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>> Joining us now live from Capitol Hill is

Republican Senator John Kennedy of

Louisiana. He's a member of the Senate

Banking Committee as well as the budget

and Judiciary Committee. Senator,

welcome to Bloomberg TV and radio. It's

great to have you on Balance of Power

especially on a Fed day of all days. If

the Fed didn't hike today,

are you concerned that they might have

to do so just ahead of the midterms?

>> Well, they might.

Um

I guess I'd make two points. Number one,

let's not lose sight of the big picture.

I wouldn't trade the American economy

right now for any economy in the world.

Not China, not Germany,

not anybody in Europe, not Canada.

Uh num- number two, I think the Fed

didn't hike because they don't know what

to do. Now, they're not going to

come out in front of the American people

and say we don't know what the hell to

do, but they're not clairvoyant. They

have to wait for the future like

everybody else.

Uh the Fed under Chairman Powell cut

rates because they were worried about

the labor market.

Labor market's okay. It's not great, but

we have we're not adding a ton of new

jobs, but nobody's being laid out

relative laid off relatively speaking.

But we've got inflation.

And it's caused by three things in no

particular order. Uh number one, all

this AI spending. They're spending

billions of dollars. I hope those guys

know what they're doing cuz they got to

pay the money back.

Um num- number two, to a lesser extent,

tariffs.

Um

when when imports cost more, that

contributes to inflation. But number

three, the energy costs. I mean, you

don't you know, you don't have to be

Einstein's cousin

to to to figure that out. And so, they

wanted just watch it and wait a little

bit more, and [clears throat] I that's

what I would have done.

Uh I just wait and see and get a little

bit more data. But but let me say this,

look, inflation's pernicious. You You

cannot let it get out of control. And I

know the Fed supposedly has a dual role,

inflation, price stability, and full

employment. But but its main role is is

inflation, and uh they're going to have

to if they we don't get control of it,

uh they're going to have to raise rates.

Now, I'm not saying that's going to make

me happy, but uh they can't let this

inflation get out of control.

>> A lot of folks thought he he he would

hike the the Fed would hike rates today.

I can't imagine what the market would

have done in that world. Uh Senator,

what do you make of the performance

today? Could he have communicated things

differently because this market reaction

is visceral. You've got a 30-year at

5.2%. I'm kind of scared to think of

what's going to happen tomorrow morning.

>> Well, let me say it again. The The

people at the Fed are not clairvoyant.

They have to wait on the future like the

rest of us. Number two,

uh I don't want to overstate this, but

but sometimes the economists at at the

Fed uh remind me of those

late-night psychic hotlines that you see

on TV. I mean, they're about as accurate

because they just don't know, but but

the chairman can't come out today and

say, "Hell if I know."

You know, we we we know inflation's a

problem, but we're not sure if it's

going to come down because we're not

sure about what's going to happen to

Iran. But that's the truth. That's

what's going on.

>> Well, on the subject of Iran, Senator,

as I'm sure you well know, President

Trump is threatening to retaliate

against Iran after what the US described

as a surprise attempted attack on uh US

assets in Jordan. If we're responding to

Iranian attacks, as CENTCOM said was the

case in the previous 12 days of strikes

we're just coming off of, is the US

really in control in this theater?

>> Well, I've been very supportive of what

President Trump has done in Iran. I

think it was something we had to do.

That's point one.

Uh point two,

um

there are limits to American air power.

I have I don't have the intelligence

that the president has, so I don't know

about the additional strikes, but I

think the two most effective things we

can do right now to uh to to get Iran to

control to behave is number one,

the sanctions on its sale of oil, and

number two, that blockade. I think we're

just going to have to starve them out.

Now, that's going to be painful because

energy prices could go even higher.

Um and nobody wants that. I don't want

that.

But we we can't our our credibility's at

stake, and Iran is dangerous,

and we have to do something about it. I

I don't support putting troops on the

ground.

Um and I'm I'm not convinced, but again,

I don't have the information, that all

these extra strikes are doing any good,

but I know one thing, that blockade, if

you leave it on long enough, uh Iran's

going to have to to start shutting down

its wells because it's got no place to

put its oil. And once Iran shuts down

those old old wells, they may not be

able to get them going again.

Um and and I would if we stay the course

a few more months,

uh I think I think Iran will be a

easier, not easy, but easier to deal

with. But you also have to remember

that you're dealing with the son of Sam

or Charles Manson. These people

uh are not just mildly insane.

>> Well, that's why you have the chorus of

call them a war Iran hawks who say then

let's not play around at the negotiating

table. We need to finish the job

militarily, Senator. I know you're

paying a little less than the the

national average in Louisiana. It's

368

according to AAA. But if there's a few

more months of this, that puts us smack

dab

right around election day, right? What

does that mean for the midterms?

>> Well, it'll be painful as hell. But

number two, you can't you can't always

Look, I'm mindful this place is

political as hell. It Politics is in the

blood of everybody here. Kind of like

herpes. Not not me. I mean, I I think

sometimes you've you've got to

you've got to you've got to try to do

the right thing. And and

I wish the president and his team could

do a little better job of messaging

about why we're in Iran and why we're

staying the course.

Uh, but he's the president and I'm not.

>> Well, the president, of course, wants

people around him that are of his

selection when it comes to his cabinet.

And he has told you and your colleagues

on the Judiciary Committee and Committee

in the United States Senate that he

would like Todd Blanche to go from

acting to the Attorney General of the

United States. To your knowledge,

Senator, will you be voting on his

confirmation in the committee tomorrow?

What is the status?

>> Well, if I'm called to vote, I'm going

to vote yes.

Uh, and I'll be glad to explain why if

you care to hear it.

>> Do you expect to be able to vote?

>> I don't know if we're going to have a

vote. Um,

John Cornyn uh, has requested the

paperwork to resolve this issue of the

anti-weaponization fund. John's a good

senator. Uh, I know him well. He's uh,

he's a he's serious as an aneurysm about

this. He's not going back down. And if I

were Mr. Cornyn, I would give Cornyn

what he wants. If he doesn't, he's not

going to be confirmed. Um I'm not saying

I agree

with Senator Cornyn, but I know Senator

Cornyn and he's not backing down. So,

that's where we are. If I had to bet,

I'd say we're not voting.

>> Wow.

Well, this is quite a moment we're in,

Senator, and I understand that when

you're not in Washington,

uh you're a substitute teacher at

McKinley Magnet Middle School, teaching

government and civics

to public school students. Talk to us

like your class for a moment.

>> Well, we'll come back to that. Is the

system working? Is this going well,

Senator?

>> I've been doing this for 15 years and I

I substitute teach. I try to do it three

times a year. We need substitutes badly.

They'll even take politicians. You ought

to try to You ought to do it. And it'd

be a real substitute.

>> What's What's your civics lesson,

Professor? How How is the system working

right now?

>> Well, every school's different. If

you're lucky, the

>> No, I mean Washington.

>> I'm sorry?

>> I mean Washington.

>> Well, I'm not going to tell the kids

this, but right now, as we were talking

off the air,

uh this place is a is is a total

cock-up, as they say in England. It

looks like uh

uh the the uh the happy hour at an

airport Chili's.

Um there there is no plan right now. I

say that gently, but there is no plan.

President wants one thing. Our majority

leader, who I support, wants another.

Only the majority leader can put a bill

on the floor.

If it were up to me, I'd do it

differently.

Um I I would put I mean, there's this

mantra of we've got to work it out with

the Democrats and we've all got to be

happy. Look, that's why That's why God

made votes. You're not going to make

everybody happy. And I'd vote on the

budget resolution. I'd call a vote on

the Iran sanctions bill, the final vote.

Uh I'd vote on a clean CR. If Senator

Schumer wants to shut government down,

he can vote no on a clean CR.

Um I would vote on the FISA

uh renewal. I would have I'd vote on all

of our pending business. And I'm

prepared to stay as as long as we have

to. If that means missing the August

break, so be it. We ought to get our

work done. But for for 6 months, I've

been in meeting [clears throat] after

meeting after meeting that could have

been an email to discuss these bills and

who's happy and who's sad and what are

my Democratic friends going to do? At

some point, you got to vote. And we're

not doing nearly enough voting and way

too much talking.

Um

>> Well,

>> in Louisiana, we'd say we're doing a lot

of lot of chopping, but no chips are

flying.

>> Well, I'll tell you what, I'd love to

meet you in that classroom someday. I

want to hear what you're saying to the

students and I'm sure you'd love to get

back to Catahoula as soon as you can.

>> are great. These kids are great. I've

learned something every time I do it.

>> Well, we're glad to have you, Senator.

We've been looking forward to this for

longer than you know, and I hope this

won't be the last opportunity.

Republican

>> it again.

>> Kennedy of Louisiana. Thank you for

being with us on Bloomberg TV and radio.

Great pleasure.