1 00:00:00,080 --> 00:00:14,280 Speaker 1: Bloomberg Audio Studios, podcasts, radio news, A. 2 00:00:14,320 --> 00:00:17,599 Speaker 2: Single best idea, how about an extended version? Just some 3 00:00:17,920 --> 00:00:24,120 Speaker 2: phenomenal conversation. Major shout out to the FED deicides team yesterday, 4 00:00:24,360 --> 00:00:27,640 Speaker 2: it was not only the most interesting meeting of the 5 00:00:27,720 --> 00:00:30,160 Speaker 2: years we've done, the FED decides it was the most 6 00:00:30,280 --> 00:00:33,760 Speaker 2: interesting meeting. I'll say back to the early eighties and 7 00:00:33,800 --> 00:00:37,400 Speaker 2: Wayne Angel I'm guessing there, back to the vulgar years. 8 00:00:37,680 --> 00:00:42,000 Speaker 2: Absolutely twisted. I don't mean that in a negative way, 9 00:00:42,000 --> 00:00:47,040 Speaker 2: but just a twisted meeting of convolutions, discombobulated, I'll let 10 00:00:47,040 --> 00:00:49,680 Speaker 2: you pick the right word for it. Market's all over 11 00:00:49,720 --> 00:00:52,760 Speaker 2: the place during the meeting, and then a moonshot this 12 00:00:52,840 --> 00:00:56,080 Speaker 2: morning as people tried to figure out a new accommodation 13 00:00:56,320 --> 00:01:00,200 Speaker 2: by her central Bank. We called upon Francis Donald's she's 14 00:01:00,240 --> 00:01:04,800 Speaker 2: at RBCT Capital Markets. Her interpretation of what was wrought. 15 00:01:05,080 --> 00:01:07,360 Speaker 3: I felt like it was more like a breakdancing than 16 00:01:07,520 --> 00:01:11,120 Speaker 3: ballet yesterday because there was a little bit more chaos 17 00:01:10,760 --> 00:01:14,679 Speaker 3: and not necessarily super clear messaging. It didn't feel like 18 00:01:14,760 --> 00:01:18,000 Speaker 3: it was very well choreographed in general, or at least 19 00:01:18,000 --> 00:01:21,720 Speaker 3: there were dislocations within it. What I heard yesterday from 20 00:01:21,800 --> 00:01:24,399 Speaker 3: Chair Powell, I know you've probably already talked about it 21 00:01:24,400 --> 00:01:27,960 Speaker 3: one hundred times. Was there are no risk free paths ahead? 22 00:01:28,360 --> 00:01:31,520 Speaker 3: This was a haunting comment from a central banker, but 23 00:01:31,560 --> 00:01:35,480 Speaker 3: it also reflects the underlying US economy, which is that 24 00:01:35,640 --> 00:01:38,680 Speaker 3: we are still in the air pocket before we will 25 00:01:38,720 --> 00:01:41,679 Speaker 3: know the impact of this once in one hundred year 26 00:01:41,959 --> 00:01:44,600 Speaker 3: trade shock that has hit the US economy. It is 27 00:01:44,680 --> 00:01:47,240 Speaker 3: our view that there are still significant inventories in the 28 00:01:47,319 --> 00:01:50,120 Speaker 3: United States, and we don't know whether companies will truly 29 00:01:50,160 --> 00:01:53,400 Speaker 3: pass on those costs to inflation or whether they will 30 00:01:53,400 --> 00:01:56,120 Speaker 3: have to cut their own costs, and that will come 31 00:01:56,160 --> 00:01:58,760 Speaker 3: down to labor. And so when you talk about data dependency, 32 00:01:58,840 --> 00:02:02,160 Speaker 3: Tom I'm looking at is one single data point, which 33 00:02:02,240 --> 00:02:04,640 Speaker 3: is how many inventories are left in the United States 34 00:02:04,800 --> 00:02:07,480 Speaker 3: and how long until we answer that question? Because neither 35 00:02:07,520 --> 00:02:10,200 Speaker 3: of those paths are good, but they result in very 36 00:02:10,240 --> 00:02:11,840 Speaker 3: different focuses from a central. 37 00:02:11,600 --> 00:02:15,160 Speaker 2: Bank Francis Donald on inventories, looking at the tariff impact, 38 00:02:15,200 --> 00:02:19,200 Speaker 2: which I was shocked with so little discussed yesterday as well. 39 00:02:19,840 --> 00:02:25,120 Speaker 2: Each former president and frankly president President of the Central Bank, 40 00:02:25,320 --> 00:02:28,560 Speaker 2: the many of them have a different character. It was 41 00:02:28,600 --> 00:02:32,240 Speaker 2: a perfect day to speak to Robert Kaplan, former president 42 00:02:32,280 --> 00:02:34,600 Speaker 2: of the Dallas FED, with all of his work at 43 00:02:34,840 --> 00:02:41,639 Speaker 2: HBS and at Goldman Sachs on innovation, on process, on technology, 44 00:02:42,320 --> 00:02:46,560 Speaker 2: on the Central Bank. Robert Kaplan of Goldman Sex on 45 00:02:46,720 --> 00:02:48,520 Speaker 2: the FED and the economy. 46 00:02:48,800 --> 00:02:51,800 Speaker 4: I think that the FED pays attention to financial markets, 47 00:02:51,800 --> 00:02:56,519 Speaker 4: but it's got to set monetary policy based on the economy. 48 00:02:56,960 --> 00:03:02,280 Speaker 4: And right now you have a divergence. You've got regulatory 49 00:03:02,400 --> 00:03:09,000 Speaker 4: review reform coming, you've got tax incentives coming, accelerated appreciation, 50 00:03:09,120 --> 00:03:12,880 Speaker 4: you got an AI boom. Those three things are not 51 00:03:13,040 --> 00:03:17,560 Speaker 4: really in the economy quite yet, and so you've got 52 00:03:17,560 --> 00:03:21,239 Speaker 4: a sluggish economy and you have a booming financial market. 53 00:03:21,760 --> 00:03:25,720 Speaker 4: I actually think the tailwinds are significant, and so if 54 00:03:25,720 --> 00:03:28,240 Speaker 4: you're at the FED, on the one hand, you pay 55 00:03:28,280 --> 00:03:32,560 Speaker 4: attention to it, but you got to set monetary policy 56 00:03:32,600 --> 00:03:35,120 Speaker 4: based on the underlying economy, and I think that's I 57 00:03:35,120 --> 00:03:36,880 Speaker 4: think that's the right thing to do right now, and 58 00:03:36,920 --> 00:03:39,240 Speaker 4: that's what they're doing. This is not one of those 59 00:03:39,360 --> 00:03:43,520 Speaker 4: stock markets that's being fueled by excess monetary policy, in 60 00:03:43,560 --> 00:03:46,920 Speaker 4: my opinion, It's being fueled by other structural drivers, and 61 00:03:47,000 --> 00:03:49,040 Speaker 4: the FED would do well to recognize that. 62 00:03:49,440 --> 00:03:53,360 Speaker 2: Robert Kaplan of Goldman Sachs on our podcast on Apple 63 00:03:53,400 --> 00:03:56,520 Speaker 2: and Spotify. Good morning on the Pacific Rim. Thank you 64 00:03:56,600 --> 00:03:59,839 Speaker 2: so much for the podcast. Interest across a Pacific Rim 65 00:04:00,000 --> 00:04:04,680 Speaker 2: across Asia as well and on YouTube podcasts. It's single 66 00:04:04,760 --> 00:04:12,119 Speaker 2: best idea.