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Speaker 1: Broadcasting live to New York, Bloomberg to Washington d C,

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Speaker 1: Bloomberg to Boston, Bloomberg dwell unders to San Francisco, Bloomberg

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Speaker 1: nine to the Country Channel one nine and around the globe.

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Speaker 1: The Bloomberg Radio Plus happened. Bloomberg dot Com. This is

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Speaker 1: Bloomberg Surveillance. Good Morning eight Thorny on Wall Street and

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Speaker 1: Michael McKee along with Tom Keane. Economic indicators brought to

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Speaker 1: you by Commonwealth Financial Network. When it's time to change

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Speaker 1: the conversation, talk with a broker dealer r I A

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Speaker 1: that's ready to listen Calle six two three three eight,

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Speaker 1: or visit Commonwealth dot com to learn more. No numbers.

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Speaker 1: Until ten o'clock this morning, we get existing home sales

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Speaker 1: their forecast to be up one point three to a

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Speaker 1: five point four million annual rate. We shall see interesting

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Speaker 1: question about how home sales another interest rate sensitive purchases

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Speaker 1: will be effected if the Fed does indeed raise rates

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Speaker 1: in June. They raised rates in December and a week

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Speaker 1: or so ago thirty year note thirty year fixed rate

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Speaker 1: mortgage hit like an old time low or something like that.

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Speaker 1: So um, I mean it's not always the follow through

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Speaker 1: that you think, Uh. To talk about more about what

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Speaker 1: the Fed may do and what they may think and

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Speaker 1: how they're talking about it, we need to turn town

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Speaker 1: to the the man, the expert, Vince Reinhardt. He's chief

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Speaker 1: econd of is for standish now, but he was. He

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Speaker 1: was the man at the FED, the head of the

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Speaker 1: Monterary Policy Division for a long time. He was in

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Speaker 1: the room when they made lots of decisions and wrote

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Speaker 1: lots of statements. And he joins us now, good morning, Vince. Um.

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Speaker 1: I kind of wonder when you when you see the

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Speaker 1: market reaction to the April statement, and then you see

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Speaker 1: them come out with a set of minutes which which

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Speaker 1: they you know, they can they can sort of write

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Speaker 1: those in any way they want, uh, as they did

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Speaker 1: this week. Um. Do they have a problem communicating with

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Speaker 1: the markets? I think they always have a problem with

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Speaker 1: communicating with the markets, and I would know it in

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Speaker 1: the minutes. They said that twice. Uh. And for this

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Speaker 1: group of people, the solution to a problem in communicating

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Speaker 1: is actually to talk more, which isn't always necessarily the case. Uh.

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Speaker 1: There's a couple of problems. Number one is market participants

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Speaker 1: don't really believe you until you start doing it. We

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Speaker 1: saw the outsized reaction in December exactly to that. Uh.

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Speaker 1: And it's not until they start raising rates that you're

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Speaker 1: going to see the your dollar curve accepting more of

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Speaker 1: the SAID rate guidance. They said it a couple of

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Speaker 1: times in the minutes, but they said, the markets aren't

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Speaker 1: getting what we're saying. Do they recognize that It could

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Speaker 1: be that they're not saying what they really mean? Well,

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Speaker 1: they could also be wrong. Uh. I think the way

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Speaker 1: to look at market pricing right now is that investors

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Speaker 1: don't believe the SAID will tighten as much as their guidance,

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Speaker 1: or that there will be enough other tightening and financial

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Speaker 1: conditions to say, because the dollar appreciates an equity prices fall,

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Speaker 1: that the SAID won't follow through. And that's the major disconnect.

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Speaker 1: But it's a it's been a disconnect as long as

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Speaker 1: Janet Allen's tenure. Your dollar curve is always uh been

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Speaker 1: below the dot guidance in the Summary of Economic projections.

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Speaker 1: Vince A, good morning. Congratulations son. Working with the Bank

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Speaker 1: of New York Mellon and their Standish Air effort, I

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Speaker 1: think of Edward Ladd and the history of Standish air

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Speaker 1: and wood is an investment house. And one of their

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Speaker 1: wise men of years ago told me once over a

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Speaker 1: beverage of my choice that the c f A designation

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Speaker 1: is a right of passage. That is something that has

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Speaker 1: stayed with me forever. I would suggest the good economists

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Speaker 1: of the Fed right now are going through a right

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Speaker 1: of passage. They are desperately trying to get back to

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Speaker 1: orthodox theory. Is it gone forever or the world you

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Speaker 1: knew with Alan Greenspan, or do we have an ability

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Speaker 1: to get back to economics as normal? I think ultimately

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Speaker 1: will be able to renormalize interest rates. It's gonna be

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Speaker 1: at a lower, lower level of rates. And in some sense,

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Speaker 1: here's the thing everybody's got to wrap their head around.

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Speaker 1: That is, the economy's rate of growth of potential output

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Speaker 1: is slower than it's been in our generation. Demographics are

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Speaker 1: such that the population is getting older and the population

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Speaker 1: is growing more slowly. For some reason, we're not adding

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Speaker 1: to output per hour the way we used to. And

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Speaker 1: that implies that one and a half percent real GDP

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Speaker 1: growth in any given quarter might be about the best

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Speaker 1: we can do. And indeed, we're going to get to

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Speaker 1: a point where on the first Friday of a month

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Speaker 1: when the non farm perils come out and it prints

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Speaker 1: with a hundred thousands. That's a good number. We're growing

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Speaker 1: more slowly, and there's a limit to what a senile

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Speaker 1: man can do. It doesn't make extra output. It can

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Speaker 1: create extractors demand so that we use that output. So

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Speaker 1: then how do you respond to the humbled inflation nestas Uh,

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Speaker 1: it's when my experience in Flish and Nesta don't get

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Speaker 1: humbled very easily. It's always working around the next corner. Uh.

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Speaker 1: What I would say is, look, it's a big world,

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Speaker 1: it's more globalized, it employes. It's tougher to generate domestic

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Speaker 1: inflation pressures if it means you're moving your price level

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Speaker 1: differently than than than your major trading partners, and if

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Speaker 1: one of your most important, most rapidly growing trading partner

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Speaker 1: is a source of cost compression at each China, it

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Speaker 1: can be hard to generate inflation, but I'm confident the

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Speaker 1: central Bank tries hard enough. Eventually they'll do it. The

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Speaker 1: experience of the bank and just span notwithstanding, Mike, you

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Speaker 1: want to jump in here, well, just very quickly, are

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Speaker 1: you um sympathetic to Jeff Lacker's view that the dynamics

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Speaker 1: have changed and now we are Oh there you go,

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Speaker 1: stirring things up, young McKee, going to see it. You

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Speaker 1: only go about thirty seconds when you see inflation based

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Speaker 1: on diminishing slack. Yes, I think we see a little

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Speaker 1: bit of wage pressures. Uh, it is slow, it is gradual.

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Speaker 1: They've got enough time, and you know their plan is

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Speaker 1: to renormalize rates at the slowest pace in recorded time. Uh,

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Speaker 1: you know, a half point a year. So they're giving

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Speaker 1: themselves time. In the act of tightening. They will be

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Speaker 1: conveying to markets that they're confident enough that, uh, the

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Speaker 1: economy will can bear that that removal of policy accommodation,

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Speaker 1: seek it all. Vince Reinhardt was standish being why melon

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Speaker 1: standish with us this morning? We're up for Dow futures

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Speaker 1: up thirty eight, the yen one ten thirty three, a

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Speaker 1: stronger dollar this week. All right, let's check in with

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Speaker 1: Michael Barr and get the latest world of national headlines,

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Speaker 1: brought to you by Volvo Cars, White Planes. Visit Volda

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Speaker 1: Cars White Planes dot Com. Mike Tom, thank you very much.

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Speaker 1: The search for missing egypt Air Flight eight oh four

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Speaker 1: is concentrated around a hundred eighty miles north of the

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Speaker 1: port city of Alexandria, an area where debris and personal

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Speaker 1: belongings were spotted. Today, the Greek officials says a body

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Speaker 1: part was also spotted. Authorities say a team of Egyptian investigators,

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Speaker 1: along with French and British investigators, will inspect what the

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Speaker 1: army has found. The issue of abortion is front and

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Speaker 1: center in the state of Oklahoma. Bill passed by the

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Speaker 1: state legislature punishes any doctor who performs an abortion in

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Speaker 1: Oklahoma with fellon it. Republican state Senator Nathan dom says

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Speaker 1: the bill is aimed at overturning the nineteen seventy three

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Speaker 1: rovers his Way Supreme Court ruling. We've had a lot

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Speaker 1: of support, you know, over a thousand pastors of churches

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Speaker 1: across Oklahoma have come and support of this, as well

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Speaker 1: as thirty tho individual citizens. Kelly Baden is with the

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Speaker 1: Center for Reproductive Rights. It is the first of its

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Speaker 1: kind bill that is not only outrageous and unconstitutional, but

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Speaker 1: also insulting to women and doctors alike. A handful of

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Speaker 1: Republicans joined Democrats and voting against the measure. Or yet

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Speaker 1: if Republican Governor Mary Fallon will sign him Global News

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Speaker 1: twenty four hours a day, powered by our twenty four

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Speaker 1: hundred journalists and more than a hundred fifty news bureaus

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Speaker 1: around the world at Michael Bar Mike Tom Time Now

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Speaker 1: for the land of our Parsipani Bloomberg NBC Sports Update

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Speaker 1: with the Robushka Rock, Good Morning, Mike and Tom. Joe

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Speaker 1: Girardi's new plan, let your starter go six, then leave

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Speaker 1: it up to the bullpen. So far, so good. It's

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Speaker 1: worked twice in as many days. Yankees took the series

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Speaker 1: opener four to one in Oakland Van Nova Root just

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Speaker 1: sixty two pitches, seventre for strikes. Girardi turned it over

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Speaker 1: to the trio of Delan matanceas Andrew Miller and Arolda's Chapman.

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Speaker 1: They got it done. It's home coming tonight for Bay

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Speaker 1: Area native CC Sabathia when he battles Sonny Gray. First

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Speaker 1: pitch is at to the Mats. Matt Harvey's having an

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Speaker 1: off year to say the least, but one thing he

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Speaker 1: remains professional despite getting knocked out in the third inning

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Speaker 1: and a nine one loss to the Nationals. My job

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Speaker 1: to go out there and keep working and try and

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Speaker 1: fix figure this thing out. And that's you know, that's

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Speaker 1: all I'm gonna do is start over tomorrow, keep working

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Speaker 1: hard and do everything I can to fix this. Harvey

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Speaker 1: is three and six this year NATS. They took the series,

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Speaker 1: outscoring New York sixteen to four. Homestand continues as Stephen

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Speaker 1: Matt's squares off with the Brewers. Willie perraulta NBA Eastern

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Speaker 1: Conference at Finals, Lebron James triple double more than enough.

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Speaker 1: The Caps took down the Raptors one a weight eighty

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Speaker 1: nine for a commanding two games. The non lead four

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Speaker 1: starters scored in double figures for Cleveland. They moved to

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Speaker 1: ten and oh this postseason, allowing more than a hundred

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Speaker 1: points only twice, and lebron And passes some guy named

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Speaker 1: Shaquille O'Neill for fourth all time in postseason scoring a

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Speaker 1: NHL Playoffs San jose Is Martin Jones with back to

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Speaker 1: BacT shutouts of St. Louis. That's putting the Sharks up

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Speaker 1: to one out West Tonight, Eastern Conference Finals Game four

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Speaker 1: from Tampa, Pittsburgh leads at two to one. That's your

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Speaker 1: NBC Bloomberg Sports update. Mike and Tom. Thanks so much,

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Speaker 1: greatly appreciate that. I tell you, Michael, basketball, which you

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Speaker 1: don't talk nearly enough about, Golden State Cleveland would be

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Speaker 1: like like it would be that's gotta be nirvana for

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Speaker 1: everybody involved. It's just it's just like going back ten years.

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Speaker 1: I would say, no, I know, you know, we only

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Speaker 1: get so much time to do this, and you and

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Speaker 1: I both happened like hockey. But I'm sorry. Golden State

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Speaker 1: Cleveland was just wow, lights out wow. Features of five.

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Speaker 1: That was great with vincent rein artist standers. Thank you

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Speaker 1: so much for that. Features up five from New York.

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Speaker 1: This is Bloomberg Surveillance. The Sports Report was brought to

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