Bloomberg Audio Studios, podcasts, radio news. Glad to have Senator Bill Haggerty with us right now. Senator, welcome back to Bloomberg TV and Radio. You've been calling, I believe, for rate cuts over the course of this regime. Are you now saying that it's the right move higher for longer when it comes to interest rates?
Joe, actually 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 pala is under a tremendous amount of political pressure to cut rates. My colleagues, 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, direction 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.
Well, Senator, if it really is about the data, and say, the data tomorrow and the data that we get in the intervening months do show that inflation is indeed cooling, that data could support the idea that the FED would cut rates. Are you essentially saying there is no way that they can do that before the election without it being seen as political, even if the indicators within the economy would support it.
No, Kayley, 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 is 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 you every indication in his testimony that that is precisely what he's going to do.
It brings us to the issue of FED independence, Centator, something that you brought up in your remarks yesterday. Here's what you had to say during yesterday's testimony, and we'll follow up with a question now.
As you know, the Federal Reserve was structured to shield monetary policy from political influence, and that independence has given the FED unique credibility in executing its mission. If the FOMC were influenced in any way by political calculation rather than economic data, it would severely damage the Fed's credibility as an independent institution. It would increase uncertainty in our markets, and it would jeopardize the dollar status as a global reserve currency.
So FED independence is something we hear about every time we talked to White House official. Senator, and I'm glad that you went there. You're talking about this through the guise of Joe Biden's political interests here, but I wonder where you are on FED independence if there's another Trump administration, because we all remember the tweeting directly at the FED chair and now reading reports that the former president wants to be more directly in if he wins this election.
And actually have a hand in setting interest rates. Does FED independence work for both sides of the.
Aisle, Well, it definitely should, and I think the case is very clear that as long as the FED maintains data driven approach, that we will see certainty in the marketplace. The world looks to what the FED does and the approach that Chairman pal has taken, and I think that I'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.
Of course, it's not just the Fed's job to set monetary policy. They also act as a regulator of the banking system. And Chairman Powell did make a little news in your hearing yesterday in regard to Basel three and what the game will be. He suggested they're going to have to repropose it. What do you need to see in that reproposal?
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 have 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 have 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 the Chair has indicated 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 they'll take that fully into account.
Donald Trump has said Senator that he wants to be the most crypto friendly president in American history. I guess that history doesn't go back too far if we want to draw a comparison. But what would that look like.
Well, I've spent a good deal of time with the President talking about this industry and 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, and I think as voters go to the polls, they're going to realize that as they cast their vote 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 cryptotechnology. The innovation is going to happen. Cryptotechnology possesses tremendous potential for America. We have innovative DNA here that goes beyond any of the 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.
Well, it's interesting, Senator to hear a little bit about the conversations you've had with the former president on that subject, and knowing that you've served as his ambassador to Japan, I wonder what conversations you've had with him about the US's relationship with allies As we have the NATO summit underway here in Washington, do you expect that the nature of US participation in that alliance will be changed in
any way if he does indeed win in November. Our allies right to be concerned about that as they meet this week.
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, and 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. 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 is the Natos Nateto group continues to visit me here this week. That's a message I'm going to be very consistent in delivering, all right.
Republican Senator Bill Haggerty of Tennessee, member of the Senate Form Relations Committee and the Banking Committee as well, thank you so much for joining us.