1 00:00:02,520 --> 00:00:09,319 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. Our next guest used 2 00:00:09,320 --> 00:00:10,639 Speaker 1: to be on the FED. He used to head the 3 00:00:10,720 --> 00:00:13,319 Speaker 1: Dallas FED, and he says that investors should actually be 4 00:00:13,400 --> 00:00:16,160 Speaker 1: watching for two things out of this meeting. Any potential 5 00:00:16,200 --> 00:00:20,320 Speaker 1: foreshadowing for the fmc's pivotal September meeting, and any commentary 6 00:00:20,400 --> 00:00:24,000 Speaker 1: around the fed's framework, particularly as it relates to Central 7 00:00:24,200 --> 00:00:28,440 Speaker 1: banks independence, pleases say. Joining us right now is Robert Kaplan, 8 00:00:28,560 --> 00:00:31,240 Speaker 1: former Dallas FED president and now vice chairman over at 9 00:00:31,240 --> 00:00:34,680 Speaker 1: Goldman Sachs. Thanks for joining us here today, Robert. And 10 00:00:34,840 --> 00:00:37,160 Speaker 1: of course before I ask you specifically about Jay Powell 11 00:00:37,200 --> 00:00:38,800 Speaker 1: and what we're going to learn out of Jackson Hole, 12 00:00:39,000 --> 00:00:40,960 Speaker 1: I do have to ask you about some of the 13 00:00:40,960 --> 00:00:45,640 Speaker 1: allegations surrounding Lisa Cook, the political undertones that some people 14 00:00:45,680 --> 00:00:47,519 Speaker 1: think that there is a concerted effort to try to 15 00:00:47,560 --> 00:00:51,479 Speaker 1: reshape the FED board, and of course the general idea 16 00:00:51,560 --> 00:00:55,720 Speaker 1: here of what FED independence even means in this current environment. 17 00:00:57,760 --> 00:01:00,400 Speaker 2: Yeah, so I've obviously read the reports. I don't have 18 00:01:00,480 --> 00:01:04,040 Speaker 2: anything to comment on there. I do think the main 19 00:01:04,120 --> 00:01:08,360 Speaker 2: thing is it's critical for members of the FED to 20 00:01:09,520 --> 00:01:13,959 Speaker 2: do their work without regard to political considerations or political 21 00:01:14,000 --> 00:01:17,120 Speaker 2: influence and come to the best judgments they can, and 22 00:01:17,160 --> 00:01:19,280 Speaker 2: I'm hopeful that will continue to be the case. 23 00:01:19,840 --> 00:01:23,000 Speaker 1: I am curious about just the general process here, because 24 00:01:23,040 --> 00:01:24,840 Speaker 1: I mean, there are a lot of allegations. 25 00:01:24,280 --> 00:01:26,400 Speaker 3: That we know so little publicly. 26 00:01:26,840 --> 00:01:29,240 Speaker 1: There has to be an investigation both by the FED internally, 27 00:01:29,280 --> 00:01:31,640 Speaker 1: and it looks like at this point maybe potentially by 28 00:01:31,720 --> 00:01:34,640 Speaker 1: the DOJ. But you were the subject of allegation several 29 00:01:34,680 --> 00:01:36,960 Speaker 1: years ago when it came to trading, you decided to 30 00:01:36,959 --> 00:01:40,680 Speaker 1: step down, in your words, to avoid that distraction. Only 31 00:01:40,800 --> 00:01:42,880 Speaker 1: you know what was it maybe about three years later 32 00:01:43,080 --> 00:01:44,920 Speaker 1: to have the FED come out and say, after doing 33 00:01:44,920 --> 00:01:48,400 Speaker 1: an investigation, they found you actually did nothing wrong. 34 00:01:49,400 --> 00:01:51,400 Speaker 3: Do you regret stepping down when you did? 35 00:01:52,680 --> 00:01:55,320 Speaker 2: No. I made the best decision that I thought was 36 00:01:55,360 --> 00:02:00,760 Speaker 2: the best interest to the institution. But I think I'm sympathetic. 37 00:02:00,840 --> 00:02:04,680 Speaker 2: The situation that you're currently talking about has its own 38 00:02:04,720 --> 00:02:08,880 Speaker 2: set of facts, and I don't want to comment or 39 00:02:09,120 --> 00:02:13,560 Speaker 2: say anything about it. I think the people involved will 40 00:02:13,560 --> 00:02:15,360 Speaker 2: do the best they can to deal with it, and 41 00:02:15,440 --> 00:02:16,520 Speaker 2: I think I'll leave it at that. 42 00:02:16,840 --> 00:02:19,640 Speaker 4: Thank you for sharing that, Robert. If you believe that 43 00:02:19,720 --> 00:02:22,600 Speaker 4: President Trump is trying to secure a majority of the 44 00:02:22,600 --> 00:02:25,280 Speaker 4: Federal Reserve Board, the seven member board, what would that 45 00:02:25,320 --> 00:02:27,720 Speaker 4: really accomplish? And I asked that, Robert, because we know 46 00:02:27,800 --> 00:02:30,840 Speaker 4: that the FMC is more than just the board itself, right, 47 00:02:30,919 --> 00:02:34,560 Speaker 4: You have FED presidents who also vote on the FLMC. 48 00:02:37,000 --> 00:02:42,680 Speaker 2: There are twelve votes in every meeting, and they're the 49 00:02:42,720 --> 00:02:48,239 Speaker 2: governors as well as five of the presidents. And no 50 00:02:48,320 --> 00:02:52,480 Speaker 2: one person makes the decision. That chaired doesn't make the decision. 51 00:02:52,919 --> 00:02:55,880 Speaker 2: He or she has to form a consensus around the table. 52 00:02:56,200 --> 00:02:58,280 Speaker 2: And I think you've got an ethic at the FED 53 00:02:58,360 --> 00:03:02,919 Speaker 2: which is very strong of looking at all the available analysis, 54 00:03:02,919 --> 00:03:08,000 Speaker 2: talking to businesses, understanding all the structural drivers in the economy, 55 00:03:08,240 --> 00:03:11,520 Speaker 2: and trying to come to the very best judgment that 56 00:03:11,560 --> 00:03:14,400 Speaker 2: you can, and then bring that to the meeting and 57 00:03:14,440 --> 00:03:18,400 Speaker 2: debate it out. And I think it's very a healthy 58 00:03:18,440 --> 00:03:21,000 Speaker 2: process and I'm very hopeful that that's the process that 59 00:03:21,040 --> 00:03:22,040 Speaker 2: will continue. 60 00:03:22,320 --> 00:03:24,200 Speaker 4: And of course, one of the things everyone will be 61 00:03:24,240 --> 00:03:27,760 Speaker 4: debating about is what the economic data show about the 62 00:03:27,760 --> 00:03:30,080 Speaker 4: state of the economy and what's in store for the economy. 63 00:03:30,400 --> 00:03:32,800 Speaker 4: As a former FED official, as a former voting member 64 00:03:32,840 --> 00:03:35,200 Speaker 4: at the FMC, how would you interpret the data that 65 00:03:35,240 --> 00:03:38,200 Speaker 4: we've seen the last two weeks, which includes consumer and 66 00:03:38,200 --> 00:03:41,760 Speaker 4: wholesale inflation. Seemingly at odds, you have rising jobless claims. 67 00:03:41,800 --> 00:03:44,720 Speaker 4: You now have a rebound in manufacturing, at least according 68 00:03:44,720 --> 00:03:45,360 Speaker 4: to surveys. 69 00:03:46,720 --> 00:03:50,760 Speaker 2: Yeah. So here's the challenge for the Fed. On the 70 00:03:50,800 --> 00:03:56,120 Speaker 2: one hand, we have a relatively sluggish jobs market and 71 00:03:56,360 --> 00:04:00,520 Speaker 2: relatively sluggish GDP growth. We're at full and play employment. 72 00:04:01,280 --> 00:04:04,760 Speaker 2: But the reason we're add full employment is because labor 73 00:04:04,800 --> 00:04:10,080 Speaker 2: supply has been decelerating. Hiring has been very sluggish, and 74 00:04:10,160 --> 00:04:14,720 Speaker 2: so I think the FED probably would like not to 75 00:04:14,760 --> 00:04:17,200 Speaker 2: see a further weakening in the labor market. That's on 76 00:04:17,279 --> 00:04:19,960 Speaker 2: the one hand. On the other hand, we're running inflation 77 00:04:20,040 --> 00:04:23,040 Speaker 2: above target. We've been running inflation above target for the 78 00:04:23,120 --> 00:04:27,560 Speaker 2: last three or four years. It's been primarily services. This 79 00:04:27,600 --> 00:04:31,240 Speaker 2: is before we even talk about tariffs. Goods ironically have 80 00:04:31,279 --> 00:04:34,960 Speaker 2: been disinflating. We'll have to understand how the tariffs flow 81 00:04:35,040 --> 00:04:38,240 Speaker 2: through goods and what the FED is trying to balance 82 00:04:39,440 --> 00:04:44,000 Speaker 2: is I think if the job market were stronger, I 83 00:04:44,040 --> 00:04:46,960 Speaker 2: think it would be clearer to more be patient and 84 00:04:47,120 --> 00:04:51,000 Speaker 2: wait to see how the inflation is going to unfold, 85 00:04:51,440 --> 00:04:54,040 Speaker 2: and be more patient to see a trend further down 86 00:04:54,080 --> 00:04:57,600 Speaker 2: toward target. But I think with this weakening the labor market, 87 00:04:57,640 --> 00:04:59,520 Speaker 2: it's it's going to push the Fed I think, to 88 00:04:59,560 --> 00:05:03,840 Speaker 2: be more forward leading and maybe do an adjustment in September. 89 00:05:04,200 --> 00:05:06,880 Speaker 2: But the caution I would give if they do move 90 00:05:06,880 --> 00:05:10,440 Speaker 2: in September, I don't think that's the start of a cycle. 91 00:05:10,520 --> 00:05:13,520 Speaker 2: I think it's an individual decision then will wipe the 92 00:05:13,560 --> 00:05:16,240 Speaker 2: slate clean and take the next six weeks try to 93 00:05:16,320 --> 00:05:19,320 Speaker 2: understand these cross currents again, and so I think they'll 94 00:05:19,360 --> 00:05:21,840 Speaker 2: shorten up the timeframe and take it one meeting at 95 00:05:21,839 --> 00:05:22,200 Speaker 2: a time. 96 00:05:22,400 --> 00:05:24,120 Speaker 1: I am curious as to what you think that debate's 97 00:05:24,120 --> 00:05:26,200 Speaker 1: going to be. Like, we got the FMC minutes from 98 00:05:26,240 --> 00:05:29,880 Speaker 1: the last meeting, and there was clear division there as 99 00:05:29,920 --> 00:05:32,000 Speaker 1: to what the FED should do and when they should 100 00:05:32,040 --> 00:05:34,320 Speaker 1: start doing it, if at all. And I assume that's 101 00:05:34,320 --> 00:05:36,800 Speaker 1: going to intensify by the time we get to mid September, 102 00:05:37,400 --> 00:05:40,640 Speaker 1: once we have now that we've had some additional economic data, 103 00:05:41,040 --> 00:05:43,719 Speaker 1: having been in that room and knowing how those debates 104 00:05:43,760 --> 00:05:47,080 Speaker 1: go out, does that debate is that going to center around, 105 00:05:47,080 --> 00:05:49,680 Speaker 1: in your view, much more on the inflation side, or 106 00:05:49,720 --> 00:05:51,320 Speaker 1: do you think it's going to lean a little bit 107 00:05:51,360 --> 00:05:53,920 Speaker 1: more on the labor market side of the mandate. 108 00:05:55,120 --> 00:05:59,320 Speaker 2: So while there's a lot of focus on Jpal's speech tomorrow, 109 00:05:59,839 --> 00:06:02,160 Speaker 2: the reality is we're going to get at least one 110 00:06:02,200 --> 00:06:05,400 Speaker 2: more inflation print, and we're going to get the jobs market. 111 00:06:05,480 --> 00:06:08,440 Speaker 2: We're going to get the jobs numbers for August, and 112 00:06:08,520 --> 00:06:12,880 Speaker 2: so that actually that job's number for August is going 113 00:06:12,920 --> 00:06:16,120 Speaker 2: to be very telling and will shape the debate. But 114 00:06:17,200 --> 00:06:20,080 Speaker 2: you're either going to see a job's number that shows 115 00:06:20,080 --> 00:06:24,240 Speaker 2: a further weakening or continued sluggishness. I think that would 116 00:06:24,320 --> 00:06:28,960 Speaker 2: tilt toward taking some action in the September meeting, or 117 00:06:29,000 --> 00:06:32,000 Speaker 2: you may see something stronger. But the debate is going 118 00:06:32,080 --> 00:06:34,760 Speaker 2: to be about the fact that we are at risk 119 00:06:34,800 --> 00:06:37,800 Speaker 2: of not meeting either side of our dual mandate. We're 120 00:06:37,800 --> 00:06:42,599 Speaker 2: already above target on inflation, and how serious is the 121 00:06:42,720 --> 00:06:45,720 Speaker 2: threat that the job market is going to weaken further. 122 00:06:45,920 --> 00:06:48,000 Speaker 2: That's what they're going to debate. And the reason there's 123 00:06:48,040 --> 00:06:51,400 Speaker 2: a disagreement is for good reason. It's not clear, and 124 00:06:51,520 --> 00:06:54,080 Speaker 2: I think the fact that there's debate and disagreement, I 125 00:06:54,080 --> 00:06:56,479 Speaker 2: think is a good thing. I think there ought to 126 00:06:56,520 --> 00:06:59,360 Speaker 2: be where there's these type of cross currents, So I 127 00:06:59,400 --> 00:07:03,240 Speaker 2: think that's a good thing that they'll be disagreeing and debating. 128 00:07:03,120 --> 00:07:06,000 Speaker 1: When it comes to where the inflation rate or where 129 00:07:06,040 --> 00:07:08,080 Speaker 1: the inflation target should be. There's been a lot of 130 00:07:08,120 --> 00:07:10,120 Speaker 1: talk about two percent or I guess now it's two 131 00:07:10,160 --> 00:07:13,760 Speaker 1: percent ish. But the idea that the economy has been 132 00:07:13,840 --> 00:07:18,400 Speaker 1: running relatively okay with at least headline inflation in the 133 00:07:18,440 --> 00:07:21,560 Speaker 1: three percent range, core inflation in the high twos, is 134 00:07:21,600 --> 00:07:24,239 Speaker 1: there an argument to be made Robed that longer term, 135 00:07:24,640 --> 00:07:26,760 Speaker 1: maybe we can live with. 136 00:07:26,760 --> 00:07:29,160 Speaker 3: A higher target rate, a higher neutral rate. 137 00:07:30,160 --> 00:07:34,720 Speaker 2: Yeah, I would argue against that. And here's why. There 138 00:07:34,800 --> 00:07:39,040 Speaker 2: are approximately eighty million workers in this country that make 139 00:07:39,160 --> 00:07:42,400 Speaker 2: fifty or fifty five thousand dollars a year or less. 140 00:07:43,040 --> 00:07:46,640 Speaker 2: They've lost twenty five percent plus purchasing power over the 141 00:07:46,680 --> 00:07:49,520 Speaker 2: last three or four years. They are struggling to make 142 00:07:49,640 --> 00:07:55,080 Speaker 2: ends meet. If headline inflation is three, headline inflation for them, 143 00:07:55,160 --> 00:07:57,600 Speaker 2: based on share of wallet might be five or six 144 00:07:57,720 --> 00:08:01,240 Speaker 2: or seven. And so I actually think it's very critical, 145 00:08:01,560 --> 00:08:06,000 Speaker 2: particularly for low moderate income workers, that the FED continue 146 00:08:06,240 --> 00:08:10,040 Speaker 2: to work on getting the headline inflation rate down to 147 00:08:10,120 --> 00:08:13,120 Speaker 2: two and not be satisfied with three. 148 00:08:14,240 --> 00:08:16,200 Speaker 4: Rob I got to get your sense as well about 149 00:08:16,240 --> 00:08:19,200 Speaker 4: what we've learned from companies this earning season, particularly of 150 00:08:19,320 --> 00:08:22,280 Speaker 4: late with the retailers reporting results. We already know Nike, 151 00:08:22,400 --> 00:08:25,640 Speaker 4: SONOSP and g I've been mulling raising prices. Walmart said 152 00:08:25,680 --> 00:08:27,720 Speaker 4: as much as well, that it would have to at 153 00:08:27,720 --> 00:08:29,720 Speaker 4: some point start raising prices in the second half of 154 00:08:29,720 --> 00:08:32,520 Speaker 4: the year. Dittover Home Depot as well. So how do 155 00:08:32,520 --> 00:08:37,400 Speaker 4: you fold that into the thinking of inflation as we 156 00:08:37,480 --> 00:08:42,160 Speaker 4: anticipate higher prices due to higher costs from presumably the teriffs. 157 00:08:43,080 --> 00:08:46,800 Speaker 2: So there are four areas that are going to impact 158 00:08:46,840 --> 00:08:49,760 Speaker 2: on the tariffs. One is, can you We've got a 159 00:08:49,800 --> 00:08:55,760 Speaker 2: world of manufacturing over capacity, which tells you that companies 160 00:08:55,800 --> 00:08:58,400 Speaker 2: here that are buying from overseas may have more leverage 161 00:08:58,400 --> 00:09:02,280 Speaker 2: over suppliers. Dollar. Although it's weakened this year, the dollar 162 00:09:02,320 --> 00:09:04,840 Speaker 2: could strengthen. That'll take a bite out of the terrace. 163 00:09:05,320 --> 00:09:07,959 Speaker 2: They companies may take some of that out of margin, 164 00:09:08,320 --> 00:09:10,559 Speaker 2: and yes, they may put some in prices, but you've 165 00:09:10,559 --> 00:09:15,920 Speaker 2: got to remember the consumer has the ability to substitute. 166 00:09:16,080 --> 00:09:19,760 Speaker 2: They can be very price sensitive. About twenty four to 167 00:09:19,760 --> 00:09:22,960 Speaker 2: twenty five percent of the US economy is goods, seventy 168 00:09:23,000 --> 00:09:26,800 Speaker 2: five percent of services. Consumers can decide not to buy 169 00:09:26,800 --> 00:09:28,440 Speaker 2: a good and they can decide to go out to 170 00:09:28,480 --> 00:09:32,040 Speaker 2: dinner or do something else instead. And so to the 171 00:09:32,080 --> 00:09:36,920 Speaker 2: extent companies can pass on tariffs to consumers is going 172 00:09:36,920 --> 00:09:39,319 Speaker 2: to depend a lot on their pricing power, how strong 173 00:09:39,440 --> 00:09:41,920 Speaker 2: demand is. And so there's a lot of these things 174 00:09:41,960 --> 00:09:45,520 Speaker 2: that companies I talk to still are uncertain about. They're 175 00:09:45,559 --> 00:09:48,839 Speaker 2: feeling their way. They'll figure it out and they'll make 176 00:09:48,880 --> 00:09:52,440 Speaker 2: it work. Where I'm more concerned is small businesses I 177 00:09:52,559 --> 00:09:56,240 Speaker 2: talk to who don't have these levers to pull, and 178 00:09:56,280 --> 00:10:00,319 Speaker 2: I think for them, for many they're actively to dating 179 00:10:00,720 --> 00:10:02,480 Speaker 2: whether they can make it through the end of the 180 00:10:02,559 --> 00:10:06,679 Speaker 2: year because they don't have the flexibility to manage tariffs 181 00:10:06,679 --> 00:10:07,800 Speaker 2: the way big companies do. 182 00:10:08,000 --> 00:10:09,880 Speaker 4: Yeah, they don't have as many options. And I really 183 00:10:09,880 --> 00:10:11,520 Speaker 4: appreciate you bringing that up. I mean, all of that 184 00:10:11,559 --> 00:10:14,719 Speaker 4: adds up to a very complicated economic picture where the 185 00:10:14,760 --> 00:10:17,840 Speaker 4: economic indicators that we rely on and debate over don't 186 00:10:17,840 --> 00:10:20,760 Speaker 4: always capture the cross currents and the nuances that are 187 00:10:20,760 --> 00:10:25,280 Speaker 4: taking place underneath all this anecdotal insight from companies, particularly 188 00:10:25,280 --> 00:10:27,920 Speaker 4: small companies as you put it around the country is 189 00:10:27,920 --> 00:10:32,160 Speaker 4: incredibly valuable, and all that is encapitulated in something called 190 00:10:32,160 --> 00:10:34,000 Speaker 4: the Beige Book. Do you feel like the Beige Book 191 00:10:34,000 --> 00:10:36,120 Speaker 4: should be more valuable to the FMC than it has 192 00:10:36,160 --> 00:10:38,280 Speaker 4: been up to this point. I mean, I know that 193 00:10:38,320 --> 00:10:40,199 Speaker 4: as a reporter, we sometimes get the Bagebook and we 194 00:10:40,280 --> 00:10:42,160 Speaker 4: kind of look at it and say, oh, that's backwards looking. 195 00:10:42,200 --> 00:10:43,320 Speaker 4: It didn't really tell us anything. 196 00:10:44,520 --> 00:10:47,079 Speaker 2: Yeah, the Beige Book for me is a critical part 197 00:10:47,080 --> 00:10:50,000 Speaker 2: of the process. There's a whole there's a whole mosaic 198 00:10:50,040 --> 00:10:52,400 Speaker 2: of things. You look at. You talk to businesses, you 199 00:10:52,480 --> 00:10:55,320 Speaker 2: look at data that is published, you look at the 200 00:10:55,360 --> 00:10:59,840 Speaker 2: Beige Book. You try to understand structural drivers and macro factors. 201 00:11:00,160 --> 00:11:02,440 Speaker 2: But the Beige Book is very viable. It's one of 202 00:11:02,440 --> 00:11:04,880 Speaker 2: the unique things that the FED is set up to 203 00:11:04,960 --> 00:11:08,679 Speaker 2: do because it is distributed all over the United States 204 00:11:08,720 --> 00:11:11,920 Speaker 2: and has relationships locally and we get these survey results. 205 00:11:12,240 --> 00:11:15,280 Speaker 2: It's very informative, but it's a piece of the puzzle 206 00:11:15,320 --> 00:11:18,360 Speaker 2: that's very helpful in periods like this where you have 207 00:11:18,400 --> 00:11:21,920 Speaker 2: a number of structural changes going on. I think being 208 00:11:22,040 --> 00:11:25,600 Speaker 2: closer to business that includes the Beige Book, it can 209 00:11:25,640 --> 00:11:28,760 Speaker 2: be talking to businesses. I think that becomes more important 210 00:11:29,040 --> 00:11:32,480 Speaker 2: because the data, again is backward looking, it's aggregated, it 211 00:11:32,520 --> 00:11:35,400 Speaker 2: may be lagging, it gets revised, and so I think 212 00:11:35,440 --> 00:11:36,760 Speaker 2: you have to look at the whole picture. 213 00:11:37,240 --> 00:11:38,520 Speaker 1: And that's a good point, and I think a lot 214 00:11:38,559 --> 00:11:40,120 Speaker 1: of people in the market have been trying to do 215 00:11:40,160 --> 00:11:43,160 Speaker 1: that even prior to some of the recent developments. And 216 00:11:43,200 --> 00:11:45,600 Speaker 1: it gets to this idea as to whether you see 217 00:11:45,640 --> 00:11:50,000 Speaker 1: any opportunity to actually improve the government the official government data, 218 00:11:50,160 --> 00:11:52,880 Speaker 1: the collection of that data, the timeliness of that data, 219 00:11:52,960 --> 00:11:55,240 Speaker 1: more importantly, the accuracy of that data. 220 00:11:55,240 --> 00:11:59,320 Speaker 3: I mean, what can we do to actually update that well. 221 00:12:00,040 --> 00:12:04,680 Speaker 2: So there's been a lot of discussion. Got to I 222 00:12:04,679 --> 00:12:07,400 Speaker 2: think I've mentioned you before. I remember I learned when 223 00:12:07,400 --> 00:12:09,439 Speaker 2: I first got to the FED. The first piece of 224 00:12:09,480 --> 00:12:13,120 Speaker 2: advice I got is don't over rely on anyone data 225 00:12:13,160 --> 00:12:16,760 Speaker 2: print tends to be backward looking, it's aggregated, it's going 226 00:12:16,800 --> 00:12:22,440 Speaker 2: to get revised. And so I think we also are 227 00:12:22,440 --> 00:12:26,440 Speaker 2: aware of post COVID the survey response rates have declined. 228 00:12:26,760 --> 00:12:30,040 Speaker 2: So I think in this world at AI high frequency data, 229 00:12:30,440 --> 00:12:33,480 Speaker 2: a lot of private sources as well as public sources 230 00:12:33,559 --> 00:12:36,920 Speaker 2: use of technology. I think the BLS will be well 231 00:12:36,960 --> 00:12:39,839 Speaker 2: served and I'm confident they will do this to look 232 00:12:39,880 --> 00:12:43,679 Speaker 2: at how to upgrade the accuracy of their data. Even 233 00:12:43,840 --> 00:12:47,080 Speaker 2: with that, I would say the data is never going 234 00:12:47,120 --> 00:12:49,520 Speaker 2: to be perfect, and I think you're always better off 235 00:12:49,559 --> 00:12:52,760 Speaker 2: looking at the three to six month trend, not overreacting 236 00:12:52,800 --> 00:12:56,720 Speaker 2: to anyone data print. And I think that ethic is 237 00:12:56,800 --> 00:12:58,079 Speaker 2: always worth a reminder. 238 00:12:58,120 --> 00:13:00,000 Speaker 3: When you're at the FED, I am curious. 239 00:13:00,040 --> 00:13:02,040 Speaker 1: I mean, you sit in a very unique position, having 240 00:13:02,080 --> 00:13:04,000 Speaker 1: of course worked in the government, at the FED and 241 00:13:04,040 --> 00:13:07,120 Speaker 1: obviously a long career on Wall Street and now back 242 00:13:07,120 --> 00:13:11,040 Speaker 1: there as vice chairman of Goldman Sachs. There is the 243 00:13:11,120 --> 00:13:13,280 Speaker 1: idea that we have to be as a market I say, 244 00:13:13,280 --> 00:13:16,920 Speaker 1: the we Royal we not necessarily relying on that data, 245 00:13:17,000 --> 00:13:19,320 Speaker 1: but at least have some faith in it, in the data, 246 00:13:19,400 --> 00:13:21,760 Speaker 1: faith in the independence of the FED, faith in the 247 00:13:21,800 --> 00:13:25,440 Speaker 1: reliability of US government economic data. That faith is being 248 00:13:25,480 --> 00:13:28,200 Speaker 1: tested right now, and I'm curious if that worries you 249 00:13:28,280 --> 00:13:30,400 Speaker 1: at all. 250 00:13:31,960 --> 00:13:35,600 Speaker 2: It's always a concern. It should be a concern. However, 251 00:13:37,320 --> 00:13:39,440 Speaker 2: this is where I used to teach leadership, as you 252 00:13:39,480 --> 00:13:42,040 Speaker 2: may know, at Harvard Business School for ten years. This 253 00:13:42,120 --> 00:13:45,880 Speaker 2: is where people matter. It's up to the people involved 254 00:13:46,160 --> 00:13:49,600 Speaker 2: to adhere to an ethic that they're going to make 255 00:13:49,679 --> 00:13:54,360 Speaker 2: decisions based on their best available information without regard to 256 00:13:54,400 --> 00:13:58,960 Speaker 2: political influence or political consideration. That ethic is very strong 257 00:13:59,000 --> 00:14:02,320 Speaker 2: today at the FED. I'm very hopeful that that ethic 258 00:14:02,360 --> 00:14:04,720 Speaker 2: will continue, and I'll be up to the leaders of 259 00:14:04,760 --> 00:14:05,880 Speaker 2: the FED to make sure of that. 260 00:14:06,320 --> 00:14:08,880 Speaker 4: All right, Thank you so much. Rob Kaplan is the 261 00:14:08,880 --> 00:14:12,000 Speaker 4: former Dallas FED president and of course, current vice chair 262 00:14:12,080 --> 00:14:12,920 Speaker 4: of Goldman Sachs