00:00:00.000In the meeting just concluded, the FOMC decided to raise the target range for the federal funds rate by a quarter of a percentage point to three and three quarters to four percent in support of the Federal Reserve's dual mandate.
00:00:14.520Economic activity is expanding at a solid pace. While uncertainty remains elevated, owing in part to geopolitical developments, domestic spending has been resilient.
00:00:26.540productivity growth strong and capital investment is robust job gains have kept pace with the
00:00:35.120workforce and the unemployment rate has changed little but inflation remains elevated today's
00:00:43.640policy action will support a timelier return to the committee's two percent goal so the labor
00:00:49.520side of the Fed's congressional remit is in good shape. Yet for more than five years, inflation has
00:00:56.960been running above target. So our predominant focus is on the price stability side of our
00:01:03.540mandate. The plain fact is that inflation is too high and has been for too long. This summer's
00:01:11.240inflation readings do not tell me that underlying trends have meaningfully improved. Based on the
00:01:18.000most recent CPI and PPI data, the 12-month change in total PCE prices likely was around 3.6% in
00:01:26.760August, core PCE and CPI prices running at about 3.2 and 2.4% respectively. Too many categories
00:01:36.540are still posting increases above 3% on both a 6- and 12-month basis.
00:01:48.000Yeah, I do. I mean, I'm relying on Kevin, but he's got, you know, a very tough board.
00:01:53.760He's got a board that was put there by a lot of other people and the interest rates are too high.
00:01:59.820They're not appropriate. And I told I talked to Kevin and I said, you might as well vote with the board because it's not going to matter.
00:02:07.180The board is very hostile. They're very political. They're doing the wrong thing.
00:02:11.760There are a bunch of politicians or people put on by politicians.
00:02:15.420And it's a shame because it's too high an interest rate.
00:02:19.300Despite that, the country barrels through everything because we're doing so well.
00:04:37.600And that's not really stuff that the interest rates and the Fed can fix.
00:04:42.880In the longer term, yes, that should push down maybe PC and the CPI just a bit.
00:04:50.860But I think in the short term, I wouldn't expect much, much effect.
00:04:55.400What about this potential threat from the president that he would cut off trade?
00:05:02.380It's dumbfounding. The reality is that I don't really see why the Fed would care or how that would affect the Fed's decision.
00:05:15.140The president also, quite frankly, doesn't really have the power to cut off all trade like that.
00:05:20.900But the guy likes tariffs and sees it as a lever, even apparently against his own Fed chair.
00:05:27.140Could we see more to come? Because here's the problem.
00:05:30.180We've had easy money, really, really low rates for a really long time around the world.
00:05:37.660Yeah, I think the general consensus is at least one more rate hike, probably very soon.
00:05:45.260But it looks like now folks are pricing in maybe another one after that.
00:05:49.860I think it makes perfect sense. You know, leaving even Iran out of this, inflation was still above the Fed's 2 percent benchmark before, again, Iran even started.0.99
00:06:05.260And so it wouldn't surprise me at all that as long as the economy continues to chug along, as long as the labor market continues to chug along as it is, and as long as inflation remains stubbornly above that benchmark, I would expect the Fed to continue to hike.0.96
00:06:21.780It's dumbfounding, Gautam, but isn't it just dumb? Who would that help?0.86
00:06:25.840well it wouldn't help anyone and it's it's sort of the way someone thinks about the world if
00:06:32.460their only metric is sort of will i die on a pile of money that reaches the moon um those of us who
00:06:38.800understand that the point of money is that it buys you things see that a trade deficit isn't
00:06:44.160isn't something where you're losing money because you're running it means that people are selling
00:06:47.800you things that you want and the sort of level of mad economic illiteracy madness um word salad
00:06:54.520that he's producing, and that is, even by Trump's standards, pretty astonishing. I just note that
00:07:00.240the really scary thing is that Congress just passed a law which was motivated partly to
00:07:05.400supposedly to improve our sanctions on Russia that gives him a lot more authority to level,
00:07:10.600to cut off trade than he had before. This was passed yesterday.
00:07:16.000Thursday, 17th September, in the year of our Lord, 2026. It's Constitution Day here in the
00:07:22.000war room we're absolutely uh packed um we were trying to get matt gates on this morning but matt
00:07:27.960is in town and um and taking some very important meetings let's say that the great matt gates uh
00:07:33.640we'll try to figure out maybe get matt on tomorrow if not uh very shortly when matt's thinking the
00:07:39.000architect of the um the 2022 midterm victory matt gates um i want to go to dr peter navarro and
00:07:46.720And here's what I saw. I've got Navarro. I have Rickards. I got Philip Patrick. We want to take
00:07:52.900some time on this because President Trump, one of the centrality, one of the central issues of
00:08:00.520President Trump and why he came on the political scene was about, with his businessman's knowledge
00:08:07.400and savvy, the economy. And, you know, the economy's got to work for American citizens.
00:08:12.840So I've got Dr. Peter Navarro at the White House.
00:08:16.740So, Dr. Navarro, you've got a piece up in Real Clear Markets, but I want to make sure we frame this so the audience has the best information on kind of the theoretical side.
00:08:26.780Quite frankly, President Trump, I think, reiterated what you've been laying out about the Fed as the central bank.
00:08:34.180Warsh, I believe, and correct me if I'm wrong, went totally counter to what your thinking has been and the president's been.
00:08:41.600So walk us through what is – when the president says the interest rates are too high, we get the best credit in the world, you make this case today that Warsh went against basic underlying philosophy of the Fed.
00:09:44.500It means that people have less purchasing power, and that means a slower economy.
00:09:50.600So, in effect, the energy price shock does the work of an interest rate hike.
00:09:59.080So if you pile on also with an interest rate hike, you run the very real risk of driving an economy into recession or worse, stagflation.
00:10:12.240And Warsh showed absolutely no clue in understanding that, as did any of the other Fed members.0.71
00:10:21.680But historically, if you go back to two points in time, 1990 and 2007-2008, Bernanke in 2007-2008, energy price shock, it's eerily similar to the one that Iran doing now looks like a lot like back then.0.59
00:10:44.360Bernanke didn't raise rates, eventually cut them.0.90
00:17:07.760Well, that's testimony to the strength of the Trump economy and the ability to generate strong growth without generating inflation.
00:17:20.280You have the central tariffs basically protecting our factories and workers, now bringing in an amazing amount of production here, coupled with the tax cuts for factories.
00:17:45.920This was a double tap. You know what a double tap is when Walsh did this? Let me make clear
00:17:51.460about what I'm challenging Walsh on. I want Walsh and the board to respond to history of the Fed.
00:17:59.140I want Kevin Walsh to tell the American people why this is different from Greenspan and Bernanke.
00:18:07.220And maybe he can call up Eric and get a little tip on how to do it.
00:18:11.200But the way Eric's doing it, no, just wait, OK, because it's coming.
00:18:17.220You can't do what Walsh did and not have a contractionary impulse going through.
00:18:24.960But particularly if you're signaling you're going to do it again in October.
00:18:28.980This is not, it's just, it's just wrong.
00:18:33.300Did you, let me just go back into history.
00:18:36.400You're talking about, you lionize Greenspan and Bernanke, but they have a lot of critics,
00:18:43.180particularly Greenspan on what's called the Greenspan put, which was always cutting rates
00:18:47.260to continue to juice the market and flood the market with easy money.
00:18:50.300In 2000, is it not true also with Bernanke that the 2007-2008 rate cut might have somehow continued the late summer of the financial crisis?
00:19:04.120I mean, I'm not sure if I bring those two up as examples, but you did.
00:19:08.000So when Morse sees that, he goes, hey, Navarro's got his history wrong, sir.
00:20:42.280Well, he's a he's a Canadian Keynesian hawk. OK, he's not a supply sider. That's clear. And so he didn't get the lesson on energy price shocks because those are those those don't happen very often.
00:21:00.160OK, so so it's a different playbook. So somehow he hasn't studied that.
00:21:06.380I mean, how can you as a Fed chair not bring that into the discussion?
00:21:13.440You would you would think that he would say, well, I know that Greenspan did this in 90 and I know that Bernanke did this.
00:21:20.180But but this case is different. It's different because he didn't do that.
00:21:25.540And by the way, if you look at what he's been saying in just the near past and what he said
00:21:32.780yesterday, there's all sorts of contradictions in there.
00:21:35.640So I'm not impressed with the quality of his analysis and his thinking.
00:21:46.320Now, the other hypothesis is that it's political.
00:21:49.460We know that there's a core on the Fed board that are the power lights that have acted throughout the Trump administration this time and last to derail the Trump economy.
00:22:04.140We know that's the case. And it may be that that Warsh wants to go in there and try to make some peace.
00:22:12.960I know. But are you accusing Warsh of actually being captured by the Federal Reserve already?
00:22:21.280I mean, this was a unanimous vote. Everybody looked at the same data.
00:22:24.860Are you accusing the Fed chair of of actually getting over there as President Trump's nominee?
00:22:30.420And it's obviously an independent agency, but falling into the trap of Powell, which we know was he was highly political.
00:22:38.200Remember, he cut rates to try to juice Biden and Camilla Harris's chance.
00:22:42.480I mean, he was a total political hack.
00:22:44.640But are you saying that Warsh in the first, what, he's been there a couple of months, has already been captured by the central bank?
00:22:54.960I've told you Greenspan did it right with an energy price shock, didn't raise rates, eventually cut them.
00:23:01.620Bernanke did the same thing, energy price shock.
00:23:04.940So the question to me is a simple one.
00:23:07.920Why hasn't Warsh followed that playbook?
00:23:11.180Why hasn't Warsh, if he chooses not to, at least explain why he hasn't followed that playbook in terms of basic economics?
00:23:21.200You don't raise rates in the teeth of an energy price shock because the energy price shock acts as a tax and therefore the demand suppressant.
00:23:30.780Why hasn't he done that? And we offered two possibilities. One, gap in his training to political.
00:23:37.640That's all. I'm looking for an answer. And again, Mr. Warsh, Chairman Warsh, can you please explain to America why you've done what you've done that is so different from the success of Greenspan and Bernanke in the face of very similar circumstance?
00:23:54.860I would like the journalists out there. I got the press room, Steve, right next to me, the Brady room.
00:23:59.620I don't see any of the journalists, including the journalists in the financial news areas, asking that question.
00:24:07.160And I'm bewildered, Steve, because this is that. This is the same thing years later.
00:24:15.200And raising rates is just a monumental mistake. Full stop.
00:24:20.220OK, hang on. Hang on. Riddle riddle me this. The president of the United States, a pretty sophisticated guy around Wall Street, he's barred a couple of three dollars and raised equity.
00:24:30.800So he knows the game and he knows capital markets. And, you know, he's very focused on interest rates and capital flows.
00:24:40.240The president makes even a different argument. He's saying because of the credit, the United States, our interest rates are should be lower in that wars should actually have cut rates.
00:24:56.280Well, let me give you another thought experiment on that line.
00:25:00.220I mean, we've argued from the beginning of this administration, Trump, 47, that the Fed should have been cutting rates.
00:25:08.820And I have argued and I've done it on your show many times and I've done it out here on Pebble that we should be 100 basis points or more below what we are now, even prior to worse raising rates yesterday.
00:25:24.180OK. And the reason why is simply that we run a supply shock economy in a positive way so that we can grow fast without generating inflation.
00:25:35.940So here's the thought experience, Steve. Suppose that Powell had done the right thing at the beginning of this administration and cut rates down by 100 basis points.
00:25:48.060And we were already down there when the war in Iran started. Like, what would the Fed be doing today?
00:25:55.460Would it have raised rates 125 basis points to make up for that or maybe just 25 or not at all?
00:26:02.860So we're just not thinking about this right at the Fed.
00:26:07.220It's like these folks at the Fed and out in the financial news, absent you guys, the war room, just don't understand the power of Trump policies to propel an economy, to propel wages without generating inflation.
00:26:27.540But look, you know, the mantra, Steve, it's it's it's lower taxes to bring factories on shorts, less regulation, a lower cost and help businesses.
00:26:37.280It's strategic energy dominance. And above all, it's the fair trade with the tariff walls to bring investment here and factories here so that we get not just economic security, but national security.
00:31:06.060But again, I want to just repeat the Kevin Worsh challenge.
00:31:09.100Chairman Walsh, would you please explain to the country how this is different than what Alan Greenspan dealt with in 1990 and Bernanke dealt with in 2007, 2008?
00:31:22.540If you can explain that in a credible way, then we've solved the training issue.
00:31:28.660If you can't, then you've forgotten history or you never remembered it to begin with.
00:31:33.560OK, I want to let's go. Let's pivot now to the Epoch Times.
00:31:40.460Jan Jekalek, one of the great editors over there of the finest newspaper in the country, Broadsheet, a full page today.
00:31:49.400Walk me through the Epoch Times and then I want to talk about your book on on Fauci writing in prison, sir.
00:31:55.480sure well epoch times why fauci must rot in prison it's on amazon they did a beautiful
00:32:05.460front page spread on the opinion section i was quite honored to have that done and it was
00:32:13.040basically explaining the genesis of the virus itself through fauci funding the gain of research
00:32:22.320gain-of-function research at the Wuhan lab. Like you and I, Steve, the Epoch Times is very
00:32:29.960interested in getting to the truth of what happened at Wuhan. And what I do in the book,
00:32:36.420Why Fauci Must Rot in Prison, is I show that he had this Frankenstein fantasy. He thought he could
00:32:43.480create these dangerous viruses and then vaccines to cure him. That was the Frankenstein part.
00:32:49.340And he did that by funding research at a Chinese lab with lower safety standards, never thinking the thing could either leak or with the military there possibly be let out of the lab as an attack on America.0.58
00:33:05.620This stuff never went through his mind. And then when the pandemic hit from the Wuhan lab, he's thinking he's got to be thinking and it shows up in the diary.0.66
00:33:16.180This, wow, I might have done this. Oh, I probably did this because he had experts.0.86
00:33:22.260And this is in his diary telling him that thing came from the lab and the would be the Wuhan lab.
00:33:29.380So this book, I'm the prosecutor, you, the reader or the jury, why Fauci must rot in prison.
00:33:37.800You, Steve, right there wrote the foreword and you, Steve, and the war room were the very first with the very best coverage of the whole issue.
00:33:50.460And it was you and I and a few others raising questions that now in this book, why Fauci must rot in prison, we can really answer.
00:34:01.880And you and I just said we're going to do a special on Saturday.
00:34:05.200I hope people sit in on that and we'll get down to all the things I fought Fauci on in this building here.
00:34:12.100The travel ban, the masks, the lockdowns, the vaccine booster, all of that, the force jabs.
00:34:17.560uh he's a bad man and he uh prison's too good for him uh let's uh we're gonna do an entire hour dr
00:34:26.280navarro on saturday dr uh we'll let you go now we know you got a lot of work at the white house
00:34:31.240uh where do people go for the book and where they go for all this great content you're putting up
00:34:35.000including a fantastic piece yesterday in real clear markets i think it was about maga and
00:34:40.840and MAGA economics, and then today about the Fed. Where do people go for all of it?
00:34:47.240Well, I thank RealClearMarkets for putting up those two pieces. I thank EBOC Times.
00:34:53.220Go to Amazon right now, friend. Why Fauci Must Rot in Prison. And then go to PeterNavarro.com.
00:35:00.920It's the gateway to all the good stuff we're doing. X, Getter, Truth, Instagram, and the
00:35:06.780Substack. What I'm trying to do is is get the message out on all the different ways you folks
00:35:12.140like it. Thank you, brother. Appreciate it. We'll make sure that we'll make sure that Kevin Warsh
00:35:21.580sees that over at the Fed. Thank you, sir. Jim Rickards joins us. Jim, I know I got you've got
00:35:28.540a lot to say about interest rates, about all of it. We're going to get into that in a moment.
00:35:32.120But but I want to do a reset with folks because this is not done in in some theoretical exercise.
00:35:39.200This is in the real world. And right now we have it.
00:35:42.940We talk about oil price shocks and all this, whether it is one, whether it's related to demand, hasn't dropped all of it.
00:35:50.960You have been warning us about a metastasizing war in the Middle East that maybe even can hook up with the Ukraine situation through Gaza.
00:36:57.600was a pipeline across Saudi Arabia Peninsula out to the Red Sea. Two things happened there.
00:37:03.300Last week, the Houthis blew it up. Sorry, it was Iraqi missiles, missiles from Iraq,0.98
00:37:09.060obviously an Iranian proxy. They blew it up. At the same time, the Houthis expanded their control0.99
00:37:14.720over the Red Sea coastline all the way to the Bab al-Mandeb Strait. They took an island that's
00:37:20.560in the middle of the strait. So they basically controlled the whole thing on the coastline all
00:37:25.600the way down to Aden. The Houthis have put basically a chokehold on the Red Sea. The
00:37:32.860Iranians already have a chokehold on the Strait of Hormuz. The Saudi workaround pipeline has been0.98
00:37:39.320blown up. That was getting 2 to 3 million barrels a day, nowhere near the 20 million that they were
00:37:45.940exporting, but 3 million helps. That's now offline. Somebody said to me the other day,
00:37:51.680well, yeah, they can rebuild it. Of course they can, and they'll blow it up again. I mean, what
00:37:55.220good does it do to rebuild it? It's not clear that the Saudis are going to waste their time on that.0.98
00:37:59.700So the Saudis right now are exporting zero. So the U.S. is not going to invade Iran,
00:38:07.500not with any significant force. I think we can rule that out. So what you're left with is an
00:38:12.340escalating kinetic war, which will fail because it's mostly air power. You can blow things up.
00:38:17.920I don't question the ability of the U.S. military, the U.S. Air Force to do that, but it doesn't work.0.88
00:38:24.880We saw that we bombed Vietnam for 10 years, and it didn't work.0.91
00:38:28.600The missiles are better, but the result will be the same.0.99
00:38:32.500And the stranglehold on the global economy is now becoming acute.0.73
00:38:37.520And one of the criticisms or pushback I get is, you know, hey, Jim, you said in March, days after the war began, that Iran was going to win, et cetera.0.84
00:39:11.680Hang on one second, because you've been running this.0.91
00:39:15.380You said escalating kinetic when you have Iraqi, because there's a huge, people would argue almost the entire Iraq government, but there are elements, major party elements in Iraq that are proxies for the Iranians.
00:39:29.360That was the missiles, plus the Houthis.
00:48:41.040So this is, again, feeding back into inflation, could produce starvation.
00:48:45.380this is uh so so that's that's going on at the same time i can explain to the white house how
00:48:52.480you can win both wars with one phone call and i can do it in one word which is russia why that
00:48:59.660now the congress just passed a whole new list of super sanctions you know lindsey graham's uh
00:49:04.920what did he say beat them today i forget i asked him a phrase um the uh sanctions against russia
00:49:11.060They haven't worked. They're not going to work. What you need to do is basically just look at a
00:49:15.140map. Look at the Caspian Sea. Russia is Iran's outlet. Russia can provide Iran with gold and
00:49:21.580hard currency. Russia can rescue Europe from economic suicide. All we have to do is get them0.54
00:49:28.540on our side and isolate China. So why are we not just antagonizing, why are we in a proxy war with0.94
00:49:34.940russia when they are the solution to all the issues in ukraine and iran uh jim i want you
00:49:44.520can you hold for a a moment i want to hold it through the next break i want to talk to you
00:49:48.780about the interest rates and your your your thoughts on um on uh global um on the global
00:49:55.320economy and all of it you said the great framework and like you said the one of the things we tried
00:50:00.220to do was to make sure you don't have a merger of these wars in Ukraine and the Black Sea and the
00:50:05.440Caspian Sea now merge with what's happening in Lebanon and of course Israel and Gaza and now
00:50:10.580you've got Syria and you've got Iraq in it on the Persian War and it's in the Arabian Peninsula if
00:50:17.080you just look at the arc of instability and folks once you combine the Balkans and Ukraine you know0.52
00:50:24.020the bloodlands they call Ukraine the bloodlands you combine Ukraine the Russian-speaking eastern
00:50:29.360border up there the the balkans turkey greece all the way through all the way through the horn of
00:50:35.100africa and then sub-saharan africa you got yourself let's go in pakistan and the northwest
00:50:41.020frontier up in india you got yourself a uh that is the kinetic part of world war three we got to
00:50:47.700be very very very careful on this i mean very careful it's just it boggles my mind that uh
00:50:53.520we're, you know, going down this path because like I said,
00:50:57.500Scott Besson and the economic war is always the way we should have gone.
00:51:01.520And I think Jim is right. You're not going to get it done yesterday.
00:51:04.220Although Scott's putting in, I think getting some real support for secondary
00:51:08.020sanctions. Anyway, Rick is going to stick with us.
00:51:10.660I've got Dr. Thayer and Karen Sigmund big announcement on this event.
00:51:14.500We're going to have this evening that we want everybody to attend.
00:51:17.580I will actually be, be speaking. And so we're going to combine all that.
00:51:21.580They're going to be at the top of the hour and Jim Rickards has promised to stay over in the effort of our sponsors to try to make sure that whatever this concept is, affordability or however the Democrats frame it, actually that you can get better deals in your life.
00:51:36.780We've got sponsors prepared to step up. First off, break the stranglehold of Big Farmer on you.
00:51:43.400This piece in the Epoch Times about Fauci and Navarro and the whole thing, you've got to read.
00:51:48.840But remember, break big pharma's stranglehold on you and your medical freedom.