1 00:00:02,759 --> 00:00:07,240 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. 2 00:00:08,000 --> 00:00:11,360 Speaker 2: Let's get back now to Bloomberg's Michael McKee in Washington. 3 00:00:11,600 --> 00:00:16,040 Speaker 1: He's sitting down with Fed Governor Christopher Waller. Mike, Well, 4 00:00:16,079 --> 00:00:16,840 Speaker 1: thank you very much. 5 00:00:16,800 --> 00:00:20,360 Speaker 2: And welcome to Bloomberg Television and Radio worldwide. Chris Waller, 6 00:00:20,440 --> 00:00:22,680 Speaker 2: thank you for taking the time to come in today. 7 00:00:22,840 --> 00:00:24,799 Speaker 1: Yeah, thanks, Mike, I appreciate having me on. 8 00:00:25,560 --> 00:00:27,440 Speaker 2: You give a speech a short time ago in which 9 00:00:27,480 --> 00:00:31,200 Speaker 2: you said tariffs are the elephant in the room. Elephant 10 00:00:31,200 --> 00:00:33,640 Speaker 2: seems to have only gotten bigger. You told me you 11 00:00:33,640 --> 00:00:36,080 Speaker 2: were in Saint Louis yesterday for a FED Listens event 12 00:00:36,120 --> 00:00:38,920 Speaker 2: which is supposed to be about your framework review, and 13 00:00:38,960 --> 00:00:40,839 Speaker 2: all anybody wanted to talk about was tariff's. 14 00:00:40,960 --> 00:00:43,360 Speaker 3: Yeah, that's pretty much the talk of the town. It's 15 00:00:43,440 --> 00:00:46,280 Speaker 3: kind of hard not to talk about the economy without 16 00:00:46,280 --> 00:00:47,120 Speaker 3: having to address it. 17 00:00:47,640 --> 00:00:50,960 Speaker 2: Well, the Beige Book yesterday addressed it used the word 18 00:00:51,040 --> 00:00:56,760 Speaker 2: uncertainty eighty times in that companies talking about not growing 19 00:00:56,920 --> 00:01:00,480 Speaker 2: but possible layoffs, getting ready to do something to try 20 00:01:00,520 --> 00:01:03,160 Speaker 2: to mitigate the effects of tariffs. Are you seeing are 21 00:01:03,200 --> 00:01:06,120 Speaker 2: you hearing the same things from companies that they're sort 22 00:01:06,160 --> 00:01:09,280 Speaker 2: of stepping back and just sitting on the sidelines. 23 00:01:09,520 --> 00:01:12,760 Speaker 3: Yeah, And that's the general tone of every person I've 24 00:01:12,760 --> 00:01:16,600 Speaker 3: talked about in the private sector is that they're just 25 00:01:16,680 --> 00:01:20,280 Speaker 3: kind of frozen by what's going to happen with tariffs 26 00:01:20,360 --> 00:01:23,240 Speaker 3: and so cap X everything has just come to a stop. 27 00:01:23,240 --> 00:01:25,600 Speaker 3: It doesn't mean it won't happen later when there's a 28 00:01:25,640 --> 00:01:28,679 Speaker 3: little more clarity, but it has actually just stopped. If 29 00:01:28,680 --> 00:01:31,560 Speaker 3: the tariffs, the large tariffs had stayed on or come 30 00:01:31,640 --> 00:01:33,840 Speaker 3: back on, then firms are trying to figure out how 31 00:01:33,880 --> 00:01:36,840 Speaker 3: they're going to absorb some of that cost. And the 32 00:01:36,880 --> 00:01:38,640 Speaker 3: minute they do that, they're looking at other ways to 33 00:01:38,680 --> 00:01:41,240 Speaker 3: cut costs and labors obviously one way they do that. 34 00:01:41,400 --> 00:01:44,600 Speaker 3: So it will wouldn't surprise me that you might start 35 00:01:44,600 --> 00:01:48,880 Speaker 3: seeing more layoffs tick up in the unemployment rate going forward. 36 00:01:49,640 --> 00:01:51,880 Speaker 3: If the big tariffs are particular, come back on the 37 00:01:51,960 --> 00:01:55,040 Speaker 3: smaller tariff world of ten to twelve percent, most of 38 00:01:55,040 --> 00:01:58,120 Speaker 3: the firms I talk to they figure out they can 39 00:01:58,200 --> 00:02:00,200 Speaker 3: deal with it. They kind of often give me this 40 00:02:00,280 --> 00:02:02,600 Speaker 3: kind of formula of our suppliers will eat a third 41 00:02:02,600 --> 00:02:04,240 Speaker 3: of it, I will eat a third of it, and 42 00:02:04,240 --> 00:02:06,840 Speaker 3: we'll pass a third of it on their consumers. So 43 00:02:06,880 --> 00:02:09,040 Speaker 3: if you're talking about ten to twelve percent tariff. It's 44 00:02:09,040 --> 00:02:11,600 Speaker 3: not a big price hint to the consumers if that's 45 00:02:11,639 --> 00:02:12,520 Speaker 3: all they pass through. 46 00:02:12,880 --> 00:02:16,120 Speaker 2: But economics tells us that the tariffs in general are 47 00:02:16,160 --> 00:02:19,160 Speaker 2: not good. So even if we get the smaller tariffs, 48 00:02:19,200 --> 00:02:23,480 Speaker 2: does that still leave business on the sidelines and growth 49 00:02:23,480 --> 00:02:24,560 Speaker 2: prospects lower? 50 00:02:24,960 --> 00:02:27,560 Speaker 3: Well, if it is a tax, and it's inevitable that 51 00:02:27,560 --> 00:02:30,840 Speaker 3: there's a tax. But however, I've always tried to tell 52 00:02:30,960 --> 00:02:33,880 Speaker 3: people that, you know, given the fiscal situation we're in, 53 00:02:34,000 --> 00:02:37,720 Speaker 3: we need to get some better control of the budget deficit, 54 00:02:37,880 --> 00:02:41,040 Speaker 3: and that means some combination of tax, taxes and spending. 55 00:02:41,639 --> 00:02:43,520 Speaker 3: It's just an argum about what taxes do you want 56 00:02:43,520 --> 00:02:46,000 Speaker 3: to have to raise. So nobody likes taxes. I don't 57 00:02:46,080 --> 00:02:48,799 Speaker 3: like taxes. But if you're going to get any kind 58 00:02:48,800 --> 00:02:51,880 Speaker 3: of fiscal situation, get our fiscal situation and color. 59 00:02:51,680 --> 00:02:53,280 Speaker 1: You're going to have to have some tax revenue. 60 00:02:53,280 --> 00:02:56,080 Speaker 3: And there's no obvious reason why tariffs should have be 61 00:02:56,160 --> 00:02:56,799 Speaker 3: off the table. 62 00:02:56,840 --> 00:02:57,440 Speaker 1: Per se. 63 00:02:58,000 --> 00:03:01,200 Speaker 2: We have some tariffs in place, even though the President 64 00:03:01,280 --> 00:03:03,200 Speaker 2: goes back and forth about other tariffs. But you put 65 00:03:03,240 --> 00:03:05,160 Speaker 2: some one in March. When do we start to see 66 00:03:05,200 --> 00:03:06,000 Speaker 2: that in the hard data. 67 00:03:06,680 --> 00:03:11,360 Speaker 3: Well, by taking off the April second tariffs, you postpone 68 00:03:11,400 --> 00:03:14,799 Speaker 3: that decision till July, so we'll see some of the 69 00:03:15,240 --> 00:03:17,760 Speaker 3: ten percent tariffs and the auto tariffs. Some of that 70 00:03:17,800 --> 00:03:21,240 Speaker 3: will start coming through particular sectors, but it's not likely 71 00:03:21,280 --> 00:03:24,640 Speaker 3: to me that by the in July first you're going 72 00:03:24,720 --> 00:03:28,000 Speaker 3: to see really big impacts from it. You will see it, 73 00:03:28,040 --> 00:03:29,840 Speaker 3: like I said, in Capex and things like that have 74 00:03:30,000 --> 00:03:32,520 Speaker 3: just been put off the side, So you probably see 75 00:03:32,520 --> 00:03:34,960 Speaker 3: some softing in the data, but you're probably not likely 76 00:03:35,000 --> 00:03:40,160 Speaker 3: to see anything dramatic happen before we get a better 77 00:03:40,240 --> 00:03:42,200 Speaker 3: decision from the administrators what they're going to do with 78 00:03:42,240 --> 00:03:45,640 Speaker 3: the big tariff package that they initially proposed on April second. 79 00:03:45,960 --> 00:03:48,120 Speaker 2: Well, what will we see first a big rise in 80 00:03:48,200 --> 00:03:52,560 Speaker 2: inflation or slow down in growth, perhaps epitomized by the 81 00:03:52,640 --> 00:03:53,440 Speaker 2: unemployment rate. 82 00:03:53,920 --> 00:03:56,000 Speaker 3: I think you could see both of them almost happen 83 00:03:56,080 --> 00:03:57,800 Speaker 3: at the same time, just in the sense of like 84 00:03:57,840 --> 00:04:00,280 Speaker 3: I said, that firms have to make it as decision 85 00:04:00,360 --> 00:04:01,000 Speaker 3: right away. 86 00:04:00,760 --> 00:04:01,480 Speaker 1: To pass through. 87 00:04:01,520 --> 00:04:04,040 Speaker 3: Now they have a lot of firms told me they 88 00:04:04,080 --> 00:04:07,360 Speaker 3: have price contracts, so they're protected for a little while 89 00:04:07,440 --> 00:04:10,600 Speaker 3: until they have to renegotiate those price contracts, but they're 90 00:04:10,640 --> 00:04:14,040 Speaker 3: all anticipating it, particularly the bigger tariffs. They're all anticipating 91 00:04:14,040 --> 00:04:16,800 Speaker 3: they're going to have to cut costs somewhere. And the 92 00:04:17,080 --> 00:04:19,279 Speaker 3: easiest thing to do when firms have sixty five to 93 00:04:19,320 --> 00:04:22,360 Speaker 3: seventy percent of their cost is labor, to start shedding 94 00:04:22,360 --> 00:04:24,760 Speaker 3: some labor. So you might see layoffs start to happen 95 00:04:24,800 --> 00:04:28,520 Speaker 3: about the same time you start seeing prices going up. 96 00:04:28,560 --> 00:04:30,480 Speaker 3: So I'm not so convinced that it's going to be 97 00:04:30,520 --> 00:04:32,719 Speaker 3: one first and then the other. You can see them 98 00:04:32,760 --> 00:04:34,960 Speaker 3: both happen roughly at the same time. We're very close 99 00:04:35,160 --> 00:04:35,840 Speaker 3: close together. 100 00:04:36,279 --> 00:04:38,160 Speaker 2: I assume that we're not going to see any move 101 00:04:38,200 --> 00:04:41,400 Speaker 2: from the Fed on May seventh, But when would you 102 00:04:41,600 --> 00:04:44,160 Speaker 2: have enough data you think to be able to make 103 00:04:44,200 --> 00:04:46,040 Speaker 2: a decision one way or another on whether you need 104 00:04:46,080 --> 00:04:46,719 Speaker 2: to move rates. 105 00:04:47,000 --> 00:04:48,880 Speaker 3: Well, as I was saying, the President's put off any 106 00:04:48,960 --> 00:04:52,120 Speaker 3: decision on the large tariff world that was proposed in 107 00:04:52,120 --> 00:04:55,240 Speaker 3: April second un till July. So all you're going to see, 108 00:04:55,240 --> 00:04:57,800 Speaker 3: probably tills you lie, is whatever the existing tariffs are 109 00:04:57,800 --> 00:05:00,360 Speaker 3: in place. And as I said, I don't think you're 110 00:05:00,360 --> 00:05:04,240 Speaker 3: going to see enough happen in the real data in 111 00:05:04,279 --> 00:05:06,400 Speaker 3: the next couple of months until you get past July. 112 00:05:06,839 --> 00:05:08,360 Speaker 3: When you get to the second half of the year, 113 00:05:08,400 --> 00:05:10,560 Speaker 3: I think we'll start having better ideas what's going to 114 00:05:10,600 --> 00:05:14,520 Speaker 3: happen with the tariff world that the administration is considering, 115 00:05:14,880 --> 00:05:17,120 Speaker 3: And by then you'll start seeing more in the form 116 00:05:17,160 --> 00:05:21,279 Speaker 3: of tariff price pass through and also stuff on the 117 00:05:21,279 --> 00:05:24,200 Speaker 3: real side. But like, you're not going to see anything 118 00:05:24,200 --> 00:05:26,039 Speaker 3: on the real side because of all the uncertainty in 119 00:05:26,120 --> 00:05:28,400 Speaker 3: terms of freezing decisions spending decisions. 120 00:05:28,480 --> 00:05:32,000 Speaker 2: Well, let's put some parameters around your thinking. On the 121 00:05:32,000 --> 00:05:34,919 Speaker 2: employment mandate side, what level of unemployment would bother. 122 00:05:34,839 --> 00:05:38,200 Speaker 3: You, Well, it's more the speed of which would start 123 00:05:38,240 --> 00:05:40,640 Speaker 3: going up. I mean, if it just ticked up one tenth, 124 00:05:41,440 --> 00:05:44,120 Speaker 3: ticked up one tenth, ticked up one tenth, kind of 125 00:05:44,160 --> 00:05:46,159 Speaker 3: like what we saw last year, it would be concerning, 126 00:05:46,160 --> 00:05:48,160 Speaker 3: but it wouldn't be a big problem. But if it 127 00:05:48,200 --> 00:05:51,520 Speaker 3: starts going up two tenths, three tenths a month, then 128 00:05:51,640 --> 00:05:54,000 Speaker 3: that's going to happen because you're seeing layoffs starting to 129 00:05:54,040 --> 00:05:56,320 Speaker 3: take off. And if labor market's in kind of a 130 00:05:56,360 --> 00:05:58,880 Speaker 3: good spot, it's not like twenty twenty two where you 131 00:05:58,880 --> 00:06:03,240 Speaker 3: could reduce vacancy. Now, if labor demand pulled back, it's 132 00:06:03,240 --> 00:06:05,480 Speaker 3: going to be in terms of bodies, so you'll see 133 00:06:05,520 --> 00:06:09,000 Speaker 3: employees start to drop. So I'm more concerned about the 134 00:06:09,040 --> 00:06:11,600 Speaker 3: speed at which the unemployment rate starts going off. And 135 00:06:11,839 --> 00:06:14,680 Speaker 3: if there's a big reaction to big tariffs, it could 136 00:06:14,720 --> 00:06:15,640 Speaker 3: go up very quickly. 137 00:06:16,080 --> 00:06:17,920 Speaker 1: Four and a half percent? Is I guess the Psalm 138 00:06:18,080 --> 00:06:18,719 Speaker 1: rule trigger? 139 00:06:18,839 --> 00:06:21,440 Speaker 2: Would that be a trigger for you? 140 00:06:21,440 --> 00:06:23,560 Speaker 3: You know, I gave a speecial last September I kind 141 00:06:23,600 --> 00:06:26,680 Speaker 3: of discounted the same rule as a mechanical description of 142 00:06:26,839 --> 00:06:29,479 Speaker 3: the data and what it really is capturing as shocks 143 00:06:29,880 --> 00:06:34,120 Speaker 3: that hit the economy. A big tariff regime being put 144 00:06:34,160 --> 00:06:36,880 Speaker 3: back on in July and being put in place for 145 00:06:36,960 --> 00:06:39,320 Speaker 3: the foreseeable future, that would be that kind of a 146 00:06:39,320 --> 00:06:41,839 Speaker 3: big shock. So it's not so much the Sam rule 147 00:06:41,920 --> 00:06:44,000 Speaker 3: as the fact that the Sam rule is really always 148 00:06:44,040 --> 00:06:46,240 Speaker 3: picking up some big shock to the economy, and the 149 00:06:46,279 --> 00:06:48,680 Speaker 3: big tariff regime as it was on April second, would 150 00:06:48,760 --> 00:06:50,440 Speaker 3: end up being a big shock to the economy. 151 00:06:50,839 --> 00:06:54,240 Speaker 2: Well, on the inflation mandate side, since you expect some 152 00:06:54,400 --> 00:06:58,560 Speaker 2: inflation from tariffs, is it the speed with which it 153 00:06:58,640 --> 00:07:02,440 Speaker 2: rises as well? Because we've seen a lot of volatility 154 00:07:02,480 --> 00:07:04,440 Speaker 2: and inflation numbers recently. 155 00:07:05,120 --> 00:07:07,960 Speaker 3: Yeah, that's been the struggle for me for the last 156 00:07:08,120 --> 00:07:12,000 Speaker 3: basically eighteen months, is that inflation progress to our two 157 00:07:12,040 --> 00:07:14,920 Speaker 3: percent goal has been this kind of seesaw. You're making 158 00:07:14,960 --> 00:07:16,680 Speaker 3: progress going down, but then you get a couple of 159 00:07:16,760 --> 00:07:19,280 Speaker 3: bad months and it comes back down and it's just 160 00:07:19,360 --> 00:07:21,400 Speaker 3: slower than I ever thought it would have been, saying 161 00:07:21,440 --> 00:07:22,640 Speaker 3: December of twenty three. 162 00:07:23,440 --> 00:07:24,760 Speaker 1: But the tariffs are at one time. 163 00:07:24,880 --> 00:07:27,880 Speaker 3: I still strongly believe just the economic seales me that 164 00:07:28,520 --> 00:07:32,200 Speaker 3: the tariffs are a one time price level effect that's 165 00:07:32,200 --> 00:07:34,400 Speaker 3: going to pass through. Now it's one time level, doesn't 166 00:07:34,440 --> 00:07:36,760 Speaker 3: mean it's small or big. It's just a one time 167 00:07:36,920 --> 00:07:39,440 Speaker 3: So I still think even if it was fairly large, 168 00:07:39,440 --> 00:07:42,480 Speaker 3: you would see a one time price level effect. The 169 00:07:42,520 --> 00:07:45,640 Speaker 3: demand slow down would offset some of that, is consumers 170 00:07:45,720 --> 00:07:49,960 Speaker 3: back off, employment goes down, unemployment rises, wealth continues to 171 00:07:50,400 --> 00:07:54,040 Speaker 3: financial wealth declines. You will see demand effects from that 172 00:07:54,040 --> 00:07:56,360 Speaker 3: that'll put downward pressure on inflation. So it may not 173 00:07:56,400 --> 00:08:00,280 Speaker 3: be as high as people think, but the critical thing 174 00:08:00,320 --> 00:08:03,600 Speaker 3: is it's going to be. It's going to be take 175 00:08:03,640 --> 00:08:07,520 Speaker 3: some courage to stare down these tariff increases and prices 176 00:08:07,560 --> 00:08:10,520 Speaker 3: with the belief that they are transitory I'm not going 177 00:08:10,600 --> 00:08:13,800 Speaker 3: to lie that we all have twenty one in our 178 00:08:13,840 --> 00:08:16,680 Speaker 3: minds when we think about how we go forward. But 179 00:08:18,120 --> 00:08:20,600 Speaker 3: you know, the question is what are the things that 180 00:08:20,640 --> 00:08:25,720 Speaker 3: will cause this inflation to persist through the initial tariff increases, 181 00:08:26,040 --> 00:08:28,160 Speaker 3: And I just have a hard time seeing exactly what 182 00:08:28,200 --> 00:08:28,720 Speaker 3: that would be. 183 00:08:29,160 --> 00:08:30,760 Speaker 2: Well, do you think if we start to see the 184 00:08:30,800 --> 00:08:36,040 Speaker 2: economy slow that you would be more reluctant to cut 185 00:08:36,160 --> 00:08:41,000 Speaker 2: rates because you expect that tariffs and the higher inflation 186 00:08:41,120 --> 00:08:43,240 Speaker 2: will come down because of the demand effect. 187 00:08:43,480 --> 00:08:46,480 Speaker 3: See, I'm willing to look through whatever tariff price effects are, 188 00:08:46,520 --> 00:08:49,040 Speaker 3: and I've said that so for me, then I'm not 189 00:08:49,080 --> 00:08:51,679 Speaker 3: going to overreact to any increase in inflation that. 190 00:08:51,679 --> 00:08:53,480 Speaker 1: I think is attributable to the tariffs. 191 00:08:53,800 --> 00:08:56,840 Speaker 3: But if I see a significant drop in the labor market, 192 00:08:57,040 --> 00:08:58,880 Speaker 3: then the employment side of the mandate I think is 193 00:08:58,920 --> 00:09:01,400 Speaker 3: important and we step in and we would have to start. 194 00:09:01,480 --> 00:09:02,959 Speaker 1: I said this last week in my speech. 195 00:09:03,240 --> 00:09:05,360 Speaker 3: You know I would expect more rate cuts and sooner 196 00:09:05,720 --> 00:09:08,959 Speaker 3: once I start seeing some serious deterioration in the labor market. 197 00:09:09,280 --> 00:09:11,640 Speaker 2: Now, some people looked at your speech last week and said, 198 00:09:12,000 --> 00:09:14,560 Speaker 2: Chris Waller's on the opposite side of all this from 199 00:09:14,640 --> 00:09:18,680 Speaker 2: chair Powell. Do you think there's division on the Open 200 00:09:18,720 --> 00:09:20,320 Speaker 2: Market Committee about what should be done? 201 00:09:20,400 --> 00:09:22,600 Speaker 1: Well, that's the beauty of not having group thing. 202 00:09:22,679 --> 00:09:25,520 Speaker 3: People have different views about how the economy is evolving 203 00:09:25,520 --> 00:09:26,679 Speaker 3: and how policies should be done. 204 00:09:26,720 --> 00:09:28,200 Speaker 1: I think that's actually a healthy thing. 205 00:09:28,520 --> 00:09:31,760 Speaker 3: As far as I've heard exactly that comment that Waller's 206 00:09:31,760 --> 00:09:34,560 Speaker 3: outside of consensus away from the chair, and I've had 207 00:09:34,600 --> 00:09:36,680 Speaker 3: other people tell me I didn't really hear much different 208 00:09:36,679 --> 00:09:38,319 Speaker 3: from what the Chair said two days later. 209 00:09:38,440 --> 00:09:39,920 Speaker 1: So this is. 210 00:09:39,920 --> 00:09:42,760 Speaker 3: Always a funny thing about communication. I can say something 211 00:09:43,280 --> 00:09:46,440 Speaker 3: and people perceive it one way to the left, or 212 00:09:46,480 --> 00:09:47,120 Speaker 3: they perceive it. 213 00:09:47,040 --> 00:09:47,920 Speaker 1: The other way to the right. 214 00:09:48,040 --> 00:09:51,800 Speaker 3: So how people receive what I say is not always, 215 00:09:52,160 --> 00:09:54,320 Speaker 3: you know, one clear vision of what it is. So 216 00:09:54,480 --> 00:09:56,440 Speaker 3: I'll leave it up to people to decide whether there's 217 00:09:56,480 --> 00:09:59,160 Speaker 3: a difference between the Chair or I. But all I 218 00:09:59,160 --> 00:10:00,800 Speaker 3: can do is say what my views are, and I'm 219 00:10:00,880 --> 00:10:02,360 Speaker 3: trying to be very clear what they are. 220 00:10:02,960 --> 00:10:06,040 Speaker 2: A lot of people are thinking at this point that 221 00:10:07,120 --> 00:10:11,960 Speaker 2: Trump being Trump and marterial that the tariffs could change 222 00:10:12,240 --> 00:10:16,080 Speaker 2: at any moment. Would you be reluctant to move rates 223 00:10:16,320 --> 00:10:20,160 Speaker 2: not knowing that you've got any certainty about what's going 224 00:10:20,240 --> 00:10:20,760 Speaker 2: to be happening. 225 00:10:20,920 --> 00:10:22,400 Speaker 3: Well, like I said, what we're going to look at 226 00:10:22,480 --> 00:10:24,439 Speaker 3: is the data. I mean, that's how we always. 227 00:10:24,240 --> 00:10:26,040 Speaker 2: Determin Does that leave you behind the curve? 228 00:10:27,480 --> 00:10:28,920 Speaker 1: You know, there's always at risk. 229 00:10:29,000 --> 00:10:31,160 Speaker 3: You're saying, you're looking at these things like if this 230 00:10:31,320 --> 00:10:33,760 Speaker 3: inflation are going to get worse? Is in unemployment going 231 00:10:33,800 --> 00:10:35,560 Speaker 3: to get worse? And you have to it's a balancing 232 00:10:35,600 --> 00:10:40,560 Speaker 3: act to make that decision. Hopefully you're not late. And 233 00:10:40,640 --> 00:10:42,559 Speaker 3: I think if we saw That's why I said, if 234 00:10:42,559 --> 00:10:45,079 Speaker 3: I saw enough movement in the unemployment rate to make 235 00:10:45,120 --> 00:10:48,360 Speaker 3: me think that things were going bad, or or growth 236 00:10:48,360 --> 00:10:52,200 Speaker 3: prospects started tanking, or consumer spending started really going down, 237 00:10:52,600 --> 00:10:54,720 Speaker 3: then I'd be ready to go. I wouldn't be sitting 238 00:10:54,760 --> 00:10:59,000 Speaker 3: here waiting to determine whether the inflation is transitory or not. 239 00:10:59,080 --> 00:11:01,240 Speaker 3: It's time to worry about the real side of the economy. 240 00:11:01,760 --> 00:11:04,319 Speaker 2: I can't let you go without asking about FED independence, 241 00:11:04,360 --> 00:11:08,320 Speaker 2: because it's obviously the other elephant in the room these days. 242 00:11:09,040 --> 00:11:12,439 Speaker 2: Will the president backing off of his comments on firing 243 00:11:12,559 --> 00:11:14,680 Speaker 2: j poll make it a little bit easier for you 244 00:11:14,760 --> 00:11:15,240 Speaker 2: all to. 245 00:11:15,120 --> 00:11:16,920 Speaker 1: Do your job? Well, I just try to. 246 00:11:17,080 --> 00:11:19,840 Speaker 3: I try to ignore all this stuff and just focus 247 00:11:19,880 --> 00:11:23,079 Speaker 3: on the data and focus on doing my job. That's 248 00:11:23,120 --> 00:11:26,439 Speaker 3: what I try to do every day. Criticism of what 249 00:11:26,480 --> 00:11:29,839 Speaker 3: we do, that's the job. If you don't like being criticized, 250 00:11:29,880 --> 00:11:32,760 Speaker 3: don't take the job. So, and the President's free to 251 00:11:32,800 --> 00:11:35,520 Speaker 3: say whatever they want to probasey just like anybody else. 252 00:11:36,000 --> 00:11:39,000 Speaker 3: But central bank independence, as we saw I think on Monday, 253 00:11:39,160 --> 00:11:42,160 Speaker 3: is critical to the well functioning of the US economy. 254 00:11:42,440 --> 00:11:43,520 Speaker 1: It has served us well. 255 00:11:44,000 --> 00:11:46,439 Speaker 3: It allows us to do things in a non political way, 256 00:11:46,960 --> 00:11:50,320 Speaker 3: and it's something I worked on in my academic life 257 00:11:50,400 --> 00:11:53,040 Speaker 3: research wise for twenty years about the value of it. 258 00:11:53,080 --> 00:11:55,840 Speaker 3: And I don't think there's ever been anything in the 259 00:11:56,000 --> 00:11:58,800 Speaker 3: data that shows you that lack of independence is a 260 00:11:58,800 --> 00:11:59,280 Speaker 3: good thing. 261 00:12:00,120 --> 00:12:03,120 Speaker 2: Would ad hominem attacks like we've seen on a chair 262 00:12:03,200 --> 00:12:05,640 Speaker 2: make it harder for the next chair to do the job? 263 00:12:06,040 --> 00:12:08,280 Speaker 2: Does a job itself get harmed? 264 00:12:08,720 --> 00:12:10,439 Speaker 3: I think it's up to the Like I said, it's 265 00:12:10,520 --> 00:12:12,240 Speaker 3: up to the person that's in the chair. You know, 266 00:12:12,360 --> 00:12:15,040 Speaker 3: you take the job knowing you're going to be criticized 267 00:12:15,120 --> 00:12:19,680 Speaker 3: from markets, from fed watchers, from average consumers. That's part 268 00:12:19,679 --> 00:12:21,679 Speaker 3: of the job. And if you don't like to be criticized, 269 00:12:21,679 --> 00:12:24,319 Speaker 3: don't take the job. So It's really going to be 270 00:12:24,360 --> 00:12:26,400 Speaker 3: a question of whoever the next chair is, are they 271 00:12:26,440 --> 00:12:28,840 Speaker 3: going to come in and keep the tradition of central 272 00:12:28,840 --> 00:12:32,520 Speaker 3: bank independence making policy in a non political way, And 273 00:12:32,559 --> 00:12:34,680 Speaker 3: for me that's critical for whatever the next whoever the 274 00:12:34,679 --> 00:12:35,160 Speaker 3: next chair 275 00:12:35,240 --> 00:12:37,600 Speaker 2: Is, Chris Waller, thank you very much for your time 276 00:12:37,600 --> 00:12:38,079 Speaker 2: this morning.