1 00:00:09,840 --> 00:00:13,800 Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keene Jay Ley. 2 00:00:13,960 --> 00:00:17,560 Speaker 1: We bring you insight from the best in economics, finance, investment, 3 00:00:18,000 --> 00:00:23,480 Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, 4 00:00:23,600 --> 00:00:27,560 Speaker 1: Bloomberg dot Com, and of course on the Bloomberg And 5 00:00:27,640 --> 00:00:30,200 Speaker 1: we welcome all of you worldwide on Bloomberg Television and 6 00:00:30,240 --> 00:00:33,479 Speaker 1: Bloomberg Radio. An important interview with a Vice Chairman of 7 00:00:33,520 --> 00:00:37,120 Speaker 1: the Fellow Reserve, Richard Claida, made more important by the 8 00:00:37,159 --> 00:00:39,880 Speaker 1: events of this week. Yes, we always talk about Richard 9 00:00:39,920 --> 00:00:43,280 Speaker 1: Claida about the broader scope and scale of economics, but 10 00:00:43,440 --> 00:00:47,000 Speaker 1: this time is different. As Reinhardt and Rogoff said classically 11 00:00:47,120 --> 00:00:50,960 Speaker 1: ten years ago, the news flow is extraordinary. Vice Chairman, 12 00:00:50,960 --> 00:00:53,559 Speaker 1: thank you so much for toomerg. It's important to be 13 00:00:53,600 --> 00:00:56,800 Speaker 1: in this room. We're in the Magisterial Echoes building. It's 14 00:00:56,840 --> 00:01:00,200 Speaker 1: a jewel of nineties architecture. And we are in the 15 00:01:00,320 --> 00:01:04,440 Speaker 1: special library with all these books, most of them first 16 00:01:04,600 --> 00:01:08,240 Speaker 1: edition from the private collection of Adolph Miller and others. 17 00:01:08,280 --> 00:01:11,240 Speaker 1: It's the scope of economics just over your right shoulder, 18 00:01:11,280 --> 00:01:14,760 Speaker 1: the three volumes of Alan Meltzer. To any of these 19 00:01:14,800 --> 00:01:18,720 Speaker 1: books in this library matter in the modern economics that 20 00:01:18,840 --> 00:01:20,920 Speaker 1: we have today. I think they do. Tom you know, 21 00:01:21,040 --> 00:01:24,040 Speaker 1: contacts is important. Uh, you know whether they say history 22 00:01:24,040 --> 00:01:26,319 Speaker 1: doesn't repeat, but it rhymes. And I think I'm a 23 00:01:26,520 --> 00:01:29,520 Speaker 1: I'm a student to some extent of monetary history. So so, 24 00:01:29,600 --> 00:01:31,760 Speaker 1: of course, yeah, there's a lot of wisdom in this building, 25 00:01:31,840 --> 00:01:34,440 Speaker 1: in this room. As they brought us in from security, 26 00:01:34,520 --> 00:01:37,600 Speaker 1: we looked down in the lobby where FDR dedicated this building. 27 00:01:37,760 --> 00:01:40,840 Speaker 1: He had some challenges. Chairman Bernanke is of course written 28 00:01:40,920 --> 00:01:44,840 Speaker 1: exclusively wonderfully I should say about those challenges, and they 29 00:01:44,880 --> 00:01:48,880 Speaker 1: had a challenge of disinflation and deflation. This challenge we 30 00:01:48,920 --> 00:01:51,840 Speaker 1: have now is different than then, right, Well, it is different. 31 00:01:51,840 --> 00:01:55,120 Speaker 1: Although we are in a world really globally of lower inflation. 32 00:01:55,200 --> 00:01:57,000 Speaker 1: You see that in the year Zone, you see that 33 00:01:57,040 --> 00:01:59,480 Speaker 1: in Japan and the US were close to our two 34 00:01:59,480 --> 00:02:03,320 Speaker 1: percent objective, and that's very important to us. But you're right, 35 00:02:03,560 --> 00:02:06,600 Speaker 1: there are some important global trends now that are impacting 36 00:02:06,600 --> 00:02:08,720 Speaker 1: the U S and other countries. Let's begin with this 37 00:02:08,760 --> 00:02:11,760 Speaker 1: word solid. I think of yelling slack, there's a number 38 00:02:11,760 --> 00:02:15,680 Speaker 1: of others. Uh, we have a solid economy. What is 39 00:02:15,680 --> 00:02:18,160 Speaker 1: a solid economy? Well, look, I think our outlook is 40 00:02:18,200 --> 00:02:21,720 Speaker 1: really for a sustained economic expansion, Tom, and that's important 41 00:02:21,760 --> 00:02:24,480 Speaker 1: because as of about a week from now, this will 42 00:02:24,520 --> 00:02:28,320 Speaker 1: become the longest expansion in US history. We had very 43 00:02:28,360 --> 00:02:30,880 Speaker 1: strong growth in the first quarter, north of three percent. 44 00:02:31,320 --> 00:02:33,800 Speaker 1: We could see some moderation and growth this year, but 45 00:02:33,880 --> 00:02:37,519 Speaker 1: the economy's baseline outlook is good sustained growth, a strong 46 00:02:37,600 --> 00:02:41,639 Speaker 1: labor market, and inflation near our objective. Then why are 47 00:02:41,680 --> 00:02:46,160 Speaker 1: we speaking of cutting interest rates? Well? Because in this environment, Tom, 48 00:02:46,240 --> 00:02:48,480 Speaker 1: especially in the last six or eight weeks, there have 49 00:02:48,560 --> 00:02:52,480 Speaker 1: been elevated uncertainty about the outlook. The economy is hitting 50 00:02:52,520 --> 00:02:55,400 Speaker 1: some cross currents now, there's been a marking down on 51 00:02:55,440 --> 00:02:59,880 Speaker 1: global growth prospects. There's uncertainty about international trade. There's some 52 00:03:00,040 --> 00:03:03,520 Speaker 1: evidence that's weighing on sentiment a bit. So we're monitoring 53 00:03:03,560 --> 00:03:07,400 Speaker 1: that that closely, and we'll act as appropriate to sustain expansion. 54 00:03:07,560 --> 00:03:09,880 Speaker 1: I can go four or five ways. Let's let's begin 55 00:03:10,000 --> 00:03:15,240 Speaker 1: with this new word uncertainty. Uncertainty are non policy shocks. 56 00:03:15,680 --> 00:03:19,320 Speaker 1: We focus on the trade or we focus on the president, 57 00:03:19,360 --> 00:03:22,600 Speaker 1: but there's many other shocks out there. Mr Droggy dealing 58 00:03:22,600 --> 00:03:25,600 Speaker 1: with his shots. Mr Crown and others dealing with actually 59 00:03:25,600 --> 00:03:29,120 Speaker 1: the Norwegian Bank just yesterday or the day before, raising 60 00:03:29,240 --> 00:03:32,359 Speaker 1: rates because of the shocks they have. What's the non 61 00:03:32,480 --> 00:03:36,040 Speaker 1: policy shock? It matters for the vice chairman. Well, I 62 00:03:36,080 --> 00:03:39,200 Speaker 1: think that that we really have uncertainty in the sense 63 00:03:39,240 --> 00:03:43,080 Speaker 1: that there's always some geopolitical uncertainty, but there's also uncertainty 64 00:03:43,120 --> 00:03:46,360 Speaker 1: about how the global economy navigates at a point, you know, 65 00:03:46,400 --> 00:03:49,400 Speaker 1: you have negative interest rates in the Eurozone, UH and 66 00:03:49,600 --> 00:03:52,720 Speaker 1: in Japan. Those countries are are well away from where 67 00:03:52,760 --> 00:03:54,800 Speaker 1: they want to be UH and I think that is 68 00:03:54,840 --> 00:03:59,960 Speaker 1: a factor as as well. When you ran Colombia economic 69 00:04:00,120 --> 00:04:03,960 Speaker 1: and some would say reinvigorated Columbia economics with your acquisition 70 00:04:03,960 --> 00:04:07,640 Speaker 1: of talent, there was a demanded Columbia about a study 71 00:04:07,760 --> 00:04:11,800 Speaker 1: of economic history within our economic history. Have we ever 72 00:04:11,920 --> 00:04:15,400 Speaker 1: had an American central bank that is central banker to 73 00:04:15,480 --> 00:04:19,440 Speaker 1: the world because of negative interest rates because of the challenge? 74 00:04:19,480 --> 00:04:23,040 Speaker 1: Is that's an interesting question Toomas. I'm not surprised from you. 75 00:04:23,320 --> 00:04:25,880 Speaker 1: I think the FAT has played the dominant role in 76 00:04:25,920 --> 00:04:30,160 Speaker 1: central banking throughout most of my professional career. I think 77 00:04:30,200 --> 00:04:33,160 Speaker 1: perhaps what's a little bit unusual this time is the 78 00:04:33,240 --> 00:04:35,839 Speaker 1: U the U S is much closer to where it 79 00:04:35,839 --> 00:04:39,720 Speaker 1: wants to be in terms of both employment and inflation 80 00:04:40,000 --> 00:04:43,120 Speaker 1: than our other major economies. And because we have a 81 00:04:43,200 --> 00:04:46,400 Speaker 1: much more globalized capital market than we did forty years 82 00:04:46,440 --> 00:04:49,000 Speaker 1: ago when I began my studies, that also has an 83 00:04:49,040 --> 00:04:51,600 Speaker 1: impact as well. That's probably a little bit different than 84 00:04:51,640 --> 00:04:53,400 Speaker 1: in the past. You know, when I do these interviews, 85 00:04:53,440 --> 00:04:55,880 Speaker 1: always bring in the resources of Bloomberg. Let me start 86 00:04:55,880 --> 00:04:58,960 Speaker 1: with a silence in the press conference, Michael McKee has 87 00:04:59,080 --> 00:05:03,839 Speaker 1: an important and Chairman Powell gave a graceful answer, but 88 00:05:04,440 --> 00:05:08,440 Speaker 1: maybe dodge the glide path of what you hope to accomplish. 89 00:05:08,760 --> 00:05:11,640 Speaker 1: If we have one rate cut, two or even three 90 00:05:11,720 --> 00:05:15,840 Speaker 1: rate cuts, what does that accomplish for the American economy 91 00:05:16,000 --> 00:05:19,480 Speaker 1: given your two percent statistic for growth. Well, first of all, 92 00:05:19,520 --> 00:05:21,640 Speaker 1: of course, let me remind your viewers that at our 93 00:05:21,680 --> 00:05:24,640 Speaker 1: most recent meeting we made no adjustment to policy, but 94 00:05:24,760 --> 00:05:28,000 Speaker 1: we did say that we are monitoring closely the cross 95 00:05:28,080 --> 00:05:31,880 Speaker 1: currents that are facing the economy and some of these uncertainties. 96 00:05:31,920 --> 00:05:34,960 Speaker 1: And also, as chair Pal indicated, UH, there was I 97 00:05:34,960 --> 00:05:37,800 Speaker 1: think broad agreement around the table that the case for 98 00:05:37,880 --> 00:05:42,960 Speaker 1: providing more accommodation has increased since our May meeting. Uh, 99 00:05:43,000 --> 00:05:45,880 Speaker 1: and clearly We're going to be looking and and be 100 00:05:46,080 --> 00:05:48,560 Speaker 1: very attuned to the incoming data flow. But again, I 101 00:05:48,600 --> 00:05:52,080 Speaker 1: think the important point Tom about our policy is we 102 00:05:52,160 --> 00:05:56,119 Speaker 1: have the tools necessary to sustain expansion, a strong labor 103 00:05:56,200 --> 00:05:59,920 Speaker 1: market and stable prices, and as appropriate, we will deploy 104 00:06:00,040 --> 00:06:03,159 Speaker 1: those tools to achieve those goals. We welcome all of 105 00:06:03,160 --> 00:06:06,599 Speaker 1: you again on Bloomberg Radio and Bloomberg Television worldwide conversation 106 00:06:06,720 --> 00:06:10,120 Speaker 1: with the Vice Chairman of the FED, Richard Clarata. Our 107 00:06:10,160 --> 00:06:13,640 Speaker 1: Creig Tourist is not only writing of economics, but he 108 00:06:13,800 --> 00:06:16,320 Speaker 1: is truly a student of the history of it. As 109 00:06:16,360 --> 00:06:19,840 Speaker 1: I mentioned before, yelling with the words slack, Clarada with 110 00:06:19,960 --> 00:06:24,039 Speaker 1: the words solid, Craig Tourist says, how stuck is this 111 00:06:24,160 --> 00:06:27,400 Speaker 1: Federal Reserve? What are the degrees of freedom you feel 112 00:06:27,400 --> 00:06:31,080 Speaker 1: you have? Given the global events and given the realities 113 00:06:31,200 --> 00:06:34,440 Speaker 1: of a boy in a solid American economy, and yet 114 00:06:34,480 --> 00:06:37,040 Speaker 1: a need for ray cuts? How stuck in a position 115 00:06:37,440 --> 00:06:39,640 Speaker 1: is this FED? Well? I admire, Craig. I don't think 116 00:06:39,680 --> 00:06:41,560 Speaker 1: we're stuck at all. I think, in fact, we have 117 00:06:41,920 --> 00:06:44,240 Speaker 1: the flexibility that we need that I think some other 118 00:06:44,279 --> 00:06:46,920 Speaker 1: countries would wish that they would wish that they had 119 00:06:47,360 --> 00:06:50,000 Speaker 1: uh you know, our primary tool is the federal funds. Right, 120 00:06:50,080 --> 00:06:53,080 Speaker 1: you know, we're far away from the zero bounds and 121 00:06:53,200 --> 00:06:55,960 Speaker 1: we certainly have some some room along those lines if 122 00:06:56,000 --> 00:06:58,760 Speaker 1: we need to, And again we'll act as appropriate. So 123 00:06:58,800 --> 00:07:01,200 Speaker 1: I don't think we're stuck at all. And I think again, 124 00:07:01,560 --> 00:07:03,760 Speaker 1: we have a tool kit, and we have an objective 125 00:07:03,800 --> 00:07:06,200 Speaker 1: assigned to us by the Congress, and and we're going 126 00:07:06,240 --> 00:07:08,560 Speaker 1: to do our best to achieve that objective. It was 127 00:07:08,600 --> 00:07:12,040 Speaker 1: an incredibly important idea of being near the zero bound. 128 00:07:12,360 --> 00:07:14,320 Speaker 1: And we have one rate cut. I'll get the fifty 129 00:07:14,320 --> 00:07:16,760 Speaker 1: basis point rate cut in July in a moment I'm sure, 130 00:07:17,080 --> 00:07:19,200 Speaker 1: I know you don't want to talk about, but is 131 00:07:19,200 --> 00:07:23,000 Speaker 1: it linear if you cut twenty five basis points fifty 132 00:07:23,120 --> 00:07:26,360 Speaker 1: then seventy five? Is it a linear effect on the 133 00:07:26,360 --> 00:07:30,520 Speaker 1: American economy? Or does it compound? Is there a inertial force? 134 00:07:31,040 --> 00:07:34,520 Speaker 1: Is there an increasing force? Is you make multiple rate cuts? Well, 135 00:07:34,560 --> 00:07:36,120 Speaker 1: I think there are a couple of points here. First 136 00:07:36,120 --> 00:07:38,920 Speaker 1: of all, a lot of our models are are linear, 137 00:07:39,360 --> 00:07:41,480 Speaker 1: and as someone who wrote down models, I know that. 138 00:07:41,520 --> 00:07:43,680 Speaker 1: But the real world is nonlinear, and I think as 139 00:07:43,720 --> 00:07:47,520 Speaker 1: policymakers we factor that in at you know, as we can. 140 00:07:47,600 --> 00:07:50,120 Speaker 1: So the linear response is the starting point, but in 141 00:07:50,160 --> 00:07:54,440 Speaker 1: that room and in that meeting, we're certainly alert to nonlinearities. Yeah. 142 00:07:54,640 --> 00:07:59,000 Speaker 1: Market economists right now judging Draggy of a few days ago, 143 00:07:59,160 --> 00:08:02,440 Speaker 1: judging the Polpe press conference, and now judging Richard Claire 144 00:08:02,480 --> 00:08:06,040 Speaker 1: to Alan Ruskin and Deutsche Meka many others, go, July 145 00:08:06,200 --> 00:08:10,480 Speaker 1: five really matters a moldy unemployment report. You're gonna tell 146 00:08:10,520 --> 00:08:13,400 Speaker 1: me it's just one data point. What is the challenge 147 00:08:13,400 --> 00:08:16,679 Speaker 1: on July five? If you get a soft a week 148 00:08:16,800 --> 00:08:20,520 Speaker 1: attempted labor economy report, well, I think here today, then 149 00:08:20,600 --> 00:08:23,360 Speaker 1: the labor market has been has been strong obviously if 150 00:08:23,360 --> 00:08:25,040 Speaker 1: you look at payroll games and you look at the 151 00:08:25,080 --> 00:08:28,480 Speaker 1: unemployment rate on average, we did have a soft print recently. 152 00:08:28,480 --> 00:08:30,520 Speaker 1: But it's important for your reviewers to no time. We're 153 00:08:30,520 --> 00:08:32,680 Speaker 1: not looking at any one data point. We get a 154 00:08:32,679 --> 00:08:35,480 Speaker 1: lot of data. We're getting data on GDP towards the 155 00:08:35,600 --> 00:08:40,199 Speaker 1: end of July. We'll get data on PC inflation pretty soon. Obviously, 156 00:08:40,240 --> 00:08:42,120 Speaker 1: we get a lot of global data. We're looking at 157 00:08:42,120 --> 00:08:46,920 Speaker 1: the global manufacturing cycle. We're looking at the down down, 158 00:08:47,120 --> 00:08:49,360 Speaker 1: you know, downward estimates to global growth as well. So 159 00:08:49,520 --> 00:08:51,280 Speaker 1: a lot of a lot of factors. It's we're not 160 00:08:51,320 --> 00:08:53,880 Speaker 1: a one note to central bank here, that's for sure. 161 00:08:53,960 --> 00:08:57,760 Speaker 1: Sometimes we read one re ugget it out research note 162 00:08:58,400 --> 00:09:01,160 Speaker 1: Vice Chairman, You maybe Mrs rees Orsch note from Barclays 163 00:09:01,160 --> 00:09:04,720 Speaker 1: where they stun Global Wall Street with the idea of 164 00:09:04,720 --> 00:09:08,120 Speaker 1: a fifty basis point rate cut in July. I don't 165 00:09:08,160 --> 00:09:10,040 Speaker 1: want you to comment on that. I know you want to. 166 00:09:10,520 --> 00:09:12,480 Speaker 1: I know you're not going to answer the question. But 167 00:09:12,559 --> 00:09:16,720 Speaker 1: what's important there is the underlying theme, which is these challenges, 168 00:09:16,800 --> 00:09:21,000 Speaker 1: these uncertainties, these non policy shocks will move from goods 169 00:09:21,040 --> 00:09:25,880 Speaker 1: producing and manufacturing producing America in Europe and the rest 170 00:09:26,400 --> 00:09:30,920 Speaker 1: over into the buoyant service sector. Is that a risk? Well, 171 00:09:30,960 --> 00:09:33,960 Speaker 1: I think there's an evolution and economies evolved, and for 172 00:09:34,000 --> 00:09:36,720 Speaker 1: the last fifty years we've seen the economy become more 173 00:09:36,760 --> 00:09:39,600 Speaker 1: of a service economy. That's true around the world. That's 174 00:09:39,640 --> 00:09:43,079 Speaker 1: just a trend of global um development. Uh. You know, 175 00:09:43,160 --> 00:09:45,840 Speaker 1: But again, the U S economy is a complex organism 176 00:09:45,920 --> 00:09:50,120 Speaker 1: and and overall growth rate is obviously important. But markets 177 00:09:50,120 --> 00:09:53,000 Speaker 1: are going to work to allocate resources, and we really 178 00:09:53,040 --> 00:09:55,960 Speaker 1: focus on the overall aggregate picture. You know, it's not 179 00:09:56,000 --> 00:09:59,000 Speaker 1: the FEDGS job to look at the service sector versus 180 00:09:59,040 --> 00:10:02,360 Speaker 1: any other a sector. But we're again trying to support 181 00:10:02,440 --> 00:10:04,959 Speaker 1: maximum employment of price stability. One of the things that's 182 00:10:04,960 --> 00:10:07,800 Speaker 1: wonderful about you is you've left a paper trail of 183 00:10:07,880 --> 00:10:12,920 Speaker 1: academic You must left a paper trail, don't. You've left 184 00:10:12,920 --> 00:10:15,680 Speaker 1: the paper trill. And there's all sorts of things out there. 185 00:10:15,800 --> 00:10:18,520 Speaker 1: I like to pick one paper and study it before 186 00:10:18,559 --> 00:10:21,520 Speaker 1: you when I speak, vice chairman or not vice chairman. 187 00:10:22,120 --> 00:10:27,280 Speaker 1: Clara Waldman two thousand seven is a brilliant walkthrough of 188 00:10:27,360 --> 00:10:31,160 Speaker 1: inflation shock. Did you ever think we'd be here where 189 00:10:31,160 --> 00:10:34,360 Speaker 1: we're looking the other way? It disinflation ship? Well you 190 00:10:34,400 --> 00:10:37,320 Speaker 1: know that that you bring that up, Tommy, you're right. 191 00:10:37,400 --> 00:10:39,720 Speaker 1: That paper was written in two thousand and six and 192 00:10:39,760 --> 00:10:43,000 Speaker 1: published in two thousand and seven. Uh, And certainly my 193 00:10:43,080 --> 00:10:46,480 Speaker 1: crystal ball didn't indicate almost anything that has happened in 194 00:10:46,480 --> 00:10:49,959 Speaker 1: the last dozen years. The interesting thing about that paper, though, 195 00:10:50,040 --> 00:10:53,240 Speaker 1: is it basically argued that in the old world, the 196 00:10:53,240 --> 00:10:56,560 Speaker 1: way exchange rates would respond to inflation was to weaken. 197 00:10:56,600 --> 00:10:59,600 Speaker 1: And we argued that if you have inflation targeting central banks, 198 00:10:59,600 --> 00:11:03,400 Speaker 1: incredible central banks, that that correlation can go the other way. 199 00:11:03,440 --> 00:11:05,680 Speaker 1: And in that paper and other paper since then that 200 00:11:05,760 --> 00:11:08,200 Speaker 1: is held up in the data. Is credibility at risk? 201 00:11:08,280 --> 00:11:10,760 Speaker 1: With all the challenges this is historic week from the 202 00:11:10,760 --> 00:11:14,840 Speaker 1: economics of the of the draggy uh discussion of the 203 00:11:14,880 --> 00:11:18,559 Speaker 1: delicacy of the Chairman Powell faced in the press conference. 204 00:11:19,080 --> 00:11:22,760 Speaker 1: Is credibility of our banking at risk? I don't think so, Tom, 205 00:11:22,840 --> 00:11:25,679 Speaker 1: you know, and let me explain to your viewers because 206 00:11:25,679 --> 00:11:27,520 Speaker 1: you have a lot of global viewers on your show. 207 00:11:28,440 --> 00:11:31,640 Speaker 1: Our mandate is assigned to us by the Congress Instatute 208 00:11:31,640 --> 00:11:33,960 Speaker 1: in black and wine. The loss as we have a 209 00:11:34,080 --> 00:11:37,320 Speaker 1: goal and maximum employment, price stability, and we have the 210 00:11:37,400 --> 00:11:40,120 Speaker 1: independence to set our policy rates in order to achieve 211 00:11:40,160 --> 00:11:43,280 Speaker 1: those goals. But we are accountable. We're accountable for our results, 212 00:11:43,600 --> 00:11:46,840 Speaker 1: were accountable for explaining and trying to explain what we're 213 00:11:46,840 --> 00:11:49,440 Speaker 1: doing and why we did it. Um, and I don't 214 00:11:49,440 --> 00:11:51,880 Speaker 1: think our independence is is under threat, and I think 215 00:11:51,920 --> 00:11:54,360 Speaker 1: we're doing our job, will continue to do our change. 216 00:11:54,360 --> 00:11:56,720 Speaker 1: And we say this, folks, in honor of Martin Feldstein 217 00:11:57,320 --> 00:12:00,640 Speaker 1: just this week, a huge loss for this current of 218 00:12:00,679 --> 00:12:03,319 Speaker 1: my and one of my teachers and manator teachers and 219 00:12:03,320 --> 00:12:05,560 Speaker 1: and and truly a mentor. Talking to Rick Michigan, the 220 00:12:05,600 --> 00:12:09,439 Speaker 1: former governor the other day, a profound linkage of policy 221 00:12:09,559 --> 00:12:13,120 Speaker 1: with this academics that we have. We are at a 222 00:12:13,320 --> 00:12:17,480 Speaker 1: moment where we're asking for other people to finally help 223 00:12:17,640 --> 00:12:21,959 Speaker 1: central bankers. Are we so fiscally constrained right now that 224 00:12:22,000 --> 00:12:25,240 Speaker 1: you guys feel alone given the growth of the debt 225 00:12:25,280 --> 00:12:28,079 Speaker 1: and the deficit. Well, let me say this. Let let 226 00:12:28,080 --> 00:12:31,120 Speaker 1: me say this again. Our mandate is is monetary policy. 227 00:12:31,240 --> 00:12:34,360 Speaker 1: So we don't weigh into two fiscal policy. Obviously, we 228 00:12:34,440 --> 00:12:38,480 Speaker 1: take fiscal policy into account in our outlook and calibrating 229 00:12:38,480 --> 00:12:43,000 Speaker 1: our appropriate policy response. I do think that we are 230 00:12:43,000 --> 00:12:45,160 Speaker 1: in a world where we're not just in the US, 231 00:12:45,240 --> 00:12:47,760 Speaker 1: but around the world. We do need to recognize that 232 00:12:47,800 --> 00:12:50,360 Speaker 1: there are a lot of important public policy issues that 233 00:12:50,400 --> 00:12:53,520 Speaker 1: are really fiscal policy issues that are not the purview 234 00:12:53,520 --> 00:12:56,320 Speaker 1: of central banks. And I think to the extent that 235 00:12:56,400 --> 00:12:59,200 Speaker 1: the public feels that the central banks are the solution 236 00:12:59,280 --> 00:13:02,800 Speaker 1: to every concern about the economy, is is not the 237 00:13:02,840 --> 00:13:05,679 Speaker 1: correct one. We actually have a pretty narrow mandate, uh, 238 00:13:05,720 --> 00:13:07,960 Speaker 1: and we tend to focus on that. I have no 239 00:13:08,120 --> 00:13:14,280 Speaker 1: idea the law or process of demotion at this great institution. 240 00:13:14,480 --> 00:13:16,840 Speaker 1: I know you don't want to talk about this, but 241 00:13:16,960 --> 00:13:19,719 Speaker 1: it is in the air in Washingshion. We have a 242 00:13:19,760 --> 00:13:24,439 Speaker 1: president who speaks his mind by this modern communication method. 243 00:13:24,880 --> 00:13:29,640 Speaker 1: How has this building responded to the gossip, the innuendo 244 00:13:29,800 --> 00:13:32,559 Speaker 1: of a demotion of any given faure time. I can 245 00:13:32,600 --> 00:13:34,800 Speaker 1: tie and we've known each other for twenty years. We're 246 00:13:34,840 --> 00:13:36,560 Speaker 1: just doing our job. It helps that we have a 247 00:13:36,640 --> 00:13:39,280 Speaker 1: very crisp and clear mandate. We have a tool kit, 248 00:13:39,360 --> 00:13:41,760 Speaker 1: we have an excellent staff. We have twelve Reserve Bank 249 00:13:41,800 --> 00:13:44,800 Speaker 1: presidents from around the country. We sit around that big 250 00:13:44,840 --> 00:13:48,280 Speaker 1: table just across the hall. We have an objective, we 251 00:13:48,360 --> 00:13:51,680 Speaker 1: have the tools um and we have a very very 252 00:13:51,840 --> 00:13:54,320 Speaker 1: very very collegial committee and we reach we think good 253 00:13:54,480 --> 00:13:59,720 Speaker 1: good decision. Mclaria, thank you so much. Thanks for listening 254 00:13:59,760 --> 00:14:04,320 Speaker 1: to a Bloomberg Surveillance podcast. Subscribe and listen to interviews 255 00:14:04,360 --> 00:14:09,600 Speaker 1: on Apple Podcasts, SoundCloud, or whichever podcast platform you prefer. 256 00:14:10,120 --> 00:14:13,480 Speaker 1: I'm on Twitter at Tom Keene before the podcast. You 257 00:14:13,520 --> 00:14:16,920 Speaker 1: can always catch us worldwide. I'm Bloomberg Radio.