CNBC’s Joe Kernen Raises Concern Trump Economic Plans Could ‘Reignite Inflation’ If ‘A Lot of Things Don’t Go Right’
CNBC’s Joe Kernen asked an excited Kevin McCarthy on Tuesday whether there should be concerns that President-elect Donald Trump will “reignite inflation” and hurt the bond market with his sweeping day-one economic proposals.
McCarthy, the former House speaker, joined CNBC’s Squawk Box on Tuesday and was full of praise for the Department of Government Efficiency, nicknamed DOGE, which will see Elon Musk and Vivek Ramaswamy proposing major cuts in government spending. McCarthy argued that having an outside group make the proposals would make it appear less “partisan,” helping lawmakers pick and choose cuts they would back.
“You might not get 100% of it, but I’m telling you if you get 50% of what they’re proposing the country is in a much stronger position than we were,” he said. “I’m excited.”
“Do you think that with all of these different crosscurrents, you know, tariffs were announced, on day one, he’s going to try and do some of these things?” co-host Kernen asked before quickly throwing it back to McCarthy.
McCarthy noted that Trump is already proposing a 25% tariff on all goods from Mexico, Canada, and China, citing the tariffs as a way to combat the southern border and fentanyl crises. Kernen asked whether these massive tariffs, plus other vows like no tax on tips and tax cuts, will feed inflation.
“I’m just wondering — don’t a lot of things have to go right for us not to reignite inflation and scare the bond market?” Kernen asked. “I’m surprised the bond market keeps — it’s very strange the 10-year yield keeps going down because it’s supposed to be at 5% now that it’s Trump.”
McCarthy argued that by targeting fentanyl that comes into the country from China and elsewhere, the United States is protecting its young, working class, which is the country’s greatest asset.
“If they’re successful, they won’t even go into effect. What the president is telling you is he’s going to focus on America, but he’s going to use every single tool he has in whatever negotiation you’re talking about,” he said. “That’s why the world is going to be reset.”
Watch above via CNBC.
