WASHINGTON—United States Senator Bill Hagerty (R-TN), a member of the Senate Banking and Foreign Relations Committees, joined Balance of Power on BloombergTV to discuss Fed Chair Jerome Powell’s testimony on Capitol Hill, the status of Basel III Endgame, the future of cryptocurrency under a second Trump Administration, and the ongoing NATO conference in Washington, D.C.
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Partial Transcript
Hagerty on Potential Interest Rate Cuts: “I haven’t been calling for rate cuts at all. What I’ve been calling for is for the Fed to remain data driven. I know Chairman Powell is under a tremendous amount of political pressure to cut rates. My colleagues, and frankly, my colleagues from the other side of the aisle on the Democrat side, have put immense pressure on him to cut rates ahead of the November election. What I’ve been maintaining is that he needs to remain data-driven because, to the extent the Fed gets involved or even gives the appearance of acting in a political fashion, it will destroy its credibility. Chairman Powell made it clear in his testimony with me that he understands that he’s going to remain data-driven. We see inflation moving, you know, directionally downward, at least the rate of growth, but it’s not where it’s supposed to be, and I think he’s going to make certain that this isn’t a transitory bump before he takes any sort of action. I think that’s the right thing for the Fed to do. We need to make certain that we get inflation under control, and the most important thing right now is that they not allow themselves to be perceived as political actors.”
Hagerty on the Political Pressure to Cut Rates: “No, Kaylee, I think you mentioned the indicators. They just have to support it and, I don’t care when it happens, as long as the data do support it. I’m just concerned that he’s getting a lot of pressure. The Fed Chair’s getting a lot of pressure right now that is political in nature, and I think he’s got to stick to his guns. He gave me every indication in his testimony that that is precisely what he’s going to do.”
Hagerty on Fed Independence: “Well, it definitely should. I think the case is very clear that as long as the Fed maintains a data data-driven approach that we will see certainty in the marketplace. The world looks to what the Fed does and the approach that Chairman Powell has taken, and I think that he’ll maintain this over time. We need to make certain that the Fed is perceived not as a political actor, but one that is driven by the data.”
Hagerty on Basel III Endgame: “Well, frankly, I don’t think we even require a submission. We’ve been through a massive stress test. If you think about what happened through the pandemic and for three consecutive years, we were told that the system was adequately capitalized. We get a new Vice Chair who comes in and makes a dramatic proposal that everyone in the industry told me would’ve been devastating in terms of our competitiveness as a nation. Our banking system is one of our true sources of competitive advantage here in America, and this would’ve placed us at a huge disadvantage relative to Europe and relative to other banking systems across the world. I’m delighted to see that the Fed Board has realized that. They’ve withdrawn it or he’s talking about withdrawing it and reproposing. At least he’s indicated that that they’re going to follow the Administrative Procedures Act, and that means they will have a reasonable amount of input from the industry. And I hope that they’ll take that fully into account.”
Hagerty on Donald Trump’s Pro-Crypto Stance: “Well, I’ve spent a good deal of time with the president talking about this industry. What we see – and I think a shared vision came through in our Republican platform just this week – we see crypto as a defining issue in the election this November. I think as voters go to the polls, they’re going to realize that as they cast their vote, it will determine the outcome of the crypto industry here in America. Because on the Democrat side, you have a group that are, I think, very radically trying to centralize everything. They want central control. They don’t like the decentralized nature of cryptocurrency. They don’t like the decentralized nature of crypto technology. The innovation is going to happen. Crypto technology possesses tremendous potential for America. We have innovative DNA here that goes beyond any other nation. We should capitalize on that. We’ll create the ecosystem that would allow for that, and our platform basically says we’re going to end the crackdown on the crypto industry. We’re going to allow mining, we’re going to create an ecosystem for innovation, we’re going to allow decentralized control of these assets, and we’re not going to allow the type of surveillance that the Democrat solution would support.”
Hagerty on NATO Summit in D.C.: “Kaylee, I’ve met with a number of our allies during the course of this week because they realize I’m the only former member of the Trump Administration that serves in the United States Senate. I’ve been very clear with them: America first does not mean America alone, but what we want to see is our allies standing strong with us, and what we’ve seen in NATO is that they’ve responded to President Trump’s pressure. They’ve stepped up their investment, they need to do more. I think President Trump is going to be very clear about that. We don’t hesitate to criticize our allies when it’s time for them to step up, but we stand shoulder to shoulder with them at the same time when the need arises. That’s what I’ve conveyed. That’s what I think we’ll see as the NATO group continues to visit me here this week. That’s a message I’m going to be very consistent in delivering.”
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