Larry Kudlow and David Malpass discuss the need for a fundamental shift in Federal Reserve policy following the anticipated appointment of Kevin Warsh. They argue that the central bank’s current reliance on backward-looking data and outdated economic models stifles national prosperity by failing to account for the power of innovation. Malpass suggests that by moving away from the "natural rate" of interest and embracing supply-side reforms like deregulation and tax cuts, the government can achieve rapid economic growth without triggering inflation.
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