Speaker 1: This is taking Stock. I'm pim Fox. My co host
Speaker 1: Kathleen Hayes joining us now in the studio. Steve Matthews,
Speaker 1: Bloomberg US economy reporter, will be speaking with him having
Speaker 1: to do with Janet Yellen's testimony before Congress, and also
Speaker 1: Dave Wilson, Bloomberg Stocks commis. Dave, I want to begin
Speaker 1: with you and just give us an update on where
Speaker 1: stocks are trading and the gains that seemed to be
Speaker 1: at least holding on for the moment. But we're right
Speaker 1: around that exactly. I mean, we've kind of settled in.
Speaker 1: It's almost like people kind of waiting. You know, we're
Speaker 1: a couple of days away from that vote on whether
Speaker 1: the UK stays in the European Union or not, so
Speaker 1: that gives people a reason to kind of step back.
Speaker 1: And it's not like when you go through the main
Speaker 1: industry groups in the SMP five hundred, you really see
Speaker 1: sort of any kind of overall tone to what's going on.
Speaker 1: Though I will point out phone companies and utilities are
Speaker 1: doing relatively well, and those are the more interest rate
Speaker 1: sensitive areas of the market. Uh, you look what's down
Speaker 1: and it's sort of a grab bag healthcare. Uh, you
Speaker 1: know the consumer discretionary category, which is media companies, retailers
Speaker 1: and you name it, and raw material producers. So you know,
Speaker 1: it's not like you're really getting a whole lot of
Speaker 1: a message out of today's strating, except people kind of
Speaker 1: hanging on and waiting for things to unfold as the
Speaker 1: week progresses. Well. Uh, the bond cket actually halting its
Speaker 1: recent sell off. It's pretty flat now taking some solace,
Speaker 1: it seems. From Janet Yellin's testimony to the Senate Banking
Speaker 1: Committee today it's a two day testimony. Today, she seemed
Speaker 1: to indicate that maybe beneficials are even a little more
Speaker 1: cautious about going to the next interest rate hike. Let's
Speaker 1: go to Steve Matthews. Now he joins us from our
Speaker 1: Atlanta Bloomberg News bureau where he is one of our
Speaker 1: top Federal Reserve reporters. So Steve, our colleague Chris Condon,
Speaker 1: who wrote the story on Janney Allen's testimony, emphasized that
Speaker 1: Janet used the word weather a conditional word, not saying
Speaker 1: when the Fed would raise rates, but saying it depends
Speaker 1: on whether the economy improves or not. You know, Kathleen
Speaker 1: I totally agree with your analysis. Uh. The Yelling's testimony
Speaker 1: today was was definitely on the dovish side. A couple
Speaker 1: of years ago when when she was being considered for
Speaker 1: the FED chairmanship, there was also taught that Larry Summers,
Speaker 1: the former Treasury Secretary, could be considered as FED chair
Speaker 1: And it turns out we we we we don't have Summers,
Speaker 1: but Yelling has adopted some of what Summers is saying
Speaker 1: about secular stagnation. She believes the economy is stuck in
Speaker 1: a low growth rut and that we could be in
Speaker 1: a low growth, low product productivity regime for some period
Speaker 1: of time, and in that those conditions you're going to
Speaker 1: have of, you know, very low interest rates for a
Speaker 1: long period of time. And you know, that was kind
Speaker 1: of the takeaway she talked about in her prepared testimony.
Speaker 1: She can't kind of gave a nod out to prominent
Speaker 1: economists that she didn't mention believing that the growth outlook
Speaker 1: is really dim. But that was an evident UH mentioned
Speaker 1: evidently referring to Larry Summers or to Robert Gordon, the
Speaker 1: Northwestern professor who has been a proponent of that same view.
Speaker 1: So it was very interesting, Kathleen. She also spoke specifically
Speaker 1: about the income of the meeting income of African American households,
Speaker 1: saying that that is still well below the median income
Speaker 1: of other US households. Is that also aimed at a
Speaker 1: specific audience, that Congressional Budget Office maybe having a role there. Well, actually,
Speaker 1: that's a good point of the PM, that the FED
Speaker 1: isn't responsible but for the these income disparities, but certainly
Speaker 1: keeping the economy going and jobs growing is And she
Speaker 1: answered that, Steve, didn't she in answer to a question. Course,
Speaker 1: she's a labor market economist. She's very sympathetic to these things,
Speaker 1: maybe even more than some other FED chairs. What what's
Speaker 1: the significance of that to you? Not there's a question,
Speaker 1: but how she answered it. Do we get any light
Speaker 1: UNFED policy. I'm not sure it means a lot for
Speaker 1: FED policy other than the fact that she is very
Speaker 1: worried about various groups. And she specifically said she was
Speaker 1: worried about unemployment among African Americans, for example. And to
Speaker 1: the extent that you're worried about individual groups, I think
Speaker 1: that would say that you would err on the side
Speaker 1: of being easy as opposed to aggressive in terms of
Speaker 1: raising interest rates, but she made the larger point that uh,
Speaker 1: and she didn't quite put it this way, but she
Speaker 1: could have turned to the Congress and say, why are
Speaker 1: you looking at me? It's not my issue, it's your issue, um,
Speaker 1: because it's really fiscal policy that deals with UH, job
Speaker 1: training and in the ability of people to get jobs.
Speaker 1: And she made the point that what's happening is you
Speaker 1: have more technology which is requiring more skills in the workforce,
Speaker 1: and globalization, and those are trends that Congress needs to address,
Speaker 1: not the Fed. Okay. Dave Wilson for The Stock Market,
Speaker 1: did Janet Yellen answer their question today? Well, you look
Speaker 1: at the way that the trading is gone, and it's
Speaker 1: not like you can really take away sort of an
Speaker 1: overall direction based on what she had to say. I mean,
Speaker 1: SMP five basically fluctuated within an eight point range while
Speaker 1: she was speaking and answering questions. Went from the low
Speaker 1: of the day to the high of the day. It's
Speaker 1: just trying to keep creep back towards the high at
Speaker 1: this point, but nothing really conclusive. I mean, there's plenty
Speaker 1: coming down the line. It's going to get investors attention,
Speaker 1: and that's why I've got you, Dave Wilson. Our stocks
Speaker 1: there to keep us on top of all of that,
Speaker 1: and our Steve Matthews, a regular on taking stock on
Speaker 1: Bloomberg Radio, but a reserve correspondent joining us from our
Speaker 1: Atlanta bureau today, I'm Kathleen Hayes. Along with Pim Fox,
Speaker 1: We're taking stock on Bloomberg Radio.