In an interview with FOX Business Network’s Trish Regan, GOP Presidential candidate Carly Fiorina weighed in on the market selloff.
“I actually have been expecting a correction for some time now because the underlying fundamentals of the U.S. economy are not that strong. Two percent growth is pretty lackluster. Of course now we have the Fed Reserve backing off zero interest rates and China’s economy is slowing. There’s no doubt that China has some real issues in front of it and the devaluation of the Yuan as well as the huge selloff in their markets spell trouble ahead, so I think it’s justified,” she said.
She said people are starting to focus on whether or not the stock market is the best place to put their money.
“I think people have to take a real look at the underlying fundamentals and what they see is a U.S. economy that’s growing at a very lackluster pace -- two percent. They see economies around the world slowing. Europe is not doing well. China is slowing dramatically… What I think people are now focused on is, 'guess what the fundamentals of the markets do not justify the economies -- and companies in those economies don’t justify these all-time record highs,'" she said.
Fiorina said the Fed helped create the problem.
“I don’t think there was any excuse frankly for QE2 or QE3. QE1 you can see. Obviously we're in the middle of a crisis, but my own view is that we have politicized the Fed by giving it a dual mandate, full employment as well as inflation. I don’t think the Fed has a lot to do with employment frankly. I think that second part of their mandate caused QE2 and QE3 and I think it’s created a problem where they are a real market maker and market mover as opposed to being focused on money supply and inflation,” she said.
Fiorina also weighed in on China’s economy.
“What’s interesting is, they have tried over the last several years to engineer a soft landing for their economy and it appears they have not succeeded in doing so… Frankly I think now is the time for us to put pressure on China around their activities in the South China Sea. I think now is the time for us to put pressure on China by equipping our allies to push back. We cannot permit China to control the South China trade route through which $5 trillion worth of goods and services travels through every single year. Now is the time for us to put pressure on China about that as well as their recent cyber-attacks,” she said.
She said the U.S. has leverage over China and should use it.
“I think the Chinese rely on our economy actually. I don’t see that as a point of weakness for us. I see it as a point of leverage. The truth is that we are the biggest single contributor to Chinese growth. We are their largest market. Our companies have provided technology for them which have helped lift people out of poverty,” she said.
Catch the full interview tomorrow on The Intelligence Report with Trish Regan on the FOX Business Network at 2 pm ET.