1 00:00:02,520 --> 00:00:09,040 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. Cleveland Fed President Beth 2 00:00:09,039 --> 00:00:12,119 Speaker 1: Hammock among those preferring to hold rates higher for longer, 3 00:00:12,360 --> 00:00:14,520 Speaker 1: while our next guest is taking the other side, voting 4 00:00:14,520 --> 00:00:17,799 Speaker 1: for a fifty basis point cut at the fed's last meeting. 5 00:00:17,880 --> 00:00:20,560 Speaker 1: Joining us now is Federal Reserve Governor Stephen Myron. Very 6 00:00:20,560 --> 00:00:21,880 Speaker 1: good morning to you, Steven. Thank you so much for 7 00:00:21,960 --> 00:00:22,319 Speaker 1: joining us. 8 00:00:22,320 --> 00:00:23,520 Speaker 2: Good morning, thanks for having me back. 9 00:00:23,680 --> 00:00:26,480 Speaker 1: So let's start with Beth Ham actually came out over 10 00:00:26,480 --> 00:00:29,440 Speaker 1: the weekend. Then we heard for Williams as well on Friday, 11 00:00:29,720 --> 00:00:32,440 Speaker 1: saying that potentially where we are right now, rates should 12 00:00:32,440 --> 00:00:34,839 Speaker 1: be steady and they're looking at what's going on inflation. 13 00:00:35,080 --> 00:00:37,080 Speaker 1: Even the FED chair was talking about maybe you need 14 00:00:37,120 --> 00:00:39,640 Speaker 1: to look at inflation the data we had with some 15 00:00:39,720 --> 00:00:42,199 Speaker 1: grain of salt because of the government shutdown. How are 16 00:00:42,360 --> 00:00:44,920 Speaker 1: you viewing that side of the FEDS mandate right now? 17 00:00:45,360 --> 00:00:47,560 Speaker 3: Yeah, So I gave a speech on the inflation Netlook 18 00:00:47,600 --> 00:00:50,400 Speaker 3: last week, you know, and I still believe everything I 19 00:00:50,440 --> 00:00:52,200 Speaker 3: said last week in light of this week's print. 20 00:00:52,920 --> 00:00:53,800 Speaker 2: Last week's print, I. 21 00:00:53,720 --> 00:00:55,720 Speaker 3: Mean, look, there were a couple of anomalies in last 22 00:00:55,760 --> 00:00:59,160 Speaker 3: week's print related to consequences of the government shutdown, which 23 00:00:59,200 --> 00:01:01,800 Speaker 3: have distorted and delayed economic data that we need to 24 00:01:01,840 --> 00:01:05,720 Speaker 3: make policy. But you know, in those consequences I think 25 00:01:05,720 --> 00:01:07,720 Speaker 3: are not huge there when you sort of get to 26 00:01:07,760 --> 00:01:10,080 Speaker 3: when you get to sort of the ultimate PCE print, 27 00:01:10,080 --> 00:01:12,600 Speaker 3: which is what the FED, which is what the FED targets, 28 00:01:12,880 --> 00:01:15,360 Speaker 3: it's probably ultimately going to be in the neighborhood of 29 00:01:15,360 --> 00:01:17,240 Speaker 3: two tenths of a point, maybe a tenth of that 30 00:01:17,319 --> 00:01:18,880 Speaker 3: is going to be shelter, and tenth of the other 31 00:01:18,920 --> 00:01:21,640 Speaker 3: stuff is going to be you know, calendar stuff like prices, 32 00:01:21,800 --> 00:01:23,400 Speaker 3: like data were collected in the second half of the 33 00:01:23,400 --> 00:01:25,720 Speaker 3: month around Black Friday stuff. But we'll have to sort 34 00:01:25,720 --> 00:01:29,080 Speaker 3: of see when we get the PC data. But it 35 00:01:29,120 --> 00:01:31,240 Speaker 3: is true that the shelter stuff was somewhat distorted by 36 00:01:31,240 --> 00:01:33,720 Speaker 3: some of the quirks of the of recovering from the shutdown. 37 00:01:34,319 --> 00:01:37,320 Speaker 3: But it's also true that the shelter data were distorted 38 00:01:37,360 --> 00:01:40,839 Speaker 3: for most of the year because of really long lands 39 00:01:40,840 --> 00:01:43,200 Speaker 3: with which shelter inflation is calculated. If you look at 40 00:01:43,280 --> 00:01:45,080 Speaker 3: market rents, they've been running at about a one percent 41 00:01:45,200 --> 00:01:48,160 Speaker 3: rate for about two years now, right. That's not indicative 42 00:01:48,160 --> 00:01:51,240 Speaker 3: of any price pressures in housing whatsoever, but it takes 43 00:01:51,280 --> 00:01:53,559 Speaker 3: a really long time for measured shelter inflation to catch 44 00:01:53,600 --> 00:01:55,480 Speaker 3: up to that, just because of various quirks of the 45 00:01:55,480 --> 00:01:58,400 Speaker 3: statistical measurement process that I got into my speech last week. 46 00:01:58,600 --> 00:02:00,560 Speaker 3: So I do think there was maybe someward bias in 47 00:02:00,600 --> 00:02:02,440 Speaker 3: last week's print. But at the same time, there's been 48 00:02:02,560 --> 00:02:05,400 Speaker 3: tons of upward bias in data for the entire year, 49 00:02:05,640 --> 00:02:08,320 Speaker 3: and it's inappropriate to say, Okay, well, we have to 50 00:02:08,440 --> 00:02:10,240 Speaker 3: adjust for the downward bias, but we're going to accept 51 00:02:10,240 --> 00:02:12,840 Speaker 3: the upward bias that itself is a deeply biased position. 52 00:02:12,880 --> 00:02:14,600 Speaker 2: We've got to be clear right about both. Well, do 53 00:02:14,600 --> 00:02:16,560 Speaker 2: you feel like yourself included? 54 00:02:16,760 --> 00:02:18,919 Speaker 1: But do you feel like members of the Fed are 55 00:02:19,000 --> 00:02:21,880 Speaker 1: cherry picking what about inflation they like or dislike? 56 00:02:22,480 --> 00:02:23,840 Speaker 3: Well, I mean, you know, I think that for the 57 00:02:23,880 --> 00:02:26,679 Speaker 3: last few months, we've had data come out in accordance 58 00:02:26,720 --> 00:02:28,840 Speaker 3: with I think my view of the world. The inflation 59 00:02:28,960 --> 00:02:32,320 Speaker 3: data has steadily come in cooler than expectations, the unemployment 60 00:02:32,440 --> 00:02:35,480 Speaker 3: rate has poked up potentially above where people thought it 61 00:02:35,560 --> 00:02:37,600 Speaker 3: was going to go, and so we've had data that 62 00:02:37,639 --> 00:02:40,120 Speaker 3: should push people into a duvish direction. And I think 63 00:02:40,120 --> 00:02:42,520 Speaker 3: it's somewhat problematic if you see those data coming out 64 00:02:42,520 --> 00:02:45,040 Speaker 3: and you don't adjust your policy prescriptions in the Duvish direction. 65 00:02:45,240 --> 00:02:47,400 Speaker 3: What does that say about the reactiveness of policy to 66 00:02:47,440 --> 00:02:49,600 Speaker 3: the economy? You know, I think it looks very it 67 00:02:49,600 --> 00:02:51,080 Speaker 3: reflects very poorly upon the institution. 68 00:02:51,280 --> 00:02:53,000 Speaker 4: At the end of that speech at Columbia, you nodded 69 00:02:53,040 --> 00:02:56,480 Speaker 4: to the fact that recessions are inevitable. Fed's job, it's 70 00:02:56,520 --> 00:02:58,880 Speaker 4: going to forestall them as much as they can. Policymaker's 71 00:02:58,960 --> 00:03:01,520 Speaker 4: jobs are that. I'm very curious when you look at 72 00:03:01,520 --> 00:03:03,480 Speaker 4: the labor market, in particularly the rise that we've seen 73 00:03:03,480 --> 00:03:05,639 Speaker 4: in the unemployment rate, that's kind of rise we've seen 74 00:03:05,639 --> 00:03:09,519 Speaker 4: customarily before recessions. How do you assess the risk of 75 00:03:09,560 --> 00:03:11,360 Speaker 4: there being a recession here in the near term when 76 00:03:11,400 --> 00:03:12,720 Speaker 4: you look at the labor market, for instance. 77 00:03:12,960 --> 00:03:14,760 Speaker 3: So I don't see a recession in the near term, 78 00:03:14,760 --> 00:03:18,679 Speaker 3: in part because we are adjusting our policy rate, belowering it, 79 00:03:18,680 --> 00:03:20,320 Speaker 3: which is appropriate. You know. 80 00:03:20,440 --> 00:03:24,120 Speaker 2: My view, as I've described, is that a variety. 81 00:03:23,639 --> 00:03:26,440 Speaker 3: Of shocks that hit the economy, you know, including changes 82 00:03:26,480 --> 00:03:28,239 Speaker 3: to the population growth rate due to the changes in 83 00:03:28,280 --> 00:03:30,840 Speaker 3: the border policy, have pushed what we call the neutral 84 00:03:30,919 --> 00:03:33,440 Speaker 3: rate down and that policy needs to adjust downward to 85 00:03:33,440 --> 00:03:36,480 Speaker 3: reflect that downward shift in neutral. If we don't adjust 86 00:03:36,520 --> 00:03:40,280 Speaker 3: policy down, then I think that we do run risks 87 00:03:39,240 --> 00:03:43,400 Speaker 3: of rising recessions. I don't think it's too late to 88 00:03:43,400 --> 00:03:45,280 Speaker 3: prevent that, and so I think it's important that we 89 00:03:45,360 --> 00:03:47,600 Speaker 3: keep on adjusting our policy rate down. But at the 90 00:03:47,600 --> 00:03:49,520 Speaker 3: moment it's not my base case, in part because I 91 00:03:49,520 --> 00:03:52,400 Speaker 3: think that we ultimately will end up continuing to adjust 92 00:03:52,400 --> 00:03:53,040 Speaker 3: interest raights down. 93 00:03:53,080 --> 00:03:54,360 Speaker 4: I want to ask you about the utility of the 94 00:03:54,400 --> 00:03:58,000 Speaker 4: Myrone descent. So we had the FED share asked that 95 00:03:58,040 --> 00:04:01,800 Speaker 4: press conference about the increasing fractured nature of the FED Committee. 96 00:04:01,800 --> 00:04:04,760 Speaker 4: We've talked about quiet descents as well. What are you 97 00:04:04,800 --> 00:04:07,040 Speaker 4: achieving or so what's the reaction been to you dissenting 98 00:04:07,040 --> 00:04:08,840 Speaker 4: as you have been kind of in the conversation among 99 00:04:08,880 --> 00:04:09,800 Speaker 4: the committee. 100 00:04:10,040 --> 00:04:12,920 Speaker 3: Yeah, so, look, I mean there's not really any strategy here. 101 00:04:13,000 --> 00:04:15,400 Speaker 3: I'm just transparent and say what I think and always 102 00:04:15,400 --> 00:04:17,000 Speaker 3: have and that gets me in a lot of trouble. 103 00:04:17,320 --> 00:04:19,680 Speaker 4: And does it or is it a constructive So when 104 00:04:19,680 --> 00:04:21,159 Speaker 4: you descend in the way in which you does is 105 00:04:21,200 --> 00:04:23,279 Speaker 4: it a constructive descent? Do you find that others are 106 00:04:23,480 --> 00:04:26,680 Speaker 4: willing to engage with you and your perspective on inflation? 107 00:04:26,760 --> 00:04:27,200 Speaker 2: For instance. 108 00:04:27,400 --> 00:04:30,280 Speaker 3: Yeah, well, my perspective on inflation is you know, look 109 00:04:30,279 --> 00:04:32,280 Speaker 3: at my first speech, I talked about inflation a little bit, 110 00:04:32,279 --> 00:04:34,560 Speaker 3: but I mostly was focused on neutral. 111 00:04:35,200 --> 00:04:36,320 Speaker 2: My speech last week. 112 00:04:36,160 --> 00:04:38,440 Speaker 3: I really drew out a lot about my outlook for 113 00:04:38,480 --> 00:04:40,760 Speaker 3: inflation that was sort of implicit in the first speech 114 00:04:40,800 --> 00:04:44,760 Speaker 3: and sort of just cursely curse, cursorily treated. 115 00:04:44,600 --> 00:04:45,480 Speaker 2: And I really drew that out. 116 00:04:45,520 --> 00:04:47,880 Speaker 3: So my views and inflation haven't been out there fully 117 00:04:47,880 --> 00:04:49,719 Speaker 3: fleshed out for the committee for so long and now 118 00:04:49,800 --> 00:04:52,200 Speaker 3: running into holiday season. But I have found that are 119 00:04:52,400 --> 00:04:54,320 Speaker 3: that people are constructive, they want to discuss these things, 120 00:04:54,320 --> 00:04:56,479 Speaker 3: and I think that's important. And you know, look, one 121 00:04:56,560 --> 00:05:00,320 Speaker 3: positive benefit of me potentially dissenting like this is that 122 00:05:00,400 --> 00:05:04,080 Speaker 3: it introduces more a wider variety of views. I think 123 00:05:04,080 --> 00:05:06,560 Speaker 3: it's really really important to avoid groupthink. I think if 124 00:05:07,080 --> 00:05:09,400 Speaker 3: you fall into group think, you stop questioning where you 125 00:05:09,400 --> 00:05:11,359 Speaker 3: could be wrong, and then it just becomes much easier 126 00:05:11,400 --> 00:05:13,760 Speaker 3: to be a complacent consensus that is in error. 127 00:05:13,800 --> 00:05:15,400 Speaker 2: I think we've seen that over and over this year. 128 00:05:15,520 --> 00:05:17,120 Speaker 2: For example, on tariffs. 129 00:05:17,240 --> 00:05:20,120 Speaker 1: Let's talk potentially about tariffs. The President is pushing for 130 00:05:20,240 --> 00:05:23,400 Speaker 1: this two thousand dollars tariff dividend the Church of secretary 131 00:05:23,440 --> 00:05:25,880 Speaker 1: is talking about these tax refunds start of twenty twenty six. 132 00:05:26,000 --> 00:05:29,599 Speaker 1: Is there potential that more money in consumers pockets could 133 00:05:29,600 --> 00:05:30,320 Speaker 1: goose inflation? 134 00:05:31,000 --> 00:05:33,960 Speaker 3: Yeah, so there is potential for some of these factors 135 00:05:33,960 --> 00:05:36,760 Speaker 3: to boost economic growth. With respect to sort of tax refunds, 136 00:05:36,760 --> 00:05:39,240 Speaker 3: you know, I think that sorry, with respect to tariff refunds, 137 00:05:39,240 --> 00:05:40,479 Speaker 3: I think we need to sort of wait and see 138 00:05:40,520 --> 00:05:45,120 Speaker 3: what the policy looks like before getting into analyzing its consequences. 139 00:05:45,120 --> 00:05:47,360 Speaker 3: If there does end up being a policy with respect 140 00:05:47,360 --> 00:05:50,680 Speaker 3: to tax refunds that are results of the already legislated 141 00:05:51,240 --> 00:05:53,880 Speaker 3: tax bill, the One Be Beautiful Bill Act from last year, 142 00:05:54,000 --> 00:05:56,440 Speaker 3: those are already baked into the forecast and they will 143 00:05:56,440 --> 00:05:58,680 Speaker 3: provide a little bit of demand stimulus. But there's so 144 00:05:58,760 --> 00:06:01,200 Speaker 3: much other stuff going on as result of policy Ino 145 00:06:01,360 --> 00:06:04,880 Speaker 3: triple b in deregulation, in other things that are going 146 00:06:04,880 --> 00:06:07,040 Speaker 3: on in econ policy that ultimately push out the supply 147 00:06:07,120 --> 00:06:09,320 Speaker 3: side of the economy too. And my view is that 148 00:06:09,360 --> 00:06:11,479 Speaker 3: if you push out the demand side while you're putting 149 00:06:11,480 --> 00:06:13,320 Speaker 3: the brakes in the supply side, you get inflation. 150 00:06:13,600 --> 00:06:14,839 Speaker 2: If you push out supply. 151 00:06:14,520 --> 00:06:16,200 Speaker 3: And demand at the same time, it doesn't really have 152 00:06:16,200 --> 00:06:17,480 Speaker 3: an effect on priceis But do. 153 00:06:17,440 --> 00:06:19,280 Speaker 1: You think it was a mistake that when we had 154 00:06:19,360 --> 00:06:22,120 Speaker 1: under the Biden administration the American Rescue Plan Inflation Reduction 155 00:06:22,200 --> 00:06:24,160 Speaker 1: Act sending out checks to American consumers. 156 00:06:24,440 --> 00:06:25,240 Speaker 2: Was that an error? 157 00:06:25,400 --> 00:06:27,920 Speaker 3: Well, it's not appropriate for you know, for a member 158 00:06:27,920 --> 00:06:28,560 Speaker 3: of the Federal Reserve. 159 00:06:28,640 --> 00:06:30,480 Speaker 2: Do you think it described to there's an error or not? 160 00:06:30,640 --> 00:06:32,320 Speaker 3: But I do think that if you hit if you 161 00:06:32,400 --> 00:06:34,760 Speaker 3: hit the gas on demand while you're hitting the brakes 162 00:06:34,760 --> 00:06:37,080 Speaker 3: on supply at the same time, it will result in 163 00:06:37,120 --> 00:06:37,760 Speaker 3: higher prices. 164 00:06:37,800 --> 00:06:40,599 Speaker 1: That is, that is an economic when two thousand dollars 165 00:06:40,640 --> 00:06:44,320 Speaker 1: checks do a similar reaction as we saw on by 166 00:06:44,360 --> 00:06:46,400 Speaker 1: the other checks during the American Rescue Plan, Well. 167 00:06:46,240 --> 00:06:48,480 Speaker 3: It depends what's happening on the supply. So two things matter. 168 00:06:48,680 --> 00:06:51,000 Speaker 3: One is the state of the demand, state of aggregate 169 00:06:51,000 --> 00:06:54,840 Speaker 3: demand outside of those checks. And if you go back 170 00:06:54,880 --> 00:06:58,480 Speaker 3: several years, the economy was recovering on its own from COVID. Right. 171 00:06:58,600 --> 00:07:01,520 Speaker 3: What COVID was not like the Great the Financial Crisis, 172 00:07:01,520 --> 00:07:05,040 Speaker 3: which had lingering deleveraging effects for a decade plus, which 173 00:07:05,040 --> 00:07:09,400 Speaker 3: meant that demand was persistently depressed. After COVID, you know, 174 00:07:09,440 --> 00:07:12,520 Speaker 3: we started getting vaccines, we started getting at virals, places 175 00:07:12,520 --> 00:07:14,720 Speaker 3: started opening back up, the economy started returning to normal 176 00:07:14,800 --> 00:07:17,200 Speaker 3: on its own, and so demand was growing quite healthily, 177 00:07:17,320 --> 00:07:20,160 Speaker 3: and jobs numbers were beating every month, and so throwing 178 00:07:20,200 --> 00:07:22,920 Speaker 3: more economic support on top of that wound up sort 179 00:07:22,920 --> 00:07:25,880 Speaker 3: of pushing and already expanding demand side to expand even further. 180 00:07:26,280 --> 00:07:28,360 Speaker 3: Right now, you see the unemployment rate is tilting up 181 00:07:28,360 --> 00:07:30,480 Speaker 3: on its own, right, So demand is in a separate 182 00:07:30,560 --> 00:07:32,320 Speaker 3: isn't a very different place than it was in twenty 183 00:07:32,400 --> 00:07:35,360 Speaker 3: twenty one, but so is supply. And I think that 184 00:07:35,400 --> 00:07:37,480 Speaker 3: if you're taking policy steps that are going to push 185 00:07:37,480 --> 00:07:39,720 Speaker 3: out supply, or supply is moving out for reasons other 186 00:07:39,720 --> 00:07:43,240 Speaker 3: than policy, for instance AI, which I find difficult to quantify, 187 00:07:43,320 --> 00:07:45,239 Speaker 3: but a lot of people put a lot of faith 188 00:07:45,240 --> 00:07:47,800 Speaker 3: in if supply is moving out for whatever reasons, it 189 00:07:47,800 --> 00:07:50,840 Speaker 3: can accommodate increasing demand, and so the effect on prices 190 00:07:50,840 --> 00:07:51,760 Speaker 3: could be very different. 191 00:07:52,280 --> 00:07:54,720 Speaker 4: On higher goods inflation, there is a prevailing narrative that 192 00:07:54,720 --> 00:07:56,400 Speaker 4: the terrorist policy has a lot to do with what's 193 00:07:56,400 --> 00:07:58,480 Speaker 4: been pushing that up, and you kind of push back 194 00:07:58,480 --> 00:07:59,720 Speaker 4: against that. You did that in the speech that you 195 00:07:59,800 --> 00:08:03,040 Speaker 4: Live to Columbia as well. At the same time, you 196 00:08:03,040 --> 00:08:05,800 Speaker 4: talk a lot about humility. How much uncertainty there is. 197 00:08:05,800 --> 00:08:07,400 Speaker 4: I think you nodded to Mervin King in that speech 198 00:08:07,440 --> 00:08:08,920 Speaker 4: and what he's written about uncertainty. 199 00:08:09,520 --> 00:08:10,880 Speaker 2: What's it going to take for you? 200 00:08:11,000 --> 00:08:12,520 Speaker 4: Do you feel like you have a grasp of the 201 00:08:12,520 --> 00:08:14,320 Speaker 4: effect of the tariffs policy thus far? Or are you 202 00:08:14,400 --> 00:08:16,080 Speaker 4: still waiting to figure out sort of what that's going 203 00:08:16,120 --> 00:08:17,840 Speaker 4: to mean for the economy broadly? And yes, when it 204 00:08:17,840 --> 00:08:19,040 Speaker 4: comes to goods inflation. 205 00:08:19,360 --> 00:08:21,640 Speaker 3: Yeah, So look in the speech I did discuss how 206 00:08:21,640 --> 00:08:25,080 Speaker 3: there's this consensus has emerged that tariffs are a significant 207 00:08:25,160 --> 00:08:27,760 Speaker 3: driver of inflation in the same way consensus emerged earlier 208 00:08:27,800 --> 00:08:29,400 Speaker 3: in the year the tariffs are going to drive some 209 00:08:29,440 --> 00:08:34,520 Speaker 3: sort of crazy recession, you know that was there. And 210 00:08:34,559 --> 00:08:36,559 Speaker 3: I think that consensus is wrong and and I think 211 00:08:36,559 --> 00:08:37,240 Speaker 3: it's complacent. 212 00:08:37,760 --> 00:08:40,480 Speaker 2: I described Charra factuals. Right. 213 00:08:40,679 --> 00:08:44,079 Speaker 3: If you're describing a result in prices to tariffs, you 214 00:08:44,120 --> 00:08:45,440 Speaker 3: need to say what the world would have been like 215 00:08:45,559 --> 00:08:48,600 Speaker 3: without tariffs. Now, what most people do is they look 216 00:08:48,640 --> 00:08:50,360 Speaker 3: at what we call the pre trends. What were the 217 00:08:50,400 --> 00:08:52,959 Speaker 3: trends of various items before tariffs? 218 00:08:53,040 --> 00:08:53,199 Speaker 2: Right? 219 00:08:53,480 --> 00:08:56,640 Speaker 3: And most people select pre trends from the two decades 220 00:08:56,679 --> 00:08:59,839 Speaker 3: before the pandemic. Right when the world was very very 221 00:09:00,480 --> 00:09:03,439 Speaker 3: I don't think that that's really appropriate. Instead, the counterfactors 222 00:09:03,480 --> 00:09:05,120 Speaker 3: that I want to look at that I describe in 223 00:09:05,480 --> 00:09:08,480 Speaker 3: the speech and I include pictures for them, are two things. 224 00:09:08,800 --> 00:09:12,160 Speaker 3: One what are imported goods imported core goods in the 225 00:09:12,160 --> 00:09:14,800 Speaker 3: PC index doing relative to overall core goods? 226 00:09:15,080 --> 00:09:17,360 Speaker 2: And two what are what's. 227 00:09:17,240 --> 00:09:19,960 Speaker 3: Happening on an international basis? And in both of those cases, 228 00:09:20,320 --> 00:09:22,520 Speaker 3: I don't see anything that would indicate to me that 229 00:09:22,559 --> 00:09:25,920 Speaker 3: tariffs are the driver of core goods inflation. When you 230 00:09:25,960 --> 00:09:29,440 Speaker 3: look at imported goods versus overall core goods, they're inflating 231 00:09:29,440 --> 00:09:32,120 Speaker 3: at similar rates. Importive goods don't stick out. When you 232 00:09:32,120 --> 00:09:35,000 Speaker 3: look at US core goods versus other countries. Again, US 233 00:09:35,040 --> 00:09:36,559 Speaker 3: core goods are in the middle of the pack, and 234 00:09:36,600 --> 00:09:38,600 Speaker 3: there hasn't been a change that would indicate to me 235 00:09:38,640 --> 00:09:40,920 Speaker 3: that there's some sort of very significant tariff shop. So 236 00:09:41,000 --> 00:09:43,960 Speaker 3: I think it's actually quite complacent for people to ascribe 237 00:09:44,000 --> 00:09:46,320 Speaker 3: all this inflation to tariffs. And indeed, if you look 238 00:09:46,360 --> 00:09:49,160 Speaker 3: at CPI, core goods in CPI bottomed out in the 239 00:09:49,160 --> 00:09:51,840 Speaker 3: middle of last year, right seven or eight months before 240 00:09:51,840 --> 00:09:52,800 Speaker 3: tariffs were implemented. 241 00:09:53,080 --> 00:09:55,120 Speaker 1: I just want to get a sense before you leave us, 242 00:09:55,160 --> 00:09:56,840 Speaker 1: how are you thinking about the next meeting, because it 243 00:09:56,840 --> 00:09:59,440 Speaker 1: couldn't potentially be your last. Do you plan on dissenting 244 00:09:59,559 --> 00:10:01,040 Speaker 1: in favor fifty basis point cut? 245 00:10:01,040 --> 00:10:04,360 Speaker 3: Again, Look, I plan on pushing for the policy that 246 00:10:04,400 --> 00:10:06,559 Speaker 3: I think is appropriate at the time. I will say, 247 00:10:06,640 --> 00:10:08,560 Speaker 3: when I got to the FED, we hadn't cut rates 248 00:10:08,600 --> 00:10:11,160 Speaker 3: at all this year, and so it was very important 249 00:10:11,200 --> 00:10:14,000 Speaker 3: for us to move rates down quickly. Since then, we've 250 00:10:14,040 --> 00:10:17,120 Speaker 3: pushed rates down three times, seventy five basis points of 251 00:10:17,120 --> 00:10:19,720 Speaker 3: cuts to the policy rate, so the need for me 252 00:10:19,800 --> 00:10:22,720 Speaker 3: to dissent for fifty becomes a little bit less as 253 00:10:22,760 --> 00:10:24,760 Speaker 3: we come down. I haven't yet decided whether I'm going 254 00:10:24,800 --> 00:10:26,760 Speaker 3: to push for twenty five or fifty next meeting. I 255 00:10:26,760 --> 00:10:29,720 Speaker 3: think it depends on a variety of factors. So I 256 00:10:29,760 --> 00:10:32,320 Speaker 3: could see voting for twenty five, but I do think 257 00:10:32,360 --> 00:10:35,199 Speaker 3: it's important that we continue steadily reducing the policy rate. 258 00:10:35,360 --> 00:10:37,000 Speaker 1: So basically, you'll vote for twenty five with the rest 259 00:10:37,000 --> 00:10:38,680 Speaker 1: of the committee's there. If they're not going to push 260 00:10:38,679 --> 00:10:43,760 Speaker 1: through twenty five, you may alert everyone of your dissatisfaction 261 00:10:43,920 --> 00:10:45,040 Speaker 1: with them by going for fifty. 262 00:10:45,880 --> 00:10:49,160 Speaker 3: Well, No, it depends. I think I want to see 263 00:10:49,200 --> 00:10:51,280 Speaker 3: the data. You know, we're still witting on a lot 264 00:10:51,280 --> 00:10:52,640 Speaker 3: of data because of the shutdown, right, so I want 265 00:10:52,679 --> 00:10:54,400 Speaker 3: to see what the data do to my forecast going 266 00:10:54,440 --> 00:10:57,160 Speaker 3: forward and they and how they change my forecast going forward. 267 00:10:57,200 --> 00:10:58,400 Speaker 3: But the truth is that I think that it was 268 00:10:58,440 --> 00:11:01,560 Speaker 3: really important to vote to sorry to cut in bigger 269 00:11:01,559 --> 00:11:05,439 Speaker 3: clips when policy was very high. As we continue reducing policy, 270 00:11:05,600 --> 00:11:07,559 Speaker 3: I think you sort of get into into territory where 271 00:11:07,600 --> 00:11:10,880 Speaker 3: you can start micromanaging instead of big instead of big cuts. 272 00:11:11,160 --> 00:11:12,839 Speaker 3: And I don't know whether we're here yet or it 273 00:11:12,880 --> 00:11:14,640 Speaker 3: would sort of still take a couple more cuts to 274 00:11:14,679 --> 00:11:16,400 Speaker 3: get there, but at some point you sort of start 275 00:11:16,400 --> 00:11:18,400 Speaker 3: to become okay with sort of steady twenty five business 276 00:11:18,400 --> 00:11:20,000 Speaker 3: point cuts instead of fifty business point cuts. 277 00:11:20,000 --> 00:11:21,480 Speaker 2: Do you think it's going to be your last meeting? 278 00:11:21,600 --> 00:11:23,480 Speaker 1: Has the White House reached out about whether or not 279 00:11:23,520 --> 00:11:24,720 Speaker 1: you were going to stay on at the FED? 280 00:11:25,280 --> 00:11:26,040 Speaker 2: I have no idea. 281 00:11:26,120 --> 00:11:28,080 Speaker 3: I mean, look, you know, if nobody is confirmed in 282 00:11:28,120 --> 00:11:30,680 Speaker 3: my seat by January thirty, first I assume that I 283 00:11:30,679 --> 00:11:32,600 Speaker 3: will stay. I will stay in my seat. You know, 284 00:11:32,720 --> 00:11:36,000 Speaker 3: you can stay in a seat until a successor is confirmed, 285 00:11:36,320 --> 00:11:39,160 Speaker 3: and then beyond beyond that, you know, it all depend 286 00:11:39,200 --> 00:11:42,800 Speaker 3: on who the President ultimately nominates to be the next 287 00:11:42,840 --> 00:11:45,480 Speaker 3: Chairman of the FED, because it'll depend on, you know, 288 00:11:45,480 --> 00:11:47,280 Speaker 3: what seats are available and who the President wants to 289 00:11:47,280 --> 00:11:47,840 Speaker 3: fill them. 290 00:11:47,679 --> 00:11:50,080 Speaker 1: When it comes to the next chairman of the Federal Reserve. 291 00:11:50,200 --> 00:11:52,760 Speaker 1: There are two individuals that you've worked closely with just 292 00:11:52,800 --> 00:11:54,920 Speaker 1: this year alone, Kevin Hassett of course when you were 293 00:11:55,200 --> 00:11:57,600 Speaker 1: at the White House, and also Christopher Waller Government Waller 294 00:11:57,640 --> 00:11:59,360 Speaker 1: of course with you at the FED. Can you just 295 00:11:59,360 --> 00:12:01,800 Speaker 1: give us your valuation of both those individuals, given the 296 00:12:01,800 --> 00:12:05,480 Speaker 1: fact that you have a very good, I imagine relationship 297 00:12:05,480 --> 00:12:06,120 Speaker 1: with both of them. 298 00:12:06,559 --> 00:12:06,760 Speaker 2: Yeah. 299 00:12:06,800 --> 00:12:10,760 Speaker 3: Look, they're both supremely talented economists and extremely effective individuals 300 00:12:10,760 --> 00:12:12,280 Speaker 3: that I have the utmost respect for, and I think 301 00:12:12,280 --> 00:12:15,440 Speaker 3: the counture would be very lucky to have either of them. 302 00:12:15,480 --> 00:12:17,719 Speaker 4: A quick question just about what you've witnessed in terms 303 00:12:17,760 --> 00:12:19,600 Speaker 4: of the chairman's role at the FED. You've been there 304 00:12:19,600 --> 00:12:22,599 Speaker 4: for a few months. Is there anything that's surprised you 305 00:12:22,600 --> 00:12:25,160 Speaker 4: about the way that FED share Powell is able to 306 00:12:25,240 --> 00:12:27,880 Speaker 4: kind of go to get people to galvanize themselves around 307 00:12:27,920 --> 00:12:29,920 Speaker 4: any kind of unanimity, the way that he runs the committee. 308 00:12:29,920 --> 00:12:31,480 Speaker 4: I think we think about the FED shaers this kind 309 00:12:31,480 --> 00:12:33,760 Speaker 4: of principal position. The President kind of makes us think 310 00:12:33,800 --> 00:12:34,960 Speaker 4: that way that this is going to be a highly 311 00:12:35,120 --> 00:12:37,560 Speaker 4: persons have a lot of determinism himself. But the FED 312 00:12:37,600 --> 00:12:39,800 Speaker 4: Chair's responsibility is to try to get everybody on board 313 00:12:39,800 --> 00:12:42,400 Speaker 4: with decisions. What if you wuitness about FED share power's 314 00:12:42,400 --> 00:12:43,599 Speaker 4: ability to do that, what would you say to the 315 00:12:43,640 --> 00:12:46,320 Speaker 4: president down that facet A FED chair has to have 316 00:12:46,400 --> 00:12:47,000 Speaker 4: to be effective. 317 00:12:47,480 --> 00:12:49,959 Speaker 3: Look, you know, I think that there's obviously a lot 318 00:12:49,960 --> 00:12:52,719 Speaker 3: of people on the committee who are not comfortable with 319 00:12:53,400 --> 00:12:53,960 Speaker 3: rate cuts. 320 00:12:54,520 --> 00:12:55,839 Speaker 2: And I think that's the wrong. 321 00:12:56,160 --> 00:12:58,240 Speaker 3: Economic position at the moment, given the data that we 322 00:12:58,280 --> 00:12:59,719 Speaker 3: have available to us, and the forecast that we have 323 00:12:59,760 --> 00:13:02,679 Speaker 3: able to us, and the very well known, very well 324 00:13:02,720 --> 00:13:06,560 Speaker 3: understood upward biases that are that are affecting inflation measurement 325 00:13:06,559 --> 00:13:08,480 Speaker 3: at this moment in time, I think that's the wrong 326 00:13:08,840 --> 00:13:11,640 Speaker 3: the wrong view, no question about it. Nevertheless, I think 327 00:13:11,679 --> 00:13:13,640 Speaker 3: you have to give Chairman Powell, uh, you know, a 328 00:13:13,720 --> 00:13:16,760 Speaker 3: credit for having wrangled uh, you know, wrangled three cuts 329 00:13:16,760 --> 00:13:19,440 Speaker 3: out of these guys in succession. And and it's a 330 00:13:19,480 --> 00:13:21,640 Speaker 3: it's a it's a it's a it's a cat herding task. 331 00:13:22,080 --> 00:13:22,240 Speaker 2: Uh. 332 00:13:22,280 --> 00:13:23,920 Speaker 3: And you know, and I think we have to. You know, 333 00:13:23,920 --> 00:13:25,400 Speaker 3: we got to give a little credit for that. 334 00:13:25,960 --> 00:13:27,640 Speaker 2: Well, it definitely is a cat herding task. 335 00:13:27,679 --> 00:13:29,920 Speaker 1: We look forward to to the next meeting and see 336 00:13:29,960 --> 00:13:32,440 Speaker 1: where you come up, whether fifty or twenty five basis points. 337 00:13:32,480 --> 00:13:34,040 Speaker 1: Governor Stephen Myron, thank you so much for your time 338 00:13:34,080 --> 00:13:34,439 Speaker 1: this morning.