1 00:00:00,080 --> 00:00:06,760 Speaker 1: Bloomberg Audio Studios, Podcasts, radio news. 2 00:00:11,960 --> 00:00:15,560 Speaker 2: This is the Bloomberg Surveillance Podcast. I'm Tom Keene along 3 00:00:15,600 --> 00:00:18,960 Speaker 2: with Paul Sweeney. Join us each day for insight from 4 00:00:18,960 --> 00:00:23,160 Speaker 2: the best in economics, finance, investment, and international relations. You 5 00:00:23,160 --> 00:00:26,520 Speaker 2: can also watch the show live on YouTube. Visit the 6 00:00:26,520 --> 00:00:31,280 Speaker 2: Bloomberg Podcast channel on YouTube to see the show weekday 7 00:00:31,280 --> 00:00:34,320 Speaker 2: mornings from seven to ten am Eastern from our global 8 00:00:34,360 --> 00:00:39,000 Speaker 2: headquarters in New York City. Subscribe to the podcast on Apple, Spotify, 9 00:00:39,360 --> 00:00:42,920 Speaker 2: or anywhere else you listen, and always I'm Bloomberg Radio, 10 00:00:43,080 --> 00:00:47,000 Speaker 2: the Bloomberg Terminal, and the Bloomberg Business App. Now joining 11 00:00:47,120 --> 00:00:51,680 Speaker 2: us Neil Renaissance Macro for too short a visit Neil. 12 00:00:51,720 --> 00:00:55,000 Speaker 2: Do you still keep a constructive view on the American 13 00:00:55,160 --> 00:00:56,400 Speaker 2: economic experiment? 14 00:00:59,200 --> 00:01:02,280 Speaker 3: Well, that's a great question, Tom. I do think the 15 00:01:02,320 --> 00:01:04,920 Speaker 3: tradeoffs are getting a little bit more challenging here for 16 00:01:04,959 --> 00:01:09,760 Speaker 3: the Fed. You know, my view is that inflation is 17 00:01:09,959 --> 00:01:13,680 Speaker 3: likely to moderate over the next several quarters. Okay, and 18 00:01:14,880 --> 00:01:19,319 Speaker 3: if the Fed is skittish about recalibrating policy given the 19 00:01:19,400 --> 00:01:23,520 Speaker 3: coming slowing in inflation, then that would make me a 20 00:01:23,520 --> 00:01:26,679 Speaker 3: little bit more concerned around the economic Olbum. So that's 21 00:01:26,760 --> 00:01:28,560 Speaker 3: kind of where I'm at. I think the trade offs 22 00:01:29,040 --> 00:01:31,279 Speaker 3: are not as obvious as they were a year ago. 23 00:01:32,240 --> 00:01:34,800 Speaker 3: We look at the labor markets, Tom, if you look 24 00:01:34,840 --> 00:01:38,120 Speaker 3: at average hourly earnings, I mean people talk about stubborn 25 00:01:38,200 --> 00:01:41,440 Speaker 3: or sticky prices. Well, wages are a very sticky price 26 00:01:41,480 --> 00:01:44,759 Speaker 3: in their own right, and wages have been slowing quite meaningfully. 27 00:01:46,000 --> 00:01:47,880 Speaker 3: You know, over the last several months. If you look 28 00:01:47,880 --> 00:01:50,600 Speaker 3: at the three month rate of change in average hourly earning, 29 00:01:50,920 --> 00:01:53,320 Speaker 3: it's running below three percent at an annual rate. 30 00:01:53,720 --> 00:01:57,360 Speaker 2: Uh Paul moments ago, Ian Lingen Bmo Capitol. Real question 31 00:01:57,520 --> 00:01:59,040 Speaker 2: is real spending. 32 00:01:58,640 --> 00:02:02,240 Speaker 1: Real spending that goes to that spend my spending Israel. 33 00:02:02,240 --> 00:02:04,640 Speaker 4: I can tell you that Neil talk to us about 34 00:02:04,640 --> 00:02:07,919 Speaker 4: this two percent inflation data point that the feder Reserve 35 00:02:08,000 --> 00:02:09,320 Speaker 4: talks about is a target? 36 00:02:09,880 --> 00:02:12,400 Speaker 1: How hard of a target is that? Should it be? 37 00:02:12,800 --> 00:02:14,680 Speaker 4: Why can't the world live with I don't know, two 38 00:02:14,720 --> 00:02:17,200 Speaker 4: and a half percent inflation? Two and three quarters percent? 39 00:02:17,680 --> 00:02:18,480 Speaker 1: How do you think about that? 40 00:02:20,280 --> 00:02:20,440 Speaker 5: Well? 41 00:02:20,480 --> 00:02:23,400 Speaker 3: I think the Fed can live with that. I mean, 42 00:02:23,400 --> 00:02:26,960 Speaker 3: they've signaled that they're willing to cut with inflation rates 43 00:02:27,000 --> 00:02:30,680 Speaker 3: above that, So you know, I do think that the 44 00:02:30,680 --> 00:02:35,080 Speaker 3: two percent number, you know, that's a A not necessarily 45 00:02:35,200 --> 00:02:38,040 Speaker 3: a right here right now target. It's just you know, 46 00:02:38,200 --> 00:02:40,200 Speaker 3: kind of a point in time. You know, we want 47 00:02:40,200 --> 00:02:43,000 Speaker 3: to be moving towards that, you know, in that direction 48 00:02:43,200 --> 00:02:46,799 Speaker 3: sort of thing. You know that we've litigated whether that's 49 00:02:46,800 --> 00:02:48,560 Speaker 3: the right number or not. It is what it is. 50 00:02:48,919 --> 00:02:50,440 Speaker 3: I think for the SAD it just needs to be 51 00:02:50,480 --> 00:02:52,800 Speaker 3: moving in that direction in order for them to feel 52 00:02:52,800 --> 00:02:54,720 Speaker 3: comfortable with easing. 53 00:02:55,280 --> 00:02:58,920 Speaker 2: Why is this eight thir dy PCE deflator important just 54 00:02:59,520 --> 00:03:02,160 Speaker 2: except for the you know, the Fed cares. Why is 55 00:03:02,200 --> 00:03:05,480 Speaker 2: this inflation series more important than fourteen others? 56 00:03:05,520 --> 00:03:09,480 Speaker 3: Neil Dotta, Well, remember Tom and we have you know, 57 00:03:09,480 --> 00:03:12,800 Speaker 3: in economics, you have often different ways of measuring the 58 00:03:12,840 --> 00:03:15,720 Speaker 3: same kind of concept. You have cp and GDI, you 59 00:03:15,800 --> 00:03:19,160 Speaker 3: have PC and CPI and the PCE number it just 60 00:03:19,240 --> 00:03:22,519 Speaker 3: covers them. It has a much wider scope, right. That's 61 00:03:22,560 --> 00:03:28,040 Speaker 3: why unlike CPI, forty percent is not shelter, right, I mean, 62 00:03:28,040 --> 00:03:30,040 Speaker 3: because they have it has a much wider scope. But 63 00:03:30,080 --> 00:03:34,080 Speaker 3: also it looks at things covering payments made on behalf 64 00:03:34,120 --> 00:03:36,600 Speaker 3: of an individual. I mean CPI only looks at out 65 00:03:36,640 --> 00:03:38,760 Speaker 3: of pocket expenses. So I think one way I'm thinking 66 00:03:38,760 --> 00:03:42,840 Speaker 3: about it is CPI kind of reflects what people think 67 00:03:42,920 --> 00:03:45,920 Speaker 3: they spend their money on, and the PC data reflects 68 00:03:45,920 --> 00:03:48,960 Speaker 3: what people aggravate their money on. And I think that's 69 00:03:48,960 --> 00:03:51,560 Speaker 3: one of the reasons why that looking at PCEE. 70 00:03:51,520 --> 00:03:57,279 Speaker 2: Neil Dutta does a negative statistic for inflation adjusted personal spending. 71 00:03:58,080 --> 00:04:04,320 Speaker 2: Is that a precursor for inflation adjusted negative wages out 72 00:04:04,360 --> 00:04:06,400 Speaker 2: into the rest of twenty twenty four. 73 00:04:07,400 --> 00:04:10,640 Speaker 3: Well, I mean, it just it just I mean to me, 74 00:04:10,920 --> 00:04:14,880 Speaker 3: the data on real consumption is a reminder that growth 75 00:04:15,080 --> 00:04:18,240 Speaker 3: is not getting away from the Fed. You know, going 76 00:04:18,279 --> 00:04:20,360 Speaker 3: into the year Tom, I mean, there was a lot 77 00:04:20,400 --> 00:04:25,760 Speaker 3: of enthusiasm for economic strength. I think the consensus has 78 00:04:25,839 --> 00:04:28,400 Speaker 3: largely adjusted to that, right, I mean, we went into 79 00:04:28,440 --> 00:04:31,880 Speaker 3: the year very downbeat on growth as a consensus, and 80 00:04:31,920 --> 00:04:34,359 Speaker 3: now people have adjusted, I think, to where they should be, 81 00:04:34,760 --> 00:04:36,680 Speaker 3: and you're going to likely see a mix, a more 82 00:04:36,760 --> 00:04:41,440 Speaker 3: mixed data flow now because people are in the generally speaking, 83 00:04:41,480 --> 00:04:43,320 Speaker 3: I have adjusted. I mean, growth was never going to 84 00:04:43,320 --> 00:04:45,680 Speaker 3: be as weak as it was people thought it would 85 00:04:45,680 --> 00:04:47,160 Speaker 3: be at the end of last year. Now we're kind 86 00:04:47,160 --> 00:04:48,280 Speaker 3: of more in the two to two and a half 87 00:04:48,320 --> 00:04:50,839 Speaker 3: percent camp, so you should expect to see a more 88 00:04:50,880 --> 00:04:55,360 Speaker 3: mixed kind of data flow. Relative to consensus now. But yeah, 89 00:04:55,400 --> 00:04:57,719 Speaker 3: I mean, it just demonstrates that growth isn't getting away 90 00:04:57,760 --> 00:05:00,040 Speaker 3: from the FED. And when you think about consumption, and 91 00:05:01,040 --> 00:05:03,520 Speaker 3: you know, remember that in recent months we had seen 92 00:05:03,560 --> 00:05:05,760 Speaker 3: a bit I think before the revisions, I mean, we 93 00:05:05,800 --> 00:05:07,880 Speaker 3: did see a meaningful decline in the savings rate. So 94 00:05:07,880 --> 00:05:09,680 Speaker 3: there's a limit to how much you can draw down 95 00:05:09,760 --> 00:05:12,880 Speaker 3: savings to finance consumption. So you know, you'd expect to 96 00:05:12,880 --> 00:05:17,240 Speaker 3: see consumer spending follow the growth in incomes more so. 97 00:05:17,520 --> 00:05:20,479 Speaker 3: And you know, as I mentioned, you know, wage growth 98 00:05:20,560 --> 00:05:24,360 Speaker 3: has been moderating, so it's not all that surprising to 99 00:05:24,400 --> 00:05:27,360 Speaker 3: see consumption, you know, slonging a little bit. 100 00:05:27,240 --> 00:05:30,360 Speaker 2: Here key economic data. We're commercial for you for this hour, Paul, 101 00:05:30,400 --> 00:05:32,239 Speaker 2: Why don't you continue with mister Duddo. 102 00:05:32,640 --> 00:05:35,080 Speaker 4: So, Neil, I guess if you look at this data, 103 00:05:35,240 --> 00:05:36,920 Speaker 4: I mean, there's certainly a camp out there that I 104 00:05:36,960 --> 00:05:38,840 Speaker 4: think would look at this data and kind of what 105 00:05:38,839 --> 00:05:41,039 Speaker 4: we've seen over the last several months and say, my 106 00:05:41,080 --> 00:05:44,039 Speaker 4: federal reserve can stay right where they are. They don't 107 00:05:44,040 --> 00:05:47,479 Speaker 4: need to do anything here. Let's let these higher rates 108 00:05:47,480 --> 00:05:50,520 Speaker 4: for longer do their job and pulling inflation down. How 109 00:05:50,560 --> 00:05:51,320 Speaker 4: do you think about that? 110 00:05:53,680 --> 00:05:55,200 Speaker 3: I mean, I think you want to put that argument 111 00:05:55,560 --> 00:05:57,160 Speaker 3: on as short of valicio as possible. 112 00:05:57,279 --> 00:05:57,520 Speaker 5: Okay. 113 00:05:57,520 --> 00:06:01,640 Speaker 3: I think frankly, you never have as much time as 114 00:06:01,640 --> 00:06:04,640 Speaker 3: you think. The risks with the economy are always nonlinear 115 00:06:04,720 --> 00:06:07,159 Speaker 3: in nature. I'll just leave it at that. I think 116 00:06:07,160 --> 00:06:10,560 Speaker 3: it's me it's frankly dangerous. You know, I mean, as 117 00:06:10,600 --> 00:06:13,799 Speaker 3: a policymaker, your job, I mean, you're not a business economist. 118 00:06:13,839 --> 00:06:16,560 Speaker 3: My job is to try to position clients for upside. 119 00:06:16,600 --> 00:06:19,040 Speaker 3: Their job is to try to protect things from the downside. 120 00:06:19,040 --> 00:06:23,040 Speaker 3: It's a risk management job. Okay. And what we know, 121 00:06:23,279 --> 00:06:26,320 Speaker 3: I mean core inflation came in on the nose point two. 122 00:06:26,400 --> 00:06:28,080 Speaker 3: I think it was point twenty five if you round 123 00:06:28,120 --> 00:06:32,880 Speaker 3: it out to the two decimal points. And you know, 124 00:06:32,960 --> 00:06:36,599 Speaker 3: I remember Waller in a recent speech talking about, you know, 125 00:06:36,640 --> 00:06:38,520 Speaker 3: I look forward to the day when I don't have to, 126 00:06:38,640 --> 00:06:41,080 Speaker 3: you know, look at it like out to three decimal places, 127 00:06:41,120 --> 00:06:42,920 Speaker 3: that that that might actually happen soon. 128 00:06:43,000 --> 00:06:46,440 Speaker 2: Okay, But it's a final question, Neil Dota, this is 129 00:06:46,520 --> 00:06:49,599 Speaker 2: really really important. As you say, we've gotten out to 130 00:06:49,640 --> 00:06:52,120 Speaker 2: three decimal points. I'm as guilty as this. The only 131 00:06:52,160 --> 00:06:54,200 Speaker 2: one I know doesn't go to three decimal points is 132 00:06:54,200 --> 00:06:54,919 Speaker 2: Lisa Mateo. 133 00:06:55,320 --> 00:06:56,479 Speaker 1: Right, she's the only one I know. 134 00:06:57,000 --> 00:07:00,160 Speaker 2: Neil data is just simply the great, great call. All 135 00:07:00,240 --> 00:07:04,240 Speaker 2: here of my economist of twenty twenty three is you said, 136 00:07:04,240 --> 00:07:08,039 Speaker 2: I'm sorry, productivity is the are animal spirits there and 137 00:07:08,120 --> 00:07:11,240 Speaker 2: we will clear markets to continue to prosper. Have you 138 00:07:11,360 --> 00:07:12,520 Speaker 2: changed your tune at all? 139 00:07:14,680 --> 00:07:17,760 Speaker 3: Well, the only thing I have a real bone to 140 00:07:17,800 --> 00:07:21,000 Speaker 3: pick with is on inflation. I think there's not as 141 00:07:21,080 --> 00:07:23,960 Speaker 3: much upside to growth estimates. There's plenty of downside to 142 00:07:24,080 --> 00:07:27,040 Speaker 3: inflation estimates relative to the consensus. So the consensus has 143 00:07:27,080 --> 00:07:29,120 Speaker 3: come closer to me on the economy, but I think 144 00:07:29,200 --> 00:07:32,400 Speaker 3: move further away on inflation. And so for me, I 145 00:07:32,960 --> 00:07:36,400 Speaker 3: think the momentum under inflation is lower. I think core 146 00:07:36,480 --> 00:07:39,840 Speaker 3: inflation will. I mean, you can't rule out a point 147 00:07:39,840 --> 00:07:42,440 Speaker 3: one a couple of times here and there between now 148 00:07:42,480 --> 00:07:45,800 Speaker 3: and meeting, you can't rule that out. And once that 149 00:07:45,880 --> 00:07:48,960 Speaker 3: starts to happen, look for the bond markets to rally. 150 00:07:49,000 --> 00:07:51,040 Speaker 3: So I think if I had to pick, I mean, 151 00:07:51,080 --> 00:07:54,280 Speaker 3: as a market economist, stocks or bonds, I would pick 152 00:07:54,360 --> 00:07:57,480 Speaker 3: bonds because either growth is steady and inflation slows, in 153 00:07:57,520 --> 00:08:00,920 Speaker 3: which case bond markets rally or growth start slowing and 154 00:08:01,000 --> 00:08:03,679 Speaker 3: inflation will continue to slow, in which case bond's rally alt. 155 00:08:03,880 --> 00:08:05,920 Speaker 3: So there's an asymmetry here in the market I think 156 00:08:06,200 --> 00:08:07,119 Speaker 3: in favor of fixing. 157 00:08:07,800 --> 00:08:10,040 Speaker 2: Neil Dotta, thank you so much. Really treasure the view 158 00:08:10,080 --> 00:08:12,120 Speaker 2: here at eight thirty on Fair of course with Renaissance 159 00:08:12,200 --> 00:08:15,600 Speaker 2: Macro look for mister data and Jeff to Graf's good literature. 160 00:08:15,600 --> 00:08:29,400 Speaker 2: You'll see that on Twitter and LinkedIn as well. Francis 161 00:08:29,440 --> 00:08:33,160 Speaker 2: Donald joins us out for Manual Life Investment Management. Just wondering. 162 00:08:33,160 --> 00:08:35,640 Speaker 2: We did a great panel in Toronto. It was out 163 00:08:35,679 --> 00:08:39,320 Speaker 2: real fire. Nice Francis Donald from that panel in Toronto 164 00:08:39,800 --> 00:08:41,840 Speaker 2: when I went and saw the new Jersey Devils play 165 00:08:41,880 --> 00:08:44,120 Speaker 2: the Toronto maple LEAs. Thank you Redo keeper of the 166 00:08:44,240 --> 00:08:47,320 Speaker 2: MX for that. Francis from that panel you and I 167 00:08:47,360 --> 00:08:50,760 Speaker 2: did with David Rosenberg two months ago. How has your 168 00:08:50,840 --> 00:08:51,560 Speaker 2: view changed? 169 00:08:52,200 --> 00:08:55,880 Speaker 6: It hasn't. Actually, I just looked up on chat GPT 170 00:08:56,160 --> 00:09:00,080 Speaker 6: give me examples of words for periods without any action 171 00:09:00,200 --> 00:09:01,960 Speaker 6: that is temporary, because I was trying to come up 172 00:09:01,960 --> 00:09:04,240 Speaker 6: with a clever way to say we're in a holding pattern, tom, 173 00:09:05,200 --> 00:09:09,080 Speaker 6: especially in the United States, we are waiting for more information. 174 00:09:09,360 --> 00:09:14,160 Speaker 6: Was Q one inflation temporary. Where will jobs go? The 175 00:09:14,240 --> 00:09:18,040 Speaker 6: balance of risks is that jobs deteriorate from this moment forward. 176 00:09:18,080 --> 00:09:21,080 Speaker 6: But we got to get that June July, August data. 177 00:09:21,400 --> 00:09:24,200 Speaker 6: The FED is not going to be cutting before September, 178 00:09:25,160 --> 00:09:28,000 Speaker 6: but we need more information, and so week to week 179 00:09:28,120 --> 00:09:31,160 Speaker 6: it's bits and bobs on the US economy. Now that's 180 00:09:31,160 --> 00:09:33,640 Speaker 6: true for the US, it's not true elsewhere. We had 181 00:09:33,679 --> 00:09:35,960 Speaker 6: big PCE number this morning in the US. We're not 182 00:09:36,040 --> 00:09:38,840 Speaker 6: talking about that on our team over at Many Life, 183 00:09:38,960 --> 00:09:43,120 Speaker 6: we're talking about intervention in Japan. Might seem small, huge 184 00:09:43,160 --> 00:09:48,319 Speaker 6: downward revision on Canadian GDP. Canada escaped a recession by 185 00:09:48,360 --> 00:09:52,760 Speaker 6: this decibel point in Q three Q four. We have 186 00:09:53,440 --> 00:09:56,559 Speaker 6: the ECB cutting next week, the BOC cutting next week. 187 00:09:56,600 --> 00:09:58,600 Speaker 6: There's a lot of movement in the world, but not 188 00:09:58,720 --> 00:10:00,719 Speaker 6: so much in the US. I think that's the more 189 00:10:00,760 --> 00:10:01,960 Speaker 6: interesting macro picture right now. 190 00:10:02,000 --> 00:10:04,640 Speaker 2: I'm getting on to a late jobs report June seven. 191 00:10:04,760 --> 00:10:08,600 Speaker 2: The survey is still one hundred and eighty thousand. I'm sorry, France, 192 00:10:08,600 --> 00:10:11,560 Speaker 2: there's one hundred and eighty thousand. Non farm payrolls is 193 00:10:11,640 --> 00:10:15,160 Speaker 2: still not maybe not robust. But I'm gonna borrow from 194 00:10:15,160 --> 00:10:18,160 Speaker 2: Bob sinch A solid American economy. 195 00:10:19,040 --> 00:10:21,880 Speaker 6: Yeah, it's not a problem. It's not a problem. And 196 00:10:22,120 --> 00:10:23,960 Speaker 6: this is the big issue facing the FED is that 197 00:10:24,440 --> 00:10:28,440 Speaker 6: the balance of risks is tilting towards an acceleration of 198 00:10:28,480 --> 00:10:32,120 Speaker 6: weakness in the US, but inflation is still above target 199 00:10:32,280 --> 00:10:34,920 Speaker 6: and the job market had not deteriorated. We like to 200 00:10:34,960 --> 00:10:37,160 Speaker 6: say in our team, when the FED starts cutting rates, 201 00:10:37,200 --> 00:10:40,080 Speaker 6: you won't be asking why, right the FED cut weight 202 00:10:40,160 --> 00:10:41,920 Speaker 6: in the next two months, we'd all be shaking our 203 00:10:41,960 --> 00:10:45,640 Speaker 6: heads saying why. So they just don't have the data now. 204 00:10:45,679 --> 00:10:47,880 Speaker 6: That said, when we forecast what's ahead, we think they 205 00:10:47,880 --> 00:10:50,520 Speaker 6: will have enough data by September. But they don't have 206 00:10:50,559 --> 00:10:53,560 Speaker 6: it now, which is why they can't cut in June July, 207 00:10:53,720 --> 00:10:54,840 Speaker 6: and they have to wait. 208 00:10:55,000 --> 00:10:57,640 Speaker 2: Thank god, we're commercial free this hour with key economic 209 00:10:57,720 --> 00:11:01,000 Speaker 2: data and the Marcus lifting off at SPA accept seventeen 210 00:11:01,040 --> 00:11:04,360 Speaker 2: points now first green in days in days. The live 211 00:11:04,480 --> 00:11:07,320 Speaker 2: chat on YouTube is lit up there that I can't Paul, 212 00:11:07,400 --> 00:11:10,520 Speaker 2: this is too much, Brent, Thank you so much. Alcohol 213 00:11:10,600 --> 00:11:15,720 Speaker 2: free Corona is sprite. There you go, Brent, thank you 214 00:11:15,760 --> 00:11:16,520 Speaker 2: for that wisdom. 215 00:11:17,000 --> 00:11:20,720 Speaker 4: So Francis here you talked about the bav cutting rates. 216 00:11:20,840 --> 00:11:23,920 Speaker 4: The European Central bank cutting rates soon. I mean a 217 00:11:23,920 --> 00:11:26,840 Speaker 4: lot of folks out there Francis would say, my Federal 218 00:11:26,880 --> 00:11:29,120 Speaker 4: Reserve is behind the curve here, they should be cutting. 219 00:11:29,480 --> 00:11:31,000 Speaker 1: Now. What do you say to those. 220 00:11:30,880 --> 00:11:34,839 Speaker 6: Folks, Well, I say this is actually very atypical, and 221 00:11:34,880 --> 00:11:38,600 Speaker 6: I think that's what's causing problems. Historically, the FED goes first, 222 00:11:38,760 --> 00:11:42,440 Speaker 6: everybody else follows. EM's go last. The cycle has been 223 00:11:42,520 --> 00:11:46,600 Speaker 6: so fundamentally different. Ems are almost done their cutting cycle. 224 00:11:46,679 --> 00:11:49,480 Speaker 6: We have several developed markets who are cutting ahead of 225 00:11:49,520 --> 00:11:52,079 Speaker 6: the FED. I think this is actually creating some problems. 226 00:11:52,080 --> 00:11:53,960 Speaker 6: And I was talking to my team today. We're so 227 00:11:54,200 --> 00:11:57,760 Speaker 6: used to saying the FED only cares about what's happening domestically, 228 00:11:58,040 --> 00:12:00,840 Speaker 6: and the FED is the ruler of all others central banks. 229 00:12:01,120 --> 00:12:02,800 Speaker 6: But the FED is also going to care about some 230 00:12:02,840 --> 00:12:05,440 Speaker 6: of the global disruptions that is coming from them being 231 00:12:05,559 --> 00:12:07,920 Speaker 6: last or near last. We've got the RBA and the 232 00:12:07,920 --> 00:12:11,040 Speaker 6: BOJ of course, that are still on or still on 233 00:12:11,080 --> 00:12:13,680 Speaker 6: the hawkish glance. And so the number one question that 234 00:12:13,720 --> 00:12:15,720 Speaker 6: I get is what are we doing with currency risk 235 00:12:15,800 --> 00:12:18,760 Speaker 6: and countries that need to cut rates because their economy 236 00:12:18,840 --> 00:12:22,520 Speaker 6: is weakening but can't diverge to substantially from the FED. 237 00:12:23,160 --> 00:12:25,680 Speaker 6: So I think we might see some subtle or I'd 238 00:12:25,679 --> 00:12:27,640 Speaker 6: like to see some subtle references from the FED of 239 00:12:27,800 --> 00:12:30,360 Speaker 6: some of the chaos that's being created by the FED 240 00:12:30,520 --> 00:12:32,760 Speaker 6: going later the end of the day. Though these central 241 00:12:32,760 --> 00:12:35,400 Speaker 6: banks have their own domestic bandates, the FED doesn't have 242 00:12:35,559 --> 00:12:37,960 Speaker 6: justification to be cut. These other central banks that are 243 00:12:38,000 --> 00:12:40,439 Speaker 6: cutting absolutely have to get on the ball or else 244 00:12:40,440 --> 00:12:44,200 Speaker 6: they're going to risk bigger recessions and potentially larger rate divert. 245 00:12:44,480 --> 00:12:46,000 Speaker 1: Well, that's kind of where I want to go. For instance. 246 00:12:46,040 --> 00:12:47,839 Speaker 4: I mean, there are a lot of folks out there 247 00:12:47,840 --> 00:12:51,480 Speaker 4: that are saying, boy, the more this FED r weights 248 00:12:51,480 --> 00:12:53,520 Speaker 4: here in terms of cutting rates, the more we raised 249 00:12:53,520 --> 00:12:56,480 Speaker 4: the risk of a I don't know, an accident happening. 250 00:12:56,080 --> 00:12:59,720 Speaker 1: In the marketplace or something worse. What's that risk to you? Yeah, 251 00:12:59,760 --> 00:13:05,360 Speaker 1: I'm post with Dell an accident, oh those guys. Yeah, 252 00:13:05,559 --> 00:13:05,800 Speaker 1: you know. 253 00:13:06,080 --> 00:13:07,840 Speaker 6: There are a lot of things that are different in 254 00:13:07,880 --> 00:13:11,439 Speaker 6: this post COVID economy. But I am still a traditionalist 255 00:13:11,640 --> 00:13:14,880 Speaker 6: in the sense that I think basic economic relationships hold 256 00:13:15,240 --> 00:13:19,240 Speaker 6: higher rates exist to bring down demand, and we have 257 00:13:19,360 --> 00:13:22,760 Speaker 6: seen already a few small accidents that occur. But I 258 00:13:22,760 --> 00:13:24,520 Speaker 6: think we bury the lead a little bit when we 259 00:13:24,559 --> 00:13:26,480 Speaker 6: hear economists talk about, oh, it's going to be a 260 00:13:26,480 --> 00:13:29,040 Speaker 6: soft landing and the Fed's only going to cut three times. 261 00:13:29,360 --> 00:13:32,920 Speaker 6: Well A, the question is if they don't cut pretty significantly, 262 00:13:33,200 --> 00:13:35,600 Speaker 6: what does the next recession look like. Maybe it's not 263 00:13:35,640 --> 00:13:37,679 Speaker 6: a twenty twenty four, maybe it's not even a twenty 264 00:13:37,720 --> 00:13:40,880 Speaker 6: twenty five, but that recession is likely to be much worse. 265 00:13:41,240 --> 00:13:44,160 Speaker 2: Thank you, Francis Don. What's great? I mean our bookers, 266 00:13:44,160 --> 00:13:50,920 Speaker 2: they have it nailed. So I say it on my 267 00:13:51,040 --> 00:13:54,040 Speaker 2: cell phone in shock over these announcements. The speed of 268 00:13:54,080 --> 00:13:57,360 Speaker 2: the verdict for me as an amateur, all thirty four 269 00:13:57,440 --> 00:14:00,640 Speaker 2: counts for me as an amateur. And I turned to 270 00:14:00,679 --> 00:14:03,000 Speaker 2: the team. You know, we're texting back and forth like 271 00:14:03,040 --> 00:14:05,880 Speaker 2: everybody does today, and there's only one person I wanted 272 00:14:05,880 --> 00:14:09,600 Speaker 2: to talk to, simply put, is a ute out of 273 00:14:09,640 --> 00:14:13,800 Speaker 2: amherst UMass Amherst in Harvard. He worked with Leon Jowarski. 274 00:14:14,080 --> 00:14:17,000 Speaker 2: That's all you have to know. Nick Ackerman joins US 275 00:14:17,040 --> 00:14:23,520 Speaker 2: now with decades of experience in the American judicial system. Nick, 276 00:14:23,600 --> 00:14:26,960 Speaker 2: my first question is simple, how will this moment? How 277 00:14:27,000 --> 00:14:31,560 Speaker 2: will this verdict effect the other matters of litigation that 278 00:14:31,680 --> 00:14:33,240 Speaker 2: Donald Trump faces? 279 00:14:34,240 --> 00:14:36,640 Speaker 5: I don't know as if it will affect it directly. 280 00:14:36,720 --> 00:14:40,560 Speaker 5: It really right now, those other matters I've been delayed 281 00:14:40,600 --> 00:14:44,880 Speaker 5: for various reasons. The big item is in Washington, D C. 282 00:14:45,320 --> 00:14:49,400 Speaker 5: And Atlanta, where they're waiting to see what the Supreme 283 00:14:49,480 --> 00:14:55,160 Speaker 5: Court does with the immunity argument that Trump's set forth. 284 00:14:55,960 --> 00:14:59,680 Speaker 5: So I think that that one really hinges on the immunity. 285 00:15:00,600 --> 00:15:03,880 Speaker 5: But I think it does cast a whole different pail 286 00:15:04,040 --> 00:15:09,040 Speaker 5: on these other cases, which most people have said are 287 00:15:09,320 --> 00:15:12,560 Speaker 5: probably more serious in some ways, although I would agree 288 00:15:12,560 --> 00:15:16,120 Speaker 5: with that, but it certainly puts the pressure to get 289 00:15:16,160 --> 00:15:19,520 Speaker 5: those cases moving and get them into court and tried. 290 00:15:19,880 --> 00:15:22,520 Speaker 2: What does an appeal court look like? I think we 291 00:15:22,600 --> 00:15:24,560 Speaker 2: even if we didn't have TV cameras there, we had 292 00:15:24,560 --> 00:15:26,960 Speaker 2: the great art of sketches, and I think we know 293 00:15:27,000 --> 00:15:31,000 Speaker 2: what Nick, Paul Drake, Perry Mason, I got it done cold. 294 00:15:31,480 --> 00:15:34,320 Speaker 2: But Nick, what does an appeal court actually look like? 295 00:15:35,520 --> 00:15:39,000 Speaker 5: Well, you're saying in appeals court to appeal this conviction, Yes. 296 00:15:38,920 --> 00:15:41,640 Speaker 2: What does the actual physical What do you do with 297 00:15:41,760 --> 00:15:43,120 Speaker 2: an appeals court? 298 00:15:43,440 --> 00:15:45,200 Speaker 5: Well, what you do is you go up to there's 299 00:15:45,200 --> 00:15:48,960 Speaker 5: two podiums, one for the person who's appealing and the 300 00:15:49,000 --> 00:15:52,880 Speaker 5: other for the person who's opposing the appeal. In this case, 301 00:15:52,920 --> 00:15:56,640 Speaker 5: it'll be on the prosecution opposing the appeal, and it'll 302 00:15:56,640 --> 00:16:00,120 Speaker 5: be Trump making the appeal. And you've got in this 303 00:16:00,160 --> 00:16:02,800 Speaker 5: case in the first department, there'll be five judges that 304 00:16:02,840 --> 00:16:06,360 Speaker 5: will hear that appeal, And so the only argument they 305 00:16:06,360 --> 00:16:10,440 Speaker 5: really have is to try and somehow dredge out arguments 306 00:16:10,560 --> 00:16:15,520 Speaker 5: based on the law to appeal this conviction, because essentially, 307 00:16:15,560 --> 00:16:18,760 Speaker 5: once you have a jury verdict and they've decided on 308 00:16:18,800 --> 00:16:22,560 Speaker 5: the credibility of the witnesses and the facts, there's not 309 00:16:22,680 --> 00:16:25,120 Speaker 5: much to appeal after that. And I don't think there's 310 00:16:25,200 --> 00:16:28,360 Speaker 5: much to appeal either on the legal portion of this. 311 00:16:28,920 --> 00:16:31,240 Speaker 5: So I don't think this appeal is going to go 312 00:16:31,400 --> 00:16:32,680 Speaker 5: very far for Donald Trump. 313 00:16:33,080 --> 00:16:35,600 Speaker 4: All right, Nick, then let's turn to the sentencing aspect 314 00:16:35,640 --> 00:16:39,240 Speaker 4: of this case. July eleventh. What are the scenarios? What 315 00:16:39,280 --> 00:16:41,640 Speaker 4: are the most likely sentencing scenarios? 316 00:16:41,720 --> 00:16:45,000 Speaker 5: Nick, Well, before January eleventh, there's going to be a 317 00:16:45,000 --> 00:16:47,440 Speaker 5: couple of reports that you're going to see. I guess 318 00:16:47,440 --> 00:16:49,600 Speaker 5: we won't see him until the time of sentencing, but 319 00:16:50,320 --> 00:16:54,480 Speaker 5: probation does a report that's provided to the court. Both 320 00:16:54,560 --> 00:16:59,680 Speaker 5: sides provide sentencing memoranda to the court. The question, of course, 321 00:16:59,760 --> 00:17:03,400 Speaker 5: is what they're not the DA's office asked for jail time, 322 00:17:04,400 --> 00:17:07,240 Speaker 5: and if they do, whether or not the judge Merchant 323 00:17:07,440 --> 00:17:12,560 Speaker 5: will provide jail time. My opinion is that, based on 324 00:17:13,520 --> 00:17:17,000 Speaker 5: at least the fact that Michael Cohen served three years 325 00:17:17,040 --> 00:17:23,480 Speaker 5: for these violations, and that Alan Weiselberg, the CFO of 326 00:17:23,760 --> 00:17:28,560 Speaker 5: Trump Org, who is instrumental in setting up the phony 327 00:17:30,359 --> 00:17:33,280 Speaker 5: corporate records on this and the payments that went out 328 00:17:33,280 --> 00:17:38,159 Speaker 5: to reimburse Michael Cohen, He's already served three months in 329 00:17:38,320 --> 00:17:42,480 Speaker 5: Rikers Island for you know, unrelated matters, and now he's 330 00:17:42,520 --> 00:17:45,359 Speaker 5: serving three months, another three months in Rikers Island for 331 00:17:45,480 --> 00:17:49,720 Speaker 5: line and it's pretty clear that he is not cooperated 332 00:17:49,760 --> 00:17:52,719 Speaker 5: against Donald Trump. And I think the judge is going 333 00:17:52,760 --> 00:17:55,800 Speaker 5: to have to consider that here are two people that 334 00:17:55,880 --> 00:17:59,960 Speaker 5: were instrumental in this crime that did serve jail time, 335 00:18:00,520 --> 00:18:02,919 Speaker 5: and I find it hard to believe that he is 336 00:18:02,960 --> 00:18:06,400 Speaker 5: not going to feel compelled to give Donald Trump at 337 00:18:06,480 --> 00:18:08,080 Speaker 5: least some jail time. 338 00:18:08,680 --> 00:18:09,880 Speaker 2: Wow, in what way? 339 00:18:09,960 --> 00:18:10,200 Speaker 5: I mean? 340 00:18:10,600 --> 00:18:12,400 Speaker 2: You know, I wish I could stop the clock here 341 00:18:12,400 --> 00:18:14,919 Speaker 2: in the show, Nick Akerman, I can't. I mean, what 342 00:18:15,040 --> 00:18:18,040 Speaker 2: is it? Weekend jail time. I mean, is it something 343 00:18:18,160 --> 00:18:21,239 Speaker 2: creative and different or is it Are you telling me 344 00:18:21,280 --> 00:18:24,359 Speaker 2: the former president of the United States could enjoy a 345 00:18:24,440 --> 00:18:27,440 Speaker 2: month at Rikers Island? Yeah? 346 00:18:27,440 --> 00:18:30,080 Speaker 5: Absolutely, I mean I think what they'd have to do 347 00:18:30,119 --> 00:18:34,000 Speaker 5: is create a presidential suite at Rikers Island because the 348 00:18:34,040 --> 00:18:37,560 Speaker 5: Secret Service has to be there with him, obviously, But 349 00:18:38,080 --> 00:18:42,480 Speaker 5: I think there is a very strong likelihood that he 350 00:18:42,600 --> 00:18:44,720 Speaker 5: is going to be sentenced to in prison. 351 00:18:44,880 --> 00:18:47,960 Speaker 2: Will he be protected from other prisoners? I'll just be 352 00:18:48,000 --> 00:18:50,800 Speaker 2: as direct about it as I can. Absolutely. 353 00:18:50,920 --> 00:18:53,520 Speaker 5: I don't see how in any way he can be 354 00:18:53,600 --> 00:18:55,280 Speaker 5: put into the general population. 355 00:18:55,440 --> 00:18:57,240 Speaker 2: I just don't see that happened. What does he need 356 00:18:57,280 --> 00:18:59,159 Speaker 2: to say at eleven am, Nick Akerman, we got it. 357 00:18:59,160 --> 00:19:01,879 Speaker 2: We're running out of time. Unfortunately. What does the former 358 00:19:01,920 --> 00:19:04,639 Speaker 2: president of the United States have to say at eleven 359 00:19:04,680 --> 00:19:08,280 Speaker 2: am to keep himself on a Rikers Island, a Rikers prison. 360 00:19:09,000 --> 00:19:11,440 Speaker 5: At eleven am. I don't think there's anything he can 361 00:19:11,480 --> 00:19:13,600 Speaker 5: say that's going to help him on that score. This 362 00:19:13,760 --> 00:19:16,040 Speaker 5: is all going to be decided in the courts. Just 363 00:19:16,160 --> 00:19:19,280 Speaker 5: like the jury decided guilt or innocence. The judge is 364 00:19:19,320 --> 00:19:22,800 Speaker 5: going to decide the punishment, and it's totally apart from 365 00:19:22,840 --> 00:19:26,920 Speaker 5: anything that Donald Trump says at eleven am. Nick captains 366 00:19:27,320 --> 00:19:30,479 Speaker 5: something that violates that gag order, he could wind up 367 00:19:30,480 --> 00:19:33,320 Speaker 5: in jail a lot quicker because now that he's been 368 00:19:33,359 --> 00:19:36,200 Speaker 5: convicted by a jury of his peers, I think Judge 369 00:19:36,240 --> 00:19:39,720 Speaker 5: Merchant is going to feel a lot more comfortable enforcing 370 00:19:39,760 --> 00:19:41,680 Speaker 5: that gag order through imprisonment. 371 00:19:41,760 --> 00:19:44,800 Speaker 2: Now, thank you for your service to Bloomberg with Bloomberg Law, 372 00:19:44,840 --> 00:19:48,200 Speaker 2: with June Grasso in Balance of Power is well. Nick 373 00:19:48,200 --> 00:19:52,440 Speaker 2: Ackerman working with Leon Jowarski a few years ago as well, 374 00:20:03,280 --> 00:20:06,720 Speaker 2: Betsy Stevenson and Justin Wolfers out in ann Arbor have 375 00:20:06,800 --> 00:20:11,080 Speaker 2: a textbook out which melds public policy into economics like 376 00:20:11,160 --> 00:20:14,960 Speaker 2: nobody about fifteen to fifteen years ago, Rick Michigan over 377 00:20:15,000 --> 00:20:19,280 Speaker 2: at Columbia did the same thing. Living that reality is 378 00:20:19,400 --> 00:20:23,040 Speaker 2: Jason Furman of Harvard University. And all I can say, folks, 379 00:20:23,080 --> 00:20:25,800 Speaker 2: you sit there and go jeez. I wish I had 380 00:20:25,840 --> 00:20:28,320 Speaker 2: a briefing like they have at the White House, or 381 00:20:29,119 --> 00:20:30,919 Speaker 2: I wish I could just for ten minutes sit in 382 00:20:30,960 --> 00:20:33,680 Speaker 2: the back row of X ten. I won't ask any questions, 383 00:20:33,720 --> 00:20:36,600 Speaker 2: but I just want to know what's going on. No 384 00:20:36,640 --> 00:20:41,840 Speaker 2: one is out on Twitter conveying information about this post 385 00:20:41,880 --> 00:20:45,440 Speaker 2: pandemic time. Like Professor Furman. He joins us now from 386 00:20:45,560 --> 00:20:48,920 Speaker 2: X ten and Harvard at University. Jason, first of all, 387 00:20:48,960 --> 00:20:52,439 Speaker 2: congratulations on your Twitter feed. Are you doing this or 388 00:20:52,480 --> 00:20:55,520 Speaker 2: is this a host of young freshmen at Harvard. 389 00:20:56,680 --> 00:20:58,359 Speaker 7: I'm doing it. I have somebody that helps me with 390 00:20:58,400 --> 00:20:59,080 Speaker 7: the charts. 391 00:20:59,400 --> 00:21:03,359 Speaker 2: There we go. It's like liz Ane Saunders at SWOP. Yeah, 392 00:21:03,400 --> 00:21:05,399 Speaker 2: I mean the kid from Pepperdine's doing it. I mean, 393 00:21:05,440 --> 00:21:08,399 Speaker 2: not Lizan. Someone helps you with the charts. What's the 394 00:21:08,440 --> 00:21:11,200 Speaker 2: most important chart right now? I'm going to go course 395 00:21:11,240 --> 00:21:14,439 Speaker 2: services X something. What's your most important chart? Jason? 396 00:21:15,320 --> 00:21:21,760 Speaker 7: I think probably core PCE market based. I haven't liked 397 00:21:21,760 --> 00:21:24,760 Speaker 7: the imputed stuff being in there for a while. Back 398 00:21:24,760 --> 00:21:27,399 Speaker 7: in twenty twenty two, it was lowering inflation because the 399 00:21:27,440 --> 00:21:30,320 Speaker 7: stock market was falling. Now it's raising inflation because the 400 00:21:30,359 --> 00:21:33,720 Speaker 7: stock market is rising. So I think more of a 401 00:21:33,760 --> 00:21:37,240 Speaker 7: focus on market based inflation is a good thing. 402 00:21:37,440 --> 00:21:39,800 Speaker 2: How do you describe I mean you're gonna be you know, 403 00:21:40,520 --> 00:21:42,480 Speaker 2: you're at Harvard now, but if you were down at 404 00:21:42,520 --> 00:21:45,600 Speaker 2: sixteen hundred Pennsylvania Avenue, you're sitting on the couch with 405 00:21:45,680 --> 00:21:48,879 Speaker 2: President Biden, and you're going, look, people are getting buried 406 00:21:48,920 --> 00:21:52,679 Speaker 2: by home insurance. Forget about this rent Oeer stuff. The 407 00:21:52,760 --> 00:21:57,280 Speaker 2: fact is there's selected levels way above twenty nineteen. What 408 00:21:57,359 --> 00:21:59,080 Speaker 2: would you advise President Biden? 409 00:22:00,840 --> 00:22:03,320 Speaker 7: Look, it's tough, I mean inflation. He doesn't have a 410 00:22:03,320 --> 00:22:07,679 Speaker 7: whole lot of control over for him. There's the fiscal side, 411 00:22:08,320 --> 00:22:11,440 Speaker 7: most of that's with Congress. There are things like student 412 00:22:11,480 --> 00:22:14,000 Speaker 7: loans that may end up costing a trillion dollars which 413 00:22:14,040 --> 00:22:17,919 Speaker 7: are going the wrong way in all of this. But 414 00:22:18,040 --> 00:22:20,600 Speaker 7: the most important thing he needs to think about over 415 00:22:20,600 --> 00:22:23,880 Speaker 7: the next five months is he doesn't have a whole 416 00:22:23,920 --> 00:22:26,840 Speaker 7: lot of control over this. The economy in some respects 417 00:22:26,920 --> 00:22:30,639 Speaker 7: is really really good, but people aren't wrong to be 418 00:22:30,720 --> 00:22:33,840 Speaker 7: frustrated about the pace of real wage growth the growth 419 00:22:33,840 --> 00:22:34,480 Speaker 7: of prices. 420 00:22:35,000 --> 00:22:36,960 Speaker 1: All right, Jason, let's take a look at the consumer here. 421 00:22:36,960 --> 00:22:39,360 Speaker 4: We had personal income come in and zero point three 422 00:22:39,400 --> 00:22:43,280 Speaker 4: percent positive today, right in line with expectations. Personal spending 423 00:22:43,400 --> 00:22:45,919 Speaker 4: smidge light zero point two percent. But how do you 424 00:22:46,119 --> 00:22:48,520 Speaker 4: see the consumer out there? A lot of folks are 425 00:22:48,520 --> 00:22:50,840 Speaker 4: talking about a couple different consumers out there. 426 00:22:50,840 --> 00:22:54,800 Speaker 7: Actually, yeah, we're starting to see a little bit of 427 00:22:54,840 --> 00:22:59,600 Speaker 7: slowing on a real basis. Consumer spending fell in April. 428 00:22:59,680 --> 00:23:03,360 Speaker 7: It had been really strong in February and March. If 429 00:23:03,400 --> 00:23:06,000 Speaker 7: you look at the year as a whole, it's up 430 00:23:06,000 --> 00:23:10,399 Speaker 7: at about a one percent pace so far. Consumers what 431 00:23:10,520 --> 00:23:12,720 Speaker 7: kept us out of recession last year. As the Fed 432 00:23:12,840 --> 00:23:18,080 Speaker 7: raised rates over and over and over again, they're relaxing 433 00:23:18,160 --> 00:23:22,280 Speaker 7: a little bit. The saving rate is around three and 434 00:23:22,280 --> 00:23:25,639 Speaker 7: a half percent. It's that could stay that way for 435 00:23:25,680 --> 00:23:28,280 Speaker 7: some time. I don't think it can stay that way forever. 436 00:23:29,000 --> 00:23:31,119 Speaker 4: All right, So we got some more inflation data today 437 00:23:31,440 --> 00:23:34,800 Speaker 4: and Jason presumably this feder reserva, but we also looking 438 00:23:34,800 --> 00:23:39,320 Speaker 4: at the employment environment that seems pretty solid as well. 439 00:23:39,320 --> 00:23:42,200 Speaker 4: We'll get some more data next week, but the labor 440 00:23:42,240 --> 00:23:43,680 Speaker 4: market seems pretty solid as well. 441 00:23:45,040 --> 00:23:45,240 Speaker 2: Yeah. 442 00:23:45,280 --> 00:23:47,040 Speaker 7: I mean that's the thing. That's part of what's going 443 00:23:47,080 --> 00:23:49,920 Speaker 7: on with rate cuts right now, is there's not much 444 00:23:49,960 --> 00:23:55,840 Speaker 7: reason to cut them. It's economy's growing well, job growth 445 00:23:55,920 --> 00:23:59,800 Speaker 7: is well. We're more nervous about inflation than we are 446 00:24:00,280 --> 00:24:03,440 Speaker 7: to bat inflation, so why move? And I think it's 447 00:24:03,480 --> 00:24:05,639 Speaker 7: going to take a while for the Fed to be reassured. 448 00:24:05,680 --> 00:24:07,800 Speaker 7: Back in December, they were looking at six month core 449 00:24:08,080 --> 00:24:10,920 Speaker 7: se at a one point nine percent annual rate. Now 450 00:24:10,920 --> 00:24:13,200 Speaker 7: it's a three point two percent annual rate. This worm 451 00:24:13,240 --> 00:24:15,719 Speaker 7: can turn very quickly. I think it's going to take 452 00:24:15,760 --> 00:24:18,600 Speaker 7: a while before they can feel reassured enough. 453 00:24:19,000 --> 00:24:22,000 Speaker 2: I'm not rate, Jason. I want to conflate two questions here, 454 00:24:22,119 --> 00:24:25,000 Speaker 2: which is unfair to you, but no one can handle 455 00:24:25,000 --> 00:24:29,000 Speaker 2: it like you. You have led the charge with comparing 456 00:24:29,240 --> 00:24:34,159 Speaker 2: one year, six months, three month annualized, et cetera, et cetera, 457 00:24:34,800 --> 00:24:39,119 Speaker 2: parsing out the timeline that we should choose to study inflation. 458 00:24:39,920 --> 00:24:43,159 Speaker 2: In addition with this is the raging battle over this 459 00:24:43,320 --> 00:24:46,680 Speaker 2: series or that series, or this trimmed or that Cleveland 460 00:24:46,760 --> 00:24:52,000 Speaker 2: CPI firm and CPI whatever. Conflate those two ideas together. 461 00:24:52,280 --> 00:24:55,320 Speaker 2: What's your best picture about a measure inflation? 462 00:24:56,600 --> 00:24:58,920 Speaker 7: Look, I've been having fun with something I call that 463 00:24:58,960 --> 00:25:05,119 Speaker 7: ecumenicalunderlying inflation measure, and I take you eight different ways 464 00:25:05,160 --> 00:25:08,520 Speaker 7: to measure inflation. I look at it over three different 465 00:25:08,560 --> 00:25:11,760 Speaker 7: time horizons. That's twenty four different numbers, and then I 466 00:25:11,880 --> 00:25:14,080 Speaker 7: just take the median of all twenty four of those, 467 00:25:14,760 --> 00:25:17,719 Speaker 7: and you know, statistically it actually works pretty well. It 468 00:25:17,720 --> 00:25:21,199 Speaker 7: gives you a pretty good sense of what underlying inflation is. 469 00:25:22,119 --> 00:25:24,800 Speaker 7: All that said, if I had to pick a conventional number, 470 00:25:25,240 --> 00:25:29,399 Speaker 7: you know, looking at six month core inflation is not 471 00:25:29,560 --> 00:25:30,879 Speaker 7: a bad way to understand. 472 00:25:31,280 --> 00:25:35,800 Speaker 2: We don't want any gossip here. Does does MANQ believe 473 00:25:35,840 --> 00:25:39,160 Speaker 2: in the gospel of Furman ecumenical inflation. 474 00:25:41,440 --> 00:25:44,640 Speaker 7: He's on the record saying he thinks inflation's coming down 475 00:25:44,720 --> 00:25:50,640 Speaker 7: this year. He's optimistic about shelter growth slowing. He said 476 00:25:50,640 --> 00:25:53,679 Speaker 7: that before in public. I'm less sure that there's that 477 00:25:53,840 --> 00:25:56,359 Speaker 7: much more slowing from where we are now. And I 478 00:25:56,359 --> 00:26:00,000 Speaker 7: think there's some other shoes to drop, like goods prices 479 00:26:00,040 --> 00:26:02,120 Speaker 7: aren't going to keep falling the way they have over 480 00:26:02,160 --> 00:26:03,119 Speaker 7: the last six months. 481 00:26:03,160 --> 00:26:05,400 Speaker 2: I'm sorry. It's like Jeremy ben you know, his heads 482 00:26:05,440 --> 00:26:09,520 Speaker 2: are bronzed in some museum and in England somewhere. I mean, 483 00:26:09,560 --> 00:26:12,160 Speaker 2: we're back to unitarian inflation here with the next. 484 00:26:12,040 --> 00:26:15,000 Speaker 4: Exactly approach, Professor, there are a lot of folks out 485 00:26:15,000 --> 00:26:18,480 Speaker 4: there in academia and in practice in the markets that say, 486 00:26:19,040 --> 00:26:23,120 Speaker 4: you know, forget about the first few months of twenty 487 00:26:23,160 --> 00:26:25,800 Speaker 4: twenty four inflations. Kind of it's already whipped. We're in 488 00:26:25,840 --> 00:26:28,240 Speaker 4: good shape. The FED should be cutting now. The risk 489 00:26:28,280 --> 00:26:30,200 Speaker 4: of not cutting is too great. What do you say 490 00:26:30,240 --> 00:26:32,880 Speaker 4: to those folks, I. 491 00:26:32,840 --> 00:26:36,080 Speaker 7: Say that the inflation risk is quite asymmetric. They might 492 00:26:36,119 --> 00:26:38,200 Speaker 7: be right, there might even be like a forty percent 493 00:26:38,280 --> 00:26:41,840 Speaker 7: chance they're right, But there's a thirty percent chance that 494 00:26:41,880 --> 00:26:45,200 Speaker 7: inflation is going to be well above three percent, at 495 00:26:45,200 --> 00:26:48,040 Speaker 7: which point we're in a really unacceptable place in terms 496 00:26:48,040 --> 00:26:51,119 Speaker 7: of the Fed's credibility. So you do that type of 497 00:26:51,200 --> 00:26:54,600 Speaker 7: risk analysis and it says, don't cut. In general, the 498 00:26:54,640 --> 00:26:57,120 Speaker 7: best forecast for the economists that it's going to keep 499 00:26:57,160 --> 00:27:00,320 Speaker 7: doing what it's done, and growth has been strong. Job 500 00:27:00,320 --> 00:27:02,959 Speaker 7: growth has been strong. That's my best guests going forward. 501 00:27:03,440 --> 00:27:05,600 Speaker 7: On the other hand, inflation has been elevated, and that 502 00:27:05,920 --> 00:27:09,800 Speaker 7: probably should be your best guests going forward. So we're 503 00:27:09,800 --> 00:27:12,480 Speaker 7: at an asymmetric place on the dual mandate right now. 504 00:27:12,560 --> 00:27:15,280 Speaker 2: I mean, professor Furman, you're such a hitter like I. 505 00:27:15,400 --> 00:27:17,800 Speaker 2: Did you do a speech at the University College of 506 00:27:17,840 --> 00:27:21,480 Speaker 2: London and did they show you the taxidermied head of 507 00:27:21,600 --> 00:27:24,840 Speaker 2: Jeremy Bentham? Is that where we came up with ecumenical inflation. 508 00:27:26,040 --> 00:27:29,480 Speaker 7: I have not met Jeremy Bentham alive. 509 00:27:29,480 --> 00:27:34,359 Speaker 2: We're dead. There's news you could use from Bloomberg News today. 510 00:27:34,680 --> 00:27:36,840 Speaker 2: Jason Furman, thank you so much. And I can't say 511 00:27:36,920 --> 00:27:40,400 Speaker 2: enough folks about his and his team's effort out on Twitter. Seriously, 512 00:27:40,880 --> 00:27:45,080 Speaker 2: it is the best graphical presentation of where we are. 513 00:27:45,720 --> 00:27:48,960 Speaker 2: This is a Bloomberg Surveillance podcast, bringing you the best 514 00:27:48,960 --> 00:27:53,760 Speaker 2: in economics, finance, investment, and international relations. You can also 515 00:27:53,800 --> 00:27:57,840 Speaker 2: watch the show live on YouTube. 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