There are two main drags causing economic uncertainty and turning optimism into pessimism, according to economist Larry Kudlow.
The Federal Reserve is "behind the eight ball" on raising interest rates to address inflation, and Russia's Vladimir Putin has become "the energy king of the world," Kudlow told Sunday's "The Cats Roundtable" on WABC 770 AM-N.Y.
"I think a lot of the volatility has to do with the Fed taking the punch bowl away," Kudlow told host John Catsimatidis. "They're going to be draining money and raising interest rates. No one knows precisely what, how much, when, how, where, or why – never does the Fed. The Fed's a big issue."
Also, Kudlow added the markets are concerned about "some great mischief" between Russia and China in the coming weeks.
"The second issue is what's the outcome of this Russian-Putin-Ukraine-Biden story, which is made more complicated by the Chinese Olympics next week where Putin and [Chinese President] Xi are apparently getting together," Kudlow continued. "Some great mischief could come from this.
"Oil and gas prices have already jumped quite a bit on concerns about this Putin-Ukraine-Russian standoff."
The Biden administration, including the Fed and Treasury Secretary Janet Yellen are botching what was a promising economy.
"I think the people telling investors that the inflation rate is going to come down this year, I guess they're smoking legalized pot, because I don't see any chance of that," Kudlow warned. "The Federal Reserve is going to take the punch bowl away, but they haven't so far, and when they start, it'll take a year or two to have an impact."
Making matters worse is President Joe Biden and his climate-change agenda making Americans poorer and ceding power to Putin through energy.
"They've disempowered America and empowered Putin," Kudlow lamented, echoing the warnings former President Donald Trump has long made before Biden ever assumed the White House. "They've made Putin the energy king of the world."
Kudlow said Americans concerned about climate change should be patient and allow the country to "shift more when it's economically appropriate toward renewable fuels."
"They've impoverished America by these stupid, stupid policies," Kudlow said. "I'm not a climate denier, but you have to be sensible. There is no urgent climate crisis.
"This is all a fabrication. If you read the studies from the Energy Department or the U.N., if you read them carefully, they're not predicting catastrophe. It's the far-left radical agenda that talks about catastrophe and we're in an existential state.
"It's just not true."
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