WEBVTT - Single Best Idea with Tom Keene: Bill Dudley

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news, single best idea on

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<v Speaker 1>Apple podcasts, on YouTube podcasts as well. Thrilled with that.

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<v Speaker 1>I'm late to the party, you know, I just you know.

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<v Speaker 1>I got a briefing Friday from a senior guy at

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<v Speaker 1>Westwood One and it was just simply a podcast walkthrough,

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<v Speaker 1>and I really didn't realize YouTube is really beginning to

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<v Speaker 1>do well with podcast distribution. So good morning to that.

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<v Speaker 1>I got to look that up. We'll have much more

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<v Speaker 1>on that this busy week as well. Of course, the

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<v Speaker 1>Fed on Wednesday. As I said last week, something changed

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<v Speaker 1>in the air Thursday, and I've never seen the balance

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<v Speaker 1>between twenty five and fifty bases point a quarter point

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<v Speaker 1>inter straight cut, a half point inter straight cut, and

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<v Speaker 1>the endecision, the uncertainty Doctor Wang and A Wong and

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<v Speaker 1>Bloomberg really led on this. I give her great credit.

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<v Speaker 1>She hit a bar chart out that was just completely

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<v Speaker 1>unusual in the history of the FED. So we got

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<v Speaker 1>through the weekend and we had the Wallstreet Journal had

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<v Speaker 1>an article the ft, had an article this, that and

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<v Speaker 1>the other, and very clearly on a Monday morning, we

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<v Speaker 1>had the bond market showing price up, yield down, and

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<v Speaker 1>lower yields, particularly with a two year yield breaking down

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<v Speaker 1>to a new low. And then at six thirty New

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<v Speaker 1>York time to borrow the phrase, all hell broke loose.

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<v Speaker 1>William Dudley, the former president of the New York Fed, writing

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<v Speaker 1>for Bloomberg Opinion, put out a blistering note saying he

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<v Speaker 1>supports a fifty basis point rate cut always on surveillance.

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<v Speaker 1>We have the privilege of these guests, William Dudley, right

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<v Speaker 1>now on fifty basis points.

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<v Speaker 2>I think what's essentially happened is the change expectations last

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<v Speaker 2>week with those two articles that came out on the

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<v Speaker 2>Wall Street Journal and the Financial Times, sort of suspicious

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<v Speaker 2>article because they basically reopened the possibility of fifty when

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<v Speaker 2>that was sort of getting closed off. Since that time,

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<v Speaker 2>we haven't had any you know, FED intervention in any

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<v Speaker 2>way that's visible. So it seems at least that the

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<v Speaker 2>FED is comfortable with the shifting expectations away from twenty

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<v Speaker 2>five to fifty. So I don't think, you know, as

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<v Speaker 2>time passes, I think what's going to happen is we're

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<v Speaker 2>going to continue to price more in the direction of fifty.

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<v Speaker 1>In a multiple meeting sense, of three more meetings this year,

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<v Speaker 1>wrapped around the presidential election. They literally meet the day

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<v Speaker 1>after with an announcement. The FED decides two days after

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<v Speaker 1>the November fifth election. Part of this in with the analysis,

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<v Speaker 1>of course, the analysis of Bloomberg is how do I

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<v Speaker 1>not lose money in the stock market? How do I

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<v Speaker 1>buy bonds where price goes up yield goes down? How

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<v Speaker 1>do I buy foreign exchange? What do I play in

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<v Speaker 1>the dollar? What does the litmus paper the foreign exchange

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<v Speaker 1>system mean? Paul Sweeney paying under three dollars a gallon

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<v Speaker 1>for the for his it's not a bell. What's the

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<v Speaker 1>I can't remember. I can't remember what card is it

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<v Speaker 1>Paul has? But anyways, you know, the gas is coming down,

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<v Speaker 1>commodities are coming down. It's all this market squirrel of

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<v Speaker 1>the elites. Bill Dudley was iconic out of Berkeley at

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<v Speaker 1>Golden Sachs and with the New York Fed of always

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<v Speaker 1>watching the broad spectrum of the American economy. Maybe with

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<v Speaker 1>that responsibility on the island of Manhattan, of realizing it's

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<v Speaker 1>not just about Manhattan. Bill Dudley, on the FED and

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<v Speaker 1>the poor.

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<v Speaker 2>Well, I actually think the priory motivation for the interest

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<v Speaker 2>rates cut is the deterioration out for low and modern

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<v Speaker 2>income workers.

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<v Speaker 3>We start to think about the you know, the consumer

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<v Speaker 3>spenning reports have gotten recently. It's all about stress at

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<v Speaker 3>the low end, and I think that's what's motivating the

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<v Speaker 3>FED to cut rates more quickly. I think they're definitely

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<v Speaker 3>taking that into consideration.

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<v Speaker 1>Bill Dudley. There the I should say, singing from the

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<v Speaker 1>same hymnal Jerome power, that they look at all Americans. Finally,

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<v Speaker 1>on this communication exercise, just some inside baseball, the Bank

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<v Speaker 1>of England has visible descent, acrimony and good quality, good cheer.

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<v Speaker 1>I should say about descent argument, and that the Fed

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<v Speaker 1>no one descents well. Bowman descended a number of meetings ago,

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<v Speaker 1>but it was sort of kind of like descent. Basically,

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<v Speaker 1>nobody's descentant. You can't figure out what they're doing besides

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<v Speaker 1>this idiotic analysis of the FED speeches the minutes, and

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<v Speaker 1>that maybe Chairman Powell speaks like a Jackson hole and

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<v Speaker 1>clarity is assumed, or maybe there's smoke signals from selected media.

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<v Speaker 1>Bill Dudley on the smoke signals.

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<v Speaker 3>This is sort of awkward and you really shouldn't be

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<v Speaker 3>communicating through these sort of articles in such a subtle

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<v Speaker 3>way that some people get it and some people don't.

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<v Speaker 3>That doesn't seem to be very fair for people to

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<v Speaker 3>get the right signal from the FED. I think what

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<v Speaker 3>basically happened was the issue of twenty five versus fifty

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<v Speaker 3>was getting sort of closed off as you approached the

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<v Speaker 3>blackout period. Coll didn't want it to be closed off

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<v Speaker 3>because he's actually thinking pretty strobably about fifty basis points,

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<v Speaker 3>and this was the way to keep it open. And

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<v Speaker 3>I think what's happened as people have reflected on a

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<v Speaker 3>bit more, the logic for fifty has become very compelling

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<v Speaker 3>to people, and that's why I think that's what the

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<v Speaker 3>Fit's going to do at this meeting this week.

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<v Speaker 1>Bill Dudley there just a generous amount of time with

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<v Speaker 1>us today after his market moving essay for Bloomberg Opinion.

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<v Speaker 1>We will go to Wednesday that fed to size. I

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<v Speaker 1>look for our coverage. My people haven't even briefed me

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<v Speaker 1>yet on who we have, but I'm sure it'll be

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<v Speaker 1>just as good as what we had last time around.

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<v Speaker 1>Great conversation wrapped around the announcement and then on to

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<v Speaker 1>the press conference, and after the press conference, some good work.

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<v Speaker 1>I hope Jeff Rosenberg at Black Rock shows up always

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<v Speaker 1>as after the press conference guest of what the bond

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<v Speaker 1>market thinks of the FED action. We're out at YouTube,

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<v Speaker 1>not only YouTube podcast, but subscribe to Bloomberg podcasts at YouTube.

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<v Speaker 1>That's the best way to get us on your commute,

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<v Speaker 1>Android auto Apple CarPlay out there as well. And I

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<v Speaker 1>should point out as well across all of terrestrial radio

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<v Speaker 1>across this nation and particularly the Corridor ninety nine one

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<v Speaker 1>in Washington, Bloomberg eleventh three on New York, ninety two

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<v Speaker 1>nine in Boston, on Apple podcasts, on YouTube podcasts. Single

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<v Speaker 1>best idea