WEBVTT - Fed Govenor Stephen Miran Talks Supply Shocks, Policy, Central Bank Tenure 0:00:02.520 --> 0:00:07.040 Bloomberg Audio Studios, Podcasts, radio News. 0:00:07.800 --> 0:00:10.200 We begin this hour with stocks adding to record highs 0:00:10.200 --> 0:00:12.880 at a pivotal moment for the Federal Serve, rising inflation 0:00:13.000 --> 0:00:15.600 complicating the rate outlook as a new regime takes hold 0:00:15.840 --> 0:00:18.160 at the top of the Central Bank tomorrow. Joining us 0:00:18.160 --> 0:00:20.320 now in his final broadcast interview as a member of 0:00:20.320 --> 0:00:23.000 the Federal Reserve Board of Governors, Steven Myron, Governor Maren 0:00:23.000 --> 0:00:23.880 good to see you, sir. 0:00:23.840 --> 0:00:25.279 Good to see you. Thanks for having me back. 0:00:25.400 --> 0:00:27.440 We've got a moment to step back and sort of 0:00:27.440 --> 0:00:31.000 reflect on your experience at this institution. We talked lots 0:00:31.040 --> 0:00:33.240 about how you've been received externally. Can we just start 0:00:33.280 --> 0:00:36.440 with how you've been received internally over the last few months. 0:00:36.640 --> 0:00:38.760 Sure, this has actually been one of the biggest surprises, 0:00:38.800 --> 0:00:41.080 you know, given all the drama at the beginning, I've 0:00:41.120 --> 0:00:44.200 been received internally, I think very very politely, very cordially, 0:00:44.280 --> 0:00:48.320 and very kindly. And I think folks have largely enjoyed 0:00:48.360 --> 0:00:50.640 some of the some of the intellectual conversations, some of 0:00:50.680 --> 0:00:53.200 the challenges that I've leveled against some of the ways 0:00:53.200 --> 0:00:55.400 that they had been thinking beforehand. And I think that 0:00:55.440 --> 0:00:58.560 the overall response has been you know, very welcoming and 0:00:58.640 --> 0:00:59.800 very kind, and that's one of the things that I'm 0:00:59.800 --> 0:01:00.560 most grateful for. 0:01:00.680 --> 0:01:03.280 What are the kind of ideas that have been received well, 0:01:03.640 --> 0:01:06.399 that are shaping debates right now that will linger and 0:01:06.440 --> 0:01:08.160 continue beyond your departure. 0:01:08.520 --> 0:01:10.640 Yeah, sure, so one, you know, so an example of 0:01:10.680 --> 0:01:13.520 one of those things is the importance of regulations for 0:01:13.600 --> 0:01:15.760 determining the supply side of the economy. I mean, we 0:01:15.800 --> 0:01:17.600 spend a lot of time, you know, out in the 0:01:17.640 --> 0:01:20.600 financial world at in policy discussing the effects of a 0:01:20.680 --> 0:01:23.320 thirty three versus thirty five percent marginal tax rate. But 0:01:23.360 --> 0:01:26.640 the truth is that regulations are often infinite taxes, and 0:01:26.680 --> 0:01:28.560 being told you're not allowed to do something versus you 0:01:28.600 --> 0:01:31.200 are allowed to do something is a very very strong difference. 0:01:31.400 --> 0:01:33.679 And this had played a very small role in a 0:01:33.680 --> 0:01:36.080 lot of the modeling discussions happening at the FED, in 0:01:36.120 --> 0:01:38.320 a lot of the outlooks that I that I heard 0:01:38.319 --> 0:01:41.919 people present, and I came in and really hammered that idea, 0:01:41.959 --> 0:01:43.400 and I think sort of moved it forward. And now 0:01:43.440 --> 0:01:45.920 a lot of people talk about it very often internally 0:01:45.959 --> 0:01:48.200 and externally, and you know, sort of talk a lot 0:01:48.240 --> 0:01:50.560 about supply shocks. This is a positive supply shock that 0:01:50.600 --> 0:01:53.560 is unfolding and continues to unfold, and will I hope 0:01:53.600 --> 0:01:55.800 mitigate some of the negative supply shocks we also get 0:01:55.840 --> 0:01:56.080 hit by. 0:01:56.120 --> 0:01:57.760 We let's talk about another supply shock. And I think 0:01:57.760 --> 0:01:59.440 it's been central to some of the arguments you've made 0:01:59.440 --> 0:02:02.680 on the commit and that's population growth, the negative population 0:02:02.760 --> 0:02:05.200 growth that we've seen, which is lower the break even 0:02:05.320 --> 0:02:08.240 rate for the labor market, and contribute it to arguments 0:02:08.280 --> 0:02:11.920 in some places for hotter, stickier inflation. You've taken the 0:02:12.000 --> 0:02:14.639 other side of that. Can you just explain that for us? 0:02:14.919 --> 0:02:16.720 Yeah, So I think this is a really subtle issue 0:02:16.760 --> 0:02:18.720 with a lot of moving parts. Now at a very 0:02:18.760 --> 0:02:21.480 high level, what I would say historically is that we've 0:02:21.520 --> 0:02:23.920 seen a lot of countries in different places have declines 0:02:23.960 --> 0:02:27.400 in population growth rates and stagnant populations or shrinking populations. 0:02:27.480 --> 0:02:28.680 And I think the cross country and. 0:02:28.720 --> 0:02:35.280 Historical evidence is that it's unambiguously disinflationary or even eventually deflationary. Now, 0:02:35.360 --> 0:02:37.520 there's a few ways that that works. One is by 0:02:37.560 --> 0:02:41.079 reducing sorry, there's a few consequences of lower population growth. 0:02:41.240 --> 0:02:43.880 One is it does reduce the break even in payroll 0:02:43.919 --> 0:02:45.919 growth rate. So the number of jobs you need to 0:02:46.000 --> 0:02:48.600 create every month to hold the uneploymentary constant that does 0:02:48.639 --> 0:02:51.799 come down. That's a mildly hawkish implication because it means 0:02:51.800 --> 0:02:54.360 you shouldn't get so concerned about very very low job 0:02:54.440 --> 0:02:58.920 creation rates. However, there's also there's also duffish implications as well, 0:02:58.960 --> 0:03:01.120 which are that it lowers than new rate, it brings 0:03:01.120 --> 0:03:03.760 interest rates down over time, and we've sort of seen 0:03:03.800 --> 0:03:07.200 that across countries and historically and historically to be the case. 0:03:07.440 --> 0:03:10.560 And it's also just inflationary through long lived capital and 0:03:10.880 --> 0:03:14.000 consumer goods. And if you think about something like housing, right, 0:03:14.120 --> 0:03:16.720 the supply of houses is relatively fixed in the short run, 0:03:16.800 --> 0:03:19.160 and if you throw millions of new people into an economy, 0:03:19.240 --> 0:03:20.839 you're going to drive up the price of rents because 0:03:20.880 --> 0:03:23.160 they need places to live, right, You're going to create inflation. 0:03:23.360 --> 0:03:25.480 And that inflation is very very persistent because of the 0:03:25.520 --> 0:03:28.280 way that housing inflation is calculated, it's very very sticky. 0:03:28.639 --> 0:03:31.200 If you have declining population growth, you don't need as much, 0:03:31.320 --> 0:03:33.200 you don't need as much home price growth, and that 0:03:33.480 --> 0:03:37.920 very inflationary tailwind gets taken away and ceases to be 0:03:37.960 --> 0:03:40.280 a major driver inflation. And I think you've sorted, you've 0:03:40.280 --> 0:03:42.440 been seeing that start to play out in the data market. 0:03:42.440 --> 0:03:44.000 Rents in this country have been growing at a one 0:03:44.040 --> 0:03:46.520 percent rate for the last few years. This is one 0:03:46.560 --> 0:03:49.240 of the biggest components of the inflation in disease, and 0:03:49.280 --> 0:03:52.640 I think you're going to continue seeing measured measured PCE 0:03:52.880 --> 0:03:55.880 and CPI rents and measured pc and CPI shelter inflation 0:03:56.120 --> 0:03:57.600 continue to converge down to those. 0:03:57.520 --> 0:03:58.480 Very low levels. 0:03:58.600 --> 0:04:00.720 So I think there's one hawkship of which is the 0:04:00.760 --> 0:04:03.800 lower break even peril rate. But there's also some very 0:04:03.840 --> 0:04:06.480 dubblish implications. Was that it reduces the neutral rate and 0:04:06.520 --> 0:04:08.800 it brings down inflation through some of these long lived 0:04:08.840 --> 0:04:09.960 capital and investment goods. 0:04:10.040 --> 0:04:12.240 This is a longer term structure for how to think 0:04:12.240 --> 0:04:15.920 about inflation and the benchmark rate of the Federal Reserve 0:04:16.279 --> 0:04:19.120 and how it sort of it works with the sort 0:04:19.160 --> 0:04:22.040 of long term inflation rate. Near term though, one thing 0:04:22.080 --> 0:04:23.920 that you've been known for a hallmark of your time 0:04:23.960 --> 0:04:26.400 on the Fed was that you voted to cut rates 0:04:26.480 --> 0:04:29.800 at least once at every single meeting. Do you think 0:04:30.040 --> 0:04:33.120 that that still holds even though in the short term 0:04:33.440 --> 0:04:37.520 it does seem like the inflationary shock is overwhelming potential 0:04:37.520 --> 0:04:39.919 structural changes that could lead disinflation. 0:04:40.320 --> 0:04:42.840 I do, and I think this is I think this 0:04:42.880 --> 0:04:44.839 is maybe one of the biggest differences between me and 0:04:44.880 --> 0:04:47.360 a lot of other folks is that I take very 0:04:47.360 --> 0:04:50.279 seriously the idea of Manterrea policy lacks, very very seriously. 0:04:50.320 --> 0:04:52.719 Mantera policy doesn't hit the economy right now. If we 0:04:52.880 --> 0:04:55.440 changed interest rates today, it wouldn't flow through into the 0:04:55.480 --> 0:04:57.840 economy until twelve to eighteen months from now. Right now, 0:04:57.839 --> 0:05:00.279 there's some disagreement of exactly how long those lags are are, 0:05:00.400 --> 0:05:02.880 but I think twelve to eighteen is the consensus view. 0:05:03.400 --> 0:05:05.400 And therefore, for any shock. 0:05:05.200 --> 0:05:07.400 That's hitting the economy today, you can't think about what 0:05:07.440 --> 0:05:09.240 the effect in the next few months is. You need 0:05:09.320 --> 0:05:11.000 to think about what the effect in the next twelve 0:05:11.040 --> 0:05:13.880 to eighteen months is, and sorry, the effect twelve to 0:05:13.920 --> 0:05:16.599 eighteen months out. So if oil goes higher, it's a 0:05:16.600 --> 0:05:19.640 supply shock. Straits and hore moves are closed, right, that's 0:05:19.640 --> 0:05:21.560 going to boost the oil price today. And with a 0:05:21.600 --> 0:05:23.760 bunch of other stuff that's very tightly tied to energy 0:05:23.800 --> 0:05:26.839 prices like airfares, right, that's going to go higher very 0:05:26.920 --> 0:05:28.760 quickly within the course of a few months and we've 0:05:28.760 --> 0:05:31.600 been living through that, and that is very real, right, 0:05:31.680 --> 0:05:33.960 there's no way that is very real inflation. But it 0:05:34.000 --> 0:05:37.000 is not inflation that Montara policy can affect. Monteria policy 0:05:37.000 --> 0:05:39.839 can affect twelve to eighteen months from now. So there's 0:05:39.920 --> 0:05:42.440 got to be a reason that you think airfares and 0:05:42.480 --> 0:05:44.840 oil prices are going to be moving higher in the 0:05:44.880 --> 0:05:47.920 summer of twenty twenty seven, in the fall of twenty 0:05:47.960 --> 0:05:51.039 twenty seven, not the summer and fall of twenty twenty six. 0:05:51.480 --> 0:05:55.000 And so it's those lags that really should be driving 0:05:55.120 --> 0:05:57.680 where you think about Ford looking montary policy should be. 0:05:57.960 --> 0:05:59.360 And that's a lot of what I've tried to hone 0:05:59.360 --> 0:06:03.080 into when thinking about population growth and deregulation and saying 0:06:03.120 --> 0:06:05.080 that the traditional view that we should look through in 0:06:05.120 --> 0:06:08.200 oil shock should prevail. This is very you know, vanilla 0:06:08.320 --> 0:06:10.800 basic traditional mandary policy. 0:06:10.880 --> 0:06:12.960 Part of the problem is that the market doesn't agree, 0:06:13.160 --> 0:06:16.120 at least not in terms of where longer dated bonds 0:06:16.160 --> 0:06:18.680 are trading and where yields are shifting. Where you see 0:06:18.680 --> 0:06:22.159 them shifting higher even as the front end stays where 0:06:22.160 --> 0:06:25.080 it is. Do you think that in this type of 0:06:25.240 --> 0:06:27.640 environment it's imperative to have some sort of Fed Treasury 0:06:27.680 --> 0:06:30.839 accord akin to what people have been talking about, where 0:06:30.920 --> 0:06:34.040 the Treasury steps in to sort of influence the long 0:06:34.200 --> 0:06:36.400 end while the FED cuts rates on the short end. 0:06:36.800 --> 0:06:38.440 So let me address those separately. 0:06:38.520 --> 0:06:40.960 So the market not agreeing is part a hall of 0:06:41.000 --> 0:06:43.839 mirrors issue, because if you have if the FED says 0:06:43.880 --> 0:06:47.200 we're very backward looking and inflation over the last twelve 0:06:47.240 --> 0:06:50.000 months is going to determine policy that affects twelve to 0:06:50.000 --> 0:06:53.760 eighteen months from now, meaning the economy in twenty twenty 0:06:53.800 --> 0:06:55.880 seven is affected by data in twenty twenty five in 0:06:55.880 --> 0:06:58.560 that world, right, so very very backward looking. If that's 0:06:58.560 --> 0:07:01.080 how the FED communicates that it's setting policy, then the 0:07:01.120 --> 0:07:03.080 market is going to start to reflect that. And so 0:07:03.200 --> 0:07:06.320 the market reflecting a lack of interest rate cuts, right, 0:07:06.960 --> 0:07:09.680 is in part because the FED is telling them we're 0:07:09.680 --> 0:07:12.720 backward looking, right, And so so that that's going to 0:07:12.720 --> 0:07:16.280 create a self reinforcement problem. Now on the Fed Treasury accord, 0:07:16.880 --> 0:07:18.560 you know, so first of all, you know, I won't 0:07:18.600 --> 0:07:21.600 be involved in that if it happens, but you know, 0:07:21.640 --> 0:07:23.320 I have done some work on the balance sheet, and 0:07:23.360 --> 0:07:25.520 I do think it is important that the one of 0:07:25.520 --> 0:07:27.840 the problems with having a very large balance sheet and 0:07:27.920 --> 0:07:30.400 lots of securities, lots of treasure securities on the Federal 0:07:30.360 --> 0:07:32.600 Reserve's balance sheet is it does start to get the 0:07:32.640 --> 0:07:35.280 FED involved in questions that have some fiscal implications. 0:07:35.360 --> 0:07:37.280 Right, if we own a huge. 0:07:37.120 --> 0:07:42.200 Chunk of debt, then that means that we're we're we're 0:07:42.280 --> 0:07:45.680 impinging on decisions that traditionally are the realm of the 0:07:45.680 --> 0:07:48.840 fiscal authority. What is the distribution of public death public 0:07:48.840 --> 0:07:50.760 debt that it issues that that's held by the public. 0:07:51.800 --> 0:07:53.600 And so I do think it is important that if 0:07:53.640 --> 0:07:56.120 you have a large balance sheet, there needs to be 0:07:56.360 --> 0:07:59.320 there needs to be, you know, some clear delineation about 0:07:59.360 --> 0:08:02.560 who's doing who's doing what. And to me, these questions 0:08:02.600 --> 0:08:05.360 are really murky and they you know, they implicate independence 0:08:05.400 --> 0:08:07.559 to an extent, and therefore it's one of the reasons 0:08:07.600 --> 0:08:10.320 among many that I would favor having a smaller balance sheet. 0:08:10.360 --> 0:08:12.200 How close do you think the FED should work with 0:08:12.240 --> 0:08:15.000 the Treasury to achieve that? How closely should the FED 0:08:15.120 --> 0:08:16.400 work with the administration? 0:08:17.200 --> 0:08:20.640 Yeah, So, so my view is that the FED having 0:08:20.640 --> 0:08:22.880 a big balance sheet starts to implicate a lot of 0:08:22.920 --> 0:08:25.440 those lines and becomes and becomes problematic. So the FED 0:08:25.440 --> 0:08:27.320 should strive to have as small a balance sheet as 0:08:27.320 --> 0:08:30.760 it can right to achieve its goals and implementation framework. 0:08:30.880 --> 0:08:33.520 And if we can sort of improve that implementation framework 0:08:33.559 --> 0:08:36.600 and make it smarter to reduce the minimum size the 0:08:36.600 --> 0:08:38.719 balance sheet that we need, then that's a great thing. 0:08:38.800 --> 0:08:41.240 And that was a major thrust of the paper that 0:08:41.280 --> 0:08:45.320 I wrote in the spring with Alessandra Barbarino and Anthony 0:08:45.360 --> 0:08:51.599 Dirks and and and a less say Anderson and and 0:08:51.679 --> 0:08:53.280 so that was a that was a major thrust of 0:08:53.840 --> 0:08:56.520 that work. That was that was really important now in 0:08:56.640 --> 0:08:59.120 terms of coordinating, Right, the FED should do what it 0:08:59.160 --> 0:09:01.760 should do for montera policy, and the Treasury should do 0:09:01.840 --> 0:09:04.040 what it should do in terms of fiscal policy. And 0:09:04.160 --> 0:09:07.079 the level of coordination should I think should I think 0:09:07.200 --> 0:09:10.079 be you know, sort of separate. Right, they should be 0:09:10.160 --> 0:09:11.880 doing what they what they want to do for each 0:09:11.920 --> 0:09:15.240 of their own priorities. However, there are times when there 0:09:15.320 --> 0:09:16.559 is going to be half when there is going to 0:09:16.640 --> 0:09:19.160 have to be that type of coordination. So for example, 0:09:19.600 --> 0:09:21.839 you know, right now we're doing the reserve these reserve 0:09:21.920 --> 0:09:24.880 management purchases where we're we're expanding our balance sheet to 0:09:24.960 --> 0:09:27.240 sort of provide a minimum level of reserves into the 0:09:27.320 --> 0:09:30.400 economy to meet reserve demand. Where you know, we're we're 0:09:30.400 --> 0:09:33.600 buying treasury bills, We're letting mortgages continue to mature off 0:09:33.600 --> 0:09:35.880 of our balance sheet or in place them the treasury bills. Right, 0:09:36.160 --> 0:09:38.959 Like in theory, if we did enough, you know, sort 0:09:39.000 --> 0:09:41.079 of conversion of our balance sheet, of our existing balance 0:09:41.080 --> 0:09:43.360 sheet into treasury bills, we may be absorbing all of 0:09:43.400 --> 0:09:46.920 the supply, right and then some. So this is an 0:09:46.960 --> 0:09:49.000 example of a time where there would have to be 0:09:49.200 --> 0:09:50.040 very tight coordination. 0:09:50.200 --> 0:09:53.280 We've got an administration right now, very interested in financial markets. 0:09:53.320 --> 0:09:55.439 The President often looks at where the index level is 0:09:55.480 --> 0:09:57.600 and the equity market. We've got a Treasury secretary. They 0:09:57.679 --> 0:09:59.920 used to try this stuff. Did you speak to them 0:10:00.160 --> 0:10:01.720 in your time at the Federal Reserve. Did the President 0:10:01.760 --> 0:10:04.120 ever pick up the phone and say, hey, Steve, what's happening? 0:10:04.280 --> 0:10:06.080 Tell me what you're saying in the market, in the economy. 0:10:06.679 --> 0:10:08.720 Yeah, So I spoke to the president when I when 0:10:08.760 --> 0:10:11.560 I went to go resign from the Council of Economic Advisors, 0:10:11.600 --> 0:10:14.760 I went to bring my my recommen sorry, my resignation letter. 0:10:16.240 --> 0:10:18.120 But you know, he doesn't tell me anything. He doesn't 0:10:18.120 --> 0:10:18.760 tell the whole. 0:10:18.559 --> 0:10:21.360 World right this This president is very forthright with his views, 0:10:21.520 --> 0:10:26.160 and he tells journalists all the time, including Bloomberg journalists, exactly, 0:10:26.320 --> 0:10:28.760 you know, exactly what's on his mind about policy, where 0:10:29.040 --> 0:10:29.679 and where it should be. 0:10:29.760 --> 0:10:30.760 So no, I didn't. 0:10:31.000 --> 0:10:33.559 I'm not in receipt of any information that's not that's 0:10:33.600 --> 0:10:34.040 not public. 0:10:34.120 --> 0:10:37.240 Because we've started this conversation by talking about how you 0:10:37.280 --> 0:10:41.240 were received internally externally, I thought unfairly at times. Basically 0:10:41.360 --> 0:10:45.120 everything you said about interest rates and on the economy 0:10:45.760 --> 0:10:49.000 was always described as just doing the president's bidding at 0:10:49.040 --> 0:10:52.199 the Institution, at the Federal Reserve. Did people see it 0:10:52.280 --> 0:10:54.840 that way internally when you put your hand up and said, 0:10:54.960 --> 0:10:57.400 I want to write out twenty five basis points I'm dissenting. 0:10:57.520 --> 0:10:58.839 Was there a roll of the eyes. Here we go, 0:10:59.400 --> 0:11:01.880 this is the president and Sky during the president's bidding. 0:11:02.360 --> 0:11:04.079 Well, thank you for those words. 0:11:04.360 --> 0:11:06.000 I do think it's I do think it's clear that 0:11:06.040 --> 0:11:09.319 I've disagreed with with lots of people on policy on 0:11:09.400 --> 0:11:10.880 lots of times. There have been times when there have 0:11:10.920 --> 0:11:12.840 been signals out of the White House that they wanted 0:11:12.840 --> 0:11:15.200 policy rates lower than I had my dots, and there 0:11:15.280 --> 0:11:17.160 have been times when there's been signals out of the White. 0:11:16.960 --> 0:11:19.000 House where they thought that I was too dubbish. 0:11:19.080 --> 0:11:19.160 Right. 0:11:19.200 --> 0:11:22.440 So for example, the NEC director after my first vote 0:11:22.440 --> 0:11:24.280 said that he would have preferred a twenty five basis point. 0:11:24.320 --> 0:11:24.679 God right. 0:11:24.760 --> 0:11:27.280 So I clearly do my own thing and have my views, 0:11:27.280 --> 0:11:30.280 and they're all I think grounded in very traditional economics. 0:11:30.320 --> 0:11:32.559 And we were talking about population growth before, like this 0:11:32.720 --> 0:11:35.360 is not new, right, Like six years ago we all 0:11:35.480 --> 0:11:38.160 have been talking about it is everybody becoming Japan, you know, 0:11:38.320 --> 0:11:40.480 that would have come up several times a week, right, Like, 0:11:40.600 --> 0:11:42.319 none of this is new, None of this is is 0:11:42.840 --> 0:11:45.320 heterodox economics. None of this sort of says we need 0:11:45.440 --> 0:11:47.800 to discard with the entire framework. It's all within the 0:11:47.840 --> 0:11:51.319 traditional framework. And this is part of why I think 0:11:51.400 --> 0:11:54.800 the reception internally has been has been generally pretty good, 0:11:55.120 --> 0:11:58.040 is because I'm engaging with folks on their ground, right, 0:11:58.160 --> 0:12:01.200 Like I'm within the world of normal economics. When we're 0:12:01.240 --> 0:12:03.360 talking about what drives the interest rate and popul the 0:12:03.440 --> 0:12:06.000 neutral interest rate, and does population growth drive it? And 0:12:06.120 --> 0:12:10.000 is it inflationary or disinflationary? This is all well within 0:12:10.160 --> 0:12:10.920 sort of normal. 0:12:11.160 --> 0:12:13.040 We're trying to figure out what kind of an institution 0:12:13.240 --> 0:12:16.360 Kevin Walsh is walking into, how he'll be treated, how 0:12:16.440 --> 0:12:18.360 difficult will be to get people on his side as 0:12:18.360 --> 0:12:21.600 he starts to think about changing this institution, particularly when 0:12:22.080 --> 0:12:24.520 the form of FED share. We'll be sitting there as 0:12:24.520 --> 0:12:26.880 a governor on the Board of Governors. Can you help 0:12:27.000 --> 0:12:29.439 us understand that from a man inside the building, what 0:12:29.600 --> 0:12:31.080 that might look like in the next few months. 0:12:31.520 --> 0:12:31.760 Yeah. 0:12:31.840 --> 0:12:34.520 So, I think one thing that's important to understand is 0:12:34.600 --> 0:12:40.160 that people have FED are responsive to arguments, and as 0:12:40.160 --> 0:12:43.120 I said before, you know, I've been hammering deregulation among 0:12:43.200 --> 0:12:46.360 other things since the day I got there, and you know, 0:12:46.520 --> 0:12:49.160 they start to respond, but it takes time, right, you know, 0:12:49.280 --> 0:12:50.880 it's it's it's a it's a it's a bit of 0:12:50.920 --> 0:12:53.600 a slow moving, slow moving process. 0:12:53.720 --> 0:12:54.959 How being there make it harder? 0:12:56.760 --> 0:12:59.400 Well, you know, I don't I don't know about I 0:12:59.440 --> 0:13:03.199 don't know about that. You know, certainly charm Powell built 0:13:03.200 --> 0:13:05.640 a lot of the institutions and processes that exist that 0:13:05.760 --> 0:13:09.760 exist there, and so you know, so that dynamic may 0:13:09.960 --> 0:13:11.360 you know, sort of may may play into it. I 0:13:11.400 --> 0:13:14.559 don't know, but that'll be an issue for for for chairman, 0:13:14.600 --> 0:13:16.680 doesn't it wash to to deal with when you guess and. 0:13:16.760 --> 0:13:19.200 When you heard the chairman in the news conference present 0:13:19.280 --> 0:13:20.679 to the press and sort of world that he was 0:13:20.720 --> 0:13:22.439 staying gone as a governor. Was that the first time 0:13:22.520 --> 0:13:24.040 you heard of it? Or did he town the Board 0:13:24.040 --> 0:13:25.640 of Governors ahead of time that that was his plan? 0:13:26.320 --> 0:13:26.800 No, he didn't. 0:13:26.920 --> 0:13:28.439 He didn't tell me ahead of time that that was 0:13:28.480 --> 0:13:31.160 his plan. But he'd always said that, you know, publicly 0:13:31.240 --> 0:13:33.719 and privately there's something that it's something he might do. 0:13:34.120 --> 0:13:36.240 And so it wasn't It wasn't entirely a surprise. What 0:13:36.400 --> 0:13:39.640 was your reaction to it? You know, Look, my reaction 0:13:39.800 --> 0:13:41.320 to that is that when I was. 0:13:41.320 --> 0:13:44.120 The incoming chairman of the Council of Economic Advisors last year, 0:13:44.600 --> 0:13:47.800 I was very grateful to the previous chairman, Jared Bernstein, 0:13:48.120 --> 0:13:50.080 for spending time with me on the phone, being very 0:13:50.120 --> 0:13:53.200 generous with his time several hours, over over over over 0:13:53.400 --> 0:13:56.599 days and weeks, giving me advice for how to be 0:13:56.640 --> 0:13:59.040 a good cea chairman. And I really appreciated that and 0:13:59.160 --> 0:14:00.800 sort of how does the place run, and you know, 0:14:00.840 --> 0:14:02.679 what are your responsibilities and how do you do a 0:14:02.679 --> 0:14:05.200 good job? And I thought that that was really generous 0:14:05.200 --> 0:14:06.560 of him and I was really appreciative that, and then 0:14:06.600 --> 0:14:08.200 I went out of my way to make sure they 0:14:08.320 --> 0:14:10.520 very quickly put his portrait on the wall of former 0:14:10.600 --> 0:14:13.360 CEA chairmen in the offices and nyes and how are building. 0:14:14.280 --> 0:14:15.760 You know, it's to make sure that happened, that happened 0:14:15.840 --> 0:14:17.040 quickly without delay, and I was. 0:14:17.000 --> 0:14:17.640 Really grate for So. 0:14:17.960 --> 0:14:20.360 Look, transitions are important, and I think that you know, 0:14:20.640 --> 0:14:23.680 it is maybe helpful to have someone there to give advice. 0:14:23.720 --> 0:14:25.440 Here's how to be an effective chairman, Here's how to 0:14:25.520 --> 0:14:27.560 lead the committee's you know, here's how the building works, 0:14:27.680 --> 0:14:29.720 maybe a little bit different than it was twenty years ago, right, 0:14:30.640 --> 0:14:32.160 I think that can be helpful. But I still think 0:14:32.160 --> 0:14:34.280 it's important that it be a transition because you want 0:14:34.320 --> 0:14:37.080 to have people's loyalties undivided. You want to have there 0:14:37.160 --> 0:14:39.480 be very clearly one chairman. You want to have a 0:14:39.560 --> 0:14:42.480 place where there's no question about no question about who's 0:14:42.480 --> 0:14:45.160 in charge, and there's no talk of rival factions and 0:14:45.360 --> 0:14:47.600 things being split. I think you want to have you 0:14:47.640 --> 0:14:50.840 want to have a sense of unanimity and clarity, and 0:14:50.920 --> 0:14:52.840 so transitions are important, and I think it can be 0:14:52.920 --> 0:14:54.680 helpful to have to have help and transition. 0:14:54.960 --> 0:14:58.080 But I still think it's important that it is a transition, Steve, 0:14:58.120 --> 0:14:59.880 and it's going to say you thanks for band care. 0:15:00.000 --> 0:15:01.080 You know, I just wanted to finish on this. 0:15:01.160 --> 0:15:02.840 I think a lot of people might describe your tenure 0:15:02.840 --> 0:15:05.720 at the Federal Reserve as somewhat controversial. I see it 0:15:05.800 --> 0:15:08.520 completely differently. I've seen this play out now over a 0:15:08.640 --> 0:15:11.480 number of months, and I've said this repeatedly. You've had 0:15:11.680 --> 0:15:15.280 energized debate at the FMC that's spilled out publicly in 0:15:15.320 --> 0:15:17.720 a way that we haven't seen in a long long time, 0:15:17.920 --> 0:15:20.600 if ever, at the Federal Reserve, where people are being 0:15:20.680 --> 0:15:22.920 much more opinionated about where we are in this moment. 0:15:23.240 --> 0:15:25.720 And the one complaint, the consistent complaint I've had about 0:15:25.720 --> 0:15:27.760 the Federal Reserve is one that you've had too, which 0:15:27.840 --> 0:15:30.640 is a group think. And it's very very difficult right 0:15:30.640 --> 0:15:33.560 now to describe this committee and that anyone working at 0:15:33.600 --> 0:15:35.400 the Federal Reserve is part of group think right now, 0:15:35.480 --> 0:15:38.600 because everyone's expressing themselves in a much newer, fresh, and 0:15:38.680 --> 0:15:39.400 more welcoming way. 0:15:39.640 --> 0:15:41.760 Yeah, it seems like right now no one could accuse 0:15:41.760 --> 0:15:44.760 it this committee of group think, given how fractured it is, 0:15:44.840 --> 0:15:47.480 and frankly, all of the commentary coming out, so over 0:15:47.560 --> 0:15:48.960 to you, Kevin Walsh, to come. 0:15:48.920 --> 0:15:50.840 In and have that diatest to luck. Steve's going to 0:15:50.840 --> 0:15:54.440 see you appreciate it. Stephen Maron their fed governor Stephen 0:15:54.480 --> 0:15:54.720 Maron