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president Trump chairing the UN Security Council meeting later this morning with an expected focus on Iran this after touting America's economic success and an emphasis on protecting its workers from abusive trade practices all at the UN General Assembly yesterday since my election we've added 10 trillion dollars in wealth the stock market is at an all-time high in history and jobless claims are at a 50-year low we will no longer tolerate such abuse we will not allow our workers to be victimized our companies to be cheated and our wealth to be plundered and transferred America will never apologize for protecting its citizens joining me right now is a Leon's chief economic adviser mohammed el rei mohamed good to see you this morning thanks so much for joining us thank you Maria your take on the President's message at its impact I think two very clear messages to the rest of the world one the US administration is very serious about redefining international trading relations and it will continue to get concessions for fair work trade free but still fair trade and the second is that the US economy has outpaced others and will continue to do so and other countries need to adopt their own pro-growth reform measures otherwise they're going to have greater challenges down the road yeah it sound it sounds that way let me ask you mohamed i want to get to the Fed in a moment but what's your take on where we are with trade are you concerned that we do not have a deal with Canada so far and we actually could go through the midterm elections through the next year without Canada involved in a new NAFTA how do markets react to that and of course then there's China how concerned are you about these spats going on I don't think the markets will be too concerned because the markets understand that the journey is noisy is messy but ultimately because of the game theory involved whether it's Mexico Korea which or Canada or China ultimately these other countries will make sessions that favor the US because the alternative of a global trade war they suffer a lot more so I think Marcus would look through the journey and focus on a destination that they believe will still be free but fair trade Mohammed Lindsey Bell here I completely agree with you I think that the market is reacting positively because they do believe that this trade spat is going to end well for us but what happens when we get to the end of the year and you know the tariff rate now that's on the 200 billion of 10 percent goes to 25 and what if what if the Trump administration does get more aggressive and puts tariffs on the remaining portion of goods that that we import from China every year that that aren't currently being tariffed I think we may very well end the end there I think what you should expect is the TIC for that to continue with China until China realizes that it's in their interest to make concessions on intellectual property it is there in their interest to make concession on drawing venture ultimately there was a good probability that we end up with a fair trade system but the journey will be will be very noisy and they may could there may well be more tit-for-tat trade issues Mohammed it's day and McDowell but with these tariffs that we're slapping on not just imported Chinese goods we still have the steel aluminum tariffs the retaliation from our trading partners how much ultimately does that disrupt business raise prices even slow the economy because once we start to get hardcore numbers on what is going on business by business industry by industry in this country it will start showing up in a more profound way in the stock market will it not so you said very importantly industry by industry so there will be winners there will be losers but overall the US economy has a lot of domestic momentum you saw that again yesterday 18-year high for consumer confidence whether it's household spending whether it's business investment these two things will continue to power the economy through and that's what counts for the u.s.
so yes industry by industry there certainly would be winners and lose but overall it is domestic consumption and domestic business investment that's going to drive this economy that was a big number the consumer confidence I'm glad you mentioned an 18-year high by the way China is announcing this morning that they are actually cut there they're cutting tariffs I expect me to ease tax burden by sixty billion yuan is the radio interview China is cutting import tariffs on paper products electrical devices textiles and building materials will we'll get more on this coming up in the show these are just headlines right now but the president just tweeted Mohammed and here's what he said consumer confidence it's an 18-year high close to breaking an all-time record a big jump from last eight years people are excited about the USA again we're getting bigger and richer and stronger way more to go says the president and of course jobless claims just fell to their lowest level in 49 years all reasons for the Federal Reserve to raise interest rates Muhammad you're taking what we're going to hear from Jay Powell today after this two-day meeting we are expecting the third rate hike this year to be announced at 2:15 p.m.
Eastern this afternoon yes we will will get the third hike this year which will be the eighth hike since this cycle started in December of 2015 and they have three good reasons to hike one is what we just talked about the US economy is in a good place and prospects are good too they're very close to meeting that you'll mandate and three have been vindicated for ignoring weakness outside the US I think the second issue to look for Maria is that they're going to start nudging more aggressively market expectations then what markets to price in more hikes for next year and do so in an orderly fashion so look for two things one is a rate hike and two is nurturing of market expectations what do you think is going on across the world in terms of the global economy Muhammad I mean it's interesting to see even the Italians look toward a flat tax it's interesting to see the different take that you're seeing across the world in terms of tax policy yeah I think the major concept that every investor should have on their radar screen for the next few months is divergence divergence in performance with the u.s.
outpacing other advanced economies divergence and monetary policy with the u.s. tightening more than others and divergence in stock market performance with the u.s. outperforming others that is the reality and other countries are responding so whether it is what you said about China easing conditions at home or other people looking for pro-growth policies you're going to see some reactions my concern maria is that the rest of the world is not going to get its act together fast enough and that convert that divergence with the u.s.
outpacing everybody else is going to put pressure on the interest rate market and going to put pressure on the exchange market yeah that's the main issue the one I get what you say I just wonder if wages are gonna be an issue I mean you know I we're gonna get this Fed rate hike today but what wages are up digging three percent year-over-year right 0.9 percent year-over-year right absolutely and still outpacing inflation but Mohamed don't we kind of wish for that in some way we want because you spoke to business investment household investment US consumer confidence we want these wage gains to be certainly better than they were in the last decade yes yes yes you know this economy can easily absorb 3 3 3 and 3.2 3.3 wait remember the key issue is not just growth but inclusive growth bringing more people to benefit from the growth process that's a good point Mohammed thanks so much great to see you sir thank you we'll see you soon Mohamed LRE on there
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