Rick Santelli Fights with Jon Hilsenrath over QE [VIDEO]

Are reporters lobbing “softball” questions at the Fed chairman? CNBC’s Rick Santelli and the Wall Street Journal’s Jon Hilsenrath, debate whether the economy continues to need quantitative easing. I’m trying to inform the public about what the Fed is up to, says Hilsenrath. Check out Rick Santelli’s earlier meltdown here.

Rick Santelli video and transcript below

Transcript:

 you very much, bob. it’s a big day here on cnbc with the fed news conference this afternoon. rick santelli is in chicago witha highly appropriate guest. rick, over to you. thanks, simon. and i would like to welcome jon hilsenrath. welcome, jon. hey, rick.good to see you. good to see you. listen, jon, and i mean nodisrespect in any way — that’s always a loaded introduction to a comment. no, no, but it really isn’t loaded and you will see why.i have great resor anybody who is working, taking care of their family, and you fit that to a t. but there are players and there are tailors, okay? when i talk to players, okay, when i talk to the people around me or i talk to my sources or i talk to the hedgies or i talk to the bond fund people, they think it’s crazy what’s going on with the fed, especially this many years after a crisis, especially considering the economy has some wind, maybe it’s not running a sprint, but it’s definitely certainly not in recession.and then there are the tailors. the fed chairman i think is theemperor. clothing he has, but the tailors are the surveys, some of the articles of the press. that seems to be getting all thetraction and focusing on the taper and the programs. the players are fed up. you’re one of the tailors. you write stories that move markets. my first question to you is, why it that there’s so many softball questions at these press conferences? why do you think we need qe after all this time given how many stories have been written in your publication day about how solid the stock market is? you’re jumping to a whole bunch of conclusions there. i don’t know where to start but let’s start with your question about why do i think we need qe. i don’t think — you know, i don’t argue in any of my story that is we either do or don’t. you know, i’ll explain what i do. i’m a reporter. i do several things. i’m trying to inform the public about what the fed is up to.if people don’t like hearing what the fed is up to, then, you know, that’s part of the process of me informing them. and i do think i try to hold them accountable. you know, we ask tough questions at the press conference and elsewhere. last time i asked bernanke — what was the question you asked last time?how long are you going to stick around? i think a lot of people wanted to know that. i don’t know. i don’t think that’s a toughquestion, jon. i could tell you i think they weren’t very happy about it, but, you know, if you want to talk about the stories that ihave written that have held the fed accountable — i’ll tell what you, that’s why i have — no, that’s why i have great respect for you. i understand that you need to in some way be an intermediary between what the fed — no, no, no — — thinks reality is — go on. an intermediary. i’m a reporter. i’m going to write stories — listen, let’s drop the pretense. the reason your stories move the markets is the same reason greg’s stories have moved the markets in the past and that is that the world at large does believe that you’re sourced. and that’s a reality. you can protest all you want. of course i’m sourced. every good reporter should be. yeah. so then what’s the issue? i don’t know. i don’t know. what i’m saying is they have a message.your source. it’s not like you’re saying, listen, here is the reason i think something is going to happen, but i think it’s crazyconsidering how the gdp is positive for so many quarters. see, what i would think is that i understand what you’re doing and i have no problem with it but it would be nice if there were stories after t where it was maybe more of an opinion piece or kicking the tires. i’ll ask you the question i would ask — let me stop you right there. i would — what mr. chairman, what are you afraid of? why do you think the fed chairman refuses to stop theprograms? why is he holding on to the purchases? i would suggest you read a story that i wrote on monday which showed that the fed’s growth forecast for the economy have been wrong every year in this recovery. that’s not a story. that’s a fact. they’re wrong on all their forecasts and half my friends are wrong on theirs as well. so — let’s stop. why do you think ben bernankefeels the need to continue ongoing really crisis programs with regard to the training wheels of the economy? i’m asking you, why do you think that is? well, i mean, i think we have a horrible recovery, and as the central bank, they’re asking what else can they do to get the economy going again, and this is what they havee up with. they’ve come up with a bond buying program and very low interest rates, and, you know, so i think you have to ask your question, well, so what’s the downside? what’s the risk?what damage could they be doing? a lot of people, includingyourself, have said they could cause a lot of inflation. well, show me it. show me the inflation. you can’t show the inflationbecause the $3.4 trillion on the balance sheet, that’s futureinflation. but it’s in a jurassic park-like electric fence. but it’s not going to sit there forever. or on the balance sheets of banks.it’s quarantined but it’s not going to be quarantined forever. part of me holding people accountable is holding people like you accountable. people have been saying inflation, inflation, inflation. show me, show me. no, no. you know what — no, no, no, no, no. that’s not the issue. the issue is you’re not going tohave a lot of inflation showing up when you have no velocity. i have talked about commodity, price, volatility in the past. go back to the tapes. whether it’s with steve liesman or all the others in the past. i said it was about gyrations based on these programs in the foreign exchange markets that show up in volatile. the average guy doesn’t care about a definition. he cares about volatility. when he goes to the grocery store, to the gas station, he cares about volatility p.m. and just because an index like cpi is at all-time highs and the next month it comes down a bit, to me that doesn’t mean inflation is down 0.2. it means it’s still sw at the highs. how about the dollar? how about the dollar? the dollar is like trying to measure somebody who can’t answer a question against somebody else who not only can’t answer the question, doesn’t speak the same language. okay. all right. the problem is that the eurocurrennd the british pound and the dollar all developed countries have an issue. in about ten years let’s talk about some of the upper comers, whether it’s mexico or korea because they’re t ones, the emerging markets are having huge issue was the liquidity flooding around because central bankers have too much hubris. i want to ask you another question. okay. if you ask a tough question to the fed, i mean a tough question, this is a tough one for you to answer, do you think that your access to ability to ask a question in the next press conference would be impaired? it’s not funny. i think this is important. so let me point out a story that i did with one of your colleagues a few years ago, kate kelly, okay? this is a story about the chairman of the new york fed and the trading he was doing in goldman sachs stock steve freedman. steve sfredman stepped down from the new york fed chairmanship within days of that story. that did not make them comfortable. i’m continuing to report. you know –good for you. that’s the world we live in. it just seems to me that the reporters — let me ask you anothe question. when fed chairmans or some of the committee, when they give press releases as to whether it’s their growth forecast, what they believe on the inflation front, or what they believe their impact is based on these programs to employment or unemployment, why is that most reporters, and let’s put you aside a minute, why is it that these press releases aren’t gone after the way a reporter over the last several years would go after a tea party conservative? why don’t they have the same kind of intensity when they go after some of these issues where we’re sold that these programs are helping unemployment or low interest rates are the most important part of the mortgage arena when i could show you in the ’70s, ’80s, and ’90s rates multiples where they are today where we had solid housing markets. so, you know, i will give you this, these press conferences are very polite. you could argue they’re too polite and i’m also frustratedby one aspect of them which is that it’s difficult to ask the follow-up question because you get the microphone in your hand, you ask a question, and then the microphone gets passed to thenext guy. it would be nice if we had the opportunity to ask follow-up questions when we don’t feel like we’re getting the answersthat we want on our questions. so i’ll agree with you on that. but the other point that i would make about the press conferencesis that we’re trying to do different things at these pressconferences. the fed is a very obscure institution. on the one hand we’re trying to understand where is the chairman at? what is he trying to accomplish? what is he going to do next? there’s a lot of just figuring out what happens next. you know, i would say there’s different kinds of questions. there’s accountabilityquestions, and then there’s just understanding questions. what are you thinking and what’s the process? we probably get a lot more of the questions about what are you going to do next than the hard accountability questions. no, i understand that. i have one bit of advice because we’re running out of time. you know, if they take away the mike for your second question, just think about what i did 20 minutes ago. you don’t need a mike. use the vocal cords and the second issue is — rick, i have done that.– we are debating $54 billion in tax issues ad infinitum to the point i wanted to pull out my eyelashes. here we have a federal reserve pumping $85 billion a month, $3.4 trillion balance sheet. boy, that sounds like a darn good question to ask. why does he believe he has the t to do that to the monies and why does he believe that it’s making a difference when you started out this interview five years after a crisis saying the economy is not good. okay. all right. but at the same time i think people need to ask you where are all the bad things that you’ve been saying are going to happen and they haven’t happened. listen, that’s why i say enough is enough. the bad things have diminished to a great extent. let’s move on. jon, you’re a great sport. thanks area your time today. thanks a lot.