The Federal Reserve is going to take deeper action against inflation in 2022 than even it already anticipates, according to former Trump economic adviser Larry Kudlow.
“You run from zero inflation to 7% in a year, 18 months, the Fed’s got to take action to stop it,” Kudlow told Sunday’s “The Cats Roundtable” on WABC 770 AM-N.Y. “It may not end happily. That’s the risk here. Right now, we are in an inflationary boom. But you give [the Fed] a year of tightening, and they’re going to do more than anybody thinks, including themselves. That’s my forecast.
“The story may not have a happy ending. There is no soft landing out there. I would be very, very careful right now.”
Sen. Joe Manchin, D-W.Va., is a case study on even a moderate Democrat showing concern over massive spending and inflation, as he has been a lone Democrat voice in standing against President Joe Biden’s $2 trillion Build Back Better Act.
“Manchin is not going to move,” Kudlow predicted to host John Catsimatidis. “His basic fundamental issue is more spending equals higher inflation. The inflation rate is rising, and there is nothing to stop it.”
Manchin could be pressured by Democrats in Washington, D.C., to flip, but it is voters in his state he truly cares about right now, according to Kudlow.
“In West Virginia, his polls are way, way up,” Kudlow continued. “He doubled his favorables because he is doing the right thing. You’re not going to move him. I think the [BBB Bill] is dead.”
It is not just West Virginia wary of more spending programs, either, Kudlow concluded.
“I don’t think the country wants it,” he said. “Inflation is the No. 1 issue. We do not need more and more spending. That was the source of the inflation problem to begin with.”