Kudlow Praises Ocasio-Cortez, Looks Forward to Supply-Side Chat

Galtero Lara
Julio 11, 2019

Speaking on "Fox & Friends", the National Economic Council director pointed out that it was Ocasio-Cortez that asked Powell about the Phillips Curve, which theorizes that as the unemployment rate falls, wages rise and thus, inflation accelerates.

By contrast, Ocasio-Cortez has spoken favorably about modern monetary theory - which is also relaxed about budget red ink, but for different reasons.

Ocasio-Cortez told Powell at the hearing that the theory "is no longer describing what is happening in today's economy", and Powell agreed.

"I want to note in the hearings yesterday with Fed Chairman Jay Powell it was Ms. AOC who asked him about the Phillips Curve". It suggests there's a trade-off between low unemployment and stable prices. Why does that cause inflation and higher interest rates?

Kudlow praised Ocasio-Cortez for "getting that out of the chairman" - saying it has been both his and the president's position.

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"By the way, that is my position", Kudlow continued. "It looks like the Fed is going to cut their rates".

"I'm just saying nobody in life is all good or all bad and I've got to give hats off Ms. AOC, [she] kind of nailed that and I'm hoping she and I can sit down and talk supply-side economics very soon", he added.

He further noted that there was a large jobs number that came out last Friday, and the nation is in a "powerful prosperity cycle because of pro-growth policies on taxes, regulation, trade reform, energy and so forth".

Powell admitted the Phillips Curve hasn't worked in years.

Powell said on Wednesday during congressional testimony that the stronger-than-expected June employment report will not change his thinking on the economy or interest rates.

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