Larry Kudlow: Here’s the worst economic news today

So, all eyes are on the Federal Reserve today, which raised its target interest rate by 75 basis points as everyone expected, because it leaked it to the Wall Street Journal on Monday. Here’s the worst economic news today.

Retail sales unexpectedly fell and the Atlanta Fed’s Q2 GDP tracker is now 0.0%. Remember, actual Q1 was -0.5%.

Are we in Recession? It may be…I don’t know yet, but here’s an impressive quote from the Fed’s press release: “General economic activity appears to have rebounded after declining in the first quarter.” So, someone is wrong here.

Either the Commerce Department’s drop in retail sales is wrong, or Jay Powell is wrong. Both cannot be true. For the first time in my career, I’m betting on the Department of Commerce.

Higher rates could lead to greater fortunes to achieve savings than in the past seven years: Banking Analyst

High inflation always ends in difficult recessions. This time it will be no different.

I don’t know what the Fed will do in the coming months, in part because the Fed does not know what it will do in the coming months. Having completely missed the story of high inflation, Fed says inflation remains high, reflecting supply and demand imbalances related to the pandemic, higher energy prices and broader price pressures. I’m still looking at their notes for the phrase “we were wrong”.

We inflated the M2 money supply by 40%. We bought nearly two-thirds of the bonds sold through Biden’s $2 trillion rescue package and that was a huge mistake and that’s causing inflation. I’m still looking for it. I do not see it. So, I’m going to assume this was some kind of pure miracle. We will call this “pure inflation”. It has no real reason. It was just a gift from heaven, but it’s not our fault, which is what led me to nominate Jay Powell for Joe Biden from the Federal Reserve.

The only thing missing is that Powell has so far not blamed MAGA Trump for inflation, as Biden did when he blamed Trump and Vladimir Putin for everything upsetting the country.

I kind of like this morning’s New York Post editorial: “Biden is pumping more economic bullshit.”

I think Jay Powell is pumping up some bullshit himself. If it were up to me, I would raise the Fed’s target rate by a full percentage point at each meeting, until the actual inflation rate begins to decline significantly. I will be watching gold and commodity indices, to see if the real value of the dollar is going up.

Inflation hits 40 in May as consumer prices rise 8.6%

Not just against other easy currencies, but against real assets which are historically the best measure of monetary value. So far, we haven’t seen any sustained declines in commodities. The other side of the coin is how important it is to not only reduce economic demand but increase economic supply like fossil energy, but also with Biden attacking business of all kinds and threatening to increase their tax burden, why should companies produce? Higher taxes mean less production of everything.

Our teacher Art Laver has always said, “Tax something more, you get less.” This is how stupid corporate tax increases would be right now. This is the moment when if anyone in Washington wants to avoid or mitigate the recession caused by the Fed, we will cut taxes and regulations. I’m going to call it Trump 101, but no, this is the moment Joe Biden is officially announcing it now The war on our oil and gas companies. Before that it was just a rumor. Now this is a fact.

This morning, Biden said he is prepared to use “all reasonable and appropriate tools of the federal government and emergency powers to increase refinery capacity and production in the near term,” and wants an increased dividend tax, as Senator Ron Wyden does. These are not great ideas. Next thing you know, he’s going to call in 20,000 National Guard soldiers to attack ExxonMobil in Texas and possibly go after Chevron while they’re there.

Biden won’t use forces to protect Supreme Court justices, but he may be willing to go after the Permian Basin. Incidentally, there is no refining capacity because Biden’s climate regulations prevent new refineries. Turn off the Keystone XL pipeline. Pull permits in Alaska and the Gulf. He will not allow LNG plants or refineries, but he is eager to tax their profits.

Go and conclude! With no supply-side help, the inflation battle will undoubtedly lead to another Fed recession. I hate to say it, but that’s how it stacks up. I know the cavalry is coming, but they can’t get here soon enough. Now, remember Reagan’s old line… listen:

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A portrait of Ronald Reagan hangs in the soon-to-open reception hall where the Ronald Reagan Library is holding a centenary celebration on the day of the 100th anniversary of the president’s 40th birthday, Sunday, February 6, 2011, in Simi Valley, California. (Andrew Lichtenstein/Corbis via Getty Images/Getty Images)

Reagan: Recession occurs when your neighbor loses his job. Depression occurs when you lose your injury and recovers when Jimmy Carter loses his injury.

Allow me to tweak one simple haircut: update “Carter” and enter “Biden,” and that’s my foolishness.