This is a partial transcript from "Your World with Neil Cavuto," May 10, 2006, that was edited for clarity.

NEIL CAVUTO, HOST: Well, News Corp, the parent of this network, out with its earnings — profits in the later quarter topping estimates by 6 cents a share, as revenues climb to $6.2 billion. Now, just moments ago, I spoke with chairman and chief executive Rupert Murdoch, his thoughts on the midterm elections, his new association with Hillary Clinton, and on whether the Fed should keep hiking interest rates.

Here's Rupert Murdoch.

(BEGIN VIDEOTAPE)

RUPERT MURDOCH, CHAIRMAN AND CEO, NEWS CORPORATION: I don't think that there's any reason for more rate hikes at all.

Inflation is pretty well under control. You can't do anything about the price of oil. And, you know, by slowing up the economy, you're not going to bring down the price of oil, which is set by the world market.

CAVUTO: The consistent rate hikes haven't hurt your business any. What's going on there?

MURDOCH: No.

We just announced the fourth straight year of double-digit growth. And we're doubling our buyback shares. So, we're pretty happy. And we're very global. So, we're around the world more than any other media company.

CAVUTO: Do you notice the strength is global?

MURDOCH: It varies a lot. It's not so strong perhaps in Britain or in Europe — Western Europe, that is — as it is in India or in Eastern Europe, or, to some extent, even Australia.

CAVUTO: Do you worry, as some other CEOs are telling us, Murdoch, that, if the Fed keeps hiking interest rates — they have been bucking the trend, 16 times, and corporate profits have been rising, but maybe not a 17th or an 18th time.

MURDOCH: I would think it is going too far if it goes anymore.

Five percent is OK. To go higher now seems unnecessary. They should wait and see. These things take time to take effect.

CAVUTO: Do you think the Fed risks overdoing it?

MURDOCH: No, I think it's probably about right. But it does risk it if it goes further, yes.

CAVUTO: Yes.

In the entertainment world, I mean, the argument used to be that down times, up times, people want to be entertained. Does that still hold true for a company like News Corp?

MURDOCH: Oh, absolutely.

Well, certainly, our films are doing very well. We just had a fabulous — we are doing $600 million gross around the world on "Ice Age 2."

We have got "American Idol" on the air, which is the hottest show of the year, for about the fifth year running. And we're pleased that things are going very well for us here in this country, and pretty much everywhere.

CAVUTO: And particularly for FOX and the younger demographic, which is, of course, very much coveted. What do you make of that?

MURDOCH: Well, we certainly have that. That's where our leadership is.

We expect now to have our second straight year of being the number-one network in the 18-to-49 age group, which people thought would be impossible this year, since we didn't have the Super Bowl or even a good World Series.

CAVUTO: What do you think generally of the economy in this country?

Obviously, we have rate hikes responding to a strong economy. But there are a lot of folks who look at gas prices, energy prices, all these things that are hitting all-time highs, from copper to zinc, and all this other — that it's going to be bad and that there's hell to pay down the road. Is there?

MURDOCH: No. I think it's in terrific shape. We're growing very well. Tax revenues are going up tremendously, and with the result that the federal deficit is coming down much faster than anybody expected. State revenues are very good. The politicians, of course, are spending too much money. But that's normal.

Our problem is our foreign balances. We're not exporting enough. And I think, with the dollar sliding down a little bit, that should help us.

CAVUTO: I was talking...

(CROSSTALK)

MURDOCH: But that could also be slightly inflationary, of course.

CAVUTO: Absolutely.

MURDOCH: But imports will go up...

(CROSSTALK)

CAVUTO: Well, this particular commentator was saying, sir, it could be a lot inflationary, that the dollar could go into a freefall.

MURDOCH: Well, there are bears around who say it is going to go into a freefall.

I would be very surprised. You know, the dollar is kept up by investment in U.S. treasuries by the Japanese and by the Chinese and by the Asians, who have these big balances. And they don't want to see the game stop.

They may be putting 10 percent less of this emphasis into U.S. dollars than they were before. But they're not going to let the whole game go away.

CAVUTO: There's a fear that Republicans are going to lose the game in November, that they're going to lose the House, as a distinct possibility, maybe even the Senate, in a rout. Do you see that?

MURDOCH: I think it's possible. I think the chances are, they will get their act together.

It's ridiculous. Consumer confidence is high. There's no real unemployment. The economy is booming. And, usually, people will vote according to the hip pocket nerve. And, on that basis, they would be increasing. But, somehow...

CAVUTO: Why aren't they doing that?

MURDOCH: Somehow, the White House is not getting it across to the people that they're responsible with their economic policies.

And it's amazing how well we're absorbing the price of oil, which I think speaks tremendously for the efficiency, increasing efficiency, of American industry.

CAVUTO: I would be remiss if, while you were still here, I didn't bring up Hillary Clinton. Everyone is talking about this fund-raiser you're doing for her.

(LAUGHTER)

CAVUTO: What is going on with that?

MURDOCH: It's going to be a very small fund-raiser, people in this building. I hope you will come.

And I think she's been a good senator. And you know, we don't agree on a lot of things, of course. But she's going to get reelected here. There's no opposition. There's no Republican Party in New York state any longer, it would seem.

And I think, you know, she's doing very well for us and for — I'm talking, parochially, for New York state.

CAVUTO: How about as president? Would she make a good president?

MURDOCH: Well, that's a different question. I don't even know that she's going to run.

(LAUGHTER)

(END VIDEOTAPE)

CAVUTO: Very coy.

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