On Thursday’s WarRoom, Peter Navarro and Dave Brat delivered a no-nonsense breakdown of the U.S. economy and global trade under President Trump, and the message is clear: the system is broken, the Fed is out of touch, but there’s hope on the horizon.

Navarro started with the big headline—interest rates are way too high. At over 4%, the U.S. lags Europe (2%), China (0.5%), and Japan (0.5%). That’s a tax on jobs, mortgages, credit cards, and even government debt. Navarro blasted Fed Chair Jerome Powell for ignoring the economic reality, insisting rates shouldn’t be lowered because of "tariff inflation.” Navarro points to the Trump Administration’s first-term tariffs on aluminum and steel: prices barely budged, growth soared, and the Fed’s fear of spiraling inflation was overblown.

The markets got the memo before the elites did. Bond yields fell, the stock market jumped nearly 1,000 points, and Navarro predicts rate cuts could start in September—though he warns the Fed will approach them gradually, likely by only 25 basis points at a time, when the reality is rates are still at least 100 basis points too high.

Navarro also drilled into global trade issues, particularly with India. With some of the highest tariffs in the world, India runs a massive trade surplus against the U.S. Navarro called it a national emergency: American workers, businesses, and consumers are paying the price, while India funnels revenues to Russia, fueling the war in Ukraine. Trump’s reciprocal 25% tariffs were meant to push India to take responsibility for its global obligations—but critics still complain. Navarro’s point: the math is simple, the strategy is sound, and the stock and bond markets are already signaling support.

Turning to Fed policy, Navarro slammed the Ivy League-heavy establishment economists who dominate the system. According to him, these experts prioritize abstract mandates over real-world American workers, missing the bigger picture: the cost of debt, deficits, illegal immigration, and global conflicts on U.S. economic health. Navarro joked that even a dozen folks from the Boston phone book might manage Fed decisions better than the current crew.

Brat and Navarro also touched on defense and global responsibility, noting Europe is finally stepping up defense spending after years of freeloading, while the U.S. continues to cover strategic hotspots from the Philippines to Taiwan. Navarro emphasized that tariffs, economic leverage, and Trump’s supply-side approach are tools to force the world to share the burden.

Bottom line: Navarro sees a market and economy primed for growth if the Fed wakes up, tariffs remain in play, and global trade balances adjust. Trump’s policies—tariffs, reciprocal trade measures, and supply-side strategies—are already moving markets, stabilizing prices, and setting the stage for more rate cuts. But the road ahead is still complicated: the Fed’s slow, establishment-driven decision-making, global trade imbalances, and unacknowledged costs of conflict all loom large.

Navarro’s advice: keep the focus on American workers, hold global partners accountable, and let markets reflect real economic conditions. The rally is proof the system can respond—but only if policymakers align with reality, not Ivy League dogma.

For more context, watch this whole segment: