AI are training on more and more slop and producing more and more slop.

00:34:46.740 It's actually getting worse, not better, number one.

00:34:49.540 Number two, by the way, I've written nine books.

00:34:51.540 I wrote every word of every book.

00:34:53.120 But I talked to publishers.

00:34:54.340 They're saying authors are now submitting books which are plainly written by AI.

00:34:57.680 And AI could write a book.

00:34:58.660 That's not that difficult.

00:35:00.160 but they're stilted. You can tell. What I'm seeing is people are saying, you know what?

00:35:06.580 AI is getting worse, not better. Give me a subject matter expert. I purposely do not use AI. I don't

00:35:13.260 click on Brock or Gemini, all these things. I purposely don't use them because I don't want

00:35:18.460 to degrade my own critical thinking and analytical abilities, which is what I rely on.

00:35:24.540 And that is what happens when you do it. But hang on a second. If you use Google,

00:35:28.580 I agree.

00:35:29.140 I don't use any of these AI.

00:35:30.460 I think it's demonic.

00:35:31.440 I think you're summoning the demons, so I don't do it.

00:35:34.420 I will tell you, I think one of the competitive advantages I've had for many, many decades is how basically well-read I am.

00:35:42.060 I can see that AI is not going to give the critical thinking, but guys can go in and do what's taken me decades to know.

00:35:48.840 Bang, you can hit it, and AI is going to give you maybe not a bad summary.

00:35:53.400 But, Jim, you can't go, even if you don't want to use AI and you want to be a Luddite, you can't go to Google.

00:35:59.180 Google's whole thing right now, it's AI at the top, and it's five more things below it that are sponsored links about AI to get down to anything that had the human element at all.

00:36:09.820 You've got to almost go down the whole front page or you've got to keep scrolling.

00:36:13.440 So how do you avoid artificial intelligence if you want to use a search engine?

00:36:18.480 Well, you can't avoid – well, just don't click on those particular applications.

00:36:22.060 I mean, you're right. It's there. It's in your face. Look, AI is here to stay. It's powerful.

00:36:27.040 It is not creative. There's something called the law of conservation of information in search.

00:36:32.720 Geeky name, but it's very well demonstrated mathematically. AI cannot create anything.

00:36:38.340 It can find things that humans would have difficulty finding. It could do it faster.

00:36:42.640 I don't doubt that AI will find cures for certain diseases. In fact, it already has.

00:36:46.660 But those are out there and they're waiting to be discovered. That's not creativity.

00:36:51.600 Only humans can actually be creative as an artist, a writer, et cetera.

00:36:56.660 So AI cannot do that, number one.

00:36:58.520 The slop factor is getting bigger, number two.

00:37:00.860 I can point you to experiments where five-year-old children in a play group outperformed AI when it came to simple tasks like drawing circles, et cetera.

00:37:08.800 Hang on.

00:37:11.200 To go back to unemployment, you do believe that the AI jobs apocalypse, particularly in STEM workers,

00:37:20.160 because they're not going to need coders.

00:37:22.300 One of the reasons I know this is some of my nephews

00:37:24.480 and some of the younger people in my family,

00:37:26.560 an extended family,

00:37:27.280 who are pretty good in this whole software thing,

00:37:31.240 they'll tell you now that starting a year ago,

00:37:34.500 their staffs were cut in half

00:37:35.860 and they spent half their time managing AI.

00:37:38.940 Now they're to the point

00:37:39.940 that they keep a couple of superstars around,

00:37:43.060 but the 80% of people they used to have employed

00:37:46.000 in high value-added and big paying jobs are gone.

00:37:49.380 Those billets are literally gone. You do agree that this highly leveraged bet as a country we're doing on artificial intelligence and the trillions of dollars that essentially ain't coming from equity capital, a lot of it's borrowed, that the way they're going to get their productivity increases is to get rid of the human factor, sir?

00:38:09.600 I agree with that completely. That's absolutely what's happening. And you're right. But what they're going to discover is that they're not going to get the productivity increases they expect.

00:38:18.180 They're going to do exactly what you said, Steve.

00:38:19.980 The description was perfect.

00:38:21.680 And sooner than later, they're going to find out this doesn't work, and they're going to say, hey, get me a nurse or a doctor or a writer or someone who actually knows what they're doing.

00:38:31.760 Joe Allen, that's bombshell.

00:38:33.380 You're saying, like, when Joe says 50% of the white-collar jobs, the guy from Anthropic, he's talking about lower-level lawyers, the medical technicians, maybe not the brain surgeon, but half of those that go.

00:38:46.460 And you're saying, Joe, people are going to find out pretty quickly that the machine ain't as good as a human, right, Joe Allen?

00:38:52.200 Well, I have to agree.

00:38:53.780 I agree with Jim Rickards on a number of points here.

00:38:56.760 I need to set those agreements out first.

00:38:58.900 Number one, I agree that using these tools does not help you as a writer.

00:39:04.220 The real force comes from within.

00:39:07.520 It's the human creativity is central.

00:39:09.540 I also agree that a real genius.

00:39:12.220 I've got to stop you right there.

00:39:13.280 We'll get into this in a deeper, but here's why.

00:39:16.460 right now there are people because you're you're you are a writer you're a writer at heart that's

00:39:22.120 one of the reasons i saw you at the federalist i said hey this guy may be a guy that is a uh is

00:39:27.200 a guy a roadie as we call him but he's got he's a brilliant writer because you love to write your

00:39:32.840 writer hey 90 80 of the people that are making their living off writing don't love writing it's

00:39:38.880 a job okay gotta get it done those guys use an ai all the time i get stuff every day that i can tell

00:39:44.580 with my trained eye that is either coming from a machine or, more importantly, a human tucking it

00:39:49.920 in and it's doing the heavy lifting. So I've got to agree. Again, I'm just setting out the agreement

00:39:55.180 as an olive branch to... Before you come in with the whack. Yes, because I do believe that human

00:40:02.140 creativity is far superior to anything artificial intelligence is capable of doing at present and

00:40:07.980 will be capable of doing. And even if AI was better, I still think you have to give humans

00:40:12.460 preference because we're humans. You might say I'm racist against robots. But as far as the AI

00:40:19.420 basically degrading at this point, I have to disagree on that. I mean, if you look at the

00:40:24.460 evaluations that are very rigorous, the evaluations, meaning that as the AI slot fills up the

00:40:31.040 internet, it then has been used to train the AIs and therefore the AIs are degrading. This isn't

00:40:35.640 really true. The ability to, or the companies are curating the data sets and ways to account for

00:40:41.640 that and simultaneously improvements in architecture, improvements in reinforcement

00:40:46.500 learning, expansion of the neural network, what you're seeing is an increase in capability. So if

00:40:53.080 you look at the benchmarks that are put out by people like the Center for AI Safety and the

00:40:57.680 Humanities Last Exam or Artificial Analytics and the Omniscience Index or Apollo Research or any

00:41:05.600 of these guys, what you see, you have to account for the hallucinations. You have to account for

00:41:11.200 the fact that these systems are just remixing. Tell the audience what that means. I don't want

00:41:14.380 to get over it. You have to account for the fact that these systems will oftentimes simply make

00:41:18.920 things up in order to please kind of the human user. But that is a minority of cases. And if

00:41:27.560 you look at the way in which they're tested on mathematics, which is just demonstrable,

00:41:32.700 if it can either do advanced mathematics where it can't, and they are steadily increasing in the

00:41:38.740 ability to do phd level mathematics if you look at omniscience index or humanity's last exam for

00:41:47.000 this from the center for ai safety what you see is on everything from medicine to business to

00:41:52.860 biology to economics oh be careful jim uh that these systems not every time and not in a genius

00:42:01.220 creative way but they're able to answer questions at a phd level and assemble essays at a phd level

00:42:08.360 which are accurate, meaning that they are better than 99 percent of human beings, except for when

00:42:14.580 they make things up. So it's a mixed bag is what I'm saying. But definitely, I don't think we can

00:42:19.360 just simply count on the likelihood that these systems are going to get dumber and dumber and 0.99

00:42:23.700 dumber. I think what we need to worry about is that human beings relying on these systems will 0.95

00:42:28.560 get dumber and dumber and dumber and they'll be outcompeted because they have degraded themselves. 0.98

00:42:32.780 Rickards, that's one of my concerns. If you start relying on A&M, particularly if you put it into 1.00

00:42:37.420 the schools and the education system. You're going to have people that have no, you can tell

00:42:41.180 right now, even when you go to Google, the way it lays out, you can get through a lot by just,

00:42:46.780 you know, memorizing, et cetera, but it doesn't do anything for your ability to think through

00:42:50.800 things, to connect dots and do your own pattern recognition. It's doing the pattern recognition

00:42:54.960 for you. That's why I think you're correct about half the white collar jobs, at least initially. 0.98

00:43:00.360 I think a lot of people are going back and saying, Hey, look, I just don't want AI with some senior 0.78

00:43:05.480 partner in a law firm that I'm really dealing with the machine or, you know, instead of some

00:43:10.740 medical technician or somebody working for a doctor, I got a machine that's not working for

00:43:15.720 me. Jim Rickards, your thoughts on that before we go to break. Yeah, by the way, Joe is exactly

00:43:20.500 right about curating the training set. And I should have said that myself, but he's correct.

00:43:25.860 The more curated the training set is, the less slop is in it and the better the output. So that's

00:43:30.740 exactly right. Except who's doing the curation? You need a subject matter expert. You need a

00:43:35.040 human to actually do that. That is one of the solutions. By the way, a firm that's doing a

00:43:41.120 better job of that is Anthropic. A couple of weeks ago, AI solved a math problem that Erdos

00:43:48.960 had proposed. If you have two points in a plane, how many can there be? Basically, what's the math

00:43:55.740 to solve that problem? AI solved the problem. It was a combinational geometry plus an advanced

00:44:01.320 form of algebra uh humans hadn't been able to solve it for 80 years so okay that's true that's

00:44:05.760 a real solution nice going but my point is that solution was out there and ai found it but they

00:44:12.640 didn't create it that's that that's the difference and that's where there are many things where you

00:44:17.000 need to create a factor and uh humans are not going to go away and i'm hearing from um you know

00:44:22.220 people say you know i guess they get me get me a real give me a subject matter expert i can't

00:44:26.760 over rely on the president of the united states is coming into the east room we're going to cut

00:44:32.460 live it's going to go through the charlie kirk show here we go

00:44:56.760 Thank you.

00:45:26.760 Oh, I thought that was for me.

00:45:51.420 I was very unhappy.

00:45:53.780 I looked around and I saw they're all looking at you.

00:45:56.020 I was not happy about that.

00:45:59.020 That's amazing.

00:45:59.860 That's an amazing, amazing audition.

00:46:03.920 And I'll tell you what, it's you have the most important

00:46:06.660 business people and people, political people

00:46:09.840 that you can possibly have in one room

00:46:12.880 that soon will be a much larger room than this.

00:46:15.080 We'll have a room substantially larger than this,

00:46:19.020 which is which we really do need

00:46:21.220 because we would have had five times this crowd.

00:46:24.480 everybody wanted to be here to be with you and uh it's an honor and today i'm thrilled to welcome

00:46:30.400 you to the white house the most beautiful building i love this building we fix it up all the time

00:46:35.920 that's the real estate business in me and it's in tippy top shape finally but for the swearing in

00:46:42.960 of our new chairman of the Federal Reserve Board

00:46:45.600 of Governors, Kevin Warsh.

00:46:47.740 Kevin.

00:46:48.740 And I expect he will go down as one of the truly

00:47:12.620 great chairman of the Federal Reserves that we've

00:47:16.400 ever had.

00:47:17.000 I really believe that.

00:47:17.900 I think he's got abilities that very few

00:47:21.200 people have, that covers a lot of territory, and

00:47:24.940 he's respected by everybody.

00:47:26.440 And that's so important in that position.

00:47:28.040 Congratulations to Kevin and to his wonderful

00:47:31.500 wife, Jane.

00:47:32.380 Jane, thank you very much. 0.80

00:47:33.640 Fantastic, Jane.

00:47:40.940 And to your very beautiful family.

00:47:42.500 You have a beautiful family.

00:47:44.180 Congratulations.

00:47:45.180 It's a big deal.

00:47:47.680 We're honored to be joined by some incredible people.

00:47:51.380 Our Speaker of the House, Mike Johnson, who is doing

00:47:54.380 an unbelievable job.

00:47:55.680 Mike, thank you very much.

00:48:01.560 He's working very hard on the Save America Act,

00:48:03.700 but I will not say that.

00:48:05.700 He'll get it done, too.

00:48:06.660 He gets everything done.

00:48:07.840 Thanks, Mike.

00:48:09.640 Supreme Court justices.

00:48:11.440 And they are great.

00:48:12.940 Clarence Thomas and Brett Kavanaugh.

00:48:24.580 Secretary of the Treasury.

00:48:26.800 He's like central casting.

00:48:29.060 Scott Besant.

00:48:35.460 If we do a movie on someday, we're going to

00:48:38.140 I need a Secretary of the Treasury.

00:48:39.700 We're starring him, I think.

00:48:40.840 We'll put him in there, right?

00:48:42.220 He's done a good job.

00:48:44.380 Secretary of Agriculture, Brooke Rollins.

00:48:47.680 Brooke, thank you.

00:48:51.060 Secretary of Commerce, Howard Lutnick.

00:48:53.820 Thank you, Howard.

00:48:56.720 Secretary of Transportation, Sean Duffy.

00:48:59.560 Thank you, Sean.

00:49:03.400 Acting Secretary of Labor, Keith Sonderling.

00:49:08.140 CIA Director John Radcliffe.

00:49:16.140 Thank you, John.

00:49:17.140 OMB Director Russell Vogt.

00:49:22.140 Russell, thank you, Russell.

00:49:26.140 White House Chief of Staff Susie Wiles.

00:49:33.140 Director of the National Economic Council,

00:49:37.140 So the other Kevin, I was, you know, they kept

00:49:39.640 talking about Kevin, Kevin, Kevin, and he's a

00:49:41.880 good man you're going to be working with, Kevin

00:49:44.020 Hassett.

00:49:49.020 Director of the Federal Housing Finance Agency,

00:49:52.180 Bill Pulte.

00:49:53.360 And thanks as well.

00:49:57.620 We have so many political leaders, and I just see

00:50:00.020 a few, and you have Tommy Tuberville, soon to be

00:50:04.540 a governor, right now a very successful

00:50:06.500 Senator, Dave McCormick, who's a phenomenal guy,

00:50:10.740 wherever you may be, Dave.

00:50:12.880 Wherever you may be.

00:50:14.940 Andy Barr just had a big win.

00:50:16.480 He won by 40 points.

00:50:17.880 Where's Andy?

00:50:20.340 Congratulations.

00:50:21.940 That was a big win, Andy.

00:50:23.260 I'm proud of you.

00:50:25.480 Did the endorsement help?

00:50:29.080 Dan Muser, my friend, who's a fantastic congressman.

00:50:32.760 Dan, thank you very much.

00:50:35.700 Elise Stefanak.

00:50:38.040 Elise.

00:50:39.880 Hi.

00:50:41.940 And a highly respected guy, another friend of mine,

00:50:44.200 French Hill.

00:50:45.640 Thank you, thank you.

00:50:49.120 Also with us, former Vice President Dan Quayle.

00:50:52.680 Haven't seen Dan Quayle in a long time?

00:50:55.220 Where's Dan Quayle?

00:50:56.260 Wow.

00:50:57.620 You look good.

00:51:00.120 You look good.

00:51:02.420 That's nice to see you, Dan.

00:51:03.620 Very nice.

00:51:04.900 Former Speaker of the House, Kevin McCarthy.

00:51:08.040 Kevin.

00:51:13.040 Good guy.

00:51:14.300 Former Secretary of State, Condoleezza Rice.

00:51:17.320 Highly respected.

00:51:20.180 Highly respected by everybody.

00:51:23.420 Me too.

00:51:25.120 Former Governor Glenn Youngkin has done a great job.

00:51:32.600 Great governor of Virginia, and they try and

00:51:34.300 take it apart as fast as they can.

00:51:36.040 But you did a really fantastic job.

00:51:38.740 Thank you very much, Glenn.

00:51:40.600 And many others tremendously distinguished,

00:51:44.480 the biggest leaders of business and the biggest

00:51:46.920 leaders of politics other than the ones we mentioned.

00:51:49.940 This is quite an assemblage of talent.

00:51:52.420 I see the Southern District over here.

00:51:54.520 Will you stand up, please, Southern District?

00:51:56.380 Jay, stand up.

00:51:57.460 And I don't know if our Acting Attorney General is here.

00:52:05.420 He's pretty busy.

00:52:06.420 He's kept very busy.

00:52:07.420 So if he is, or if he isn't, I'll just tell you he's doing a very good job working together,

00:52:11.960 right?

00:52:12.960 He's doing a great job, actually.

00:52:14.960 So no one in America is better prepared to lead the Federal Reserve than Kevin Warsh.

00:52:20.580 Kevin received a degree in public policy from Stanford University and then earned a JD from

00:52:25.580 Harvard Law School.

00:52:27.300 He studied under the renowned economist Milton Friedman and was mentored by the legendary

00:52:32.980 Secretary of the Treasury and Secretary of State, George Shultz.

00:52:37.260 All legendary names, really.

00:52:40.380 Kevin has worked at the highest levels of the financial world as an executive in the

00:52:44.580 private sector.

00:52:45.580 He did very well.

00:52:46.580 And he served at the highest recent reaches of government as a senior economic advisor

00:52:52.720 in the White House.

00:52:53.720 He knows the White House very well.

00:52:56.060 He's walking through the White House, he's pointing things to me that I didn't even know.

00:53:01.060 At the age of 35, he became the youngest ever Federal Reserve Governor.

00:53:04.880 For the past 15 years, Kevin has been a fellow at Stanford's Hoover Institution.

00:53:11.040 And his credentials really are second to none.

00:53:13.280 When you hear them, there's plenty more.

00:53:17.540 I know that Kevin has the deepest respect and reverence for the institution he will

00:53:22.820 lead starting today.

00:53:25.700 We're so lucky to have them.

00:53:27.980 The Federal Reserve is a pillar of the world financial system and the most important central

00:53:32.500 bank anywhere in the world, with a history stretching back more than 100 years.

00:53:38.760 It is truly the institution that's most looked to and most respected, and it's now taken

00:53:44.080 on a new and even higher respect, in my opinion.

00:53:48.500 And honestly, I really mean this.

00:53:51.280 This is not said in any other way.

00:53:52.900 I want Kevin to be totally independent.

00:53:55.940 I want him to be independent and just do a great job.

00:53:58.860 Don't look at me.

00:53:59.860 Don't look at anybody.

00:54:00.860 Just do your own thing and do a great job, okay?

00:54:03.900 .

00:54:08.900 Unfortunately, in the eyes of many, the Fed lost its way in recent years.

00:54:17.280 became distracted by concerns far removed from

00:54:21.180 its core mission and mandate, drifting into

00:54:23.780 matters such as climate policy and DEI

00:54:26.460 initiatives, with the Fed straying from its

00:54:29.660 mandate while the last administration blew out

00:54:32.660 the deficit.

00:54:33.700 Americans suffered the worst inflation that we

00:54:36.300 had in history.

00:54:37.000 It was the worst inflation we've ever had.

00:54:39.700 As you know, some people say you're wrong about

00:54:41.700 that.

00:54:41.840 It was only in 48 years, but I think 48 years

00:54:45.100 almost sounds worse.

00:54:46.040 The worst inflation.

00:54:47.280 that we've ever had, so it made it very difficult.

00:54:51.600 Kevin has spoken often about the need to restore the Fed's integrity by returning to a proper

00:54:56.380 focus on its two functional and really fundamental responsibilities, maintaining price stability

00:55:03.840 and low inflation and achieving full employment.

00:55:07.780 And we talk about it.

00:55:08.780 We've talked about it often.

00:55:10.560 And right now, we have the most people working in the United States than we've ever had.

00:55:15.020 We have never had as many people working right now

00:55:17.920 in the United States.

00:55:19.420 And it's something that I like to say,

00:55:21.860 and it's been pretty much that way

00:55:23.200 ever since I've been President.

00:55:24.620 When I go back to the first term,

00:55:26.540 I had those numbers, too, and I kept them.

00:55:29.000 And we've done things that are really amazing,

00:55:32.180 but we can bring it to a new and higher level with Kevin.

00:55:34.640 I think we can bring it to a level

00:55:36.540 that nobody ever thought possible.

00:55:38.840 By following through on this vision,

00:55:40.680 Kevin will restore confidence in the Fed,

00:55:43.080 which is so important.

00:55:44.180 and among Americans all across the political spectrum

00:55:48.160 and people from all over the world.

00:55:50.020 And they're going to be looking to Kevin probably

00:55:52.960 and possibly more than any other person

00:55:55.620 that's had your esteemed position before.

00:55:58.320 I think that's true, Kevin.

00:55:59.400 You got a lot of people watching.

00:56:01.200 I fully expect that with the greatest Fed chairs before him,

00:56:05.560 Kevin will safeguard the Fed's integrity.

00:56:07.800 They'll make their own decisions

00:56:09.900 and hopefully make them well.

00:56:12.380 But they'll be listening to Kevin all the way.

00:56:14.520 I really believe that.

00:56:15.440 Even if they're from a somewhat different persuasion,

00:56:17.820 they're going to be listening to him out of respect,

00:56:20.320 because everybody respects him.

00:56:22.420 Thankfully, unlike some of his predecessors,

00:56:24.600 Kevin understands that when the economy is booming,

00:56:28.140 it is — that's a good thing.

00:56:30.760 We don't have to go crazy. Just let it boom.

00:56:33.060 We want it to boom.

00:56:33.940 We want it to be like nobody has ever had before,

00:56:37.140 because we do have some debt we'd like to take care of.

00:56:39.680 And the way you do that is through growth.

00:56:41.900 We're going to grow our way out of it so fast.

00:56:44.540 And Kevin, somebody, and I feel strongly also,

00:56:47.640 we don't want to see it stifled.

00:56:49.300 We want to stop inflation, but we don't want to stop greatness.

00:56:53.240 And so that's really a very good thing, a very positive thing.

00:56:56.940 And that's what he's looking to do.

00:56:58.580 He's looking to do positive economic growth.

00:57:01.020 It's so important.

00:57:01.920 And as we discussed, economic growth doesn't mean inflation.

00:57:05.720 It can be just the opposite, actually.

00:57:07.700 But economic growth does not mean inflation.

00:57:11.260 You don't have to stop the world because you're doing well.

00:57:15.100 Kevin's also said that he'll bring much needed reform

00:57:18.340 and modernization, transforming obsolete data collection methods,

00:57:22.180 rolling back reliance on inaccurate models

00:57:25.740 and curtailing the Fed's practice of issuing so-called forward guidance.

00:57:30.480 They want to do things on that.

00:57:32.020 I guess it's a little complex subject,

00:57:34.620 but it's something that Kevin knows about better

00:57:36.780 than probably anybody here.

00:57:39.580 He has the temperament and leadership abilities

00:57:41.840 to foster collaboration among the entire board.

00:57:44.280 And I know he will welcome robust debate

00:57:47.980 in his mission to keep prices stable and employment high.

00:57:51.320 Kevin will have the full support of my administration.

00:57:54.700 Every one of these people felt, including Kevin, by the way,

00:57:58.060 felt so strongly about this choice.

00:58:00.760 And we have no doubt that we have absolutely no doubt.

00:58:04.940 So important to so big, so important.

00:58:07.440 I just turned on the television.

00:58:09.400 I want to see how the stock market's doing today.

00:58:11.440 Stock market's up 600 points.

00:58:13.400 That means they like you.

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Bannon's War Room - May 22, 2026

Episode 5392： President Trump Swearing In Ceremony For Federal Reserve

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