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Speaker 1: Ye, Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keene

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Speaker 1: with David Gura. Daily we bring you insight from the

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Speaker 1: best of economics, finance, investment, and international relations. Find Bloomberg

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Speaker 1: Surveillance on Apple Podcasts, SoundCloud, Bloomberg dot Com, and of course,

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Speaker 1: on the Bloomberg Jason Ferman, as I mentioned with us

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Speaker 1: now with Tom in our Bloomberg nighty nine one Studios,

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Speaker 1: former Chairman of the White House Council of Economic Advisors,

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Speaker 1: Professor the Practice of Economic Policy at the Harvard Kennedy School,

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Speaker 1: and Jason, let me start with these comments that we

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Speaker 1: just heard from Michelle Barnier a few moments ago, standing

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Speaker 1: alongside David Davis said. He said, we've worked constructively, we

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Speaker 1: clarified certain points without making massive steps forward. Here, what

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Speaker 1: do you make of of the latest iteration of these

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Speaker 1: Brexit talks? Here, I guess expressing some optimism that we

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Speaker 1: might have something closer to a dealer progress toward a

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Speaker 1: deal in two months at a time. How are you

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Speaker 1: watching all of this unfold in Brussels. I mean, this

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Speaker 1: is gonna be the headline for the next year and

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Speaker 1: a half. No progress, They maybe we're going to talk again,

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Speaker 1: and then at the very end they'll get serious. That's

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Speaker 1: how that's how these things work. It's worth paying attention

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Speaker 1: to some in the meantime. But you know what's going

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Speaker 1: to take to succeed here is for the UK to

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Speaker 1: become realistic. They went into this wildly unrealistic about their leverage,

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Speaker 1: wildly unrealistic about what they could accomplish. They sold to

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Speaker 1: their voters a package of things, um that wasn't possible.

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Speaker 1: And with each step of this, I think there has

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Speaker 1: been some increasing realization by the UK about some of

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Speaker 1: the constraints they face, some of the leverage they have,

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Speaker 1: and and and that's what's going to be needed to

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Speaker 1: get a deal here. Do you see the same newly

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Speaker 1: strong or newly strong seeming at Europe that I see

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Speaker 1: having talked to some European commissioners, there's there's a sense

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Speaker 1: that I get that there's more cohesion and and more

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Speaker 1: europositivity I think than we've seen in some time. Yeah,

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Speaker 1: you have the economy looking up throughout Europe. You have

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Speaker 1: had a couple elections where you dodged bullets and no

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Speaker 1: major you know, banking or some other crisis that was

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Speaker 1: hanging over the continent for about five years up until

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Speaker 1: a few years ago. So you know, I think there's

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Speaker 1: still big challenges. All of those challenges are still there.

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Speaker 1: I think people like President Macraw, I'm really gonna need

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Speaker 1: to deliver for the macro economy of France, which is

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Speaker 1: not going to be um an easy task. But right

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Speaker 1: now it feels the best it's felt in years. For

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Speaker 1: for years, Margaret Thatcher said, expect the unexpected, and Jason,

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Speaker 1: we're living at this morning. For the those of you

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Speaker 1: who were up watching the Yankees and not paying attention

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Speaker 1: to tax reform, is something exciting on it? No I did.

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Speaker 1: I didn't. I had it on the whole time, but

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Speaker 1: I had to the surveillance slumber, but I didn't notice

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Speaker 1: through it and loved what I saw. That was just really,

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Speaker 1: really wonderful. Mr Francona will look great in a red

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Speaker 1: sextion reform again. In Good Morning Bloomberg one of six

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Speaker 1: one FM in Boston, Jason Overnight, Sam Fleming at the

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Speaker 1: Ft and Bloomberg's economic team as well. McK mulvaaney goes

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Speaker 1: after the I m f H. Really, I thought quite

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Speaker 1: harshly on two things, tax reform and then how it

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Speaker 1: links in the deficit management and debt management, which is

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Speaker 1: more important for the I m F to analyze tax reform,

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Speaker 1: or is it's really back where we were, which is

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Speaker 1: about growing deficits. Right? First of all, you know there's

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Speaker 1: two different issues here. One is does the I m

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Speaker 1: F have the right to comment on the US tour

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Speaker 1: gas par say? Absolutely absolutely, whether you agree with them

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Speaker 1: or not, they absolutely have like a legislat they do.

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Speaker 1: They do articles article four countries in the world. They

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Speaker 1: used to do it with me. They would come in,

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Speaker 1: they talk, they'd press us. The second question is is

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Speaker 1: the I m F right in this debate? Um? I

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Speaker 1: think very much. But this is critical. You just you've

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Speaker 1: been in the chair in the office and a bunch

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Speaker 1: of smart PhDs from the IMF come in and do

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Speaker 1: they grill you? I mean, what's the meaning they They

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Speaker 1: asked tough questions on the entire range of issues. They

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Speaker 1: do fiscal, they do housing, they do financial, they talk

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Speaker 1: about you know, they'll talk about poverty, not conna mince words.

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Speaker 1: This is too important, folks. Right now. Kevin Hassett is

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Speaker 1: a pen PhD. He's completely qualified to deal with anyone

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Speaker 1: across the range of our political economics. Do you have

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Speaker 1: confidence in others in the Trump administration can keep up

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Speaker 1: with the PhDs from the i m F. You know,

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Speaker 1: the notable thing about what the I m F said

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Speaker 1: about the administration is it's consistent with what the administration's

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Speaker 1: budget itself set. The administration a couple of months ago

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Speaker 1: put out a budget in which tax reform was not

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Speaker 1: only revenue neutral, but OMB Director Mulveney testified that that

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Speaker 1: revenue neutrality was without assuming any economic impacts of the

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Speaker 1: tax cut under so called conventional or dynamic scoring. So

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Speaker 1: the im OFF was simply reasserting what the Trump administration

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Speaker 1: itself UM had claimed in their budget. So, you know,

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Speaker 1: in terms of their economic officials, I don't know when

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Speaker 1: I think there's a certain interest in not understanding these issues.

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Speaker 1: And when you have an interest in not understanding something,

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Speaker 1: it's it's very hard to teach it to someone. But

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Speaker 1: I always loved about the annual meetings as DC becomes

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Speaker 1: more fashionable, at least surrounded Botuturing the course of these meetings,

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Speaker 1: you have all these internationally economics professionals in town. James,

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Speaker 1: let me ask you about the theme of this year's

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Speaker 1: meetings of course, in the past it's been Greece, or

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Speaker 1: it's been the financial crisis. Is the is the theme

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Speaker 1: the I m from the World Bank itself? Is it multilateralism?

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Speaker 1: Is this an introspective conference this year? Look, first of all,

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Speaker 1: the good news is the theme isn't the global economy

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Speaker 1: is much worse than we thought it was. So we're

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Speaker 1: downgrading our forecast, which was the main theme of the

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Speaker 1: meetings um for the for the last many years. And yeah,

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Speaker 1: I think that does give us a little bit of

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Speaker 1: a position to introspect and think about what a rules

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Speaker 1: based multilateral system does, ways it can be improved. Heart

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Speaker 1: of the matter for all of our listeners worldwide is

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Speaker 1: a belief. It's an ancient belief. Taxes are bad. If

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Speaker 1: you cut taxes, that's good, and gross will improve. I

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Speaker 1: mean Glenn Hubbard was on the other day with an

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Speaker 1: amendment of supply side economics towards it, and he was

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Speaker 1: very responsible, frankly in his comments. Dr Furman, that's not

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Speaker 1: in vitar gas Bars textbooks. That wasn't in your textbooks

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Speaker 1: at Harvard. Where did this thought come from of Trump

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Speaker 1: tax reform policy? If it's not in the textbooks, where

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Speaker 1: did it come from the only way to cut taxes

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Speaker 1: is to cut spending. If you cut taxes without cutting spending,

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Speaker 1: you're just shifting the taxes to the future. You're not

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Speaker 1: actually cutting taxes in any meaningful sense. If this administration

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Speaker 1: wanted to put forward a serious plan to cut entitlements

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Speaker 1: and to cut taxes, I think there would be a

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Speaker 1: set of values issues with that. I might take issue

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Speaker 1: with that, but not on terms of economic growth. But

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Speaker 1: in terms of economic growth, this is an attack to

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Speaker 1: I'm sorry to interrupt here, but this is just absolutely crucial.

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Speaker 1: If Douglas holtz Ecan was sitting here studying at Princeton

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Speaker 1: under Bernanke, the two of you, Ferman and hold so

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Speaker 1: you can have a lot of commonality and a lot

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Speaker 1: of differences in political economics, but both of you would

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Speaker 1: agree that we are going to see a deficit expansion

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Speaker 1: under these various proposals, correct, GDP. Absolutely. I mean I

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Speaker 1: could have a heated argument as to whether tax cuts

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Speaker 1: pay for ten of themselves, of themselves of themselves, or

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Speaker 1: maybe even hurt the economy so much that they cost

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Speaker 1: more than the headline cost. I don't know any serious

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Speaker 1: economist that would put a number higher than thirty percent

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Speaker 1: on the offset for tax cuts, and that means instead

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Speaker 1: of adding one point five trillion to the debt, you're

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Speaker 1: adding one trillion to the debt. Well, either one of

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Speaker 1: those numbers is you know, bad and something we can

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Speaker 1: on afford in the long run. Apparently our surging stock

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Speaker 1: market is paying for everything according to the present. Last

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Speaker 1: nightly coming off the dead, Well, let me ask you

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Speaker 1: here lastly, just about trade, Jason, is that these conversations continue,

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Speaker 1: the fourth round of NA have to renegotiation at talks continue,

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Speaker 1: How worried are you that we're going to see a

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Speaker 1: termination of that deal. I'm worried, and you know it

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Speaker 1: just I don't think it's something that most of the

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Speaker 1: people in the administration want, but there's one particular person

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Speaker 1: who might want it, and he has a certain amount

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Speaker 1: of influence in his own administration. And you know, some

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Speaker 1: of these ideas, like it automatically sunsets every five years,

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Speaker 1: it's almost tents amount to ending it. It adds a

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Speaker 1: huge amount of uncertainty for businesses. I think it might

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Speaker 1: even be designed to add that uncertainty for businesses. And

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Speaker 1: and that's precisely the opposite of what you know the

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Speaker 1: benefits that have to accomplished. I hear the chopper, Tom,

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Speaker 1: you gotta go. Just landed Jason Furman, thank you so much.

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Speaker 1: A former chairman of the president Council of Economic Advisors.

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Speaker 1: I'm gonna say this very quickly. I remember when you

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Speaker 1: has took over for Ted Williams, and he was boy,

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Speaker 1: those were big shoes to fill. Nobody his filled big

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Speaker 1: shoes in sports history like d D. Gregorious of the

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Speaker 1: New York Yankees. He took over for Jeter, and boy

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Speaker 1: did he get it done. Last night worldwide, this is Bloomberg.

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Speaker 1: David Dura here in New York. Tom keenan Washington to

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Speaker 1: the IMF World Bank Annual Meeting, is going to reiterate

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Speaker 1: what Karen just mentioned. JP Morgan reporting third quarter Ernie's

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Speaker 1: just a few moments ago. The company down a quarter

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Speaker 1: percent in pre market trading. Third quarter adjusted revenue beat

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Speaker 1: the highest estimate we saw beat when it came to

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Speaker 1: investment banking as well, came in at one point seven

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Speaker 1: one billion versus the estmate of one point six five billion.

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Speaker 1: Fixed sales and training revenue slightly lower than expected three

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Speaker 1: point one six billion the estimate three point one eight

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Speaker 1: billion dollars down about twenty seven percent, but in line

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Speaker 1: with what to many analysts expected. And Ken Leon joins us.

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Speaker 1: Now he's a bank analyst at c f are A.

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Speaker 1: He's on our phone line. I should say, we expect

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Speaker 1: earning from city here in just about forty minutes time

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Speaker 1: as well. Let's look at let's look at Thick in particular. Here,

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Speaker 1: is this still just a low volatility story. You had

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Speaker 1: really tough comparisons with a strong quarter last year, the

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Speaker 1: third quarter also seasonally the SoftICE. We just didn't have

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Speaker 1: enough market volatility and customer participation. Um So I suspect that, uh,

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Speaker 1: we'll see improvement in the fourth quarter. And then you

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Speaker 1: know what's on the on deck circle is if you

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Speaker 1: have a improving interest rate in environment for banks, that's

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Speaker 1: also going to help Fixtent come trading. I think the

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Speaker 1: last time we spoke, we were talking about how this

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Speaker 1: bank was doing getting credit losses in check. Now another

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Speaker 1: quarter and how does it look. How how's this bank doing? Yeah,

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Speaker 1: you know, that's a great question, and it really ties

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Speaker 1: into loan quality, making sure that there's adequate reserves, increasing

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Speaker 1: the lending standards both on the commercial side but also

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Speaker 1: consumer for areas like mortgage financing as well as automotive

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Speaker 1: loans as well. So I think JP Morgan, especially more

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Speaker 1: than its peers, has a real strong eye on credit quality,

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Speaker 1: a strong land credit quality. I know something you're looking

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Speaker 1: at closely. Our efficiency ratios tell us a bit about

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Speaker 1: what they tell you about the health of a bank.

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Speaker 1: And now that we've got earnings from from JP Morgan,

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Speaker 1: let's focus on that bank in particularly when it comes

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Speaker 1: to efficiency. When it comes to the efficiency ratio, how's

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Speaker 1: JP Morgan doing? Sure? And for listeners, what that means

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Speaker 1: is for every dollar that you spend in the business,

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Speaker 1: what you can get in return. So it's a ratio

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Speaker 1: and those ratios, the efficiency ratios are important, which is

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Speaker 1: close control because that's needed really to meet beat earnings,

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Speaker 1: even a head for fourth quarters. So for JP Morgan um,

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Speaker 1: looking back over the last two years, it has done

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Speaker 1: better than its peers. We've seen that ratio come down

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Speaker 1: from the upper fifty percent to midcent um. They at

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Speaker 1: a conference last month, the CFO talked about fifty it's

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Speaker 1: kind of an inverse ratio, so the more it goes down,

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Speaker 1: the better it is. But they didn't give that as

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Speaker 1: official guidance. So what the biggest areas for efficiency is

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Speaker 1: consolidating bank branches, but it's also I T processing and

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Speaker 1: other areas like that, even shifting to the cloud from

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Speaker 1: computer hardware. What do we know about the regulatory landscape

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Speaker 1: at this point? This has been a big risk factor,

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Speaker 1: a big point of uncertainty here as we look at

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Speaker 1: these bank banks, as we've looked at them since the

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Speaker 1: election of last year now almost a year ago, do

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Speaker 1: we have more confidence in what the regulatory landscape is

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Speaker 1: going to look like and how that's going to affect

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Speaker 1: these banks. Yes, So with a new bank supervisor at

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Speaker 1: the Federal Reserve, we see more pragmatic regulation and that

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Speaker 1: may open up opportunities to refine the rules as relates

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Speaker 1: to the vocal rule, and that could help fix income trading.

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Speaker 1: Also having better coordination among the government agencies. Even using

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Speaker 1: the same law dot frank, there's different interpretations. So I

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Speaker 1: think what JP Morgan wants is just fair play. Can

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Speaker 1: let me ask you lastly here I mentioned we're gonna

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Speaker 1: get City earnings at eight o'clock Wall Street time. What

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Speaker 1: are you gonna be looking for in that report from

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Speaker 1: from city? There's really two things. One on the growth

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Speaker 1: side is how they're doing outside the US, particularly in

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Speaker 1: their lead franchise in Mexico and emerging markets. UH. Second

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Speaker 1: would be related to credit cards, not only the growth,

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Speaker 1: but also the credit quality. That's a strong franchise for

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Speaker 1: City as credit cards can appreciate the time this morning,

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Speaker 1: and that's Ken Leon, he's a bank analyst at c

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Speaker 1: FR giving us some commentary on JP Morgan with reported

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Speaker 1: earnings just a few minutes ago. As I mentioned, City

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Speaker 1: coming out a little bit later this morning. City certainly

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Speaker 1: a bank with the more global flavor than JP Moore Gonna.

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Speaker 1: I just want to draw your attention to some commentary

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Speaker 1: from Jamie Diamond, the CEO of JP Morgan. He said,

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Speaker 1: the global economy continues to do well. In the U S.

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Speaker 1: Consumer remains healthy with solid wage growth. He's commenting in

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Speaker 1: the third quarter earning statement. As I mentioned, we just

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Speaker 1: got a few moments ago. We'll have coverage of the

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Speaker 1: City earnings here coming up on Bloomberg Surveillance. David Gurray

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Speaker 1: in New York, Tom Keen in Washington, d C. Today.

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Speaker 1: Earning season getting underway in Earnest today. David Gurray here

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Speaker 1: in New York, Tom Keene, the headquarters of the International

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Speaker 1: Monetary Fund in Washington, d C. There for the annual

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Speaker 1: meetings of the i m F and the World Bank.

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Speaker 1: And Tom I keep returning to this interview that the

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Speaker 1: Financial Times did with the Wolfgang Scheibler, who is the

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Speaker 1: outgoing finance minister from Germany. I think he's gonna be

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Speaker 1: in Washington as well. But he talked about new bubbles

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Speaker 1: emerging in the European economy in particular. I know that

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Speaker 1: our next guest at Claus regular someone well equipped to

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Speaker 1: talk about what he's seeing when it comes to bubbles,

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Speaker 1: if any in Europe right now. Absolutely, David, no question

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Speaker 1: about that. And always one of our favorite moments here

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Speaker 1: at the meetings of the International Monetary Fund, a conversation

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Speaker 1: with Klaus Raggling. Many in America don't know he knew

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Speaker 1: who he is, but you know the alphabet soup that

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Speaker 1: he represents, and that would be the e s M

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Speaker 1: and the e F s F. People say this a

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Speaker 1: cocktail parties. They go, well, I was reading a brief

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Speaker 1: from the e F s F and they really don't

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Speaker 1: even know what they're talking about. What is the European

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Speaker 1: stability mechanism and what is the organization, the European Financial

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Speaker 1: Stability Facility? What are these two groups? All these two

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Speaker 1: institutions serves the same purpose. The e F s F

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Speaker 1: complicated name, was set up early in the middle of

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Speaker 1: the crisis in two thousand ten as a temporary institution,

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Speaker 1: and then two years later we created the e s

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Speaker 1: M European Stability Mechanism as a permanent international institution. So

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Speaker 1: the two have the same purpose. To help countries that

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Speaker 1: loose market access to get money from public funds. This

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Speaker 1: is something the Internationally Fund has been doing around the

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Speaker 1: world for more than fifty years. We now have our

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Speaker 1: own institution in Europe that follows the same approach, namely,

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Speaker 1: we provide money to a government that has problems getting

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Speaker 1: the money in the market, but only against conditionality. Conditionality

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Speaker 1: means the country has to agree on a reform program

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Speaker 1: with us, with the European Commission the ecb UM and

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Speaker 1: they only get money when they really implement those reforms

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Speaker 1: and we check that on a regular basis. So that's

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Speaker 1: like the IMF very nicely explained this is a distinctive

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Speaker 1: year and that it seems to be all clear. We

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Speaker 1: have an optimistic I M F and the global economic tone.

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Speaker 1: Interview after interview tells us of a better Europe. Can

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Speaker 1: you say all clear for Europe right now? Yes? And

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Speaker 1: I'm not surprised because I have been a bit more

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Speaker 1: optimistic than you have, than some commentators UM and even

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Speaker 1: the IMF for the last two years. And I was

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Speaker 1: optimistic because part of my job is to talk with

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Speaker 1: investors around the world, because we issue bonds to to

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Speaker 1: finance our lending operations two countries. So I've been hearing

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Speaker 1: that for some time that Europe is now considered a

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Speaker 1: safe haven, a really safe place to invest. There were

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Speaker 1: concerns about a year ago about political developments Brexit, which

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Speaker 1: I think is costly for the UK, but the implications

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Speaker 1: for the rest of Europe are limited. That's clear right now.

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Speaker 1: There were elections where some people were worried that that

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Speaker 1: populous people might take over in France and Netherlands. That

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Speaker 1: did not happen. So on the political side, it's much better,

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Speaker 1: and the economic numbers UM look very good right now.

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Speaker 1: Is the is the mix between politics, corporations and the

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Speaker 1: people the same now was two thousand six in Europe?

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Speaker 1: Or is it as we saw within the German election,

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Speaker 1: is there a new Europe. Is there a generational shift

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Speaker 1: to a different cocktail of society within Europe? There is

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Speaker 1: a shift, I think not only in Europe. I think

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Speaker 1: we see this backlash against globalization around the world, certainly

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Speaker 1: in the advanced economies, in the US, UK, UM, continental Europe,

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Speaker 1: also countries outside the EU. In Switzerland, we have seen

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Speaker 1: big populist movements for some time. So I think this

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Speaker 1: is a more global issue. It's not a European we

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Speaker 1: have to pay attention to that. I think the population

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Speaker 1: today is more aware that they're losers from globalization, from

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Speaker 1: cross border cooperation. It's good for the country as a whole,

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Speaker 1: but economists have known that forever their winners and losers.

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Speaker 1: On average, their more winners than losers. But I think

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Speaker 1: we have to do maybe a bit more for those

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Speaker 1: who lose or potentially lose. And here Europe has a

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Speaker 1: big advantage. We have our very developed welfare and social system,

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Speaker 1: which was often criticized in the past, and we had

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Speaker 1: to streamline and make a more effective but I think

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Speaker 1: it is the right answer for these new problems that

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Speaker 1: are becoming more prominent. Also, income distribution in Europe is

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Speaker 1: the best in the world. UM much better than US

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Speaker 1: or China. President Trump would say it's the worst in

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Speaker 1: the world. He would want to see an entrepreneurial lackey

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Speaker 1: in philosophy of America, every man for himself. And because

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Speaker 1: Germany has pushed against that for thirty or forty years. Yeah, Well,

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Speaker 1: if one looks that's a number, whether genie coefficient or

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Speaker 1: economists have different ways to look at income distribution UM,

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Speaker 1: it looks a lot, a lot better according to all statistics,

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Speaker 1: a lot better in Europe than in the US, and

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Speaker 1: in the US it has been deteriorating further the last

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Speaker 1: ten years. So I think this is something that I'm

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Speaker 1: not in charge of UM. It's a difficult issue. I

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Speaker 1: I hope the government can see that. But in Europe

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Speaker 1: with that's another strength we have at the moment. I

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Speaker 1: want to go to your economics in your steam career

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Speaker 1: out of the University of Hamburg and all that you've

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Speaker 1: done at the i m F and now for the

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Speaker 1: people of Europe and of Germany, and that is the

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Speaker 1: person zoom glide pass of quantitative tightening. At some point

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Speaker 1: the US, at some point Europe with Mr Dragg and

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Speaker 1: other societies have to turn the punch bowl off the

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Speaker 1: interest rate punch bowl and the balance sheet punch bowl.

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Speaker 1: Do you have a confidence that institutions can do this smoothly? Yes,

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Speaker 1: of course we all know that monetary policy is implementing

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Speaker 1: non conventional policies in response to the crisis, which was

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Speaker 1: absolutely necessary in response to the crisis. Um And it

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Speaker 1: because it's non unconventional, it has to be reversed. At

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Speaker 1: one point. Europe and its cignlical developments as a bit

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Speaker 1: behind the US. So I think we learned how the

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Speaker 1: Federal Reserve is doing it very cautiously. Communication is important,

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Speaker 1: um And I think the ECB will look at that

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Speaker 1: very carefully. This is the first time I've ever asked

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Speaker 1: this question. Class regular with this folks, wonderful they haven't

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Speaker 1: beginner coverage here in the phases of the International Monetary

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Speaker 1: Fund in their atrium. It's about an eighth story atrium.

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Speaker 1: It sort of looks like an outtake from Star Wars.

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Speaker 1: I don't know remember which movie, but there it is

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Speaker 1: a close the the I've never asked this question. Can

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Speaker 1: there be such an optimism that the European unemployment rate

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Speaker 1: maybe it doesn't get to the American rate because there's

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Speaker 1: different ways to calculate, but can it come down under

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Speaker 1: double digit and really get down towards what we see

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Speaker 1: in the United Kingdom and in the United States, Well,

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Speaker 1: it is already today below double digit It's around nine

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Speaker 1: point one percent, So it has been falling now already

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Speaker 1: for three years. Um, it's still done a lot higher

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Speaker 1: than the US. I don't think it will come down

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Speaker 1: to the US level. You're right, there's some methodological issues here.

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Speaker 1: But when we talk about the labor market and abroad US,

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Speaker 1: and there's one interesting observation that speaks in in fable

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Speaker 1: of Europe. Despite the fact that the unemployment is significantly higher,

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Speaker 1: the employment rate, which means the number of people of

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Speaker 1: working at you who have a job, has increased steadily.

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Speaker 1: In Europe's that lost twenty years. It's higher now than

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Speaker 1: the year two thousand, which means a higher percentage of

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Speaker 1: the people have a job than the yet two thousand. Well,

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Speaker 1: in the US, despite the lower unemployment rates, that employment

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Speaker 1: rate is lower. Today's I've got to finish off, and

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Speaker 1: you're gonna go. I really don't want to come in

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Speaker 1: on the Trump administration, and I certainly don't want to

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Speaker 1: come in on the uproar in the last twelve hours

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Speaker 1: of the I m F and tax reform, what they've

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Speaker 1: said about a responsible policy of tax reform and growing deficits.

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Speaker 1: But I must ask you that within your studies, have

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Speaker 1: you ever seen a certitude that lower taxes ultimately lead

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Speaker 1: to higher economic growth. We has to Olivier Blanchard this

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Speaker 1: a few days ago. He was heated that it's not

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Speaker 1: within the literature. Do you see within the Germanic literature

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Speaker 1: you studied that you could spur growth through abrupt tax

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Speaker 1: reform lower UM. I think that's a difficult question because

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Speaker 1: it's not only the level of TEX of individual taxes,

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Speaker 1: but it's also the composition of the entire TEX structure.

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Speaker 1: And one we know economists know that UM a certain

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Speaker 1: revenue structure can be more gross frendly or less gross friendly,

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Speaker 1: and therefore also lower taxes can be more gross friendies

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Speaker 1: and higher texas. But I think it very much depends

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Speaker 1: on the composition which tax you look at well. The

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Speaker 1: ambiguity of the economics that we see here class regularly,

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Speaker 1: thank you so much. With the E s M. Today

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Speaker 1: at the International Monetary Fund meetings, David will be really

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Speaker 1: interesting to speak to Madame le Guard over this uproar

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Speaker 1: on tax reform and lecturing the Trump administration. A couple

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Speaker 1: of weeks back, I had a great fortune, great opportunity

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Speaker 1: to sit down with the president of the country of Columbia, woman,

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Speaker 1: while Santos was here in New York for the You

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Speaker 1: and General Assembly meetings in the front and center for

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Speaker 1: that country. Then, still is the situation in Venezuela, and

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Speaker 1: something that the President pointed out to meet Tomas. It's

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Speaker 1: a country Venezuela is that has the largest reserves of

431
00:24:14,800 --> 00:24:17,399
Speaker 1: oil in the whole world, he said, quote the Venezuelan

432
00:24:17,440 --> 00:24:20,119
Speaker 1: situation could very easily be improved if they have a

433
00:24:20,240 --> 00:24:23,840
Speaker 1: good government, Venezuela having an abundance of oil, Columbia reacting

434
00:24:23,880 --> 00:24:25,719
Speaker 1: with the fact that it does not have as much

435
00:24:25,760 --> 00:24:27,720
Speaker 1: as its neighbor, and I know that's something we're gonna

436
00:24:27,720 --> 00:24:29,359
Speaker 1: discuss here with our next guest who joins you in

437
00:24:29,400 --> 00:24:32,680
Speaker 1: the atrium at the IMF. Well, that would be the

438
00:24:32,720 --> 00:24:35,720
Speaker 1: mother of all adjacen c certainly within the Western hemisphere.

439
00:24:35,840 --> 00:24:38,960
Speaker 1: That's something that the Minister studied at the University of

440
00:24:39,040 --> 00:24:41,720
Speaker 1: California at Berkeley a few years ago. And of course

441
00:24:41,760 --> 00:24:44,920
Speaker 1: it's wonderful to have a semi annual and annual visit

442
00:24:45,320 --> 00:24:49,200
Speaker 1: with the Minister Mr. Cardenas of Columbia. The adjacent cse

443
00:24:49,240 --> 00:24:53,560
Speaker 1: here are so important. Most Americans don't understand that Venezuela

444
00:24:53,720 --> 00:24:57,639
Speaker 1: could be the Saudi Arabia of the oil business. What

445
00:24:57,960 --> 00:25:00,280
Speaker 1: is the knock on effect of the term oil in

446
00:25:00,359 --> 00:25:04,399
Speaker 1: Caracas to your nation. Well, we have three hundred thousand

447
00:25:04,480 --> 00:25:08,440
Speaker 1: Venezuelas now living in Colombia, people that have crossed the

448
00:25:08,480 --> 00:25:13,960
Speaker 1: border looking for food for health. Um Columbia has welcomed them.

449
00:25:14,160 --> 00:25:19,399
Speaker 1: We're providing free education, access to emergency care in our

450
00:25:19,480 --> 00:25:23,159
Speaker 1: health facilities, and obviously food, which is the most scarce

451
00:25:23,240 --> 00:25:25,920
Speaker 1: product today day to day, the food getting the food

452
00:25:26,000 --> 00:25:30,119
Speaker 1: day today, many people living in our border city, cucu

453
00:25:30,240 --> 00:25:32,720
Speaker 1: Ties the city of more than a million inhabitants, and

454
00:25:32,960 --> 00:25:37,679
Speaker 1: uh there are many Venezuelans now camping in the streets

455
00:25:37,680 --> 00:25:43,240
Speaker 1: of Veneza of Cucuta. Uh So, Colombia is really a

456
00:25:43,280 --> 00:25:45,760
Speaker 1: country that is very interested in finding a solution to

457
00:25:45,880 --> 00:25:50,200
Speaker 1: Venezuela political solution. The Columbia success, I think all of

458
00:25:50,240 --> 00:25:53,600
Speaker 1: our listeners and our viewers know has been extraordinary and

459
00:25:53,720 --> 00:25:56,320
Speaker 1: that you've had to pull back your g d P

460
00:25:56,600 --> 00:25:59,159
Speaker 1: estimates a little bit. Is that just because of the

461
00:25:59,240 --> 00:26:01,760
Speaker 1: drop in oil prices or is it a more complex

462
00:26:01,960 --> 00:26:06,040
Speaker 1: It's mostly that the Venezuelan factor has played a role.

463
00:26:06,119 --> 00:26:09,359
Speaker 1: I mean, at one point we had a six billion

464
00:26:09,440 --> 00:26:13,920
Speaker 1: dollars in trade with Venezuela. Now that's practically zero. That

465
00:26:14,080 --> 00:26:18,560
Speaker 1: means that we lost our experts to Venezuela. Venezuela was

466
00:26:18,600 --> 00:26:23,040
Speaker 1: a very good market for Colombian goods, food manufactured products,

467
00:26:23,359 --> 00:26:28,040
Speaker 1: so we lost that um. But mostly the lower growth

468
00:26:28,160 --> 00:26:31,119
Speaker 1: numbers in Colombia, which will be close to two this

469
00:26:31,280 --> 00:26:35,400
Speaker 1: year three next year, is the result of lower revenues

470
00:26:35,440 --> 00:26:39,399
Speaker 1: from oil. There is an uproar this morning about tax

471
00:26:39,480 --> 00:26:42,639
Speaker 1: reform in the United States of America and the thoughts

472
00:26:42,760 --> 00:26:45,000
Speaker 1: of the I m F. What they didn't notice at

473
00:26:45,040 --> 00:26:48,240
Speaker 1: the White House is Colombia has lived text reform that

474
00:26:48,320 --> 00:26:51,199
Speaker 1: you're the experiment for what we're arguing about here. Now

475
00:26:51,359 --> 00:26:53,840
Speaker 1: to be clear, here you raise taxes to bring the

476
00:26:53,960 --> 00:26:57,520
Speaker 1: deficit in right right, Well, we we have experience with that.

477
00:26:57,920 --> 00:26:59,680
Speaker 1: And by the way, we talk a lot with the

478
00:27:00,160 --> 00:27:03,639
Speaker 1: American officials. I had a meeting yesterday with Secretary man

479
00:27:03,680 --> 00:27:09,280
Speaker 1: Nuchin Um. We talked frequently with the Garry Khan because

480
00:27:09,320 --> 00:27:11,560
Speaker 1: the you know, the dynamics and the politics of tax

481
00:27:11,640 --> 00:27:16,040
Speaker 1: reform is similar in all democracy. So what Columbia did

482
00:27:16,240 --> 00:27:20,040
Speaker 1: was to cut corporate taxes, not to as it is

483
00:27:20,200 --> 00:27:23,240
Speaker 1: uh the plan here in the US. But we did

484
00:27:23,320 --> 00:27:26,960
Speaker 1: that without increasing the fiscal deficit, which is a very

485
00:27:27,000 --> 00:27:29,600
Speaker 1: important that. I mean, we have the rating agencies of

486
00:27:29,720 --> 00:27:32,399
Speaker 1: course looking at our numbers, so we couldn't afford a

487
00:27:32,520 --> 00:27:35,600
Speaker 1: reduction in revenues. We had to upset that with an

488
00:27:35,640 --> 00:27:38,080
Speaker 1: increase in the v A T. That was the difficult part,

489
00:27:38,200 --> 00:27:41,639
Speaker 1: raising the v A T rate from sixteen to I

490
00:27:41,680 --> 00:27:43,119
Speaker 1: think I'm gonna do this. Let me bring in my

491
00:27:43,240 --> 00:27:46,480
Speaker 1: colleague in New York, David David, Mr Carlis. Let me

492
00:27:46,520 --> 00:27:48,560
Speaker 1: ask you about the prospects for a peace dividend. We

493
00:27:48,600 --> 00:27:51,719
Speaker 1: saw the formal politicization of the FARC, now that they

494
00:27:51,800 --> 00:27:54,520
Speaker 1: become a political party within within the government. There are

495
00:27:54,560 --> 00:27:57,040
Speaker 1: people here who are are counting on things changing, their

496
00:27:57,119 --> 00:27:59,159
Speaker 1: quality of life changing. Are we beginning to see the

497
00:28:00,160 --> 00:28:05,480
Speaker 1: contours of a peace dividend in Colombia today? Well, Tourism

498
00:28:06,040 --> 00:28:08,359
Speaker 1: is kind of like the sector the low hanging fruit.

499
00:28:08,640 --> 00:28:13,720
Speaker 1: Because Colombia was certainly affected by the conflict in the

500
00:28:13,880 --> 00:28:18,600
Speaker 1: sense that many tourists were warrant against visiting Colombia. Now

501
00:28:18,720 --> 00:28:21,680
Speaker 1: people are interested in coming to Colombia, a country that

502
00:28:21,840 --> 00:28:27,000
Speaker 1: has uh the Indian Mountains, they are uh the Amazon basin,

503
00:28:27,080 --> 00:28:30,200
Speaker 1: the Caribbean coast. I mean a number of attractions. This

504
00:28:30,359 --> 00:28:32,960
Speaker 1: is the sector that is picking up the most as

505
00:28:33,040 --> 00:28:35,920
Speaker 1: the first response to peace. But others will come, like

506
00:28:36,040 --> 00:28:40,240
Speaker 1: agriculture for example. So the peace dividend is already evident,

507
00:28:40,560 --> 00:28:43,960
Speaker 1: but it's just at the beginning stage editorialized and say

508
00:28:44,000 --> 00:28:47,440
Speaker 1: it's a surveillance dividends. Some of the team's surveillance has

509
00:28:47,520 --> 00:28:51,800
Speaker 1: just enjoyed the wonderful tourism. Columbian minister think it wasn't

510
00:28:51,880 --> 00:28:57,080
Speaker 1: David or myself. I love to go where the Racio

511
00:28:57,200 --> 00:29:13,560
Speaker 1: Cardenis is a minister of finance fourth a Columbid We

512
00:29:13,680 --> 00:29:16,000
Speaker 1: have a wonderful guest. And this is not the norm.

513
00:29:16,160 --> 00:29:19,880
Speaker 1: Folks within the fed Derby in Washington not too far

514
00:29:20,080 --> 00:29:22,720
Speaker 1: from this I m F headquarters, or what we see

515
00:29:22,800 --> 00:29:26,000
Speaker 1: at the Bank of England or other major central banks.

516
00:29:26,440 --> 00:29:28,560
Speaker 1: If you think of Richard Taylor, who just wanted to

517
00:29:28,600 --> 00:29:31,320
Speaker 1: know about prize in economics and the heritage of Chicago.

518
00:29:31,840 --> 00:29:36,200
Speaker 1: You you go back to Frank Knight of nine and

519
00:29:36,280 --> 00:29:40,280
Speaker 1: the idea of uncertainty and our developed economies. There's no

520
00:29:40,440 --> 00:29:45,080
Speaker 1: greater uncertainty than the political mess in South Africa. Joining

521
00:29:45,160 --> 00:29:47,400
Speaker 1: us now as a gentleman who has to courageously deal

522
00:29:47,480 --> 00:29:50,800
Speaker 1: with this each and every day he is a Central

523
00:29:50,800 --> 00:29:56,520
Speaker 1: Bank governor UH for South Africa. Kanal, wonderful to have

524
00:29:56,640 --> 00:30:00,000
Speaker 1: you with us, sir, within the uncertainties of South Africa

525
00:30:00,200 --> 00:30:03,160
Speaker 1: and really the crucible of going day to day. How

526
00:30:03,400 --> 00:30:06,520
Speaker 1: stable is the government right now and how can you

527
00:30:06,760 --> 00:30:11,680
Speaker 1: help the people of South Africa get to a better place? Well,

528
00:30:12,080 --> 00:30:17,920
Speaker 1: government is stable, Um, there is political contestation in South Africa.

529
00:30:18,040 --> 00:30:24,200
Speaker 1: Political contestation takes place in all of the democracies. What

530
00:30:24,440 --> 00:30:27,240
Speaker 1: is important for South Africa is that institutions of our

531
00:30:27,320 --> 00:30:31,480
Speaker 1: democracy are waking and it is those institutions which are

532
00:30:31,800 --> 00:30:35,280
Speaker 1: the protect us or of of our democracy. And South

533
00:30:35,280 --> 00:30:39,280
Speaker 1: Africans had figured out how to utilize these institutions to

534
00:30:39,320 --> 00:30:41,840
Speaker 1: defend the democracy. If the South African Rand is a

535
00:30:41,920 --> 00:30:45,080
Speaker 1: litmus paper of any given nation and the currency movement

536
00:30:45,160 --> 00:30:48,400
Speaker 1: and such, what does the rand tell you now about

537
00:30:48,480 --> 00:30:51,760
Speaker 1: the choices that you have? The options the degrees of

538
00:30:51,960 --> 00:30:55,120
Speaker 1: freedom that you have as a central banker. Well, then

539
00:30:55,560 --> 00:30:58,920
Speaker 1: that the when the currency tells us is that firstly

540
00:30:59,160 --> 00:31:02,560
Speaker 1: there is globally alignment of exchange rais and that is

541
00:31:02,640 --> 00:31:05,960
Speaker 1: expected that should take place. But there are South African

542
00:31:06,360 --> 00:31:09,680
Speaker 1: idiosyncresies that have to do with the political ancertainty that

543
00:31:10,520 --> 00:31:13,280
Speaker 1: that we have. And with the political ancertainty comes um

544
00:31:14,320 --> 00:31:18,480
Speaker 1: policy uncertainty and um the exchange rates will tend to

545
00:31:19,280 --> 00:31:24,080
Speaker 1: uh truly act to those to those developments. What does

546
00:31:24,120 --> 00:31:26,720
Speaker 1: it mean for monetary policy to the extent that you

547
00:31:26,880 --> 00:31:30,600
Speaker 1: have an exchange rate that moves, whether it has depreciated

548
00:31:30,720 --> 00:31:34,400
Speaker 1: or has appreciated. As a central bank, we have got

549
00:31:34,520 --> 00:31:36,840
Speaker 1: to ask ourselves the question is this a one off

550
00:31:36,880 --> 00:31:40,000
Speaker 1: shock or is this something that could lead to a

551
00:31:40,120 --> 00:31:42,280
Speaker 1: second round. Let me bring in my colleague in New York,

552
00:31:42,360 --> 00:31:45,280
Speaker 1: David Girl with the the Central Bank of South Africa.

553
00:31:45,400 --> 00:31:47,120
Speaker 1: David the governor, great to speak with you. Let me

554
00:31:47,200 --> 00:31:48,920
Speaker 1: just ask you what you intend to talk to I

555
00:31:48,960 --> 00:31:51,000
Speaker 1: am of officials about this week. You're you're there in

556
00:31:51,120 --> 00:31:53,320
Speaker 1: Washington for the for these meetings. What's on the agenda

557
00:31:53,360 --> 00:31:59,680
Speaker 1: for you? Well, the most important thing was coming to

558
00:32:00,000 --> 00:32:04,280
Speaker 1: it with what is happening with with the global economy

559
00:32:04,920 --> 00:32:09,640
Speaker 1: and speaking to colleagues from various regions and establish what

560
00:32:10,840 --> 00:32:14,120
Speaker 1: the prospects are for for the for the global economy

561
00:32:14,200 --> 00:32:17,400
Speaker 1: undertake at the moment is that we are the global

562
00:32:17,440 --> 00:32:21,040
Speaker 1: economy is in a recovery recovery phase, that this recovery

563
00:32:21,240 --> 00:32:25,760
Speaker 1: is much more broad based, it goes across across regions,

564
00:32:26,080 --> 00:32:29,760
Speaker 1: and that it gives an opportunity for for countries to

565
00:32:29,880 --> 00:32:35,040
Speaker 1: take advantage of these resurgence in growth. But secondly is

566
00:32:35,120 --> 00:32:38,920
Speaker 1: that people are starting to ask important questions and you

567
00:32:39,320 --> 00:32:43,120
Speaker 1: it comes across very strongly that we actually need to

568
00:32:43,320 --> 00:32:47,520
Speaker 1: be heaving growth, being inclusive, that we should not be

569
00:32:47,680 --> 00:32:52,920
Speaker 1: living vast sections of our populations behind. The third area

570
00:32:53,040 --> 00:32:57,680
Speaker 1: has to do with them globalization. That there is not

571
00:32:57,840 --> 00:33:04,080
Speaker 1: out that globalization has taken millions of people out of poverty,

572
00:33:04,280 --> 00:33:06,880
Speaker 1: but questions are starting to be asked, could we have

573
00:33:07,120 --> 00:33:12,960
Speaker 1: more equitable globalization? Could we behaving more equitable? A thread

574
00:33:13,280 --> 00:33:16,160
Speaker 1: and some of the discussions that are coming is concerns

575
00:33:16,280 --> 00:33:22,080
Speaker 1: that are starting to imagine that they are aspects of

576
00:33:23,400 --> 00:33:27,640
Speaker 1: trade protectionism that that are seemed to be imaging and

577
00:33:27,880 --> 00:33:31,560
Speaker 1: that could actually threaten the lobal economic recovery. Do you

578
00:33:31,600 --> 00:33:34,640
Speaker 1: expect utter the two words debt relief over the course

579
00:33:34,840 --> 00:33:36,440
Speaker 1: of these meetings, Are you at that point yet where

580
00:33:36,440 --> 00:33:40,520
Speaker 1: you need to go to the I M. F. Um

581
00:33:40,960 --> 00:33:46,800
Speaker 1: Our fundamentals are still are still solid. Um and even

582
00:33:47,400 --> 00:33:50,520
Speaker 1: if we are expecting that there will be some revenue

583
00:33:50,520 --> 00:33:52,560
Speaker 1: short form and the Minister of Finance will be tabling

584
00:33:53,080 --> 00:33:57,960
Speaker 1: the budget policy statement in thirteen days time, um our

585
00:33:58,080 --> 00:34:01,880
Speaker 1: fundamentals are solid. But importantity is that South Africa has

586
00:34:01,960 --> 00:34:07,240
Speaker 1: access to a very deep domestic capital market but also

587
00:34:08,320 --> 00:34:13,000
Speaker 1: has demonstrated our ability to be able to access international

588
00:34:13,080 --> 00:34:16,239
Speaker 1: capital market. So there isn't any indication at the moment

589
00:34:16,320 --> 00:34:18,560
Speaker 1: that you suggest that South Africa might have to run

590
00:34:18,600 --> 00:34:21,560
Speaker 1: to them. Within the research capability We've been asking this

591
00:34:21,719 --> 00:34:24,440
Speaker 1: question of all sorts of people within the commodity space,

592
00:34:24,840 --> 00:34:28,280
Speaker 1: within the research capabilities of your central bank in South Africa?

593
00:34:28,760 --> 00:34:31,840
Speaker 1: Is there any whisper that the commodity bear market is

594
00:34:32,000 --> 00:34:35,680
Speaker 1: over on a nominal or real basis. Forget about one

595
00:34:36,400 --> 00:34:39,520
Speaker 1: one mineral or one medal. Just the idea of a

596
00:34:39,680 --> 00:34:44,200
Speaker 1: lift commodities. Is it tangible? But the lift is tangible,

597
00:34:44,360 --> 00:34:46,719
Speaker 1: But we must not kill ourselves. I don't think that

598
00:34:47,160 --> 00:34:51,279
Speaker 1: we will get back to the community cycle that we

599
00:34:51,440 --> 00:34:55,040
Speaker 1: even character allized as a as a supercycle. And part

600
00:34:55,120 --> 00:34:57,200
Speaker 1: of it has to do with the fact that China,

601
00:34:57,320 --> 00:35:02,120
Speaker 1: which was a key um consume of these commodities, it's

602
00:35:02,160 --> 00:35:05,680
Speaker 1: extraually balancing its growth and it's starting to focus more

603
00:35:05,760 --> 00:35:10,120
Speaker 1: on consumption than it has on investment. So it has

604
00:35:10,200 --> 00:35:14,080
Speaker 1: got implications for the industrial for the industrial commodities. In PARTAGA,

605
00:35:14,280 --> 00:35:16,600
Speaker 1: I have to ask you a more narrow question about

606
00:35:16,640 --> 00:35:19,440
Speaker 1: South Africa, and it has to do with the American

607
00:35:19,560 --> 00:35:24,000
Speaker 1: and the European focus on Cape Town annual Honestburg, how

608
00:35:24,160 --> 00:35:28,120
Speaker 1: is Durban doing? Is Durban looking more eastward and more

609
00:35:28,160 --> 00:35:32,160
Speaker 1: across the Indian Ocean. Does Durban have a unique place

610
00:35:32,480 --> 00:35:37,799
Speaker 1: within South Africa in terms of spurring future global trade? Well,

611
00:35:37,840 --> 00:35:41,600
Speaker 1: it is our most important part. Most of our exports

612
00:35:41,640 --> 00:35:45,080
Speaker 1: and impulse come through the part of Devon, and it

613
00:35:45,160 --> 00:35:48,959
Speaker 1: doesn't matter whether the expots or imputs are going east

614
00:35:49,120 --> 00:35:51,919
Speaker 1: or are going west. This is our major, our major

615
00:35:52,000 --> 00:35:54,800
Speaker 1: trade part. It is a major, a major city and

616
00:35:54,840 --> 00:35:58,239
Speaker 1: it's just got a fantastic climate. You must visit it. Oh,

617
00:35:58,520 --> 00:36:00,320
Speaker 1: I know, I know, we must visit it, David, and

618
00:36:00,360 --> 00:36:03,120
Speaker 1: I want to do that In Uh, the summer of Durban,

619
00:36:03,160 --> 00:36:05,840
Speaker 1: which would be I think February of this year. But

620
00:36:06,120 --> 00:36:09,200
Speaker 1: but with within this governor, is the idea of what

621
00:36:09,440 --> 00:36:13,839
Speaker 1: you need in a time or multilateral trade discussions have disappeared.

622
00:36:14,520 --> 00:36:17,640
Speaker 1: What is the bilateral discussion with the United States as

623
00:36:17,680 --> 00:36:22,719
Speaker 1: an example that will spur development in Durban? When they

624
00:36:22,760 --> 00:36:25,920
Speaker 1: had been by national discussions with the United States and

625
00:36:25,960 --> 00:36:28,040
Speaker 1: at the time it had to do with a The

626
00:36:28,160 --> 00:36:34,040
Speaker 1: extension of the African Growth Opportunity Act is a major

627
00:36:34,200 --> 00:36:39,400
Speaker 1: policy framework in as fine as the U S And

628
00:36:39,840 --> 00:36:43,840
Speaker 1: Africa are consent with the RESPECTRA trade and South Africa

629
00:36:44,000 --> 00:36:48,640
Speaker 1: is a very important trading partner for for the U S.

630
00:36:48,719 --> 00:36:52,600
Speaker 1: So our engagement platform with the the US tended to

631
00:36:52,680 --> 00:36:58,640
Speaker 1: be through the ABA. Last question, you're just about inflation targeting.

632
00:36:58,680 --> 00:37:00,320
Speaker 1: This is something that we talked about here in the

633
00:37:00,360 --> 00:37:02,400
Speaker 1: States a lot. If that if the target that we

634
00:37:02,440 --> 00:37:04,520
Speaker 1: have in place should be adjusted some are you weighing

635
00:37:04,600 --> 00:37:06,239
Speaker 1: that as well? You're looking at it three to six

636
00:37:06,280 --> 00:37:11,480
Speaker 1: percent inflation? Should that be lower? Do you think? Well,

637
00:37:12,080 --> 00:37:16,080
Speaker 1: unless South Africa achieves lower inflation, we we would lose

638
00:37:17,040 --> 00:37:19,920
Speaker 1: a competitiveness. So what we had seen is that we

639
00:37:20,040 --> 00:37:24,120
Speaker 1: had had this UH inflation rate target band of three

640
00:37:24,200 --> 00:37:28,040
Speaker 1: to six since the inception of inflation targeting in South Africa.

641
00:37:28,440 --> 00:37:31,560
Speaker 1: We did devise it once and adjusted the band to

642
00:37:31,719 --> 00:37:33,959
Speaker 1: three to five, but we are hit by a shock

643
00:37:34,280 --> 00:37:38,000
Speaker 1: and we reinstated it back to to three to six UM.

644
00:37:38,440 --> 00:37:44,040
Speaker 1: At the after the previous Man Policy meeting, we actually

645
00:37:44,200 --> 00:37:48,440
Speaker 1: did indicate that we are starting to focus more on

646
00:37:48,960 --> 00:37:53,160
Speaker 1: a quarterly projection model, and that quarterly projection model doesn't

647
00:37:53,280 --> 00:37:57,520
Speaker 1: work with the inflation target bands, but it works with

648
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Speaker 1: a point and we are using the midpoint of the

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Speaker 1: target range at four point five and that is what

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Speaker 1: we watch and it's animate it clear that we would

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Speaker 1: prefer to see inflation expectations gotta be taking towards the

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Speaker 1: midpoint of that inflasion. We'll leave it there. Governor, thank

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Speaker 1: you very much for the time. That's let's take Younggo.

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Speaker 1: He's the governor of the South African Reserve Bank. Joining

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Speaker 1: Tom and me from the annual meetings to the I

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Speaker 1: m F and the World Bank in Washington, d C.

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Speaker 1: More coverage of that event throughout the morning here on

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Speaker 1: Bloomberg Surveillance and Bloomberg Radio. Thanks for listening to the

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Speaker 1: Bloomberg Surveillance podcast. Subscribe and listen to interviews on Apple Podcasts, SoundCloud,

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Speaker 1: Tom Keene David Gura. Is that David Gura? Before the podcast?

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Speaker 1: You can always catch us worldwide. I'm Bloomberg Radio