WATCH: CNBC’s Santelli Nukes Fed After Devastating Inflation Report: It Has ‘Done Nothing!’

CNBC’s on-air editor Rick Santelli tore apart the Federal Reserve following the devastating report that inflation spiked to 7.5 percent for the highest level in forty years.

Santelli ripped the Fed for its lackluster approach to fighting inflation along with Leuthold Group Chief Investment Strategist Jim Paulson’s seemingly out-of-touch positive prediction on the U.S inflation outlook during the Feb. 10 edition ofSquawk Box. Paulson predicted that inflation will recede from 7.5 percent towards the end of the year down to around three and a half percent and four percent as the economy opens up and the Fed tightens monetary policy. 

“I just love what [Paulson is] saying because I don’t really believe much of it, and I agree usually with everything he says.” Santelli then dropped the hammer on Paulson’s argument: “Just because [inflation]It has fallen from seven to one, but the problem is how it began. [two percent], and I think that’s where everybody’s going to fall into this trap: ‘Oh my God lookit! Half of this inflation has disappeared!’ But it’s still significantly higher than pre-COVID!” 

Santelli then turned on the Fed and let the institution have it: “Where’s the tightening been? Don’t be so hard! We’re zero to 25. They’re still buying.” He continued: “I don’t see any tightening. I can’t imagine that you have a microscope bigger than mine.” He wouldn’t let up: “The Fed did nothing. The Fed has not done anything! Blah blah blah blah blah.”

But CNBC senior economics reporter Steve Liesman took objection to Santelli’s rebuke and tried to be the PR guy for the Fed: “Rick, c’mon!” He continued: “Rick, there’s ninety basis points of tightening in the two-year” since Fed Chairman Jerome Powell pivoted on monetary policy. Santelli slapped Liesman’s argument down by noting that it’s the market that’s leading the charge on tightening, not the Fed: “The market’s doing it because the Fed is behind the curve,” Santelli retorted.

Surprisingly, Paulson agreed with Santelli’s frustrations about the Fed: “I totally agree. The Fed has done absolutely nothing.” But Paulson still tried to prop up his view that the market running point on monetary tightening in the current economy would eventually ease inflationary pressures. Santelli, still not convinced, called out Paulson for stating the obvious: “An economy that’s got to be slowed down, of course, is going to experience less pressures on the demand side. Yes! That’s the whole point of it!”

Conservatives are being attacked. You can contact ABC News by calling (818-460-7477), CBS News by calling (212- 975 3247), and NBC News via (212-664-6192 to request that they reveal the truth about the inflation crisis.