Speaker 1: Well, it's that time of year again. Central Bank is
Speaker 1: going to be gathering this week at the annual Jackson
Speaker 1: Whole Retreat. Joining US snuff for a preview of what
Speaker 1: we might expect. Kathleen Hayes, Bloomberg Global Policy and Economy Editor, Kathleen.
Speaker 1: This event typically watched very closely, as it's in the
Speaker 1: past been a venue for making key policy announcements. But
Speaker 1: considering the she a number of variables at the moment
Speaker 1: and then the uncertain path ahead, are we expecting any
Speaker 1: concrete guidance this week? If you want something concrete like
Speaker 1: fifty or seventy five basis points for the September twenty
Speaker 1: one rate UH decision in expecting a hike, No, not
Speaker 1: from J. Powe. We'll have lots of FED speakers though
Speaker 1: speaking Bloomberg Television and former FED officials, so we'll get more.
Speaker 1: We'll get the latest thinking so far it is they're
Speaker 1: going to high rate in the question how much, but
Speaker 1: in terms of a bigger question and we might get
Speaker 1: out of this. J. Powell speech on Friday, which officially
Speaker 1: opens the two day UH symposium sponsored by the Foot
Speaker 1: of US or Bank of Kansas City. This is the
Speaker 1: forty year. It's been held in Jackson Hole, by the way,
Speaker 1: a really beautiful and kind of remote setting for people
Speaker 1: to get together and think about big, big things. Uh. You,
Speaker 1: I'm glad you allude to the fact that this venue
Speaker 1: which for years ago, when I started going a long
Speaker 1: time ago. Um, they didn't necessarily make any kind of
Speaker 1: policy signal or statement. It was much more broad than that.
Speaker 1: And you know around the years of Ben Bernanke that's
Speaker 1: when you know QUI, the second QUI was signaled. In fact,
Speaker 1: I was looking back at that's when Maria DROGGI said,
Speaker 1: whatever it takes is Bazuka was taken out at Jackson Hole.
Speaker 1: So the potential is there for j Powe to make
Speaker 1: an important statement about where the feed is, where it's ben,
Speaker 1: and what's going to guide it next. Yeah, So we
Speaker 1: seem to be sort of debating a lot whether or
Speaker 1: not recession comes next or just to slowing in growth.
Speaker 1: But either one both are being caused by the fit
Speaker 1: right or that, or is it that is being caused
Speaker 1: by inflation. Well, I think inflation has made is gonna
Speaker 1: definitely on the margins, making it worseper And that's a
Speaker 1: good point because when things cost more you don't buy
Speaker 1: as much. However, at this point, consumer spending is still
Speaker 1: looking pretty good. The labor market is still strong. But again,
Speaker 1: what's ironic to me? Forty years forty years since they
Speaker 1: started doing this imposium in Jackson Hall. Forty years that
Speaker 1: was two? We look like two, don't we? And what
Speaker 1: did Paul Volker have to do? He had did come
Speaker 1: in and raise rates and raise rates and raise rates.
Speaker 1: He caused one recession, or they did in what was
Speaker 1: it nineteen eighty, but they stopped raising rates. That's the
Speaker 1: that's the you know, the diagnosis there too soon, and
Speaker 1: so that they had to come back and they got
Speaker 1: a worse recession. So this is the kind of question
Speaker 1: the FEDS grappling with. Now this conference is being held
Speaker 1: in person again for the first time since twenty nineteen.
Speaker 1: You have attended quite a few of these, Kathleen, in
Speaker 1: the virtual ones. Is the dynamic different when it is
Speaker 1: in person? I think so, um partly because when I
Speaker 1: started going years ago, and it wasn't so much a
Speaker 1: policy signaler, and actually I was the first TV reporter,
Speaker 1: correspondent whatever that was ever invited to attend Jackson All
Speaker 1: that that was back in the days when I was
Speaker 1: working at CNBC and they had an opened up to
Speaker 1: television yet. Um. But uh, in terms of it being different,
Speaker 1: we used to think this was all about what you
Speaker 1: learned on the sidelines. Okay, not what was said in
Speaker 1: in the panels officially, but you you got to talk
Speaker 1: to a FED Bank president, you know, somebody close to
Speaker 1: the policy action and get your hands and clues. This
Speaker 1: is a very different time now. I also think though,
Speaker 1: that when everybody's together and people are talking, there is
Speaker 1: a certain energy and a certain dynamic. I don't know
Speaker 1: if that will exactly change what J. Powell has to say,
Speaker 1: but it may. It may give more color and a
Speaker 1: sense of how what people are feeling after you, after
Speaker 1: we finish up and people are talking about what they've
Speaker 1: heard or what they sensed or and again with so
Speaker 1: many FED speakers, what the latest is, Kathleen, You know
Speaker 1: everybody sort of is what the FED is doing. Um,
Speaker 1: And and it really makes the Fed's job difficult because
Speaker 1: people are playing the pivot even though they know it's
Speaker 1: a long ways down the road. They don't think it's
Speaker 1: happening right at this moment um. And how complicated? How
Speaker 1: does that complicate? J? Pal's commentary because he wants to
Speaker 1: come out he doesn't like that financial conditions have eased
Speaker 1: this much. Probably not, Uh, it doesn't help them, and uh,
Speaker 1: I don't. I'll be surprised if Jake pale Is does
Speaker 1: anything as specific as talk about what the market's doing
Speaker 1: and uh about financial conditions easing or tidy. Now, maybe
Speaker 1: he will do something broader about how that fits into
Speaker 1: how the FED does thing, how how it has done them,
Speaker 1: how well you know, do them coming up next? Um.
Speaker 1: I think that uh, there's two ways of looking at
Speaker 1: what the markets doing. One is they don't believe the Fed.
Speaker 1: Fed's not credible, dadda. The other one is that they
Speaker 1: do believe the fit right, at least for the bond market. Uh,
Speaker 1: and they that they're going to tighten so much they're
Speaker 1: going to cause the recession. Then they can, you know,
Speaker 1: stop biking rates and turn things around. I think it's
Speaker 1: very difficult to discern what the market messages because if
Speaker 1: you ask, you can ask two people and get four
Speaker 1: different answers. I wish we had more time because you know,
Speaker 1: some people might be buying equities because they believe the
Speaker 1: FED will get the job done exactly because they think
Speaker 1: they're going to get rid of inflation, and sooner or
Speaker 1: later the brush is going to clear away and people
Speaker 1: can buy stocks again and go back into a bull market.
Speaker 1: I agree it's like that. So then PALA should not not,
Speaker 1: you know, reject what financial conditions have been easy to
Speaker 1: It's very complicated anyway, Kathleen, you helped clear it up
Speaker 1: for us. Kathleen Hayes, Bloomberg News. This is Bloomberg