Speaker 1: With us around the type on places side. The film
Speaker 1: of fed Vice chat which of cloud is with us?
Speaker 1: Still with Us? Is about Michael Jpmulgan Acid Management.
Speaker 2: Rich.
Speaker 1: It's good to see you, sir. Let's start with you.
Speaker 1: You listen to Mike. You saw the changes in the statement.
Speaker 1: What do you make of what we just had?
Speaker 3: Well, I'm a bit surprised, actually, I mean not with
Speaker 3: the adjectives. They needed to change some adjectives up, but
Speaker 3: I was a bit surprised about the reference to the
Speaker 3: attuned and attentive to the balanced outlook. I mean, that's
Speaker 3: certainly correct. The chair has been making that point, but
Speaker 3: I think it is relevant that they included it in
Speaker 3: the statement. He will, certainly, I think, reinforce it in
Speaker 3: the press conference, and I think I do think it
Speaker 3: does tee up Jackson Hole. There'll be some more information
Speaker 3: before then.
Speaker 2: I look at it, and this show is the best
Speaker 2: one we've ever done. We've got Dudley with his important
Speaker 2: Bloomberg opinion piece a couple number of days ago, and
Speaker 2: I want to go to you on what you own,
Speaker 2: which is the high ground on the x anty X
Speaker 2: post debate. You've got the Economist magazine article you did
Speaker 2: a year or whatever ago. You got your January twenty
Speaker 2: twenty two context and consequence of speech on an ex
Speaker 2: anti aspirational FED, I don't hear that here they're waiting.
Speaker 2: They're waiting, They're waiting, they are waiting.
Speaker 3: I think they are getting greater confidence. But I think
Speaker 3: the key point not to toot my own horn is
Speaker 3: my view all on It's okay. I think I've said
Speaker 3: so on this show is that the pal FED really
Speaker 3: the goal is to get inflation to two points something
Speaker 3: and then they would start thinking about the next step,
Speaker 3: which would be easy, not running an easy policy, but
Speaker 3: removing restrictions. So I do think this is what we're seeing,
Speaker 3: and if we do get the cut in Septembers, I
Speaker 3: think we and markets expect it will be because they
Speaker 3: expect inflation x antes to continue to fall.
Speaker 2: But are we anywhere near that? I'm sorry, this is
Speaker 2: an ex post FED. Going back to Arthur Burns, there
Speaker 2: is data dependent as I've ever seen.
Speaker 3: Yeah, they are data dependent, but I think that they
Speaker 3: attenuated and focused on the statement today emphasized both sides
Speaker 3: of the mandate. So I do think they're looking at
Speaker 3: just the labor market as well as the inflation data.
Speaker 4: Well, what's your take on this? It seems like it's
Speaker 4: less dubbish, a little bit more balanced than you initially thought.
Speaker 4: Do you think this just is trying to move as
Speaker 4: incrementally as possible.
Speaker 5: I think they preserve full optionality heading into Jackson Hall.
Speaker 5: I also think that central bankers are mindful of what
Speaker 5: happened to the ECB earlier this year, where you could
Speaker 5: have made the same argument, if you're going to go
Speaker 5: next month, why not go this month? And then of
Speaker 5: course you saw what happened. So I don't see too
Speaker 5: much different than what we expected, other than they just
Speaker 5: decided to maintain the full optionality. We'll see what happens
Speaker 5: as we roll into September. We're still very much expecting
Speaker 5: twenty five basis points in September.
Speaker 1: No, doctor if renmac just writes in publishes with language
Speaker 1: like this, it means the Fed will have to make
Speaker 1: a more pronounced shift in language in September. I'm surprised
Speaker 1: stocks are holding up well on this statement. Perhaps equities
Speaker 1: are looking ahead to the news conference. The news conference
Speaker 1: starts in about twenty four minutes time. It goes on
Speaker 1: to say the FED is waiting for additional data. Can
Speaker 1: they even articulate why inflation might reaccelerate from Hick pick
Speaker 1: up on that question, Bob, can you articulate the risk
Speaker 1: surround inflation? Why might it reaccelerate from here?
Speaker 5: Corporate profitability still looks great. We talked about S and
Speaker 5: P five hundred earnings. They're coming in ahead of expectations.
Speaker 5: You look at the guidance companies are giving you. They're
Speaker 5: up twelve percent next quarter. So we're not in a recession.
Speaker 5: We're slowing down in some parts of it. We'll see.
Speaker 5: You know, I can't find really the argument what's going
Speaker 5: to cause inflation to reaccelerate, to be honest, Well, Rich,
Speaker 5: we were.
Speaker 4: Talking about how this was definitely going to be unanimous,
Speaker 4: and I wonder how much of wrangling of cats there
Speaker 4: is in the room and whether this is basically a
Speaker 4: representation of that that there's some members who believe that
Speaker 4: inflation has been killed, it is nowhere in sight that
Speaker 4: labor is important. And then you have others who say, well,
Speaker 4: you know, wait for the year over year, cops. Is
Speaker 4: that kind of what we're seeing here?
Speaker 3: I think it could be an element. You know, we've
Speaker 3: had some members of the committee, and I know most
Speaker 3: of these folks, but it's different committee than the one
Speaker 3: I was on, and many of them do emphasize both
Speaker 3: sides of the dual mandate, so I'm sure that reflects
Speaker 3: a number of folks views. I do think though, this
Speaker 3: is a committee that certainly got burned earlier in this
Speaker 3: year because the inflation data went the wrong way into
Speaker 3: their credit. They became very data dependent, as Tom indicated,
Speaker 3: I think that they put it this way. I think
Speaker 3: they think they're going to go in September. There is
Speaker 3: a range of data where they wouldn't, but I think
Speaker 3: it's a pretty small range, and I think that's really
Speaker 3: the balance of trying to strike. And I think we'll
Speaker 3: hear that in the press conference.
Speaker 4: We were speaking earlier with James Bullard formally Saint Louis
Speaker 4: FED and he was talking about how he always raised
Speaker 4: the question at meetings that if you wanted to cut rates,
Speaker 4: most certainly at the next meeting, why not cut him now.
Speaker 4: Bob was sort of discussing that earlier, and it sets
Speaker 4: up the sort of difficult period of time where every
Speaker 4: data point could potentially upset the apple cart if it
Speaker 4: doesn't comply. Do you think that they are in that
Speaker 4: zone right now.
Speaker 3: I don't really. I mean, I've certainly during my time
Speaker 3: on the committee we found ourselves there a couple of times,
Speaker 3: so it can happen. I think the data we have gotten,
Speaker 3: you know, the Chair did a lot of communication before blackout,
Speaker 3: and the data since then has reinforced that view. So
Speaker 3: I think there's a pretty wide range of data where
Speaker 3: they'll feel comfortable going in September. So I don't think
Speaker 3: they're in that danger zone.
Speaker 1: Can you confirm that Jim actually said those things to
Speaker 1: the FMC mas.
Speaker 3: Well, of course I would never reveal what was said
Speaker 3: in the FMC ME except what I say, all the
Speaker 3: brilliant things I said
Speaker 1: So alongside form of FET Vice chair Rich Clouder,