1 00:00:00,000 --> 00:00:02,960 Speaker 1: And we're joined now by Steve Matthews. He is Bloomberg's 2 00:00:03,000 --> 00:00:05,320 Speaker 1: economic reporter. We're gonna look at what we just heard 3 00:00:05,800 --> 00:00:09,680 Speaker 1: from Mary Daily. So Steve, give me a sense of 4 00:00:09,720 --> 00:00:13,399 Speaker 1: the conversation before we got into the income inequality portion, 5 00:00:13,480 --> 00:00:16,040 Speaker 1: just in terms of near term FED policy. What did 6 00:00:16,040 --> 00:00:20,079 Speaker 1: you pick up on? Yeah, I think the the interesting 7 00:00:20,160 --> 00:00:24,600 Speaker 1: thing is that Mary Daly says, you know, the argument 8 00:00:24,640 --> 00:00:27,600 Speaker 1: in September is going to be between fifty and seventy 9 00:00:27,920 --> 00:00:32,240 Speaker 1: paces points. And in the perspective that she comes from 10 00:00:32,400 --> 00:00:34,520 Speaker 1: is she is one of the leading doves. I mean, 11 00:00:34,720 --> 00:00:37,680 Speaker 1: and you you are hearing over the last two days 12 00:00:38,240 --> 00:00:41,080 Speaker 1: the doves are saying we need to do at least 13 00:00:41,120 --> 00:00:44,879 Speaker 1: fifty in September. You that from Charlie Evans here, that 14 00:00:44,960 --> 00:00:49,519 Speaker 1: from Mary Dally with Kathleen's great interview. You heard that 15 00:00:49,560 --> 00:00:53,199 Speaker 1: from Cash Kari, who has become hawkish. Mary Daly says 16 00:00:53,400 --> 00:00:56,960 Speaker 1: we're going to three point four percent at the end 17 00:00:57,000 --> 00:01:00,480 Speaker 1: of the year and that we're going higher now next year. 18 00:01:01,080 --> 00:01:05,160 Speaker 1: So that's the view of the doves. And while Wall 19 00:01:05,200 --> 00:01:08,959 Speaker 1: Street has been really since the last fo MC meeting 20 00:01:09,480 --> 00:01:12,480 Speaker 1: been saying the FED is on the version of a pivot. 21 00:01:12,680 --> 00:01:15,080 Speaker 1: We could get right cuts in the first half of 22 00:01:15,160 --> 00:01:19,559 Speaker 1: next year. Uh, you're seeing even the doves like Mary 23 00:01:19,640 --> 00:01:22,800 Speaker 1: Daily are pushing back. And she was pretty forceful about it, 24 00:01:22,920 --> 00:01:27,720 Speaker 1: and it was really interesting kind of the emotional context 25 00:01:27,800 --> 00:01:30,840 Speaker 1: she brought to the whole inflation debate. She goes to 26 00:01:30,880 --> 00:01:36,120 Speaker 1: grocery stores and sees people go to go across the 27 00:01:36,200 --> 00:01:39,039 Speaker 1: shelves and pick up products and look at the price 28 00:01:39,160 --> 00:01:42,240 Speaker 1: and then put them back because they can't afford them. 29 00:01:42,240 --> 00:01:45,479 Speaker 1: And there's just it's just heartbreaking that see that, and 30 00:01:45,680 --> 00:01:49,920 Speaker 1: people can't buy products for their kids and they have 31 00:01:50,000 --> 00:01:52,840 Speaker 1: to tell their children no. So it's like, you know, 32 00:01:52,960 --> 00:01:58,760 Speaker 1: there's a real fierce emotional commitment to get an inflation lower. Yes, 33 00:01:59,040 --> 00:02:01,360 Speaker 1: she did speak passion really about the need to get 34 00:02:01,400 --> 00:02:04,480 Speaker 1: inflation under control. But then again, as you say fifty 35 00:02:04,520 --> 00:02:07,680 Speaker 1: point fifty basis points the base case, Uh, can you 36 00:02:07,720 --> 00:02:10,920 Speaker 1: really reconcile these should on the table if the plan 37 00:02:11,040 --> 00:02:15,720 Speaker 1: really is to hammer inflation. Well, she didn't say that 38 00:02:15,760 --> 00:02:19,720 Speaker 1: she was open to seventy right now, her base case 39 00:02:19,880 --> 00:02:23,360 Speaker 1: is fifty. But we get a couple more important data points. 40 00:02:23,400 --> 00:02:26,359 Speaker 1: We have one more employment report, we have one more 41 00:02:26,440 --> 00:02:30,960 Speaker 1: CPI before the September meeting. Uh, and that that they 42 00:02:30,960 --> 00:02:33,880 Speaker 1: will be data dependent and that they will be looking 43 00:02:33,919 --> 00:02:38,359 Speaker 1: at the details of the report. They're worried very much 44 00:02:38,400 --> 00:02:42,640 Speaker 1: about services inflation for example. That you know, even though 45 00:02:43,240 --> 00:02:47,400 Speaker 1: the CPI was very encouraging, which which she acknowledge, you know, 46 00:02:47,480 --> 00:02:50,880 Speaker 1: there are parts of the report that were less encouraging. 47 00:02:50,960 --> 00:02:55,240 Speaker 1: You're still seeing high rep prices, had food prices. So 48 00:02:55,800 --> 00:02:59,519 Speaker 1: you know, she was saying it's a close call. On 49 00:02:59,680 --> 00:03:03,720 Speaker 1: sept Nimber is certainly not ruling out a splint mo. Yeah. 50 00:03:03,720 --> 00:03:05,800 Speaker 1: But one thing that I picked up on Steve, a 51 00:03:05,880 --> 00:03:08,800 Speaker 1: hundred basis points in tightening between now and the end 52 00:03:08,800 --> 00:03:10,760 Speaker 1: of the year. Do you think that's pretty much what 53 00:03:10,840 --> 00:03:15,320 Speaker 1: the market is forecasting very quickly? I think right now 54 00:03:15,400 --> 00:03:18,360 Speaker 1: the market is pretty much an alignment with the FED 55 00:03:18,880 --> 00:03:22,160 Speaker 1: for this year, but not so much for next year. 56 00:03:22,480 --> 00:03:24,440 Speaker 1: All right, Steve, always a pleasure, Thank you so much. 57 00:03:24,480 --> 00:03:28,160 Speaker 1: As Steve Matthews, Bloomberg's economic reporter, joining us from Atlanta, 58 00:03:28,360 --> 00:03:31,000 Speaker 1: he keeps a close eye on all things Fed.