WEBVTT - San Francisco Fed President Mary Daly Talks Labor & Economic Growth

0:00:02.520 --> 0:00:08.879
<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news. The debate is rich

0:00:08.960 --> 0:00:13.399
<v Speaker 1>around AI's economic disruption. Is it growing more intense? Some

0:00:13.480 --> 0:00:17.440
<v Speaker 1>see the technology that can unlock enormous gains productivity and growth,

0:00:17.440 --> 0:00:20.720
<v Speaker 1>but others that they want of disruption, of unintended consequences.

0:00:20.800 --> 0:00:23.079
<v Speaker 1>And we want to try and understand the sort of

0:00:23.120 --> 0:00:25.520
<v Speaker 1>messy middle of all of this with Mary Daily, President

0:00:25.720 --> 0:00:29.840
<v Speaker 1>of Federal Reserve Bank of San Francisco. Mary Daily, extraordinary

0:00:29.920 --> 0:00:32.320
<v Speaker 1>the data that you now have to lean upon trying

0:00:32.360 --> 0:00:36.520
<v Speaker 1>to understand what's fact, what's fiction, what's utopia, what's what sensationalism?

0:00:36.800 --> 0:00:38.680
<v Speaker 1>Who do you go to for your for your data

0:00:38.720 --> 0:00:40.160
<v Speaker 1>on whether productivity is working?

0:00:40.400 --> 0:00:43.040
<v Speaker 2>I thought of the businesses who were using the technology,

0:00:43.080 --> 0:00:46.680
<v Speaker 2>because you can always encounter enthusiasts or doom sayers, but

0:00:46.800 --> 0:00:48.680
<v Speaker 2>it's really the people in the middle, as you said,

0:00:48.720 --> 0:00:51.919
<v Speaker 2>who are using that technology thinking about it, and I've

0:00:51.960 --> 0:00:55.600
<v Speaker 2>seen tremendous interest in it it last year and now

0:00:55.600 --> 0:00:58.360
<v Speaker 2>I'm seeing tremendous investment in it, thinking about how do

0:00:58.360 --> 0:01:01.280
<v Speaker 2>they train their workforces to be ready, how do they

0:01:01.360 --> 0:01:03.400
<v Speaker 2>think about what AI can do not just in the

0:01:03.440 --> 0:01:06.480
<v Speaker 2>back office, but in the front of house of operations

0:01:06.520 --> 0:01:09.680
<v Speaker 2>and We're seeing this in small businesses, medium and large,

0:01:09.959 --> 0:01:13.760
<v Speaker 2>in global companies and more regional ones, and importantly in

0:01:13.840 --> 0:01:19.120
<v Speaker 2>everything from agriculture to machining and building things to services.

0:01:19.160 --> 0:01:21.639
<v Speaker 2>And I think that's really the place we haven't seen

0:01:21.959 --> 0:01:25.640
<v Speaker 2>widespread productivity gains yet. The ROI is still to be developed,

0:01:25.840 --> 0:01:28.600
<v Speaker 2>but I'm definitely seeing the enthusiasm, and it's picked up

0:01:28.880 --> 0:01:30.880
<v Speaker 2>tremendously in the last year.

0:01:31.280 --> 0:01:34.240
<v Speaker 3>We haven't seen the productivity gains yet. You know you're

0:01:34.280 --> 0:01:37.160
<v Speaker 3>being very clear on that. As you remember, I asked

0:01:37.160 --> 0:01:40.319
<v Speaker 3>you over and over again for an hour, please show

0:01:40.400 --> 0:01:44.320
<v Speaker 3>me the productivity gains. But in the economic data, whichever

0:01:44.640 --> 0:01:47.280
<v Speaker 3>set of data you want to look at, do you

0:01:47.400 --> 0:01:50.600
<v Speaker 3>see an impact from AI negative or positive?

0:01:50.880 --> 0:01:52.160
<v Speaker 4>It's really hard to take.

0:01:52.400 --> 0:01:54.920
<v Speaker 2>We have had productivity growth that's been outside of the

0:01:55.000 --> 0:01:57.200
<v Speaker 2>historical norm, and I think that's a positive for the

0:01:57.280 --> 0:01:58.080
<v Speaker 2>US economy.

0:01:58.280 --> 0:01:59.800
<v Speaker 4>Everyone wants to say that's AI.

0:02:00.400 --> 0:02:03.800
<v Speaker 2>What I think of it is as sure, it's possible

0:02:03.960 --> 0:02:07.200
<v Speaker 2>that businesses are looking for cost savings and they hire

0:02:07.280 --> 0:02:09.560
<v Speaker 2>fewer workers than they do just as much because they're

0:02:09.639 --> 0:02:11.079
<v Speaker 2>using an.

0:02:11.200 --> 0:02:12.600
<v Speaker 4>LA I'm assistant to help.

0:02:12.880 --> 0:02:15.840
<v Speaker 2>But we just haven't heard from businesses that they're seeing

0:02:16.160 --> 0:02:20.799
<v Speaker 2>transformative ongoing productivity gains yet and they want to always

0:02:20.840 --> 0:02:22.800
<v Speaker 2>underscore yet. And so then I said, well, what's the

0:02:22.840 --> 0:02:26.280
<v Speaker 2>time frame and they said next year, year after. Because

0:02:26.280 --> 0:02:29.160
<v Speaker 2>what we know is it isn't just about getting a

0:02:29.200 --> 0:02:32.160
<v Speaker 2>model and using it for things or an agent. It's

0:02:32.200 --> 0:02:35.680
<v Speaker 2>about transforming your business processes so that you really take

0:02:35.720 --> 0:02:37.880
<v Speaker 2>advantage of things we don't even think about today, what

0:02:37.960 --> 0:02:41.080
<v Speaker 2>can be done differently that we'll transform the economy. So

0:02:41.560 --> 0:02:45.399
<v Speaker 2>you can definitely find a single business or sectors who

0:02:45.400 --> 0:02:48.120
<v Speaker 2>are using it and seeing the gains, but we haven't

0:02:48.160 --> 0:02:50.359
<v Speaker 2>seen that across the economy going forward.

0:02:50.440 --> 0:02:51.440
<v Speaker 4>But I'm pretty bullish.

0:02:51.520 --> 0:02:54.840
<v Speaker 2>I see the possibilities, and I'm hearing more and more

0:02:54.919 --> 0:02:59.480
<v Speaker 2>that people are seeing early rewards and really recognizing them.

0:02:59.520 --> 0:03:01.000
<v Speaker 4>Next year is the litmus test.

0:03:01.320 --> 0:03:04.040
<v Speaker 1>But this is an interesting kind of phrase today, putting

0:03:04.040 --> 0:03:08.920
<v Speaker 1>aside this slight dip in the market, the exuberance that

0:03:08.960 --> 0:03:11.839
<v Speaker 1>we have seen in financial markets to want to back

0:03:11.880 --> 0:03:15.639
<v Speaker 1>these companies, and we're about to get more public companies coming,

0:03:15.840 --> 0:03:19.800
<v Speaker 1>more liquidity, more money. Is that in and of itself

0:03:19.840 --> 0:03:23.200
<v Speaker 1>a financial stability issue. You worried about the market's rioting

0:03:23.280 --> 0:03:23.840
<v Speaker 1>so high.

0:03:23.800 --> 0:03:26.800
<v Speaker 2>You remember, you know who's doing most of this investment

0:03:26.800 --> 0:03:29.800
<v Speaker 2>at the mag seven who's really there. This is actually

0:03:29.840 --> 0:03:34.400
<v Speaker 2>something they can do and fund, and their enthusiasm is real.

0:03:34.440 --> 0:03:37.920
<v Speaker 2>They see what's possible. But I don't think that we

0:03:38.040 --> 0:03:41.080
<v Speaker 2>should think, oh, there's financial stability concerns just because the

0:03:41.120 --> 0:03:44.120
<v Speaker 2>market's going up. It could go up or down as

0:03:44.160 --> 0:03:46.960
<v Speaker 2>it has in the past, but a financial stability issue

0:03:47.000 --> 0:03:49.280
<v Speaker 2>would mean it's spread to the banks, it's spread to

0:03:49.320 --> 0:03:53.440
<v Speaker 2>consumers or businesses. Right now, I'm not seeing evidence of that.

0:03:53.640 --> 0:03:56.280
<v Speaker 2>We keep our eye on it for absolute sure, but

0:03:56.320 --> 0:03:59.600
<v Speaker 2>what I am seeing is that companies other than the

0:04:00.160 --> 0:04:05.200
<v Speaker 2>technology enthusiasts, companies outside of technology, are using AI to

0:04:05.240 --> 0:04:08.200
<v Speaker 2>think about how to do their business better in real ways.

0:04:08.240 --> 0:04:11.000
<v Speaker 2>I mean, I was just meeting with some machine to

0:04:11.200 --> 0:04:14.080
<v Speaker 2>make machines for a living, that's what they do, and

0:04:14.480 --> 0:04:17.000
<v Speaker 2>they're thinking about, how do I scan in fifty years

0:04:17.000 --> 0:04:19.839
<v Speaker 2>of plans of these machines I've built for companies and

0:04:19.880 --> 0:04:23.440
<v Speaker 2>then use those plans and the model to generate innovative

0:04:23.440 --> 0:04:27.120
<v Speaker 2>new ideas of things I can sell that will be faster, better,

0:04:27.240 --> 0:04:28.839
<v Speaker 2>cheaper than things I've sold before.

0:04:29.000 --> 0:04:30.920
<v Speaker 4>We toured a robotics company.

0:04:30.560 --> 0:04:34.240
<v Speaker 2>That builds things that help manufacturers do better in terms

0:04:34.240 --> 0:04:37.560
<v Speaker 2>of shipping and distribution. These are real things that do

0:04:37.680 --> 0:04:41.120
<v Speaker 2>have a capacity to change the economy. So that's why

0:04:41.279 --> 0:04:43.440
<v Speaker 2>that's the underlying part of my bull is it has

0:04:43.560 --> 0:04:46.440
<v Speaker 2>less to do about the investments that tech companies are

0:04:46.440 --> 0:04:50.520
<v Speaker 2>making and more about the investments that every day regular

0:04:50.560 --> 0:04:54.120
<v Speaker 2>companies that make things and provide services, the things they're.

0:04:53.880 --> 0:04:55.240
<v Speaker 5>Doing president daily.

0:04:55.320 --> 0:05:00.240
<v Speaker 3>Inflation is still the biggest risk and the those are

0:05:00.279 --> 0:05:02.240
<v Speaker 3>not my words. We heard it, you know, all week

0:05:02.320 --> 0:05:04.640
<v Speaker 3>long the Bloomberg Credit Forum, for example.

0:05:05.720 --> 0:05:06.760
<v Speaker 5>One of the things that you and I have.

0:05:06.800 --> 0:05:11.240
<v Speaker 3>Discussed in the past is is the massive CAPEX commitment

0:05:11.680 --> 0:05:15.400
<v Speaker 3>build out of data center in conjunction with a bottleneck

0:05:15.440 --> 0:05:19.680
<v Speaker 3>in some core areas like memory inflationary or is it disinflationary?

0:05:20.040 --> 0:05:22.600
<v Speaker 3>You know, that's the thesis that like a utility of

0:05:22.680 --> 0:05:26.279
<v Speaker 3>pgene would argue disinflationary because the big guys are buying

0:05:26.320 --> 0:05:29.839
<v Speaker 3>and aggregate. I still don't understand where we are with that.

0:05:30.040 --> 0:05:32.800
<v Speaker 2>It's a timing issue in my judgment that you know,

0:05:32.839 --> 0:05:36.080
<v Speaker 2>in the beginning of course, when companies want to invest

0:05:36.120 --> 0:05:40.239
<v Speaker 2>in big construction projects a lot of electro electricity demand,

0:05:40.760 --> 0:05:44.359
<v Speaker 2>then the companies that are providing those things or areas

0:05:44.360 --> 0:05:47.080
<v Speaker 2>that are providing those things are going to see competition

0:05:47.279 --> 0:05:50.080
<v Speaker 2>for the limited amount of services they have, But what

0:05:50.160 --> 0:05:54.560
<v Speaker 2>they're building creates the infrastructure. The data centers create the infrastructure.

0:05:54.640 --> 0:05:55.320
<v Speaker 4>Or if the big.

0:05:55.200 --> 0:05:57.640
<v Speaker 2>Guys come in as you just said and help with

0:05:57.720 --> 0:06:02.320
<v Speaker 2>electrical plants that help with electricity generation, that eventually can

0:06:02.400 --> 0:06:04.360
<v Speaker 2>help with the prices of those things.

0:06:04.440 --> 0:06:06.040
<v Speaker 5>Don't hear it now, but you just.

0:06:06.000 --> 0:06:07.239
<v Speaker 4>Have to think about the timing.

0:06:07.279 --> 0:06:10.000
<v Speaker 2>And one of the things is really important in policy

0:06:10.040 --> 0:06:12.840
<v Speaker 2>making is that we not assume we know. We actually

0:06:12.839 --> 0:06:14.599
<v Speaker 2>look for the evidence of what are we seeing in

0:06:14.680 --> 0:06:17.320
<v Speaker 2>prices today, what are we seeing in what is the

0:06:17.360 --> 0:06:19.800
<v Speaker 2>forecast of prices tomorrow? And then how do we think

0:06:19.800 --> 0:06:22.960
<v Speaker 2>about policy. So right now I'm focused on you know,

0:06:23.040 --> 0:06:26.480
<v Speaker 2>other energy prices, oil prices, and food prices are driving

0:06:26.520 --> 0:06:29.720
<v Speaker 2>up inflation. What we do know that down the road

0:06:29.880 --> 0:06:33.800
<v Speaker 2>these things could maybe compete for services and costs and

0:06:33.880 --> 0:06:36.560
<v Speaker 2>raise costs, but we haven't seen real evidence that that's

0:06:36.600 --> 0:06:38.840
<v Speaker 2>the limiting factor. The limiting factor seems it's hard to

0:06:38.839 --> 0:06:41.960
<v Speaker 2>get generators, it's hard to get the infrastructure equipment you need,

0:06:42.240 --> 0:06:44.400
<v Speaker 2>and so you see the big tech companies thinking about

0:06:44.680 --> 0:06:46.800
<v Speaker 2>solutions they can provide for themselves.

0:06:46.920 --> 0:06:49.799
<v Speaker 1>The inflationary dates must be fascinating here in San Francisco.

0:06:49.839 --> 0:06:52.400
<v Speaker 1>When I think about all these companies potentially going public, well,

0:06:52.400 --> 0:06:54.120
<v Speaker 1>that means for the employee base, Well that means for

0:06:54.600 --> 0:06:56.640
<v Speaker 1>your health price and the ability to.

0:06:56.640 --> 0:06:58.720
<v Speaker 4>Be able to buy yet more readA state here. What

0:06:58.800 --> 0:07:00.599
<v Speaker 4>it means for the cost of late as well?

0:07:00.800 --> 0:07:03.320
<v Speaker 1>Is there an infrationory pressia that you're seeing in some

0:07:03.800 --> 0:07:04.400
<v Speaker 1>I've lived through.

0:07:04.680 --> 0:07:06.960
<v Speaker 2>So I moved to San Francisco in nineteen ninety six

0:07:07.279 --> 0:07:09.320
<v Speaker 2>and then we had the dot com and I know

0:07:09.360 --> 0:07:10.920
<v Speaker 2>what it feels like to not be able to rent

0:07:10.920 --> 0:07:14.200
<v Speaker 2>a place that's affordable because the people who are making

0:07:14.440 --> 0:07:15.280
<v Speaker 2>milliony more.

0:07:15.560 --> 0:07:16.360
<v Speaker 4>Orders of magnitude.

0:07:16.360 --> 0:07:20.200
<v Speaker 2>And I was, you know, in a position where that's manageable.

0:07:20.480 --> 0:07:23.320
<v Speaker 2>But that's what's happening is people feel like they're getting

0:07:23.320 --> 0:07:26.520
<v Speaker 2>crowded out because other things are happening. But that's more

0:07:26.560 --> 0:07:29.120
<v Speaker 2>about the supply of housing than it is about the

0:07:29.160 --> 0:07:31.920
<v Speaker 2>demand for housing. We want people to come and invest

0:07:31.960 --> 0:07:34.520
<v Speaker 2>in this community. We want the city to thrive, We

0:07:34.560 --> 0:07:37.840
<v Speaker 2>want regional activity to thrive, in employment to grow. But

0:07:38.000 --> 0:07:40.240
<v Speaker 2>as you said, you know, the more interest people have

0:07:40.320 --> 0:07:42.480
<v Speaker 2>in living in a place if you have limited supply

0:07:42.520 --> 0:07:45.120
<v Speaker 2>of housing, then you're going to have a run up.

0:07:45.160 --> 0:07:47.360
<v Speaker 2>So those are the things that not the FED, but

0:07:47.440 --> 0:07:51.239
<v Speaker 2>other policymakers, other federal policies of makers, and local policy

0:07:51.280 --> 0:07:53.120
<v Speaker 2>makers like the mayor are working on.

0:07:53.680 --> 0:07:55.560
<v Speaker 4>But it looks very you know, you can see the.

0:07:55.560 --> 0:07:59.360
<v Speaker 2>Elements of nineteen ninety six already here, where there's productivity growth,

0:07:59.400 --> 0:08:01.119
<v Speaker 2>there's enthusis sasm et cetera.

0:08:01.400 --> 0:08:03.360
<v Speaker 1>But the data bubble is there a risk that we're

0:08:03.360 --> 0:08:04.040
<v Speaker 1>in that saying, you.

0:08:03.960 --> 0:08:07.720
<v Speaker 2>Know, the dot com was very different than the AI boom,

0:08:07.760 --> 0:08:09.680
<v Speaker 2>and so I just want to you know, there's a

0:08:09.720 --> 0:08:13.000
<v Speaker 2>lot there that's already being put into businesses and it's

0:08:13.320 --> 0:08:14.280
<v Speaker 2>very pervasive.

0:08:14.400 --> 0:08:15.880
<v Speaker 4>It's not just the dot com.

0:08:15.920 --> 0:08:18.400
<v Speaker 2>So I don't jump to the conclusion that if it

0:08:18.480 --> 0:08:21.120
<v Speaker 2>has similarities to the nineties, it's going to be the.

0:08:21.120 --> 0:08:24.200
<v Speaker 3>Ninth Well, if I may presentay, you went out and

0:08:24.240 --> 0:08:26.160
<v Speaker 3>did some of the most important work in that era

0:08:26.200 --> 0:08:29.720
<v Speaker 3>of how the advent of the internet would change the economy. Look,

0:08:29.760 --> 0:08:32.160
<v Speaker 3>so you've kind of established where we sit right now.

0:08:32.920 --> 0:08:37.679
<v Speaker 3>Inflation continues to rise, how likely or unlikely would that

0:08:37.840 --> 0:08:40.840
<v Speaker 3>make a rate cut in twenty twenty six? How do

0:08:40.880 --> 0:08:43.560
<v Speaker 3>you tie the two together? From this juncture onward.

0:08:43.720 --> 0:08:45.400
<v Speaker 2>You know, I think one of the questions I get

0:08:45.440 --> 0:08:50.800
<v Speaker 2>asked regularly is what's the path for the rates going forward? Yeah,

0:08:50.840 --> 0:08:52.679
<v Speaker 2>And the answer I give, because this is how I

0:08:53.200 --> 0:08:56.440
<v Speaker 2>really think we have to think about it, is we

0:08:56.559 --> 0:08:58.960
<v Speaker 2>don't know how the economy is going to play out.

0:08:59.200 --> 0:09:03.000
<v Speaker 2>We have, as we've been talking about, this tremendous possibility

0:09:03.000 --> 0:09:05.720
<v Speaker 2>with AI, but we have the same time, the war

0:09:05.760 --> 0:09:09.199
<v Speaker 2>in Iran, that is with an uncertain end, which has

0:09:09.200 --> 0:09:13.040
<v Speaker 2>pushed oil prices up and fertilizer prices which have filtered

0:09:13.040 --> 0:09:16.400
<v Speaker 2>into food prices. And right now those are fairly contained.

0:09:16.440 --> 0:09:18.360
<v Speaker 2>And if you look at the futures market for oil,

0:09:18.440 --> 0:09:20.480
<v Speaker 2>it's eighty dollars a barrel by the end of the year.

0:09:20.760 --> 0:09:23.880
<v Speaker 2>But we have to think about that, and so right

0:09:23.880 --> 0:09:26.680
<v Speaker 2>now policy is in a good place. We are prepared

0:09:26.720 --> 0:09:29.840
<v Speaker 2>to respond either way whatever the economy brings. But I

0:09:29.840 --> 0:09:33.080
<v Speaker 2>think giving more forward guidance about what's possible could be

0:09:33.160 --> 0:09:35.440
<v Speaker 2>misguiding in the end, because we just have to wait

0:09:35.440 --> 0:09:38.439
<v Speaker 2>for the economy to evolve. Everybody wants to resolve the

0:09:38.520 --> 0:09:41.960
<v Speaker 2>uncertainty today, but I think that's a mistake because it

0:09:42.000 --> 0:09:44.320
<v Speaker 2>will close off our mind about what we really have

0:09:44.400 --> 0:09:47.720
<v Speaker 2>to look at the inflation risk possibility, but also the

0:09:47.760 --> 0:09:51.000
<v Speaker 2>possibility that the war ends, oil prices come back down

0:09:51.040 --> 0:09:53.439
<v Speaker 2>and we're back to the underlying dynamics with some of

0:09:53.480 --> 0:09:55.680
<v Speaker 2>the positives of AI we've been talking about.

0:09:56.080 --> 0:09:58.160
<v Speaker 1>Can I ask you about the labor market as well,

0:09:58.160 --> 0:10:00.560
<v Speaker 1>because you've tried to bring this transpondency of thinking about

0:10:00.559 --> 0:10:02.640
<v Speaker 1>things with your blog, for example, and one of the

0:10:02.679 --> 0:10:04.599
<v Speaker 1>really interesting ones that I was reading and capture my

0:10:04.640 --> 0:10:07.199
<v Speaker 1>attention was the idea that we've got zero labor growth now.

0:10:07.520 --> 0:10:11.600
<v Speaker 1>Immigrations changed the way in which demographics change. Are you

0:10:11.720 --> 0:10:15.679
<v Speaker 1>feeling like we've seen some improvement, some some resilience in

0:10:15.679 --> 0:10:18.600
<v Speaker 1>the labor monket gap and will that hold?

0:10:18.760 --> 0:10:19.640
<v Speaker 5>Has it firmed?

0:10:19.840 --> 0:10:22.400
<v Speaker 2>Yeah, you know, I think it's too early to stay firmed.

0:10:22.480 --> 0:10:25.400
<v Speaker 2>I think we're you know, there's always statistical air, so

0:10:25.440 --> 0:10:27.640
<v Speaker 2>you can bounce around from month to month. But if

0:10:27.640 --> 0:10:30.440
<v Speaker 2>you you know, I was one of the people who

0:10:30.600 --> 0:10:33.360
<v Speaker 2>policymakers who were a little worried about the labor market

0:10:33.400 --> 0:10:35.600
<v Speaker 2>at the end of last year, was very supportive of

0:10:35.640 --> 0:10:39.200
<v Speaker 2>the cuts that we took to stabilize conditions there. So

0:10:39.520 --> 0:10:41.920
<v Speaker 2>relative to that point, I think this is we've really

0:10:41.960 --> 0:10:46.400
<v Speaker 2>stabilized and I'm starting to see businesses feel a little

0:10:46.400 --> 0:10:50.000
<v Speaker 2>more cautiously optimistic, which will feed through to hiring. But

0:10:50.080 --> 0:10:53.000
<v Speaker 2>they're not being you know, they're not just running out

0:10:53.000 --> 0:10:55.920
<v Speaker 2>to hire people they are right and you get an agent.

0:10:55.960 --> 0:10:58.720
<v Speaker 2>They're interrogating how much AI can do for them before

0:10:58.760 --> 0:11:01.679
<v Speaker 2>they hire. And you know, regularly we talk to our

0:11:01.679 --> 0:11:03.400
<v Speaker 2>businesses and they say, we don't want to hire a

0:11:03.400 --> 0:11:06.920
<v Speaker 2>bunch of people. Find out AI can do certain things,

0:11:06.960 --> 0:11:09.160
<v Speaker 2>and we did a different set of skills, So we

0:11:09.240 --> 0:11:11.320
<v Speaker 2>want to wait. We want to be patient on our

0:11:11.400 --> 0:11:15.040
<v Speaker 2>hiring and make sure we're not over hiring. Because if

0:11:15.040 --> 0:11:17.400
<v Speaker 2>you ever go through a period of time where a

0:11:17.400 --> 0:11:20.400
<v Speaker 2>business has to lay workers off, it's a painful experience

0:11:20.400 --> 0:11:22.520
<v Speaker 2>for the workers in for them, and so they just

0:11:22.520 --> 0:11:25.440
<v Speaker 2>don't want to get overly confident only to find out

0:11:25.480 --> 0:11:26.560
<v Speaker 2>they have to make adjustments.

0:11:26.559 --> 0:11:28.360
<v Speaker 4>So that caution will be with us for a bit.

0:11:28.600 --> 0:11:31.360
<v Speaker 3>We are live on Bloomberg Television and Bloomberg Radio.

0:11:31.480 --> 0:11:33.320
<v Speaker 5>We're in San Francisco.

0:11:32.760 --> 0:11:34.959
<v Speaker 3>And we're at the Bloomberg Tech event, and we're speaking

0:11:35.000 --> 0:11:39.000
<v Speaker 3>with San Francisco FED President Mary Daily Reset a little bit.

0:11:39.120 --> 0:11:42.120
<v Speaker 3>But if I may, it's the first opportunity we've had

0:11:42.120 --> 0:11:46.120
<v Speaker 3>to ask you, have you spoken to Chairman Walsh about

0:11:46.200 --> 0:11:49.400
<v Speaker 3>how he sees the FED evolving about changes to the

0:11:49.440 --> 0:11:52.520
<v Speaker 3>institution and if you may fold in the context of

0:11:52.559 --> 0:11:56.000
<v Speaker 3>your district San Francisco Fed. Yes, much more than that

0:11:57.080 --> 0:11:58.559
<v Speaker 3>and your role going forward.

0:11:58.920 --> 0:12:01.720
<v Speaker 2>Sure, absolutely, So, you know, I think what we really

0:12:01.760 --> 0:12:04.240
<v Speaker 2>want when any new chair comes in, and what we

0:12:04.280 --> 0:12:07.200
<v Speaker 2>want from all of our leaders of federaliserve banks and

0:12:07.240 --> 0:12:10.480
<v Speaker 2>all of our governors, is that you're thinking constantly about

0:12:10.520 --> 0:12:12.640
<v Speaker 2>how can the FED be better? How can it better

0:12:12.679 --> 0:12:14.760
<v Speaker 2>serve the American people? How can we do our work

0:12:14.800 --> 0:12:19.079
<v Speaker 2>more efficiently, more effectively, and more resiliently. You know, ultimately

0:12:19.440 --> 0:12:23.400
<v Speaker 2>everything we talk about is put between two bookends. We

0:12:23.440 --> 0:12:27.120
<v Speaker 2>are fiduciary stuarts of public trust, which means we better

0:12:27.160 --> 0:12:29.960
<v Speaker 2>have services that people can depend on and we better

0:12:29.960 --> 0:12:30.600
<v Speaker 2>work hard to.

0:12:30.559 --> 0:12:31.440
<v Speaker 4>Achieve our goals.

0:12:31.640 --> 0:12:34.480
<v Speaker 2>And we're fiduciary stewards of public funds, which is we

0:12:34.559 --> 0:12:38.240
<v Speaker 2>are very careful about how we spend taxpayer dollars. So

0:12:38.360 --> 0:12:40.960
<v Speaker 2>with those two things in mind, you know, I mentioned

0:12:41.000 --> 0:12:43.360
<v Speaker 2>I joined the FED back in the nineties. So I

0:12:43.440 --> 0:12:45.840
<v Speaker 2>joined the FED in the nineties and we had check

0:12:45.880 --> 0:12:48.760
<v Speaker 2>processing member checks, We had check processing.

0:12:48.840 --> 0:12:50.400
<v Speaker 4>I thought the right legs.

0:12:49.960 --> 0:12:53.240
<v Speaker 2>Everywhere, everywhere in the everywhere we had a location, we

0:12:53.280 --> 0:12:57.280
<v Speaker 2>had people who process checks, but then check demand started

0:12:57.320 --> 0:13:00.000
<v Speaker 2>to fall and so we consolidated those actives.

0:13:00.040 --> 0:13:02.320
<v Speaker 4>But he's into a few locations.

0:13:01.960 --> 0:13:05.480
<v Speaker 2>And that level of modernizing, constantly thinking about how can

0:13:05.520 --> 0:13:06.160
<v Speaker 2>you do better?

0:13:06.440 --> 0:13:07.360
<v Speaker 4>Is what I see now.

0:13:07.480 --> 0:13:09.440
<v Speaker 5>So what is the chairs equivalent of that.

0:13:10.800 --> 0:13:11.480
<v Speaker 4>Just joined?

0:13:11.720 --> 0:13:13.880
<v Speaker 2>So I'm going to give him the right time he

0:13:13.960 --> 0:13:17.560
<v Speaker 2>has to announce that. He's talked about making sure he's

0:13:17.600 --> 0:13:20.320
<v Speaker 2>holding onto that tradition, and he comes in with a

0:13:20.320 --> 0:13:22.719
<v Speaker 2>lot of ideas. But you know what I've heard him

0:13:22.760 --> 0:13:25.520
<v Speaker 2>say again and again, which I really appreciate because all

0:13:25.679 --> 0:13:27.079
<v Speaker 2>he's the fifth chair I've worked with.

0:13:27.520 --> 0:13:29.560
<v Speaker 4>All of the chairs I've worked with have the same

0:13:29.960 --> 0:13:32.760
<v Speaker 4>basic compass.

0:13:32.960 --> 0:13:35.200
<v Speaker 2>It is to do our best work for the American

0:13:35.200 --> 0:13:38.360
<v Speaker 2>people and work with all the individuals who are earnestly

0:13:38.400 --> 0:13:40.679
<v Speaker 2>doing their work in the FED to do it well.

0:13:40.920 --> 0:13:42.840
<v Speaker 4>And I see that in chair worsh that.

0:13:43.000 --> 0:13:45.800
<v Speaker 1>Earnest work within the FED. How much of that is

0:13:45.840 --> 0:13:48.959
<v Speaker 1>being was anized to use adult AI. How hord or

0:13:49.000 --> 0:13:50.480
<v Speaker 1>easy is it at the moment when you're such a

0:13:50.520 --> 0:13:51.800
<v Speaker 1>regulated the institution in and.

0:13:51.840 --> 0:13:55.640
<v Speaker 2>Of yourself well we're careful, like all regulated institutions, and

0:13:55.679 --> 0:13:59.240
<v Speaker 2>importantly like all businesses. Businesses, and when I talk to businesses,

0:13:59.320 --> 0:14:01.600
<v Speaker 2>the last thing that want to do it's a huge

0:14:01.679 --> 0:14:05.320
<v Speaker 2>risk that destroy their shareholders. They're the value of their company.

0:14:05.559 --> 0:14:08.160
<v Speaker 2>The same is true for us good fiduciary stewarts of

0:14:08.200 --> 0:14:11.520
<v Speaker 2>public trust and good fiduciary stuarts of public funds, which

0:14:11.559 --> 0:14:14.400
<v Speaker 2>means we're always driving to adopt new technology to do

0:14:14.440 --> 0:14:17.080
<v Speaker 2>our work more efficiently, but we recognize we have to

0:14:17.120 --> 0:14:19.040
<v Speaker 2>do that safely. You know, people want to know they

0:14:19.040 --> 0:14:20.840
<v Speaker 2>get and get their money when they need it. They

0:14:20.880 --> 0:14:23.360
<v Speaker 2>want to know that the banks are well supervised. They

0:14:23.400 --> 0:14:26.360
<v Speaker 2>want to know that Monterey policy is not made by machines.

0:14:26.360 --> 0:14:28.920
<v Speaker 4>It's made by people making judgments not.

0:14:28.800 --> 0:14:32.760
<v Speaker 2>Only about models and rules, but also about the lived

0:14:32.800 --> 0:14:34.520
<v Speaker 2>experiences of people across our country.

0:14:34.640 --> 0:14:37.360
<v Speaker 3>Very quickly, before the show ends, what are you saying

0:14:37.400 --> 0:14:41.280
<v Speaker 3>in credit? That's a big story for us in how

0:14:41.600 --> 0:14:43.080
<v Speaker 3>data centers are financed.

0:14:43.600 --> 0:14:44.920
<v Speaker 5>For some it's very worrying.

0:14:45.440 --> 0:14:49.280
<v Speaker 4>Well, you know, we're watching that carefully. I watch that carefully.

0:14:49.560 --> 0:14:51.560
<v Speaker 2>What we do see is that there's a lot of

0:14:51.840 --> 0:14:54.880
<v Speaker 2>there's those companies investing a lot of their own resources

0:14:54.920 --> 0:14:57.400
<v Speaker 2>in those so it's something to keep our eye on.

0:14:57.640 --> 0:15:00.160
<v Speaker 2>But at this point, you know, again, if if you

0:15:00.280 --> 0:15:03.680
<v Speaker 2>stack rank the things that are worrying today, I'd say

0:15:03.840 --> 0:15:07.600
<v Speaker 2>getting inflation back to target, Getting Americans the relief they

0:15:07.640 --> 0:15:09.840
<v Speaker 2>deserve that we've been working on for quite a while.

0:15:10.080 --> 0:15:11.440
<v Speaker 4>That's my number one priority.