Kudlow: Biden has wrecked the economy, ushered in stagflation

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Kudlow: US has entered stagflation

Fox Business host warns inflation is not transitory and interest rate hikes will be higher than expected, on 'Hannity'

Former Trump economic adviser and Fox Business Network host Larry Kudlow warned Thursday that the United States has entered a period of stagflation and that President Biden's policies, not the Russian invasion of Ukraine, have caused it.

Kudlow said on "Hannity" that former Clinton Treasury Secretary Lawrence Summers was also right when he spoke about contemporary stagflation.

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Larry Kudlow speaks to reporters at the White House. (AP Photo/Susan Walsh)

"The first quarter [figures] are going to come in about two percent, Sean, but the inflation rate is going to be about eight percent. So that's stagflation. That's not going away," Kudlow said.

"Interest rates are probably going to go up higher than almost anybody is anticipating… Interest rates are going to have to go to seven or eight percent in order to quell that."

Kudlow suggested the Federal Reserve halt its bond-buying and its money-printing behavior, or else the inflation predictions will fall lower than reality in the future.

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"We are going to have to see an enormous increase in interest rates. And yes, that is going to lead to a recession. The middle class, the working folks are going to bear the brunt of that. Their real wages are already falling and there's going to be worse than that," he said.

"It's a tragedy because I will tell you this, Sean, as a proud alumnus of the Trump administration, we left [Biden] with a solid V-shaped recovery, energy independence and virtually no inflation. And in one year-plus, they have wrecked the whole economic story. It's a tragedy."

President Joe Biden speaks at the National League of Cities Congressional City Conference, Monday, March 14, 2022, in Washington. (AP Photo/Patrick Semansky) (AP Photo/Patrick Semansky)

Host Sean Hannity noted that inflation figures are at a 40-year high and that gas and commodities prices have been steadily rising for months prior to Russian President Vladimir Putin's invasion of Ukraine.