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Speaker 1: Hello, and welcome to another episode of the Odd Lots Podcast.

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Speaker 2: I'm Joe Wisenthal and I'm Tracy Alloway.

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Speaker 1: Tracy, how about that? How about that Jolts report?

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Speaker 2: How about them Jolts?

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Speaker 1: About them jolts?

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Speaker 3: Uh?

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Speaker 2: Yeah, a lot stronger than expected, But I think there's

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Speaker 2: there's a lot of uncertainty around jolts from what I remember.

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Speaker 1: Yeah, well, it's like a I mean, we're recording this

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Speaker 1: October third. These are August Jolts, so you know already.

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Speaker 1: I guess that's like two months ago. I'm always sort

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Speaker 1: of skeptical about job openings data, like what is it

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Speaker 1: really measuring? But nonetheless, this is a measure the number

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Speaker 1: of job openings that there are that people have been

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Speaker 1: paying attention to. It had been coming down, it's jumped

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Speaker 1: back up, and then it just does raise this whole

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Speaker 1: question of like is the economy really sort of the

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Speaker 1: celery into a nice smooth, soft landing or are we

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Speaker 1: still really hot?

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Speaker 4: Well?

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Speaker 2: I know you were looking at jolts, but I've been

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Speaker 2: watching the bond market, yes today, because the other big

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Speaker 2: story in markets is, of course the big bond sell off. Yes,

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Speaker 2: the thirty year treasury yield now at the highest since

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Speaker 2: two thousand and seven, I think something like four point

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Speaker 2: eight percent. Yeah, that's pretty crazy. And there's a lot

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Speaker 2: of discussion right now over what is driving that long

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Speaker 2: end sell off. Is it the higher for a longer

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Speaker 2: stance that we saw from the Federal Reserve a couple

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Speaker 2: of weeks ago, is it worries over supply, could be anything, really, right.

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Speaker 1: We don't really know. And again, the moves that we're

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Speaker 1: seeing in rates really like across the curve, but yet

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Speaker 1: really at the long end, like they do not scream

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Speaker 1: to me like we're in for a soft landing, right,

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Speaker 1: They do not scream to me inflation is about to

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Speaker 1: come down back to target. The Fed is going to

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Speaker 1: be is going to cut sometime soon, and we're going

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Speaker 1: to be, you know, back in like twenty eighteen, twenty

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Speaker 1: nineteen Goldilock's territory. Like, we may get that, but it

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Speaker 1: does not look like what the bond market.

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Speaker 3: Is saying right now.

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Speaker 2: It screams uncertainty to me. Like if you look at

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Speaker 2: the bond sell off and you look at what's going

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Speaker 2: on with jolts, it just seems like we are still

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Speaker 2: in this period where even three years after the absolute

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Speaker 2: depths of the pandemic. It feels like we're not quite

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Speaker 2: sure how the economy is actually operating, what the impact

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Speaker 2: of interest rates are, what's going on with inflation. It's

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Speaker 2: come down, but we're not really sure if we can

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Speaker 2: attribute that to the rate hikes or something else.

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Speaker 1: You mentioned, by the way, the thirty year, but you know,

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Speaker 1: mortgage thirty or mortgages they're coming on eight percent, so

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Speaker 1: regardless or whatever I mean, like talk about a real

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Speaker 1: effect on rates and their effect on rates to the

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Speaker 1: broader economy may be kind of ambiguous, but no, no, no certain.

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Speaker 2: This is why I mentioned the thirty year yield because

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Speaker 2: this is the thing that mortgages are priced off of

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Speaker 2: commercial paper, corporate debt. It is like a big benchmark

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Speaker 2: for the wider economy.

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Speaker 1: So I guess there's questions like what's going on and

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Speaker 1: can we achieve that soft landing are still like huge

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Speaker 1: questions that are.

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Speaker 3: On everyone's mind.

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Speaker 2: Absolutely.

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Speaker 1: You know what I think is a better term than

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Speaker 1: soft landing, by the way, uh.

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Speaker 2: No, Golden path, Golden path.

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Speaker 1: The golden path, I think you know soft landing and knights,

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Speaker 1: but the golden path towards that sort of you know,

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Speaker 1: low unemployment, low inflation, and our guest today recently gave

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Speaker 1: a speech on the prospects of can we achieve that

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Speaker 1: golden path? Can we walk this golden path into the

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Speaker 1: sort of economic nirvana that we all want to see?

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Speaker 2: I know you brought up the golden path just than

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Speaker 2: your new term, but I kind of read it as

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Speaker 2: this time is different speech, and it takes like it's

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Speaker 2: pretty brave to make a this time is different speech.

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Speaker 2: But on the other hand, if any time is going

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Speaker 2: to be different, it might actually be the period after

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Speaker 2: the worst pandemic that we've seen in over one hundred.

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Speaker 1: Years, right exactly. Well, rather than us speculating about whether

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Speaker 1: we can achieve the soft landing, or whether this time

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Speaker 1: will be different, or whether we can walk down this

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Speaker 1: golden path, let's bring onto the podcast. I'm very excited

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Speaker 1: it's his first time on the show. But someone we've

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Speaker 1: on to talk to forever Austin Goldsby, who is the

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Speaker 1: relatively new president of the Chicago Fed. Austin thrilled to

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Speaker 1: have you on the show. I love that term golden path.

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Speaker 1: Can we continue to walk down it? Can we continue

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Speaker 1: to see disinflation with unemployment as low as it is.

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Speaker 4: Ray see Joe, longtime listener, first time caller. Thank you

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Speaker 4: for having me on.

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Speaker 2: Thanks.

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Speaker 4: I've been saying this golden path, I kind of few

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Speaker 4: it as that that would be the mother of all

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Speaker 4: soft landings. Yeah, it's just the to get inflation down

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Speaker 4: as much as we need to get inflation down, and

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Speaker 4: we're part of the way through without having a big recession.

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Speaker 4: As you know, there are a lot of economists who

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Speaker 4: said that is not poss I don't know that it's

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Speaker 4: still probable, but I have been highlighting it is possible

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Speaker 4: now for a variety of reasons that we might be

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Speaker 4: able to do it. And my recent speech was less

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Speaker 4: whether the golden path is possible and more like Tracy said,

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Speaker 4: it wasn't really why this time is different. But I

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Speaker 4: know that's a loaded term. Argument, that's a loaded term.

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Speaker 4: I was just making the argument why the intuition that

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Speaker 4: going back and looking what things were like the last time,

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Speaker 4: the unemployment way was three point seven percent. That's not

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Speaker 4: a great that's not that accurate of a measure at

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Speaker 4: times when there are supply shocks bumping around, at times

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Speaker 4: when expectations are not unhinged like they were the last

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Speaker 4: time inflation got out of control in the nineteen seventies,

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Speaker 4: and because of those differences, just be cautious about using

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Speaker 4: lessons from past periods to be analyzing what's happening right now.

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Speaker 4: And you see it every month when the data come out.

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Speaker 4: You'll see analysts look and say, ooh, the jolts ticked up.

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Speaker 4: That must mean we're overheating. And implicit in that is

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Speaker 4: a logic that the last time the unemployment rate was

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Speaker 4: low and inflation was high, it meant we were overheating.

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Speaker 4: So I just want to be careful of using historical

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Speaker 4: analogies that might not be totally appropriate.

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Speaker 2: I think that's totally fair and something that we've been

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Speaker 2: discussing on this podcast, the idea that everyone tends to

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Speaker 2: reach for the vulgar period of high inflation as their

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Speaker 2: preferred historical analogy, but of course there are others out there,

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Speaker 2: like what happened in the aftermath of the Spanish Flu.

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Speaker 2: We've spoken about that before. But Austin, maybe before we

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Speaker 2: move on, can you just give us give us a

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Speaker 2: little snapshot of the speech that you gave, because you

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Speaker 2: had this great series of charts in there which kind

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Speaker 2: of pointed out I know this time is different is

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Speaker 2: not a preferred term, but you kind of pointed out that, well,

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Speaker 2: things have already been different compared to what traditional economic

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Speaker 2: theory would have suggested.

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Speaker 4: Yeah, look tremendously different. So the starting point, as I've

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Speaker 4: started with this anecdote about my grandfather, who was a

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Speaker 4: wise old guy, and he lived on a ranch in Abilene, Texas,

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Speaker 4: and normally he was a great giver of life advice.

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Speaker 4: But when I took my first job, he wanted to

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Speaker 4: call and tell me never buy stocks. And I, as

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Speaker 4: I said in this speech, I didn't know those my

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Speaker 4: grandpa jack efficient markets guy. I said, you don't buy

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Speaker 4: individual stocks. No, he said, don't buy any stocks. Your

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Speaker 4: grandmother and I knew people that bought stocks. They lost

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Speaker 4: everything when the market crashed. And that idea that one

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Speaker 4: historical episode could live with you for sixty seventy years

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Speaker 4: and influence your behavior, even when it's not necessarily the

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Speaker 4: perfect lesson. There's a little element of that looking back

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Speaker 4: to the Vocar episode or to past history and assuming

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Speaker 4: that there's a let's call it a stable Phillips curve

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Speaker 4: or something like that. So point one is when you

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Speaker 4: have supply shocks going on negative or positive the normal

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Speaker 4: relationship between the contemporaneous economic conditions and the future inflation,

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Speaker 4: those relationships break down or they bend a lot. And

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Speaker 4: if you take kind of a traditional va are in

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Speaker 4: the academic language set up in which you just look

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Speaker 4: at the historical patterns of when they have monetary policy

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Speaker 4: changes and then just look over the average what happens

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Speaker 4: in the quarters and the years that follow. I put

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Speaker 4: that up on a chart and it showed that you

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Speaker 4: usually have long legs to monetary policy. When they take

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Speaker 4: the monetary actions, it's really two years plus before you

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Speaker 4: get the full impact on the economy, and it leads

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Speaker 4: to big drops in GDP. And when inflation starts to drop,

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Speaker 4: it drops a lot, and it only starts dropping after

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Speaker 4: the recession has begun. That's the normal historical pattern. And

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Speaker 4: if you look now, the same logic that says the

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Speaker 4: FED will not be able to pull off the golden

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Speaker 4: path because past history shows that if you want to

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Speaker 4: get inflation down a lot, you must have a serious

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Speaker 4: trade off with economic performance. The last six months are impossible. Okay,

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Speaker 4: inflation has come down a lot, Employment really went up,

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Speaker 4: didn't go down, and we haven't had any recession. So

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Speaker 4: if you looked at that graph, it's kind of the

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Speaker 4: predicted from nine months ago from what the FED has

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Speaker 4: done over the last year or year and a half.

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Speaker 4: What we've experienced looks nothing like the historical record. So, Teresa,

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Speaker 4: you can hear me resisting a little bit using the

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Speaker 4: phrase this time. I get it. It's just when supply

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Speaker 4: shocks are going on, there's no reason to think that

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Speaker 4: the historical relationship would be holding, and you would run

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Speaker 4: a danger of overshooting if you pay too close attention

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Speaker 4: to those kind of metrics. If you're looking at metrics

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Speaker 4: that say we must get the unemployment rate back to

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Speaker 4: four and a half percent, you're going to overshoot if

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Speaker 4: there are positive supply shocks or if the supply chain

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Speaker 4: is healing. And I do think that's extremely relevant on

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Speaker 4: any month of data separate from just individual months are noisy.

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Speaker 4: I think this broader philosophical almost issue that the past

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Speaker 4: is not that great of a guide when you got

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Speaker 4: weird things happening, and the COVID business cycle was maybe

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Speaker 4: the weirdest of all. We just need to keep that

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Speaker 4: in mind as we're deliberating and thinking this through.

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Speaker 1: Yeah, the way I like to think about this or

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Speaker 1: framness in my head is that the last six nine months,

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Speaker 1: maybe a year, it shows that the golden path soft

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Speaker 1: landing is possible in practice, but there still seems to

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Speaker 1: be a considerable, considerable debate about whether it's possible in theory.

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Speaker 1: And that's sort of within determine whether exactly whether we

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Speaker 1: get to target there is I mean, inflation is coming down.

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Speaker 1: The last core PCE print that we got I think

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Speaker 1: it was just this past Friday benign, but you know,

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Speaker 1: most measure is still some heat. The story is, and

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Speaker 1: I think most economists have come around to it, most

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Speaker 1: of the improvement that we've seen in realized disinflation is

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Speaker 1: due to supply side healing. Is there more supply side healing?

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Speaker 3: Is?

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Speaker 1: Do you see that channel as having Are we are

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Speaker 1: we healed? Or do we need to see something on

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Speaker 1: the demand mitigation side? Like sort of the difference between

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Speaker 1: where we are right now on inflation and where like

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Speaker 1: the FED is like, Okay, we are comfortable, We've done that,

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Speaker 1: Like can that still be achieved through normalization? Whatever that means?

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Speaker 4: Well, I want to make two points here. One, let's

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Speaker 4: think about the supply side, but let's loop back and

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Speaker 4: think about the role of expectations in bringing inflation down,

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Speaker 4: because it's critically important and it's it's one of the

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Speaker 4: other things that make our experience of twenty one, twenty

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Speaker 4: two to twenty three very different looking in the fundamentals

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Speaker 4: than the nineteen seventies and make our job different perhaps

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Speaker 4: than than the what the Volker moment was. On the

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Speaker 4: supply side, I talked to a lot of business contacts

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Speaker 4: in the seventh District, you know, which is part of

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Speaker 4: the Midwest. It definitely has been substantial improvement on a

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Speaker 4: lot of supply chain. I think most measures of supply

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Speaker 4: chain say there's still some to come, and it's important

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Speaker 4: and remember when the supply chain fixes, it still works

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Speaker 4: its way through the economy. It's still going to take

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Speaker 4: some time to work its way through the inflation rate.

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Speaker 4: It's not going to be an instant adjustment of inflation

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Speaker 4: when the supply shocks. When the supply socks hit, So

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Speaker 4: I do think there's still some to come. And if

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Speaker 4: you go down in the weeds, if you take like

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Speaker 4: the New York Fed's Supply Chain Index, the New York

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Speaker 4: Fed uses historical data to make a prediction of what

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Speaker 4: are going to be the impacts on inflation, and their

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Speaker 4: index shows that we've mostly returned to where we were

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Speaker 4: before COVID, but that there's still some material amount of

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Speaker 4: dropping inflation that will still come through that channel. So

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Speaker 4: I think both the anecdotes and the data tell you

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Speaker 4: that that's been improving. Now I feel okay because I

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Speaker 4: ident what I'm about to say. I've been saying for

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Speaker 4: a long time that I put on the board here's

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Speaker 4: what we're going to need to see to believe that

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Speaker 4: we are still on the golden path. So I'm not

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Speaker 4: after the fact looking back and saying, oh, it was

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Speaker 4: a B and C. I said before the first thing

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Speaker 4: that has to happen loosely, before COVID, we had two

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Speaker 4: percent inflation or even less on a stable basis, and

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Speaker 4: that was coming. It wasn't that all inflation was at

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Speaker 4: a two percent level. It's that goods were minus one

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Speaker 4: percent a year on average, housing was growing about three

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Speaker 4: or even three and a half percent per year on average,

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Speaker 4: and services not counting housing were two and a half

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Speaker 4: to three. And that combination is how we were getting

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Speaker 4: to one point eight. So we even have a little

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Speaker 4: bit of wiggle room. Any one component could be a

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Speaker 4: little higher than it was before and we could still

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Speaker 4: get to two percent. Definitely. What needed to happen first

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Speaker 4: was goods prices needed to come down. That's the thing

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Speaker 4: that went completely bonkers during the COVID times because it

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Speaker 4: was the first downturn ever where demand for durable goods

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Speaker 4: went up and demand for going to the dentist went down,

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Speaker 4: and that kind of tells you everything you need to

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Speaker 4: know about why this cycle is extremely unusual. Goods prices

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Speaker 4: have largely returned to where they were pre COVID. Then

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Speaker 4: the second thing that has to happen is housing inflation

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Speaker 4: needs to come down, and we believe that it would

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Speaker 4: because of this mechanical part that as market rents change,

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Speaker 4: that's going to slowly filter through the CPI type measures

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Speaker 4: of housing, and you have seen that begin and that

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Speaker 4: needs to continue. The issue of non housing services, we've

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Speaker 4: always known that's the most persistent part of inflation. It

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Speaker 4: doesn't need to get down to two percent for us

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Speaker 4: to hit the target. It wasn't at two percent before COVID,

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Speaker 4: and so in the short to medium run, the critical

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Speaker 4: component to whether we can stay on the golden path

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Speaker 4: is actually about housing because that's the thing that's supposed

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Speaker 4: to come down and needs to keep coming down. There

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Speaker 4: are I do have. Are they concerns? They're probably concerns.

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Speaker 4: They're not yet elevated to the level of fears that

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Speaker 4: the normal dynamics on residential house prices have had some

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Speaker 4: bumps with this aspect that there are a bunch of

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Speaker 4: people locked in because rates were so low for a

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Speaker 4: long time. There are a bunch of people with three

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Speaker 4: percent mortgages who are resisting putting their house on the market.

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Speaker 4: So the supply of existing homes is not what you

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Speaker 4: might normally think, and that's pushed prices the other way,

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Speaker 4: and eventually that could slow the decline of inflation on

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Speaker 4: the CPI style measures of residential inflation. This is the

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Speaker 4: long wind up to say I think the supply chain

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Speaker 4: mostly goes through goods and goods inflation. We've seen the

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Speaker 4: progress that we wanted, So the danger on the goods side,

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Speaker 4: of course, is now with oil prices going up. We

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Speaker 4: know what happens when you get negative supply shocks. We

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Speaker 4: just live through that. So that's an area of concern.

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Speaker 4: And then the second is about labor supply. So there

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Speaker 4: was a big negative shock to the supply of labor.

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Speaker 4: I think that explains part of the persistence and the

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Speaker 4: rise of inflation in other components. But that is also easy.

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Speaker 4: If you look at the job market or if you

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Speaker 4: talk to businesses, it's not fully back to where it

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Speaker 4: was before, but there's been dramatic improvement in the ability

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Speaker 4: to hire and retain new workers. You've seen labor supply,

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Speaker 4: labor force participation of women hitting record levels, labor supply

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Speaker 4: of people of workers with disabilities hitting record levels, both

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Speaker 4: suggesting maybe some of the increased flexibility in the workplace

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Speaker 4: is going to operate a bit like a positive supply shock,

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Speaker 4: so that's kind of promising, and immigration levels returning to

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Speaker 4: something like what the were before also a positive impact

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Speaker 4: on labor supply. So on the real side, I still

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Speaker 4: feel like nothing has happened so far that is convincing

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Speaker 4: evidence that we're off the golden path. And a lot

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Speaker 4: of the markers that we've been hitting are the things

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Speaker 4: that months ago I was saying we would have to

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Speaker 4: hit these markers to believe that this thing is still possible,

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Speaker 4: and so far we've been hitting those.

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Speaker 2: Markers soft landing, golden path, whatever you want to call it.

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Speaker 2: It's very clear why that is a desirable target for

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Speaker 2: the FED to be aiming at. But I guess one

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Speaker 2: of the questions I would have is if we say

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Speaker 2: that a lot of the inflation that we have experienced

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Speaker 2: is driven by supply shocks, is it reason for the

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Speaker 2: FED to take credit for a soft landing in that context?

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Speaker 2: Or like, what would the central bank think it has done?

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Speaker 2: Or what has the impact of higher interest rates actually

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Speaker 2: been in this scenario.

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Speaker 4: Yeah, it's it's important that we think about that in

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Speaker 4: a different way. What matters is the is the actual pudding?

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Speaker 4: You know what I mean, what does it taste like?

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Speaker 4: It's not fighting over the who deserves the credit? Is

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Speaker 4: only informative if it's telling you about the effectiveness of policy.

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Speaker 4: In a way, I think the FED has played an

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Speaker 4: important role in preventing inflation from spiraling upward, and it

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Speaker 4: kind of brings us into the area of inflation expectations.

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Speaker 2: Yeah, sorry, can I ask one really technical question before

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Speaker 2: before we do that, But when you talk about inflation

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Speaker 2: expectations as you did in your recent speech, are you

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Speaker 2: looking at market based measures or surveys or what is

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Speaker 2: your benchmark? Exactly?

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Speaker 4: In that speech, I identified both. There's, as you know, there's

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Speaker 4: a lot of argument by analysts and by economists about

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Speaker 4: exactly that question. And my point was, take any measure

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Speaker 4: you want, take them all. I put up graphs of

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Speaker 4: market based measures, which personally I do like the market

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Speaker 4: based measures and survey measures and estimates from the FED

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Speaker 4: of what those what the market expectations were back in

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Speaker 4: the nineteen seventies. And the crucial thing to see that

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Speaker 4: really came out of a lot of the academic literature

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Speaker 4: on inflation, is that if expectations remain anchored at say

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Speaker 4: two percent, you outline an inflation target of two percent.

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Speaker 4: If it is credible and people believe that the FED

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Speaker 4: will do whatever it takes to get to the target,

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Speaker 4: that is a powerful draw bringing actual inflation down if

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Speaker 4: it's above two percent. So when they're having negotiations or

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Speaker 4: thinking about price increases, what the private market participants believe

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Speaker 4: is going to happen overall will heavily influence wage and

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Speaker 4: price determinations right now. And if you look at expectations

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Speaker 4: in the nineteen seventies, they clearly became massively unhinged. They

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Speaker 4: would ratchet up with each experience of rising inflation. The

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Speaker 4: measures of expectations would rise and not come back down.

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Speaker 4: So you know, if inflation was at two and jumps

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Speaker 4: to six, the expectations, long term inflation expectations would rise,

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Speaker 4: let's say, to three and a half. And then when

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Speaker 4: inflation comes down, it doesn't go back to two, it

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Speaker 4: goes back to three and a half. And then when

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Speaker 4: you get your next bout of inflation, the long run

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Speaker 4: expectations jump up to five and a half. And so

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Speaker 4: you get this ratchet effect. And I showed the graph.

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Speaker 4: It became totally unhinged in the seventies and the experience

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Speaker 4: of the seventies with expectations are what made the Voker

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Speaker 4: experience so difficult and so painful. Now you probably know

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Speaker 4: Paul Voker was a great mentor of mine. I worked

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Speaker 4: with him through the financial crisis, and he's personal hero.

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Speaker 4: And I would ask him all the time about the

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Speaker 4: Voker experience and what was it like in the seventies,

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Speaker 4: and was it hard to convince the FOMC to go along?

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Speaker 4: And you know, what did you think when and interest

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Speaker 4: rates we're twenty percent and things like that, and that experience,

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Speaker 4: the scarring experience of trying to fight inflation when expectations

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Speaker 4: are unhinged, that should be on everyone's mind. And that

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Speaker 4: looks nothing like what happened in twenty one and twenty two.

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Speaker 4: If you plot market based measures of expectations or survey

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Speaker 4: based measures, they go up modestly and they return and

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Speaker 4: they are now they remain very well anchored at something

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Speaker 4: close to the target rate. And that is a sign

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Speaker 4: of FED credibility, and that is crucial. It's absolutely crucial

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Speaker 4: that the FED maintain that credibility because if they don't

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Speaker 4: and the thing becomes unanchored, it becomes dramatically harder to

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Speaker 4: achieve a Golden Path like outcome. If you just go look,

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Speaker 4: and partly I went through some of the theory, We've

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Speaker 4: got two economists at the Chicago FED who kind of

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Speaker 4: redid the traditional model but incorporated market based expectations of

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Speaker 4: several of the variables. In the normal analysis, there is

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Speaker 4: no role for future expectations of the unemployment rate, of

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Speaker 4: the inflation rate, at GDP growth. There is only the

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Speaker 4: backward looking monetary policy happened, how long does it take

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Speaker 4: to have an impact? So what they did is go

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Speaker 4: take some of these expectations measures and put them in

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Speaker 4: a normal analysis, and what they find is that these

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Speaker 4: measures of future expectations do matter. And if you do

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Speaker 4: a model like that, it says that the impact of

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Speaker 4: monetary policy occurs much more quickly then in the historical

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Speaker 4: In a way, it's saying something like, the market expected

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Speaker 4: conditions financial conditions to tighten well before the FED actually

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Speaker 4: started raising rates, and so the clock kind of begins

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Speaker 4: when the market believes it, not when they actually do it.

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Speaker 4: If you think that, then in a way, just go

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Speaker 4: look at the market expectations. Now, the market expects that

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Speaker 4: the FED is only going to raise rates a little

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Speaker 4: bit more, that it's going to keep them a little

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Speaker 4: bit higher for some time, but that that's going to

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Speaker 4: work the market expectations of inflation, or that it's going

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Speaker 4: to in relatively in the relatively near future get back

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Speaker 4: to target and do so without a recession. And it's

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Speaker 4: that that it's in the data is the thing that's

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Speaker 4: driving this, this model and every other model. So we

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Speaker 4: can argue about the details of anyone model, but the

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Speaker 4: fundamental fact that the market expectations are that we're going

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Speaker 4: to pull it off makes it easier to pull it off.

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Speaker 4: Because of that expectations, channel got it.

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Speaker 1: So you talked about, you know, the golden path, you

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Speaker 1: talked about some of you know, how you would decompose

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Speaker 1: getting back to a stable low inflation, a sort of

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Speaker 1: maintain modest goods inflation, maybe a little heat on the

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Speaker 1: shelter side, modest services inflation. Maybe some wiggle room within

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Speaker 1: those three categories, immigrations, picking up supply chain's healing. Maybe

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Speaker 1: we can get there. The one thing that seems unambiguously

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Speaker 1: different between right now and twenty nineteen is rates, And

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Speaker 1: so I guess I'll start with a sort of first question.

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Speaker 1: When you look at the yield curve right now and

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Speaker 1: you see rates shooting up higher and higher, I guess

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Speaker 1: we're still in inversion, but flat all that coming out

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Speaker 1: of inversion. Can you square that story with a golden

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Speaker 1: path story? Is that a market that is consistent with

437
00:29:08,040 --> 00:29:11,080
Speaker 1: a golden path? Or do you see tension between what

438
00:29:11,120 --> 00:29:13,959
Speaker 1: a golden path looks like to you and what market

439
00:29:13,960 --> 00:29:17,120
Speaker 1: participants are pricing it in terms of the trajectory of

440
00:29:17,440 --> 00:29:18,160
Speaker 1: rates going out.

441
00:29:19,800 --> 00:29:22,800
Speaker 4: I kind of think two things. One, I'm struck by

442
00:29:22,840 --> 00:29:28,920
Speaker 4: your comparison. People are comparing the labor market and the

443
00:29:29,000 --> 00:29:31,840
Speaker 4: ratio of unemployment of vacancies and things like that to

444
00:29:32,040 --> 00:29:36,719
Speaker 4: pre COVID, and we're comparing inflation levels to pre COVID.

445
00:29:37,600 --> 00:29:41,360
Speaker 4: It's an interesting racle Joe to say, but the rates

446
00:29:41,360 --> 00:29:44,520
Speaker 4: were a lot lower than if anything, I would have

447
00:29:44,640 --> 00:29:49,360
Speaker 4: thought that would make you more optimistic that inflation would

448
00:29:49,360 --> 00:29:52,840
Speaker 4: come down, because on top of if we could get

449
00:29:52,960 --> 00:29:55,640
Speaker 4: some of the conditions to look like what they were before,

450
00:29:56,240 --> 00:30:00,640
Speaker 4: that those higher rates, higher real rates, would would exert

451
00:30:00,680 --> 00:30:08,440
Speaker 4: a little restraint on things. I guess one answer to

452
00:30:08,480 --> 00:30:12,400
Speaker 4: the question would be me personally, what do I think?

453
00:30:12,680 --> 00:30:15,240
Speaker 4: And one answer the question is what does the market think?

454
00:30:15,560 --> 00:30:18,200
Speaker 4: And I guess the answer to both of those is

455
00:30:19,040 --> 00:30:24,400
Speaker 4: both the market and I think that it's still possible.

456
00:30:24,560 --> 00:30:32,080
Speaker 4: So the market has decided that the SEP higher for

457
00:30:32,200 --> 00:30:37,240
Speaker 4: longer is accurate. And it's yet another in the series

458
00:30:37,280 --> 00:30:40,800
Speaker 4: of the market realizing the FED is serious and there

459
00:30:40,280 --> 00:30:43,640
Speaker 4: we're not bs ing, you know when we when we

460
00:30:43,960 --> 00:30:47,400
Speaker 4: say what we're going to do, but that that hasn't

461
00:30:47,560 --> 00:30:52,400
Speaker 4: led them to predict a recession. The you know, the

462
00:30:52,480 --> 00:30:57,000
Speaker 4: forecast of GDP are for not a recession. So I

463
00:30:57,160 --> 00:31:00,480
Speaker 4: still feel like this is our goal and it's still possible.

464
00:31:01,480 --> 00:31:08,160
Speaker 4: My concerns are less that we're misinterpreting the whether the

465
00:31:08,200 --> 00:31:15,480
Speaker 4: economy is overheating or undershooting, overcooling, whatever's the opposite of overheating.

466
00:31:16,320 --> 00:31:22,200
Speaker 4: My concerns are more past soft landings that were easier

467
00:31:22,200 --> 00:31:26,560
Speaker 4: than the Golden Path version have been derailed, like nineteen

468
00:31:26,640 --> 00:31:31,280
Speaker 4: ninety two thousand and one. They were derailed by external shocks,

469
00:31:31,960 --> 00:31:34,520
Speaker 4: and we got a lot of external shocks that we're

470
00:31:34,520 --> 00:31:36,959
Speaker 4: going to have to monitor. We got the price of

471
00:31:37,360 --> 00:31:42,400
Speaker 4: fuel rising pretty significantly. You've got potential slow down in

472
00:31:42,520 --> 00:31:45,960
Speaker 4: China that could do damage to the rest of the

473
00:31:45,960 --> 00:31:51,640
Speaker 4: world's growth rate. We didn't have a government shutdown, we

474
00:31:51,760 --> 00:31:55,719
Speaker 4: got auto strikes, we got the prospects of government shutdown

475
00:31:56,400 --> 00:32:01,240
Speaker 4: maybe in November, and things like that. If you look

476
00:32:01,240 --> 00:32:05,080
Speaker 4: at past history, they have had negative impacts if they

477
00:32:05,200 --> 00:32:09,440
Speaker 4: last long enough. So that's kind of where my head

478
00:32:09,520 --> 00:32:12,120
Speaker 4: is about whether we could pull it off or not.

479
00:32:12,840 --> 00:32:15,120
Speaker 1: Just maybe if I can reframe the question, what is

480
00:32:15,160 --> 00:32:20,040
Speaker 1: it that's changed in this environment pre pandemic versus now

481
00:32:20,240 --> 00:32:26,080
Speaker 1: such that this sort of benign environment is such higher

482
00:32:26,160 --> 00:32:29,840
Speaker 1: rates are necessary. I mean, again, you know we did

483
00:32:29,920 --> 00:32:32,479
Speaker 1: not need higher rates. We did not need rates at all.

484
00:32:32,480 --> 00:32:36,160
Speaker 1: We basically observe prior to COVID. We certainly did not

485
00:32:36,320 --> 00:32:39,560
Speaker 1: need eight percent mortgage rates to have this sort of,

486
00:32:39,720 --> 00:32:44,400
Speaker 1: you know, a cool inflationary environment. What's changed in your

487
00:32:44,520 --> 00:32:45,680
Speaker 1: view in that time.

488
00:32:46,920 --> 00:32:50,560
Speaker 4: Let's say two. It all depends compared to what and

489
00:32:51,400 --> 00:32:55,440
Speaker 4: so we'll answer the question compared to six months ago

490
00:32:55,840 --> 00:32:57,880
Speaker 4: as we think about the why are the long rates

491
00:32:57,920 --> 00:33:01,720
Speaker 4: going up? But then you're saying, well, let's compare to

492
00:33:01,760 --> 00:33:05,360
Speaker 4: five years ago. The thing is, when we're at the

493
00:33:05,480 --> 00:33:09,920
Speaker 4: zero lower bound, that's not normal. That's you don't the

494
00:33:09,960 --> 00:33:13,000
Speaker 4: central Bank doesn't want to be sitting there bumping around

495
00:33:13,440 --> 00:33:19,520
Speaker 4: at zero interest rates because it restricts the flexibility of

496
00:33:19,560 --> 00:33:23,080
Speaker 4: the central bank, and it restricts the central bank's ability

497
00:33:23,120 --> 00:33:28,920
Speaker 4: to respond to external shocks. Of course, so if you

498
00:33:29,000 --> 00:33:32,480
Speaker 4: take a step back in history, the thing that's oddest

499
00:33:33,160 --> 00:33:36,040
Speaker 4: is why were we at zero for so long? It's

500
00:33:36,080 --> 00:33:40,880
Speaker 4: not why do we have positive interest rates now? If

501
00:33:40,960 --> 00:33:46,480
Speaker 4: you compare to six months ago. Six months ago we

502
00:33:46,480 --> 00:33:50,240
Speaker 4: were trying to figure out is the collapse of Silicon

503
00:33:50,320 --> 00:33:55,120
Speaker 4: Valley Bank, First Republic? Are these indicators that we're about

504
00:33:55,200 --> 00:33:58,480
Speaker 4: to have a financial crisis or some kind of a

505
00:33:58,560 --> 00:34:01,960
Speaker 4: credit crunch a la the savings and loan crisis or

506
00:34:02,000 --> 00:34:05,120
Speaker 4: those kind of things, and there was a much more

507
00:34:05,240 --> 00:34:09,040
Speaker 4: pessimistic view about whether we're going to have a recession

508
00:34:09,080 --> 00:34:14,239
Speaker 4: and is there going to be a significant slowdown. I

509
00:34:14,320 --> 00:34:18,959
Speaker 4: do think compared to that, if you think there's less

510
00:34:19,080 --> 00:34:23,680
Speaker 4: chance of recession and a deep recession would be a

511
00:34:23,719 --> 00:34:27,799
Speaker 4: low rate environment. We've seen that over and over. So

512
00:34:28,520 --> 00:34:32,680
Speaker 4: if you take away the prospects of a financial collapse

513
00:34:32,719 --> 00:34:35,319
Speaker 4: and a back to zero for a long time kind

514
00:34:35,320 --> 00:34:37,719
Speaker 4: of environment, the long rates are going to go up.

515
00:34:37,800 --> 00:34:41,960
Speaker 4: So in that sense, that part is not a puzzle.

516
00:34:42,040 --> 00:34:44,919
Speaker 4: I think the puzzle that people are trying to put

517
00:34:44,960 --> 00:34:47,600
Speaker 4: together is, well, why did it happen in the last

518
00:34:47,640 --> 00:34:50,840
Speaker 4: three weeks and what was it that got announced? Like

519
00:34:50,840 --> 00:34:53,960
Speaker 4: the SEP came out and it was a little different

520
00:34:55,360 --> 00:34:57,839
Speaker 4: than the market expectation, It was a little different than

521
00:34:57,840 --> 00:35:02,400
Speaker 4: the previous SEP. But was it so different that it

522
00:35:02,440 --> 00:35:06,000
Speaker 4: would lead to a material change in a three week period.

523
00:35:06,400 --> 00:35:09,480
Speaker 4: That part's still a puzzle. But if you take a

524
00:35:09,560 --> 00:35:13,600
Speaker 4: six month perspective, in a way, I don't think it's

525
00:35:13,640 --> 00:35:16,239
Speaker 4: that much of a puzzle. It's clear that the long

526
00:35:16,360 --> 00:35:21,960
Speaker 4: rates coming up is what you'd expect, and getting back

527
00:35:22,000 --> 00:35:26,600
Speaker 4: to what I consider a more normal environment where we're

528
00:35:26,640 --> 00:35:30,520
Speaker 4: not hitting the zero lower bound, we don't have seriously

529
00:35:30,680 --> 00:35:33,920
Speaker 4: negative real interest rates for an extended period of time.

530
00:35:35,480 --> 00:35:38,040
Speaker 4: We can argue about what that level is, but it's

531
00:35:38,120 --> 00:35:40,400
Speaker 4: not a surprise that we would be going back to

532
00:35:40,480 --> 00:35:41,200
Speaker 4: something like that.

533
00:35:41,440 --> 00:35:44,080
Speaker 2: Well, just on this note, I take the point that

534
00:35:44,160 --> 00:35:47,560
Speaker 2: the bond market could be reacting to the idea that

535
00:35:47,600 --> 00:35:50,200
Speaker 2: a recession or at least rate cuts are off the table.

536
00:35:50,440 --> 00:35:53,240
Speaker 2: The bond market could also just be wrong, of course,

537
00:35:53,320 --> 00:35:56,560
Speaker 2: But let me ask this question is in a slightly

538
00:35:56,560 --> 00:35:59,560
Speaker 2: different way, which is is there a point at which

539
00:35:59,640 --> 00:36:03,320
Speaker 2: you start to worry about the run up in real

540
00:36:03,400 --> 00:36:06,160
Speaker 2: rates or the sell off in the long end of

541
00:36:06,200 --> 00:36:10,440
Speaker 2: the curve? And you mentioned SVB just then. I mean,

542
00:36:10,440 --> 00:36:13,080
Speaker 2: we know that banks are sitting on huge amounts of

543
00:36:13,200 --> 00:36:15,879
Speaker 2: duration at the moment. It does feel like the sort

544
00:36:15,920 --> 00:36:20,799
Speaker 2: of financial markets channel is a potential path where we

545
00:36:20,840 --> 00:36:23,759
Speaker 2: could maybe get a little bit of trouble. Maybe the

546
00:36:23,760 --> 00:36:27,200
Speaker 2: bond market sell off causes financial conditions to tighten too much.

547
00:36:27,320 --> 00:36:30,440
Speaker 2: Is that something that you're worried about and around you

548
00:36:30,440 --> 00:36:32,600
Speaker 2: know what level would that be a concern for you.

549
00:36:35,120 --> 00:36:37,880
Speaker 4: My only hesitation is on the word worry. That's not

550
00:36:37,960 --> 00:36:42,640
Speaker 4: the right. We absolutely monitor that and are thinking about that,

551
00:36:42,800 --> 00:36:46,160
Speaker 4: and that could be a blow to the to the

552
00:36:46,360 --> 00:36:52,120
Speaker 4: either the financial or the real economy that various manifestations

553
00:36:52,120 --> 00:36:56,759
Speaker 4: of that. That would be the credit crunch hypothesis that

554
00:36:56,840 --> 00:37:00,520
Speaker 4: we were quite nervous about, especially in the wake of

555
00:37:00,600 --> 00:37:04,160
Speaker 4: the of the bank collapses, because in past bank collapses

556
00:37:04,200 --> 00:37:08,600
Speaker 4: you've seen that spiral into credit crunch. But as I

557
00:37:08,600 --> 00:37:12,200
Speaker 4: always say, the you know, it's a very Midwestern thing

558
00:37:12,719 --> 00:37:15,759
Speaker 4: that we're gonna deal with the problems. It doesn't matter

559
00:37:15,800 --> 00:37:17,879
Speaker 4: what the conditions are, you go get the job done.

560
00:37:18,040 --> 00:37:20,760
Speaker 4: You know, out in Chicago there is no bad weather.

561
00:37:21,040 --> 00:37:23,960
Speaker 4: There is only bad clothing. And we're gonna put on

562
00:37:24,000 --> 00:37:26,360
Speaker 4: a parka if we need to put on a parka.

563
00:37:26,400 --> 00:37:31,480
Speaker 4: So if there is a credit crunch, if those things

564
00:37:32,840 --> 00:37:38,080
Speaker 4: materially deteriorate in a way that we haven't seen but

565
00:37:38,320 --> 00:37:43,080
Speaker 4: feared seeing over the last six months, we will adjust.

566
00:37:43,320 --> 00:37:46,320
Speaker 4: And we've got to think about it. We by law,

567
00:37:46,520 --> 00:37:49,560
Speaker 4: we have a dual mandate. As you know, we're gonna

568
00:37:49,600 --> 00:37:54,960
Speaker 4: stabilize prices and maximize employment, and all eyes are on

569
00:37:55,040 --> 00:37:57,920
Speaker 4: getting inflation down. We must get inflation down. That's the

570
00:37:57,960 --> 00:38:00,960
Speaker 4: part of our mandate that we have not been hitting.

571
00:38:01,800 --> 00:38:06,040
Speaker 4: We've been making quite substantial progress on getting the inflation

572
00:38:06,239 --> 00:38:10,279
Speaker 4: rate back down to where we want it. And for

573
00:38:10,400 --> 00:38:14,120
Speaker 4: all of the for all of the attention and heat

574
00:38:14,680 --> 00:38:18,840
Speaker 4: about whether inflation would stall out at three and a half,

575
00:38:19,160 --> 00:38:22,399
Speaker 4: at three, I would just point out, if you take

576
00:38:22,480 --> 00:38:27,200
Speaker 4: the three months performance of inflation, we already blew through

577
00:38:27,280 --> 00:38:32,600
Speaker 4: three percent. We're already getting it down more. And if

578
00:38:32,800 --> 00:38:35,440
Speaker 4: we start to see weakness on the other side of

579
00:38:35,480 --> 00:38:40,080
Speaker 4: the mandate coming from financial conditions getting tighter and that

580
00:38:40,239 --> 00:38:44,840
Speaker 4: leading to more traditional business cycle dynamics where the interest

581
00:38:44,920 --> 00:38:48,560
Speaker 4: rates sensitive sectors like durable goods and autos and stuff

582
00:38:48,600 --> 00:38:53,719
Speaker 4: like that slows, we will adjust to it. You know.

583
00:38:53,760 --> 00:38:57,880
Speaker 4: That's the that's the why the so far chat GPT

584
00:38:58,120 --> 00:39:01,960
Speaker 4: is not going to replace the FOMC. The FOMC is

585
00:39:02,000 --> 00:39:04,279
Speaker 4: a collection of a lot of different people, have a

586
00:39:04,320 --> 00:39:06,200
Speaker 4: lot of different views on the economy, and that's the

587
00:39:06,200 --> 00:39:07,319
Speaker 4: best thing we got going.

588
00:39:07,800 --> 00:39:11,480
Speaker 2: Can you adjust even if inflation is still above target?

589
00:39:11,560 --> 00:39:13,439
Speaker 2: I mean, again, I take the point that it has

590
00:39:13,520 --> 00:39:17,319
Speaker 2: been coming down, But the concern, the major concern is

591
00:39:17,360 --> 00:39:19,759
Speaker 2: that if we start to see it go up again,

592
00:39:19,840 --> 00:39:23,040
Speaker 2: for instance, because of gas prices, which you've already mentioned,

593
00:39:23,400 --> 00:39:27,520
Speaker 2: then maybe it becomes trickier for the Fed to navigate

594
00:39:27,680 --> 00:39:32,400
Speaker 2: some sort of financial markets crisis while maintaining that momentum

595
00:39:32,400 --> 00:39:33,320
Speaker 2: on the price side.

596
00:39:33,880 --> 00:39:41,840
Speaker 4: Tricky is a perfectly accurate word. That's why the FMC exists.

597
00:39:42,000 --> 00:39:44,640
Speaker 4: Is to try to think through the waggles. The worst

598
00:39:44,719 --> 00:39:49,920
Speaker 4: thing you could do is pre announced. Hey, my policy

599
00:39:50,000 --> 00:39:53,160
Speaker 4: is just take whatever last month's inflation rate was and

600
00:39:53,200 --> 00:39:57,560
Speaker 4: whatever last month's unemployment rate was, and just react this

601
00:39:57,680 --> 00:40:03,319
Speaker 4: month at the FOMC table based on one month's data.

602
00:40:03,480 --> 00:40:08,480
Speaker 4: That's the wrong way to do it. I outlined Traditionally,

603
00:40:09,320 --> 00:40:14,319
Speaker 4: the impact of monetary policy has a substantial lag, and

604
00:40:15,120 --> 00:40:20,400
Speaker 4: inflation comes down after a big increases in rates, but

605
00:40:20,640 --> 00:40:26,279
Speaker 4: the inflation comes down only after the recession begins. So

606
00:40:26,880 --> 00:40:30,680
Speaker 4: what we have already experienced over the last six months

607
00:40:31,200 --> 00:40:35,719
Speaker 4: is extremely unusual by historical standards, because the inflation came

608
00:40:35,760 --> 00:40:42,680
Speaker 4: down before or slash without slow down. On the economic side,

609
00:40:43,400 --> 00:40:47,600
Speaker 4: any central banks got to think through are these supply

610
00:40:47,719 --> 00:40:51,680
Speaker 4: shocks or demand shocks? They've got to think through the dynamics,

611
00:40:53,040 --> 00:40:56,120
Speaker 4: by which I mean, what have we already done and

612
00:40:56,239 --> 00:40:58,960
Speaker 4: how much is of that is still to come? How

613
00:40:59,000 --> 00:41:02,319
Speaker 4: much of that impact is is still to come, and

614
00:41:02,400 --> 00:41:05,560
Speaker 4: we don't want to overshoot, and that's a balancing act,

615
00:41:06,239 --> 00:41:08,959
Speaker 4: and we got to strike that balancing act. And that's

616
00:41:09,800 --> 00:41:13,760
Speaker 4: kind of the root of the discussion. But I definitely

617
00:41:13,760 --> 00:41:18,520
Speaker 4: don't want to tie my hands or anybody's hands on

618
00:41:18,719 --> 00:41:24,600
Speaker 4: the FOMC about hypotheticals of like, well, would you vote

619
00:41:24,640 --> 00:41:27,680
Speaker 4: for twenty five basis points up or down or this

620
00:41:27,920 --> 00:41:31,040
Speaker 4: if the inflation rate came in at exactly this and

621
00:41:31,080 --> 00:41:36,560
Speaker 4: it was matched to the unemployment rate? Of why, Because

622
00:41:37,160 --> 00:41:39,120
Speaker 4: there's a lot of art as well as a lot

623
00:41:39,120 --> 00:41:42,680
Speaker 4: of science to monetary policy, and you just got to

624
00:41:42,719 --> 00:41:46,239
Speaker 4: monitor the conditions. That's why I always say I'm in

625
00:41:46,280 --> 00:41:49,239
Speaker 4: the coalition of the data dogs. You know, our thing

626
00:41:49,400 --> 00:41:52,640
Speaker 4: is go sniff, and if you don't know what's happening,

627
00:41:52,680 --> 00:41:55,719
Speaker 4: go sniff some more. That's the that's the root of

628
00:41:55,760 --> 00:41:58,000
Speaker 4: the school of thought where I come from.

629
00:41:58,040 --> 00:42:02,200
Speaker 1: Well, I get your reluctance for patheticals and obviously not

630
00:42:02,320 --> 00:42:06,960
Speaker 1: wanting to tie your hand. Well, it's just sort of

631
00:42:07,000 --> 00:42:12,000
Speaker 1: like a vague hypothetical because you know, let's call.

632
00:42:11,920 --> 00:42:13,320
Speaker 2: It scenario planning.

633
00:42:13,800 --> 00:42:14,880
Speaker 4: Yeah, scenario planning.

634
00:42:15,360 --> 00:42:19,840
Speaker 1: Yeah, Tracy nails it. Scenario planning. But it's basically, you know,

635
00:42:19,920 --> 00:42:23,000
Speaker 1: right now the job is to get inflation down. As

636
00:42:23,040 --> 00:42:25,640
Speaker 1: you said, the actual last few months, you're blowing through

637
00:42:25,640 --> 00:42:27,520
Speaker 1: some of the expectations on the downside.

638
00:42:27,880 --> 00:42:28,160
Speaker 4: Good.

639
00:42:28,600 --> 00:42:31,080
Speaker 1: You know, obviously you have a dual mandate, and one

640
00:42:31,160 --> 00:42:33,600
Speaker 1: side of the mandate is labor, which has been very

641
00:42:33,600 --> 00:42:37,480
Speaker 1: strong by most metrics, including today's jobs report, including on

642
00:42:37,600 --> 00:42:40,759
Speaker 1: employment rate below four percent. But talk to us just

643
00:42:40,920 --> 00:42:45,839
Speaker 1: generally about where the shift would come from. What would

644
00:42:45,840 --> 00:42:52,239
Speaker 1: you need to see such shift of what thinking about cuts? Yeah,

645
00:42:52,239 --> 00:42:54,880
Speaker 1: whether it's on the employment side or just on the

646
00:42:54,920 --> 00:42:57,160
Speaker 1: inflation side, what would be the type of thing to

647
00:42:57,520 --> 00:42:59,759
Speaker 1: sort of get the other side of the mandate, the

648
00:42:59,800 --> 00:43:03,840
Speaker 1: maintaining low employment via cutting. What would you need to

649
00:43:03,840 --> 00:43:04,959
Speaker 1: see to get into that frame?

650
00:43:07,120 --> 00:43:10,919
Speaker 4: Look, the I'm already not don't want to get into

651
00:43:11,600 --> 00:43:18,839
Speaker 4: hypothetical discussions, much less phil hypothetical discussions about philosophy in

652
00:43:18,880 --> 00:43:23,840
Speaker 4: the future. So I kind of can't. I don't have us, okay,

653
00:43:24,480 --> 00:43:28,640
Speaker 4: definitive answer to what would the conditions look like? We

654
00:43:28,680 --> 00:43:33,880
Speaker 4: would not just be past the raising period and past

655
00:43:34,000 --> 00:43:36,000
Speaker 4: the to be fair period, to.

656
00:43:35,960 --> 00:43:38,360
Speaker 1: Be fair to my question, to be fair to my question,

657
00:43:38,520 --> 00:43:41,240
Speaker 1: I get cut well, to be fair to my question

658
00:43:41,560 --> 00:43:44,120
Speaker 1: is why it's not completely out there. I mean, up

659
00:43:44,200 --> 00:43:48,000
Speaker 1: until very recently, the market was pricing in cuts. Actually

660
00:43:48,000 --> 00:43:50,600
Speaker 1: in twenty twenty three, I think those are gone. So

661
00:43:50,640 --> 00:43:52,479
Speaker 1: it was like the market was trying to figure out

662
00:43:52,680 --> 00:43:55,000
Speaker 1: when's the Fed gonna cut? When's the Fed gonna cut?

663
00:43:55,200 --> 00:43:57,000
Speaker 1: You know, it's the down showed Maybe we're not going

664
00:43:57,080 --> 00:43:59,560
Speaker 1: to get any cuts anytime soon. But this is like

665
00:43:59,600 --> 00:44:02,439
Speaker 1: a sort of central question the market trying to figure

666
00:44:02,440 --> 00:44:05,440
Speaker 1: out would it take a recession to get rate coaches

667
00:44:05,560 --> 00:44:06,160
Speaker 1: or could we just.

668
00:44:06,120 --> 00:44:14,440
Speaker 4: Get philosophical basis, the Fed is trying to maximize employment

669
00:44:14,480 --> 00:44:19,120
Speaker 4: and stabilize prices. If we're stabilized prices in a way

670
00:44:19,520 --> 00:44:23,080
Speaker 4: that we felt like we're on the target, then the

671
00:44:23,160 --> 00:44:27,560
Speaker 4: Fed doesn't need to be tightening. And it's it's worth

672
00:44:27,600 --> 00:44:32,680
Speaker 4: remembering holding rates at a level while the inflation rate

673
00:44:32,800 --> 00:44:36,520
Speaker 4: comes down is a form of tightening. The real rate

674
00:44:36,640 --> 00:44:40,520
Speaker 4: is getting tighter as that happens, and the if your

675
00:44:40,560 --> 00:44:43,880
Speaker 4: target is something about real rates and a level of

676
00:44:43,960 --> 00:44:50,640
Speaker 4: restrictiveness that matches your your mandate, The abstract answer to

677
00:44:50,680 --> 00:44:53,440
Speaker 4: your question of when is it time to cut rates

678
00:44:54,200 --> 00:44:59,640
Speaker 4: is when the dual mandate conditions suggest that cutting rates

679
00:45:00,160 --> 00:45:04,480
Speaker 4: is necessary to maintain your to maintain your mandate. So

680
00:45:05,000 --> 00:45:10,720
Speaker 4: if you observe big increases in unemployment, big drops in GDP,

681
00:45:11,200 --> 00:45:15,600
Speaker 4: what looks like a recession in past business cycles, those

682
00:45:15,719 --> 00:45:20,120
Speaker 4: can come on quite suddenly. You know, they can come

683
00:45:20,160 --> 00:45:24,279
Speaker 4: on rapidly, they say of the unemployment rate. Usually it

684
00:45:24,400 --> 00:45:26,640
Speaker 4: rises like a rocket, it goes down like a feather.

685
00:45:27,000 --> 00:45:31,440
Speaker 4: So if you start to see rocketing higher unemployment rates

686
00:45:32,280 --> 00:45:38,880
Speaker 4: while the inflation target remains tame, then that's a sign

687
00:45:38,960 --> 00:45:41,080
Speaker 4: that the dual mandate, the other part of the dual

688
00:45:41,120 --> 00:45:42,240
Speaker 4: mandate you got to think about.

689
00:45:59,480 --> 00:46:02,399
Speaker 2: So we've been talking a lot about soft landing, golden path,

690
00:46:02,480 --> 00:46:04,799
Speaker 2: and again, as you pointed out in your speech, that

691
00:46:04,920 --> 00:46:06,680
Speaker 2: is a tantalizing prospect.

692
00:46:06,840 --> 00:46:10,480
Speaker 4: I like how you keep I don't know if it's

693
00:46:10,520 --> 00:46:13,800
Speaker 4: a if it's a gift to me or to Joe,

694
00:46:14,040 --> 00:46:17,440
Speaker 4: But you want to say soft landing, but then you

695
00:46:17,560 --> 00:46:21,320
Speaker 4: add slash golden paths. I'm just going to difference the

696
00:46:21,880 --> 00:46:25,520
Speaker 4: path and the soft landing is that the golden path

697
00:46:25,719 --> 00:46:28,520
Speaker 4: is the biggest of all the soft landings. That's when

698
00:46:28,560 --> 00:46:30,719
Speaker 4: the softest of the soft land.

699
00:46:30,480 --> 00:46:33,240
Speaker 1: That's when they chisel all of your all the faces

700
00:46:33,280 --> 00:46:35,839
Speaker 1: on Mount rush. That's right, when you hit the golden path.

701
00:46:36,320 --> 00:46:38,600
Speaker 4: That's right, the golden path. I get that.

702
00:46:38,640 --> 00:46:42,160
Speaker 2: It's a great thing to aim for and a tantalizing

703
00:46:42,200 --> 00:46:45,920
Speaker 2: prospect for policymakers. Do you worry at all about the

704
00:46:45,960 --> 00:46:48,280
Speaker 2: no landing scenario anymore?

705
00:46:48,360 --> 00:46:48,480
Speaker 4: Like?

706
00:46:48,560 --> 00:46:51,120
Speaker 2: Is that still a tail risk? The idea that well,

707
00:46:51,200 --> 00:46:56,759
Speaker 2: maybe landing meaning inflation, inflation stays above target, but unemployment

708
00:46:57,000 --> 00:47:00,319
Speaker 2: is still relatively low, rates remain pretty high.

709
00:47:01,640 --> 00:47:03,560
Speaker 4: I would tell you that, I mean, maybe this is

710
00:47:03,600 --> 00:47:06,960
Speaker 4: too blunt. I don't worry about the no landing scenario

711
00:47:07,320 --> 00:47:10,520
Speaker 4: because the FED will never allow it. The prospect that

712
00:47:11,080 --> 00:47:15,200
Speaker 4: will just surrender and give up without getting inflation down

713
00:47:15,400 --> 00:47:19,000
Speaker 4: to the target, that will not happen. The I can't.

714
00:47:19,120 --> 00:47:21,880
Speaker 4: I'm not allowed to speak for anybody else on the FMC,

715
00:47:22,320 --> 00:47:26,239
Speaker 4: but for me, I will, over my dead body, will

716
00:47:26,280 --> 00:47:29,680
Speaker 4: that happened. And I feel like my mentor Paul Volger

717
00:47:30,200 --> 00:47:33,920
Speaker 4: is whispering. My ghost will come back to haunt you

718
00:47:34,000 --> 00:47:37,960
Speaker 4: forever if you don't. If you do not get us

719
00:47:38,040 --> 00:47:41,280
Speaker 4: back to inflation, we will get inflation back to the target.

720
00:47:41,520 --> 00:47:46,360
Speaker 4: So I don't view the no landing scenario as that

721
00:47:46,560 --> 00:47:48,719
Speaker 4: that's not a foremost risk in my mind.

722
00:47:48,760 --> 00:47:49,920
Speaker 2: All right, you're serious about it.

723
00:47:49,960 --> 00:47:53,680
Speaker 1: I got it. You look, you're congressionally healthy.

724
00:47:54,760 --> 00:48:00,680
Speaker 4: No, all I would tell people is this upset of

725
00:48:00,760 --> 00:48:06,160
Speaker 4: folks who want to constantly express doubt. Ah, the FED

726
00:48:06,200 --> 00:48:09,399
Speaker 4: will never do it. The FED won't achieve that FED

727
00:48:09,440 --> 00:48:11,680
Speaker 4: doesn't have the guts to kids raise the raids. They

728
00:48:11,680 --> 00:48:14,360
Speaker 4: don't have the guts to keep the raids there. Remember

729
00:48:14,640 --> 00:48:19,080
Speaker 4: the lesson of Silicon Valley Bank, which I couldn't for

730
00:48:19,120 --> 00:48:22,040
Speaker 4: the life of me understand. The Silicon Valley Bank knew

731
00:48:22,040 --> 00:48:25,160
Speaker 4: they don't have a traditional deposit franchise, and they knew

732
00:48:25,200 --> 00:48:27,600
Speaker 4: they hold a bunch of bonds and that the rates

733
00:48:27,600 --> 00:48:29,640
Speaker 4: are going up. So I could not, for the life

734
00:48:29,680 --> 00:48:32,719
Speaker 4: of me understand why did they just hedge? Why if

735
00:48:32,760 --> 00:48:35,680
Speaker 4: you know you have these vulnerabilities, just hedge it? And

736
00:48:35,760 --> 00:48:39,359
Speaker 4: the answer if you go through the bar report, they

737
00:48:39,400 --> 00:48:43,440
Speaker 4: did hedge. But then they thought that the FED wouldn't

738
00:48:43,480 --> 00:48:46,880
Speaker 4: stick it out, and that they would make more money

739
00:48:47,120 --> 00:48:49,640
Speaker 4: if they got rid of the hedges, and so they

740
00:48:49,640 --> 00:48:53,200
Speaker 4: got rid of them. And that's yet another in the

741
00:48:53,280 --> 00:48:56,719
Speaker 4: long line of lessons. Don't bet against the FED. That's

742
00:48:56,760 --> 00:48:57,279
Speaker 4: not a good night.

743
00:48:57,440 --> 00:49:01,560
Speaker 1: So basically they made the ultimate price of fighting the FED,

744
00:49:01,760 --> 00:49:02,719
Speaker 1: and no.

745
00:49:02,440 --> 00:49:05,560
Speaker 4: No, they made a bet. They took a bet against

746
00:49:05,560 --> 00:49:09,520
Speaker 4: the FED being being committed to its target or doing

747
00:49:09,520 --> 00:49:11,040
Speaker 4: what it was said it was going to do. And

748
00:49:11,080 --> 00:49:13,160
Speaker 4: that was not a good that was not smart. So

749
00:49:14,520 --> 00:49:17,120
Speaker 4: I feel that way here too. The FED is not

750
00:49:17,160 --> 00:49:19,759
Speaker 4: going to give up all the inflation rates three and

751
00:49:19,800 --> 00:49:22,640
Speaker 4: a half percent. It's too hard to get it down anymore.

752
00:49:22,760 --> 00:49:25,080
Speaker 4: That's totally wrong. That is not the FED is not

753
00:49:25,120 --> 00:49:25,719
Speaker 4: going to do that.

754
00:49:25,760 --> 00:49:29,400
Speaker 2: I'm kind of getting whatever it takes, vibes, whatever it takes. Y.

755
00:49:29,520 --> 00:49:32,440
Speaker 4: Yes, well, we've said I don't know what you're getting

756
00:49:32,480 --> 00:49:34,760
Speaker 4: that vibe. I don't know how to say it anymore.

757
00:49:34,840 --> 00:49:37,279
Speaker 4: That we will do whatever it takes to get the

758
00:49:37,320 --> 00:49:39,759
Speaker 4: band aid down. That's the law. The law tells us

759
00:49:39,760 --> 00:49:41,600
Speaker 4: we have to do that. You know.

760
00:49:41,719 --> 00:49:45,520
Speaker 1: One of the maxims in markets is that narrative follows price.

761
00:49:45,680 --> 00:49:47,879
Speaker 1: And one of the things that is coming on big

762
00:49:47,920 --> 00:49:49,240
Speaker 1: time with this rise.

763
00:49:49,160 --> 00:49:51,920
Speaker 4: Is that a maxim narrative follows price. I like that.

764
00:49:52,200 --> 00:49:54,719
Speaker 1: Yeah, you know, something happens and then people tell a

765
00:49:54,760 --> 00:49:58,200
Speaker 1: story about whye. But with the rising rates, there has

766
00:49:58,239 --> 00:50:01,880
Speaker 1: been a crescendo of a weirdess, a big pic about

767
00:50:02,000 --> 00:50:06,280
Speaker 1: the deficit and expansionary fiscal policy and how the deficit

768
00:50:06,360 --> 00:50:08,279
Speaker 1: is a percentage of GDP or however you want to

769
00:50:08,320 --> 00:50:11,440
Speaker 1: measure it is much higher than it normally is with

770
00:50:11,640 --> 00:50:16,239
Speaker 1: unemployment below four percent and structurally high deficits for a

771
00:50:16,280 --> 00:50:19,040
Speaker 1: long time to come. And I know you don't you know,

772
00:50:19,080 --> 00:50:22,040
Speaker 1: I understand the whole not commenting on fiscal policy in

773
00:50:22,120 --> 00:50:24,920
Speaker 1: terms of giving just about to say that, I know,

774
00:50:24,960 --> 00:50:27,800
Speaker 1: I know, we all know that. We all know that part.

775
00:50:28,000 --> 00:50:31,680
Speaker 1: But from a sort from a FED standpoint, it is

776
00:50:31,719 --> 00:50:33,880
Speaker 1: your job to you know, as you say, do the

777
00:50:34,360 --> 00:50:37,280
Speaker 1: Congress gives you that job? Does it make it harder?

778
00:50:37,560 --> 00:50:39,080
Speaker 1: And on a sustained basis?

779
00:50:39,280 --> 00:50:39,480
Speaker 3: Is it?

780
00:50:39,520 --> 00:50:42,239
Speaker 1: I is it a force for keeping rates as high

781
00:50:42,320 --> 00:50:45,840
Speaker 1: as they are From the Fed's perspective, that fiscal policy

782
00:50:45,880 --> 00:50:50,319
Speaker 1: appears to be so loose without any change to that insight.

783
00:50:51,680 --> 00:50:55,000
Speaker 4: Is starting from your observation. I'm a FED man, now,

784
00:50:55,239 --> 00:50:58,400
Speaker 4: I don't. My job is not to go argue about

785
00:50:58,480 --> 00:51:02,520
Speaker 4: what the fiscal polity he should be or is. Like

786
00:51:02,600 --> 00:51:07,680
Speaker 4: I said before, FED mandate is you take the conditions,

787
00:51:07,719 --> 00:51:11,640
Speaker 4: whatever the conditions are, and figure out how to maximize

788
00:51:11,640 --> 00:51:15,880
Speaker 4: employment and stabilize prices. And that's what we're gonna do.

789
00:51:16,040 --> 00:51:20,800
Speaker 4: I mean that there's a whole argument among the fiscal

790
00:51:20,960 --> 00:51:27,480
Speaker 4: policy minded economists about things like measurement and is what's

791
00:51:27,520 --> 00:51:30,120
Speaker 4: the proper measure of debt and what's the proper measure

792
00:51:30,200 --> 00:51:35,680
Speaker 4: of fiscal policy? And from a GDP kind of impulse perspective,

793
00:51:36,560 --> 00:51:40,480
Speaker 4: isn't it all about delta from last year? So if

794
00:51:40,520 --> 00:51:43,080
Speaker 4: the deficit is big, but it's smaller than it was

795
00:51:43,239 --> 00:51:46,160
Speaker 4: last year, is that does that mean the fiscal impulse

796
00:51:46,239 --> 00:51:52,319
Speaker 4: is going down? I don't, I studiously don't have an

797
00:51:52,400 --> 00:51:56,759
Speaker 4: opinion about fiscal policy. I just tell you we're going

798
00:51:56,840 --> 00:52:02,040
Speaker 4: to watch the conditions and on the ground. If whatever external, internal,

799
00:52:02,200 --> 00:52:07,359
Speaker 4: or other shocks lead inflation to go up or unemployment

800
00:52:07,400 --> 00:52:10,560
Speaker 4: to go up, then that's the kind of stuff that

801
00:52:10,960 --> 00:52:13,959
Speaker 4: we're going to be factoring into our decisions for sure.

802
00:52:14,920 --> 00:52:18,600
Speaker 1: Austin Golesby, such a thrill to finally have you on

803
00:52:18,640 --> 00:52:21,120
Speaker 1: the show. Really appreciate you coming on on lots.

804
00:52:21,280 --> 00:52:23,600
Speaker 4: Absolutely my pleasure. Keep up the good work.

805
00:52:23,800 --> 00:52:26,040
Speaker 2: Thanks so much, Austin. I have that I have the

806
00:52:26,080 --> 00:52:29,160
Speaker 2: clip of what is it Tim Allen from Galaxy Quest

807
00:52:29,200 --> 00:52:31,520
Speaker 2: going never give up, never surrender in my head.

808
00:52:32,480 --> 00:52:33,040
Speaker 4: That's right.

809
00:52:33,160 --> 00:52:37,480
Speaker 1: Thank you for indulging about credibility, all of our hypotheticals,

810
00:52:37,560 --> 00:52:41,279
Speaker 1: our philosophical hypotheticals, our attempts to get you to, you know,

811
00:52:41,760 --> 00:52:44,520
Speaker 1: comment on physical policy. Appreciate you playing along.

812
00:52:45,400 --> 00:52:48,160
Speaker 4: You guys do great work. Thank you, it's really my pleasure,

813
00:52:48,280 --> 00:52:50,320
Speaker 4: and thank you for for inviting. Thanks.

814
00:52:50,520 --> 00:52:52,280
Speaker 2: We're going to send that clip to our bosses.

815
00:52:54,200 --> 00:52:55,000
Speaker 1: Take care, Austin.

816
00:52:55,239 --> 00:53:09,080
Speaker 3: Yeah, thank you, Tracy.

817
00:53:09,120 --> 00:53:12,319
Speaker 1: I really like the way he sort of frame this

818
00:53:12,440 --> 00:53:16,239
Speaker 1: sort of golden path question, which is that theft the

819
00:53:16,280 --> 00:53:19,240
Speaker 1: soft landing question, which is, you know, there's a few

820
00:53:19,280 --> 00:53:22,439
Speaker 1: things we would want to see to know that we're

821
00:53:22,480 --> 00:53:26,319
Speaker 1: getting back to something to the fence goals, and at

822
00:53:26,440 --> 00:53:28,759
Speaker 1: least so far as he sees it, and I think

823
00:53:28,800 --> 00:53:31,680
Speaker 1: it makes a good case. There hasn't been anything to

824
00:53:31,760 --> 00:53:34,440
Speaker 1: disprove it. It doesn't mean it's guaranteed to happen, but

825
00:53:34,520 --> 00:53:36,680
Speaker 1: we have yet to have something that says, oh no, no,

826
00:53:36,719 --> 00:53:37,479
Speaker 1: we're off the path.

827
00:53:37,719 --> 00:53:37,959
Speaker 4: Well.

828
00:53:38,040 --> 00:53:42,440
Speaker 2: Also, his point about keeping interest rates high as inflation

829
00:53:42,920 --> 00:53:47,040
Speaker 2: falls being a de facto tightening that makes a lot

830
00:53:47,040 --> 00:53:48,840
Speaker 2: of sense to me, and I think that kind of

831
00:53:48,840 --> 00:53:51,879
Speaker 2: plays into the long and variable lags idea that we're

832
00:53:51,960 --> 00:53:54,200
Speaker 2: still seeing the effects of a lot of higher interest

833
00:53:54,280 --> 00:53:58,799
Speaker 2: rates kind of filter through. That said, I wonder if

834
00:53:58,800 --> 00:54:04,560
Speaker 2: there's sort of a tension between forward guidance and crushing,

835
00:54:05,040 --> 00:54:11,160
Speaker 2: crushing inflation expectations while maintaining the flexibility that the Fed

836
00:54:11,280 --> 00:54:14,720
Speaker 2: is clearly trying to hold on too, right, because Austin

837
00:54:14,800 --> 00:54:18,160
Speaker 2: was very adamant about well, you know, we don't want

838
00:54:18,160 --> 00:54:23,040
Speaker 2: to bind ourselves to any one particular path, which all

839
00:54:23,040 --> 00:54:26,720
Speaker 2: makes sense from their perspective, But if the big wild

840
00:54:26,880 --> 00:54:30,680
Speaker 2: card is inflation expectations, then I don't know, it feels

841
00:54:30,719 --> 00:54:31,719
Speaker 2: like there's a tension there.

842
00:54:32,239 --> 00:54:37,759
Speaker 1: I still feel some level of unsatisfaction. It's not like

843
00:54:37,800 --> 00:54:40,600
Speaker 1: Austin or anything we're saying, but this question of like, okay,

844
00:54:40,680 --> 00:54:42,920
Speaker 1: if inflation is coming down, right, it is, it's come

845
00:54:42,960 --> 00:54:45,400
Speaker 1: down a lot, and as he said, the last actually

846
00:54:45,480 --> 00:54:47,719
Speaker 1: last few months, like they're really like, you know, it's

847
00:54:47,840 --> 00:54:49,719
Speaker 1: it's been really cool. Maybe it'll pick back up a

848
00:54:49,760 --> 00:54:53,360
Speaker 1: little bit. Why do we just see the sustained day

849
00:54:53,440 --> 00:54:56,759
Speaker 1: after day pressure And you could tell a story kind

850
00:54:56,760 --> 00:55:00,040
Speaker 1: of like Austin has, which is that, well, that's the

851
00:55:00,000 --> 00:55:01,520
Speaker 1: the market saying the Fed is going to do its

852
00:55:01,600 --> 00:55:04,040
Speaker 1: job right. So that's I guess there's a positive spin

853
00:55:04,280 --> 00:55:07,279
Speaker 1: but why does the Fed need to keep rates? Why

854
00:55:07,360 --> 00:55:10,440
Speaker 1: is the market anticipating that the Fed will need to

855
00:55:10,520 --> 00:55:13,439
Speaker 1: keep rates as high as they are just to get

856
00:55:13,480 --> 00:55:16,960
Speaker 1: back to macro conditions? Like Lisa a few years ago,

857
00:55:17,320 --> 00:55:19,200
Speaker 1: I sort of feel like the answer must on some

858
00:55:19,400 --> 00:55:22,080
Speaker 1: level have to do with the big a shift in

859
00:55:22,120 --> 00:55:26,120
Speaker 1: fiscal policy. But I'm not really sure. But like, you know,

860
00:55:26,280 --> 00:55:29,759
Speaker 1: it's great that, it's great that on low employment, it's

861
00:55:29,800 --> 00:55:32,920
Speaker 1: great if inflation gets back to two percent, But I

862
00:55:32,920 --> 00:55:35,840
Speaker 1: don't want to pay eight percent for a mortgage, you know, Like,

863
00:55:35,880 --> 00:55:37,560
Speaker 1: why do I didn't need to pay eight percent for

864
00:55:37,640 --> 00:55:39,560
Speaker 1: mortgage in twenty nineteen for these conditions.

865
00:55:39,600 --> 00:55:41,360
Speaker 2: No, it's a good point. It's also I mean, just

866
00:55:41,400 --> 00:55:46,160
Speaker 2: to put it more simplistically, it feels like inflation is

867
00:55:46,200 --> 00:55:49,600
Speaker 2: coming down, but we're still not entirely sure why or

868
00:55:49,640 --> 00:55:52,799
Speaker 2: if interest rate hikes actually had much to do with it,

869
00:55:52,840 --> 00:55:56,520
Speaker 2: because again, as Austin pointed out, things like the most

870
00:55:56,560 --> 00:56:00,400
Speaker 2: interest rate sensitive portions of the economy like housing, have

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Speaker 2: kind of surprised to the upside, at least for now.

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Speaker 4: Yeah.

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Speaker 1: No, it really does seem like on some level a

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00:56:07,360 --> 00:56:10,279
Speaker 1: big chunk of the inflation and it, you know, I

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Speaker 1: not to go back to the old persistent versus transitory debates.

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Speaker 1: But at least on some level, a big chunk of

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Speaker 1: the rise in inflation in the fall seems to have

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00:56:21,120 --> 00:56:24,640
Speaker 1: to be seems to do with sort of economic dislocation,

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00:56:24,800 --> 00:56:27,200
Speaker 1: is related to COVID whatever they are. And then the

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Speaker 1: question is is it all of it? Is it eighty

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00:56:30,440 --> 00:56:32,359
Speaker 1: percent of it? Is it fifty percent of it? And

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Speaker 1: what is it actually going to take to get to,

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Speaker 1: you know, the end of the golden path.

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Speaker 2: Yeah? Absolutely, all right, Well for now, shall we leave

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Speaker 2: it there?

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Speaker 1: Let's leave it there.

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Speaker 2: Okay, this has been another episode of the Odd Thoughts podcast.

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00:56:43,920 --> 00:56:46,840
Speaker 2: I'm Tracy Alloway. You can follow me at Tracy Alloway.

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00:56:47,200 --> 00:56:50,000
Speaker 1: I'm Joe Wisenthal. You can follow me at the Stalwart.

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00:56:50,120 --> 00:56:54,000
Speaker 1: Follow our guest Austin Goolesby. He's at Austin Underscore Goulesby.

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00:56:54,400 --> 00:56:58,040
Speaker 1: Follow our producers Carmen Rodriguez at Carmen Arman, dash O

892
00:56:58,080 --> 00:57:01,040
Speaker 1: Bennett at dashbod and a big thanks to Moses Onam.

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00:57:01,360 --> 00:57:04,879
Speaker 1: Follow all of the Bloomberg podcasts under the handle at podcasts,

894
00:57:05,160 --> 00:57:07,719
Speaker 1: and for more oddlogs content, go to Bloomberg dot com

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00:57:07,760 --> 00:57:10,960
Speaker 1: slash odd Lots where we post transcripts, a blog and

896
00:57:11,000 --> 00:57:14,200
Speaker 1: a newsletter, and you can chat about all this in

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00:57:14,280 --> 00:57:17,560
Speaker 1: our discord People Talking There twenty four to seven. There's

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00:57:17,600 --> 00:57:19,880
Speaker 1: gonna be a lot of conversation in there about monetary

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00:57:19,920 --> 00:57:23,120
Speaker 1: policy in this one discord dot gg slash online.

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00:57:23,400 --> 00:57:26,360
Speaker 2: And if you enjoy odd Lots, if you like our

901
00:57:26,480 --> 00:57:29,640
Speaker 2: interviews with FED policymakers, if you want us to work

902
00:57:29,680 --> 00:57:32,600
Speaker 2: our way up to Jerome Powell, then please leave us

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Speaker 2: a positive review on your favorite podcast platform. Thanks for

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00:57:36,120 --> 00:57:36,480
Speaker 2: listening

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00:58:02,320 --> 00:58:03,280
Speaker 3: In AG