LOU: AS WE ARE USED TO.

THE YIELD CURVE INVERTED AGAIN,

BUT INVESTORS NOT EXCITED AT

ALL.

THE DOW UP 258 POINTS.

THE NASDAQ UP 30.

TWO WEEKS AGO, MUCH IF NOT MOST

OF OF THE LEFTIST MEDIA AND

BUSINESS PRESS PANICKING OVER

THE INVERSION OF THE YIELD CURVE

AND USE IT TO FUEL THEIR

NARRATIVE OF AN IMPENDING

RECESSION.

OFTEN FORGETTING TO KNOW IT

USUALLY TAKES TWO YEARS BEFORE A

RECESSION SETS IN AFTER AN

INVERSION.

JOINING US TONIGHT PETER

NAVARRO, STARNT TO THE

PRESIDENT, DIRECTOR OF TRADE AND

TRAIL POLICY, DIRECTOR OF THE

WHITE HOUSE NATIONAL TRADE

COUNCIL.

LET'S START WITH THE YIELD CURVE

INVERTED AGAIN.

TO A GREATER DEGREE THAN TWO

WEEKS AGO.

AND INVESTORS DISMISSING IT.

I READ THAT AS A PRESIDENT WHO

HAS GREATER CREDIBILITY THAN THE

BUSINESS PRESS.

THEIR HAIR WAS ON FIRE TWO

WE KNOW WE HAVE THE JAY POWELL

PROBLEM WHERE THEY ARE NOT

LOWERING RATES FAST ENOUGH.

LET ME GIVE YOU MY 60 SECONDS.

>> CAN YOU MAKE IT 30, WE ARE

ALREADY A MINUTE AND.

>> TRUMP FOR PILLARS, TAX-CUT

DEREGULATION, TOUGH TRADE

REFORM.

THE WAY WE GET THIS, FROM 2% TO

3% GROWTH, FED CREDITS RATES,

EUROPEAN CENTRAL KIT CUT RATES.

AND WE GET CHINA ENGAGING IN THE

STIMULUS.

IT IS ALL GOOD.

THAT IS THE KEY AND FINALLY ALL

THE ACING ON THE CAKE.

>> USMC I, THAT SOUND A LOT LIKE

A TRADE AGREEMENT WITH MEXICO

AND CANADA.

>> WHAT IS INTERESTING, I KNOW

YOU'RE ON A ROLL AND A HATE TO

INTERRUPT, BUT WE NEED TO

UNDERSTAND THE UNDERLYING

MOTIVATION TODAY AT LEAST

REPORTED BY THE BUSINESS PRESS.

THAT IS OPTIMISM ABOUT THE CHINA

U.S. TRADE AGREEMENT, IS IT

MISPLACED, THE OPTIMISM, OR IS

IT WELL-PLACED.

>> I THINK WHAT THE MARKET WAS

RESPONDING TO WAS THE REALITY OF

ALL THE GOOD THINGS HAPPENING IN

TERMS --

>> LET ME TRY THIS AGAIN, I KNOW

YOU WOULD LOVE TO FOLLOW --

>> I WOULD SAY IS OPTIMISM I'M

NOT SURE WHETHER IT'S MISPLACED,

YOU KNOW ALL NEGOTIATIONS TAKE

PLACE BEHIND CLOSED DOORS --

>> WE WON'T BUY THAT.

SO WHAT IS YOUR PRECISE

QUESTION?

>> IS SUCH OPTIMISM MISPLACED OR

WELL-PLACED CUSTOMER

WELL-PLACED?CUSTOMER

>> WE HAVE SERIOUS STRUCTURAL

PROBLEMS BUT THE CHINESE ARE

COMING HERE IN SEPTEMBER TO TALK

ABOUT THEM.

LET'S SEE IF WE CAN WORK THROUGH

THAT.

I TELL YOU IS UNLIKELY THAT

ANYTHING QUICK WILL HAPPEN GIVEN

THE STRUCTURAL BASIS OF THE

PROBLEM.

YOU KNOW WHAT THEY ARE, STEALING

OUR STUFF AND KILLING AMERICANS

WITH FENTANYL AND EVERY THING IN

BETWEEN.

BUT FOR ME, LOOKING AT THE

ECONOMY.

LIZ: THERE NOT A NICE BUNCH ARE

THEY?

>> I THINK THEY HAVE A

REPUTATION GOING BACK TO 1949

AND NEVER FOR FILLING ANY OF THE

COMMITMENTS AND THEN GOING BACK

TO 2001 AND BREAKING EVERY RULE

IN THE WTO BOOK AND TAKE OVER

70000 FACTORIES AND 5 MILLION

MAIN FACTORY JOBS.

YOU THINK AMERICA HAS FINALLY

REALIZED THAT'S EXACTLY WHO

CHINA IS IN SUPPORTING PRESIDENT

TRUMP AND TAKING ACTION.

LOU: I DON'T THINK THERE'S ANY

DOUBT ABOUT THAT SUPPORT AND IT

IS UNDERSTATED POWER IN THE

LEFT-WING 80

LEFT-WING M0

LEFT-WING MEDIA.

I DON'T HEAR A LOT OF BLUBBER

FROM WALL STREET ANYMORE OR THE

CHAMBER OF HORRORS OR COMMERCE

OR THE BUSINESS ROUNDTABLE ABOUT

FREE TRADE.

THE PRESIDENT SEEMS TO HAVE MADE

IT VERY CLEAR THAT THERE HAS

BEEN NOTHING FREE ABOUT FREE

TRADE FOR THE LAST FOUR DECADES

IN THE BALANCE TRADE IS THE

FUTURE AND AS A LEADER OF THE

FREE WORLD, HE IS PERSUADING IN

THE REST OF WESTERN CIVILIZATION

CERTAINLY THAT THIS IS A NEW

DAWN.

WHAT DO YOU THINK?

>> ITS RECIPROCAL TRADE AND

EUROPE IS GETTING ON BOARD AND I

THINK EUROPE VIEWS CHINA JUST AS

WE DO, AS A COUNTRY THAT IS

VIOLATING ALL THE ROLES AND

THREATENING THE INTERNATIONAL

ABILITY TO HAVE A DECENT TRADING

SYSTEM.

SO LET'S SEE WHAT HAPPENS.

IN THE MEANTIME, IN THE NEXT

MONTH OR TWO, WE NEED THE FED TO

DO ITS JOB, TO CUT RATES,

EUROPEAN CENTRAL BANK WILL HELP

US AS WELL.

LOU: LET ME MAKE A FORECAST,

THAT IS THE FED WILL CUT RATES,

JEROME POWELL HAS HAD -- HE IS

BEEN TUTORED, HE IS MORE

EXPERIENCED BY EVENTS.

THERE IS NO WAY IN THE WORLD HE

WOULD NOT CUT RATES.

AND I WILL BET YOU ANY AMOUNT OF

MONEY ON THAT ONE.

>> LET'S MAKE SURE HE IS PLAYING

CHESS NOT CHECKERS.

LOU: I CANNOT MAKE SURE OF

ANYTHING AND IF YOU'RE NOT GONNA

TAKE MY BET I GOT A GO.

>> WILL BE PUT MONEY DOWN ON IT.