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Speaker 1: Bloomberg Audio Studios, podcasts, radio.

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Speaker 2: News, and the economics of the moment. Tiffany Wilding joins

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Speaker 2: from the Pacific Investment Management Company PIMCO, where she is

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Speaker 2: a Managing Director Economist North America. At Tiffany, I know

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Speaker 2: you have to wait and dive into the data or

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Speaker 2: the media frenzy here at eight thirty four is unfair

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Speaker 2: to you. But the feeling I get here is trend

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Speaker 2: based disinflation. Am I off the mark?

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Speaker 3: Yeah? I mean, you know what I would just say,

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Speaker 3: taking a step back when you look at a wide

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Speaker 3: range of data, is it is getting back to you know,

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Speaker 3: some semblance of pre pandemic. You know, you look at

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Speaker 3: headline inflation levels. There were some stickier pieces of underlying inflation.

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Speaker 3: But now that labor market adjustment looks like it's happening

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Speaker 3: more fully. You know, those pieces of stickier inflation, we'll

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Speaker 3: be trending back to target. And so when you kind

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Speaker 3: of look around the economy, things look, you know, like

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Speaker 3: they're getting back to some semblance of normal after the

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Speaker 3: unique set of shocks that we had post pandemic. And

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Speaker 3: I think the thing that's you know, not as normal

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Speaker 3: that really stands out obviously is the policy rate, you know,

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Speaker 3: and obviously Federal Reserve officials understand that Powe was very

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Speaker 3: clear at Jackson Hole that they are going to start

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Speaker 3: that journey back to normal or at least kind of

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Speaker 3: what they think could be normal. And you know, and

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Speaker 3: the pace of that is really going to depend on

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Speaker 3: on the data from here. And you know, if we

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Speaker 3: see economic weakness, then then they'll go faster.

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Speaker 1: Tiffany, I really appreciate that. I'm kind of situating it

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Speaker 1: in this in this moment of the way that we

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Speaker 1: had Brian Levitt doing it at Katie Kaminsky earlier in

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Speaker 1: the show. This this notion that there has been this

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Speaker 1: kind of post pandemic readjustment that might not be as

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Speaker 1: notable or as noticeable as the kind of initial adjustment

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Speaker 1: that we had. Where are we in this cycle as

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Speaker 1: you see it, when you look at what we're getting

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Speaker 1: in terms of inflation data, pulling back more broadly to

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Speaker 1: look at labor data as well, give us a sense

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Speaker 1: of where this economy is as you see in.

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Speaker 3: Yeah, well, I mean I think I think the labor

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Speaker 3: market data has has been you know, sort of confusing,

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Speaker 3: if you will. The usual signs in the labor market

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Speaker 3: of an underlying economy that's not doing well. The unemployment

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Speaker 3: rate rising, I think is a bit of you have to,

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Speaker 3: you know, kind of dig into the drivers of that indicator,

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Speaker 3: because if you just looked at the labor market and

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Speaker 3: you looked at nothing else, you would be incredibly worried

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Speaker 3: about a recession. But if you look at a broader

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Speaker 3: range of indicators of the economy, it looks like it's

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Speaker 3: doing okay. Right, It's a soft landing if anything. Uh,

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Speaker 3: you know, the activity data, the growth data, the GDP

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Speaker 3: data have been coming in better than expected. So I

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Speaker 3: think you have to, you know, kind of take a

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Speaker 3: step back and you know, just again understand that there's

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Speaker 3: been a unique set of shocks since the pandemic. It's

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Speaker 3: made indicators, usual economic indicators, more difficult to read. And

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Speaker 3: I think the unemployment rate right now is one of

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Speaker 3: those things, I mean.

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Speaker 2: Difficult to read. I'm sorry. At a three percent real

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Speaker 2: GDP ending June thirty, I got a five and a

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Speaker 2: half percent amateurs look at nominal GDP led by Newport Beach, California.

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Speaker 2: I mean, Tiffany, we've been wrong, wrong, wrong, on the

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Speaker 2: resilience and spirit of America, when you sit with cynics

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Speaker 2: like Jerome Schneider and the other animals at PIMCOH are

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Speaker 2: you trying to tell them it's not as bad out

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Speaker 2: there as you think?

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Speaker 1: His words, not yours.

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Speaker 3: Yeah, I mean, I think the you know, I guess

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Speaker 3: the point that I would just really emphasize is that,

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Speaker 3: you know, when you look at the labor market, the

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Speaker 3: things that have driven the unemployment rate higher this time

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Speaker 3: is more about labor supply. Obviously, over the last few

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Speaker 3: years we've gotten a surge of immigration, and that has

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Speaker 3: resulted in a higher unemployment rate. Because you just have

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Speaker 3: more people in the labor force, you're not actually seeing layoffs. Now.

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Speaker 3: Certainly we could start to see more material layoffs across

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Speaker 3: the economy, but you know, I would just say, overall,

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Speaker 3: you know, the things still appear relatively strong, and usually

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Speaker 3: when you have labor supply gains, you know, that's actually

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Speaker 3: good for the economy. More people are consuming, more people

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Speaker 3: are working. It's not usually the time where you're going

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Speaker 3: into recession.

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Speaker 2: Tiffany Martin, thank you so much, greatly appreciate it. This

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Speaker 2: morning here