WEBVTT - Kathleen Hays on Jackson Hole (Audio) (Correct)

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<v Speaker 1>Well, it's that time of year again. Central Bank is

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<v Speaker 1>going to be gathering this week at the annual Jackson

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<v Speaker 1>Whole Retreat. Joining US snuff for a preview of what

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<v Speaker 1>we might expect. Kathleen Hayes, Bloomberg Global Policy and Economy Editor, Kathleen.

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<v Speaker 1>This event typically watched very closely, as it's in the

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<v Speaker 1>past been a venue for making key policy announcements. But

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<v Speaker 1>considering the she a number of variables at the moment

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<v Speaker 1>and then the uncertain path ahead, are we expecting any

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<v Speaker 1>concrete guidance this week? If you want something concrete like

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<v Speaker 1>fifty or seventy five basis points for the September twenty

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<v Speaker 1>one rate UH decision in expecting a hike, No, not

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<v Speaker 1>from J. Powe. We'll have lots of FED speakers though

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<v Speaker 1>speaking Bloomberg Television and former FED officials, so we'll get more.

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<v Speaker 1>We'll get the latest thinking so far it is they're

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<v Speaker 1>going to high rate in the question how much, but

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<v Speaker 1>in terms of a bigger question and we might get

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<v Speaker 1>out of this. J. Powell speech on Friday, which officially

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<v Speaker 1>opens the two day UH symposium sponsored by the Foot

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<v Speaker 1>of US or Bank of Kansas City. This is the

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<v Speaker 1>forty year. It's been held in Jackson Hole, by the way,

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<v Speaker 1>a really beautiful and kind of remote setting for people

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<v Speaker 1>to get together and think about big, big things. Uh. You,

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<v Speaker 1>I'm glad you allude to the fact that this venue

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<v Speaker 1>which for years ago, when I started going a long

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<v Speaker 1>time ago. Um, they didn't necessarily make any kind of

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<v Speaker 1>policy signal or statement. It was much more broad than that.

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<v Speaker 1>And you know around the years of Ben Bernanke that's

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<v Speaker 1>when you know QUI, the second QUI was signaled. In fact,

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<v Speaker 1>I was looking back at that's when Maria DROGGI said,

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<v Speaker 1>whatever it takes is Bazuka was taken out at Jackson Hole.

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<v Speaker 1>So the potential is there for j Powe to make

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<v Speaker 1>an important statement about where the feed is, where it's ben,

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<v Speaker 1>and what's going to guide it next. Yeah, So we

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<v Speaker 1>seem to be sort of debating a lot whether or

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<v Speaker 1>not recession comes next or just to slowing in growth.

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<v Speaker 1>But either one both are being caused by the fit

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<v Speaker 1>right or that, or is it that is being caused

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<v Speaker 1>by inflation. Well, I think inflation has made is gonna

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<v Speaker 1>definitely on the margins, making it worseper And that's a

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<v Speaker 1>good point because when things cost more you don't buy

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<v Speaker 1>as much. However, at this point, consumer spending is still

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<v Speaker 1>looking pretty good. The labor market is still strong. But again,

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<v Speaker 1>what's ironic to me? Forty years forty years since they

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<v Speaker 1>started doing this imposium in Jackson Hall. Forty years that

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<v Speaker 1>was two? We look like two, don't we? And what

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<v Speaker 1>did Paul Volker have to do? He had did come

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<v Speaker 1>in and raise rates and raise rates and raise rates.

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<v Speaker 1>He caused one recession, or they did in what was

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<v Speaker 1>it nineteen eighty, but they stopped raising rates. That's the

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<v Speaker 1>that's the you know, the diagnosis there too soon, and

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<v Speaker 1>so that they had to come back and they got

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<v Speaker 1>a worse recession. So this is the kind of question

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<v Speaker 1>the FEDS grappling with. Now this conference is being held

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<v Speaker 1>in person again for the first time since twenty nineteen.

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<v Speaker 1>You have attended quite a few of these, Kathleen, in

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<v Speaker 1>the virtual ones. Is the dynamic different when it is

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<v Speaker 1>in person? I think so, um partly because when I

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<v Speaker 1>started going years ago, and it wasn't so much a

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<v Speaker 1>policy signaler, and actually I was the first TV reporter,

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<v Speaker 1>correspondent whatever that was ever invited to attend Jackson All

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<v Speaker 1>that that was back in the days when I was

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<v Speaker 1>working at CNBC and they had an opened up to

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<v Speaker 1>television yet. Um. But uh, in terms of it being different,

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<v Speaker 1>we used to think this was all about what you

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<v Speaker 1>learned on the sidelines. Okay, not what was said in

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<v Speaker 1>in the panels officially, but you you got to talk

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<v Speaker 1>to a FED Bank president, you know, somebody close to

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<v Speaker 1>the policy action and get your hands and clues. This

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<v Speaker 1>is a very different time now. I also think though,

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<v Speaker 1>that when everybody's together and people are talking, there is

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<v Speaker 1>a certain energy and a certain dynamic. I don't know

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<v Speaker 1>if that will exactly change what J. Powell has to say,

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<v Speaker 1>but it may. It may give more color and a

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<v Speaker 1>sense of how what people are feeling after you, after

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<v Speaker 1>we finish up and people are talking about what they've

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<v Speaker 1>heard or what they sensed or and again with so

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<v Speaker 1>many FED speakers, what the latest is, Kathleen, You know

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<v Speaker 1>everybody sort of is what the FED is doing. Um,

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<v Speaker 1>And and it really makes the Fed's job difficult because

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<v Speaker 1>people are playing the pivot even though they know it's

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<v Speaker 1>a long ways down the road. They don't think it's

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<v Speaker 1>happening right at this moment um. And how complicated? How

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<v Speaker 1>does that complicate? J? Pal's commentary because he wants to

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<v Speaker 1>come out he doesn't like that financial conditions have eased

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<v Speaker 1>this much. Probably not, Uh, it doesn't help them, and uh,

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<v Speaker 1>I don't. I'll be surprised if Jake pale Is does

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<v Speaker 1>anything as specific as talk about what the market's doing

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<v Speaker 1>and uh about financial conditions easing or tidy. Now, maybe

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<v Speaker 1>he will do something broader about how that fits into

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<v Speaker 1>how the FED does thing, how how it has done them,

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<v Speaker 1>how well you know, do them coming up next? Um.

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<v Speaker 1>I think that uh, there's two ways of looking at

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<v Speaker 1>what the markets doing. One is they don't believe the Fed.

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<v Speaker 1>Fed's not credible, dadda. The other one is that they

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<v Speaker 1>do believe the fit right, at least for the bond market. Uh,

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<v Speaker 1>and they that they're going to tighten so much they're

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<v Speaker 1>going to cause the recession. Then they can, you know,

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<v Speaker 1>stop biking rates and turn things around. I think it's

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<v Speaker 1>very difficult to discern what the market messages because if

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<v Speaker 1>you ask, you can ask two people and get four

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<v Speaker 1>different answers. I wish we had more time because you know,

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<v Speaker 1>some people might be buying equities because they believe the

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<v Speaker 1>FED will get the job done exactly because they think

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<v Speaker 1>they're going to get rid of inflation, and sooner or

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<v Speaker 1>later the brush is going to clear away and people

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<v Speaker 1>can buy stocks again and go back into a bull market.

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<v Speaker 1>I agree it's like that. So then PALA should not not,

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<v Speaker 1>you know, reject what financial conditions have been easy to

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<v Speaker 1>It's very complicated anyway, Kathleen, you helped clear it up

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<v Speaker 1>for us. Kathleen Hayes, Bloomberg News. This is Bloomberg