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Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane. Along

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Speaker 1: with Jonathan Farrell and Lisa Brownwitz. Daily we bring you

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Speaker 1: insight from the best and economics, finance, investment, and international relations.

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Speaker 1: Find Bloomberg Surveillance on Apple Podcast, Suncloud, Bloomberg dot Com,

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Speaker 1: and of course on the Bloomberg termainment. Let's get right

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Speaker 1: to it right now. He is the Vice Chairman of

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Speaker 1: the Federal Reserve System, Richard Clarida, of course of Columbia

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Speaker 1: University and truly one of our noted academics on monetary policy,

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Speaker 1: assisting Jerome Powell at every step of the way. Vice

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Speaker 1: Chairman John Farrell and Tom can good morning to you.

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Speaker 1: Good morning. I look, Richard Claida, where we are, and

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Speaker 1: I want to go back to your important paper The

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Speaker 1: Science of Monetary Policy with Galli and Galli and Girdler

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Speaker 1: of years ago. And you lead with a quote from

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Speaker 1: another Vice Chairman, Alan Blinder, who talks about the practicing

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Speaker 1: of the dark art. Give us the state of the

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Speaker 1: practicing of the dark art of the FED, given this

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Speaker 1: original moment in American history. Well, thank you, Tom and

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Speaker 1: and as Alan and we all and I certainly believe

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Speaker 1: there's there's as much or probably much more art than

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Speaker 1: science and monetary policy, but it's good to refer to

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Speaker 1: some of that UH as well. I think I think

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Speaker 1: that the Federal Reserve in August adopted a new framework.

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Speaker 1: It's an evolution, but it's a robust evolution, and primarily

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Speaker 1: it is outcome based UM our goals our maximum employment

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Speaker 1: and price stability, and we want our policy to be robust.

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Speaker 1: If our models break down UM and we can still

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Speaker 1: do monetary policy, but we're gonna be more outcome based

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Speaker 1: and less outlook based. And I think that served us

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Speaker 1: well in the pandemic, and I think it will service

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Speaker 1: well in the years ahead. Could you count arise that

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Speaker 1: as a commitment to being late instead of being guly well.

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Speaker 1: What we've said in September of last year, following our

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Speaker 1: framework announcement in August is that we are we do

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Speaker 1: not expect to lift off until a three conditions are met. First,

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Speaker 1: that inflation actually gets to two percent. We want to

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Speaker 1: see actual inflation for at least a year or two

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Speaker 1: per cent, and we want that to be sustained, not

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Speaker 1: just one and done. Secondly, we want to be UH

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Speaker 1: looking at labor market indicators that are consistent with a

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Speaker 1: fully employed um economy. And third, we want that to

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Speaker 1: be sustained. We think that's appropriate since we've hit the

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Speaker 1: effective lower bound, inflation has been below our target for

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Speaker 1: most of the last ten years, and under those circumstances,

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Speaker 1: that is a good UH policy. You are correct that

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Speaker 1: in the past the FED was more preemptive, and indeed,

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Speaker 1: my research suggested that if you've got good models, you

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Speaker 1: want to be preemptive. But if the models are not

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Speaker 1: serving you, well, you're more robust if you're looking at

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Speaker 1: actual data. So that's that's the way I chacterize the job.

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Speaker 1: The conversation, as you know, vice check clouded right now,

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Speaker 1: is over what substantial progress actually is. You're familiar with

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Speaker 1: the debate. We talk about it almost every single down

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Speaker 1: programs like this. Do you think it's necessary to define

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Speaker 1: what substantial progress actually is? Well, first of all, it's

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Speaker 1: actual progress. I think that's an important point. It's not

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Speaker 1: projective progress. It's it's hard numbers on the labor market

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Speaker 1: and on prices. That's the first point. Secondly, Um, you

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Speaker 1: know we're early on in this year. I know we've

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Speaker 1: already sort of penciled in six or seven percent growth

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Speaker 1: and a big ball and unemployment. But under outcome based policy,

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Speaker 1: we really want to see that as as share power

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Speaker 1: is indicated and I've under indicated, as we go through

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Speaker 1: the year, as the data comes in, as we release

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Speaker 1: our SEP projections based on that incoming data, we will

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Speaker 1: have a sense on on where we are relative to

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Speaker 1: that progress. And as share pal is also indicated. Um,

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Speaker 1: as we think we are making that progress, we will

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Speaker 1: communicate that to UH people who listen to our communication.

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Speaker 1: And so I think that this is really where we

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Speaker 1: want to be. It's actual progress, it's not projective progress.

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Speaker 1: And as we go through the year, we will be

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Speaker 1: informing the public about our views on that progress. So Rich,

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Speaker 1: let's talk about it right now. You've talked about the

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Speaker 1: conditions needed for lift off, but we haven't ready defined

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Speaker 1: them conditions consistent with full employment. I don't know what

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Speaker 1: that is. I have no idea. If you'll tell me,

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Speaker 1: we're talking about substantial progress, but it needs to be actual,

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Speaker 1: not forecast. But I still don't know what progress actually is.

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Speaker 1: So you don't plan to define what substantial further progress is.

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Speaker 1: You've promised to give markets warning before changing policy. How

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Speaker 1: exactly do you plan to do that? Well, certainly we have.

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Speaker 1: We have eight meetings a year. The Chair does a

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Speaker 1: press conference at at each of those meetings. We release

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Speaker 1: the summary of economic projections at four of those meetings,

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Speaker 1: and so we will have apple opportunity. And again the

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Speaker 1: Chair would not have been making those comments publicly if

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Speaker 1: if he was not committed to it. So we'll have

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Speaker 1: many opportunities as as the actual data ms en uh

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Speaker 1: to to inform uh fat observers about our assessment of

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Speaker 1: are we making that progress? Vice Chairman. The critics, and

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Speaker 1: as you know, there are many critics. They have a

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Speaker 1: habit of coming out Friday for weekend consumption. Have a

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Speaker 1: true fear of inflation? You're Andrea Aella running your research

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Speaker 1: for monetary affairs. Is a fabulous phrase of the core

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Speaker 1: and the crust. Looking at core inflation, looking at the

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Speaker 1: dynamics of energy, It gets to the visceral fear that

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Speaker 1: our radio and TV listeners have. Are you afraid of inflation?

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Speaker 1: Should we fear inflation? Well, the reality is we have

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Speaker 1: a dual mandate and and half of that is price

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Speaker 1: stability um and so the federal reserve, every federal reserve

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Speaker 1: since Paul Wolker's leadership has been committed to that the

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Speaker 1: pal fit is too But but tom um two percent

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Speaker 1: as a ceiling, which is in effect the way many

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Speaker 1: thought of our prior policy, also does not serve the

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Speaker 1: economy well. It has in fact serious implications for the

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Speaker 1: labor market and prosperity. And so essentially what we've said

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Speaker 1: is that we want inflation outcomes that keep inflation expectations

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Speaker 1: anchored at two percent, and that's gonna mean sometimes will

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Speaker 1: be above two and sometimes will be UM below uh.

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Speaker 1: We focus on inflation expectations UH intensely. We have a

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Speaker 1: new index of common inflation expectations, I would say, and

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Speaker 1: we've indicated tom uh that because of the nature of

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Speaker 1: the pandemic shock a year ago, as we moved through

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Speaker 1: one on a year over a year basis, headline inflation

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Speaker 1: is gonna likely move above two percent because we're gonna

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Speaker 1: be comparing this year's prices with last year's collapsing prices.

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Speaker 1: But we expect in our baseline most of that to

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Speaker 1: be transitory and for inflation to return later this year

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Speaker 1: to around uh two. That's our that's our baseline. Let

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Speaker 1: me also say that around the baseline, there are risks

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Speaker 1: on both sides, uh, and in the risk case and

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Speaker 1: inflation were to begin to move above a level consistent

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Speaker 1: with price stability, we would have the tools to address that,

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Speaker 1: and I'm confident that we would under that under that

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Speaker 1: wrist scenario fold in the balance sheet and that can

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Speaker 1: be the twin deficits, a comparison of the fiscal situation

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Speaker 1: to g d P and of course trade dynamics as well.

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Speaker 1: What do we do with the sixth standard deviation move

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Speaker 1: and the twin deficit oout say two years. Are you

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Speaker 1: optimistic we can stabilize that terrible trend? Are you optimistic

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Speaker 1: that we can somehow revert to a better outcome? Well,

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Speaker 1: you are correct, Tom, and I think this was pointed

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Speaker 1: out in the I m F World Bank meetings this week.

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Speaker 1: UM that because the US, for a variety of reasons,

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Speaker 1: including better progress on vaccination and very robust policy support,

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Speaker 1: is going to be growing rapidly this year compared to

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Speaker 1: other countries. And what we tend to see historically is

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Speaker 1: that when the US grows faster than most of the

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Speaker 1: rest of the world, some of that spills into our

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Speaker 1: imports and we have a bigger trade deficit. From the

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Speaker 1: point of view of the rest of the world, that's

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Speaker 1: a good thing that we're more of a locomotive than caboose,

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Speaker 1: and so I would expect the current account deficit to

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Speaker 1: widen this year and next under the baseline scenario. It's

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Speaker 1: not something now that that is a concern because capital

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Speaker 1: flows into the US in part because of our our

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Speaker 1: rage relative to the rest of the world. So no,

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Speaker 1: it's not a concern. Obviously, any circumstance with a big

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Speaker 1: imbalance can become a concern, but it's not a concern

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Speaker 1: now to me. Colleague and good friend Michael McKee reached

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Speaker 1: down early this morning Rich and indicated that Lorie Logan,

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Speaker 1: who I'm sure you're familiar with, of course over the

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Speaker 1: New York Fed, suggested last night that they'll be changing

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Speaker 1: the composition of his QUEI purchases to match the outstanding

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Speaker 1: US debt profile. Can you elaborate a little bit on

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Speaker 1: the objectives behind that, Ridge, Sure, And look, Laurie is

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Speaker 1: a fine colleague and and has done a fabulous job

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Speaker 1: in my three years at the at the board, so

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Speaker 1: I'm lucky to be able to work with her. Well,

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Speaker 1: we're said in those remarks is essentially restarting what has

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Speaker 1: been our policy for some time now, which is that

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Speaker 1: as we're purchasing treasury securities, we're doing so in the

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Speaker 1: secondary market, and we'd like those purchases to roughly match

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Speaker 1: the outstanding, the supply of treasuries in the market according

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Speaker 1: to different maturities, and so, you know, as the Treasury

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Speaker 1: changes its issuance patterns, then we would of course adapt

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Speaker 1: our program to match those those outstanding. So I don't

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Speaker 1: think she was really trying to make news there. It's

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Speaker 1: really just articulating what our policy has been for for

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Speaker 1: some time. You wouldn't characterize this is operation twist, then

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Speaker 1: I would not characterize the as operation twists. Michael mckill

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Speaker 1: be happy that we address that particular question, said, I

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Speaker 1: think John that was on the edge of the route,

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Speaker 1: just so you know, have to bring it up. At

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Speaker 1: one of the conversation, Rich you mentioned transit tree, and

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Speaker 1: we've been playing the drinking game transit tree every time

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Speaker 1: the vice chairman is South speaks. Every time the chairman

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Speaker 1: speaks transitory, transity transitory. Say, here's my question. Riches the

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Speaker 1: Epograms says, how would you know if you're wronk that

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Speaker 1: it's not just transit treat How would you know if

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Speaker 1: you're wronk. Well, the simplest answer is that of inflation

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Speaker 1: at the end of the year, is has not declined

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Speaker 1: from where it is in the middle of the year,

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Speaker 1: that will be some good evidence. Um. I also think

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Speaker 1: that you know, we look at both headline and core measures.

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Speaker 1: And let me also say, John, because not surprisingly it's

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Speaker 1: a good question that the show tends to ask good questions. Um,

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Speaker 1: the reality the real sometimes not not always, But I

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Speaker 1: would say that that an important point to note, and

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Speaker 1: I've made this point several times, so let me repeat it.

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Speaker 1: Show there is a there is a lot of pent

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Speaker 1: up demand in the economy. We have a lot of

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Speaker 1: fiscal support, monetary policy has been all in for thirteen months.

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Speaker 1: But there's a lot of pent up supply in the economy.

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Speaker 1: Eight and a half million jobs short of where we

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Speaker 1: were thirteen months ago. A lot of small businesses shut down,

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Speaker 1: and so we do think the economy is going to reopen.

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Speaker 1: So both supply and demand will be in play, and

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Speaker 1: there could be some temporary and balances in certain sectors

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Speaker 1: um so called bottle nuck bottleneck effects. But again we

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Speaker 1: would expect those to be transitory, and there's the year progressive,

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Speaker 1: and there's we go into next year. If they're not,

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Speaker 1: then we'll have to take that into account, certainly, John,

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Speaker 1: I should also say that. I should also say that

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Speaker 1: I consult my Bloomberg regularly, UH and my favorite, one

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Speaker 1: of my favorite screens is e CFC, where you accumulate

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Speaker 1: all the individual forecast for the economy UH, and your

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Speaker 1: entire Bloomberg panel shows a similar projection. Now, again, forecasting

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Speaker 1: is hard, That's why we do it a lot. But

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Speaker 1: the baseline view, even given the fiscal package, is that

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Speaker 1: most of the move above two percent inflation we see

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Speaker 1: the spring should revert back later this year. I'm looking

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Speaker 1: at a CFC right now at two point one, twenty one,

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Speaker 1: twenty two point twenty three. You mentioned something important, Nut Rich,

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Speaker 1: and it wasn't lost on me until about that turn

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Speaker 1: from twenty one into twenty two. Is that the ultimate

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Speaker 1: test for you? But you won't really know until we

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Speaker 1: get a little bit deeper into early twenty two. To

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Speaker 1: draw that distinction between whether something is transitory or perhaps

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Speaker 1: a little bit more persistent, Well, sure, I think I

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Speaker 1: just think as as time, you know, as time goes on,

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Speaker 1: going to a depth. I think I saw heard some

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Speaker 1: sound you must have had my good friend Ken Rugoff

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Speaker 1: up an excellent observation, which is that this is a

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Speaker 1: very unusual shock, a global shutdown, shutdown of the global

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Speaker 1: economy through a true, truly exhaugenous event. I think it's

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Speaker 1: never happened to my professional career because it impacted both

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Speaker 1: supply and demand. So we're gonna be learning as sectors

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Speaker 1: come back online, and I'm sure there'll be surprises along

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Speaker 1: the way, and we need to be attuned and attentive

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Speaker 1: to the data flow. But yes, of course, and also

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Speaker 1: John Um, you know, yes, we we welcome the nine

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Speaker 1: thousand plus jobs that are gained, but there's a a

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Speaker 1: hole in the in the labor market, and will begin

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Speaker 1: to get a better sense as we go through this

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Speaker 1: calendar year about how how rapid that progress is and

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Speaker 1: how that is showing up another indicators of the labor market.

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Speaker 1: So of course, I think, yeah, Vice Chairman, a final question,

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Speaker 1: if we could, we did speak with Kenneth Rogoff of

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Speaker 1: Harvard today, and he traced a path in our academics

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Speaker 1: back to UH Dr Mundell Robert Mandel passing at this week,

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Speaker 1: Richard Clarida, you had the privilege of not only reading

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Speaker 1: Mundel and doing Mundel, but working with Mundel at Columbia University.

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Speaker 1: Your thoughts on what he gave to Kenneth Rogoff, Richard

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Speaker 1: Clarida and the rest of us, well, it's uh. I

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Speaker 1: was very saddened when I heard the news this week.

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Speaker 1: Bob was a mentor and a friend for thirty years.

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Speaker 1: It was one of the thrills of my career too,

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Speaker 1: to be a colleague of his. Because as a global Mackerel,

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Speaker 1: all global and Mackerel columns today are either students of

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Speaker 1: Mundeal or the students of Mundal in one way or

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Speaker 1: the other. And that was certainly true with me. He's

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Speaker 1: truly the father of the euro expansive, creative, a wonderful gentleman,

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Speaker 1: UH and really one of the great great economists of

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Speaker 1: the second half of the twentieth century. Will be sorely missed,

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Speaker 1: both as a human being UH and as a scholar.

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Speaker 1: And I think everyone here at Blomberg's of violence and

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Speaker 1: a tame across the Blimberg universe at those comments, Rachel

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Speaker 1: always trying to catch out these. I think we're all

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Speaker 1: looking forward to just getting into the same room again

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Speaker 1: and look forward to doing that soon. Maybe, Like Danny D. C.

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Speaker 1: Richard kod Of, Vice Chair of the Federals, Eve Kenneth

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Speaker 1: Rogoff of Hervard University on the dollar in the place

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Speaker 1: within our global system, Professor Rogoff I mentioned to Catherine

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Speaker 1: Mann this line that goes from modern economics of you

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Speaker 1: and Obsfeld, back through Jacob Frankel to the founding of

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Speaker 1: Robert Mundel. In all of that is the politician velleries

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Speaker 1: you started to staying of France who aked about the

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Speaker 1: US dollar exorbitant privilege. Mundell talked about this for years

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Speaker 1: and years. Are we finally here where we could lose

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Speaker 1: our exorbitant privilege? Well, first, let me say it's a

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Speaker 1: great tragedy that we've lost Robert Mandel. I regard him

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Speaker 1: as my intellectual grandfather. He was my thesis advisor, Rudy

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Speaker 1: Dornbush's thesis advisor, and certainly an incredibly original scholar. Uh No,

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Speaker 1: I don't think we're about to lose our exorbitant privilege tomorrow.

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Speaker 1: But there's no question that part of what strengthened it

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Speaker 1: over the last ten twenty years is that China has

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Speaker 1: had a very dollar centric policy. They stabilized against the dollar.

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Speaker 1: Now it's a mix of the dollar in the year

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Speaker 1: with the dollar in the year aren't moving that much.

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Speaker 1: And as long as that holds up, I think the

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Speaker 1: US exorbitan privilege is solid, but it might not hold

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Speaker 1: up forever. It's really not an optimal policy for China.

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Speaker 1: And I might add that if you look at the

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Speaker 1: longer end of five year ten year debt UH and

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Speaker 1: look at say the covered comparisons, the US no longer

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Speaker 1: gets any exorbitant privilege. It's really only on short debt.

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Speaker 1: Can we will go if the basic theme of the

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Speaker 1: less sophisticated is it China not as it war with US,

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Speaker 1: but certainly has a different political system and as a

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Speaker 1: new robust offense. Can they use remimbi as a weapon?

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Speaker 1: Can you weaponize a currency? Look, they view themselves as

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Speaker 1: doing very well and they're not looking to rock the boat.

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Speaker 1: Their technocrats have been telling them for two decades almost

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Speaker 1: now you really should have an inflation targeting regime like

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Speaker 1: everybody else. Let us be a little bit more independent

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Speaker 1: central bank. We can keep thinks stable. We shouldn't be

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Speaker 1: following around the dollar for lots of reasons. Uh, the

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Speaker 1: politicians have said, you know, things are going great, let's

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Speaker 1: not do that. Uh. They are looking at the longer run,

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Speaker 1: and they thoroughly intend for the NIMBI first to be

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Speaker 1: coequal with the dollar, at least with the Euro, and

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Speaker 1: maybe eventually take over. Uh. If we look at a

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Speaker 1: long enough horizon, trying to continues to rise, that would

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Speaker 1: be hard to stop. But I don't think they're looking

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Speaker 1: to do anything quickly. That said, they put out this

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Speaker 1: new starting to put out a new digital central bank

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Speaker 1: currency which certainly has the seeds of being able to

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Speaker 1: replace the dollar. Can as you see things right now,

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Speaker 1: what do you think is the biggest threat to dollar hegemony?

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Speaker 1: Is it a decision that America could make, or decision

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Speaker 1: that could be made out of sweat. I think it

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Speaker 1: would come from, you know, a shock to the system.

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Speaker 1: Dollar hegemony is not something that's going to go away overnight. Typically,

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Speaker 1: when you get on top, you keep it for a

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Speaker 1: century or more. We've had it for a century. Uh,

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Speaker 1: certainly since we'll under World War One. So it's But

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Speaker 1: on the other hand, if you're let's say, piling up

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Speaker 1: sixty percent of the global public and corporate debt UH

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Speaker 1: in the world, as the US is sort of doing,

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Speaker 1: it just dominates UH debt issuance markets, and you're counting

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Speaker 1: on that, and that can't go away quickly. It's a fragility.

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Speaker 1: And the late Emanuel far He, together with Matteo Monjori

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Speaker 1: at Stanford far He was my colleague, I wrote this

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Speaker 1: wonderful paper about you know that hedgemon is tempted to

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Speaker 1: push things, to take advantage of this exorbitant privilege and

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Speaker 1: create fragility. That might be a reasonable calculus for the

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Speaker 1: United States, but not for the world as a whole.

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Speaker 1: So let me talk about that fragility right now. Ken,

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Speaker 1: what's the biggest source of it do you think Do

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Speaker 1: you think it is in the debt market? Boy? Um, well,

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Speaker 1: certainly if interest rates went up, I just would turn

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Speaker 1: the world upside down. I think we'll find out a

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Speaker 1: lot when Europe gets out of this. When the vaccines come.

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Speaker 1: That's really the biggest difference between the US and Europe.

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Speaker 1: The vaccines come as long as Europe, which is roughly

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Speaker 1: as big as the United States is sort of stuck

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Speaker 1: in the mud. It's very hard to tell what's going

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Speaker 1: on with global interest rates, what's going on with inflation.

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Speaker 1: So I think I think the US has a while

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Speaker 1: to run before that happens, But when it does, I

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Speaker 1: don't know what's next. Obviously, this has been a very

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Speaker 1: hard pandemic to call, particularly because uh waves of it

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Speaker 1: and the vaccines have been vastly more successful. And I

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Speaker 1: think almost anyone expected can rogoff. This time is different

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Speaker 1: a book from another time in place, and I'll have

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Speaker 1: the clearest recommended recollection. I think I was at your

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Speaker 1: book party and remember opening and there was that single

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Speaker 1: page you put together with Carmen on the finances of

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Speaker 1: the Spanish Armada, and it was, you know, the Spanish

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Speaker 1: government falling apart. Is our debt structure now span this

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Speaker 1: government equivalent when they launched the Armada. I mean, are

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Speaker 1: we in that bad a condition? Well, listen, they are.

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Speaker 1: If the Armada hadn't crashed because of the weather, we'd

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Speaker 1: be living in a different world history now. I think.

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Speaker 1: I think it takes a shock to the system, just

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Speaker 1: a massive shock of which I can't even imagine. Uh,

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Speaker 1: But you know, we've had shocks to the system which

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Speaker 1: we can't even imagine, roughly twice at the last twelve years,

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Speaker 1: so we're more vulnerable than we were. On the other hand,

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Speaker 1: By the way, I just want to be clear, I mean,

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Speaker 1: I think it makes perfect sense what President Biden is doing.

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Speaker 1: Certainly politically, it makes what he's doing, and uh, you know,

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Speaker 1: we're we're in this terrible situation and he's sort of

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Speaker 1: getting done what he thinks he can get done. And

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Speaker 1: they're parts of the infrastructure bill that make a lot

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Speaker 1: of sense. There are a lot of things we could

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Speaker 1: do in this country addressing inequality. I will say, at

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Speaker 1: the end of the day, you have to raise taxes

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Speaker 1: to pay for this. If we're just not the nest

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Speaker 1: on the physical infrastructure, but the what they called the

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Speaker 1: social infrastructures transfer programs great, but you gotta pay for it.

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Speaker 1: Ken rogof James Diamond wrote a sixty six page letter

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Speaker 1: this week. He running JP Morgan, and part of the

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Speaker 1: discussion is we have two quarters of boom, and then

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Speaker 1: there's a question about how we come out of a

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Speaker 1: boom the runway. Do we drop off sharply, do we

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Speaker 1: as ease out of it? If you will, Mr Diamond

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Speaker 1: very optimistic about an extended good g DP in America.

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Speaker 1: What is the academic history of how we come off

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Speaker 1: a boom economy or are we flying blind? Well? Look,

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Speaker 1: we are to some extent flying blind here at this

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Speaker 1: pandemic is quite different than the financial crisis. People who

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Speaker 1: you know say, there's almost exactly the same thing. That's

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Speaker 1: just crazy. We don't know what's next. If I go

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Speaker 1: back to I mentioned Robert Bondello, my intellectual grandfather. His

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Speaker 1: student Rudy Dorn. But she had a great book twenty Years.

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Speaker 1: It's Sebastian AdWords of U. C. L. A. And a

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Speaker 1: theme of it is that populism actually works great for

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Speaker 1: a while. Uh and their timeline was sort of two

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Speaker 1: to four years. You get a boom, but then you

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Speaker 1: get problems at the end of the boom. The problem,

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Speaker 1: you know, we talked about, will there be inflation? Will

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Speaker 1: something go wrong? Larry Summers you mentioned, you know, raise

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Speaker 1: the point. I don't think it's an immediate problem, but obviously,

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Speaker 1: if at some point you run the war economy and

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Speaker 1: don't stop, it will be a problem. And politically it

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Speaker 1: may not be that easy to stop. After a couple

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Speaker 1: of years. Can't just a fund of question for me?

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Speaker 1: If I can on the transitory argument around inflation, will

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Speaker 1: catch up with the Federal Serve vice chair a little

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Speaker 1: bit later. How will we know if they're wrong? When

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Speaker 1: will we know? When's the real test for you. I

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Speaker 1: don't think we'll know for a while. I don't think

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Speaker 1: it's just going to blow up. That's it's possible. You

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Speaker 1: know that some commodity price changes will spike inflation for

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Speaker 1: a while, but the the core inflation and expectations are

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Speaker 1: very sluggish. They're very slow to move. On the other hand,

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Speaker 1: if you keep running a war economy, you just undermine

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Speaker 1: all the things underlying those expectations. And people say it's

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Speaker 1: never gonna stop, it will change. That was the theme

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Speaker 1: of dorn Bush's book, that populism, if you just keep

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Speaker 1: doing it for too long, blows up. And that's a

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Speaker 1: political question. Uh. You know, if you get a lot

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Speaker 1: of stimulus and people say, hey, that worked great, let's

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Speaker 1: do it again. Hey that worked great, Let's keep doing it.

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Speaker 1: That's how you got into trouble. I ken it's gonna

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Speaker 1: catch you up. It's gonna see you John, And I

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Speaker 1: think I got the book already up and out on Twitter.

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Speaker 1: John Ford in twelve pages dorn Bush Edwards, John, I

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Speaker 1: think that's light reading for you this week. Yeah, thanks

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Speaker 1: for that film. What are you giving us reading for

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Speaker 1: the weekend? I mean, Wilkins me, Kenneth Rogoff that how

427
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Speaker 1: much University professor of Economics and Public Policy, and thank you.

428
00:23:55,920 --> 00:23:59,640
Speaker 1: It has been a terrific day of economics including Professor Rogoff,

429
00:23:59,680 --> 00:24:02,000
Speaker 1: professor to Clarida and now vice Chairman of the Federal

430
00:24:02,040 --> 00:24:06,600
Speaker 1: Reserve System. And we finished strong because Rogolf and Clara.

431
00:24:06,680 --> 00:24:10,199
Speaker 1: To listen to the laureate Angus Deaton, I will not

432
00:24:10,359 --> 00:24:14,800
Speaker 1: mince words. The gentleman from Princeton is our definitive voice

433
00:24:15,400 --> 00:24:18,560
Speaker 1: on our inequalities. It is front and center for all

434
00:24:18,600 --> 00:24:22,120
Speaker 1: of us in our economics and our politics. Is new

435
00:24:22,160 --> 00:24:26,000
Speaker 1: book is also definitive. Also, I should say it is

436
00:24:26,000 --> 00:24:29,520
Speaker 1: Francine Laquise book of the year. And we're thrilled to

437
00:24:29,560 --> 00:24:32,080
Speaker 1: have Angus eaton on with us. He looks as the

438
00:24:32,160 --> 00:24:36,960
Speaker 1: despair that is out there. Professor, Uh, how bad is

439
00:24:37,000 --> 00:24:41,479
Speaker 1: our inequality? What is original about our two thousand twenty

440
00:24:41,520 --> 00:24:48,200
Speaker 1: one inequality? Well, everything's different in the pandemic. So one

441
00:24:48,240 --> 00:24:52,320
Speaker 1: of the things that once most worried about inequality during

442
00:24:52,359 --> 00:24:56,760
Speaker 1: the pandemic. This is the pandemic is affecting different people differently. UM.

443
00:24:56,800 --> 00:24:59,560
Speaker 1: And some people like you and me are staying at

444
00:24:59,600 --> 00:25:02,200
Speaker 1: home and UM talking to each other over the web,

445
00:25:02,680 --> 00:25:07,399
Speaker 1: while others are out there risking their lives. And what

446
00:25:07,440 --> 00:25:11,160
Speaker 1: I'm afraid of is that these splits during covid um

447
00:25:11,400 --> 00:25:17,120
Speaker 1: will exacerbate UM differences that were already there. And we're

448
00:25:17,240 --> 00:25:21,440
Speaker 1: festering in America surrounding the issues that that's of despair,

449
00:25:21,560 --> 00:25:23,600
Speaker 1: that and Case and I have been writing about it.

450
00:25:23,840 --> 00:25:28,080
Speaker 1: Do you believe that we have a political will to

451
00:25:28,240 --> 00:25:33,120
Speaker 1: at least nudge our inequalities in a better direction. Well,

452
00:25:33,200 --> 00:25:37,000
Speaker 1: we certainly have some people, and the current administration to

453
00:25:37,040 --> 00:25:40,320
Speaker 1: Biden administration is much more interested in doing that than

454
00:25:40,359 --> 00:25:45,360
Speaker 1: the previous administration was. But it's very early days yet. UM.

455
00:25:45,440 --> 00:25:49,040
Speaker 1: The American Rescue Acts certainly would help with income inequality

456
00:25:49,119 --> 00:25:51,800
Speaker 1: because so much of it is targeted towards less well

457
00:25:51,800 --> 00:25:59,120
Speaker 1: off people. UM. Whether the measures in the infrastructure plan

458
00:25:59,640 --> 00:26:04,080
Speaker 1: will through is not clear to me right now. What

459
00:26:04,119 --> 00:26:07,200
Speaker 1: do we do with our American individualism? There's a voice

460
00:26:07,240 --> 00:26:12,560
Speaker 1: in America that says inequality comes from our individualistic effort,

461
00:26:13,040 --> 00:26:16,440
Speaker 1: and of course that buttress is up against those more societal,

462
00:26:17,000 --> 00:26:20,920
Speaker 1: those more all encompassing. How do we stand on our

463
00:26:21,040 --> 00:26:24,800
Speaker 1: individualism and how do we move that forward and sustain

464
00:26:24,920 --> 00:26:29,160
Speaker 1: that as we try to get away from this inequality? Well,

465
00:26:29,200 --> 00:26:32,000
Speaker 1: I think the individualism is incredibly important and I don't

466
00:26:32,080 --> 00:26:35,199
Speaker 1: really think it's very much at risk, to tell you

467
00:26:35,240 --> 00:26:39,920
Speaker 1: the truth. Um, We've focused on the individualistic aspect for

468
00:26:39,960 --> 00:26:42,159
Speaker 1: a very long time, and it's brought us great benefits.

469
00:26:42,200 --> 00:26:46,280
Speaker 1: I mean, you know, the wonderful benefits of modern capitalism

470
00:26:46,280 --> 00:26:48,720
Speaker 1: which have helped many. But you know, we've got to

471
00:26:48,720 --> 00:26:51,640
Speaker 1: make sure for those of us suit have done well

472
00:26:51,640 --> 00:26:54,600
Speaker 1: out of this that other people share in that too.

473
00:26:54,680 --> 00:26:57,080
Speaker 1: And one of the biggest divisions in America today and

474
00:26:57,119 --> 00:27:01,560
Speaker 1: one of the riskiest ones, is the an educated elite

475
00:27:01,560 --> 00:27:04,560
Speaker 1: people broadly who have a four year college degree have

476
00:27:04,720 --> 00:27:07,720
Speaker 1: been doing extremely well for the last fifty years, whereas

477
00:27:07,760 --> 00:27:12,359
Speaker 1: for the people without college degree UM, they've seen a

478
00:27:12,440 --> 00:27:18,680
Speaker 1: fifty year trend of downward um wages, downward labor force participation.

479
00:27:19,320 --> 00:27:21,639
Speaker 1: And you know, we'll tear our country apart if we

480
00:27:21,720 --> 00:27:24,760
Speaker 1: don't share angus. What is so important here and I

481
00:27:24,800 --> 00:27:26,840
Speaker 1: believe you and I talked about this at Davos two

482
00:27:26,920 --> 00:27:29,040
Speaker 1: years ago, and I'm going to believe nothing has changed

483
00:27:29,040 --> 00:27:33,760
Speaker 1: here as well is the impute of technology upon this debate?

484
00:27:34,119 --> 00:27:37,119
Speaker 1: We try to look out ten years or twenty years

485
00:27:37,480 --> 00:27:41,480
Speaker 1: or half a century to what this profound technology means.

486
00:27:41,640 --> 00:27:46,320
Speaker 1: What do you think it will mean for society less

487
00:27:46,320 --> 00:27:49,080
Speaker 1: than some people think. I think. I think this vision

488
00:27:49,200 --> 00:27:51,639
Speaker 1: of a world in which there's no jobs at all

489
00:27:52,040 --> 00:27:56,840
Speaker 1: and everything is done by robots is science fiction, was then,

490
00:27:57,200 --> 00:28:00,600
Speaker 1: is now, and probably ever will be. Uh. There's a

491
00:28:00,640 --> 00:28:04,640
Speaker 1: lot of things we can do to help provide good

492
00:28:04,720 --> 00:28:08,640
Speaker 1: jobs for less educated Americans, or to stop destroying good

493
00:28:08,720 --> 00:28:13,760
Speaker 1: jobs for less educated Americans, like subsidizing um the introduction

494
00:28:13,760 --> 00:28:16,480
Speaker 1: of robots, for instance, which we're doing right now, or

495
00:28:16,560 --> 00:28:19,479
Speaker 1: having a healthcare system which is gutting the labor market

496
00:28:19,520 --> 00:28:22,600
Speaker 1: for less educated folks. But I mean, I guess what

497
00:28:22,760 --> 00:28:24,480
Speaker 1: is so important here? And I'm gonna go to a

498
00:28:24,560 --> 00:28:27,760
Speaker 1: chapter in Deaths of Despair, which is things come apart.

499
00:28:27,880 --> 00:28:31,480
Speaker 1: A huge body of our radio and TV audience believe,

500
00:28:31,800 --> 00:28:34,399
Speaker 1: whatever their background, whatever their wealth, maybe they're in the

501
00:28:34,440 --> 00:28:37,480
Speaker 1: highest tax record in New York State. The fact is

502
00:28:37,520 --> 00:28:41,800
Speaker 1: they look at this country and say things are coming apart.

503
00:28:42,280 --> 00:28:46,880
Speaker 1: How do the elites engage this conversation? Given the political

504
00:28:46,960 --> 00:28:51,520
Speaker 1: maelstrom of Washington, I think it would be really good

505
00:28:52,040 --> 00:28:54,320
Speaker 1: for us to talk together a better than we do

506
00:28:54,480 --> 00:28:58,080
Speaker 1: right now. UM. I think it's very important for those

507
00:28:58,080 --> 00:29:00,760
Speaker 1: of us who do belong to the educated to listen

508
00:29:01,120 --> 00:29:04,480
Speaker 1: to the other people. UM. One of the things I

509
00:29:04,600 --> 00:29:07,680
Speaker 1: keep hearing people saying is, do you hear us now

510
00:29:08,680 --> 00:29:14,640
Speaker 1: and you know, um rioting at the capitol or you know,

511
00:29:14,880 --> 00:29:18,400
Speaker 1: voting for someone I regarded as a very destructive president.

512
00:29:18,440 --> 00:29:23,240
Speaker 1: Our house of protests, and perhaps those would be less

513
00:29:23,240 --> 00:29:26,720
Speaker 1: severe if we'd been listening harder and a little longer,

514
00:29:26,880 --> 00:29:31,600
Speaker 1: and not just celebrating the undoubted triumphs of capitalism, but

515
00:29:32,080 --> 00:29:34,840
Speaker 1: understanding that those two thirds of the population who are

516
00:29:34,880 --> 00:29:38,400
Speaker 1: not benefiting very much from it, whose life expectancy is falling,

517
00:29:39,080 --> 00:29:42,800
Speaker 1: even that which is a pretty fundamental thing, even that's

518
00:29:42,880 --> 00:29:45,480
Speaker 1: falling for the last ten years for people without a

519
00:29:45,520 --> 00:29:49,400
Speaker 1: bachelor's degree. Angstein, thank you so much so, Laurian from Princeton,

520
00:29:49,400 --> 00:29:51,320
Speaker 1: And of course the new book does of despair with

521
00:29:51,440 --> 00:30:00,280
Speaker 1: Anne Kate John. We can do the transitory drinking game

522
00:30:00,560 --> 00:30:03,000
Speaker 1: with one Anthony Chrissenzi, we can do that right now,

523
00:30:03,080 --> 00:30:06,040
Speaker 1: Tony percentI joins his film cut portfolio manager Market Strategy

524
00:30:06,120 --> 00:30:07,800
Speaker 1: is Tony right to catch up. Said, you've coded the

525
00:30:07,840 --> 00:30:10,040
Speaker 1: great head fake, the great inflation head fake. If the

526
00:30:10,040 --> 00:30:13,280
Speaker 1: next couple of months, can you walk us through it? Well,

527
00:30:13,320 --> 00:30:16,200
Speaker 1: the inflation rate because of decline in prices that was

528
00:30:16,720 --> 00:30:21,320
Speaker 1: seen last year after COVID hit um that declined will

529
00:30:21,360 --> 00:30:24,080
Speaker 1: be met by a year over year game. We think

530
00:30:24,080 --> 00:30:26,840
Speaker 1: in the consumer price in xs CPI, not the pc

531
00:30:27,080 --> 00:30:29,880
Speaker 1: E that the Fed targets of two point two percent

532
00:30:30,080 --> 00:30:32,880
Speaker 1: or so from the mid ones that we've seen of late,

533
00:30:33,320 --> 00:30:35,840
Speaker 1: but then we see it by year end moving down

534
00:30:36,120 --> 00:30:39,120
Speaker 1: back to one point seven percent or so. It'll climb

535
00:30:39,200 --> 00:30:41,760
Speaker 1: we think by the end of two point to Now.

536
00:30:41,760 --> 00:30:44,360
Speaker 1: The significance of that in terms of FED policy is

537
00:30:44,360 --> 00:30:47,480
Speaker 1: that a two point two percent c p I at

538
00:30:47,520 --> 00:30:51,320
Speaker 1: the end of next year probably means a pc personal

539
00:30:51,320 --> 00:30:55,600
Speaker 1: consumption expensions deflator of something less than two percent. Now.

540
00:30:55,640 --> 00:30:58,720
Speaker 1: The Fed has said it won't raise its policy rate

541
00:30:58,840 --> 00:31:01,480
Speaker 1: until the inflation and rate has been at two percent

542
00:31:01,600 --> 00:31:05,200
Speaker 1: for about a year and show signs of accelerating to

543
00:31:05,280 --> 00:31:08,160
Speaker 1: above two percent for some time and So the market

544
00:31:08,160 --> 00:31:10,880
Speaker 1: now looking at your dollar futures for December twenty two,

545
00:31:10,880 --> 00:31:14,240
Speaker 1: their price today for the BED to raise its policy

546
00:31:14,320 --> 00:31:16,240
Speaker 1: rate by a full quarter point by the end of

547
00:31:16,320 --> 00:31:19,120
Speaker 1: next year. So we would say that it's highly improbable

548
00:31:19,160 --> 00:31:22,520
Speaker 1: and that more likely the first rate hike occurs somewhere

549
00:31:23,000 --> 00:31:26,520
Speaker 1: in the end of SOS. Some value to be harvested

550
00:31:26,560 --> 00:31:30,280
Speaker 1: in the front end of the Yielkert for the debt

551
00:31:30,360 --> 00:31:32,920
Speaker 1: that the market is making on the FED moving early.

552
00:31:33,120 --> 00:31:35,200
Speaker 1: Sounds like you're in line with the feder reserve then

553
00:31:35,240 --> 00:31:37,440
Speaker 1: and their outlook Tony, that the next couple of weeks,

554
00:31:37,480 --> 00:31:38,800
Speaker 1: next few months is going to be a head fake

555
00:31:38,880 --> 00:31:42,480
Speaker 1: that maybe you choose the word transitory. As for substantial

556
00:31:42,760 --> 00:31:45,440
Speaker 1: improvement progress towards their goals, do you think they need

557
00:31:45,480 --> 00:31:50,120
Speaker 1: to define that? Is that necessary? Yes? Uh, it is,

558
00:31:50,200 --> 00:31:54,840
Speaker 1: but the markets will define it for its themselves. Um.

559
00:31:54,880 --> 00:31:57,680
Speaker 1: But the type of improvement that's a little bit more vague,

560
00:31:57,680 --> 00:32:00,800
Speaker 1: it will be more difficult to discern. Is this idea

561
00:32:00,840 --> 00:32:03,760
Speaker 1: of a broad and inclusive gain and employment. It wants

562
00:32:03,800 --> 00:32:07,000
Speaker 1: maximum employment as it's safe stated August last year, and

563
00:32:07,040 --> 00:32:10,040
Speaker 1: it's long statement on longer run goals and monetary policy

564
00:32:10,080 --> 00:32:13,200
Speaker 1: strategy that the pursuit of maximum employment is a broad

565
00:32:13,280 --> 00:32:16,320
Speaker 1: and inclusive goal. This likely means a job irust rate

566
00:32:16,400 --> 00:32:19,080
Speaker 1: of under four percent. Keep in mind, by the way,

567
00:32:19,080 --> 00:32:22,600
Speaker 1: even after last week's strong jobs report, it still remains

568
00:32:22,640 --> 00:32:26,560
Speaker 1: about eight million people unemployed relative to pre COVID, So

569
00:32:26,560 --> 00:32:28,239
Speaker 1: there's a long way to go on that front. End.

570
00:32:28,280 --> 00:32:31,600
Speaker 1: To define broad and inclusive, it means more women in

571
00:32:31,600 --> 00:32:35,920
Speaker 1: the workforce, more minorities, etcetera, etcetera. Uh, that's that'll take

572
00:32:36,040 --> 00:32:37,680
Speaker 1: some time. And this is what this is why that

573
00:32:37,960 --> 00:32:43,440
Speaker 1: December view is wrong headed. Anthony tim King, good morning

574
00:32:43,480 --> 00:32:46,240
Speaker 1: to you. I was just reading last night light reading Stagums.

575
00:32:46,240 --> 00:32:49,160
Speaker 1: I was going through the twelve hundred pages of the

576
00:32:49,240 --> 00:32:53,360
Speaker 1: chrisense Tone and on page Tony, you talk about don't

577
00:32:53,400 --> 00:32:57,280
Speaker 1: fight the FED, follow it. How do we follow a FED?

578
00:32:57,840 --> 00:33:00,640
Speaker 1: If the FED is as exposed as it ben since

579
00:33:00,720 --> 00:33:05,719
Speaker 1: mc chesney Martin, I don't understand. That's the strategic bond investor. Folks.

580
00:33:06,040 --> 00:33:09,160
Speaker 1: Look for that film just signed at the Sunset Tower

581
00:33:09,240 --> 00:33:12,120
Speaker 1: in London, a film you'll see that Memorial Day two

582
00:33:12,160 --> 00:33:16,400
Speaker 1: thousand twenty four. I'm talking about STEMS classic. But Tony,

583
00:33:16,520 --> 00:33:19,360
Speaker 1: how do we how do we react to a FED?

584
00:33:19,480 --> 00:33:24,560
Speaker 1: That's waiting and waiting and waiting and waiting. Well, here's

585
00:33:24,560 --> 00:33:27,320
Speaker 1: how to think about it. Um there are three components

586
00:33:27,360 --> 00:33:31,160
Speaker 1: of a bond shield, expected short rates, expected inflation, and

587
00:33:31,200 --> 00:33:33,440
Speaker 1: what's called the term premium, the extra yield that a

588
00:33:33,480 --> 00:33:36,680
Speaker 1: bond a vesta wants for risk. Not in the past,

589
00:33:36,720 --> 00:33:39,440
Speaker 1: one might say, by the FED keeping by following the Fed,

590
00:33:39,480 --> 00:33:41,760
Speaker 1: you'd say, well, the Fed's keeping the funds very low,

591
00:33:41,840 --> 00:33:45,240
Speaker 1: so shouldn't all yields below? The answer right now, and

592
00:33:45,280 --> 00:33:49,280
Speaker 1: markets have already given their u boat is no, because

593
00:33:50,000 --> 00:33:52,200
Speaker 1: the fact that the Fed will be keeping the short

594
00:33:52,280 --> 00:33:55,320
Speaker 1: ray low means the two other components, so they expected

595
00:33:55,320 --> 00:33:57,640
Speaker 1: short very part is good for the bond market, but

596
00:33:57,680 --> 00:34:00,760
Speaker 1: the two other components are free to go. In other words,

597
00:34:00,800 --> 00:34:04,800
Speaker 1: inflation expectations might rise faster, and so might the term pinion,

598
00:34:04,840 --> 00:34:08,920
Speaker 1: which has come up tally. I think this is so important.

599
00:34:09,239 --> 00:34:11,480
Speaker 1: But what the heart of the matter is for our

600
00:34:11,520 --> 00:34:15,040
Speaker 1: listeners and viewers is out somewhere in twenty three or

601
00:34:15,120 --> 00:34:19,120
Speaker 1: late twenty two of Fed waiting and waiting and waiting,

602
00:34:19,239 --> 00:34:21,399
Speaker 1: and then the market's going to react to it. What

603
00:34:21,440 --> 00:34:25,000
Speaker 1: do you anticipate, Well, this is this. There will be

604
00:34:25,120 --> 00:34:28,040
Speaker 1: numerous tests of the FED that the Fed will have

605
00:34:28,120 --> 00:34:30,759
Speaker 1: to apply to over time. And you'll want to ask

606
00:34:30,840 --> 00:34:33,399
Speaker 1: risch Clara whether he still believes. I'm sure he does

607
00:34:34,040 --> 00:34:36,239
Speaker 1: um in this idea of a new neutral, the new

608
00:34:36,280 --> 00:34:40,279
Speaker 1: neutral thesis that he helped develop it PEMPCO. The new

609
00:34:40,320 --> 00:34:43,640
Speaker 1: neutral means the FED thinks that the neutral policy rate

610
00:34:44,320 --> 00:34:46,439
Speaker 1: is lower than it today than it used to be.

611
00:34:46,760 --> 00:34:48,600
Speaker 1: In the past, it might have been called it three

612
00:34:48,600 --> 00:34:52,360
Speaker 1: percent or so or even four. Today it's probably in

613
00:34:52,400 --> 00:34:55,239
Speaker 1: the low twos. And so we want to know if

614
00:34:55,239 --> 00:34:59,040
Speaker 1: the FED still believes that, and the tests will come

615
00:34:59,320 --> 00:35:01,680
Speaker 1: frequently be is when the inflation rate does, if it

616
00:35:01,680 --> 00:35:03,439
Speaker 1: ever does get back up to the level the FED

617
00:35:03,480 --> 00:35:07,279
Speaker 1: wants low twos. On the PC, the markets will test

618
00:35:07,280 --> 00:35:09,520
Speaker 1: the FED to see if it will react to it,

619
00:35:09,600 --> 00:35:12,040
Speaker 1: because the markets will be worried about inflation. That's where

620
00:35:12,040 --> 00:35:15,920
Speaker 1: those other two components will require a different sort of policeman.

621
00:35:16,040 --> 00:35:19,200
Speaker 1: On the inflation be the bond vigilante might come back,

622
00:35:19,320 --> 00:35:22,799
Speaker 1: as you saw recently, So those um periods like we've

623
00:35:22,840 --> 00:35:26,520
Speaker 1: seen recently will return now and then, But in the end,

624
00:35:27,160 --> 00:35:30,440
Speaker 1: the inflation rate probably won't rise materially, that's our belief.

625
00:35:30,520 --> 00:35:33,960
Speaker 1: And now will the federal funds rate call it somewhere

626
00:35:33,960 --> 00:35:37,120
Speaker 1: and the twos most likely, but that test is yet

627
00:35:37,160 --> 00:35:39,319
Speaker 1: to come. So in your mind, Tony, nothing about this

628
00:35:39,360 --> 00:35:42,760
Speaker 1: pandemic is Shane Shane change the trajectory of the economy

629
00:35:42,760 --> 00:35:44,879
Speaker 1: going against the pandemic. In the next couple of years

630
00:35:44,880 --> 00:35:48,319
Speaker 1: will be back to normal. Well, the in the US

631
00:35:48,360 --> 00:35:51,080
Speaker 1: we're expecting about seven percent quote this year. We called

632
00:35:51,160 --> 00:35:53,560
Speaker 1: three percent next year, and the growth will be the

633
00:35:53,560 --> 00:35:56,600
Speaker 1: best in forty years. But there are aspects of growth

634
00:35:56,600 --> 00:35:59,960
Speaker 1: in this coming decade. Uh you could say this transfer

635
00:36:00,080 --> 00:36:03,520
Speaker 1: nation underway. It will be more digital, more inclusive, and

636
00:36:03,640 --> 00:36:06,000
Speaker 1: more green. So it will be a very different sort

637
00:36:06,000 --> 00:36:09,920
Speaker 1: of economy. You see this benefiting, for example, the semiconductor industry.

638
00:36:10,320 --> 00:36:12,840
Speaker 1: Semi Conductors will be a component of the green economy.

639
00:36:12,920 --> 00:36:17,680
Speaker 1: Think of a charging station for electric vehicle requires semiconductors.

640
00:36:17,760 --> 00:36:21,560
Speaker 1: Cars these days require more semiconductors, So it'll be there

641
00:36:21,560 --> 00:36:23,920
Speaker 1: will be a transformation. It will be more focused on

642
00:36:24,000 --> 00:36:26,759
Speaker 1: the true drivers of growth. Investments in people and in

643
00:36:26,920 --> 00:36:30,160
Speaker 1: things capital those are the major drivers, along with of

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00:36:30,200 --> 00:36:33,239
Speaker 1: course total factor productivity, how we use people's skills, how

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00:36:33,280 --> 00:36:35,440
Speaker 1: we use the things in place. So there is a

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00:36:35,480 --> 00:36:38,280
Speaker 1: major transformation on the way that could mean faster growth

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00:36:38,600 --> 00:36:41,360
Speaker 1: when we think it may mean about a two tenth

648
00:36:41,440 --> 00:36:45,440
Speaker 1: or so gain in uh GDP this decade relative to

649
00:36:45,520 --> 00:36:47,840
Speaker 1: less simply because we're investing in people and in things.

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00:36:47,880 --> 00:36:51,160
Speaker 1: But whether that leads to meaningful meniqually more inflation, we

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00:36:51,200 --> 00:36:53,080
Speaker 1: would doubt it. Right now. It's so manny, good to

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00:36:53,080 --> 00:36:59,640
Speaker 1: see you. Thanks portfolio manager, a market strategist. This is

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00:36:59,640 --> 00:37:03,359
Speaker 1: the blue Burg Surveillance Podcast. Thanks for listening. Join us

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00:37:03,400 --> 00:37:07,160
Speaker 1: live weekdays from seven to ten am Eastern on Bloomberg

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00:37:07,239 --> 00:37:11,080
Speaker 1: Radio and on Bloomberg Television each day from six to

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00:37:11,200 --> 00:37:15,880
Speaker 1: nine am for insight from the best in economics, finance, investment,

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00:37:16,000 --> 00:37:21,040
Speaker 1: and international relations. And subscribe to the Surveillance podcast on

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Speaker 1: Apple podcast, SoundCloud, Bloomberg dot com, and of course on

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Speaker 1: the terminal. I'm Tom keene In. This is Bloomberg