Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane Jay Lee.
Speaker 1: We bring you insight from the best in economics, finance, investment,
Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud,
Speaker 1: Bloomberg dot Com, and of course on the Bloomberg Charles
Speaker 1: Evans sitting down with bloom Bluck's Tom Kane to the
Speaker 1: Council on Foreign Relations. We can bring the beginning of
Speaker 1: that conversation to you now right here on bloom Buck Radio.
Speaker 1: A moment to Chicago Economics and to Mr Moscow the
Speaker 1: Researcher Department. There are now and it was important duty.
Speaker 1: So let us dive in right now. And I within
Speaker 1: the many speeches you've given, have to go to the
Speaker 1: speech in Frankfurt, Germany where you speak about mid cycle
Speaker 1: and about the dynamics at hand. Let's first define this
Speaker 1: new phrase. I don't believe I read it in Ring
Speaker 1: Bush Fisher Stars. What is mid cycle? Well, um, you
Speaker 1: know what what the Federal Open Market Committee sort of
Speaker 1: identified in uh early you know, twenty nineteen is that
Speaker 1: the you know, state of the economy and financial markets
Speaker 1: and inflation were behaving somewhat differently than we thought, um,
Speaker 1: you know, going into the end of eighteen and so
Speaker 1: we had been raising the short term policy rate, the
Speaker 1: federal funds rate target for you know, some time. We
Speaker 1: were never on a preset course for anything, but we
Speaker 1: were basically increasing the federal funds right by twenty five
Speaker 1: basis points every um, every quarter. And then we got
Speaker 1: to the point where it's like, there seems to be
Speaker 1: more uncertainty. Um, there were a lot of things in
Speaker 1: in play the Chinese economy, and it looked like the
Speaker 1: path that we had expected, which in my own estimation
Speaker 1: would have called for probably three more rate increases in
Speaker 1: twenty nineteen, all of a sudden that didn't look like
Speaker 1: that was appropriate. So in the middle of this you know,
Speaker 1: economic cycle, as we had been taking the funds right,
Speaker 1: we thought to a more neutral setting, and then just
Speaker 1: a little bit beyond that, we decided, I'm not even
Speaker 1: sure what neutral is anymore. I think it may have
Speaker 1: mowed down on a short term basis, and we need
Speaker 1: to make an adjustment so that policy would be and
Speaker 1: I would say moving from leaning towards a restrictive stance
Speaker 1: as a path to leaning towards an accommodative stance and
Speaker 1: that's pretty much what I think we've engineered with our
Speaker 1: third rate cut. At our last meeting. First the distinctions
Speaker 1: of this Vice Chairman Fisher would speak of ultra accommodative.
Speaker 1: Where where we are now within accommodated. I love the
Speaker 1: phrase Hawker's rate cut. Please explain that to me when
Speaker 1: we get a chance, Hawkers rate. Don't use this language
Speaker 1: like that. It's explaining somebody else, not appropriate for long relations.
Speaker 1: But within this is this path of accommodation that we're
Speaker 1: on right now. We're at the stasis point now waiting
Speaker 1: from were But how accommodative is accommodative right now? That's
Speaker 1: a great question. Um, so you know, so so, um.
Speaker 1: You know, at some level, monetary policy can be very detailed,
Speaker 1: very technocratic. You can look at a lot of data,
Speaker 1: you can try out different models, you can look for
Speaker 1: a robust response. But at some point you're always basically
Speaker 1: searching for do I want to be neutral? Do I
Speaker 1: want to sit in the background and just let the
Speaker 1: economy go? Let businesses do what they do very well,
Speaker 1: you know, capitalism and uh they employ people and they
Speaker 1: deploy capital and they put it in play. When the
Speaker 1: government is behaving in a nice, responsible value added manner
Speaker 1: than the economy does very well, and you sit in
Speaker 1: the background, and then sometimes, uh, there's a shortfall of
Speaker 1: aggregate demand, a weakness, and you know, providing more incentives
Speaker 1: for credit intermediation is helpful or the other way around.
Speaker 1: So you know, you're you're sort of trying to find
Speaker 1: out are we neutral? Are we accommodative? And I would
Speaker 1: call the mid cycle adjustment as one where we were
Speaker 1: clearly on a path headed towards slightly restrictive historically not
Speaker 1: that restrictive at that point in an economic cycle, but
Speaker 1: slightly restrictive. And now, in my own mind, I was
Speaker 1: searching for something that was definitely accommodative, not hugely accommodative,
Speaker 1: but definitely on the accommodative side of neutral. And I
Speaker 1: think that neutral rate probably moved down. I mean, on
Speaker 1: a long run basis, my assessment of neutral is two
Speaker 1: and three quarters per cent, and so we were still
Speaker 1: below that when we paused, and now we're at one
Speaker 1: and a half to one and three quarters. I think
Speaker 1: we are definitely accommodative, but I'm not entirely sure that
Speaker 1: the short run UH neutral funds rate isn't a lot
Speaker 1: closer to two. I want to get to them this moment.
Speaker 1: But you mentioned the foreground right now, and there's times
Speaker 1: where a central bank and for the luxury of being
Speaker 1: not in the foreground is the central Bank of the
Speaker 1: United States of America right now? Too much in the foreground?
Speaker 1: Are we asking too much of the eCos building? No,
Speaker 1: I think at this point in the cycle, as we
Speaker 1: made that judgment to move towards something more neutral and
Speaker 1: and and the short run neutral was moving up during
Speaker 1: that time, we still had a lot of work uh
Speaker 1: to do, even though um we started thinking about raising rates.
Speaker 1: But you know, I would say that UH policy is
Speaker 1: uh not that far off neutral. I'd say it's accommodative.
Speaker 1: That's a point where Um, there are other factors you
Speaker 1: know working. There's there's businesses or you know, working very
Speaker 1: hard to take advantage of the tax reform UH that
Speaker 1: they enjoy now to focus their business investment. Of course,
Speaker 1: business investment right now has been following a little bit,
Speaker 1: so that's that's been a weakness. And now the other
Speaker 1: factors the weak foreign growth, trade policy, uncertainty and things
Speaker 1: like that. So there's a variety of external factors that
Speaker 1: have acted to be restrictive, and so it makes sense
Speaker 1: for us to I don't set that a little bit
Speaker 1: in a risk management setting, but basically we're not in
Speaker 1: the foreground, I would say, And and I believe the
Speaker 1: Frankfort speech you mentioned is one measurement here two with
Speaker 1: added to the two percent inflation added to the real
Speaker 1: our starret and it migrates within your text from five
Speaker 1: down to four down to two and a half percent.
Speaker 1: How our story are we are we slaves to this
Speaker 1: calculation right now? I said, this is just a technocratic
Speaker 1: way of describing what I was just discussing about. Are
Speaker 1: you accommodative or are you restrictive? And so you know,
Speaker 1: if if you're completely comfortable and talking about you know,
Speaker 1: I think we want to be a little more leaning
Speaker 1: towards uh UM, incentivizing, helping, credit intermediation so people can
Speaker 1: take on some investments and consumer spending a little bit.
Speaker 1: Then that would be you know, below this neutral right,
Speaker 1: So you can go as technocratic as you want and say,
Speaker 1: our stars moved down. The short run version of our
Speaker 1: stars moved down, and I'm just trying to catch up
Speaker 1: to it and be a little below that. But in
Speaker 1: my mind, we're just trying to be a little bit accommodative,
Speaker 1: and it's very artful. I mean I could pull out
Speaker 1: all kinds of you know, technical assessments, slowback williams uh
Speaker 1: other measures of that, but there's a lot of uncertainty
Speaker 1: around that. So we have to make what's so interesting
Speaker 1: here and I will speak of Michael Ferro at JP,
Speaker 1: Morgan Mr Powers where this from a city Bank Ellen
Speaker 1: Center with Morgan Stanley and others have a glide path
Speaker 1: down a terminal rate and potential GDP it's under two percent.
Speaker 1: Let us begin with the idea that's not politically acceptable
Speaker 1: as well, GDP growth, GDP growth. There's politics got to
Speaker 1: do with that. What has nothing to do with politics,
Speaker 1: we understand. But but but the the the distinction here
Speaker 1: is you people are dealing with demographics, nominal GDP what
Speaker 1: you've been handid and that's unacceptable to so many. And
Speaker 1: I would suggest the impatience of the president as well.
Speaker 1: How do you deal with that politics buttressing off you
Speaker 1: every day. I don't feel alone in this. I think
Speaker 1: business has have been dealt this environment, demographics, households have
Speaker 1: been dealt this, you know, environment, the ability of the
Speaker 1: economy to grow at some at some level, it's it's
Speaker 1: you know, very simple, it's a matter of arithmetic. Growth
Speaker 1: in output is going to be equal to the growth
Speaker 1: and labor input hours plus what those hours are able
Speaker 1: to accomplish with the capital that businesses give them. That's
Speaker 1: labor productivity. That's just identity. And then you sort of
Speaker 1: look at what determines that labor hours. Demographics are a
Speaker 1: big part of that. Well, the aging of the population,
Speaker 1: mail attachment to the labor force diminishes as they get older.
Speaker 1: Female increases in labor force participation have run their course.
Speaker 1: That led to very strong growth in labor hours in
Speaker 1: the eighties, but now are much weaker and younger people
Speaker 1: don't have the same attachment to the workforce that they
Speaker 1: used to, so they don't work as much now. If
Speaker 1: you add on top of that the fact that you
Speaker 1: have a particular attitude towards uh immigration, which would add
Speaker 1: to labor employment and hours, then you've got a big
Speaker 1: hold that you're looking at. So that labor hours component
Speaker 1: is not going to be very large. We estimated to
Speaker 1: be half a percent each year going forward, half a percent. Now,
Speaker 1: labor productivity, what are you expecting from that? I'd love
Speaker 1: to think that technology is going to improve us labor
Speaker 1: productivity a lot with technology. You didn't mention technology technology
Speaker 1: in any of that discussion, which is fine, But now
Speaker 1: we're all living with technology. Does that lead to an inequality?
Speaker 1: Does that lead to a Barbell outcome where technology a vanage?
Speaker 1: Just let me finish, let me let me finish the
Speaker 1: low growth, just to complete the thought right, because because
Speaker 1: the labor productivity might kind of go. We got a
Speaker 1: tax reform, we've got disruptive technologies, we've got new digital technologies.
Speaker 1: We oughtously really strong growth. When did we see really
Speaker 1: strong growth the eighties? In the eighties, we saw really
Speaker 1: strong growth when we were growing, not not in a decline.
Speaker 1: We grew three and a quarter percent. Why was that
Speaker 1: labor input? Labor input was really st long during that
Speaker 1: time period. How about labor productivity? They call that the
Speaker 1: labor slow the productivity slowdown period. We had great growth,
Speaker 1: low productivity growth. There was a whole bunch of things
Speaker 1: going and it wasn't until nine to two thousand five
Speaker 1: that we really saw an acceleration of productivity. Is very
Speaker 1: difficult to predict when labor productivity is going to accelerate.
Speaker 1: It takes a very long time. Computers hit the factory floor,
Speaker 1: uh in a digital fashion in manufacturing durable goods in
Speaker 1: the late nineties, and so you get this, but it's
Speaker 1: very difficult to predict. You could hope for it to
Speaker 1: be really strong. You can hope a long time. I
Speaker 1: just don't know how to predict. We're predicting one and
Speaker 1: a quarter percent. I think that's a pretty good great
Speaker 1: rate of growth. And that's how I get the one
Speaker 1: and three. And that's what the economy has dealt that hand.
Speaker 1: We're looking at it. The politicians are dealt that hand too.
Speaker 1: If they want three percent, if they want four or
Speaker 1: five percent, then you've got to think about public policies
Speaker 1: are gonna have an effect on that. Call it fiscal
Speaker 1: space this year with new name for labor employment practices.
Speaker 1: All kinds of things tell me about nominal GDP. With
Speaker 1: the lower demographics, with the new lower potential GDP, do
Speaker 1: we need to have a reset in our belief of
Speaker 1: the animal spirit we need to get Are we going
Speaker 1: to be sustained under four percent? Or could we do
Speaker 1: okay the current GDP? Yeah? I don't spend as much
Speaker 1: of my time thinking about nominal GDP, you know, as
Speaker 1: as he's thinking more about how you cut out a car,
Speaker 1: about the real GDP growth in the inflation, and I
Speaker 1: would say inflation has been on the light side. It's
Speaker 1: been under our two percent objective, and we've said that
Speaker 1: we should be pursuing a symmetric two percent objective. So
Speaker 1: that means, you know, it would be good if the
Speaker 1: FM clarified that a little bit more, and some of
Speaker 1: our discussions about our long run strategy, I think clarifying
Speaker 1: what we mean by symmetry would be important to me.
Speaker 1: It means we should average two percent over some reasonable
Speaker 1: period of time. We should probably spend half our time
Speaker 1: above two percent, But we've spent our entire time below
Speaker 1: two percents since we uh called this out. So being
Speaker 1: willing to go above two percent is something that I
Speaker 1: think conservative central bankers have a lot of trouble with.
Speaker 1: I think the ECB historically has had trouble with that.
Speaker 1: Bank of Japan has really had problem with that. And
Speaker 1: so if you limit yourself, if you say our objective
Speaker 1: is two percent, but you really act as if it's
Speaker 1: a ceiling, that reduces the monetary policy space that you
Speaker 1: have when you need to provide more accommodation of during
Speaker 1: the downturn. So that's why I think it's important to
Speaker 1: achieve our two percent symmetric objective. In Evan's speech is
Speaker 1: responsible until it's not and the words come out here,
Speaker 1: I have mild comfort with two and a half percent inflation.
Speaker 1: Perseverance is crucial, a powerful, full throated commitment to this
Speaker 1: a symmetry you speak of because it all centers on
Speaker 1: outcome based monetary policy. Let's dive into this. Olivier Blanchard
Speaker 1: and others many years ago said, look, we need to
Speaker 1: really pop inflation. We need an aggressive approach. Here you
Speaker 1: follow on as a public official with really a strong
Speaker 1: statement that we have to jump start this search for
Speaker 1: a higher level of inflation. Explain what a powerful, full
Speaker 1: throated Evans commitment is. Ah, so you've you've, you've you've
Speaker 1: interwoven two different policies. I would never do that. So so, um,
Speaker 1: I believe you were probably referring to Olivier blanche Shard.
Speaker 1: I think he was research director at the I m
Speaker 1: F and he sort of said, you know, there's really
Speaker 1: because what we have said is on average, the federal
Speaker 1: reserve when we go into recession we cut the short
Speaker 1: run policy rate by at least five hundred basis points
Speaker 1: five percentage points and more. If we start at two
Speaker 1: and three quarters per cent, we can't do five percentage points,
Speaker 1: and so we don't have a lot of ammunition and
Speaker 1: capacity that's premised on a real rate of three quarters
Speaker 1: of a percentage point and two percent being at two
Speaker 1: percent inflation. If you don't get to two percent, you
Speaker 1: start lower than that if you had a higher inflation objective.
Speaker 1: And this is where Olivier Blanchechard was musing, if we
Speaker 1: had four percent for plus a one percent real rate,
Speaker 1: you know that gives you five percentage points, and then
Speaker 1: you've got more capacity. Central banks have sort of settled
Speaker 1: on two percent um. People get very nervous when you
Speaker 1: talk about two point one percent or more than that,
Speaker 1: but any rate, So I think most people have backed
Speaker 1: off in our own long run framework. Cher J. Powell
Speaker 1: took off the table resetting the inflation objective before we
Speaker 1: even got started that type of things. So so when
Speaker 1: you are trying to hit two percent symmetrically, I think
Speaker 1: you need to hit it. And so if you say symmetric,
Speaker 1: we need to say what we mean. That is, if
Speaker 1: it's averaging. That just means it some of the time
Speaker 1: you're going to be above it. And since we've been
Speaker 1: down at one percent and one and a half percent
Speaker 1: one a corner for a very long period of time,
Speaker 1: two and a half just does and seem that outrageous,
Speaker 1: except that they're an awful lot of people who kind
Speaker 1: of say, as soon as you go above two, you're
Speaker 1: probably headed to eighteen on a big number um, and
Speaker 1: it just sort of presumes that it's not possible to
Speaker 1: operate in a parallel environment around that two per set.
Speaker 1: We need to discuss that, we need to communicate what
Speaker 1: we mean. I'm comfortable with two and a half percent
Speaker 1: inflation um, and in fact, trying to get to two
Speaker 1: percent with momentum full throated harder than many would try
Speaker 1: to make sure that we actually get there head for
Speaker 1: two and a half. Half the time we don't get
Speaker 1: to two. So maybe that would get us to two,
Speaker 1: and then maybe the other half we go over a
Speaker 1: little bit. You know, when I get to two and
Speaker 1: a half, I'm definitely gonna be Look, what's my forecast?
Speaker 1: Am I expecting to go to three? Or their special
Speaker 1: circumstances that are gonna make us go further. It is
Speaker 1: very difficult to generate inflation in the current environment. And
Speaker 1: in fact, we just agreed to tax reform and a
Speaker 1: fiscal policy and government spending that increase the national debt
Speaker 1: um by a trillion a half dollars over tenure. That's
Speaker 1: not enough to get inflation going either. So I think, um,
Speaker 1: you know, we need to we need to work harder.
Speaker 1: I was talking to her, Michael McKie this morning about
Speaker 1: the outcome of your Frankfurt speech. How do we affect
Speaker 1: the as you say, momentum the physics to get above
Speaker 1: two even two point five, three months of two point seven,
Speaker 1: how do you affect that process? You know, I'm trained
Speaker 1: as a monetary economists, and most of the time your
Speaker 1: training is you know, inflation is the monetary authorities concern.
Speaker 1: If you're Paul Wolker, you know, if you're g. William
Speaker 1: Miller back in the seventies and you kind of go
Speaker 1: or Arthur Burns, well, you know inflations double I can't
Speaker 1: do anything about that. No, do some way down you
Speaker 1: can do something about that, and Paul Bolker did that.
Speaker 1: It's the responsibility to deal with that. If inflation is
Speaker 1: under your objective. It's your responsibility if you don't understand
Speaker 1: all the other factors that at work to make you
Speaker 1: think you think low rates are accommodative, when in fact
Speaker 1: they're actually still restrictive if you're not hitting there on
Speaker 1: the interst rate lower Young mois with that summer piece
Speaker 1: out of JP Morgan, not a forecast, but a model
Speaker 1: of how you bring the tenure yel down. Is that
Speaker 1: where we could be heading as we affect and evans
Speaker 1: like two and a half percent inflation jump. So I
Speaker 1: think they're kindling to I think there are a lot
Speaker 1: of details. At any point in the process, we could
Speaker 1: have a discussion like that, and I'm willing to have
Speaker 1: it as guy. But at the moment, I'm thinking more
Speaker 1: about strategy and how you go about operationalizing to get
Speaker 1: to your strategic goals, and I think an enormous part
Speaker 1: of it is communicating we are we are headed for symmetry,
Speaker 1: we are willing to go over. We must go over
Speaker 1: two percent. If we are going to average two percent,
Speaker 1: you've got to be above two percent when you've been
Speaker 1: below it. When you think about the effects of the
Speaker 1: U zero lower bound, we now call it the effective
Speaker 1: lower bound. I guess because some people think we might
Speaker 1: go to negative interest rates. I think zero lower bound
Speaker 1: is probably more accurate. But you know, when when when
Speaker 1: interest rates fall a lot and we're at the zero
Speaker 1: lower bound, our expectation is inflation is going to be
Speaker 1: pretty low. Then we get out of this in the
Speaker 1: second half of the cycle, we get back to a
Speaker 1: more we should be there now, and then if you're
Speaker 1: gonna average two, you've got to be above two for
Speaker 1: that second half. Well, maybe you need to, you know,
Speaker 1: be be targeting something more like two and a quarter
Speaker 1: or two and a half on the second half of
Speaker 1: an economic cycle just to get to an average two percent.
Speaker 1: Talking about that strategy, making sure that everybody is totally
Speaker 1: comfortable with it or not, and admitting what your operational approaches,
Speaker 1: but communicating what you're going to do after being very
Speaker 1: clear about that, and not kind of getting nervous and
Speaker 1: twitching when you get to two point one or one
Speaker 1: point nine, Because I confess I'm about as outspoken as
Speaker 1: anybody in terms of I'm okay with inflation above two.
Speaker 1: But then I start talking about inflation at two point two,
Speaker 1: and maybe my maybe my voice breaks a little bit.
Speaker 1: I think it's part of the DNA of central bankers,
Speaker 1: and we really need to break out of that if
Speaker 1: we're going to be able to achieve two percent symmetric inflation.
Speaker 1: I mentioned Gerald Ford today on television. I realized nobody
Speaker 1: on my staff kneho. He was what about whips United
Speaker 1: States whip disinflation? Now, I mean, that's that's really the
Speaker 1: strategy we're talking about. How big a constraint is trillion
Speaker 1: dollar deficits. You mentioned the fiscal response to the vogue
Speaker 1: this moment is fiscal space. Whatever that means. Are you
Speaker 1: constrained by the fiscal challenges of the nation. I mean,
Speaker 1: as we look at conducting monetary policy, you do it
Speaker 1: over a particular horizon and that you know you can
Speaker 1: have some effect on three to five years. You look
Speaker 1: at that forecast, there seems to be uh no constraints
Speaker 1: from um accumulation of fiscal debt. I would expect that
Speaker 1: to emerge from very high treasury rates, long term bond yields.
Speaker 1: That is not what we're seeing. Even though we've seen
Speaker 1: a little bit of a turnaround, they're very low right now,
Speaker 1: so there doesn't seem to be any pressure there. This
Speaker 1: is a different world than the seventies. There's an intense
Speaker 1: desire for safe assets. Um, you know, people used to
Speaker 1: kind of go tee. Have you noticed that the German
Speaker 1: Bund is negative? Who in the heck would want to
Speaker 1: own the German Bund? And I say a lot of people,
Speaker 1: because most people who see the negative yield don't see
Speaker 1: the point that the price is very high because people
Speaker 1: want that. So are are low long term interest rates
Speaker 1: indicate that people like holding that there's a demand for that.
Speaker 1: You could argue that there's, you know, a need for
Speaker 1: more supply and this would be one way for it,
Speaker 1: but it doesn't in any as I can tell. Constraining
Speaker 1: our forecast carnigu melon with the heritage of Allen Meltzer
Speaker 1: Marvin good friend there as well. He wrote a Jackson
Speaker 1: whole about negative interest rates. There was a modest uproar
Speaker 1: about that paper. Your thoughts on the experiment of negative
Speaker 1: interest rates and with that the idea of Japan to
Speaker 1: Europe to a US slowdown? Do we have should we
Speaker 1: have a fear of a trajectory towards negative interest rates
Speaker 1: in America? I think the central banks that have used
Speaker 1: negative interest rates have found them to be helpful for them.
Speaker 1: I think that, um, if you let me just take
Speaker 1: the e c B d c B and in the
Speaker 1: Bank of Japan. They came later to the um broad
Speaker 1: asset purchasing programs that the Fed head embarked upon with
Speaker 1: our open ended QUE three in September two thousand twelve.
Speaker 1: We did quantitative easy before that, but we did the
Speaker 1: open ended in twelve, and that sort of changed things.
Speaker 1: I think for guidance was helpful, but the combination was useful. Um,
Speaker 1: the Bank wage Fan did that. ECB did that, but
Speaker 1: they also added negative interest rates, so I think that
Speaker 1: helped them a little bit. If you look at the
Speaker 1: level of negative interest rates, they sort of pale in
Speaker 1: comparison to the actual need for accommodation. Back in two
Speaker 1: thousand nine, according to many interest rate rules, the Federal
Speaker 1: reserves should have been seeking to set the nominal Federal
Speaker 1: funds rate at about minus four percentage points. That's what
Speaker 1: the tailor rules straight reading would have indicated. We can't
Speaker 1: do that, because you know, got zero minus seventy basis
Speaker 1: points is probably a very low down payment on something
Speaker 1: like that. Other policies would have been you know, at
Speaker 1: some point also fiscal policy and other policies. You know, I,
Speaker 1: you know, I think that the central Bank has to
Speaker 1: address inflation and has to help the economy as much
Speaker 1: as we can. But as you know, long term treasury
Speaker 1: rates go very low. If you're concerned about that, that
Speaker 1: seems to indicate that it's not very expensive to run
Speaker 1: expansionary fiscal policies, and maybe the trade off there is
Speaker 1: better so negative interest rates. I don't think that we
Speaker 1: can achieve enough with that tool. I worry that financial
Speaker 1: institutions and UH savvy investors who would find themselves at
Speaker 1: risk would organize their resources in a way to make
Speaker 1: their exposure more limited. That would be a natural thing
Speaker 1: for them to do, and so I would expect it
Speaker 1: would be even less effective in the future. I would
Speaker 1: much prefer to get our communications strategy more in line
Speaker 1: with achieving our objectives. Financial institutions and savvy investors have
Speaker 1: gone after you, guys over You mentioned the balance sheet,
Speaker 1: and the critics would say quantitative using, and there the
Speaker 1: new quantitative using that's under process now. Bill Dudley, of course,
Speaker 1: with a firestorm, wrote about this with Bloomberg Vice chairman
Speaker 1: Clarative spoke to me the other day and made clear
Speaker 1: this is not a new que about just lightly touched.
Speaker 1: Given the time on the repo uproar and the efficacy
Speaker 1: of your solution away from being quantity of easing forever. Sure,
Speaker 1: so we spent a long time at the zero lower bound.
Speaker 1: We've got a very large balance sheet. We went up
Speaker 1: to foreign half trillion dollars at some point, and so
Speaker 1: it was clear that we needed to bring the size
Speaker 1: of the balance sheet down. There were a lot of
Speaker 1: people who kept telling us, yelling at us that we
Speaker 1: should have a lower balance sheet. At the end of
Speaker 1: the day, we're going to do what we think is best.
Speaker 1: But reducing the size of the balance sheet was always
Speaker 1: part of our plan. And so as we embarked upon
Speaker 1: a plan to reduce the size of the balance sheet
Speaker 1: at some point, and you know, you realize this very
Speaker 1: early on. How big is the balance sheet going to
Speaker 1: be when you settle down and then start growing it again.
Speaker 1: Because cash starts to grow in the size of the economy,
Speaker 1: the balance sheets going to grow. And so we had
Speaker 1: discussions about that. And this is gonna have an implication
Speaker 1: for when short term policy rates all of a sudden
Speaker 1: might start to um uh tighten and all of that,
Speaker 1: and so you know, we made a judgment that we
Speaker 1: could reduce the balance sheet to a certain point, and
Speaker 1: then then early September we kind of learned that looks
Speaker 1: like the markets need on a short term basis because
Speaker 1: of tax policies where checks are written, funds are put
Speaker 1: off to the side and aren't used for repo and
Speaker 1: things like that other things, there wasn't as much liquidity there.
Speaker 1: You've also got a change in regulatory policies so that
Speaker 1: some of the banks and dealer brokers that previously were
Speaker 1: in the business of arbitraging these rates between um uh
Speaker 1: you know, repo rates and you know other depository rates,
Speaker 1: they might uh provide that, and then it's kind of like,
Speaker 1: you know, the regulatory incentives now aren't as attractive for that.
Speaker 1: So we kind of decided ultimately that the balance sheet
Speaker 1: probably needed to be larger than where we were at
Speaker 1: that time, and so we embarked on, um, you know,
Speaker 1: buying sixty billion dollars a month at the moment short
Speaker 1: term t bills. So this doesn't add duration to speak
Speaker 1: of to our balance she It's not like the QUI
Speaker 1: where we're buying long term assets, and so it's in
Speaker 1: that sense. This is not QWI. This is just trying
Speaker 1: to provide liquidity, and we're gonna be searching for the
Speaker 1: right level of liquidity so that we can hit our
Speaker 1: funds rate target, keep the funds right within the target range,
Speaker 1: and not have it um, you know, go of that
Speaker 1: because of a lack of arbitrage with other treasury rates.
Speaker 1: One more question and then I'm going to go to
Speaker 1: questions from the floor of a wonderful audience here today.
Speaker 1: Just as a warning, the first question we'll go to
Speaker 1: the gentleman from Cedar Rapids, which I haven't talked to
Speaker 1: before this, but we'll figure out who the gentleman from
Speaker 1: Cedar Rapids is here in a moment. One final question.
Speaker 1: This is all great, and it's great for the elites,
Speaker 1: and it's great for the suits and ties, but the
Speaker 1: bottom line is America's savers have been crushed by this
Speaker 1: collapse of the real interest rate and for even that matter,
Speaker 1: the nominal interest rate. Speak to the savers out there,
Speaker 1: Speak to the have nots of investment who haven't articipated
Speaker 1: through all of this economics. Um. Yeah, I talked to somebody,
Speaker 1: you know, you know, every morning before I go to
Speaker 1: an f o MC meeting about this exact problem. My
Speaker 1: wife is always telling me, make sure that you don't
Speaker 1: cut that interest rate. I need a higher There we go, right,
Speaker 1: you can see what effect that's haden. Riley, could you Riley?
Speaker 1: Could you get her on radio? Will want her Mrs
Speaker 1: evans Um. You know, so that's definitely the case. One
Speaker 1: thing about monetary policy. When you're raising interest rates, there
Speaker 1: are some people who benefit from getting higher interest rates.
Speaker 1: There are some people who don't benefit because they've got
Speaker 1: higher borrowing costs and things like that. So it's extremely
Speaker 1: natural for us to you know, be paying attention to that.
Speaker 1: But at the end of the day, it comes down
Speaker 1: to how the economy is gonna do. I think that
Speaker 1: everybody is going to be better off when we pursue
Speaker 1: monetary policies, even when that means low interest rates. So
Speaker 1: our market determined, I mean, we set this uh short
Speaker 1: term policy rates, and then the market determines all the
Speaker 1: other rates. And if it's not in line with that,
Speaker 1: like if there's fiscal policy see problems the yod kerbel
Speaker 1: Steepen and things like that. So we we can't do
Speaker 1: everything that's golden. But you know, in this case, I
Speaker 1: think getting the economy going so that the job market
Speaker 1: is very strong, labor markets are very strong. I think
Speaker 1: the consumer right now uh is supporting the economy in
Speaker 1: an enormous way, in a way that the business side
Speaker 1: at the moment is not, even though the architects of
Speaker 1: tax corporate reform indicated it should be stronger than that.
Speaker 1: And I think that are we're still waiting to say, well,
Speaker 1: there's so many other things going on with reform. Ah,
Speaker 1: well yeah, but anyway that much trouble right now, you know.
Speaker 1: But but I think that getting the economy going is
Speaker 1: going to help everybody, including savers in this room. A
Speaker 1: number of years ago, he was with the i m
Speaker 1: F at the time, John Let's he talked about macroprudential risk.
Speaker 1: Will let him have the first question today, Dr Lipsky, Thanks,
Speaker 1: good morning, good question. Obviously, the FED in recent uh
Speaker 1: FO MC and its recent pronouncements has paid a lot
Speaker 1: of attention to international economic development financial developments. Does that
Speaker 1: represent a heightened awareness of the influence of international forces
Speaker 1: on domestic and the domestic economy and hence on domestic
Speaker 1: UNFED policy or is this in line with the previous practice.
Speaker 1: And secondly, it was many had suggested that with central banks,
Speaker 1: all key central banks focusing on the same inflation target
Speaker 1: of two, that that would bring about an implicit coordination
Speaker 1: of international monetary policy among key central banks. Yet today
Speaker 1: we see as substantial differences in UH in actual short
Speaker 1: term rates, substantial and uncertainty about its influence on UH
Speaker 1: the value of the global value of the dollar. Has
Speaker 1: that agreement on a common inflation target actually brought about
Speaker 1: coordination or of international monitory policy? Those Yeah, now, that's
Speaker 1: that's that's that's really interesting and and quite quite complicated
Speaker 1: because as you point out, that sort of gets at
Speaker 1: the foreign exchange values. You know, we could all agree
Speaker 1: on different inflation objectives, and that in principle would have
Speaker 1: a path for how foreign exchange rates would evolve smoothly
Speaker 1: over time if everything went on a steady state fashion.
Speaker 1: So it gets complicated pretty quickly. But I believe that
Speaker 1: UM on that basis more clarity for all the central
Speaker 1: banks as to what their objectives are, the weights that
Speaker 1: they give to inflation versus other objective of which in
Speaker 1: most of those cases are secondary to the inflation, right,
Speaker 1: But they also care about the economy and also probably
Speaker 1: financial stability to some extent, and so the more we
Speaker 1: all understand UM and our in line in the sense
Speaker 1: that it's normal we do this too, so it's more
Speaker 1: likely we'll understand that. You know, I think there's better
Speaker 1: understanding of the policies that everyone would pursue UM to
Speaker 1: achieve that. I wouldn't call it coordination. There is, you
Speaker 1: know better than I do. There's lots of conversations. Uh.
Speaker 1: People get together in Bosle uh six times a year
Speaker 1: at least, and other places around the world, and so
Speaker 1: there's a sharing of information about what's going on that
Speaker 1: I think is helpful for everybody to achieve their objectives
Speaker 1: in um UM. You know, if it's not cooperative, at
Speaker 1: least it's non um rivalrous UM as best it can be.
Speaker 1: I think in terms of the international situation san UM,
Speaker 1: I don't think things are different in terms of a
Speaker 1: different policy reaction. I think it's a different moment in
Speaker 1: time than UM many other times where uh. You know,
Speaker 1: Europe is definitely slowing. Brexit is a huge uncertainty, even
Speaker 1: though it looks like now things could play out in
Speaker 1: a more careful fashion. But it's really hard to guess
Speaker 1: that I and and and China is a big uncertainty,
Speaker 1: and then international tariff trade discussions uncertainty around that certainly
Speaker 1: changes things. So I mean, in terms of the mid
Speaker 1: cycle adjustment, I would say this is very much a
Speaker 1: risk management approach to ensuring that the US economy is
Speaker 1: positioned as well as it can be for a little
Speaker 1: more noise from wherever it could come from to the
Speaker 1: economy to help support it. Our adjustments have not been anywhere, um,
Speaker 1: you know, large enough to change the dynamics substantially. If
Speaker 1: there was a big negative shock, we'd have to respond,
Speaker 1: and I would expect other countries would have to. So
Speaker 1: I think this is sort of the normal response. But
Speaker 1: the moment in time is really, you know, quite different
Speaker 1: than large events you're channeling there, Frank Night, Chicago. I'm
Speaker 1: in the same maybe, but parts right now. Chair Paul's
Speaker 1: out there at the press conference and he has to
Speaker 1: parse the risks you measure versus the tangible uncertainties that
Speaker 1: are out there right now. Expand a little bit here
Speaker 1: on on how uncertain those uncertainties are something Muhammadalarian, I'm sorry,
Speaker 1: how uncertain are those uncertainties right now? Those unknowns, Uh,
Speaker 1: they're uncertain they're big. Um uh. You know, before before
Speaker 1: before breakfast, we were talking about a few things and
Speaker 1: we mentioned Rudy dorn Bush and um, you know, while
Speaker 1: I never met him myself, I have seen a number
Speaker 1: of scholars who studied with him. He's much beloved and
Speaker 1: and Paul Krugman attributed but others to to Rudy Dornbush
Speaker 1: this idea from international crisis that you can see something
Speaker 1: really bad happening and it unfolds in a very slow fashion,
Speaker 1: and you just think that it has to change the world,
Speaker 1: and it doesn't, and it takes longer than you can imagine.
Speaker 1: Then when things really hit the fan, it happens much
Speaker 1: more quickly than you ever you know, expect, And so
Speaker 1: there's this non linearity, you can call it nighty and
Speaker 1: ninety and uncertainty in the sense that it may never
Speaker 1: have happened. You can't predict the timing of it. But
Speaker 1: they're these factors out there and unless something offsets them
Speaker 1: or somebody else gets their act together, it you know,
Speaker 1: doesn't look like it would be helpful, but it might
Speaker 1: not occur. That's really hard to address. Allan Santner plays
Speaker 1: the chief economist to Morgan Stanley. I thought the Evans
Speaker 1: rule original was brilliant because unemployment our rates remain low,
Speaker 1: at least until unemployment was below six and a half
Speaker 1: percent um. But you had to guard against financial stability,
Speaker 1: and that was important, right, so as long as inflation
Speaker 1: doesn't move but isn't projected to move above two and
Speaker 1: a half percent. So if you think about, um, you know,
Speaker 1: you all have been discussing inflation framework. What would an
Speaker 1: Evans role look like today that would aim at getting
Speaker 1: inflation higher but have some sort of knockout clause for
Speaker 1: financial stability. Yeah, so, um, you know. So when I
Speaker 1: was arguing for Ford guidance, it was a little bit
Speaker 1: simpler in the following since we were stuck at zero
Speaker 1: on the funds rate, we had a lot of discussions
Speaker 1: about you know, the committee was divided. Some people wanted
Speaker 1: to raise rates, um, you know, sooner than certainly I thought.
Speaker 1: And the unemployment rate was high, and you had a
Speaker 1: discussion about, well, what's a natural rate of unemployment? What
Speaker 1: if it's seven percent. If it's seven percent, maybe we
Speaker 1: need to start raising the funds right now we think
Speaker 1: it's more like four point three percent. So you talk
Speaker 1: about uncertainty a whole lot of that, and it was
Speaker 1: a little easier. I thought we were trying to stifle
Speaker 1: premature expectations of a FED tightening. Now, if you're gonna
Speaker 1: do it, I mean, we've got the funds rate target
Speaker 1: at one and a half to one on a quarter percent,
Speaker 1: and so now you would be trying to craft something
Speaker 1: where you'd indicate we're going to continue to maintain an
Speaker 1: accommodative stance of policy. Maybe that would be keeping the
Speaker 1: funds rate where target where it is now until and
Speaker 1: then some objective has stated. So my colleague Neil cash Cary,
Speaker 1: I believe, is not being shy about sort of saying,
Speaker 1: you know, we should have inflation at two percent, and
Speaker 1: maybe one thing to do would keep accommodative policy until
Speaker 1: inflation gets to two percent. That could be one example
Speaker 1: of that it gets to be well, it was challenge.
Speaker 1: It was kind of easy then because unemployment was so
Speaker 1: high and six and a half percent was such an
Speaker 1: achievable objective just kind of knew we should blow through that.
Speaker 1: You know, you get to two percent and you kind
Speaker 1: of go, is it sustainable at two did we just
Speaker 1: kind of touched too? You know? Should we have six
Speaker 1: months at two, you'd have to craft something like that. Um.
Speaker 1: And then I suppose I know, I have a number
Speaker 1: of colleagues the committee. By judging by my colleague speeches
Speaker 1: and our summary of economic projections, the committee's fairly well divided. UM.
Speaker 1: You know a number of people have mentioned financial instability
Speaker 1: risks that if there was more leverage taken, more frothiness
Speaker 1: and markets than maybe the low funds right target would
Speaker 1: be inconsistent with that. I don't subscribe to that argument myself,
Speaker 1: because I think that that's trying to do too much
Speaker 1: with a single tool. I think our supervisory and regulatory
Speaker 1: policies ought to be UM ensuring that any damage that
Speaker 1: comes from leverage. First off, it's we don't get to
Speaker 1: an over leverage position, and also that we're ready with
Speaker 1: the capital without re leveraging. Can you reflate without re leveraging? Well,
Speaker 1: I mean we have to talk about the circumstances that
Speaker 1: I you know, we're talking about a two thousand nine
Speaker 1: uh period and so I mean, I think a lot
Speaker 1: of it comes down to capital in the banking system,
Speaker 1: and UM, at the moment, it looks like we have, um,
Speaker 1: you know, quite a lot of capital. We've added more
Speaker 1: and better capital, and the regulatory environment has shifted just
Speaker 1: a little bit to allow uh, you know, more UH
Speaker 1: dividends and and things like that a little bit um.
Speaker 1: You know, it comes down ultimately during a financial downturn,
Speaker 1: when banks are rebuilding their capital, when did they think
Speaker 1: they've got as much as they need to lend freely
Speaker 1: and intermediate credit in all the right places. And that's
Speaker 1: one of those things that I think always takes longer
Speaker 1: than most people appreciate. And I think that was a
Speaker 1: big part of UH coming out of the financial crisis
Speaker 1: this time. Uh. And also, you know, financial institutions thinking
Speaker 1: about how their business model might change over the next
Speaker 1: five and ten years. So it gets complicated pretty quickly.
Speaker 1: I've only got one tool. There's an awful lot of
Speaker 1: objectives out there. And if you want to put a
Speaker 1: little political spend on some of the police, I just
Speaker 1: don't know you you I only say that because you
Speaker 1: did um. But if you did about you know, you
Speaker 1: like more growth and things like that, you have to
Speaker 1: think about sustainability and all of that. So it gets
Speaker 1: complicated very quickly. Well, the path, let's go to a
Speaker 1: villain bowder here. The path from Yell and James Tobin
Speaker 1: with City Group. Villain Bowder, thank you very much. You
Speaker 1: mentioned that standard Taylor rule into the nine called for
Speaker 1: roughly minded four percent policy rate. UM. Admittedly, you know,
Speaker 1: but every effective lower bound is it's about to be
Speaker 1: higher than that. But it doesn't explain by the margin
Speaker 1: that is there. Technically it wasn't used by the authority.
Speaker 1: The question is is this political or is there a
Speaker 1: believe that there's a reversal rate, which you mean why
Speaker 1: we didn't take it into Neglece territory and the next
Speaker 1: time of asking the next tichtical slowdown you will be
Speaker 1: back at infective zolo about and by not plot further?
Speaker 1: Is there any particularity for that, Um, that's a good question, certainly. Um.
Speaker 1: The FED was ahead of the other central banks in
Speaker 1: two thousand and eight, two thousand nine. It started in
Speaker 1: the US, and uh, our our our problems were worse initially.
Speaker 1: I think there was you know, I really can't recall
Speaker 1: any substantial discussions of negative interest rates during that time.
Speaker 1: I would give you know, Professor Governor Chairman Ben Bernanke
Speaker 1: huge credit for thinking up new liquidity programs that were
Speaker 1: inspired by things he had studied in the nineteen thirties
Speaker 1: and problems there and all of that. Negative interest rates
Speaker 1: just weren't something that seemed to appeal to many people.
Speaker 1: Now we have experience in these other central banks, and
Speaker 1: so you could imagine trying that, you know, like I said,
Speaker 1: I think maybe you could get seventy bases points and
Speaker 1: whether or not that would help maybe, I I frankly
Speaker 1: think that a lot. I mean, you know, if we
Speaker 1: had a longer discussion about asset purchases and open ended
Speaker 1: QWI three and you can probably every side can find
Speaker 1: studies that indicate powerful and not really so powerful an
Speaker 1: event studies being what they are, that's a very difficult
Speaker 1: thing to measure. I continue to come down on the
Speaker 1: side of it really came down to communicating the signaling channel.
Speaker 1: We were going to do whatever it takes. If you
Speaker 1: look at what Mario Draggy achieved in two thousand and
Speaker 1: twelve by saying, we'll do whatever it takes and it
Speaker 1: will be enough. What did he do He developed the
Speaker 1: o MT How many O m T bonds did they
Speaker 1: ever issue? None? I mean, you showing your willingness to
Speaker 1: do something that previous versions of the head of the
Speaker 1: Central Bank weren't willing to contemplate goes. Always following through
Speaker 1: and delivering though is really important, So constantly working on
Speaker 1: that if negative interest rates were a helpful signal, and
Speaker 1: I think that's part of what it is, because they
Speaker 1: keep backtracking on what reserve levels are actually being hit.
Speaker 1: If anything, you kind of want to hit more of it,
Speaker 1: and in sent if you lend out more than you
Speaker 1: get more credit or whatnot. So the design is challenging.
Speaker 1: This gets to courage. As you mentioned the perseverance needed
Speaker 1: to reflate above two or two and a half percentages.
Speaker 1: I want to circle back to the single idea, what
Speaker 1: is the mechanism of that perseverance, that courage that we need. Well,
Speaker 1: I think it's very important that the Central Bank have
Speaker 1: uh sufficient level of independence and be perceived as independence.
Speaker 1: So I think whenever you start worrying about the actions
Speaker 1: that I take through increasing my balance sheet might not
Speaker 1: be perceived well by a variety authorities, that tends to
Speaker 1: make you wonder about that being able to undertake these
Speaker 1: very strong actions and be accountable. So go and testify
Speaker 1: to Congress and explain it to the public and and everybody.
Speaker 1: I'm not saying it's not without risk because we tried
Speaker 1: things which had not been tried before to my knowledge,
Speaker 1: and um, they were unpopular for a lot of people.
Speaker 1: And then you've got the saber question. I have taken
Speaker 1: the saber question many, many times. Um, it's still there.
Speaker 1: It will always be there. Um. You know, some people
Speaker 1: benefit from some policies and other people are disadvantaged. When
Speaker 1: we we know when Paul Boker had to bring double
Speaker 1: digit inflation down, the unemployment roles increased hugely and that
Speaker 1: was part of the cost. And so monetary policy affects
Speaker 1: people differently at different points in time. Sir h thank you,
Speaker 1: David Fake. You alluded to the conundrum of lack of
Speaker 1: productivity growth in the eighties. How comfortable are you with
Speaker 1: your metrics and your ability to appropriately measure productivity in services,
Speaker 1: which is constitutes the lion's share of our economy. Yeah,
Speaker 1: now there's a good points. Productivity is one of the
Speaker 1: most difficult things to measure. Services in particular, is very difficult. Um, yep.
Speaker 1: I I take those points. I think that um, no
Speaker 1: matter how poorly they may be measured at the moment,
Speaker 1: I believe them to be measured on a basis that
Speaker 1: is consistent with the way the national income and product
Speaker 1: accounts are measured. I say that only because if we
Speaker 1: pick a benchmark, we can pick a benchmark GDP growth,
Speaker 1: real GDP growth. UM. I'm trying to explain to people
Speaker 1: why I think one in three quarters per cent is
Speaker 1: the rest growth rate for the economy. I do not
Speaker 1: think it's three um. Now, UM, inflation has not been
Speaker 1: growing very strongly. Part of this is going to come
Speaker 1: down to UM. If inflation we're growing very strongly, um Collie,
Speaker 1: you know, and we're at two and a quarter percent
Speaker 1: growth and inflation is growing very strongly, we'd have to
Speaker 1: have more restrictive policies. I would guess that would reduce
Speaker 1: economic activity, and so that would make you wonder about
Speaker 1: what productivity is. Now. If productivity was really strong, that
Speaker 1: presumably would reduce unit labor costs, and that could be
Speaker 1: consistent with the lower inflation. So, you know, I look
Speaker 1: at inflation and I kind of go, if we can
Speaker 1: hit our inflation objective and get that right. We look
Speaker 1: at real GDP, We look at all the indicators of productivity,
Speaker 1: and if they're aligned and seem like they're doing well,
Speaker 1: then I call it a day and I'm done. The
Speaker 1: search staff looks at productivity and tries to find out
Speaker 1: if there's new insights from the services. It's very important,
Speaker 1: there's no doubt about it. But it's the you know,
Speaker 1: the big inflation and how's the economy doing that capture
Speaker 1: most of my intention. I'm sure that some sectors of
Speaker 1: the economy have very strong and thriving productivity growth, but
Speaker 1: when you put it all together, and we've also got
Speaker 1: the age of disruption too, and so you see spectacular
Speaker 1: productivity gains in other areas that completely decimate, you know,
Speaker 1: the legacy producers, and that gets averaged across that. So
Speaker 1: you kind of want to People usually want to pick
Speaker 1: out the winners and look at the strong productivity growth,
Speaker 1: and we've also got the laggards that need to be
Speaker 1: dealt with. To this wonderful question, it's a hard question.
Speaker 1: I can't do. It's a hard question. There's no answer there.
Speaker 1: I was speaking with Ellen Meltzer lunch with Allan Meltzer
Speaker 1: in Pittsburgh. We got this raging argument about should we
Speaker 1: add you know, Allan Meltzer. You up at Allan Meltzer.
Speaker 1: I upset Allan Meltzer at lunch. It's hard to do.
Speaker 1: But we have this raging debate about John Edwards in
Speaker 1: two America's versus the desire to aggregator. As you say,
Speaker 1: put all the data together. Do we need to be
Speaker 1: more respectful of not putting all the data together and
Speaker 1: worrying about two or three America's. They have benefiting from
Speaker 1: the new productivity and they have nots left behind. I
Speaker 1: have a lot of respect round Melzer. He was steam
Speaker 1: professor Carnegie Mellon when when when I was there, I
Speaker 1: didn't always agree with everything, But you know, that's the
Speaker 1: nature of economics. Um, yeah, I don't know. I think
Speaker 1: it's you know, the state of the economy is really hard. Um.
Speaker 1: You know, I was falling back on my meager economics
Speaker 1: training and macroeconomics. One of the first things you assume
Speaker 1: is that the distribution of activity just isn't that important.
Speaker 1: Income distribution I income, low income. It's just a simplifying assumption.
Speaker 1: But it seems like the level of income inequality is
Speaker 1: really very large at the moment. And um, the nature
Speaker 1: of productivity enhances returns to UM. Education and certain skills
Speaker 1: UM lead to outcomes like that. And I think if
Speaker 1: you're you know, wondering about appropriate levels for economic growth
Speaker 1: that benefit a large uh swath of the population. You
Speaker 1: have to be thinking about how you can address some
Speaker 1: challenges that aren't in my economic models to help more
Speaker 1: people benefit from that. So I mean, is that two
Speaker 1: America's three America the data? I mean, you can kind
Speaker 1: of try to do the uniform macroeconomist viewpoint that it's
Speaker 1: GDP and that's all I care about. But there's way more, um,
Speaker 1: you know, going on, you know, and this comes up
Speaker 1: in in the economics profession now, in the lack of
Speaker 1: diversity and women in the profession. And do we find
Speaker 1: ourselves looking at certain questions more and deciding that it's
Speaker 1: perfectly fine because of that? I really don't know, but
Speaker 1: I know that when I have more people in the
Speaker 1: room giving me new perspectives on how things will be
Speaker 1: playing out, I usually end up in a better place.
Speaker 1: Thanks for listening to the Bloomberg Surveillance podcast. Subscribe and
Speaker 1: listen to interviews on Apple Podcasts, SoundCloud, or whichever podcast
Speaker 1: platform you prefer. I'm on Twitter at Tom Keane Before
Speaker 1: the podcast, you can always catch us worldwide. I'm Bloomberg
Speaker 1: Radio