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Speaker 1: Bloomberg Audio Studios, Podcasts, Radio News, Single.

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Speaker 2: Best Idea on Apple Podcasts. Thank you for listening, Thank

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Speaker 2: you for subscribing. What a day. I mean, It wasn't

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Speaker 2: an exhausting day. It wasn't like the other day where

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Speaker 2: I had a space launch and I had ecb Leguard

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Speaker 2: was talking as a rocket was going up in the air.

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Speaker 2: It wasn't like that. But it was really a dense

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Speaker 2: day with an important CPI report into the FED report.

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Speaker 2: We're taping single Best Idea here before the FED meeting,

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Speaker 2: and the inflation report was shocking. Thank you, Bob. He's

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Speaker 2: a former Hamilton College goalie. I think he's I don't

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Speaker 2: think he's retired, and goalies don't retire. They just you know,

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Speaker 2: they go on until they go to the great goalie

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Speaker 2: in the sky. Anyways, Bob emails and he says, you

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Speaker 2: got to go to three decimal points and you really

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Speaker 2: could have taken this down near zero point one percent

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Speaker 2: on one of the microdata, which clearly disinflation. We had

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Speaker 2: a great lineup throughout, Julia Carnado Constance Hunter, both at

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Speaker 2: Micropolicy Perspectives, added Vailue. We'll get to Paul Donovan, a

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Speaker 2: ubs here in a moment. But what a joy to

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Speaker 2: have a gentleman from I can't believe him saying is Purdue.

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Speaker 2: He has a PhD from Indiana University. Purdue is a

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Speaker 2: small engineering school up the road from AYU. But Bullard,

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Speaker 2: Jim Bullard, former president of Saint Louis FED, is now

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Speaker 2: building and rebuilding and executing Mitch Daniel's great graduate program

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Speaker 2: at Purdue. Of course, all wrapped around technology and engineering,

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Speaker 2: which Produe is known for years. So Bullard was perfect

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Speaker 2: timing here with a FED that's decidedly trying to figure

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Speaker 2: out when to move Jim Bullard on CPI.

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Speaker 3: We did get tremendous reduction and core PC inflation in

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Speaker 3: the second half of twenty twenty three. It was four

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Speaker 3: point eight percent last summer on a twelve month basis,

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Speaker 3: it came all the way down to two point eight percent.

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Speaker 3: So in this world, in this game, two hundred basis

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Speaker 3: points of inflation reduction over six months or so is

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Speaker 3: fantastically large. So you should be taking that into account.

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Speaker 3: You should be reducing the policy rate. But the committee

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Speaker 3: just couldn't find the right moment to do that because

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Speaker 3: all the inflation reports up to now we were mixed

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Speaker 3: or even even negative, so unfortunately didn't find the right

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Speaker 3: moment to do that. But this idea that the policy

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Speaker 3: rate is a little too high for where the economy

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Speaker 3: is today, I think makes a lot of sense. So

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Speaker 3: I've advocated for like a technical adjustment, you know, you

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Speaker 3: want to get this idea across that because inflation isn't

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Speaker 3: isn't near five percent anymore. Core inflation it's now under

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Speaker 3: three percent. We can afford to reduce the policy rate,

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Speaker 3: still be restrictive and get this glide path into two percent.

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Speaker 3: The two percent target and the.

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Speaker 2: Key Phraser glide path just sort of the history, this

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Speaker 2: smoothness that economists and bankers plead for and hope for

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Speaker 2: as well. Here's more with Jim Bullard on the path forward.

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Speaker 3: First of all, I don't think anybody ever won an

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Speaker 3: election based on whether the FED did something at the

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Speaker 3: September meeting, So I don't think it matters for actual

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Speaker 3: election outcomes. I don't think the median voter is voting

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Speaker 3: on that. They're voting on much broader issues. So I

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Speaker 3: think that the Committee feels in bolden to do whatever

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Speaker 3: it thinks is right at that meeting or any of

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Speaker 3: the other meetings and the lead up to the election,

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Speaker 3: and they have moved in the past during the election

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Speaker 3: cycle and I think they can do that if they

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Speaker 3: wish this time.

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Speaker 2: Jim Bullard of Purdue, many many great guests today. Just

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Speaker 2: to start us off strong early in the morning was

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Speaker 2: Paul Donovan. He's at UBS just always outstanding. He's been

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Speaker 2: at UBS for over thirty years, providing huge insight. I

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Speaker 2: can't say enough about in Paul Donovan's work out on

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Speaker 2: linked In. They really are a value add out on LinkedIn.

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Speaker 2: You can see Paul Donovan there. He was pretty much

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Speaker 2: scathing this morning. You know, Bullard's got to be diplomatic

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Speaker 2: about it. As a former FED official, Donovan didn't mince words.

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Speaker 2: Let's listen.

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Speaker 4: I think it's worse than Greenspan because there's no defense

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Speaker 4: these days. I mean, when was the last time we

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Speaker 4: had at least a publicly dissenting voice from THEFMC. These

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Speaker 4: decisions are all unanimous. It's really really weird now. I mean,

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Speaker 4: you know, the UK, the Bank of England is basically

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Speaker 4: a fist fight every meeting, So you know, the UK

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Speaker 4: is perhaps a somewhat weird suspective to come from. But

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Speaker 4: even at the ECB there is descent. So it's this

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Speaker 4: unanimity of thought, this almost all Wellian mind control is

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Speaker 4: going on. Said that's what worries me.

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Speaker 2: And he said more than that, that we couldn't put

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Speaker 2: out on a podcast because it's a family podcast. Paul

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Speaker 2: Donovan of UBS very heated about a fe let's get going.

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Speaker 2: I could go on and on. We're going to keep

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Speaker 2: it contained today. Yesterday went a little bit too long.

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Speaker 2: We're trying to give you six minutes, a smart two

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Speaker 2: minutes of insight on the show. And all that we've

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Speaker 2: seen has just been such rich booking and great perspective.

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Speaker 2: Anne Marie Hordaren is in Pullia, Italy for the G

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Speaker 2: seven meetings of the President. That will be timely, particularly

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Speaker 2: with the upset that we see in France. On Apple

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Speaker 2: Podcasts ru on YouTube, subscribe to Bloomberg Podcasts out on YouTube.

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Speaker 2: Apple CarPlay, did they mention Apple CarPlay Eric in the

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Speaker 2: in the you know, you know it's like old news,

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Speaker 2: Apple car plays successful. They don't have to fix it

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Speaker 2: on Apple car Play as well, and of course on

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Speaker 2: Apple podcasts. This is single best idea