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Speaker 1: Thank you, Da Wilson. We want to bring a Mat

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Speaker 1: and Bosler from our ace Fed a reserve reporting team,

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Speaker 1: and I want to set this up for you, Matt

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Speaker 1: as you've had a chance now to take a couple

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Speaker 1: of minutes and and read our story on the Bloomberg

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Speaker 1: and maybe even scan a bit of the minutes yourself

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Speaker 1: that we've had dueling comments from top FED officials the

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Speaker 1: last couple of days, because John Williams from the San

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Speaker 1: Francisco Fed said a rate height could still be appropriate

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Speaker 1: this year, depending on how the economy plays out, depending

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Speaker 1: on his expectation that there will be no impact on

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Speaker 1: the US from Brexit versus Dan tr Rullo. He said,

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Speaker 1: regardless of Brexit, you don't have employment and inflation at

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Speaker 1: a point where it's time to raise rates. It seems

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Speaker 1: to me there's just there's just still maybe two camps there. Yeah,

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Speaker 1: you know, it's interesting. I think, um, what one thing

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Speaker 1: that both of them would agree on, and many others

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Speaker 1: on the committee is this idea that the neutral FED

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Speaker 1: funds rate where they're eventually going, is lower, and there's

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Speaker 1: a lot of uncertainty around that. And one of the

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Speaker 1: lines here that really jumps out at me is uh.

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Speaker 1: Several noted that in the prevailing circumstances of considerable uncertain

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Speaker 1: about the neutral federal funds rate, the committee could better

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Speaker 1: gauge the effects of increases in the federal funds rate

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Speaker 1: on the economy if it proceeded gradually in adjusting policy.

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Speaker 1: So this to me suggests that, you know, the pace

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Speaker 1: of rate hikes is going to be very slow because

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Speaker 1: not only do they, you know, have so much uncertainty

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Speaker 1: about this, but they don't know how each rate hike

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Speaker 1: is going to impact the economy. And that's going to

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Speaker 1: um call for additional time between increases to gauge the effects.

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Speaker 1: And that's exactly what we're seeing so far this year.

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Speaker 1: Um And here we are, you know, seven months later

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Speaker 1: and we've only hiked once. Wondering if you could just

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Speaker 1: comment a little bit about Loretta Mester, the president of

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Speaker 1: the Federal Reserve Bank of Cleveland, because I believe that

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Speaker 1: there's a bit of a surprise that the Smester didn't

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Speaker 1: dissent in the meeting favoring a more hawkish stance. She

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Speaker 1: since clarified that the Brexit concerns kept her from wanting

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Speaker 1: to tighten policy. Yeah, you know that was interesting, and

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Speaker 1: I think perhaps even more interesting was Esther George, the

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Speaker 1: Kansas City FED president, is known to be probably the

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Speaker 1: most hawkish member on the committee, and she said after

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Speaker 1: the June meeting that the real and she's been dissenting

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Speaker 1: right at previous meetings, and the reason she didn't dissent

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Speaker 1: in June was because of that job's report. So it

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Speaker 1: really goes to show you how important that bad jobs

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Speaker 1: report in May was, how it's scared off even the

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Speaker 1: most hawkish FED officials. And you know, therefore, how important

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Speaker 1: this Friday's number is going to be to see whether

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Speaker 1: or not that was real. You know, Dave Wilson, if

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Speaker 1: we look at the market expectations, So if we look

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Speaker 1: at w I r P on the Bloomberg, which is

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Speaker 1: the world into a strate projection right for key rates

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Speaker 1: around the world, But if you look at the one

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Speaker 1: regarding the Fed right now, the markets aren't even looking

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Speaker 1: for an interest rate increase, possibly all the way through

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Speaker 1: next year. So I just wonder if I'm especially if

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Speaker 1: I'm an equity investor, this is great for bonds. The

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Speaker 1: global bond rally is still on fire. Yields are falling

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Speaker 1: all around the world, but for stocks. Can you just say,

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Speaker 1: no big deal. Are you concern that the FED is

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Speaker 1: still concerned enough about the economy and global risks that

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Speaker 1: is not moving well? I mean you have to be

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Speaker 1: concerned to the then that you figure out, well, what

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Speaker 1: kind of companies do you want to invest in? I mean,

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Speaker 1: you look at the last several years, and it's been

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Speaker 1: about growth because you haven't seen a whole lot of

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Speaker 1: it in the US economy or certain economies elsewhere. So

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Speaker 1: you've had growth stocks, the ones that can deliver the

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Speaker 1: biggest increases in sales and earnings and so on, do

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Speaker 1: relatively well when you compare them with value stocks, the

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Speaker 1: ones that people tend to buy because they're relatively cheap

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Speaker 1: when you look at earnings or sales or asset advantage.

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Speaker 1: It's actually know chart of the day I just did

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Speaker 1: on this whole idea that you've had this reversal this

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Speaker 1: year where you've seen the value stocks do a bit

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Speaker 1: of a rebound. Given what's happening in the economy though,

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Speaker 1: and and the Fed's reluctance to raise rates, you do

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Speaker 1: have to ask the question whether that equation is going

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Speaker 1: to reverse again and growth stocks are going to regain

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Speaker 1: prominence here at least that's the Barry Banister UH strategy

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Speaker 1: Silver Stephen was talking about, and it's why it showed

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Speaker 1: been like try from yesterday. Yeah, indeed, I'm also worth

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Speaker 1: noting that these minutes are being released at a time

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Speaker 1: the goal is gold has reached a fresh two year

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Speaker 1: high sixty nine ounce. Also that the yield on the

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Speaker 1: benchmark tenure US Treasury No, Kathleen, I know you've been

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Speaker 1: following this falling to its lowest level ever. Ever, U.

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Speaker 1: That means a pretty important piece of information for people

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Speaker 1: who are in the bond market. And we note that,

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Speaker 1: for example, the long bond, the thirty year, I think

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Speaker 1: the return so far this year is over seventeen percent

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Speaker 1: in capital appreciation as well as whatever payments you may

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Speaker 1: have received. Well, let's toss this somebody, Matt. Matt bowls

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Speaker 1: are Matt because RPN because Larry Summer's a OpEd in

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Speaker 1: the Washington Post today. Former Treasury secretary has been pounding

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Speaker 1: the table on secular stagnation. You know, these long term

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Speaker 1: forces holding back economies around the world, saying this is

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Speaker 1: why the bottom deals are falling. I wonder what they

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Speaker 1: mean to the Fed, and I wonder as we combed

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Speaker 1: through these minutes with our our fine tooth, you know,

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Speaker 1: reporter combs, if we'll see any reference to this concern

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Speaker 1: over what this plunging bond yield might mean. Yeah, you know,

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Speaker 1: it's really interesting because I was just looking at UM,

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Speaker 1: the appendix to the Minutes that comes out once a

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Speaker 1: quarter when they release their UM you know, projections for

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Speaker 1: the economy, and one of the things they include in

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Speaker 1: the appendix is how they see the risks to their

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Speaker 1: projections for inflation and unemployment waited, you know, whether it's

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Speaker 1: to the upside to the downside. And one thing we

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Speaker 1: saw in March was that a lot of people on

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Speaker 1: the committee saw their risks to their inflation forecast is

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Speaker 1: waited to the downside. So that would help explain why

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Speaker 1: yields are so low. But the interesting thing, and this

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Speaker 1: is something I really wasn't expecting at all, is that

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Speaker 1: UM in June, uh, there were a lot less members

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Speaker 1: who saw a risk to inflation as way to the downside.

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Speaker 1: So that kind of you know, doesn't jibe with the market.

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Speaker 1: I want to thank you very much, Matt Bosler, Bloomberg

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Speaker 1: Federal Reserve reporter Dave Wilson Bloomberg Stocks. Colm was to

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Speaker 1: be joining us the next hour of taking stock. And

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Speaker 1: this is Bloomberg