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Kevin Hassett, American Enterprise Institute senior fellow & director of economic policy, on Ben Bernanke’s speech today, and what he predicts t...
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From the Fed when they meet next month.
-- -- -- Kevin massive former Federal Reserve senior economist and now a senior fellow and director of economic policy at the American Enterprise Institute.
Kevin -- your being the best price of the -- pretty much what we expected.
So why you think in -- -- Why I think instead what we're seeing right now is sort of exactly what we expected it's going exactly by the -- -- Which is that the Fed signal that the last meeting in the minutes that they're probably gonna give us quantitative easing three at the September meeting.
And I think that they chose the September meeting for a number of reasons one of the reasons might be that -- we'll get all their GDP forecast so we can see that they're getting pessimistic.
That justifies the extraordinary action.
I think they're also very worried about the proximity to the election it's gonna look like the Fed's trying to bail out Obama and maybe they're gonna take a lot of heat for that and I think because of that.
Bernanke's position needs to be -- it's not me it's the committee right so if you went to Jackson Hole and he said here's what we're gonna do we're gonna you know Jack up quantitative easing in September.
Well then he's -- immediately via in the line of fire political attacks and so I think what he did is he very -- set up the quantitative easing at the end of the month I think everybody in in the markets expect that's gonna happen now.
And he did it without necessarily making himself -- target.
OK so so basically then what you're saying is he's gonna somehow.
Lower expectations lower forecast make the economy almost appeared to be worse so that it becomes just a final.
But yet that you could -- in the meetings last night -- in the minutes of the meetings last time they basically said unless we see something really significant.
Big changes are our outlook that we see sustained growth something that we can really bank time.
Then word you know likely to take action soon and I think that one of the reasons that the Fed is so worried as we've got.
You know tax -- -- -- all these expiring things coming at the end of the year we saw last summer that back -- really slow things down and we're already grown you know one and a half one point 7% so if you slowdown from there you really are looking pretty close to a recession.
Now you know Mitt Romney has basically said that if he is elected he will not rehire Ben Bernanke.
Does that play into.
The Fed chairman's decision making at all.
You know I I don't think so I I've known Ben Bernanke for a long long time.
And I'm sure that he's just trying to do the best independent job he -- as a central banker now I don't agree with his policies all the time I don't think we need another quantitative easing right now.
But but I really don't think that he's doing -- -- -- -- for political reasons -- out of spite for Romney or anything like that but it definitely will help Obama on the census you're saying -- markets today visit the Fed gets very aggressive in September it'll Jack up markets and Jack up the economy going to deal.
-- -- on those temporary right okay let's talk a little bit more about the selection -- economic advisor to George W.
Bush in 2004 presidential campaign.
Senator John McCain's chief economic advisor at one point it fewer Mitt Romney's economic advisor right now what would you tell -- to -- get out there right now what does he need to state of the people.
Why did back I am a advisor not a full time advisor for governor Romney -- and I think that he's he's.
-- area -- but he's actually hitting all the right notes.
And so what -- present Obama's position has -- is that we basically should ignore the nation's big problems not worry too much about the deficit and just have more stimulus.
Well governor -- he's done is he's put out a plan a goes after each and every major probably have Medicare Medicaid social security and and attacks system.
And proposed big reforms that could turn the economy around and so I I think that on substance.
-- is actually going to -- as Bowles Simpson did going after the tough problems with real solutions Obama's ducking them right now.
-- that's -- that's all good -- thanks for being with us today sir that.
