Scott Bessent & Trump’s Economy 2.0 11/06/24
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This is a pot. The morning after the twenty twenty four election, Donald trump elected president of the united states again, and we have a news making interview for you. Scott besant has donated to the trump campaign, and he's been advising the former president on economic policy, how the controversial terrace s might turn out.

I would recommend that terrorists would be layer and gradually, which the Price adjustment with the over a period of time .

and tackling the deficit with a red senate in a more unified government.

Liberty been in conversations with a lot of the republicans who will share those committees. And I can tell you in the republic, convert, especially the house, there's a big appetite for pay force.

Scott best and the adviser who might be on the short list for treasury secretary.

i'm going to do whatever president from us.

M C N B C producer katty cramer squaw election twenty twenty four.

Another bonus podcast starts right now.

On this special series of podcasts, we're bringing you the best of our four hour post election squak box, the wednesday morning show with our anchors joe knin bakker and Andrew ross sorkin. And this next interview is with the name you might not already know, scot basset. He's a donor to the Donald trump campaign and has been a key adviser to the president elect on economic policy. He's been so involved, in fact, that he's rumor to be on the short list for the new administration's role as treasury secretary following yelling, who had the job under jae biden after SHE served as chair of the federal reserve and speaking of the fed, essent was also the trump adviser who floated a rare intervention in the White house's s relationship with the central bank. In an interview with parents last month, basin suggested that a trump administration two point o would name the next fed had so early as to sideline the man currently in the job, jpl best and joined squad box in september when he said Donald trump s was the country is, quote, last chance to grow out of our deficit problem.

We can look back to what happen and trump one point now and see the success there. But what we d have now is a spending problem. President trump, the extensive conversations with, we have a plan to talk about the direction, ary spending, getting that into control.

Let's get to jail. Carne, who kicks things off.

John is now Scott and a founder in CEO of key square group and we have talked .

column secretary.

I don't will get to that uh, soon um skype I don't know h how much you won't go into that on on whether that, that is a possibility as far uh, is treasury. But both sides agree it's just a way to get there is different. The only way out of this is growth.

Larry, think I thought I was interesting. He wrote something about that today. But how it's got to be growth, I think his idea of how to gender growth is probably one hundred and eighty degrees from more years as h yeah.

joe. I I I think we're going to do IT through deregulation, uh, energy dominance and we privatizing the economy because we've seen this massive government spending. We had a seven percent deficit to GDP, which we've never had in peacetime. They are non recession ony period. So you know, and we ve got this elon mask cost cutting commission, which over the past weeks, months when i've been out of talking to people on the campaign trail, a the public is very excited about .

know I head people earlier a more less characterising the president as someone who that does like to spend uh some money and and we talked about whether the I R A would um would be repeal. Talked about whether even the infrastructure, what would happen there, and in there are people saying that that instead of repealing these things, the president trumps gna take credit for the red states that benefit from all this of spending, fiscal spending. What's gona happen? What would you recommend?

You look this I R A or inflation reduction act, which is or well named, is to do state machine the for the budget. I believe that this thing was originally scored. And you know, for civilians and Normal people like I used to be, all the scoring is done over ten years, I think was originally score plus fifty, then it's scored at negative three hundred.

Now I think we're at a trillion, and i've seen estimates that over the life of this thing, you could go to four and and a half trillion. So uh, I think of priority is going to be turning off, uh, the I R A and the you've seen president trump and is distained for this Green new deal. And you know I just can't imagine a worst time to move towards this kind of evening Mandate that we've had all of I ra.

all the I R ra, because we've had got to have come on today and suggested that not just president trump, T A lot of republican senators and aggressor might like some of the spending .

was taking place in their district wow. Look, I it's ready embedded and I think think it's deeply cynical. What the democrats tried to do was to embed this in the district.

The a Becky that, you know, I couldn't have written a script with greater and components. Then the by Harris administration, did we have this incredible induction ous A I boom that is going to require huge amounts electricity. They are probably three percent, and they have growth and electricity, and they simultaneously were pushing for a twenty thirty five E.

V. Mandate. So moral electricity. So on the virgin in on electricity shortage in the U. S. We're already seeing one of the sources of inflation and the affordability crisis is electric bills going up. So I don't think anyone's gona have a problem with slowing down or cutting off this I R A god.

There's been lots of questions about the future of the photo reserve, its independence, whether jiao remains in his role to the end of his term uh whether there are shadow uh chairman that are tried to be put in place for all the things like that。 I don't know how feasible or even practical those things are but what is your um what what do you think present trump is going to do as IT relates the photo reserve and what would you recommend him?

Yeah I I I I think is already come on and said that the chair part is gonna ish out this term and um I wasn't closed they buy a very good barn reporter who I think misunderstood what I said. Um I think that we should um a point that the next or nominate the next federal reserve chair a very early I one of the sources of great inflation, the twenty twenty two was j power was the latest appointment the of the century.

And you know you'd have to ask the biden people why they waited so late. He was not very nominated until the end of november twenty twenty one. He the was confirmed in november in december twenty twenty one.

And then they began hiking rates in march of twenty two. If they had the nominated him and reappointed him six months, he could have been started in sooner. So and of the other thing too is think about IT.

President trump has already said he is not going to renna inaa, pal. So in a way that increases he is independence, right? He is not gunning for a reappointment.

Let me ask your related follow question. One of the candidates and have had on the broadcast many times is Kevin watch the people talk about is a prospective chairman for that role. Um but one of the things that he has been um is I would argue not double sh Davis would not be the term I I I would put with Kevin wars and how you think uh present trump would think about h somebody who isn't a court David given a some of the .

things that he may want to do well know and I think it's had a way to find damage because they you j pal did what ethos and inappropriate jumble rate cut in september and look what David exclude the move in the bond market today, which we can talk about if you want. But a David fend raise the tenured rate by seventy basis point. So you know that's not David.

They're actually tightened ed financial conditions at the tenure in which is what drives a lot of capital formation for businesses and certainly the mortgages. So I think that we we have some great candidates, including Kevin wars. And you know sometimes a short term holding short term rates brings long term rates down.

So I I don't think that you know someone who is you cut, cut on on the short end. And I think too, that we can get into an equal librarian where the trump one point o was very uh disinflationary. Or you could just say that inflation was very recent under president trump. IT was around target of two. And if you can get inflation back to target they through good policy, then I think we could get into a proper easing cycle that you know any the fed shelter would push for .

scot the elections over. So I don't know if we need to promise everybody, the world and any more about, but if if you were the economy was, let's say, you were treasury secretary and you had the, you know, IT, the book stops with you when the president says, OK, we're on tips, no taxes, we're done so the security h no taxes or do I get rid of the cap and extending my tax cuts? All these things and tariff s some of them maybe it's negotiating, but you're gonna to deal with, with some of those consequences.

Aren't a lot of those things inflationary? And where the times where you would just like the president, don't promise all these things? I know there's an election, but it's not all possible to do all those all things for all people is IT.

There's a lot of impact there on both sides. So let's talk about first the some of the the attacks cuts that IT are some trump talk about during the campaign. No, that's going to be a negotiation with the republican congress and looks like we did have a right. I here's .

what I want .

OK say here.

Now i'll sign whatever you give me IT it's really well.

no. And book. I've already been in conversations with a lot of the republicans who will share the those committees. And I can tell you in the republicans, especially the house, there is a big appetite payment. Ce, and um so you know IT IT will be a negotiated .

although, Scott, that comes down to the idea that there's a big appetite for pay force. But I would also imagine there's not a big appetite to tussle with A A reelected president who is coming in with a landslide with a red way, who's clearly pretty powerful on this. And a lot of the reason that many of those um elected are the reason that they are going to have the majority is because of president tribe. If he really wants this IT seems to me like he can push what whatever he wants .

in the beginning back IT. I can tell you the one thing he doesn't want is a replay of what we ve just got under biden Harris because the reason Donald I would say the two reasons Donald trump is going back to sixteen hundred penny sylvana the the great inflation and the freeze especially on working class people's real wages and know the mass unfeared immigration um so let's talk about the squeeze wages.

You would not do a replay on the streets on wages because you know, under president trump there was real wage growth. Under biden Harris, there was a loss of purchase in power, especially among the bottom two quintiles of earners who have a very different the basket of goods and services. So the president trump the has some very good ideas, but I guarantee the last thing he wants is to cause inflation.

And this is a problem the worth seeing all over the world. You know, I think prime minister cassia in japan was pushed out because. The of negative wait.

meaning some of the things that he promised he knows would be inflationary. So he's not going to push through and follow through on some of those things.

Well, look that you can have a both ways. You can say a tax cut inflationary and a care of is also in lation ary, right? So I don't think there are ly inflationary um and what we're seeing, I think today in the the bond market is I don't think the bad market is worried about a trump two point o inflation.

I think what you're seeing is a healthy the is A. Healthy move to dear told a growth importance, you know, we are going to see deregulation, which is distinct lation ary. We are going to see president trump s said he wants to get energy Prices down disinflationary. And then terrace are a one time Price adjustment. The federal reserve in their tail book in the summer two thousand seventeen said that the fed should go through terrorists and your my view and I don't have a say now yet or maybe ever, but is that the I would recommend that terrorist be laid and gradually, which would the the Price adjustment would be over a period of time. But I think you take that Price adjustment, coupled with all the other disinflationary things present trump is talking about that we're gonna at or below the two percent inflation target .

again is got uh personal question for you. Um I don't know if you can answer them up, but just should we expect to be doing interviews like this from the lawn outside the White house in the future?

Uh, well, I don't. If you will be doing up with me, i'm sure you'll be doing up with somebody with you.

Scott, with you. I'm GTA do .

whatever president from p ask if he says the sky, be Better to have you in the outside. We speak once a week and you you can critique what's going on. I'll do that if he says they, you know, they are, i'm onna, settle the war and they ukraine, please go help rebuild the ukraine, an economy.

I will do that. We there have been no discussions about jobs. Pant thing was to win as we did last night. I was a real wave. Um I am not surprised ah it's what know I think I said IT when I was on before that predicted that we've have the try factor and the present trump t won the puppy or about so as you said, he does have a Mandate okay?

I was actually when he said IT might not be him, but he at least be us. I was actually happy that you said at least IT right, at least it'll be us because. Needy, very needy. So thanks maybe to be you maybe always but good to have you offered extended a talk today and um and we'll see whether .

we talk and whether we're begging you for interviews about .

three much.

You can still ask me if I, I, I still have a day job.

You do, you do. okay? Thank you.

Cnbc has quick and easy to understand business news updates at the open midday and close every weekday, markets, money and more from wall street to main street. I M C N B C, Jessica adding a follow and listen to C M C business news updates wherever you get your podcasts.

That's IT for squad pod today. We tried something a little new, pushing out a series of mini podcasts to give you the best of our election coverage faster. Let us know what you think of that approach. As always, you can find us on x at squad xy nbc, or you can rate or review this podcasts on apple podcasts we love to hear from you. Thanks school box anchor jo kerne, Becky quick and Andrew ross sorkin, and thanks to you for listening that that have a great lens day.

Cnbc has quick and easy to understand business news updates at the open midday and close every weekday, markets, money and more from wall street to main street. I C N B C, Jessica adding to follow and listen to C N B C business news updates wherever you get your podcasts.