‘There Will Be Inflation, Mr. Speaker’: CNBC Hosts Warn Mike Johnson What Will Happen if Rates Are Cut in ‘Hot’ Economy

Speaker Mike Johnson (R-LA) was warned on Friday that his desire to see the Federal Reserve cut interest rates in what he called a “hot” economy would likely lead to an even hotter one marked by inflation.

In recent months, President Donald Trump has urged Fed Chair Jerome Powell to cut interest rates. Powell has resisted those calls, drawing Trump’s ire and sparking rumors that the president may attempt to fire him. Whether Trump can do so without cause is legally dubious, but lately, the president has grumbled about the chair’s oversight of renovations at the Fed. Trump denied a report that he is preparing to attempt to fire Powell and appeared to forget that he appointed the chair in 2017.

Powell’s term expires in May 2026.

“Mr. Speaker, do you think that Jay Powell is going to be around until May?” host Joe Kernen asked Johnson. “Do you think he should be around in May?”

Johnson responded by saying he had no idea and repeated Trump’s call for lower interest rates. In response, Kernen and co-host Melissa Lee explained that cutting rates would likely lead to inflation and an economy that’s “too hot”:

JOHNSON: I’m as anxious to see how that plays out as you are. I will tell you that the sentiment here, certainly my opinion is that we should reduce interest rates. The American economy is hot, and we have so many good things going on. We’re delivering over and over, the Republican majority here, for the American people. Not just the one big beautiful bill, not just with the rescissions package that we passed last night, clawing back $9 billion of wasted taxpayer funds.

KERNEN: If it’s too hot, you don’t wanna cut rates!

LEE: If it’s hot, there will be inflation, Mr. Speaker.

KERNEN: Right, if it’s too hot, maybe you don’t want to cut.

Johnson replied by saying rates should be lowered to make “large-ticket items” such as homes and automobiles more enticing to prospective buyers, who are currently facing high borrowing rates.

“I don’t say slash interest rates, but do something that’s meaningful to get that humming again because that will last, or have a lasting effect,” the speaker said. “And if you combine that with the other things that are happening, I think we’d have the greatest economy in the history of the world.”

Watch above via CNBC.

New: The Mediaite One-Sheet "Newsletter of Newsletters"
Your daily summary and analysis of what the many, many media newsletters are saying and reporting. Subscribe now!