(DCNF)—Political analyst Mark Halperin described on Fox News Wednesday why the nation is experiencing “as confused an economy as we’ve ever seen.”
The gross domestic product (GDP) rose by 3%, surpassing expectations, driven in part by a decline in imports. During an appearance on “Special Report with Bret Baier,” Halperin said that multiple conflicting forces are at play.
“Look, let’s stipulate three things. First of all, this is about as confused an economy as we’ve [ever] seen. There’s so many crosscurrents, right? The tariffs are a big piece, but there’s questions about supply chains, upcoming back to school, Thanksgiving, Halloween, Christmas, consumer behavior. There’s a lot of uncertainty,” Halperin told host Bret Baier.
Halperin said that if the economy is growing rapidly then cutting interest rates would contradict traditional economic principles.
“The irony, of course, of the White House message today is if the economy is growing quickly, you don’t want to cut interest rates, at least under classic economics, right? You wouldn’t want to stimulate an overstimulated economy,” Halperin said.
Halperin turned his attention to members of President Donald Trump’s economic team, who have put forward a detailed plan that they say will navigate these challenges.
“The last thing is President Trump, Scott Bessent, the other economic team members, they’ve got a plan, and it involves these trade deals. It involves energy. It involves some of the technology things they announced today regarding healthcare. The [Federal Reserve] Chairman [Jerome Powell] doesn’t care about their plan. The chairman cares about his bidding, and his bidding is hold the course, stay the course for now,” Halperin said. “I think the president’s right. I think they may well be cut in the fall.”
Powell faced tough questions from reporters about the decision to keep interest rates steady, despite a 3% GDP growth in the second quarter. Reporters from the Wall Street Journal and Fox Business Network pressed Powell on why he didn’t lower rates, with Fox’s Ed Lawrence highlighting the impact on potential homebuyers.
“Housing is a special case, right? We don’t set mortgage rates at the Fed. We set an overnight rate. The rates that go into mortgages are longer-term rates, like Treasury rates, might be 30-year rates … Something we don’t have any effect, we have do an effect but not we’re not the main effect,” Powell said.
Trump and Powell have reportedly clashed over the Fed’s decision not to lower interest rates, with Trump dubbing Powell “Too Late.” Additionally, two members of the Federal Open Market Committee, Governor Michelle Bowman and Governor Christopher Waller, dissented from the decision, calling for a 0.25% cut, marking the first double dissent since 1993.
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