1 00:00:02,520 --> 00:00:07,040 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. 2 00:00:07,920 --> 00:00:10,799 Speaker 2: The big question for everybody, especially for Wall Street, is 3 00:00:10,840 --> 00:00:13,320 Speaker 2: what happens on September seventeenth. 4 00:00:13,680 --> 00:00:16,880 Speaker 3: So this is, as you know, kind of an interesting 5 00:00:17,920 --> 00:00:21,720 Speaker 3: month because we've got Jackson Hole and then we've got 6 00:00:22,000 --> 00:00:24,520 Speaker 3: quite a few weeks of data to kind of pull in. 7 00:00:24,720 --> 00:00:29,040 Speaker 3: So I'm really I think everybody's quite interested in some 8 00:00:29,120 --> 00:00:31,680 Speaker 3: of the maybe the prints that happened in the last 9 00:00:31,680 --> 00:00:34,360 Speaker 3: couple of months and kind of where they go from here. 10 00:00:35,360 --> 00:00:40,720 Speaker 3: So I'm I'm like everybody. I think there was some 11 00:00:41,120 --> 00:00:44,879 Speaker 3: fascinating conversations at the last FMC, As you know, there 12 00:00:44,920 --> 00:00:49,120 Speaker 3: were a couple of cents. I think my interpretation of 13 00:00:49,159 --> 00:00:52,560 Speaker 3: what's happening, especially in the labor market, is that the 14 00:00:52,600 --> 00:00:55,200 Speaker 3: first couple quarters, a lot of business people were just 15 00:00:55,240 --> 00:00:58,920 Speaker 3: saying there's uncertainty enough, and I think they kind of 16 00:00:58,960 --> 00:01:01,920 Speaker 3: cooled a little bit on higher side. But the most 17 00:01:01,960 --> 00:01:04,360 Speaker 3: recent couple of weeks that we've been talking to businesses 18 00:01:04,360 --> 00:01:07,880 Speaker 3: in the district, there seems to be a burgeoning optimism 19 00:01:07,959 --> 00:01:11,440 Speaker 3: again that they've kind of digested and they've been agile 20 00:01:11,560 --> 00:01:13,360 Speaker 3: enough to try to work their way through some of 21 00:01:13,400 --> 00:01:17,280 Speaker 3: the new policies from the administration and maybe going forward, 22 00:01:17,760 --> 00:01:20,840 Speaker 3: maybe we'll see a little bit uptick. That said, I 23 00:01:20,840 --> 00:01:26,000 Speaker 3: still believe there's that the inflation number is trending closer 24 00:01:26,040 --> 00:01:26,760 Speaker 3: to three than two. 25 00:01:27,120 --> 00:01:29,360 Speaker 2: Well, we saw that in the minutes that in general 26 00:01:29,560 --> 00:01:32,600 Speaker 2: the Open Market Committee felt that inflation was a bigger 27 00:01:32,680 --> 00:01:33,800 Speaker 2: danger at this point. 28 00:01:34,120 --> 00:01:36,280 Speaker 1: Would you say that's your view now? 29 00:01:37,319 --> 00:01:38,319 Speaker 4: It would be my view now. 30 00:01:38,520 --> 00:01:41,559 Speaker 3: I think with an understanding that what may have happened 31 00:01:41,600 --> 00:01:43,800 Speaker 3: in the first couple quarters on the labor side, which 32 00:01:43,840 --> 00:01:49,160 Speaker 3: I think concerned several people on the committee, me included. 33 00:01:49,480 --> 00:01:53,920 Speaker 3: But I think this PPI was interesting, that print was interesting. 34 00:01:53,960 --> 00:01:57,560 Speaker 3: But I really believe that when we talked to a 35 00:01:57,600 --> 00:02:01,600 Speaker 3: lot of a lot of folks in our district, is 36 00:02:01,600 --> 00:02:04,920 Speaker 3: that if you had to kind of lean or have 37 00:02:05,000 --> 00:02:07,400 Speaker 3: a bias toward, it would be on the inflation side. 38 00:02:07,520 --> 00:02:09,600 Speaker 2: Well, it sounds like what you're saying is that companies 39 00:02:10,080 --> 00:02:13,160 Speaker 2: may be feeling better about being able to keep employees 40 00:02:13,200 --> 00:02:15,799 Speaker 2: on the payroll, but they're going to have to raise prices. 41 00:02:16,080 --> 00:02:18,360 Speaker 4: I don't know. I think that. 42 00:02:19,800 --> 00:02:23,440 Speaker 3: What's interesting to me, Mike is is I think the 43 00:02:23,560 --> 00:02:25,560 Speaker 3: business has learned a lot in that twenty two to 44 00:02:25,560 --> 00:02:28,480 Speaker 3: twenty three cycle with the supply chain disruptions, and I 45 00:02:28,480 --> 00:02:33,000 Speaker 3: think a lot of them really made new decisions with 46 00:02:33,080 --> 00:02:36,200 Speaker 3: plan b's and c's relative to where their goods come from. 47 00:02:36,560 --> 00:02:39,840 Speaker 3: And I think they might not have prepared for terrorists, 48 00:02:39,880 --> 00:02:42,720 Speaker 3: but they might have prepared themselves for other supply shocks. 49 00:02:42,720 --> 00:02:45,519 Speaker 3: But it seems like they've adapted a lot of their 50 00:02:45,560 --> 00:02:48,240 Speaker 3: businesses from that experience. 51 00:02:48,320 --> 00:02:52,639 Speaker 4: So I actually think that the agility that they created. 52 00:02:52,160 --> 00:02:55,480 Speaker 3: From that experience is going to get them through this 53 00:02:55,600 --> 00:02:57,119 Speaker 3: next few quarters. 54 00:02:57,400 --> 00:03:01,200 Speaker 2: Well, then it sounds again that may you've moved toward 55 00:03:01,240 --> 00:03:04,920 Speaker 2: the middle in terms of whether you should hold rates 56 00:03:05,120 --> 00:03:06,000 Speaker 2: or cut rates. 57 00:03:06,560 --> 00:03:09,760 Speaker 3: You know, it's really fascinating you think about and you 58 00:03:09,760 --> 00:03:12,080 Speaker 3: have great experience in this when you get to the 59 00:03:12,120 --> 00:03:18,800 Speaker 3: policy table there when you're talking about it, everything's connected 60 00:03:18,840 --> 00:03:23,040 Speaker 3: to the to the dual mandate, right, and when inflation 61 00:03:23,240 --> 00:03:27,440 Speaker 3: is really ramping up, you have a blunt instrument and 62 00:03:27,480 --> 00:03:31,080 Speaker 3: you act, which is what we did. Now, as you 63 00:03:31,160 --> 00:03:35,760 Speaker 3: get closer to the optimum dual mandate numbers, it actually 64 00:03:35,880 --> 00:03:39,320 Speaker 3: becomes more difficult to make decisions on the margin relative 65 00:03:39,360 --> 00:03:42,640 Speaker 3: to where that policy rate should go. And so that 66 00:03:42,720 --> 00:03:44,560 Speaker 3: I think that's where you're seeing a lot of the 67 00:03:44,640 --> 00:03:48,720 Speaker 3: debate now is you know where's your lean is it? 68 00:03:48,840 --> 00:03:51,080 Speaker 3: Where do you believe things are too restrictive on the 69 00:03:51,120 --> 00:03:54,560 Speaker 3: policy rate side or not. I think they're modestly restrictive. 70 00:03:54,800 --> 00:03:58,280 Speaker 3: I'm still trying to find ways of what's being inhibited 71 00:03:58,320 --> 00:04:01,160 Speaker 3: in the economy from where are policy rate is today. 72 00:04:02,280 --> 00:04:04,000 Speaker 3: But I think we're on a good path. 73 00:04:04,360 --> 00:04:07,760 Speaker 2: So at this point, it probably would be a mistake 74 00:04:07,840 --> 00:04:11,320 Speaker 2: for Fairm and Powell on Friday to say definitely we're 75 00:04:11,360 --> 00:04:12,839 Speaker 2: going to cut as he did last year. 76 00:04:12,920 --> 00:04:17,919 Speaker 3: Yeah, yeah, I always can't wait for that speech. I 77 00:04:17,960 --> 00:04:20,680 Speaker 3: think he keeps it close fast. I wouldn't front round 78 00:04:20,760 --> 00:04:24,200 Speaker 3: him even if I knew. But I think that we've 79 00:04:24,240 --> 00:04:28,680 Speaker 3: been doing so much work this year around the framework, 80 00:04:29,440 --> 00:04:33,640 Speaker 3: around really getting into where how we get this soft 81 00:04:33,720 --> 00:04:36,760 Speaker 3: landing to two percent without breaking anything. 82 00:04:37,480 --> 00:04:39,080 Speaker 4: So I think he has a lot. 83 00:04:38,880 --> 00:04:41,359 Speaker 3: Of different directions to go, and I think it'll be 84 00:04:41,440 --> 00:04:44,600 Speaker 3: a very anticipated discussion. 85 00:04:44,360 --> 00:04:47,200 Speaker 2: Well speaking of the framework or about at that point 86 00:04:47,200 --> 00:04:49,920 Speaker 2: where he is expected to announce what you're going to do. 87 00:04:50,560 --> 00:04:53,760 Speaker 2: Is it basically going back to the old framework of 88 00:04:53,880 --> 00:04:56,400 Speaker 2: we will do whatever is best for the economy at 89 00:04:56,480 --> 00:04:59,120 Speaker 2: the time, as opposed to leaning towards one side or 90 00:04:59,120 --> 00:04:59,400 Speaker 2: the other. 91 00:04:59,440 --> 00:04:59,960 Speaker 4: Of the mandate. 92 00:05:00,400 --> 00:05:02,600 Speaker 3: Yeah, I think I'd say maybe two things on that. 93 00:05:02,720 --> 00:05:05,159 Speaker 3: I think we learned a ton. I mean, think about 94 00:05:05,279 --> 00:05:10,039 Speaker 3: the disruptions that we're created in that twenty twenty pandemic cycle, 95 00:05:11,040 --> 00:05:14,960 Speaker 3: and I think it was very instructive what we did 96 00:05:15,000 --> 00:05:19,360 Speaker 3: and how we did it through twenty twenty. That said, 97 00:05:19,640 --> 00:05:21,560 Speaker 3: you know, I think those learnings are going to come 98 00:05:21,600 --> 00:05:25,680 Speaker 3: out in the framework discussion. And I think the thing 99 00:05:25,720 --> 00:05:28,599 Speaker 3: I'm very interested in the framework is this whole concept 100 00:05:28,839 --> 00:05:32,000 Speaker 3: of transmission. I think we can all learn and try 101 00:05:32,000 --> 00:05:34,960 Speaker 3: to do better relative to how we transmit what we're 102 00:05:35,000 --> 00:05:38,360 Speaker 3: doing at the table, so one people understand what we're 103 00:05:38,400 --> 00:05:41,000 Speaker 3: doing and how we're doing it. And so I'm kind 104 00:05:41,000 --> 00:05:44,520 Speaker 3: of interested in even how we communicate and transmit the 105 00:05:44,560 --> 00:05:46,440 Speaker 3: activities and actions of the FLMC. 106 00:05:46,920 --> 00:05:49,160 Speaker 2: Well, you're on the inside and you're dealing with this 107 00:05:49,279 --> 00:05:50,760 Speaker 2: all the time, and I'm reporting on it. 108 00:05:50,839 --> 00:05:52,080 Speaker 1: So we care about the framework. 109 00:05:52,279 --> 00:05:54,839 Speaker 2: But I'm wondering how important the framework actually is in 110 00:05:54,880 --> 00:05:57,599 Speaker 2: the sense that they adopted a framework in twenty twenty, 111 00:05:58,400 --> 00:06:01,799 Speaker 2: it didn't work when we get the post pandemic inflation, 112 00:06:02,360 --> 00:06:04,840 Speaker 2: and the Chairman has already said, well, right after that, 113 00:06:04,880 --> 00:06:06,839 Speaker 2: we abandoned the framework and we went back to doing 114 00:06:06,839 --> 00:06:08,240 Speaker 2: what we needed to do at the time. 115 00:06:09,080 --> 00:06:11,000 Speaker 1: Does it really matter? We talk about it a lot, 116 00:06:11,240 --> 00:06:12,119 Speaker 1: Does it really matter? 117 00:06:12,440 --> 00:06:14,560 Speaker 3: I think you have to have something that kind of 118 00:06:15,080 --> 00:06:17,320 Speaker 3: frames around what you're trying to accomplish. I mean, you 119 00:06:17,360 --> 00:06:20,520 Speaker 3: have nineteen people at the table, you're trying to collaborate 120 00:06:20,560 --> 00:06:23,320 Speaker 3: and trying to have a consensus of some kind. I 121 00:06:23,360 --> 00:06:26,200 Speaker 3: think there's an expectation of those nineteen that we have 122 00:06:26,520 --> 00:06:28,960 Speaker 3: at least some sense of how we're going to take 123 00:06:29,480 --> 00:06:32,039 Speaker 3: and do our work best, and then how are we 124 00:06:32,080 --> 00:06:35,240 Speaker 3: going to transmit and communicate it after we make the decision. 125 00:06:35,360 --> 00:06:38,400 Speaker 3: So I think it matters because I think there's a 126 00:06:38,480 --> 00:06:42,080 Speaker 3: consistency it creates, even though you've got to have agility 127 00:06:42,120 --> 00:06:46,000 Speaker 3: as you're doing the work, and how you're going to 128 00:06:46,000 --> 00:06:47,480 Speaker 3: communicate it after you decide. 129 00:06:47,480 --> 00:06:48,880 Speaker 4: So I really do. 130 00:06:50,480 --> 00:06:52,640 Speaker 3: I've been there two years and I've been fascinated by 131 00:06:52,680 --> 00:06:55,080 Speaker 3: it all, and I think we're going to emerge with 132 00:06:55,160 --> 00:06:57,479 Speaker 3: something that I think is better than what we had. 133 00:06:57,800 --> 00:07:00,719 Speaker 2: Well, how do you think you should communicate going forward? 134 00:07:00,760 --> 00:07:04,080 Speaker 2: Because there are some people who are candidates for to 135 00:07:04,120 --> 00:07:06,560 Speaker 2: be the next chair who say the FED talks too much. 136 00:07:06,880 --> 00:07:11,960 Speaker 3: Yeah, wow, well you hear both sides of that coin 137 00:07:12,360 --> 00:07:14,960 Speaker 3: all the time. Right, One, do we keep too much 138 00:07:15,000 --> 00:07:15,520 Speaker 3: to our best? 139 00:07:15,840 --> 00:07:16,080 Speaker 4: Two? 140 00:07:16,640 --> 00:07:22,080 Speaker 3: Why aren't we doing more kind of transmitting future crystal 141 00:07:22,120 --> 00:07:25,000 Speaker 3: ball or or or how are we how are we 142 00:07:25,040 --> 00:07:29,000 Speaker 3: interpreting the numbers to a future event? Uh, you know, 143 00:07:29,080 --> 00:07:32,040 Speaker 3: the se P and the dot plot is maybe some 144 00:07:32,080 --> 00:07:35,040 Speaker 3: of that. But I don't hear a lot that we 145 00:07:35,520 --> 00:07:40,120 Speaker 3: that we don't talk enough or express ourselves enough. I 146 00:07:40,120 --> 00:07:43,480 Speaker 3: think it's more important where the American public is concerned. 147 00:07:43,520 --> 00:07:46,280 Speaker 3: As they understand, we do a better job on helping 148 00:07:46,320 --> 00:07:47,440 Speaker 3: them understand what. 149 00:07:47,480 --> 00:07:49,760 Speaker 4: We're doing and why we're doing it. Uh. 150 00:07:49,840 --> 00:07:52,560 Speaker 3: And and the dual mandate and the and the crispness 151 00:07:52,560 --> 00:07:54,760 Speaker 3: of those two mandates help us help us a. 152 00:07:54,720 --> 00:07:56,840 Speaker 4: Lot in the role we have. 153 00:07:57,440 --> 00:07:59,880 Speaker 2: I have to ask you about the latest presidential twe 154 00:08:00,320 --> 00:08:05,200 Speaker 2: and the attack on Lisa Cook, Governor Cook. I know 155 00:08:05,280 --> 00:08:08,760 Speaker 2: that FED officials will always say, we don't let politics come. 156 00:08:08,680 --> 00:08:09,520 Speaker 1: Into the boardroom. 157 00:08:09,720 --> 00:08:11,520 Speaker 2: We do just what we think we should do on 158 00:08:11,520 --> 00:08:12,960 Speaker 2: the account, we don't even talk about it. 159 00:08:13,360 --> 00:08:15,160 Speaker 1: But you've got to be getting sick of this. 160 00:08:17,000 --> 00:08:22,400 Speaker 3: Well, Look, I'm a little philosophical about the whole conversation 161 00:08:22,480 --> 00:08:26,880 Speaker 3: of FED independence and where our role is in the 162 00:08:27,240 --> 00:08:31,080 Speaker 3: American economy. We're almost two hundred and fifty years old 163 00:08:31,080 --> 00:08:33,920 Speaker 3: as a nation. I think there's something to be said. 164 00:08:33,920 --> 00:08:37,080 Speaker 3: We were built on words, and we continue to debate 165 00:08:37,120 --> 00:08:44,080 Speaker 3: those words legislatively and judicially, whatever whatever friction we might 166 00:08:44,200 --> 00:08:47,959 Speaker 3: have with other branches of the government. I think great 167 00:08:48,040 --> 00:08:51,680 Speaker 3: steels tested by fire. So what we can always eat better, 168 00:08:51,679 --> 00:08:54,600 Speaker 3: We can always do this better. But I think the 169 00:08:54,720 --> 00:08:59,840 Speaker 3: nature of independence and I think, don't believe me, believe 170 00:09:00,080 --> 00:09:03,920 Speaker 3: other nations that have central banks and don't it seems 171 00:09:03,960 --> 00:09:07,280 Speaker 3: to work. But I'm always open for the conversation of 172 00:09:07,280 --> 00:09:08,240 Speaker 3: how do we make it better? 173 00:09:08,400 --> 00:09:08,559 Speaker 1: Well? 174 00:09:08,600 --> 00:09:11,200 Speaker 2: Do you think the FED has suffered a hit to 175 00:09:11,240 --> 00:09:14,520 Speaker 2: credibility by the constant attacks from Washington? 176 00:09:15,679 --> 00:09:19,520 Speaker 3: So I think the credibility issue is more in are 177 00:09:19,559 --> 00:09:23,400 Speaker 3: we fulfilling our responsibility and role around the actions of 178 00:09:24,040 --> 00:09:28,520 Speaker 3: monetary policy and monetary operations? And I think the work 179 00:09:28,559 --> 00:09:31,320 Speaker 3: we do on behalf of the American people is very 180 00:09:31,360 --> 00:09:36,960 Speaker 3: important to their lifestyle and their living, and I want 181 00:09:37,000 --> 00:09:40,280 Speaker 3: to make sure that our reputations stay strong around the 182 00:09:40,320 --> 00:09:44,599 Speaker 3: things that we're mandated to do by Congress. Other than that, 183 00:09:44,920 --> 00:09:48,160 Speaker 3: there's a lot of noise outside of that dual mandate 184 00:09:48,800 --> 00:09:52,800 Speaker 3: and look, you take this chair, you do this job, 185 00:09:52,880 --> 00:09:56,160 Speaker 3: and people are going to have opinions, and I'm fine 186 00:09:56,160 --> 00:09:56,480 Speaker 3: with that. 187 00:09:56,679 --> 00:09:58,440 Speaker 2: Well, what kind of reaction do you get from people 188 00:09:58,480 --> 00:10:00,840 Speaker 2: around the district these days? Do people bring it up 189 00:10:00,840 --> 00:10:03,320 Speaker 2: and say, are you guys really on the level? 190 00:10:04,200 --> 00:10:09,880 Speaker 3: Yeah? We have those conversations several times a week. They're 191 00:10:10,040 --> 00:10:13,080 Speaker 3: really the most important conversations. What it helps us do 192 00:10:13,200 --> 00:10:16,760 Speaker 3: is it creates a real time experience and expression that 193 00:10:16,840 --> 00:10:20,480 Speaker 3: I can take to Washington at the FOMC table. But 194 00:10:20,880 --> 00:10:25,360 Speaker 3: I don't think we can communicate enough about the value 195 00:10:25,400 --> 00:10:28,319 Speaker 3: proposition of the feeder reserve. And I think a lot 196 00:10:28,360 --> 00:10:31,800 Speaker 3: of the things that we do, clearly, the monetary policy 197 00:10:31,800 --> 00:10:33,400 Speaker 3: thing gets a lot of press and it gets a 198 00:10:33,440 --> 00:10:38,880 Speaker 3: lot of notoriety. It's the monetary operations that we spend 199 00:10:38,880 --> 00:10:42,080 Speaker 3: most of our time doing, you know, safe and sound banks, 200 00:10:42,120 --> 00:10:45,559 Speaker 3: making sure payments get made every day around the globe, 201 00:10:45,800 --> 00:10:48,240 Speaker 3: and making sure that the research that we're doing is 202 00:10:48,240 --> 00:10:51,120 Speaker 3: a value added to the people we serve in the 203 00:10:51,160 --> 00:10:51,800 Speaker 3: tenth district. 204 00:10:51,960 --> 00:10:54,760 Speaker 2: Well, when you talk to people, do they understand why 205 00:10:54,800 --> 00:10:56,120 Speaker 2: you're not lowering interest rates? 206 00:10:57,440 --> 00:10:58,960 Speaker 4: Actually, it's interesting. 207 00:10:59,640 --> 00:11:02,160 Speaker 3: So we're going to have two sets of folks that 208 00:11:02,200 --> 00:11:04,280 Speaker 3: we would talk to, one are going to be business 209 00:11:04,320 --> 00:11:07,640 Speaker 3: people and finance people that really they understand because they 210 00:11:07,640 --> 00:11:10,440 Speaker 3: have to. I mean, I'm a former banker. You have 211 00:11:10,520 --> 00:11:13,959 Speaker 3: to risk manage the cycles of rates to run your 212 00:11:14,000 --> 00:11:20,640 Speaker 3: bank well and profitably. The general public that we continue 213 00:11:20,679 --> 00:11:23,840 Speaker 3: to try to reach to give them some sense of 214 00:11:23,840 --> 00:11:27,400 Speaker 3: what this dual mandate means to them, and I think 215 00:11:27,520 --> 00:11:31,680 Speaker 3: there's a little bit of perfection in the healthy friction 216 00:11:31,880 --> 00:11:36,839 Speaker 3: between full employment and stable prices. And I actually like 217 00:11:36,960 --> 00:11:39,959 Speaker 3: that friction, and it allows us to kind of balance 218 00:11:39,960 --> 00:11:42,600 Speaker 3: and rebalance what we're doing on their behalf. And it's 219 00:11:42,640 --> 00:11:45,840 Speaker 3: one hundred percent on their behalf. If you reach full 220 00:11:45,880 --> 00:11:49,720 Speaker 3: employment and if you keep prices stable, people can work 221 00:11:50,040 --> 00:11:52,720 Speaker 3: and thrive. And I think that's an important piece of 222 00:11:52,720 --> 00:11:53,480 Speaker 3: what the FED does. 223 00:11:53,880 --> 00:11:56,200 Speaker 2: Our last question has to follow up on something we 224 00:11:56,240 --> 00:11:59,800 Speaker 2: always asked esther before you took over. 225 00:12:00,480 --> 00:12:01,920 Speaker 1: Predictions for the Chiefs this year. 226 00:12:02,040 --> 00:12:07,760 Speaker 3: Oh man, they look pretty good. I love the management, 227 00:12:07,800 --> 00:12:10,880 Speaker 3: I love their focus. I think their coaching is amazing. 228 00:12:11,920 --> 00:12:15,520 Speaker 3: I also follow the Nebraska Cornhuskers. You know, hope spring's 229 00:12:15,520 --> 00:12:18,480 Speaker 3: eternal when it comes to football season. Mike, So, where 230 00:12:18,520 --> 00:12:21,240 Speaker 3: the Chiefs and the huskers are concerned. I'm very hopeful