Larry Kudlow: Why the Fed Ignores Blue-Collar Wage Growth and Falling Inflation

Blue-Collar Wage Growth Under Trump

• 💡 Blue-collar wage growth has reached levels not seen since President Trump's first term, with real wages for hourly workers rising nearly 2% in the first five months.
• 🎯 This wage increase is attributed to President Trump's emphasis on manufacturing and policies that contrast with the Biden administration's approach.

Inflation Decline and its Impact

• 📉 The decline in the inflation rate, with the CPI easing to 1.4% annually since January, has contributed to real wage gains and increased take-home pay.
• ⚠️ In contrast, during the Biden years, prices rose over 20% while real wages fell by roughly 4%, marking the worst inflation in 40 years.

Border Policy and Labor Market Effects

• 🔒 The decrease in illegal alien border crossings, with no illegal migrants released into the US in May under the Trump administration, is highlighted as a significant policy difference.
• 📈 This policy shift, along with programs encouraging self-deportation, has led to nearly 1 million fewer foreign-born workers in the workforce since January, while native-born workers have increased.
• 💰 Businesses are reportedly raising wages to attract domestic workers, indicating a stronger labor market for American workers.

Federal Reserve's Opaque Stance

• 🧐 Fed Chair J. Powell is criticized for not discussing the positive impact of falling inflation on take-home pay and for maintaining a stance that appears to fight blue-collar wage booms.
• ❓ The Federal Reserve is described as the most opaque and least transparent government agency, with its power over the economy making this lack of transparency particularly concerning.
• ⏳ President Trump is expected to appoint a new Fed chair in May of next year, suggesting potential future changes in policy or transparency.