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Speaker 1: One of the most important decision makers on economic policy

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Speaker 1: in our country is the Chairman of the Federal Reserve Board.

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Speaker 1: Our recently sat down with the chairman, J. Pow to

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Speaker 1: talk about interest rates, inflation, and the overall economy in So,

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Speaker 1: Jay Um, thank you very much for being here, and

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Speaker 1: why don't we start with an easy question. So you

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Speaker 1: made a speech last week commenting on the f O

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Speaker 1: m c s decision to raise the FED discount rate

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Speaker 1: by um a small amount relatively speaking basis points. Someone

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Speaker 1: people would say that was small um, but at the

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Speaker 1: time it wasn't clear that the Job's report would be

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Speaker 1: as strong as it turned out to be. Subsequently, had

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Speaker 1: you known that the Job's report was going to be

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Speaker 1: as strong, would you have done twenty five basis points

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Speaker 1: or something different? David, thank you for that question. Thank you,

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Speaker 1: thank you for inviting me here today. It's great to

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Speaker 1: be here. So we don't get to play it that way,

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Speaker 1: unfortunately we have to, but I'll I'll take it this way.

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Speaker 1: So the message we were sending at the fhone C

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Speaker 1: meeting last Wednesday was really that the disinflationary process, the

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Speaker 1: process of getting inflation down, has begun and it's begun

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Speaker 1: in the goods sector, which is about a quarter of

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Speaker 1: our economy, but it has a long way to go.

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Speaker 1: These are the very early stages of disinflation. So the

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Speaker 1: services sector really, except for housing services, pardon me, is

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Speaker 1: not really showing any any disinflation yet. So our message

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Speaker 1: really was this process is likely to take quite a

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Speaker 1: bit of time. It's not going to be we don't

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Speaker 1: think smooth. It's probably gonna be bumpy. And so we

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Speaker 1: think that we're gonna need to do further rate increases,

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Speaker 1: as we said, and we think that will need to

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Speaker 1: hold policy at a restrictive level for a period of time.

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Speaker 1: If next month you had another five thousand jobs created

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Speaker 1: net jobs, would that be good or bad from your

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Speaker 1: point of view? Have we got a lot of people

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Speaker 1: working but maybe producing more inflation. We don't. We don't

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Speaker 1: have the luxury of thinking about good or bad. It

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Speaker 1: just is what it is. So but I would say

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Speaker 1: again we most most analysts, most economists would say that

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Speaker 1: to get inflation down from high levels that we've had,

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Speaker 1: if you look at history, there is some softening and

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Speaker 1: labor market conditions that goes along with that, and that

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Speaker 1: is still you know, very possible and indeed likely here

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Speaker 1: some softing and labor market conditions. However, this cycle is

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Speaker 1: different from other cycles because of where it came from,

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Speaker 1: and it's just confound at all all sorts of attempts

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Speaker 1: to predict what it would do. Okay, so the markets

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Speaker 1: um after your speech last week, the markets assumed that

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Speaker 1: therefore there would probably be another basis point increase in

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Speaker 1: your next f i MC meeting. Um was that a

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Speaker 1: bad assumption by the markets? So what again? What we

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Speaker 1: said at the meeting was was that we we believe

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Speaker 1: that we anticipate is what we said, that ongoing rate

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Speaker 1: increases will be appropriate. Uh. And the reason is we're

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Speaker 1: trying to achieve a stance of policy that is sufficiently

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Speaker 1: restrictive to bring inflation down to two percent over time,

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Speaker 1: and we don't think we've achieved that yet, so we

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Speaker 1: said that. Uh. And and you know, now you see

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Speaker 1: the labor market report, and I think again, financial conditions

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Speaker 1: are are are more well aligned with that than they

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Speaker 1: were before. So the assumption when you made your speech

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Speaker 1: was that probably they're fed, might I am and consider

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Speaker 1: uh decreasing rates by the end of this year, And

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Speaker 1: the markets no longer assume that you think the markets

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Speaker 1: are wrong. Well, so let me say these are all

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Speaker 1: of these numbers that we're throwing around here are conditional

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Speaker 1: on incoming data and what happens. So we never say

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Speaker 1: this is this is what we think will happen. You know.

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Speaker 1: We we make a tentative forecast and then we let

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Speaker 1: the data come in. For example, if the data were

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Speaker 1: to continue to come in stronger than we expect and

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Speaker 1: we were to conclude that we needed to raise rates

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Speaker 1: more than is priced to the markets, or then we

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Speaker 1: wrote down at our last group of forecasts in December,

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Speaker 1: then we would certainly do that. We would certainly raise

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Speaker 1: rates more. So you've said their inflation rate target is

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Speaker 1: two percent um, but why two percent and not three percent?

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Speaker 1: Three percent could be tolerable really, I mean most for

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Speaker 1: most of organized history, three percent is considered. Okay, why

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Speaker 1: do you want two percent? Two percent is the global standard,

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Speaker 1: and that is our objective two percent piece as measured

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Speaker 1: by the PC index, and that's just that's not something

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Speaker 1: we're looking at changing. That isn't going to change. It's

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Speaker 1: that's not gonna change, not gonna change now. But okay,

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Speaker 1: so you need to get the two percent, and your

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Speaker 1: goal to get there is by what period of time

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Speaker 1: would you like to get there? Well, we say, we

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Speaker 1: say that we're using our tools to get there over time.

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Speaker 1: If you look at our forecasts, we expect two thousand

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Speaker 1: twenty three to be a year of significant declines in inflation.

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Speaker 1: And it's actually our job to make sure that that's

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Speaker 1: the case. But I would tell you that, uh, you know,

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Speaker 1: with inflation headline headline PC in inflation is running about five.

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Speaker 1: This is on a twelve month basis. Core is running

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Speaker 1: at four point four. My guess is it will take

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Speaker 1: certainly into not just this year, but next year to

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Speaker 1: get down close to two. Okay, so two percent is firm.

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Speaker 1: That's you're not going to get off that, yes, okay,

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Speaker 1: So uh. The theory of raising interest rates um is

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Speaker 1: that it will decrease economic activity and increase unemployment. But

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Speaker 1: you've been increasing interest rates for a while and unemployment

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Speaker 1: is now at to record low. So what's wrong with

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Speaker 1: the theory. Why is unemployment not going higher? Well, the

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Speaker 1: labor market is strong, because the economy is strong, and

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Speaker 1: as I mentioned, it's a good thing that we've been

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Speaker 1: able to see the beginnings of disinflation without seeing the

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Speaker 1: labor market weekend. Um, it's just that there's a lot

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Speaker 1: of demand for workers. In fact, if you look at

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Speaker 1: the supply of workers versus demand for workers, demand for

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Speaker 1: for US workers is now more than five million greater

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Speaker 1: than the available supply, and available supply can systs of

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Speaker 1: people who were either working or actively looking for a job.

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Speaker 1: So this this is this was not the case before

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Speaker 1: the pandemic. The pandemic really had a significant left a

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Speaker 1: list lasting marks so far on labor supply in the

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Speaker 1: United States. The labor force participation rate came down, and

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Speaker 1: there now is a shortage of workers, and it it

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Speaker 1: feels it almost feels more structural than cyclical. So that

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Speaker 1: that's a that's a significant issue that you've resisted I

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Speaker 1: think saying what unemployment rate would be acceptable to you?

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Speaker 1: I think, but is there an unemployment rate that you

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Speaker 1: think would moderate inflation such that you would tolerate unemployment

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Speaker 1: at four, five percent, six percent? I guess I think

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Speaker 1: about it this way. UM, we have two goals that

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Speaker 1: Congress is assigned US, maximum employment and price stability. Price stability,

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Speaker 1: as we've agreed, is two percent inflation. Maximum employment means

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Speaker 1: if you want a job, you can get one. So

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Speaker 1: right now the labor market is at least at maximum employment,

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Speaker 1: but many would say that that is out of balance

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Speaker 1: with more demand and there is supply. So what we're

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Speaker 1: trying to do is get inflation down. We're not we're

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Speaker 1: not targeting, you know, a different unemployment rate. We're trying.

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Speaker 1: We're trying to use our tools to get inflation to

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Speaker 1: come down over time. So if I wanted to go

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Speaker 1: get a mortgage on a house I was gonna buy,

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Speaker 1: for example, uh, you would say, I'm not going to

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Speaker 1: be any better off waiting till next year than now

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Speaker 1: because rates aren't going to come down that much at

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Speaker 1: the beginning of next year, so I might as well

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Speaker 1: get the house now mortgage. So I say, Surprisingly enough,

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Speaker 1: I get a lot of requests for advice on those

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Speaker 1: kind of things and you don't give anything, and I

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Speaker 1: but I really can't, Okay, I can't really can't respond,

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Speaker 1: So okay, So on the whole, to summarize where you are,

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Speaker 1: you're basically saying that the job's data was that came

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Speaker 1: out was a little bit surprising, but in the end

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Speaker 1: you're taking you've taken into account and you're pretty comfortable

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Speaker 1: with the guidance you gave last time, and you're not

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Speaker 1: prepared to give anything that's completely different guidance than you

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Speaker 1: gave last week. Well, I mean, this is a world

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Speaker 1: in which we've had the the inflation, sorry, the the

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Speaker 1: the labor market report, and I think that does I

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Speaker 1: think it underscores the message that I was sending at

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Speaker 1: the at the press conference and in the meeting that

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Speaker 1: we have a significant road ahead to get inflation down

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Speaker 1: to two percent. And I think there has been an

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Speaker 1: expectation that it will that will go away quickly and painlessly,

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Speaker 1: and I don't think that's at all guaranteed. That's not

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Speaker 1: the base case. The base cases it will for me

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Speaker 1: is that it will take some time and we'll have

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Speaker 1: to do more rate increases, and then we'll have to

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Speaker 1: look around and see whether we've done enough. In hindsight,

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Speaker 1: would you say that when COVID hit the economy and

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Speaker 1: we chected five trillion dollars of physical policy into the economy,

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Speaker 1: and the Fed did quantity of easing and other related

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Speaker 1: things kept interest rates very low, would you say, in

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Speaker 1: hindsight that was a mistake or was the right policy

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Speaker 1: at the time. So I think you have to go

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Speaker 1: back to the decisions that were made in real time,

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Speaker 1: and it was something nobody had ever seen. The global

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Speaker 1: economy came to a virtual stand still. People were talking

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Speaker 1: about depression. People were talking and we didn't think. We

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Speaker 1: had no idea when we would get vaccines that worked.

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Speaker 1: So Congress took very strong measures, and we took very

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Speaker 1: strong measures. And you see where the economy is. You've

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Speaker 1: got a very very strong labor market, but you have

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Speaker 1: high inflation. As I mentioned, we're at the beginning of

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Speaker 1: getting that down. If you look around the world though,

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Speaker 1: at other countries, they're also experiencing high inflation, including countries

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Speaker 1: that didn't that didn't do that as much as we did,

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Speaker 1: either from a fiscal or monetary standpoint. So that that

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Speaker 1: tells you though that a big part of this inflation

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Speaker 1: is actually related to the you know, the pandemic itself

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Speaker 1: is shut down and then the reopening. That's a big

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Speaker 1: part of it. So are some people that are worried

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Speaker 1: about the federal debt limit and that we might not

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Speaker 1: have to extend it on time. We have thirty one

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Speaker 1: point four trillion dollars of debt. Are you a little

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Speaker 1: worried about the debt limit not getting extended. So the

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Speaker 1: debt limit is really something for the fisc authorities to

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Speaker 1: deal with. The FED our only role in this is

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Speaker 1: that we're that we're the fiscal agent of the Treasury Department.

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Speaker 1: We're not a policy maker on that. And I will

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Speaker 1: just say this, this can this really can only end

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Speaker 1: one way, and that is with Congress raising the debt

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Speaker 1: ceiling in a timely fashion so that the US can

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Speaker 1: pay all of its bills one and as do. That's

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Speaker 1: what has to happen. And if that doesn't happen, no

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Speaker 1: one should think that the FED has the ability to

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Speaker 1: shield the financial markets or the economy from the consequences

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Speaker 1: of moving too slow. So you don't have any program

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Speaker 1: in place ready to go if, in fact, the that

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Speaker 1: limit isn't passed in time. This is something that Congress

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Speaker 1: has to deal with. And the so called trillion dollar

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Speaker 1: gold coin solution is not one year in favor of

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Speaker 1: I guess I. As I said, this ends in only

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Speaker 1: one way, and that way is Congress voting to raise

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Speaker 1: the debt ceiling so that the US can pay all

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Speaker 1: of our bills. And today, what about the debt total

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Speaker 1: debt of the United States, which produces some inflation. With

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Speaker 1: thirty one point four leaving inside the debt limit, are

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Speaker 1: you worried about the total indebtiness United States producing inflation

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Speaker 1: or you don't think that's a big problem. Yeah, it's

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Speaker 1: not the level of debt. I would say. The thing

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Speaker 1: I'd say about the level of debt is really it's not.

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Speaker 1: First of all, it's not the Fed's job. But I

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Speaker 1: would say that we we we're on an unsustainable fiscal

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Speaker 1: path at the federal government level. That has been the

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Speaker 1: case for some time, and it's something we will have

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Speaker 1: to deal with it. Better to deal with it sooner

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Speaker 1: rather than later. Now, many of your predecessors were economists,

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Speaker 1: your train as a lawyer. Um so Um, they spoken

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Speaker 1: what I call FED speak, which is to say, incomprehensible

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Speaker 1: kind of economic language, which was done intentionally. I think

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Speaker 1: sometimes they would say, so you tend to speak in English? Um?

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Speaker 1: Is that have been a plus? You'd say, when you're

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Speaker 1: dealing with members of Congress, they can understand what you're saying.

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Speaker 1: I like to think, so, you know, I've made it

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Speaker 1: a real priority to to engage a lot with Congress.

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Speaker 1: In our system of government, unlike the parliamentary system. Our

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Speaker 1: accountability is to the legislature. It's to send it in

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Speaker 1: the House, and particularly the two oversight committees Senate Banking

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Speaker 1: and House Financial Services. And I think it's very important

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Speaker 1: that we respect that and explain what we're doing and

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Speaker 1: listen to their concerns and and share with them how

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Speaker 1: we're thinking about things. And I think they appreciate that.

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Speaker 1: And but that is, you know, we have this precious independence.

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Speaker 1: We can't be removed from office. We serve these long terms.

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Speaker 1: The other side of that has to be accountability. And

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Speaker 1: the way for us to get accountability is to be

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Speaker 1: as transparent as possible and try to reach you know,

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Speaker 1: the people of the United States through their elected representatives.

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Speaker 1: So this is a very high priority and we're gonna

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Speaker 1: keep doing it. So when you testify in front of Congress,

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Speaker 1: how much time does it take to prepare for that?

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Speaker 1: Is that a one hour preparation session or is it

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Speaker 1: a one day session or a one week session? These

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Speaker 1: are supposed to be monetary policy hearing is under the

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Speaker 1: Humphrey Hawkins Act, and they're actually on any anything that's

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Speaker 1: any political issues, So it's it's quite extensive. You have

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Speaker 1: to prepare for everything that the FIT is involved in

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Speaker 1: and many things that the FIT is not involved in.

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Speaker 1: So it's it's a lot of preparation. So when you

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Speaker 1: get questions from some members, you have to bite your

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Speaker 1: tongue and say, why are you asking a question like that?

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Speaker 1: Or you never have that problem? That never happens, Never happens, Okay.

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Speaker 1: In terms of consultation, um, do you consult regularly with

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Speaker 1: the Treasury Secretary or the head of the National Economic

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Speaker 1: Council or the President United States? How do you kind

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Speaker 1: of relate to the administration? For a long long time,

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Speaker 1: you know, sixty or seventy years there, I think there's

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Speaker 1: been a weekly breakfast or lunch with the Treasury Secretary

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Speaker 1: and the FED Chair. And that's what I've had with

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Speaker 1: with Treasure secretaries that I've had as FED Chair. I've

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Speaker 1: also had a regular article it called irregular lunches with

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Speaker 1: the head of the NBC. We also have regularly, regularly

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Speaker 1: scheduled lunches with the Council of Economic Advisors. And that's

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Speaker 1: that's really the that's the that's the institutional structure of

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Speaker 1: our of our contact with the administration. Does the President

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Speaker 1: United States ever call you with any advice or you

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Speaker 1: don't really the President Trump ever call you, or President

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Speaker 1: Bide never call you, or well, I think it's a

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Speaker 1: matter of public record that President Trump did used to

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Speaker 1: call me from time to time. What did he call you? Um, no,

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Speaker 1: I I haven't had that kind of I haven't gotten

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Speaker 1: any calls from from President Biden. For people who aren't

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Speaker 1: familiar with the f O m C, who is actually

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Speaker 1: is on the f O m C. The US Central

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Speaker 1: Bank consists of a board of governors. Here in Washington,

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Speaker 1: they're seven governors. Those governors are nominated by the President

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Speaker 1: and confirmed by the Senate, and we serve terms that

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Speaker 1: are that are not syncd up with the election cycle,

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Speaker 1: so we're we're independent. There are also twelve reserve banks

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Speaker 1: around the country which have a degree of independence, and

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Speaker 1: they're so so each each reserve bank is led by

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Speaker 1: a president who works there full time. All twelve of

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Speaker 1: them sit on the FMC. So that's nineteen people sit

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Speaker 1: on the FMC, so it's quite a large committee, of

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Speaker 1: which twelve vote in any given year. The reserve bank

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Speaker 1: presidents vote on a rotating basis, except New York, which

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Speaker 1: votes every year. So when you vote, do you vote

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Speaker 1: at the beginning of an f o MC meeting and

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Speaker 1: then just kind of have discussions afterwards, or do you

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Speaker 1: wait till the very end and then you vote. Now,

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Speaker 1: we voted at the end, I mean the whole the

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Speaker 1: FMC meeting process takes, you know, more than a full week.

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Speaker 1: I'm talking to all of the participants all night, eighteen

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Speaker 1: other ones, and staff is sent around memos and there's

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Speaker 1: something called the Teal Book, which is the staff's assessment

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Speaker 1: of the you know, of the economy and international economy

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Speaker 1: and monetary policy and all that. Then we have an

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Speaker 1: extensive discussion on the morning of the first day about

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Speaker 1: the economy. Everybody talks about that. On the second day

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Speaker 1: we talk about monetary policy, and then we vote on

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Speaker 1: monetary policy around noon on the second day. So there's

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Speaker 1: the Chairman of the Federal Reserve Board speak first and

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Speaker 1: say here's what I think, and or does he wait

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Speaker 1: until the end and say, well, thanks for what you think,

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Speaker 1: but let me tell you what I think. What do

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Speaker 1: you do for different chairs have done in different ways,

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Speaker 1: and so I tend I've tended to do what my predecessor,

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Speaker 1: media predecessor did. I think, Well, this is what I do.

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Speaker 1: I speak last on the sort of the economic go around,

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Speaker 1: So everyone else talks about what they think about the

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Speaker 1: economy and in their district, for example of the Reserve

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Speaker 1: Bank president, and I listened to all that, and then

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Speaker 1: I give my comments at the end, and I kind

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Speaker 1: of sum up what people have said, and then I

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Speaker 1: speak first on monetary policy. So do you consult regularly

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Speaker 1: with some of your predecessors, I mean, obviously wanted Secretary

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Speaker 1: of the Treasury now, but Ben Bernaki for example, Or

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Speaker 1: I do. I I talked to U former Chairman Bananke.

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Speaker 1: I talked to you know, uh, Secretary yelling. I still

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Speaker 1: talk to Alan Greenspan now. And again, when you're dealing

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Speaker 1: with this with your colleagues on the FED board and

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Speaker 1: you disagree with them, do you say, look, I'm the

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Speaker 1: chairman of the FED. I am the person who has

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Speaker 1: to make the final decision, and this is what we

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Speaker 1: should do, or you don't quite do it that way.

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Speaker 1: It's a it's a process of reaching agreement, and um,

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Speaker 1: I hear what people have to say, I tell them

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Speaker 1: what I think, and then I'm the one who has

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Speaker 1: to bring a proposal in front of the full committee,

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Speaker 1: not just the Board in front of the Full Committee

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Speaker 1: on Monetary Policy, and it works. Know, we have to

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Speaker 1: reach an agreement, and uh, you know, we get to

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Speaker 1: a place. I think you can tell today we are

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Speaker 1: blessed with a diversity of perspectives on the FOMC with

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Speaker 1: nineteen people. Of course we are. But you have one

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Speaker 1: thing that unites all of us, and that is a

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Speaker 1: very strong commitment to getting inflation down. And when you

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Speaker 1: want to talk to members of the of the Board

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Speaker 1: of the Federals a board, do you go to their

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Speaker 1: office or they come to your office. I like to

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Speaker 1: do both. I mean, I really don't like to sit

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Speaker 1: in my office all day and and have just have

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Speaker 1: people come to see me. I like to go barge

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Speaker 1: in on people. And you know, I think it's much

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Speaker 1: better to get up and walk around and see people.

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Speaker 1: The fet has been pretty good at avoiding leaks of

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Speaker 1: its decisions. How do you do that? Because most people

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Speaker 1: in Washington are not so good at that. How do

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Speaker 1: you avoid leaks? We do have, you know, we've got

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Speaker 1: very strict rules around confidentiality, particularly around the written materials

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Speaker 1: that we have. You know, we we publish these things

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Speaker 1: internally for for the FOMC, meaning the memos and the

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Speaker 1: Teal Book and all that um. But the other thing

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Speaker 1: to remember, though, is you know, we're not trying to

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Speaker 1: hide our decisions from the public. We actually, in the

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Speaker 1: modern modern monetary policy, we want the public to understand

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Speaker 1: how we think, how we're thinking. And and you know,

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Speaker 1: if markets really understand how you're thinking in a new

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Speaker 1: a new piece of data comes in, the markets will

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Speaker 1: go where they're going to do this, and it sort

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Speaker 1: of happens organically. And that happened all last year as

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Speaker 1: we were, you know, talking about raising rates. The market

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Speaker 1: priced in rate increases long before we actually enacted them.

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Speaker 1: So it's not we want to be transparent. We're not

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Speaker 1: looking to surprise markets with these decisions. So you get

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Speaker 1: data from all the various government agencies. But do you

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Speaker 1: ever use anecdotal things like you go to the supermarket

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Speaker 1: and you see prices are high, and you say, this

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Speaker 1: price is high? Or how do you get you ever

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Speaker 1: get anecdotal things or people ever call you up our

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Speaker 1: friends and say, by the way, you should do this

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Speaker 1: or that. I mostly get data, but I will say

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Speaker 1: the the I I do believe that ancdotal information is

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Speaker 1: very useful and one of the things the reserve banks

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Speaker 1: are great at is all twelve of them have big

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Speaker 1: operations where they talk to business is and nonprofits, universities,

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Speaker 1: every sector of the of the country and the economy,

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Speaker 1: and they bring that back to the FMC means and

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Speaker 1: they talk about what they're seeing. So there has been

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Speaker 1: discussion recently about the FED some FED members, pread board

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Speaker 1: presidents selling their securities and maybe not doing everything that

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Speaker 1: they were supposed to do in terms of disclosing it.

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Speaker 1: What have you done to fix that process. We've put

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Speaker 1: a new system in a new set of rules in place,

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Speaker 1: which I think are best in class for a public

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Speaker 1: institution like the FED. And uh, you know, the the

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Speaker 1: innovations were that that if someone wants to sell something

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Speaker 1: that they own or buy something, they have to clear

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Speaker 1: them at advance with with staff at the Board of

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Speaker 1: Governors and then you've got to wait forty five days

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Speaker 1: for that to execute. Also, you can't own individual stocks

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Speaker 1: and there there you can only do these you can

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Speaker 1: only authorize these transactions or execute them during specific times. Um.

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Speaker 1: And it's you know, it's it's a and we we

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Speaker 1: just of course all these are disclosed. If if you're

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Speaker 1: if your idea is to go to trade things, buy

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Speaker 1: and sell them because you think, you know, you think

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Speaker 1: this stock is cheap in that kind of thing, that's

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Speaker 1: just not something that will work. What is the salary

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Speaker 1: of the chairman of the Federal Reserve Board. It's um,

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Speaker 1: it's around a hundred and ninety dollars, I believe, okay,

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Speaker 1: So you're you live on the hundred dollars. If you

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Speaker 1: need to sell something, what do you do? You have

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Speaker 1: to clear it for forty five days. That's right. We

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Speaker 1: we've you know too, if we have family expenses that

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Speaker 1: if we have them that exceed my salary, then we

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Speaker 1: have to sell and as I think that's a fair

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Speaker 1: salary for the job or I do, yes, okay, So today, Um,

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Speaker 1: how do you coordinate with central banks, let's say in

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Speaker 1: England or Japan or or China. Do you have regular

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Speaker 1: conversations with them about what they're doing? We do, you know,

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Speaker 1: and I meet six times a year in Switzerland with

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Speaker 1: the heads of all the many, many central banks, you know,

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Speaker 1: even the even the small and medium sized ones at

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Speaker 1: the at in Bosel at the Bank for International Settlements.

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Speaker 1: In addition, among the major central banks, I have regular

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Speaker 1: or dialogues going with with most of them. And so

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Speaker 1: what we're talking though about is really what's happening in

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Speaker 1: the economy and how are you thinking about policy and

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Speaker 1: that kind of thing. It's very important that we keep

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Speaker 1: those discussions going because, particularly in a crisis, you're gonna

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Speaker 1: need to know each other and you're gonna need to

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Speaker 1: know you're gonna be able to trust each other. Okay,

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Speaker 1: so the biggest challenge you have now is being able

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Speaker 1: to keep a straight face, not telling people what you're

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Speaker 1: gonna do in the future, and look at the data

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Speaker 1: and then come up with the right solution. Right. That's

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Speaker 1: mostly yet, I think the biggest challenge we face at

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Speaker 1: the FED is completing the process of getting inflation down

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Speaker 1: to two percent. And what what I want to point

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Speaker 1: out is that we're seeing disinflation in the good sector.

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Speaker 1: We're going we expect to see it in the housing

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Speaker 1: services sector, and that's that's These are the three parts

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Speaker 1: of the of the core PC inflation index that we

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Speaker 1: look at. There's fifty six percent of the economy, which

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Speaker 1: is the rest of the services sector. It's the biggest

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Speaker 1: part obviously, and we're not seeing disinflation there yet. And

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Speaker 1: that's going to take some time, and I just we

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Speaker 1: we need to be patient, and we think we're gonna

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Speaker 1: need to keep rates at a restrictive level for you know,

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Speaker 1: for a period of time before that comes down. Thanks

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Speaker 1: for listening to hear more of my interviews. You can

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Speaker 1: subscribe and download my podcast on Spotify, Apple, or wherever

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Speaker 1: you listen.