Victor Davis Hanson: Experts Were Wrong. The Economy’s Strong—But the Fed Won’t Budge.

At the start of August, the economic numbers tell a surprisingly strong story despite every prediction to the contrary. GDP is up, inflation is holding steady, unemployment remains low, and for the first time in years, the federal government actually ran a surplus in May.

So why are media outlets still talking down the economy? And why is Chairman of the Federal Reserve Jerome Powell refusing to cut interest rates, despite earlier recession warnings that never materialized? Victor Davis Hanson breaks it all down on today’s episode of “Victor Davis Hanson: In His Own Words.”

“Remember that The Wall Street Journal, New York Times, Washington Post, and our main media organs all told us in May when Donald Trump was talking about art of the deal tariffs, … we were going to have high inflation, stagflation, bad job growth, static GDP, and a trade war along with a Wall Street collapse, basically a recession. Well, wall Street stock prices are at historical highs. Every one of those predictions was wrong.

“If [Powell] is worried about a trade war, and tariffs and soft job growth, which was predictive but didn't happen, why don't you lower interest rates? And the fact is that if you look at the interest rates that he did cut right before the 2024 election and his all over the map, attitude toward interest rates today, there is no logic because if he's worried that the economy inflation might— it's gone up one 10th of an point and it's steaming and then he's going to what? Keep interest rates that high?”

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(0:000Economic Health
(0:54)Current Economic Indicators
(2:14)Reactions to Economic Data
(3:17)Interest Rates and Federal Reserve
(6:07)Trump's Economic Strategies
(8:00)Final Thoughts