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Speaker 1: Bloomberg Audio Studios, podcasts, radio news.

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Speaker 2: Joining US now is former Saint Louis FED President Jim Bullard,

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Speaker 2: one of the potential candidates President Trump is considering for

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Speaker 2: FED chair. Jim, great to talk to you, or Dean,

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Speaker 2: I should probably address you by your title, Dean of

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Speaker 2: the Purdue University School of Business. I got to first

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Speaker 2: ask you your take on rates. Considering the shape the

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Speaker 2: United States economy is in, do we need a fifty

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Speaker 2: basis point rate cut at the next meeting.

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Speaker 3: I've seen one hundred basis points over the next as

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Speaker 3: we go into twenty twenty six, so I think you

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Speaker 3: could get started on that path. I think fifty sounds panicky,

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Speaker 3: sounds like the administration wouldn't be that confident in their

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Speaker 3: economic program, which I don't think is the right stance

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Speaker 3: to take here. I think they've got a pro business

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Speaker 3: program that will fire up the economy after we get

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Speaker 3: through the initial phase of the new tariff policies, which

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Speaker 3: is slowing down the global economy, but eventually very strong

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Speaker 3: growth in the US economy, and monetary policy has to

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Speaker 3: be looking ahead and anticipating that. I do think the

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Speaker 3: policy rates high, but.

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Speaker 4: The committee is going to probably lower in September.

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Speaker 3: Here you could speed up the pace of reduction if

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Speaker 3: the data cooperates as we go through the rest of

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Speaker 3: the year and into twenty twenty six.

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Speaker 1: Well, tell us what parts of the economy need a

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Speaker 1: rate cut at this moment. We were just talking with Mike

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Speaker 1: McKee about how FED officials too have been saying that

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Speaker 1: rates look restrictive here. We're not at neutral necessarily when

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Speaker 1: we're north of four percent. Where do we really need

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Speaker 1: those rate cuts?

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Speaker 3: Well, I just think you would want to be at

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Speaker 3: neutral if you felt in play was coming down to

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Speaker 3: two percent. That's why I've suggested that we can get

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Speaker 3: one hundred basis points lower.

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Speaker 4: But you know, you're.

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Speaker 3: Looking through this inflation that's still CPI core is still

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Speaker 3: up around three percent.

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Speaker 4: You're looking through that.

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Speaker 3: But still you want to get confirmation that inflation is

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Speaker 3: actually coming down to target in the way that you

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Speaker 3: would like. And so you don't want to be too

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Speaker 3: aggressive because you might have to you might get burned

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Speaker 3: by the data, as the Committee did last year.

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Speaker 4: So I think.

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Speaker 3: You know you want to get on this pay path

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Speaker 3: toward neutral, and you want to keep watching the data,

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Speaker 3: especially on inflation, and if inflation comes in, you know,

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Speaker 3: too high or starts going up again, that would be

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Speaker 3: the main thing that would disrupt the the growth agenda

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Speaker 3: for the US. So I don't think you want to

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Speaker 3: get into that hot water if you don't have Well.

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Speaker 5: Jim, we're talking to you because you are, of course

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Speaker 5: on the list of people being considered to be the

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Speaker 5: next FED chair, and you confirmed you had talked to

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Speaker 5: folks at Treasury. What else you can tell us about

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Speaker 5: the interview process and the process of choosing a new

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Speaker 5: FED chair. You've obviously passed the first test, which is

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Speaker 5: you say rates need to be cut. What else do

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Speaker 5: they want to see in a new chairman?

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Speaker 3: I did talk to the Treasury Secretary relatively briefly. We

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Speaker 3: did not go through, you know, ideas about what was

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Speaker 3: required or job requirements or anything like that. I was

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Speaker 3: under the impression that the process is still under construction

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Speaker 3: for interviewing all these candidates, and you know, at that

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Speaker 3: point we can discuss in more details. So I just

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Speaker 3: said that I'd be happy to participate in that process.

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Speaker 2: I wonder what the process looks like. Can you tell

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Speaker 2: us any of the details. Have you met with anybody?

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Speaker 2: Do you have meeting scheduled.

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Speaker 4: I do not, but that's why I say that.

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Speaker 3: I think this is all under construction, so we'll see

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Speaker 3: how they want to design it, and I'm sure it'll

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Speaker 3: be a good process. I would say this is a

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Speaker 3: credible list of candidates. I know almost all these people.

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Speaker 3: I think this is a very sharp group, and many

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Speaker 3: of these people would do a fantastic job.

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Speaker 1: Yeah. Absolutely, a list of heavy hitters there, including yourself. Now,

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Speaker 1: you said on CNBC this week that you would accept

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Speaker 1: the job of leaving the FED if the institution's independence

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Speaker 1: is respected. Plenty of people would say that what we're

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Speaker 1: seeing right now is not respect What did you mean

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Speaker 1: by that? What is respecting the independence of the FED

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Speaker 1: look like to you?

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Speaker 4: Yeah?

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Speaker 3: I mean the FED is where it is because of

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Speaker 3: the Federals IRV Act, and the Committee does what it

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Speaker 3: does because of the Federal Reserve Act. So if you know,

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Speaker 3: you have to do all this under existing law, and

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Speaker 3: if you want to change the law, the Congress can

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Speaker 3: certainly come in and do that. But Congress has looked

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Speaker 3: at the Federal Reserve Act six ways from Sunday, and

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Speaker 3: they keep coming up with the idea that, hey, this

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Speaker 3: is this is a pretty good way to do it.

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Speaker 3: So it's it's a complicated system. It is done by committee,

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Speaker 3: it is at arms length from day to day politics.

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Speaker 3: But that's the way it is, and I think that's

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Speaker 3: the way it's going to be going forward, because I

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Speaker 3: don't think Congress is in the mood to change that.

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Speaker 3: So I think, you know, we have to respect that

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Speaker 3: and we have to make these decisions under the law.

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Speaker 5: Well, speaking of changes, a number of people on the

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Speaker 5: list that the administration is considering have suggested they want

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Speaker 5: to make some major changes in the way the FED operates,

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Speaker 5: and the President has suggested he'd like to see major

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Speaker 5: changes in the way the FED operates. If you were

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Speaker 5: to become chair, what would you change about the FED?

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Speaker 3: Well, I've been outspoken over the years about various aspects.

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Speaker 3: I do think that the FED is a research powerhouse.

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Speaker 3: I think we could make more use of the various

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Speaker 3: ideas that are proposed around the around the nation from

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Speaker 3: the FED, and we could you know, break up the

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Speaker 3: group think a little bit more than what it has

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Speaker 3: been in the last few years. I think there's a

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Speaker 3: lot of emphasis on Philip's curve. I'm thinking I've often

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Speaker 3: said that I think that the evidence for that is

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Speaker 3: not very good, or if to the extent there is

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Speaker 3: even evidence, it's very muted. And so that story, that

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Speaker 3: Phillips curve type story gets emphasized too much in financial

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Speaker 3: markets and too much in policymaker's mind.

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Speaker 4: I try to break out of that a little bit.

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Speaker 3: And emphasize the role of expectations a little bit more,

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Speaker 3: and so there'd be more forward lookingness than probably what

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Speaker 3: we have today.

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Speaker 2: And Dean Bullard, does it concern you when you know

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Speaker 2: the President and his allies disagree with Jerome Powell's monetary

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Speaker 2: policy views, so they start looking into things like renovation

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Speaker 2: costs at the FED, or when the President disagrees with

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Speaker 2: the numbers coming out of the Bureau of Labor and

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Speaker 2: Statistics and so he simply fires the chief statistician there.

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Speaker 2: Does that concern you? Yeah?

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Speaker 3: I think the President put up a new candidate for

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Speaker 3: BLS who's who I think will be pretty credible.

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Speaker 4: So it looks to me like that issues maybe behind us.

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Speaker 3: I do think that the nation as a whole does

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Speaker 3: not have as good of economic data as we could,

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Speaker 3: even though we're better than most other countries.

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Speaker 4: You know, you think about it.

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Speaker 3: Omark knows it's one point six million employees or something

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Speaker 3: like that. They know their inventory in real time, They

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Speaker 3: know their pricing in real time for all those stores

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Speaker 3: all over the country and all over the world. Why

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Speaker 3: are we getting a retail sales report once a month.

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Speaker 4: That's kind of sketchy, you know. Why can't that all

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Speaker 4: be done a lot better?

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Speaker 3: So I think I think to the extent that information

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Speaker 3: is important for how financial markets operate and how policy operates,

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Speaker 3: we could do much better than we do today in

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Speaker 3: making sure that we have the right information available so

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Speaker 3: we make good decisions.

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Speaker 5: If you did end up in the chair, obviously you

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Speaker 5: could be the target of the president's truth social account

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Speaker 5: when you look at what he has said about J.

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Speaker 5: Powell and others on the FED, do you think the

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Speaker 5: criticism has been fair?

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Speaker 3: Yeah, I mean, I think the president can espouse his

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Speaker 3: views as he often does on monetary policy, just like

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Speaker 3: all the other politicians that like to talk about monetary

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Speaker 3: policy on both sides of the aisle, and so I

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Speaker 3: just don't see any reason why you can say that

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Speaker 3: the president can't do that. A lot of presidents haven't

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Speaker 3: done that, but I don't think they maybe wanted to

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Speaker 3: take that on, or they didn't feel that they wasn't

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Speaker 3: their style, or they didn't feel as confident in talking

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Speaker 3: about the economy as President Trump does know he's got

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Speaker 3: a lot of experience in a very intra sensitive industry,

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Speaker 3: and so he thinks and all the people I've ever

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Speaker 3: been in real estate always want lower.

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Speaker 4: Interest rates because that's the way the industry works.

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Speaker 3: It is a little different from public policy perspective because

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Speaker 3: you've got the inflation component there they might feed into

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Speaker 3: if you go too far, too fast. And so I

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Speaker 3: think the role of the FED chair is to guide

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Speaker 3: that process and make sure that we've got good outcomes

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Speaker 3: for the Call.

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Speaker 1: Me all right, Dean Bullard, we really appreciate your time.

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Speaker 1: We're eager to have you back soon. That is Purdue

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Speaker 1: University School of Business dean and former Saint Louis FED

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Speaker 1: President Jim Bullard.