Speaker 1: Bloomberg Audio Studios, podcasts, radio news, A.
Speaker 2: Single best idea, how about an extended version? Just some
Speaker 2: phenomenal conversation. Major shout out to the FED deicides team yesterday,
Speaker 2: it was not only the most interesting meeting of the
Speaker 2: years we've done, the FED decides it was the most
Speaker 2: interesting meeting. I'll say back to the early eighties and
Speaker 2: Wayne Angel I'm guessing there, back to the vulgar years.
Speaker 2: Absolutely twisted. I don't mean that in a negative way,
Speaker 2: but just a twisted meeting of convolutions, discombobulated, I'll let
Speaker 2: you pick the right word for it. Market's all over
Speaker 2: the place during the meeting, and then a moonshot this
Speaker 2: morning as people tried to figure out a new accommodation
Speaker 2: by her central Bank. We called upon Francis Donald's she's
Speaker 2: at RBCT Capital Markets. Her interpretation of what was wrought.
Speaker 3: I felt like it was more like a breakdancing than
Speaker 3: ballet yesterday because there was a little bit more chaos
Speaker 3: and not necessarily super clear messaging. It didn't feel like
Speaker 3: it was very well choreographed in general, or at least
Speaker 3: there were dislocations within it. What I heard yesterday from
Speaker 3: Chair Powell, I know you've probably already talked about it
Speaker 3: one hundred times. Was there are no risk free paths ahead?
Speaker 3: This was a haunting comment from a central banker, but
Speaker 3: it also reflects the underlying US economy, which is that
Speaker 3: we are still in the air pocket before we will
Speaker 3: know the impact of this once in one hundred year
Speaker 3: trade shock that has hit the US economy. It is
Speaker 3: our view that there are still significant inventories in the
Speaker 3: United States, and we don't know whether companies will truly
Speaker 3: pass on those costs to inflation or whether they will
Speaker 3: have to cut their own costs, and that will come
Speaker 3: down to labor. And so when you talk about data dependency,
Speaker 3: Tom I'm looking at is one single data point, which
Speaker 3: is how many inventories are left in the United States
Speaker 3: and how long until we answer that question? Because neither
Speaker 3: of those paths are good, but they result in very
Speaker 3: different focuses from a central.
Speaker 2: Bank Francis Donald on inventories, looking at the tariff impact,
Speaker 2: which I was shocked with so little discussed yesterday as well.
Speaker 2: Each former president and frankly president President of the Central Bank,
Speaker 2: the many of them have a different character. It was
Speaker 2: a perfect day to speak to Robert Kaplan, former president
Speaker 2: of the Dallas FED, with all of his work at
Speaker 2: HBS and at Goldman Sachs on innovation, on process, on technology,
Speaker 2: on the Central Bank. Robert Kaplan of Goldman Sex on
Speaker 2: the FED and the economy.
Speaker 4: I think that the FED pays attention to financial markets,
Speaker 4: but it's got to set monetary policy based on the economy.
Speaker 4: And right now you have a divergence. You've got regulatory
Speaker 4: review reform coming, you've got tax incentives coming, accelerated appreciation,
Speaker 4: you got an AI boom. Those three things are not
Speaker 4: really in the economy quite yet, and so you've got
Speaker 4: a sluggish economy and you have a booming financial market.
Speaker 4: I actually think the tailwinds are significant, and so if
Speaker 4: you're at the FED, on the one hand, you pay
Speaker 4: attention to it, but you got to set monetary policy
Speaker 4: based on the underlying economy, and I think that's I
Speaker 4: think that's the right thing to do right now, and
Speaker 4: that's what they're doing. This is not one of those
Speaker 4: stock markets that's being fueled by excess monetary policy, in
Speaker 4: my opinion, It's being fueled by other structural drivers, and
Speaker 4: the FED would do well to recognize that.
Speaker 2: Robert Kaplan of Goldman Sachs on our podcast on Apple
Speaker 2: and Spotify. Good morning on the Pacific Rim. Thank you
Speaker 2: so much for the podcast. Interest across a Pacific Rim
Speaker 2: across Asia as well and on YouTube podcasts. It's single
Speaker 2: best idea.