WASHINGTON—United States Senator Bill Hagerty (R-TN), a member of the Senate Banking Committee, today joined Balance of Power on Bloomberg TV to discuss his exchange with Federal Reserve Chair Jerome Powell today, the need for Biden to end his war on American energy, and the gun control legislation currently being considered in the Senate.
Partial Transcript
Hagerty on his questioning of Fed Chair Powell today: “As of March of this year, the Fed [Federal Reserve] had 330 billion of losses. This is largely from taking long-dated mortgage-backed securities onto the balance sheet. And as you know, the quantitative easing requires that the Fed buy up securities. And what that, in fact, does, is it puts the American taxpayer in the hook because we get a long position on these securities. Every time rates go up, the value of those bonds go down. That’s the position we find ourselves in now. Again, the 330 billion number back in March is probably half a trillion at this point in time. So, we have a substantial loss in the balance sheet. When I questioned the Fed chairman [Jay Powell], he told me that they are not at a point yet to be selling these mortgage-backed securities, but he did not eliminate the possibility that he may sell them and sell them at a loss. I think he’s been put in a very difficult situation. I wish that they’d gone back and started easing the quantitative, you know, started easing this pressure on the balance sheet much, much earlier than they did. And we find ourselves in a very tough situation right now. I think it shows the dangers of quantitative easing when you find the taxpayers in this situation, where we’ve got, at this point, I think more than half a billion dollars or half a trillion dollars’ worth of exposure in the negative.”
Hagerty on Powell debunking the Administration’s “Putin’s price hike” misinformation: “I think that’s the tight rope that the Fed chairman and his federal open market committee are trying to walk right now, is to bring inflation down, at the same time, not push us over the precipice into recession, but let’s be clear about what’s causing this: I think Jay Powell’s job has been made far more difficult by the policies of the Biden Administration. The fiscal policies are creating a tremendously inflationary environment. And when I asked the Fed chair point blank whether [Vladimir] Putin’s invasion of Ukraine was the primary cause of this—which is what the White House continues to say: it’s Putin’s price hike—the Fed chair could have been no more clear: it’s not the primary cause. In fact, if you look at where we were in January of last year when Biden took office, inflation was at 1.4 percent. By the time we got to December of 2021, it was already at 7 percent as more stimulus money went into the economy. More regulations came into constrained supply. And if you think about it, only an additional 1.6 percent increase has occurred since Putin invaded Ukraine. So now we’re at 8.6 percent versus 7 percent in January before the invasion took place. Clearly this is a falsehood that’s being perpetuated by the Biden Administration. The real root cause of the inflation are these policies, particularly the war that the Biden Administration is waging on American energy right now.”
Hagerty on unspent stimulus money worsening inflation: “I’ll remind you of this: a number of states still have unspent stimulus money in their accounts. So, the chamber is still loaded with stimulus money that’s going to continue to pour into the economy. This is not going to stop anytime soon. I’d like to see those funds be reverted to the Treasury [Department]. It will not happen. The Democrats won’t support that. So, we’ve still got more stimulus spending loaded in the chamber thanks to the fact that these funds are still unspent and are on the state’s balance sheets.”
Hagerty on Biden’s call for a federal gas tax holiday: “I don’t [favor a gas tax moratorium]. I find myself in the odd position of actually agreeing with former President Barack Obama. President Obama called this type of move a gimmick. This is an election year gimmick, clearly. This is probably a moratorium that, you know, the Biden Administration hopes will ease the pain leading into the midterm elections. The American public is too smart for this. What are we going to do about the lost funding for infrastructure that occurs in the meantime? I’m not supportive of this, and I think that it’s going to create, you know, just yet another knock-on problem down the road for us.”
Hagerty on how to end the energy crisis: “I think if you look at the letter that the CEO of Chevron just sent back to the White House after the White House attacked the CEOs of oil companies here in America, that basically states the case. We’ve got to create the environment here in America where capital will actually be rewarded to make the type of multi-billion-dollar long-term investments required to expand refinery capacity, drilling capacity. We need more pipelines. That should be the goal of the Biden Administration, is to create the right environment for all of the above sorts of energy. Whether it’s oil and gas, whether it’s alternate energy sources, whether it’s nuclear from my home state of Tennessee, we need to be looking at all of the above and creating the right environment for capital investment there. Instead, the Biden Administration is doing everything to signal the market that any investment in oil and gas is going to be punished severely. And from a regulatory standpoint, they’re not granting permits. They’ve gone back and retroactively removed exemptions and imposed punitive fines on refineries. I mean, they’ve made it very, very difficult to be in the oil and gas business here in America today. And the results are showing. I mean, we were in a position where we were actually net exporters of energy in the previous Administration. And now we are far weaker from a national security standpoint. We cannot come to the aid of our allies, and we find ourselves with rampant inflation driven, as you mentioned, by a rapid increase in oil prices and gasoline prices at the pump […] This needs to be a wholesale, you know, review of the entire regulatory clamp down that the Biden Administration has imposed. And if you think about it, just recently, they shut down a million-acre lease in Alaska. They shut down leases in the Gulf. So, they’re talking on one side about some sort of gimmick to, you know, lower taxes on gasoline. But at the same time, they’re imposing policies that are constraining supply, and again, inherently inflationary, driving those prices up.”
Hagerty on the Senate gun control legislation: “I think when you get into the way the language is worded, particularly vague around some of the red flag law provisions, what it does is it provides, you know, unelected bureaucrats and judges a great deal of autonomy to determine how they’re going to restrict Americans’ Second Amendment rights. That’s a problem for me. And I think it’ll be a problem for many of my colleagues. As you said, there are parts of the bill, whether it has to do with mental health, behavioral health, hardening schools that I think we can address, but the red flag law component of it, I think has got some real issues […] I haven’t seen the type [of red flag law] that I would support at this point. You think about it—New York had a red flag law in place and it didn’t do anything to stop that shooting there either […] I think the key question for me, and I think it is for many of us here, is it needs to be done in a way that it does not constrain our fundamental, constitutional rights. And that’s the concern that I have.”
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