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Speaker 1: The former Kansas City FED president as the George Ester.

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Speaker 1: Welcome to the programmer, So wonderful to hear from you

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Speaker 1: once again. How difficult is life about to get at

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Speaker 1: the Federal Reserve.

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Speaker 2: Well, it's never an easy path when you get to

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Speaker 2: a time like this. But remember, Jonathan, this institution was

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Speaker 2: by design anticipating that there would be political influences on it,

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Speaker 2: and so a lot of safeguards will put around it

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Speaker 2: to allow the individuals that sit around that table to

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Speaker 2: really maintain their focus on the American public and the

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Speaker 2: mandate that was given to it by Congress.

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Speaker 3: There is a confusion though as to giving effect. Is

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Speaker 3: that a lot of the potential proposals would have a

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Speaker 3: fundamental effect on the trajectory of the economy, and that's

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Speaker 3: certainly what the market seemed to be responding to. Do

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Speaker 3: you think if you were on the Fed you'd be

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Speaker 3: rethinking just how much further the Fed can cut?

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Speaker 2: Well, there's no question, Lisa, that you have to take

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Speaker 2: into aunt fiscal policies and the impact they can have

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Speaker 2: on the economy.

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Speaker 4: And of course, when you're making a forecast.

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Speaker 2: You have to be thinking about what are the risks

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Speaker 2: around that forecast? Whatever baseline you set, you have to

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Speaker 2: be thinking about what lies ahead in terms of setting

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Speaker 2: a path, and I thought yesterday the Chairman was pretty

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Speaker 2: clear that he wasn't going to offer any forward guidance

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Speaker 2: about what comes next, and I think that's really.

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Speaker 5: The right way to handle it at this stage.

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Speaker 3: At this stage, December isn't going to be so easy

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Speaker 3: because they do have to release a new statement of

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Speaker 3: economic projections. I'm sure that you are very glad that

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Speaker 3: you don't have to offer up yours. How do they

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Speaker 3: signal a potential scenario analysis around something that the market

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Speaker 3: is actively considering and responding to.

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Speaker 4: So I think where we will see that.

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Speaker 2: Certainly you could see it play out in the median

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Speaker 2: assessment of those nineteen forecasts, but you'll also see it

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Speaker 2: in the state where this committee will talk about the

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Speaker 2: balance of risk and they will talk about their own

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Speaker 2: assessment of what the path ahead might look like. Today,

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Speaker 2: they're relying on what they know, which is we have

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Speaker 2: the economy that's handed to us. We are saying risk

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Speaker 2: are roughly in balance. You heard the Chairman say several

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Speaker 2: times what the trade offs are between going too fast

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Speaker 2: versus too slow, And so it will be a while

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Speaker 2: before they get any clarity on what steps will be

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Speaker 2: taken in Congress in the administration that will begin to

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Speaker 2: bend the curve of those forecasts.

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Speaker 1: As they can. We rewind and play the tape back,

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Speaker 1: because you've lift this, you lift the tax cuts in seventeen,

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Speaker 1: and you lift the trade war in eighteen. And we're

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Speaker 1: asking the same questions of people now that we were

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Speaker 1: asking in the back end of sixteen when President Trump

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Speaker 1: was elected to his first term. Could you share with

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Speaker 1: our audience your experience and at that time time how

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Speaker 1: long things took to really start to consider what was

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Speaker 1: happening on the other side of Washington.

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Speaker 2: So there's the real challenge for the committee when you

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Speaker 2: were watching.

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Speaker 4: How fiscal policy might play out.

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Speaker 2: So you can see today, for example, if you're thinking

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Speaker 2: about tax cuts, as we were back in twenty seventeen,

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Speaker 2: at what point do those feed through the economy? When

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Speaker 2: do you feel their full impact? And importantly, what else

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Speaker 2: is going on that is going to counter whatever you.

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Speaker 5: Might estimate those effects to be. So it is really.

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Speaker 2: A process as it was when I was at the

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Speaker 2: table of saying what are the various scenarios where might

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Speaker 2: we see more immediate impact, and then what tends to

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Speaker 2: play out over a longer timeframe, also taking into account

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Speaker 2: other things going on in this very large and complex.

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Speaker 5: Economy that we're trying to make an assessment of.

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Speaker 1: So that final point, I think is the more important one.

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Speaker 1: The terriss back in eighteen didn't turn out to be

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Speaker 1: as inflationary as some people warned. Is there reason to

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Speaker 1: believe that, given the backdrop now, given the current context

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Speaker 1: for things, that it could be more inflationary this time around?

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Speaker 2: Well, I think, by the Fed's own admission, there are

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Speaker 2: upside risks to inflation right now. Inflation has not returned

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Speaker 2: to target even as it has come down. We are

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Speaker 2: looking at a fiscal situation that is likely to bring

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Speaker 2: upside risk.

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Speaker 4: Here.

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Speaker 2: We're looking at really global trade and changes and shifts. There,

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Speaker 2: so many aspects of what we see playing out today,

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Speaker 2: I think give good reason to be cautious to think

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Speaker 2: about those upside risks even as you watch any given

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Speaker 2: action taken that could be pro inflationary.

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Speaker 1: As the George, thank you for sharing your experience with

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Speaker 1: us this morning. We appreciate it. As always, the former

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Speaker 1: Kansas City FED president there as the George