WEBVTT - Surveillance: Job's Day Moderation 0:00:05.080 --> 0:00:08.440 This is the Bloomberg Surveillance podcast. I'm Tom Keane, along 0:00:08.440 --> 0:00:12.280 with Jonathan Faroe and Lisa Abramowitz joined us each day 0:00:12.320 --> 0:00:16.800 for insight from the best and economics, geopolitics, finance and investment. 0:00:17.239 --> 0:00:22.000 Subscribe to Bloomberg Surveillance on demand on Apple, Spotify and 0:00:22.239 --> 0:00:26.560 anywhere you get your podcasts, and always on Bloomberg dot Com, 0:00:26.600 --> 0:00:30.160 the Bloomberg Terminal and the Bloomberg Business App. I want 0:00:30.160 --> 0:00:32.760 to pause here for the public service and Muhammad Larrian 0:00:32.800 --> 0:00:35.680 and there's a photo out on his Twitter feed on radio. 0:00:35.720 --> 0:00:38.760 It's real simple. It is the students of Queen's College, 0:00:38.840 --> 0:00:42.360 Cambridge with the beast Bosa. This is the official dog 0:00:42.400 --> 0:00:45.080 of the University of Cambridge. And Muhammad, I want to 0:00:45.080 --> 0:00:47.360 just pause for a bit here, and this is on 0:00:47.520 --> 0:00:51.240 Good Friday. Now. You studied with Erasmus Cambridge years ago. 0:00:51.680 --> 0:00:54.480 And the problem is John Fisher had your job a 0:00:54.520 --> 0:00:57.240 few years ago and he ran into an altercation with 0:00:57.400 --> 0:01:00.720 Henry the Eighth. You got to be careful at Cambridge 0:01:00.800 --> 0:01:04.000 when you're there. It's a it's an emotional place. What's 0:01:04.120 --> 0:01:08.200 been your experience dealing with these students. What's been the 0:01:08.200 --> 0:01:11.680 biggest surprise of your day job. Now, So for those 0:01:11.720 --> 0:01:14.440 of you who don't know English history as well as 0:01:14.520 --> 0:01:17.920 Tom does, John Fisher, who was the President of Queen's 0:01:17.920 --> 0:01:22.720 got beheaded and you've got beheaded by Henry the Eighth. Look, 0:01:23.000 --> 0:01:25.040 it's been an amazing experience with the students I can. 0:01:25.080 --> 0:01:30.240 I'll tell you how exciting it is to see them 0:01:30.400 --> 0:01:34.400 embrace the opportunity to giving and you're seeing transformation right 0:01:34.480 --> 0:01:38.080 in front of your eyes. I experienced it, so I 0:01:38.120 --> 0:01:40.400 see it repeat it over and over again, and it 0:01:40.440 --> 0:01:44.640 happens especially to people who come from more difficult backgrounds 0:01:44.680 --> 0:01:47.360 and who recognize that this is life's changing, not just 0:01:47.440 --> 0:01:50.800 for them, but for subsequent generation. Tell me about the 0:01:50.880 --> 0:01:54.360 elites that you're living with, and frankly, we are every day. 0:01:54.440 --> 0:01:57.360 Maybe not at Cambridge, but we're in an elite world. 0:01:57.960 --> 0:02:01.360 What is your optimism seeing this job report of an 0:02:01.360 --> 0:02:05.120 America that's essentially flat on its back. Half of America 0:02:05.440 --> 0:02:08.680 is struggling just to get by. So I do think 0:02:08.720 --> 0:02:12.720 we have an inequality problem. I call it a trifecta income, wealth, 0:02:12.960 --> 0:02:15.760 and in particular opportunity, and I think a lot has 0:02:15.800 --> 0:02:18.480 to be done to try and level the playing field 0:02:18.480 --> 0:02:22.280 on opportunity. Having said that this is not an economy 0:02:22.440 --> 0:02:27.080 on its knees. This is an economy that's incredibly robust 0:02:27.160 --> 0:02:30.560 and only gets down to its knees if there is 0:02:30.720 --> 0:02:35.160 further policy mistakes. I'm actually quite encouraged by how well 0:02:35.160 --> 0:02:37.560 the US economy has been doing, given what else has 0:02:37.560 --> 0:02:39.959 been going on in the world. Well, I just want 0:02:39.960 --> 0:02:42.600 to point out, because we're talking about inequality in the world, 0:02:43.000 --> 0:02:47.000 this is a really, really good report for minorities. The 0:02:47.080 --> 0:02:50.320 unemployment rate for blacks or African Americans drops from five 0:02:50.360 --> 0:02:53.560 to seven to five percent, a seven tenths drop in 0:02:53.720 --> 0:02:57.320 one month. Asian unemployment drops by six tenths to two 0:02:57.360 --> 0:03:00.800 point eight percent, and Hispanic drops by seven intense to 0:03:00.919 --> 0:03:04.200 four point six percent. This is only conjecture, but it 0:03:04.320 --> 0:03:08.080 seems like when you have this kind of continuing improvement 0:03:08.280 --> 0:03:11.280 in the labor market, it is getting to the people 0:03:11.280 --> 0:03:14.280 who are less hired, to the people at the lower 0:03:14.400 --> 0:03:17.000 end of the socioeconomic scale who didn't get the jobs 0:03:17.040 --> 0:03:19.640 back right away, and it seems to be broadening. So 0:03:19.720 --> 0:03:22.959 this is the question that people ask Mohammed. To Mike's point, 0:03:23.040 --> 0:03:25.520 the labor market looks, so can this labor market report. 0:03:25.600 --> 0:03:28.200 Some people might disagree based on other figures we've had 0:03:28.240 --> 0:03:30.560 this week, But let's just go with this. Why does 0:03:30.560 --> 0:03:32.640 the FED want to ruin it? That's the question you 0:03:32.680 --> 0:03:34.360 often here asked. Why do they want to ruin this? 0:03:34.400 --> 0:03:37.480 Why do they want to get unemployment higher? I think 0:03:37.520 --> 0:03:39.960 a lot of people outside of Wall Street and the 0:03:40.040 --> 0:03:42.800 federerserve the institution don't quite understand that. Can you make 0:03:42.840 --> 0:03:45.680 sense of that for us? So the charitable interpretation is 0:03:45.720 --> 0:03:48.120 because they're not getting enough help on the supply side, 0:03:48.560 --> 0:03:51.240 and if we did more to enhance labor force participation, 0:03:51.800 --> 0:03:53.920 they wouldn't have to do so much on the demand side. 0:03:54.040 --> 0:03:57.400 That's the charitable side. The less charitable is they started 0:03:57.520 --> 0:04:01.440 very late, and because they started for they are having 0:04:01.880 --> 0:04:04.360 a lot of hikes in a very short amount of time, 0:04:04.960 --> 0:04:08.080 which then creates more damage to the real economy than 0:04:08.120 --> 0:04:10.640 you would have had otherwise had you started on time. 0:04:10.920 --> 0:04:13.840 And I think there's general agreement that they started very late, 0:04:14.080 --> 0:04:18.200 probably a year late. The Fed's argument, I'll take the 0:04:18.279 --> 0:04:22.839 Randy Krausner's side for right now, is that they think 0:04:22.839 --> 0:04:26.120 they can tighten the way they are tightening because there 0:04:26.160 --> 0:04:29.080 were so many job openings left over after the pandemic 0:04:29.320 --> 0:04:33.480 that people are filling those holes rather than unemployment rising. 0:04:33.480 --> 0:04:37.400 We saw yesterday the jobless claims numbers, which when they 0:04:37.480 --> 0:04:41.520 changed the seasonally adjusted factors, went up by about thirty thousand, 0:04:41.640 --> 0:04:44.279 but they're still very low and not showing signs of 0:04:44.400 --> 0:04:47.400 breaking out. There does seem to be also because it 0:04:47.440 --> 0:04:49.960 was so hard to find workers, a labor hoarding thing 0:04:50.040 --> 0:04:52.760 going on, where companies are reluctant to let people go. 0:04:53.240 --> 0:04:55.919 So the FED is maybe gambling at this point that 0:04:55.960 --> 0:04:58.160 they can get away with this, but it's paid off. 0:04:58.200 --> 0:05:00.679 I'm going to take the Elizabeth Warren's side. We've created 0:05:00.680 --> 0:05:03.720 a million jobs in ninety days. You just gave us 0:05:03.960 --> 0:05:09.680 stunning diversity statistics of the minorities of America. Prospering, John, 0:05:09.920 --> 0:05:12.280 is this maybe the best jobs report I've ever seen, 0:05:12.400 --> 0:05:16.680 a million jobs in ninety days in different minority unemployment 0:05:16.720 --> 0:05:19.000 that I never imagined, or you know what I'm going 0:05:19.040 --> 0:05:22.080 to say back to that, So just wait, just wait, 0:05:22.400 --> 0:05:24.440 just wait. Based on the titan we've had in twelve 0:05:24.440 --> 0:05:28.599 months zero to five, potentially in the coming meeting on 0:05:28.680 --> 0:05:31.200 May third, they go beyond five. I'm ahabit. On top 0:05:31.240 --> 0:05:33.520 of that, the banking stress an extra layer of it. 0:05:33.760 --> 0:05:36.080 I just think that's a big group of individuals right 0:05:36.120 --> 0:05:39.000 now on Wolf Street market participants looking at the states 0:05:39.120 --> 0:05:42.880 point this morning and saying, great, okay, wait it for 0:05:42.920 --> 0:05:44.679 a couple of months, because it's going to get worse. 0:05:45.240 --> 0:05:48.320 Is that your take? That's the fear. That is the fear, 0:05:48.760 --> 0:05:52.160 and I worry about it every single day. My question 0:05:52.200 --> 0:05:54.360 for you, if I add up all the numbers you've 0:05:54.360 --> 0:05:56.279 given us, he's spanning down from five point three to 0:05:56.320 --> 0:05:59.359 four point six, I'm black unemploying five point seven to 0:05:59.440 --> 0:06:02.360 five age and three point four to two point eight. 0:06:02.800 --> 0:06:06.919 That means white unemployment must have spiked higher in a 0:06:07.120 --> 0:06:09.480 very big way. Well, I can check that out very 0:06:09.520 --> 0:06:12.599 quickly here. White unemployment obviously has been very very low 0:06:13.279 --> 0:06:19.120 at this point. White unemployment is unchanged, so that doesn't 0:06:19.160 --> 0:06:22.159 add up. So if everything else goes down and white 0:06:22.360 --> 0:06:26.120 is unchanged, so well, you can come with me tomorrow 0:06:26.160 --> 0:06:29.640 to the Bureau of Labor Statistics and talk to them. 0:06:30.240 --> 0:06:32.880 I run the table a moment. I want to celebrate 0:06:32.960 --> 0:06:36.080 Mike mckey's work here talking with the Federalserve Bank of Boston, 0:06:36.200 --> 0:06:38.599 talking to the Federiserve Bank of Cleveland, talking to the 0:06:38.600 --> 0:06:41.240 feder Reserve Bank of Saint Louis, and I want to 0:06:41.279 --> 0:06:43.680 go back to something. This is john so important because 0:06:43.680 --> 0:06:47.479 it's what surveillance does. And McKee lives every day and folks, 0:06:47.520 --> 0:06:49.840 you don't even know this, but Alarian on the side 0:06:49.960 --> 0:06:53.159 is a songwriter. Here's Allarian off of one of his 0:06:53.279 --> 0:06:56.800 key songs for Hamilton a number of years ago, and 0:06:56.880 --> 0:06:59.560 the lyrics of this are just important and go really 0:06:59.760 --> 0:07:03.920 right too, the idea of what the Fed will do. 0:07:04.160 --> 0:07:08.040 Talk less, what smile more. Don't let them know what 0:07:08.120 --> 0:07:10.840 you're against or what you're for. You can't be serious. 0:07:10.920 --> 0:07:13.720 You want to get ahead. Fools who run their mouths 0:07:13.720 --> 0:07:16.800 off wind up dead. You wrote about this, I didn't 0:07:16.880 --> 0:07:20.920 quite write about that whole thing, but let me let me. 0:07:21.040 --> 0:07:24.000 I just want to join you, because Mike, you are amazing. 0:07:24.360 --> 0:07:27.680 I always listen to you. I end up having because 0:07:27.720 --> 0:07:30.400 of you many more insights than I would otherwise. And 0:07:30.520 --> 0:07:33.680 the way you interview federal officials and your questions at 0:07:33.680 --> 0:07:36.800 the FEMC press conference or just terrific. So thank you. 0:07:36.840 --> 0:07:40.960 Working too much? Oh absolutely, that're talking too much. I 0:07:41.040 --> 0:07:43.920 think just talk to former federal officials see how they 0:07:43.920 --> 0:07:46.960 feel about the amount of the follow under that that 0:07:47.400 --> 0:07:49.440 they would give you is would you rather we go 0:07:49.520 --> 0:07:52.840 back to the days when nobody spoke? And but that's 0:07:52.840 --> 0:07:57.040 a false choice. Talk less doesn't mean don't talk. Well, 0:07:58.680 --> 0:08:02.960 as as as a president of a college, when you 0:08:03.000 --> 0:08:05.880 help a faculty meeting, can you tell members of the 0:08:05.960 --> 0:08:09.160 faculty to shut up and not speak? That's kind of 0:08:09.160 --> 0:08:11.600 the problem. They've got nineteen people eighteen at the moment 0:08:11.840 --> 0:08:15.080 on the committee and they're all gonna want their chance 0:08:15.160 --> 0:08:17.720 to say what they think. If knowing what we know today, 0:08:17.920 --> 0:08:20.760 would you keep the dots? No? Well, you know, I 0:08:20.920 --> 0:08:23.000 was just asked that by one of the people I interviewed, 0:08:23.040 --> 0:08:26.440 and I said no, not because the dots couldn't be helpful, 0:08:26.440 --> 0:08:29.400 but because they're not. Wall Street does not read them 0:08:29.440 --> 0:08:34.960 as nineteen different dots based on the forecasts that those 0:08:35.000 --> 0:08:37.160 people make. They read it is this is our this 0:08:37.280 --> 0:08:41.800 is our plan. Okay, So Judge Keene, I rest my case. John. 0:08:41.960 --> 0:08:44.000 Does the Bank of England need dots? Does the Bank 0:08:44.000 --> 0:08:46.079 of England talk so much? Does the Bank of England 0:08:46.120 --> 0:08:48.120 talked to Michael McKee like this and half my camera, 0:08:48.240 --> 0:08:51.440 just my single, just for a moment, Mike McKay, you're 0:08:51.440 --> 0:08:55.080 a masic. That's just my turn it's my turn, Mama. 0:08:55.160 --> 0:08:56.600 Do you think the Bank of England dies this better 0:08:56.600 --> 0:08:58.880 than the federal seff? Don't you just the communication? Why 0:08:58.960 --> 0:09:02.080 what do they do differently? I think they are less political, 0:09:02.120 --> 0:09:04.640 they're honest. They say things that may be unpleasant but 0:09:04.760 --> 0:09:06.880 need to be said. You know, your governor came out 0:09:06.880 --> 0:09:08.959 and said inflation will go up to thirteen percent if 0:09:08.960 --> 0:09:11.320 we're not careful. He came out and warned against a 0:09:11.360 --> 0:09:14.320 wage price spiral. The inflation report was the first to 0:09:14.360 --> 0:09:16.959 acknowledge that they had made a mistake on transitory They 0:09:17.040 --> 0:09:19.760 hiked first. I mean, if you look at what they do, 0:09:20.040 --> 0:09:23.560 and then they publish fan charts and they're honest about 0:09:23.600 --> 0:09:28.280 the answer. So does publish fan charts. No one looks 0:09:28.320 --> 0:09:31.160 at them exactly because if you put something else out there, 0:09:31.360 --> 0:09:34.120 they will look at that. So I do think that 0:09:34.440 --> 0:09:37.240 there's a lot to learn from best practice central banking 0:09:37.240 --> 0:09:39.160 around the world, and that we have to have an 0:09:39.200 --> 0:09:42.200 open mind and we must not get stuck in this 0:09:42.679 --> 0:09:45.720 lack of cognitive diversity, because it ends up hurting the 0:09:45.800 --> 0:09:48.600 American people. It really does. If I could give you 0:09:48.600 --> 0:09:50.679 one thing right now, would you take the CPR report 0:09:50.720 --> 0:09:52.400 next week or the Bank arnings. What would you like 0:09:52.440 --> 0:09:55.120 to number up front? If I'm worried about the economy, 0:09:55.160 --> 0:10:00.640 I would take the bank earnings, but more details about deposits. 0:10:00.679 --> 0:10:04.000 I think people don't understand what happens to a banking 0:10:04.000 --> 0:10:07.200 system when money flows out, not just at the large banks, 0:10:07.200 --> 0:10:10.800 but due to money market sector. It is significantly different 0:10:10.800 --> 0:10:13.520 in terms of the propensity to lend and who gets hurt. 0:10:13.880 --> 0:10:18.040 Small and medium term industries and they are major drop creators. 0:10:18.400 --> 0:10:20.160 Would you like to stay for next hour? I mean 0:10:20.200 --> 0:10:23.040 we can do this from those sixty minutes if you want. 0:10:23.160 --> 0:10:35.920 All right, I think I managed the hour. Randa Krasner 0:10:35.960 --> 0:10:38.160 where this as well, the former governor of the Federal Reserve. 0:10:38.200 --> 0:10:41.760 Of course, the universe of Chicago Boost School, Professor Krauser. 0:10:41.800 --> 0:10:44.160 When I look at this data and what doctor Larion 0:10:44.280 --> 0:10:48.440 says about clearly optimistic data, I want you to speak 0:10:48.480 --> 0:10:52.680 to the optimistic market economists that say there's more going 0:10:52.760 --> 0:10:57.880 on than traditional economic analysis, that this is an America resilient. 0:10:58.400 --> 0:11:02.040 How do you see that it boosts School. Oh, this 0:11:02.120 --> 0:11:04.120 is something we've talked about before, and I've called this 0:11:04.160 --> 0:11:08.959 so called immaculate disinflation that somehow because inflation is gradually 0:11:09.000 --> 0:11:11.520 coming down that we can do this without the labor 0:11:11.600 --> 0:11:15.920 market cracking, without really feeling much pain. I think that's 0:11:15.960 --> 0:11:20.360 a little bit too positive. I think people would be 0:11:20.400 --> 0:11:22.760 a little bit concerned to say, oh, well, we'll just 0:11:22.800 --> 0:11:25.679 be able to make it all work work very easily. 0:11:26.640 --> 0:11:30.319 One thing that was at least heartening in the in 0:11:30.400 --> 0:11:35.480 the report is that the changes in wages seem to 0:11:35.520 --> 0:11:39.439 be be roughly where the well exactly on where the 0:11:40.440 --> 0:11:44.320 forecast was. Um. So that's down a bit from where 0:11:44.360 --> 0:11:48.960 things had been. So we're seeing still recently robust labor market, 0:11:49.000 --> 0:11:51.959 but not quite as much wage pressure. I very much 0:11:52.000 --> 0:11:54.839 agree with with Muhammad. I think the FED has been well. 0:11:54.880 --> 0:11:56.320 I would say the Fed has been very clear and 0:11:56.320 --> 0:11:59.400 that makes it very easy to to say that unless 0:11:59.400 --> 0:12:02.520 something wild happens in the next next few weeks, they're 0:12:02.520 --> 0:12:04.800 going to go twenty five basis points and then it's 0:12:04.840 --> 0:12:09.120 likely that they're they made pause. Obviously that'll relate to 0:12:09.240 --> 0:12:14.800 how the the inflation report comes out, but they're getting 0:12:14.800 --> 0:12:17.560 into the fives, and that's something that you know, we've 0:12:17.559 --> 0:12:20.120 talked about for many months that I think that's where 0:12:20.120 --> 0:12:22.280 the FED was going. I think they've made it fairly 0:12:22.280 --> 0:12:23.920 clear that that's that's where they were going, and they're 0:12:23.920 --> 0:12:27.520 probably gonna pause five and five and a half Governor Krasner, 0:12:28.080 --> 0:12:31.199 I look at the one million jobs formed off revisions 0:12:31.200 --> 0:12:35.120 of the last ninety days. The three months moving average 0:12:35.160 --> 0:12:39.560 is three hundred and fifty five thousand. That is a 0:12:39.679 --> 0:12:44.360 booming job economy under any theory. How distant is Jerome 0:12:44.480 --> 0:12:50.400 Powell from his higher unemployment that he desires. Yeah, so, 0:12:50.520 --> 0:12:52.480 as I said, you know, the FS, the Fed's not 0:12:52.520 --> 0:12:55.160 going to quit until the labor market quits. And the 0:12:55.240 --> 0:12:58.199 labor market has not yet quit, because I think the 0:12:58.679 --> 0:13:00.640 view is still it's going to be very, very difficult 0:13:00.679 --> 0:13:05.000 to bring inflation down in a consistent and permanent way 0:13:05.200 --> 0:13:08.079 until you see some more weakness in the more weakness 0:13:08.080 --> 0:13:12.400 in the job market. Fortunately, we don't see wages wage 0:13:12.400 --> 0:13:15.480 growth accelerating, but it's not come down nearly as much 0:13:15.480 --> 0:13:19.880 as as just extraordinary. I mean, are we back to 0:13:19.920 --> 0:13:24.160 a bullard seven percent in the last four minutes. I'm 0:13:24.160 --> 0:13:26.960 looking at three hundred and fifty five thousand jobs per month. Well, 0:13:26.960 --> 0:13:29.160 here's the interesting thing that's happened, that happened in the 0:13:29.240 --> 0:13:32.320 last month. When you look at that household survey the 0:13:32.400 --> 0:13:34.600 labor force grew by four hundred and eighty thousand, which 0:13:34.640 --> 0:13:36.680 the FETE has been expecting more people come into the 0:13:36.720 --> 0:13:40.600 labor force and maybe that's bringing down the jolts jobs numbers. 0:13:40.880 --> 0:13:43.600 And of those coming into the labor force, more people 0:13:43.920 --> 0:13:47.240 got jobs five hundred and seventy seven thousand, while unemployment 0:13:47.240 --> 0:13:49.880 fell by ninety seven thousand. There was a big dichotomy 0:13:49.920 --> 0:13:53.720 between the establishment survey and the household survey for a 0:13:53.760 --> 0:13:56.360 couple of months. It looks like household is now catching 0:13:56.440 --> 0:13:58.679 up to thirty six. It's the number we haven't had 0:13:58.679 --> 0:14:02.040 to downside the price on a piebrow support in twelve months. 0:14:02.400 --> 0:14:04.920 Ronnie Crust and thank you at the University of Chicago 0:14:05.000 --> 0:14:12.520 booth scold a business. Tiffany Wilding now with Pimco, thrilled 0:14:12.520 --> 0:14:15.079 that she could join us this morning. Tiffany, what was 0:14:15.120 --> 0:14:19.840 the distinctive feature for you of this job's report? Well, 0:14:19.880 --> 0:14:23.080 I mean, I think, you know, obviously, the payroll number 0:14:23.080 --> 0:14:25.680 on the surface was very strong, and as you mentioned, 0:14:25.720 --> 0:14:28.840 the three month moving average is well above you know, 0:14:28.880 --> 0:14:31.200 kind of what we need to sustain the level of 0:14:31.200 --> 0:14:34.040 the unemployment rate. But but if you look at the 0:14:34.080 --> 0:14:36.640 wage numbers, actually thought That was kind of interesting because 0:14:36.720 --> 0:14:39.040 on a three month over three month basis, average hourly 0:14:39.080 --> 0:14:43.040 earning is decelerating. We were at six and now we're 0:14:43.040 --> 0:14:46.360 at three. That's much closer to the Fed's targets. You know, 0:14:46.360 --> 0:14:48.840 I would say, actually, overall, you know, this payroll report, 0:14:48.840 --> 0:14:51.280 even though we're talking about recession and things like that, 0:14:51.360 --> 0:14:54.479 you know, at least this payroll report was very consistent 0:14:54.520 --> 0:14:57.520 with a soft landing view that the FED has. Man 0:14:57.640 --> 0:15:00.600 that's the soft landing view that they have of means, 0:15:00.640 --> 0:15:03.880 I guess there's no fear of a twenty five deep lift. 0:15:04.680 --> 0:15:11.120 If they lift twenty five more basis points, who is damaged? Well? 0:15:11.160 --> 0:15:13.560 You know, I mean from an economist perspective, twenty five 0:15:13.600 --> 0:15:17.240 basis points isn't really a lot, right, It's really all 0:15:17.280 --> 0:15:20.640 about you know, the five percentage points that have increased, 0:15:21.080 --> 0:15:23.480 you know, over the course of the last year. That 0:15:23.560 --> 0:15:26.440 really matters, you know, and ultimately, the you know, we've 0:15:26.440 --> 0:15:28.680 talked about a lot about long and variable lags. You know, 0:15:28.760 --> 0:15:31.320 that in our view is impacting the economy. And I 0:15:31.360 --> 0:15:33.520 think that the banking stress that you're seeing or that 0:15:33.560 --> 0:15:36.560 we have seen, is kind of symptomatic of those long 0:15:36.600 --> 0:15:39.240 and variable lags and the fact that monetary policy conditions 0:15:39.280 --> 0:15:41.880 are tight. You know, so I I you know, I do. 0:15:41.960 --> 0:15:44.240 I will say that as everyone knows, the labor market 0:15:44.280 --> 0:15:48.080 does tend to lag. You do see growth decelerating first, 0:15:48.160 --> 0:15:49.720 you know, and we think that that you know is 0:15:49.760 --> 0:15:52.480 happening and will continue to happen, and then eventually labor 0:15:52.520 --> 0:15:56.000 markets will also decelerate more as well. Tiffany, it's a 0:15:56.040 --> 0:15:59.200 point on the Canada where you'd be comfortable saying that's 0:15:59.200 --> 0:16:01.920 about the time I think we should realize recognize just 0:16:02.000 --> 0:16:04.960 how much credits tightening we dispect off the bank of 0:16:05.000 --> 0:16:06.960 the banking stress of the last month. When are we 0:16:07.000 --> 0:16:09.680 going to find that out? Yeah? I mean so, I 0:16:09.680 --> 0:16:11.160 mean we are starting to see it some of the 0:16:11.240 --> 0:16:14.880 higher frequency data. You know that lending growth is slowing 0:16:14.920 --> 0:16:17.920 and some of the regionals obviously the deposits are moving 0:16:17.960 --> 0:16:20.560 out of some of the mid size and smaller banks, 0:16:20.880 --> 0:16:23.320 and you know, I think overall the caustic capital for 0:16:23.320 --> 0:16:25.960 those mid size and smaller banks, as for everyone else, 0:16:26.080 --> 0:16:28.240 is going up, and so that's just going to make 0:16:28.280 --> 0:16:31.400 loans less attractive for them to make. But overall, I 0:16:31.400 --> 0:16:33.960 would just take a step back. We've done an analysis 0:16:34.040 --> 0:16:37.080 just looking over fourteen developed markets over the past seventy 0:16:37.160 --> 0:16:40.920 years around tightening cycles, and what that suggests is that 0:16:41.000 --> 0:16:43.480 after a central bank starts hiking interest rates around four 0:16:43.520 --> 0:16:46.040 to eight quarters after, you tend to see a more 0:16:46.080 --> 0:16:49.640 material deceleration in the output gap and in growth. So 0:16:49.800 --> 0:16:52.960 that's kind of lining up with what we're seeing, you know, 0:16:53.000 --> 0:16:55.160 it's maybe suggestive that in the second half we actually 0:16:55.160 --> 0:16:58.400 could see some more deterioration. Tiffany, this was wonderful to 0:16:58.400 --> 0:17:01.560 get your few Tiffany Wilding Pimcock in on a holiday. 0:17:01.680 --> 0:17:14.200 We appreciate that, Tiffany, thank you very much. And now 0:17:14.240 --> 0:17:17.160 a conversation as we do with someone who works three 0:17:17.240 --> 0:17:19.119 hundred and sixty five days of the year. She is 0:17:19.160 --> 0:17:23.320 the US Commerce Secretary, but far more the former governor 0:17:23.359 --> 0:17:25.840 of Rhode Island. And what is so important within the 0:17:25.880 --> 0:17:30.720 stereotype of our politicians removed from the labor economy, that 0:17:30.880 --> 0:17:34.120 is not Gina Ramando, the Commerce Secretary, joins us now 0:17:34.520 --> 0:17:37.760 with the experience of the collapse of the Bulova watch 0:17:37.840 --> 0:17:41.879 company in Rhode Island. Oh, Gina, I lived it with you. 0:17:41.880 --> 0:17:45.120 You lived it in real time with your father. There's 0:17:45.160 --> 0:17:48.520 an awful lot of America feeling they're living the Bulova 0:17:48.640 --> 0:17:52.960 watch experience right now? How does the administration speak to 0:17:53.080 --> 0:17:58.879 those that are not prospering? Good morning, good to see well. 0:17:58.920 --> 0:18:02.400 First of all, the illustration is speaking directly to those 0:18:02.440 --> 0:18:06.800 people because the President is obsessed with bringing more manufacturing 0:18:06.840 --> 0:18:09.399 back to America. In fact, I was with the President 0:18:09.560 --> 0:18:13.160 last week in Hickory, North Carolina, a town just like 0:18:13.200 --> 0:18:17.359 what we're talking about, and I was there because of 0:18:17.520 --> 0:18:23.640 expansions of two American companies making fiber optic cable, because 0:18:23.680 --> 0:18:28.359 of our initiatives to provide every American broadband. So you know, 0:18:28.560 --> 0:18:31.840 the President's calling on manufacturers to make more in America. 0:18:32.000 --> 0:18:35.000 It is working, and it's reflected in these jobs numbers. 0:18:35.000 --> 0:18:37.600 I mean, this is an excellent jobs report. You're seeing 0:18:38.280 --> 0:18:43.320 record low black unemployment, You're seeing record low unemployment among 0:18:43.600 --> 0:18:47.040 people who have been left behind. And the best news 0:18:47.080 --> 0:18:51.639 for me is higher percentage of people working in the 0:18:51.720 --> 0:18:57.040 workforce anytime in decades. So we're going to Middle America. 0:18:57.080 --> 0:19:00.000 We're going to folks like my dad who were left 0:19:00.119 --> 0:19:03.240 behind in the collapse of manufacturing, and we're getting them 0:19:03.240 --> 0:19:06.080 back to work. That's the message to Middle America. Secondly, 0:19:06.160 --> 0:19:08.879 Romando what's the message to the Europeans as you do 0:19:08.960 --> 0:19:12.879 this work with us? You know, I'm headed to Europe 0:19:12.920 --> 0:19:16.840 at the end of next month. We need to work together, 0:19:17.520 --> 0:19:20.680 and you know, I think whether it's the IRA or 0:19:20.800 --> 0:19:27.119 the Chips initiative, there's opportunities for European companies and opportunities 0:19:27.160 --> 0:19:30.439 for us to work together to meet the moment with 0:19:30.520 --> 0:19:33.720 climate change and our global competition with China. Perhaps I 0:19:33.720 --> 0:19:36.520 should have been more precise. European companies will invest in 0:19:36.560 --> 0:19:40.120 the United States. What's the message for European governments who 0:19:40.440 --> 0:19:44.080 perhaps unhappy about what's happening at the moment, It's the 0:19:44.160 --> 0:19:47.479 same message. You know. I understand that there was some 0:19:47.560 --> 0:19:51.640 initial concern about the IRA in particular, but I'll tell 0:19:51.680 --> 0:19:54.520 you we are in constant contact with our European colleagues, 0:19:54.600 --> 0:19:58.200 including me. I've met with numbers of them and from 0:19:58.320 --> 0:20:00.760 Germany from the EU in the past couple of months. 0:20:01.160 --> 0:20:04.800 I think they're now understanding that there are opportunities for 0:20:04.840 --> 0:20:07.359 them and by the way, we all need to do 0:20:07.480 --> 0:20:12.320 more to come back climate change. So initial hurt feelings maybe, 0:20:12.359 --> 0:20:14.639 but there's a lot of good work to do together. 0:20:14.840 --> 0:20:17.280 Let's talk about's handy with supply chains. I know this 0:20:17.320 --> 0:20:20.040 is very important to you. Adam Poston of the Piece 0:20:20.040 --> 0:20:23.920 and Institute said, the idea that making everything domestically built 0:20:23.960 --> 0:20:27.960 resiliency is quote the fallacy of self sufficiency and has 0:20:28.000 --> 0:20:32.840 been disproven repeatedly. How would you respond to that? He's right? 0:20:33.200 --> 0:20:35.960 I mean, nobody thinks we should be making everything that 0:20:36.040 --> 0:20:38.840 we need in America. Nobody's saying we should be self sufficient. 0:20:38.880 --> 0:20:42.160 It's a global economy. We want to continue to trade. 0:20:43.440 --> 0:20:46.240 But in the case of semiconductors, for example, which are 0:20:46.520 --> 0:20:50.040 essential to our national security, the fact that we buy 0:20:50.160 --> 0:20:53.480 ninety plus percent of our leading edge chips from Taiwan 0:20:54.200 --> 0:20:58.680 is also unsustainable and quite frankly, almost dangerous. So no 0:20:58.720 --> 0:21:01.080 one would say we need to make enough chips in 0:21:01.119 --> 0:21:05.160 America for all that we consume. That would be silly, 0:21:05.440 --> 0:21:08.920 but we do need to have more resiliency, Madame Secretary, 0:21:08.960 --> 0:21:11.720 I spoke to the managing director of the IMF yesterday 0:21:11.720 --> 0:21:13.440 and it could have easily been one hundred and ten 0:21:13.520 --> 0:21:17.560 percent conversation on China. You are gifted and that you 0:21:17.680 --> 0:21:23.399 have Elizabeth Economy advising you, arguably our best young China 0:21:23.520 --> 0:21:28.560 expert in America. What does doctor Economy advising you on 0:21:28.720 --> 0:21:34.480 about improved China US relationships. Well, I am smiling because 0:21:34.560 --> 0:21:36.919 doctor Economy is about to get on a plane and 0:21:37.000 --> 0:21:42.199 head to China. And you know, what we are doing 0:21:42.600 --> 0:21:48.880 is pursuing the policy of protecting and promoting. First and foremost, 0:21:48.960 --> 0:21:51.240 we have to protect the United States of America and 0:21:51.359 --> 0:21:55.199 our national security, and we're doing that with Gusto, with 0:21:55.320 --> 0:22:00.120 our export controls and guarding our tech leading edge technology. 0:22:00.359 --> 0:22:04.400 Having said that, where it makes sense, we need to promote, 0:22:04.480 --> 0:22:07.480 We need to export, We need to help American businesses 0:22:07.480 --> 0:22:10.879 and make sure that China provides for a level playing field. 0:22:11.000 --> 0:22:15.320 So that's the administration strategy. You are correct that I 0:22:15.320 --> 0:22:18.800 am extremely lucky to have Liz. She's extraordinary and she's 0:22:18.840 --> 0:22:21.760 here in the Commerce Department. There is no level playing field. 0:22:21.840 --> 0:22:24.480 There is a lack of reciprocity when it comes to 0:22:24.520 --> 0:22:28.560 things like social media in tech, it's likely. Do you 0:22:28.600 --> 0:22:30.879 think then that we need to stop banning more things 0:22:30.880 --> 0:22:34.800 here in the United States? There is a law called 0:22:34.800 --> 0:22:38.199 the Restrict Act weaving its way through Congress. The chief 0:22:38.359 --> 0:22:42.240 architect is Senator Mark Warner or Virginia, which I think 0:22:42.320 --> 0:22:46.320 is excellent and is very sensible, which is to say, 0:22:46.560 --> 0:22:49.359