1
00:00:02,520 --> 00:00:09,680
Speaker 1: Bloomberg Audio Studios, podcasts, radio News. Pimco Global Economic advisor

2
00:00:09,720 --> 00:00:13,560
Speaker 1: and former FED Vice Chair Rich Clarita joining us Now

3
00:00:13,720 --> 00:00:15,880
Speaker 1: and Rich, what's your take on what we just heard

4
00:00:16,040 --> 00:00:18,919
Speaker 1: from FED Chair J Powell?

5
00:00:19,120 --> 00:00:22,120
Speaker 2: Well, I think the Chair certainly intended to open the

6
00:00:22,160 --> 00:00:27,440
Speaker 2: door pretty wide to cutting in September. Importantly, Lisa, he

7
00:00:27,520 --> 00:00:29,560
Speaker 2: spent a lot of time on balance of risk, which

8
00:00:29,600 --> 00:00:32,960
Speaker 2: is what policymakers do, but at the two key junctures

9
00:00:33,320 --> 00:00:36,320
Speaker 2: he highlighted the balance of risk to the labor market

10
00:00:36,520 --> 00:00:39,800
Speaker 2: is to a weaker labor market, and he basically indicated

11
00:00:39,800 --> 00:00:42,920
Speaker 2: that the balance of risk to higher inflation doesn't appear

12
00:00:42,960 --> 00:00:46,800
Speaker 2: to be a first order concern in terms of persistent inflation.

13
00:00:46,960 --> 00:00:49,559
Speaker 2: So I think the message was they think they're going

14
00:00:49,600 --> 00:00:51,600
Speaker 2: to cut in September, we get some more data, and

15
00:00:51,640 --> 00:00:53,200
Speaker 2: the markets have reacted to that.

16
00:00:55,560 --> 00:00:58,000
Speaker 1: How much do you think that this is partly to

17
00:00:58,120 --> 00:01:01,600
Speaker 1: maintain the Fed's credibility, not as is they'rely with respect

18
00:01:01,640 --> 00:01:04,240
Speaker 1: to the president, but that right now, if they get

19
00:01:04,280 --> 00:01:07,400
Speaker 1: it wrong on the labor market front, that it is

20
00:01:07,520 --> 00:01:10,520
Speaker 1: that much more pernicious based on some of the job owning.

21
00:01:10,920 --> 00:01:12,240
Speaker 3: By what we hear from the president.

22
00:01:14,080 --> 00:01:17,200
Speaker 2: Well, yeah, I mean, as the share said in the remarks,

23
00:01:17,240 --> 00:01:20,319
Speaker 2: it's a curious kind of balance in the labor market.

24
00:01:20,360 --> 00:01:23,520
Speaker 2: The payroll employment growth has been very, very weak in

25
00:01:23,560 --> 00:01:27,839
Speaker 2: the private sector, but the unemployment rate has not gone up,

26
00:01:27,920 --> 00:01:31,080
Speaker 2: and so they are really focused on the balance of risk. Look,

27
00:01:31,120 --> 00:01:34,479
Speaker 2: the FAT has a dual mandate. It's costly to let

28
00:01:34,520 --> 00:01:37,560
Speaker 2: inflation move higher and stay there, but it's also costly

29
00:01:37,600 --> 00:01:39,760
Speaker 2: to have a recession with the rise of the unemployment.

30
00:01:40,040 --> 00:01:42,920
Speaker 2: And I think, Lisa, you're correct they are tilting in

31
00:01:42,959 --> 00:01:44,280
Speaker 2: that direction now.

32
00:01:46,280 --> 00:01:48,960
Speaker 1: It feels like a very different Jackson Hole. And this

33
00:01:49,000 --> 00:01:50,600
Speaker 1: is something that we've been talking about with all of

34
00:01:50,640 --> 00:01:53,080
Speaker 1: our guests today. Rich that people have come on and

35
00:01:53,120 --> 00:01:56,520
Speaker 1: said there is a different tone about central banking independence

36
00:01:56,560 --> 00:01:59,120
Speaker 1: and a question of how to communicate at a time

37
00:01:59,480 --> 00:02:01,520
Speaker 1: of political interference.

38
00:02:01,960 --> 00:02:04,440
Speaker 3: What's your sense of where that was.

39
00:02:04,560 --> 00:02:06,680
Speaker 1: In the speech that we just heard from FED Chair

40
00:02:06,760 --> 00:02:09,239
Speaker 1: J Powell.

41
00:02:09,320 --> 00:02:11,800
Speaker 2: I think the approach the Chair took was to really

42
00:02:11,840 --> 00:02:15,440
Speaker 2: focus front and center, Lisa, on the dual mandate that's

43
00:02:15,480 --> 00:02:19,440
Speaker 2: assigned by Congress, maximum employment and price stability. And the

44
00:02:19,560 --> 00:02:24,120
Speaker 2: Chair gave a very reasoned and thoughtful analysis and discussion

45
00:02:24,240 --> 00:02:28,560
Speaker 2: of how they're balancing the dual mandate risks, and I

46
00:02:28,600 --> 00:02:31,520
Speaker 2: think that's the Jay Powell message to the issue of

47
00:02:31,520 --> 00:02:34,200
Speaker 2: FED independence. We have an assignment from Congress, and this

48
00:02:34,240 --> 00:02:38,200
Speaker 2: is what we're doing to achieve it.

49
00:02:38,880 --> 00:02:41,320
Speaker 1: At this point, we also are dealing with the headlines

50
00:02:41,320 --> 00:02:44,520
Speaker 1: that are coming out about FED Governor Lisa Cook, where

51
00:02:44,800 --> 00:02:47,560
Speaker 1: at the same time that Jerome Powell was giving his speech,

52
00:02:48,040 --> 00:02:50,520
Speaker 1: President Trump came out with this truth post saying that

53
00:02:50,560 --> 00:02:52,200
Speaker 1: he will fire Lisa.

54
00:02:51,880 --> 00:02:53,160
Speaker 3: Cook if she doesn't resign.

55
00:02:53,360 --> 00:02:57,080
Speaker 1: We did hear reports that in the Jackson Lake Lodge

56
00:02:57,080 --> 00:03:01,440
Speaker 1: and the lobby that James Fishback was screaming at Lisa

57
00:03:01,520 --> 00:03:04,720
Speaker 1: Cook that why did she commit mortgage fraud? What's your

58
00:03:04,760 --> 00:03:08,240
Speaker 1: take on what this does in terms of both the

59
00:03:08,280 --> 00:03:11,880
Speaker 1: FED composition but also just the ability to be clear

60
00:03:11,919 --> 00:03:13,840
Speaker 1: minded about making FED policy.

61
00:03:15,639 --> 00:03:19,640
Speaker 2: Well, obviously understand just looking at the headlines that you

62
00:03:19,760 --> 00:03:23,640
Speaker 2: mentioned myself and don't know the details or the facts

63
00:03:23,680 --> 00:03:29,320
Speaker 2: in this particular situation, but clearly we're in an environment

64
00:03:29,840 --> 00:03:35,280
Speaker 2: where FED independence is under scrutiny. And my conviction is that,

65
00:03:35,600 --> 00:03:39,240
Speaker 2: notwithstanding all of the very relevant factors that you mentioned,

66
00:03:39,240 --> 00:03:41,800
Speaker 2: that the Fed's is going to keep doing keep doing

67
00:03:41,800 --> 00:03:42,320
Speaker 2: its job.

68
00:03:45,160 --> 00:03:47,400
Speaker 4: Richard Claire to Tom Keene here, thank you so much

69
00:03:47,440 --> 00:03:49,920
Speaker 4: for joining. U's very valuable. I've got two texts I

70
00:03:49,960 --> 00:03:53,040
Speaker 4: want to take here that I think are important. You

71
00:03:53,200 --> 00:03:56,800
Speaker 4: recently said that what matters is the institution, that this

72
00:03:56,960 --> 00:04:01,240
Speaker 4: chairman and any future chairman has to protect the institution.

73
00:04:01,800 --> 00:04:05,600
Speaker 4: What's the day one first mandate to protect the institution

74
00:04:06,120 --> 00:04:07,160
Speaker 4: for the next chairman.

75
00:04:09,040 --> 00:04:11,840
Speaker 2: Well, I think first and foremost it's to have in

76
00:04:11,920 --> 00:04:17,600
Speaker 2: place a plan and communication that will deliver expectations of

77
00:04:17,680 --> 00:04:20,479
Speaker 2: price stability. I think the chair was right today to

78
00:04:20,560 --> 00:04:23,720
Speaker 2: emphasize that the FED has to focus on getting price

79
00:04:23,720 --> 00:04:27,599
Speaker 2: stability because that's going to deliver the ability to deliver

80
00:04:27,760 --> 00:04:32,160
Speaker 2: maximum employment. I've also written Tom that the FED is

81
00:04:32,680 --> 00:04:36,119
Speaker 2: sort of a complex, encumbersome institution with nineteen folks around

82
00:04:36,160 --> 00:04:38,560
Speaker 2: the table and the Reserve Bank presidents. But I do

83
00:04:38,600 --> 00:04:41,680
Speaker 2: think that is a strength right now of the institution.

84
00:04:43,000 --> 00:04:45,880
Speaker 4: Right Well, this is really important because it's as fractious

85
00:04:45,880 --> 00:04:48,359
Speaker 4: as a meeting of the bond team at PIMCO. In

86
00:04:48,400 --> 00:04:52,719
Speaker 4: the middle of the speech, Powell channeled a few years

87
00:04:52,760 --> 00:04:55,359
Speaker 4: ago at PIMCO the New Normal. For a moment, I

88
00:04:55,360 --> 00:04:59,280
Speaker 4: thought Mohammed Hlarian had personated in to write the speech.

89
00:05:00,000 --> 00:05:03,760
Speaker 4: There's your optimal new normal for the Fed, which Powell

90
00:05:03,800 --> 00:05:07,520
Speaker 4: mentioned today. What's the best new normal for the next Fed?

91
00:05:09,320 --> 00:05:12,159
Speaker 2: Well, I think a new normal would be inflation moving

92
00:05:12,200 --> 00:05:15,040
Speaker 2: down towards the two percent target, which would let the

93
00:05:15,080 --> 00:05:18,280
Speaker 2: next FED chair cut rates down towards a neutral level.

94
00:05:18,320 --> 00:05:20,800
Speaker 2: You know, PIMCO in twenty fourteen we rolled out the

95
00:05:20,839 --> 00:05:24,599
Speaker 2: idea of a new neutral and we've been operating in

96
00:05:24,640 --> 00:05:27,360
Speaker 2: that new neutral world now for more than a decade,

97
00:05:28,000 --> 00:05:31,920
Speaker 2: and so I think well anchored inflation expectations, getting tariffs

98
00:05:31,920 --> 00:05:34,880
Speaker 2: in the rear view mir would allow the FED to

99
00:05:34,880 --> 00:05:37,839
Speaker 2: cut rates by probably one hundred and fifty basis points

100
00:05:38,240 --> 00:05:41,240
Speaker 2: from here in achieving that ultimate soft landing. So I

101
00:05:41,240 --> 00:05:44,320
Speaker 2: think that would be a good new normal destination for

102
00:05:44,400 --> 00:05:45,320
Speaker 2: the next FED chair.

103
00:05:47,080 --> 00:05:49,520
Speaker 1: What risks are there to that given what we're seeing

104
00:05:49,560 --> 00:05:51,479
Speaker 1: with the dollar, given the fact that we really have

105
00:05:51,560 --> 00:05:54,479
Speaker 1: a very high level of uncertainty around which tariffs are

106
00:05:54,480 --> 00:05:55,840
Speaker 1: going to stick and how much is going to get

107
00:05:55,839 --> 00:05:57,560
Speaker 1: past along to consumers.

108
00:05:59,080 --> 00:06:01,559
Speaker 2: Sure, and I think the Chair was right to point

109
00:06:01,560 --> 00:06:04,720
Speaker 2: out that we are seeing evidence of tariffs showing up

110
00:06:04,880 --> 00:06:08,960
Speaker 2: in the price indexes for imported goods, but that's been

111
00:06:09,000 --> 00:06:13,480
Speaker 2: offset to some extent with a decline in services inflation. Again,

112
00:06:13,680 --> 00:06:16,919
Speaker 2: I think where they are focused is to make sure

113
00:06:16,960 --> 00:06:20,080
Speaker 2: that what is an inevitable increase in the price level

114
00:06:20,400 --> 00:06:25,400
Speaker 2: from tariffs does not over time result in persistent inflation.

115
00:06:25,520 --> 00:06:28,760
Speaker 2: And I think the speech today addressed their thinking right now,

116
00:06:28,800 --> 00:06:31,840
Speaker 2: which is that their baseline is that that will not happen,

117
00:06:32,120 --> 00:06:35,040
Speaker 2: which will give them the room possibly in September, to

118
00:06:35,839 --> 00:06:36,440
Speaker 2: cut rates.

119
00:06:37,640 --> 00:06:39,599
Speaker 4: Yeah, at least I think it's important to mention within

120
00:06:39,640 --> 00:06:42,000
Speaker 4: the market, check that the market is putting on steam.

121
00:06:42,640 --> 00:06:46,039
Speaker 4: Here an hour after the beginning of the speech and

122
00:06:46,120 --> 00:06:49,599
Speaker 4: Mike McKee's bombshell headlines a Dow lifting up, I'm not

123
00:06:49,640 --> 00:06:52,359
Speaker 4: told I can't leave Jackson Hall unless Dow goes up

124
00:06:52,360 --> 00:06:53,240
Speaker 4: a thousand points.

125
00:06:53,320 --> 00:06:54,680
Speaker 3: Well, I'm getting pretty close to it.

126
00:06:54,680 --> 00:06:56,880
Speaker 1: It sounds like you're going to be hiking for maybe

127
00:06:56,960 --> 00:06:58,839
Speaker 1: another six hours and then all of a sudden not

128
00:06:58,880 --> 00:06:59,160
Speaker 1: so much.

129
00:06:59,279 --> 00:06:59,479
Speaker 3: Rich.

130
00:06:59,640 --> 00:07:02,240
Speaker 1: I do want to know, though, about what this does

131
00:07:02,360 --> 00:07:05,919
Speaker 1: in terms of the currency ramifications and where your preference

132
00:07:05,960 --> 00:07:09,359
Speaker 1: lies in terms of the good investment backdrop, because what

133
00:07:09,400 --> 00:07:10,440
Speaker 1: we heard from Fetcher J.

134
00:07:10,520 --> 00:07:12,960
Speaker 3: Powell is so vastly different from what we.

135
00:07:12,960 --> 00:07:17,720
Speaker 1: Heard from Joakim Novel of the German Central Bank where

136
00:07:17,760 --> 00:07:20,880
Speaker 1: he said we have to focus on inflation and right

137
00:07:20,920 --> 00:07:23,760
Speaker 1: now that is more concerning to them than trying to

138
00:07:23,800 --> 00:07:27,760
Speaker 1: support growth by cutting rates or being stimulative. The fact

139
00:07:27,760 --> 00:07:29,760
Speaker 1: that that is the framework there and it is such

140
00:07:29,800 --> 00:07:32,360
Speaker 1: a different framework here, does that make you want to

141
00:07:32,400 --> 00:07:34,400
Speaker 1: invest in Europe a little bit more?

142
00:07:35,440 --> 00:07:38,040
Speaker 2: Well? You know, I think one of our themes at

143
00:07:38,080 --> 00:07:41,040
Speaker 2: PIMCO is that we're in a world where taking advantage

144
00:07:41,040 --> 00:07:44,920
Speaker 2: of a global opportunity set makes sense. Also, we're in

145
00:07:44,920 --> 00:07:48,000
Speaker 2: a world where makes us to focus on valuations and

146
00:07:48,040 --> 00:07:51,440
Speaker 2: without getting into particular markets or securities. There have been

147
00:07:51,480 --> 00:07:55,440
Speaker 2: some pretty big divergencies between valuation and the US and Europe,

148
00:07:55,520 --> 00:08:00,160
Speaker 2: especially in inequity markets. Also, you know, the Europeans are

149
00:08:00,280 --> 00:08:03,440
Speaker 2: much closer to their two percent target than is the

150
00:08:03,520 --> 00:08:06,960
Speaker 2: FED because from your point of view, the tariffs are

151
00:08:07,000 --> 00:08:11,040
Speaker 2: really a disinflationary for so we're at different points in

152
00:08:11,080 --> 00:08:14,560
Speaker 2: the rate cycle and that does open up some good opportunities.

153
00:08:16,680 --> 00:08:20,240
Speaker 4: Richard Clarita, you are definitive in the mathematics, the modern

154
00:08:20,280 --> 00:08:22,239
Speaker 4: mathematics of our economics.

155
00:08:22,680 --> 00:08:23,320
Speaker 3: Then, you know, we.

156
00:08:23,280 --> 00:08:25,360
Speaker 4: Talk about a new framework and it's a lot of

157
00:08:25,440 --> 00:08:28,360
Speaker 4: job boning about process. Maybe it's what are we going

158
00:08:28,440 --> 00:08:30,400
Speaker 4: to do with the dots? What are we going to

159
00:08:30,480 --> 00:08:35,959
Speaker 4: do with the mathematics of modern economics forward? Is it

160
00:08:36,080 --> 00:08:38,119
Speaker 4: diminished after all this turmoil?

161
00:08:39,880 --> 00:08:41,760
Speaker 2: You know, you know, Tom, you and I over the years,

162
00:08:41,800 --> 00:08:44,280
Speaker 2: decades now, I've talked about that a number of times,

163
00:08:44,320 --> 00:08:48,520
Speaker 2: and my thinking continues to be the mathematics, the models,

164
00:08:48,720 --> 00:08:51,880
Speaker 2: including my own, our tools. They're a starting point for

165
00:08:51,920 --> 00:08:55,440
Speaker 2: analysis and discussion. But they're not They're not handcuffs, nor

166
00:08:55,640 --> 00:09:00,439
Speaker 2: are they the destination. And certainly, you know, the the

167
00:09:00,520 --> 00:09:03,640
Speaker 2: last five years have been unusual with a pandemic and

168
00:09:03,679 --> 00:09:07,120
Speaker 2: all the rest. But I continue to believe that models

169
00:09:07,120 --> 00:09:09,319
Speaker 2: in math are our tools, not handcuffs.

170
00:09:10,800 --> 00:09:12,680
Speaker 4: My goal right now, Rich is to get you on

171
00:09:12,760 --> 00:09:14,760
Speaker 4: the short list, is to be the next chairman. So

172
00:09:14,840 --> 00:09:19,520
Speaker 4: let's talk tariffs here. What is the clarita mathematics of

173
00:09:19,640 --> 00:09:20,880
Speaker 4: Trump tariffs?

174
00:09:22,640 --> 00:09:24,640
Speaker 2: Well, as Mike mckeeth said, they are raising a heck

175
00:09:24,679 --> 00:09:27,080
Speaker 2: of a lot of revenue, and I would agree with

176
00:09:27,200 --> 00:09:31,320
Speaker 2: my Washington there you go. I think I think Washington

177
00:09:31,720 --> 00:09:35,280
Speaker 2: may very quickly get hooked on the two or three

178
00:09:35,360 --> 00:09:39,440
Speaker 2: hundred billion dollars a year in tariff revenue, especially if

179
00:09:39,520 --> 00:09:42,400
Speaker 2: you know the initial cost of raising that revenue is

180
00:09:42,440 --> 00:09:45,760
Speaker 2: in the rearview mirror, which which I think I expect

181
00:09:45,760 --> 00:09:49,840
Speaker 2: to be the case down the road. Look, we're in

182
00:09:49,920 --> 00:09:52,560
Speaker 2: a different regime, you know. We talked at PIMCO in

183
00:09:52,640 --> 00:09:56,960
Speaker 2: June about uh an era of fragmentation, and these trends

184
00:09:56,960 --> 00:10:01,760
Speaker 2: have been accelerating and the destination global trading system and

185
00:10:01,800 --> 00:10:04,800
Speaker 2: global economy is going to be very different in five

186
00:10:04,920 --> 00:10:07,880
Speaker 2: years than it was in the thirty years of globalization.

187
00:10:08,120 --> 00:10:10,840
Speaker 2: So I think to be continued is the way I

188
00:10:10,840 --> 00:10:12,120
Speaker 2: would answer your question.

189
00:10:14,160 --> 00:10:15,480
Speaker 3: He's running, Is that what you think?

190
00:10:17,120 --> 00:10:17,320
Speaker 1: I know?

191
00:10:17,440 --> 00:10:18,200
Speaker 4: Bullets running?

192
00:10:18,400 --> 00:10:18,600
Speaker 3: Yeah.

193
00:10:18,679 --> 00:10:20,480
Speaker 4: I think by the time we get done on the

194
00:10:20,480 --> 00:10:22,439
Speaker 4: show today, we're gonna have Tracy Alloway running.

195
00:10:22,559 --> 00:10:27,320
Speaker 1: I think that maybe we'll doubt but I am we will.

196
00:10:27,640 --> 00:10:29,840
Speaker 1: She's sitting here with us. I'm sure, she says, I

197
00:10:30,000 --> 00:10:33,400
Speaker 1: bag Rich. I am curious though, going forward this idea

198
00:10:33,559 --> 00:10:36,480
Speaker 1: of how inflationary tariffs could or couldn't be given the

199
00:10:36,520 --> 00:10:38,400
Speaker 1: fact that this is a new world order. And we

200
00:10:38,400 --> 00:10:41,520
Speaker 1: were talking with Adam Posen of the Peters Constitute earlier

201
00:10:41,559 --> 00:10:44,880
Speaker 1: and he was talking about how he sees inflation as

202
00:10:44,920 --> 00:10:49,240
Speaker 1: having nodes of the nineteen seventies and potentially being really

203
00:10:49,320 --> 00:10:52,160
Speaker 1: pernicious Why do you not necessarily see that?

204
00:10:52,360 --> 00:10:55,280
Speaker 3: Why are markets more sanguine on that risk?

205
00:10:56,840 --> 00:11:02,679
Speaker 2: Well, I think simply because the the nineteen seventies we're

206
00:11:02,720 --> 00:11:06,920
Speaker 2: a very serient experience for the current group of policy

207
00:11:06,960 --> 00:11:11,199
Speaker 2: makers who lived through it, and I think there were

208
00:11:11,240 --> 00:11:15,600
Speaker 2: some important lessons learned. And one lesson learned is high

209
00:11:15,640 --> 00:11:18,960
Speaker 2: and persistent inflation is very costly to the economy. And

210
00:11:19,080 --> 00:11:22,760
Speaker 2: I think politicians learned that as well, and so I

211
00:11:22,800 --> 00:11:26,040
Speaker 2: think that central banks have earned a lot of credibility

212
00:11:26,160 --> 00:11:29,800
Speaker 2: the under Vulcar, under green Span, under pass FED chairs

213
00:11:29,840 --> 00:11:34,199
Speaker 2: in the US and abroad, and I think that expectations

214
00:11:34,280 --> 00:11:37,240
Speaker 2: of inflation, we're sort of in a world in which

215
00:11:37,640 --> 00:11:39,760
Speaker 2: the bomb markets at least think that over a five

216
00:11:39,840 --> 00:11:42,400
Speaker 2: year period, the FED is going to do whatever it

217
00:11:42,440 --> 00:11:45,760
Speaker 2: takes to get inflation down what I call two points something.

218
00:11:46,160 --> 00:11:49,080
Speaker 2: And I think that's an important victory that central banks

219
00:11:49,120 --> 00:11:52,160
Speaker 2: are still benefiting from. And I would expect that and

220
00:11:52,200 --> 00:11:55,079
Speaker 2: certainly hope that will continue.

221
00:11:55,559 --> 00:11:57,760
Speaker 4: Richter Clarita with us follow you on radio and TV.

222
00:11:57,840 --> 00:12:00,800
Speaker 4: We've extended this wonderful show with a huge market movie

223
00:12:00,800 --> 00:12:04,000
Speaker 4: c today. Off of the Powell speech, I want to

224
00:12:04,040 --> 00:12:06,880
Speaker 4: turn to Michael McKee because my head's spinning. I've got

225
00:12:07,040 --> 00:12:12,120
Speaker 4: Chairman Bullard, Chairman Clarita, Chairman Alloway, and the rest. So

226
00:12:12,200 --> 00:12:15,200
Speaker 4: when they're in the Oval Office and they're sitting on

227
00:12:15,240 --> 00:12:18,520
Speaker 4: the couches and President Trump is going to turn to

228
00:12:18,640 --> 00:12:21,239
Speaker 4: the people he trusts. Here, let's start with the Secretary

229
00:12:21,480 --> 00:12:25,360
Speaker 4: of Treasury. What is Beson can say to him about

230
00:12:25,440 --> 00:12:29,120
Speaker 4: the qualifications needed for a Trump chairman.

231
00:12:30,000 --> 00:12:32,840
Speaker 5: Well, probably from Scott Besson's you would hear the importance

232
00:12:32,840 --> 00:12:35,439
Speaker 5: of being able to relate on Wall Street. It was

233
00:12:35,480 --> 00:12:38,640
Speaker 5: put once to me that the Treasury Secretary's job in

234
00:12:38,720 --> 00:12:41,559
Speaker 5: terms of the markets is to be able to calm

235
00:12:41,600 --> 00:12:44,520
Speaker 5: them down when something is going wrong. And so that

236
00:12:44,800 --> 00:12:48,040
Speaker 5: I would argue for a certain number of the candidates,

237
00:12:48,600 --> 00:12:52,640
Speaker 5: maybe miss Alloway, it fits in that category that have

238
00:12:52,760 --> 00:12:57,120
Speaker 5: that gravitas to be able to do that. The idea

239
00:12:57,200 --> 00:13:01,240
Speaker 5: that you want to cut rates is that's not really

240
00:13:01,240 --> 00:13:02,800
Speaker 5: part of it, because you wouldn't be on the list

241
00:13:02,880 --> 00:13:05,160
Speaker 5: if you didn't want to cut rates at this point.

242
00:13:05,200 --> 00:13:09,080
Speaker 5: So it's going to be somebody who is the president

243
00:13:09,120 --> 00:13:12,000
Speaker 5: will feel comfortable with maybe this move if the Fed

244
00:13:12,040 --> 00:13:14,679
Speaker 5: cuts rates. He's more comfortable with a wider group of

245
00:13:14,720 --> 00:13:16,679
Speaker 5: people because he started to get what he.

246
00:13:16,679 --> 00:13:18,520
Speaker 4: Wants and Joe Wisenthal.

247
00:13:19,000 --> 00:13:22,000
Speaker 5: We could add job Weisenthal because well, we don't know

248
00:13:22,240 --> 00:13:24,360
Speaker 5: if the president is a country music fan. We'd have

249
00:13:24,400 --> 00:13:28,160
Speaker 5: to find that out first. But I think going forward,

250
00:13:28,679 --> 00:13:30,480
Speaker 5: the one thing you could say maybe out of this

251
00:13:30,520 --> 00:13:34,320
Speaker 5: speech is if an ordinary administration which wasn't going to

252
00:13:34,320 --> 00:13:36,439
Speaker 5: be subject kind of the whims the way Donald Trump

253
00:13:36,440 --> 00:13:39,280
Speaker 5: does things, this would have really given a boost to

254
00:13:39,360 --> 00:13:42,480
Speaker 5: Chris Waller because essentially what they're saying is Chris Waller

255
00:13:42,600 --> 00:13:47,440
Speaker 5: was right that inflation looked through inflation from tariffs because

256
00:13:47,760 --> 00:13:50,160
Speaker 5: it will be a one time price boost.

257
00:13:50,280 --> 00:13:52,760
Speaker 1: Yeah, Now the question is going to be and ultimately

258
00:13:52,800 --> 00:13:53,520
Speaker 1: is this going to be.

259
00:13:53,480 --> 00:13:55,480
Speaker 3: A hawkish cut or a dubbish cut.

260
00:13:55,600 --> 00:13:58,599
Speaker 1: In September, Pimpko goes at Rich Clarita, you've been incredibly

261
00:13:58,800 --> 00:14:01,520
Speaker 1: generous with your time. Thank you so much for being

262
00:14:01,720 --> 00:14:04,520
Speaker 1: with us as we dissect that speech. It was a

263
00:14:04,600 --> 00:14:07,360
Speaker 1: lot longer than as prior speeches, and it was one

264
00:14:07,679 --> 00:14:10,960
Speaker 1: that signaled at the beginning of a new rate cutting cycle.

265
00:14:10,960 --> 00:14:14,200
Speaker 1: They have not cut rates since December in twenty and

266
00:14:14,320 --> 00:14:15,200
Speaker 1: twenty four