Larry Kudlow: There is no growth strategy right now in the political system

The more The Fed is failing on inflationThe more we need Trump’s tax cuts, that’s what the hype is about.

Do you know what upsets the stock market? The Fed has no monetary compass and there remains confusion about whether Trump’s tax cuts will be delayed.

There is no growth strategy at the moment in the political system and there is no end to the royal dollar of Biden inflation in the world monetary system, so no wonder the stocks are falling day by day.

The Dow fell more than 1,100 points today – the 10th straight daily decline, and the biggest since 1974. As I said, nothing good happened in America in 1974.

In the final days of the 118th Congress, Democrats are still pushing for big spending and big money — and Republicans have yet to come up with their tax and border reconciliation strategy next year when they take office.

Trump’s Treasury pick reveals whether Fed Chairman Powell will finish his term

The Fed has once again misread the economy as inflation has risen in recent months, not fallen, and consumer spending has been stronger than it thought. Most of the stimulus comes from Biden’s $2 trillion a year in deficit financing, and the Fed continues to generate income. The reins of confusion.

the Trump The stock market honeymoon has been broken, at least temporarily. There have been many rumors that President Trump wants a big, nice reconciliation package that includes tax cuts and border security, but it is still in the rumor stage and an agreement has not yet been reached with the White House and Senate leadership. The Fed has now decided to cut interest rates only twice next year instead of four, and now expects inflation to rise.

The market and the Fed have become helpless, led by the ignorant. It’s a sad state of affairs. They missed the big rate cut in September, and they missed the quarter-point cut in today’s rate cut in December. They made the mistake of cutting the interest rate in November.

They were wrong in their predictions. They have mismanaged their balance sheet and, by the way, have imposed 20% price increases in Central America over the past four years with absolutely no hope of prices going down due to their faulty and misleading models.

They should get rid of their excess cash by cutting the balance sheet by several trillion dollars, but they don’t, and of course the Biden-Schumer policy continues to spend like crazy. Now, President Trump can fix all of this. He will pass a tax-cut bill — the question is only when.

The DOGE brothers — also known as Elon Musk and Vivek Ramaswamy — will dismantle the regulatory state and cut government spending. Again, it’s just a matter of when.

Get FOX Business on the go by clicking here

Closing borders and deporting illegal immigrants to end the crime spree – that will come too… It’s just a question of when, but now we have to think about how to turn next year’s economy into a 2025 labor boom.

I’m not worried about 2026. I’m not worried about 2027. I’m worried about 2025, which starts in a few weeks. The problem is solvable: cut taxes immediately, along with spending and deregulation, combine that with the border closure package into a large reconciliation bill – and get it done within the next 100 or 120 days.

This would fatten middle-class wallets, renew business investment, and deliver the worker boom that Mr. Trump promised his working-class coalition. This is the riff.

This article is adapted from Larry Kudlow’s editorial commentary on the December 18, 2024 edition of “Kudlow.”