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Speaker 1: Bloomberg Audio Studios, Podcasts, radio News. This is Masters in

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Speaker 1: Business with Barry Ritholts on Bloomberg Radio.

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Speaker 2: This week on the podcast, another extra special guest Richmond

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Speaker 2: Federal Reserve President and CEO Tom Barkin. He's been a

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Speaker 2: member of the Richmond Fed since twenty eighteen. He is

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Speaker 2: also on the Federal Open Markets Committee and is responsible

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Speaker 2: for a variety of Richmond Fed technology and bank supervision. Previously,

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Speaker 2: Tom has spent thirty years at Mackenzie where eventually he

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Speaker 2: became chief Risk Officer and then chief Financial Officer. I

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Speaker 2: found this conversation absolutely fascinating. He is a super intelligent,

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Speaker 2: thoughtful guy, very well versed in business economics and monetary policy.

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Speaker 2: I think you will find this conversation to be both

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Speaker 2: timely and fascinating. With no further ado, my conversation with

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Speaker 2: FMC Committee member and President of the Richmond Federal Reserve Bank,

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Speaker 2: Tom Barkin.

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Speaker 3: Very thanks for having me here.

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Speaker 2: What a perfect resume and a perfect person to talk

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Speaker 2: about the state of the world today. Before we go there,

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Speaker 2: let's just dip into your background. You're a triple threat

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Speaker 2: bachelor's MBA and jd ole from Harvard. What was the

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Speaker 2: original career plan.

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Speaker 4: Well, it wasn't that. I grew up in Tampa, went

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Speaker 4: to a public school there, applied to a few Southern

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Speaker 4: schools and Harvard because it had a good name, and

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Speaker 4: I thought it was sort of a neat idea, and

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Speaker 4: then I got in, which was kind of a surprise.

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Speaker 4: And when I went there, I was going to be

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Speaker 4: a lawyer and I was going to major in mathematics.

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Speaker 4: And I took my freshman year math and that all

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Speaker 4: went great, and my software I ended up in a

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Speaker 4: class called basic algebra, one that was not basic and

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Speaker 4: was not in the algebra that I knew anything about.

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Speaker 4: And it turned out that half of that class had

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Speaker 4: been the US National Math team, and they had all

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Speaker 4: competed internationally and they knew stuff I didn't. And I

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Speaker 4: was at the time taking Introductor to Economics, which I

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Speaker 4: really liked because it combined history and politics and math

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Speaker 4: and economics. And so I moved my major into economics

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Speaker 4: and had a great experience as an economics major. Undergrad,

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Speaker 4: I was still going to go to law school, and

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Speaker 4: I applied to law school and got in, but a

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Speaker 4: bunch of my roommates were applying to business school, and

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Speaker 4: it felt to me like that was a neat way

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Speaker 4: to get a master's in something related to economics that

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Speaker 4: I was interested in. And so I applied also to

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Speaker 4: business school and got into that and then started that

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Speaker 4: program once into law school. In business school, I was

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Speaker 4: able to compare two sets of professions, one the law

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Speaker 4: and the second being going into business, and it just

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Speaker 4: felt like the second was much more vibrant, much more interesting,

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Speaker 4: learned a lot more, and so I made that transition.

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Speaker 4: But I wouldn't have made that transition if I hadn't

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Speaker 4: been an economics major. I wouldn't have made that transition.

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Speaker 4: If I hadn't applied to business school, I just wouldn't

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Speaker 4: have the confidence to do it.

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Speaker 2: So I know Wharton has like a joint CPA, JD

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Speaker 2: MBA program. Did you were you enrolled as a full

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Speaker 2: time JD and a full time MBA student at Harvard

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Speaker 2: or were these was this sort of a combined program.

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Speaker 4: It is a combined program. You take a year at

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Speaker 4: law school a year at business school in two years combined.

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Speaker 4: I didn't realize there was a program where you could

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Speaker 4: also get a CPA. Maybe that would have been a

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Speaker 4: third degree just for extra credit.

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Speaker 2: I believe that's Wharton. So you come out of Cambridge

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Speaker 2: with three degrees, what's the first first job you take.

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Speaker 3: I went to work in McKenzie. I mean that was.

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Speaker 2: Literally your first year. So you go to work in

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Speaker 2: McKenzie in eighty seven and you stay for thirty years.

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Speaker 4: Yeah, And I was lucky, lucky, lucky to go there.

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Speaker 4: I joined an office that had about twenty five people

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Speaker 4: in Atlanta. Felt like an entrepreneurial opportunity to build something,

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Speaker 4: made a lot of friends there, enjoyed the work, really

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Speaker 4: enjoyed my clients, and the opportunity to help a bunch

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Speaker 4: of great leaders improve the performance their organizations.

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Speaker 3: Fell in love with.

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Speaker 4: McKenzie people, smart, talented, idealistic, and the combination just worked

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Speaker 4: great for me.

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Speaker 2: You've held a number of roles there, eventually becoming a

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Speaker 2: senior partner, but the two that are most fascinating and

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Speaker 2: relevant to your current situation is chief risk Officer and

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Speaker 2: chief financial officer. Tell us a little bit about the

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Speaker 2: career path to two very important roles at a very

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Speaker 2: important company.

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Speaker 4: Well, starting in ninety nine, I started leading the Atlanta office,

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Speaker 4: which eventually became the Southern offices of McKenzie. So from

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Speaker 4: Texas through Virginia. It was sort of our territory and

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Speaker 4: we had I don't remember the number sixty seventy eighty

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Speaker 4: partners plus another several hundred associates and we were serving

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Speaker 4: clients in that geography. So I'll point to that as

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Speaker 4: a role that I really enjoyed it in one where

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Speaker 4: I got to spend so much time with so many

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Speaker 4: business people about what was happening in their business and

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Speaker 4: opportunities for McKenzie to help. We worked our way through

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Speaker 4: nine to eleven. That was a very difficult time for

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Speaker 4: our business, and I think coming out of it, the

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Speaker 4: folks at McKenzie thought, you know, I knew how to

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Speaker 4: manage a bottom line and our office got through quite nicely.

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Speaker 4: And when a new managing partner was named around the

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Speaker 4: financial crisis, they asked me to be the CFO to

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Speaker 4: help navigate mckenzy through that, which I'm very pleased with

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Speaker 4: how well we navigated through that. I did that for

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Speaker 4: six years and then spent three years trying to help

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Speaker 4: institutionalize some risk processes at McKenzie, including a lot of

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Speaker 4: the stuff that has been done to defend against cyber

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Speaker 4: and in whatever role and there are others that I'm

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Speaker 4: not going to bore you with. You know, the opportunity

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Speaker 4: to try to take a partnership and influence it to

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Speaker 4: become better is a challenge and also a lot of fun.

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Speaker 2: That sounds really interesting. So you're at McKenzie for three decades.

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Speaker 2: How do you end up on the Richmond Federal Reserve.

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Speaker 4: First of all, I was very involved civically in Atlanta

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Speaker 4: and in lots of different organizations, and at some point

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Speaker 4: I met the president, my equivalent in Atlanta, who then

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Speaker 4: was Dennis Lockhart, who's a great guy, and Dennis at

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Speaker 4: some point invited me to join his board from so

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Speaker 4: from nine to fourteen I was on the board and

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Speaker 4: then eventually the chair of the board of the Atlanta Fed.

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Speaker 4: And I stepped down term limited, and three years later

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Speaker 4: I was in the process of leaving McKenzie. McKinsey is

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Speaker 4: a mandatory retirement age. I'm very young in my own mind,

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Speaker 4: but not that young at McKenzie, and I had signed

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Speaker 4: the papers and agreed to retire, and I got a

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Speaker 4: call from a head hunter suggesting that I interviewed for

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Speaker 4: the Richmond job, And of course I called Dennis and

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Speaker 4: asked if you thought this made sense, and you know,

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Speaker 4: he encouraged me to do it, and so for me,

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Speaker 4: it just seemed like a great opportunity to, well, let

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Speaker 4: me take something. I've really been impressed with the Atlanta

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Speaker 4: Fed from nine to fourteen, feder Reserve in general, navigating

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Speaker 4: to the financial crisis, all the innovations that happened in

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Speaker 4: the early twenty tens. It reawakened an interest in economics

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Speaker 4: that I'd had since being an undergrad. But I never

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Speaker 4: thought that that's a job I would do. It just

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Speaker 4: didn't occur to me until the combination of the headhunter

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Speaker 4: and Dennis encouraged me to do it, and then I

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Speaker 4: interviewed and was offered the job.

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Speaker 2: So maybe perhaps this is a touch of hindsight bias,

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Speaker 2: But thirty years at McKenzie Cybersecurity, Chief Risk Officer, chief

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Speaker 2: financial Officer, the dot com implosion September eleventh, the financial

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Speaker 2: crisis sounds like your tailor made to be sitting on

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Speaker 2: the Fed that just never popped into your into your mind, Like,

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Speaker 2: what was the moment that you said, oh, I have

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Speaker 2: skills that seemed to apply to this.

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Speaker 4: Yeah, you describe me as a very modest person. I'm

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Speaker 4: not sure, that's true, but I'll just say I'll just

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Speaker 4: say that I was so impressed with the grounding and

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Speaker 4: the experience of the people that make monetary policy that

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Speaker 4: it wouldn't have occurred to me that, you know, I

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Speaker 4: should go stick my hand up and do that. And

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Speaker 4: even when you walk into the room of the FOMC,

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Speaker 4: you've got nineteen people there, they're very impressive. Probably two

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Speaker 4: thirds are academic economists. They've spent their entire career working

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Speaker 4: and studying in that. And of course I had taken

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Speaker 4: four years of economics, you know, forty years well, I

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Speaker 4: guess thirty five years earlier, and so I think it

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Speaker 4: would have been, you know, pretty arrogant to imagine that

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Speaker 4: that would place. That was natural for me, now, you know,

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Speaker 4: when I got into the process and started thinking about it,

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Speaker 4: you know, I was able to articulate a model for

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Speaker 4: how I thought I could add value to the room.

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Speaker 4: And I think, you know, if your performance oriented or

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Speaker 4: even competitive, what you really want to do is add

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Speaker 4: value to whatever job you've got. And so for that job,

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Speaker 4: for this job, you know, I asked myself what could

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Speaker 4: I do that would be valuable? And what I thought

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Speaker 4: I can do and what I spend my days doing

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Speaker 4: is trying to understand what's actually happening on the ground

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Speaker 4: with businesses, because that's what I did for thirty years.

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Speaker 4: I think that's a differential skill within the FOMC, because

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Speaker 4: anyone can tell you they're raising prices or lowering prices,

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Speaker 4: but to understand why and how things are going to

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Speaker 4: play out, and to spend enough time with people and

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Speaker 4: feel comfortable enough with their businesses that you could understand

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Speaker 4: the context that is behind whatever choices they're making. I

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Speaker 4: think that is a place where I can add real value.

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Speaker 4: And I convince myself that, and I guess I convinced

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Speaker 4: the board of that as well.

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Speaker 2: You know, people often talk about how much they wish

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Speaker 2: the government was run more like a business, and for

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Speaker 2: better or worse, that doesn't always apply. But it really

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Speaker 2: feels like the Federal Reserve is sort of halfway between

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Speaker 2: a private sector entity and a full governmental agency, almost

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Speaker 2: has a foot in each camp. Tell us how your

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Speaker 2: private sector your experience helped to drive FED policy, and

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Speaker 2: especially at the Richmond Fed, how it affects just the

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Speaker 2: everyday operation of a large, influential central bank like that

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Speaker 2: regional central bank.

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Speaker 4: Well, let me start by saying. One of the things

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Speaker 4: that was very attractive to me about the Federal Reserve

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Speaker 4: when I got to know it in Atlanta was these

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Speaker 4: banks are private sector entities, which means you have, you know,

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Speaker 4: a value proposition to highly talented people who have freedom

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Speaker 4: to work hard and do what they know is right.

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Speaker 4: But in addition, you've got very mission oriented people. So

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Speaker 4: very talented and very mission oriented. That's a nice combination

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Speaker 4: for something that's working for the public interest. And so

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Speaker 4: that was definitely an attraction.

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Speaker 3: To me.

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Speaker 4: I'm not trying to mess that up, so I'm not

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Speaker 4: coming in and saying all right, now, you know, here's

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Speaker 4: what we're going to do. Because I was in the

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Speaker 4: private sector, you know, I'm actually I respect the institution

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Speaker 4: and trying to figure out how to operate within it

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Speaker 4: as opposed to disrupted and so operationally, the Richmond Fed

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Speaker 4: overseas technology for the system, and I oversely saw technology

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Speaker 4: in my old life, and so, you know, making sure

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Speaker 4: we're better and working better and delivering better. I think

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Speaker 4: we've done a great job in that. I'm also chairing

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Speaker 4: the committee that oversees payments within the Federal Reserve, which

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Speaker 4: is the one business the Federal Reserve runs and trying

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Speaker 4: to make that a good and even better business. Those

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Speaker 4: are there are places I bring my business skills to bear,

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Speaker 4: talent management, all all of that stuff. In addition, as

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Speaker 4: I said, I think, you know, being able to bring

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Speaker 4: some insight, for example, on how businesses are going to

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Speaker 4: behave in the context of volatility and tariff announcements, that's

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Speaker 4: something that I think I can bring. You know, my

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Speaker 4: business experience has a lot of benefit in the room,

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Speaker 4: and that's it's good to just say that you bring

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Speaker 4: that benefit, but I try to reinforce that by spending

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Speaker 4: literally five days a week in the market talking to

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Speaker 4: businesses throughout my district, trying to really dig into what's happening.

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Speaker 4: I think that's a place I can also add value.

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Speaker 2: So you joined the FED in twenty eighteen, and it

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Speaker 2: was a very consequential seven years. Q four of twenty eighteen,

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Speaker 2: people were very nervous about a recession. Market dropped about

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Speaker 2: twenty percent in the quarter, some of which was related

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Speaker 2: to tariff and do slowdowns back then twenty twenty obviously,

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Speaker 2: the pandemic once in a generation, maybe even once in

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Speaker 2: one hundred years event twenty twenty two. First, not only

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Speaker 2: is the fastest rate increase in modern memory. First time,

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Speaker 2: I want to say, since eighty eighty one eighty two,

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Speaker 2: we're both stocks and bonds down double digits. That was

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Speaker 2: twenty twenty two, and then twenty twenty five. Obviously, all

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Speaker 2: this volatility and Stuerman drang with tariffs. What is the

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Speaker 2: biggest occupier of your mental bandwidth? Is it the day

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Speaker 2: to day operations or is it all of these seemingly

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Speaker 2: unprecedented disruptions that just turn the whole world upside now,

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Speaker 2: whether it's just a quarter like it was in twenty eighteen,

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Speaker 2: or a couple of years like the pandemic.

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Speaker 3: Well, so I joked sometimes.

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Speaker 4: I was on the board of the Atlanta Fed from

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Speaker 4: nine to fifteen, and during that six year period, interest

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Speaker 4: rates did not change once. Nothing happened, right, And look

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Speaker 4: at where we've been here from you know, raising it

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Speaker 4: in twenty eighteen, to lowering it in twenty nineteen, to

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Speaker 4: really lowering it in twenty twenty, then to raising it

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Speaker 4: again in twenty twenty two, and then lowering it again.

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Speaker 2: Are you saying it's your fault since you joined the

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Speaker 2: FED everything went up?

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Speaker 4: Then I'll take whatever credit or fault you want. I

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Speaker 4: would say the thing I've been reflecting on is the

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Speaker 4: question of did we in our working careers just benefit

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Speaker 4: from a period that, with hindsight is an was an

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Speaker 4: unbelievably low volatility period. You know, the wall fell, while

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Speaker 4: there were conflicts globally, there weren't very many. Nine to

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Speaker 4: eleven felt like a big deal at the time, but

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Speaker 4: you know, Lehman Brothers was obviously a big deal.

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Speaker 3: But over a thirty year period, it's pretty calm.

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Speaker 4: And you know stat I like to throw out there

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Speaker 4: is in the twenty tens, inflation was between one and

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Speaker 4: two percent every single cycle.

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Speaker 3: We added jobs every month.

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Speaker 4: In the twenty tens, GDP was in the very narrow

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Speaker 4: range of sort of two to three percent. We just

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Speaker 4: had a very stable, long term expansion with very low inflation,

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Speaker 4: and that was a very friendly environment, you know, i'd

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Speaker 4: say for policymakers. But maybe that if you look at

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Speaker 4: you know, through the sands of time, that kind of

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Speaker 4: stability is not what you should expect. And so we've

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Speaker 4: had significant volatility, the pandemic obviously being example, the inflation

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Speaker 4: episode being another one, and maybe that's going to be

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Speaker 4: more like reality.

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Speaker 2: You know, it's so funny you say that we did

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Speaker 2: a study in house and looked at the fifteen year

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Speaker 2: period from the financial crisis forward. So somewhere in the

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Speaker 2: middle of last year was the third best fifteen year

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Speaker 2: rolling period on record. You have to look at the

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Speaker 2: fifteen years post World War Two and then the fifteen

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Speaker 2: years up until late ninety nine, which were eighteen and

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Speaker 2: seventeen percent a year, respectively. The fifteen year period ending

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Speaker 2: last year was sixteen percent annually. And all anybody did

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Speaker 2: was complain about or at least a lot of market

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Speaker 2: participants complained about the FED, complained about deficits, complained about

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Speaker 2: the economy. It's the single best decade and a half

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Speaker 2: in modern era for asset prices. So in the face

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Speaker 2: of that sort of you know, criticism of the FED

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Speaker 2: and carping about all sorts of policy, how do members

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Speaker 2: of the FMC. How do members of the FED respond

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Speaker 2: when the data says, hey, things are pretty good, but

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Speaker 2: the sentiment, which continues to just get worse and worse,

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Speaker 2: says things are terrible.

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Speaker 4: Well, I'd start, you know, to the people who complain

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Speaker 4: also by saying, we're given a priv by Congress, which

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Speaker 4: is the ability and the independence to set monetary policy

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Speaker 4: on behalf of the economy of this country, and we

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Speaker 4: take that very seriously. I do think part of the

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Speaker 4: trade there is that people on both sides get to

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Speaker 4: critique what we do, and that just is what it is.

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Speaker 4: And I think you just keep your head down and

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Speaker 4: do the job you've been assigned and you don't spend time,

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Speaker 4: you know, worrying about the critiques.

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Speaker 3: So that's that part of it.

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Speaker 4: In terms of uncertainty involved, I think in sentiments quite

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Speaker 4: pronounced now. I think business sentiment and consumer sentiment's different.

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Speaker 4: I mean, business sentiment feels to me like very tied

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Speaker 4: to outcomes. If businesses are highly uncertain, they're not going

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Speaker 4: to invest, they're not going to hire, they're going to

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Speaker 4: defer growth plans. We saw that in twenty nineteen, as

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Speaker 4: you referenced earlier. I think we're seeing that right now,

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Speaker 4: certainly the businesses I'm talking to. I've described it as

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Speaker 4: trying to drive through a really dense fog. It's hard

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Speaker 4: to put your foot on the gas because you don't

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Speaker 4: know where the next cliff is. You don't want to

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Speaker 4: put your foot on the break because you don't know

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Speaker 4: who's on you, and so the only rational strategy is

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Speaker 4: to pull over and put on the hazards. And that's

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Speaker 4: what I hear businesses doing, which is pulling and pulling

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Speaker 4: over the hazards, pulling over and putting on the hazards.

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Speaker 4: Now it's different on the consumer side. Historically, consumer sentiment

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Speaker 4: has been a leading indicator of consumer spending, but we

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Speaker 4: didn't see that two or three years ago when consumer

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Speaker 4: centerment got negative, and consumer centerence has got very negative

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Speaker 4: again recently. I think the reason we haven't seen that

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Speaker 4: is inflation. It turns out, I mean, we all knew

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Speaker 4: this in the seventies, but we've all relearned it in

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Speaker 4: the last three years. It turns out consumers really hate inflation.

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Speaker 4: Now it doesn't stop them from spending. You know, if

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Speaker 4: your wages go up and your prices go up, you

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Speaker 4: have the same spending capability, but you're just much less happy.

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Speaker 4: And that's what we've seen, and I think today we'll

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Speaker 4: see if we have more inflation. But I think the

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Speaker 4: kind of relentless noise about tariffs is leading people to

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Speaker 4: think that that's going to lead to higher prices, which

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Speaker 4: is leading people to be more negative about the expectations,

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Speaker 4: and you can see that in the expectations. Let's say

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Speaker 4: one year price expectations have elevated significantly, and that's what's

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Speaker 4: driving sentiment. But so far that doesn't seem to be

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Speaker 4: affecting spending on the consumer side. I think it does

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Speaker 4: on the business side.

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Speaker 2: Yeah, very much. Businesses have to plan much longer term.

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Speaker 2: First of all, I love the foggy metaphor. Driving in

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Speaker 2: the fog is really perfect. But you mentioned inflation expectations,

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Speaker 2: and I always wonder does the FED put too much

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Speaker 2: emphasis on expectations, at least in the modern era. If

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Speaker 2: we look at twenty twenty one twenty twenty two, inflation

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Speaker 2: expectations were at their lowest just as inflation spiked, and

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Speaker 2: of course they were at their highest just as inflation

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Speaker 2: peaked in twenty two and began coming down. My experience

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Speaker 2: with sentiment is it's always backward looking. You ask people

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Speaker 2: how they feel about anything, the markets, the economy, inflation,

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Speaker 2: and they're always telling you here's what the past six

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Speaker 2: months have been like. Even if you say, what do

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Speaker 2: you see going forward? How much, how significant, how important

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Speaker 2: are inflation expectations to FOMC policy?

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Speaker 4: Well, I think the theory is very straightforward, which is

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Speaker 4: that if inflation expectations long term in particular, stay anchored,

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Speaker 4: then that means that, you know, businesses will quickly return

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Speaker 4: even after inflationary episode, to prior levels of price increases.

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Speaker 3: I really believe in it.

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Speaker 4: I mean, in my business experience, I think the expectations

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Speaker 4: of what inflation would be absolutely governed how business has behaved,

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Speaker 4: both in terms of their pricing and their wage setting.

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Speaker 4: You know, if you showed up at your retailer with

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Speaker 4: an eight percent price increase and inflation was two percent,

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Speaker 4: they would say, why are you doing that? And if

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Speaker 4: you didn't have the world's greatest reason, you weren't even.

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Speaker 3: Walking in the door.

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Speaker 4: And so I think, I think the concept of inflation

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Speaker 4: expectations is a very powerful concept. I really believe in it,

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Speaker 4: and I believe it's what happens in the world. What

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Speaker 4: I don't believe is that we have any good way

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Speaker 4: to measure it. And so, you know, you talked about

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Speaker 4: market based inflation expectation. There's a lot going on in

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Speaker 4: those market based expectations, including liquidity and a bunch of

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Speaker 4: other things, you know.

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Speaker 3: Survey based expectations.

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Speaker 4: It turns out you know, if you ask someone a

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Speaker 4: survey question and you bias it in any way, then

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Speaker 4: they end up with different biases, and different surveys have

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Speaker 4: different ways of managing that, and so I think it

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Speaker 4: really matters. But I don't think our metrics are very good.

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Speaker 4: And my shorthand, for whatever it's worth, is I think

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Speaker 4: there are two competing things in every business's mind, in

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Speaker 4: every consumer's mind about inflation. One is what is it today?

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Speaker 4: Because the best indicator of tomorrow is today. And the

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Speaker 4: second is do you trust the Federal return it to

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Speaker 4: two percent in the long term?

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Speaker 3: And it's almost that simple of a question.

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Speaker 4: You try And as long as you trust the Fed

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Speaker 4: in the long term and market expectations are reasonable proxy

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Speaker 4: for that, then I think what you should expect for

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Speaker 4: near term inflation is some combination of today versus tomorrow,

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Speaker 4: and you get there over time. And if the if

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Speaker 4: you go back to the eighties and nineties, after Volcar

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Speaker 4: and through green Span, you know, we didn't go to

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Speaker 4: two percent inflation in nineteen eighty six or eighty seven

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Speaker 4: or eighty eight. We were at four, and then we

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Speaker 4: were at three and a half, and then we're at three,

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Speaker 4: and then we're two and a half. I think you

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Speaker 4: get there over time. You don't get there quite as

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Speaker 4: quickly as sort of a purest model would suggest.

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Speaker 2: So let me get a little wonky with you, since

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Speaker 2: you brought up the two percent target. Former Federal Reserve

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Speaker 2: Vice Chairman Roger Ferguson, I believe, did a paper on

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Speaker 2: the two percent inflation target, and he was kind of

408
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Speaker 2: critical of it, saying it's a made up round number

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Speaker 2: that comes from New Zealand in the nineteen eighties. It's

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Speaker 2: not relevant to a modern era versus it was. But

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Speaker 2: to kind of flesh out his thoughts a little more, Hey,

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Speaker 2: the post financial crisis period, really, the post nine to

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Speaker 2: eleven period was driven in large part by very low

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Speaker 2: monetary policy, very low rates, and then the pandemic led

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Speaker 2: to the single biggest fiscal stimulus at least as a

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Speaker 2: percentage of GDP since World War Two. So we had

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Speaker 2: that regime change from monetary to fiscal. Is two percent

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Speaker 2: still the right target. We couldn't get up to two

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Speaker 2: percent during the twenty tens where deflation was a bigger concern.

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Speaker 2: Now you have the Okay, admittedly the pig is mostly

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Speaker 2: through the python, but we still have all this fiscal

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Speaker 2: stimulus around is two percent? Like why two? Why not

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Speaker 2: two and a half or three?

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Speaker 4: So I would ask the first question is is it

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Speaker 4: a good idea to have a target? And I'd want

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Speaker 4: to make the case that it's a really good idea

427
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Speaker 4: to have a target, because it anchors the public in

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Speaker 4: terms of where you're trying to go, and it builds

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Speaker 4: commitment and credibility among the FMC that you'll take the

430
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Speaker 4: initiatives you need to take when you're absent from a target.

431
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Speaker 4: In terms of what should the target be, the original

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Speaker 4: debate in the nine was actually between zero and two.

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Speaker 4: Zero was price stability. That's price stability, right, and two

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Speaker 4: was an alternative that gave you a little bit of room.

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Speaker 4: Eventually they settled on to our predecessors, and as you

436
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Speaker 4: were suggesting, pretty much every central bank in the world

437
00:23:15,920 --> 00:23:18,840
Speaker 4: has settled onto and by the way, we've delivered to

438
00:23:19,200 --> 00:23:21,640
Speaker 4: or just around two for almost all of the last

439
00:23:21,640 --> 00:23:23,960
Speaker 4: thirty years. And so it doesn't strike me that it's

440
00:23:23,960 --> 00:23:28,199
Speaker 4: a ridiculous target. Is an achievable target, it's a global target.

441
00:23:28,200 --> 00:23:31,040
Speaker 4: It makes sense to people. By the way, you know,

442
00:23:31,040 --> 00:23:34,479
Speaker 4: we're at two point three percent. I think headline right, now,

443
00:23:34,520 --> 00:23:36,720
Speaker 4: so we're not even very far away from it, so

444
00:23:36,800 --> 00:23:39,640
Speaker 4: I see no reason to move the target. Of course,

445
00:23:39,680 --> 00:23:42,200
Speaker 4: you could argue about whether two is the right number,

446
00:23:42,280 --> 00:23:45,160
Speaker 4: two point two or one point eight or some other number. Also,

447
00:23:45,200 --> 00:23:47,399
Speaker 4: two things about that one is one of the reasons

448
00:23:47,480 --> 00:23:49,639
Speaker 4: why you go with two as opposed to zero is

449
00:23:49,680 --> 00:23:52,800
Speaker 4: you don't like deflation. Deflations when prices go down every

450
00:23:52,840 --> 00:23:55,240
Speaker 4: year and then no one wants to buy anything is

451
00:23:55,240 --> 00:23:57,520
Speaker 4: going to be cheaper tomorrow, and two gives you a

452
00:23:57,520 --> 00:24:00,400
Speaker 4: little bit of room against deflation. It's also the case

453
00:24:00,400 --> 00:24:04,480
Speaker 4: that there's some mismeasurement. Take encyclopedias for example. Let's assume

454
00:24:04,560 --> 00:24:07,880
Speaker 4: encyclopedias were in the index in the nineties. Well, they're

455
00:24:07,880 --> 00:24:10,720
Speaker 4: free today, they're on your phone, and so that's deflation

456
00:24:10,760 --> 00:24:12,239
Speaker 4: that doesn't show up in the numbers, and so it

457
00:24:12,280 --> 00:24:14,520
Speaker 4: just gives you a little bit of room there. So

458
00:24:14,640 --> 00:24:16,880
Speaker 4: that's why too, you know, you sort of said we're

459
00:24:16,880 --> 00:24:19,480
Speaker 4: not at two today. We weren't at two a decade ago.

460
00:24:20,080 --> 00:24:23,080
Speaker 4: And I think I personally do think of false precision

461
00:24:23,080 --> 00:24:25,960
Speaker 4: as being a concept worth considering here, which is I

462
00:24:26,200 --> 00:24:28,520
Speaker 4: definitely didn't criticize myself that much when we're at one

463
00:24:28,520 --> 00:24:31,400
Speaker 4: point eight. I mean, you're trying to get to two.

464
00:24:31,760 --> 00:24:34,320
Speaker 4: The economy is not something that you manage. So finally

465
00:24:34,400 --> 00:24:36,080
Speaker 4: that in each and every month of each and every

466
00:24:36,160 --> 00:24:39,080
Speaker 4: year inflation comes in in exactly too. That's something that

467
00:24:39,119 --> 00:24:42,000
Speaker 4: doesn't exist. Two's a target, and if you're off too

468
00:24:42,720 --> 00:24:44,320
Speaker 4: on the above or on the below, you try to

469
00:24:44,320 --> 00:24:47,159
Speaker 4: manage yourself toward it, and you recognize that you're not

470
00:24:47,240 --> 00:24:49,000
Speaker 4: always going to be right on it right.

471
00:24:49,080 --> 00:24:52,000
Speaker 2: It reminds me of the old joke economists use decimal

472
00:24:52,040 --> 00:24:54,159
Speaker 2: points to reveal they have a sense of humor.

473
00:24:54,280 --> 00:24:57,600
Speaker 3: So something has something has to make that case.

474
00:24:58,680 --> 00:25:03,120
Speaker 2: So let's pivot a little bit to the Richmond Federal Reserve.

475
00:25:05,200 --> 00:25:10,240
Speaker 2: The Federal Reserve Bank of Richmond District covers South Carolina,

476
00:25:10,600 --> 00:25:15,919
Speaker 2: North Carolina, Virginia, d C, West Virginia, and Maryland. That

477
00:25:16,000 --> 00:25:20,119
Speaker 2: seems like a fairly unique group of states, especially with

478
00:25:20,200 --> 00:25:22,560
Speaker 2: the nation's capital right in the middle. Tell us a

479
00:25:22,600 --> 00:25:25,280
Speaker 2: little bit about what makes that region so special.

480
00:25:25,840 --> 00:25:28,000
Speaker 4: So three things I like about it. One is DC

481
00:25:28,119 --> 00:25:31,920
Speaker 4: Metro unique. There's no other place in the country like that, obviously,

482
00:25:32,600 --> 00:25:35,600
Speaker 4: and all that's implied there. Second is we have nine

483
00:25:35,680 --> 00:25:41,240
Speaker 4: or ten i'll call them really fast growth New South regions, communities,

484
00:25:41,320 --> 00:25:50,120
Speaker 4: cities Charlotte, Greenville, Raleigh, Richmond, Northern Virginia. They're really very,

485
00:25:50,320 --> 00:25:53,480
Speaker 4: very vibrant, fast growing. You know, North and South Carolina,

486
00:25:53,520 --> 00:25:56,320
Speaker 4: for example, are two of the four fastest growing states

487
00:25:56,320 --> 00:25:58,520
Speaker 4: in terms of population in terms of housing growth over

488
00:25:58,520 --> 00:26:02,720
Speaker 4: the last several years. And then you've got a lot

489
00:26:02,760 --> 00:26:07,280
Speaker 4: of rural markets, and that would be you know, west

490
00:26:07,280 --> 00:26:09,800
Speaker 4: of the Appalachian part of the district in North Carolina,

491
00:26:10,359 --> 00:26:13,760
Speaker 4: West Virginia, and Western Virginia. But that would also include

492
00:26:13,840 --> 00:26:15,560
Speaker 4: up and down you know, I ninety five. There are

493
00:26:15,560 --> 00:26:17,760
Speaker 4: a lot of small towns there, and so I kind

494
00:26:17,760 --> 00:26:20,000
Speaker 4: of think about as three different economies, and I think

495
00:26:20,000 --> 00:26:24,200
Speaker 4: it's very interesting to be able to represent a community

496
00:26:24,240 --> 00:26:26,880
Speaker 4: with three so very different economies.

497
00:26:27,320 --> 00:26:30,840
Speaker 2: You know, you mentioned Charlotte. My office has we have

498
00:26:31,040 --> 00:26:34,520
Speaker 2: dozens of office across the country, but we have three hubs,

499
00:26:34,600 --> 00:26:39,440
Speaker 2: New York, Chicago, and Charlotte. And every time I visit Charlotte,

500
00:26:39,440 --> 00:26:41,919
Speaker 2: it feels like the city is twice the size it

501
00:26:42,080 --> 00:26:46,440
Speaker 2: was a year earlier. The area it's become a finance

502
00:26:46,480 --> 00:26:50,679
Speaker 2: center and a banking center. How do you look at

503
00:26:50,840 --> 00:26:53,880
Speaker 2: such a diverse area where some parts are a little

504
00:26:53,960 --> 00:26:56,760
Speaker 2: more rural, a little more sleepy, and growth is just

505
00:26:57,480 --> 00:27:03,360
Speaker 2: normal agricultural progression, and other areas are just absolute boom towns.

506
00:27:03,640 --> 00:27:05,040
Speaker 4: Well, the biggest thing I try to do is show

507
00:27:05,080 --> 00:27:05,720
Speaker 4: up in all of them.

508
00:27:05,800 --> 00:27:07,920
Speaker 2: And so you go to a lot of parts of

509
00:27:08,320 --> 00:27:10,200
Speaker 2: your district all the time.

510
00:27:10,000 --> 00:27:11,040
Speaker 3: Right everywhere.

511
00:27:11,040 --> 00:27:13,360
Speaker 4: And if you're bored on the website, they've even got

512
00:27:13,359 --> 00:27:17,240
Speaker 4: a map, kind of a ware's waldo. But no every

513
00:27:17,320 --> 00:27:20,480
Speaker 4: I mean, last week I was in Marion and Roanoke, Virginia.

514
00:27:20,560 --> 00:27:22,480
Speaker 4: Then I was in Arlington, Virginia. Then I was in

515
00:27:22,600 --> 00:27:25,480
Speaker 4: d C. And I'm trying to get into the big cities,

516
00:27:25,520 --> 00:27:27,880
Speaker 4: into the small towns, because you actually do hear about

517
00:27:27,880 --> 00:27:31,480
Speaker 4: the economy differently in big cities versus small towns. For example,

518
00:27:31,840 --> 00:27:35,720
Speaker 4: labor markets. You know, the the labor markets in the

519
00:27:35,720 --> 00:27:38,960
Speaker 4: small towns are unbelievably stressed still, and if you have

520
00:27:39,000 --> 00:27:41,359
Speaker 4: a national conversation, you say, hey, labor markets sort of

521
00:27:41,359 --> 00:27:45,240
Speaker 4: in balance unemployment's four point two percent, wage growth sort

522
00:27:45,240 --> 00:27:47,560
Speaker 4: of moderate. It's still the case in these small towns

523
00:27:47,560 --> 00:27:50,560
Speaker 4: that they can't find workers at restaurants and certainly in

524
00:27:50,880 --> 00:27:54,280
Speaker 4: manufacturing facilities. You also hear, you know, you get a

525
00:27:54,320 --> 00:27:56,600
Speaker 4: lot easier access to small businesses when you're in the

526
00:27:56,600 --> 00:27:58,840
Speaker 4: small town. So when I was in Marion last week,

527
00:27:58,880 --> 00:28:00,760
Speaker 4: I actually spent an hour and a half just wandering

528
00:28:00,840 --> 00:28:02,680
Speaker 4: up and down main Street and I talk to every

529
00:28:03,000 --> 00:28:05,800
Speaker 4: small business on main street about you know, what does

530
00:28:05,840 --> 00:28:08,320
Speaker 4: demand look like? Are you seeing any impact from tariffs?

531
00:28:08,320 --> 00:28:10,000
Speaker 4: What are you going to do with your pricing? So

532
00:28:10,040 --> 00:28:12,080
Speaker 4: it's a forcing device to help you see that part

533
00:28:12,119 --> 00:28:15,760
Speaker 4: of the economy, which of course employs so many And

534
00:28:15,800 --> 00:28:18,439
Speaker 4: so I think if you're on the ground, you'll see

535
00:28:18,600 --> 00:28:21,680
Speaker 4: and I've got red parts and blue parts and purple parts.

536
00:28:21,680 --> 00:28:22,240
Speaker 3: Statisticts.

537
00:28:22,480 --> 00:28:25,200
Speaker 4: You hear what's on people's minds in very different ways

538
00:28:25,560 --> 00:28:28,159
Speaker 4: based of where you are, and I really appreciate that

539
00:28:28,160 --> 00:28:29,000
Speaker 4: part of my district.

540
00:28:29,400 --> 00:28:33,040
Speaker 2: How do you balance the anecdotes you hear from the

541
00:28:33,080 --> 00:28:36,719
Speaker 2: man or woman in the street, the business owner, the shopkeeper, whatever,

542
00:28:37,640 --> 00:28:41,600
Speaker 2: with the hard data that you know, both the Richmond

543
00:28:41,640 --> 00:28:45,120
Speaker 2: Fed and the Federal Reserve proper have an enormous staff

544
00:28:45,120 --> 00:28:50,800
Speaker 2: of researchers crunching numbers. How do you balance data versus anecdote?

545
00:28:50,920 --> 00:28:53,400
Speaker 4: Well, so the data is better than the anecdotes because

546
00:28:53,800 --> 00:28:56,840
Speaker 4: you know it's a bigger sample. It's done in a

547
00:28:57,920 --> 00:29:01,760
Speaker 4: serious and approach statistically appropriate. It also comes in about

548
00:29:01,840 --> 00:29:04,600
Speaker 4: six weeks late and is revised three times, and so

549
00:29:05,360 --> 00:29:07,520
Speaker 4: the data really matters. But if you just count on

550
00:29:07,560 --> 00:29:09,760
Speaker 4: the data, you're going to miss turning points and you're

551
00:29:09,760 --> 00:29:12,480
Speaker 4: going to miss explanations. And so I don't make the

552
00:29:12,520 --> 00:29:15,080
Speaker 4: mistake of talking to one company and saying, oh, okay,

553
00:29:15,240 --> 00:29:18,000
Speaker 4: everything in the data is wrong. But I do try

554
00:29:18,040 --> 00:29:21,360
Speaker 4: to understand what the data is telling me by testing,

555
00:29:21,640 --> 00:29:24,200
Speaker 4: you know, with the conversations we're having in the field,

556
00:29:24,240 --> 00:29:26,480
Speaker 4: and so you know, a good example would have been

557
00:29:27,600 --> 00:29:30,680
Speaker 4: May first of twenty twenty when I talked to a

558
00:29:30,840 --> 00:29:33,960
Speaker 4: real estate developer in western Virginia who was telling me

559
00:29:33,960 --> 00:29:36,040
Speaker 4: that Tennessee has just opened the malls in Bristol and

560
00:29:36,040 --> 00:29:38,840
Speaker 4: they're packed, and of course Virginia was still closed down.

561
00:29:39,080 --> 00:29:41,440
Speaker 4: And that was my first indicator that you're going to

562
00:29:41,440 --> 00:29:44,800
Speaker 4: see this big wave of spending when the lockdowns started

563
00:29:45,120 --> 00:29:47,960
Speaker 4: to open up. And so that's a turning point that

564
00:29:48,000 --> 00:29:51,200
Speaker 4: you wouldn't otherwise have gotten if you weren't in the markets.

565
00:29:51,480 --> 00:29:53,680
Speaker 4: We heard the same thing with household furnishings. Yeah, there's

566
00:29:53,680 --> 00:29:56,960
Speaker 4: a big boom and furniture during COVID, but about twenty

567
00:29:57,040 --> 00:29:58,760
Speaker 4: twenty two, it backed off. We heard that from the

568
00:29:58,800 --> 00:30:02,640
Speaker 4: furniture manufacturers, we before you saw that in the data.

569
00:30:03,080 --> 00:30:05,480
Speaker 4: And then I think explanations matter a lot too. And

570
00:30:05,520 --> 00:30:08,600
Speaker 4: if you're trying to understand how it could be that

571
00:30:08,920 --> 00:30:11,320
Speaker 4: we've had all this news from Washington, yet the unemployment

572
00:30:11,360 --> 00:30:14,040
Speaker 4: statistics don't seem to show that much of a tick

573
00:30:14,120 --> 00:30:17,240
Speaker 4: up in unemployment in Washington, well, there are lots of explanations,

574
00:30:17,240 --> 00:30:19,959
Speaker 4: including how those programs have been rolled out and what

575
00:30:20,000 --> 00:30:22,280
Speaker 4: the timing of it is. And so if you're in

576
00:30:22,360 --> 00:30:25,480
Speaker 4: the market talking about we actually understand the data in

577
00:30:25,520 --> 00:30:27,680
Speaker 4: a fundamentally more sophisticated way.

578
00:30:28,440 --> 00:30:32,440
Speaker 2: Since you mentioned the pandemic, let's talk about two issues

579
00:30:32,840 --> 00:30:37,240
Speaker 2: post pandemic, wages and real estate, and we'll just start

580
00:30:37,320 --> 00:30:42,400
Speaker 2: with there have been substantial wage gains across every economic strata,

581
00:30:43,360 --> 00:30:47,560
Speaker 2: and impressively very much so in the bottom half of

582
00:30:48,640 --> 00:30:53,719
Speaker 2: earners since the pandemic, although that is now starting to

583
00:30:53,760 --> 00:30:57,720
Speaker 2: slow down. How do you look at the wage situation

584
00:30:57,880 --> 00:31:00,920
Speaker 2: as part of employment and what's happened with that trend

585
00:31:00,960 --> 00:31:03,640
Speaker 2: towards wage pressures beginning to ease off.

586
00:31:03,920 --> 00:31:06,200
Speaker 4: Well, I do think you've described accurately. You know, what's

587
00:31:06,200 --> 00:31:09,200
Speaker 4: happened to wages. It's definitely bigger increases at the lower

588
00:31:09,320 --> 00:31:11,400
Speaker 4: end and less at the higher end. You know, I

589
00:31:11,440 --> 00:31:15,800
Speaker 4: should add that inflation also hits lower income earners the

590
00:31:15,840 --> 00:31:18,520
Speaker 4: hardest because they spend the greatest amount of their pay,

591
00:31:18,560 --> 00:31:22,320
Speaker 4: and so nobody has this mental ledger that says, my

592
00:31:22,360 --> 00:31:25,040
Speaker 4: wages went up x percent, my prices went up y percent,

593
00:31:25,080 --> 00:31:27,200
Speaker 4: and so i'm you know, it's not like operating margin

594
00:31:27,240 --> 00:31:30,280
Speaker 4: for a business. Those are two different ledgers in humans minds,

595
00:31:30,320 --> 00:31:32,200
Speaker 4: And so to a lot of lower income people doesn't

596
00:31:32,200 --> 00:31:34,160
Speaker 4: feel like their wages have gone up as much because

597
00:31:34,320 --> 00:31:37,320
Speaker 4: inflation's gone up, and also because they don't they discount

598
00:31:37,720 --> 00:31:41,040
Speaker 4: the wages when they measured against inflation. You know, going forward,

599
00:31:41,080 --> 00:31:43,200
Speaker 4: it definitely looks like we've got a labor market that

600
00:31:43,360 --> 00:31:46,560
Speaker 4: is much more in balance, maybe even starting to loosen,

601
00:31:46,680 --> 00:31:49,160
Speaker 4: than the one we had a year or two or

602
00:31:49,200 --> 00:31:51,680
Speaker 4: three years ago. You still hear tightness, as I said,

603
00:31:51,680 --> 00:31:54,160
Speaker 4: in small towns. You definitely hear it in the skilled trades.

604
00:31:54,720 --> 00:31:57,120
Speaker 4: I think there are a set of professions out there

605
00:31:57,240 --> 00:32:01,360
Speaker 4: that used to be a wall with employees that now

606
00:32:01,400 --> 00:32:05,000
Speaker 4: seem to be systemically short of employees. And you know,

607
00:32:05,080 --> 00:32:06,920
Speaker 4: a lot of that skilled trades, but I'd also put

608
00:32:06,960 --> 00:32:11,840
Speaker 4: a lot of the care professions, nurses, teachers, elder care, childcare.

609
00:32:12,320 --> 00:32:14,840
Speaker 4: A lot of people found those professions to be pretty

610
00:32:14,920 --> 00:32:17,840
Speaker 4: unattractive during COVID and moved into other jobs, and there

611
00:32:17,840 --> 00:32:19,960
Speaker 4: hasn't been a way, you know, to replace them. And

612
00:32:20,520 --> 00:32:24,320
Speaker 4: there's not that much money to available to increase the

613
00:32:24,320 --> 00:32:27,600
Speaker 4: compensation to account for it. So you hear shortages there.

614
00:32:27,640 --> 00:32:31,280
Speaker 4: You hear shortages in state and local government still. So

615
00:32:31,680 --> 00:32:34,600
Speaker 4: there's still places where the impact of the pandemic on

616
00:32:34,640 --> 00:32:37,000
Speaker 4: the labor market has not yet. We're not back to

617
00:32:37,040 --> 00:32:39,160
Speaker 4: where we were at the beginning, and you know, some

618
00:32:39,280 --> 00:32:43,560
Speaker 4: combination of training and development of people and compensation of

619
00:32:43,600 --> 00:32:45,120
Speaker 4: people is going to have to happen if we're going

620
00:32:45,200 --> 00:32:46,640
Speaker 4: to staff these appropriately.

621
00:32:46,920 --> 00:32:51,320
Speaker 2: So let's talk about remote work and both commercial real

622
00:32:51,400 --> 00:32:55,640
Speaker 2: estate space and residential real estate. The US continues to

623
00:32:55,680 --> 00:32:59,960
Speaker 2: have a substantial number of workers that are either high

624
00:33:00,480 --> 00:33:02,840
Speaker 2: or full time remote. I used to be in the

625
00:33:02,880 --> 00:33:04,680
Speaker 2: city four or five days a week. Now I'm in

626
00:33:04,720 --> 00:33:07,160
Speaker 2: the city two or three days a week. If you

627
00:33:07,200 --> 00:33:09,600
Speaker 2: were in Bloomberg today, I would have been in Bloomberg.

628
00:33:10,000 --> 00:33:12,320
Speaker 2: But it didn't make sense to come in to have

629
00:33:12,360 --> 00:33:17,840
Speaker 2: a remote conversation, and the US continues to have a

630
00:33:17,960 --> 00:33:24,640
Speaker 2: higher level of remote work than other similar industrialized societies

631
00:33:24,680 --> 00:33:28,880
Speaker 2: like Europe. What's going on with remote work? What does

632
00:33:28,960 --> 00:33:32,680
Speaker 2: this mean for FED policy? What does this mean for

633
00:33:33,080 --> 00:33:36,400
Speaker 2: a variety of different aspects. It seems to be fading

634
00:33:36,520 --> 00:33:40,600
Speaker 2: as a topic, but it's still a pretty significant issue.

635
00:33:40,920 --> 00:33:43,560
Speaker 4: We have flexibility we didn't know we had. That's where

636
00:33:43,560 --> 00:33:46,760
Speaker 4: I start, and you can't bury that. And so I

637
00:33:46,760 --> 00:33:48,560
Speaker 4: think there's a whole bunch of workers in a whole

638
00:33:48,560 --> 00:33:50,760
Speaker 4: bunch of days who found out that, like you and

639
00:33:50,800 --> 00:33:52,760
Speaker 4: like May, you could work from home this day as

640
00:33:52,760 --> 00:33:56,480
Speaker 4: opposed to working somewhere else. It's also true that there's

641
00:33:56,480 --> 00:34:00,000
Speaker 4: a bunch of employees who discovered that they actually prefer

642
00:34:00,160 --> 00:34:03,360
Speaker 4: to be at home rather than come into the office.

643
00:34:03,600 --> 00:34:05,760
Speaker 4: By the way, there's another set that would prefer to

644
00:34:05,760 --> 00:34:08,399
Speaker 4: come in the office. But there's certainly a segment there.

645
00:34:08,880 --> 00:34:12,520
Speaker 4: And so we're in a marketplace. People will compete it out,

646
00:34:12,560 --> 00:34:16,160
Speaker 4: and there are executives who believe passionately that their business

647
00:34:16,200 --> 00:34:19,279
Speaker 4: is not going to deliver unless their people are there

648
00:34:19,360 --> 00:34:22,319
Speaker 4: five days a week, every week, and their businesses who

649
00:34:22,400 --> 00:34:25,040
Speaker 4: believe they'll get access to better people if they just

650
00:34:25,080 --> 00:34:28,120
Speaker 4: allow them to be remote. And those two often those

651
00:34:28,120 --> 00:34:30,280
Speaker 4: two are in the same sector, and so they'll compete

652
00:34:30,320 --> 00:34:32,879
Speaker 4: it out. One will have lower property costs, one will

653
00:34:32,880 --> 00:34:37,640
Speaker 4: have higher collaboration. We'll see what happens. One thing I

654
00:34:37,680 --> 00:34:40,319
Speaker 4: tried to look at when all this started was how

655
00:34:40,320 --> 00:34:42,719
Speaker 4: did we ever end up with the five hour, five

656
00:34:42,800 --> 00:34:45,320
Speaker 4: day a week, forty hour work week. And the answer

657
00:34:45,360 --> 00:34:48,160
Speaker 4: is that was General Motors and Alfred Sloan back in

658
00:34:48,200 --> 00:34:51,000
Speaker 4: the mid twenties just decided it, and five or ten

659
00:34:51,080 --> 00:34:53,360
Speaker 4: years later everybody was doing it. But none of us

660
00:34:53,360 --> 00:34:55,680
Speaker 4: who were doing it thought that was perfect if we

661
00:34:55,719 --> 00:34:57,600
Speaker 4: stopped to think about it. It's just what we did.

662
00:34:57,920 --> 00:35:01,000
Speaker 4: And so you know, different sectors, different businesses, they'll evolve

663
00:35:01,040 --> 00:35:04,239
Speaker 4: toward different models. I do think their implications, as you say,

664
00:35:04,280 --> 00:35:07,480
Speaker 4: on real estate, on the residential side, if some set

665
00:35:07,480 --> 00:35:09,040
Speaker 4: of people are going to spend more of their time

666
00:35:09,040 --> 00:35:11,520
Speaker 4: in their house, then they're going to value their house more.

667
00:35:12,040 --> 00:35:13,839
Speaker 4: They're going to value their office, they're going to value

668
00:35:13,880 --> 00:35:17,840
Speaker 4: their space, their garden, whatever. And so we saw that

669
00:35:17,920 --> 00:35:20,200
Speaker 4: during COVID, people got shut up in their house, they

670
00:35:20,200 --> 00:35:22,760
Speaker 4: decided they no longer liked their house. They also decided

671
00:35:22,880 --> 00:35:26,120
Speaker 4: they didn't like their roommates, and so the economists call

672
00:35:26,200 --> 00:35:28,800
Speaker 4: that household formation. So you have a lot more households

673
00:35:28,800 --> 00:35:30,839
Speaker 4: out there for the same amount of houses, and that's

674
00:35:30,840 --> 00:35:33,720
Speaker 4: what's led to the price increase that we've had in housing.

675
00:35:34,120 --> 00:35:36,400
Speaker 4: And unless we build a lot more housing, you're going

676
00:35:36,440 --> 00:35:38,120
Speaker 4: to have that out there for some time.

677
00:35:38,200 --> 00:35:40,040
Speaker 3: It's a bigger part of the basket.

678
00:35:40,080 --> 00:35:42,759
Speaker 4: And maybe you know, public transit or parking is a

679
00:35:42,760 --> 00:35:44,840
Speaker 4: lower part of the basket, but housing will be a

680
00:35:44,880 --> 00:35:48,200
Speaker 4: bigger part of the basket. On the commercial real estate side,

681
00:35:48,320 --> 00:35:50,640
Speaker 4: you know, folks are still trying to adapt, and you know,

682
00:35:50,640 --> 00:35:53,319
Speaker 4: it's much less flexible than the housing side because some

683
00:35:53,360 --> 00:35:55,560
Speaker 4: of the space is very much built for purpose, built

684
00:35:55,560 --> 00:35:58,360
Speaker 4: for an institution at least for fifteen years, as you know.

685
00:35:59,520 --> 00:36:01,319
Speaker 3: And so I think think we're still midway.

686
00:36:01,000 --> 00:36:03,960
Speaker 4: Through an adjustment process where some amount of that commercial

687
00:36:04,000 --> 00:36:06,400
Speaker 4: real estate is used more because people come back to

688
00:36:06,440 --> 00:36:10,160
Speaker 4: the office, some is redeployed into other uses, whether it

689
00:36:10,239 --> 00:36:14,480
Speaker 4: be anything from data centers to residential, and some has

690
00:36:14,480 --> 00:36:17,879
Speaker 4: eventually taken off the market. But I think I think

691
00:36:17,880 --> 00:36:19,759
Speaker 4: we're still very much mid process on that.

692
00:36:20,040 --> 00:36:22,520
Speaker 2: So let's talk a little bit about real estate, and

693
00:36:22,560 --> 00:36:26,399
Speaker 2: in particular residential real estate. We seem to have this

694
00:36:27,280 --> 00:36:31,399
Speaker 2: chicken and egg problem where prices are up because there's

695
00:36:31,440 --> 00:36:34,960
Speaker 2: so little supply on the market. And while some of

696
00:36:35,000 --> 00:36:37,279
Speaker 2: that is a little bit of nimbi, and some of

697
00:36:37,320 --> 00:36:44,279
Speaker 2: that has been post financial crisis builders tilted towards multifamily

698
00:36:44,360 --> 00:36:48,200
Speaker 2: and apartments versus single family homes. But the largest chunk

699
00:36:48,280 --> 00:36:53,040
Speaker 2: seems to be the golden mortgage handcuffs. Something like sixty

700
00:36:53,280 --> 00:36:57,560
Speaker 2: seventy percent of people have mortgages under five percent and

701
00:36:57,719 --> 00:37:01,880
Speaker 2: some huge, crazy number under four percent mortgage rates. So,

702
00:37:02,200 --> 00:37:06,640
Speaker 2: on the one hand, if we lower yields too fast, well,

703
00:37:06,680 --> 00:37:10,319
Speaker 2: that could set off another round of inflation. On the

704
00:37:10,360 --> 00:37:13,920
Speaker 2: other hand, all of this supply is locked up, and

705
00:37:14,040 --> 00:37:16,759
Speaker 2: either we're going to wait for those people to age out,

706
00:37:17,160 --> 00:37:21,480
Speaker 2: or if rates come down enough, they could trade up

707
00:37:21,640 --> 00:37:25,520
Speaker 2: or trade to a downsize or whatever, but move to

708
00:37:25,600 --> 00:37:28,640
Speaker 2: a different property. How does the FED think about this,

709
00:37:29,239 --> 00:37:31,640
Speaker 2: you know, sort of conundrum where damned if you do,

710
00:37:31,760 --> 00:37:32,760
Speaker 2: damned if you don't.

711
00:37:32,719 --> 00:37:35,120
Speaker 3: Well, I think I wouldn't I wouldn't buy.

712
00:37:35,200 --> 00:37:36,719
Speaker 4: I do buy your story that there are a lot

713
00:37:36,760 --> 00:37:38,719
Speaker 4: of people who have decided not to move because they

714
00:37:38,760 --> 00:37:41,400
Speaker 4: can't give up their mortgage. But I don't buy the

715
00:37:41,400 --> 00:37:44,480
Speaker 4: story that if all we did was lower rates, then

716
00:37:44,760 --> 00:37:46,440
Speaker 4: they would all give up their mortgage and the housing

717
00:37:46,440 --> 00:37:48,480
Speaker 4: market would free up, because every one of those people

718
00:37:48,920 --> 00:37:52,480
Speaker 4: who moved is a seller and a buyer, and so

719
00:37:52,520 --> 00:37:54,879
Speaker 4: they're going to be increasing their demand at the same

720
00:37:54,920 --> 00:37:57,000
Speaker 4: time that they're increasing supply. So you're still going to

721
00:37:57,040 --> 00:38:01,200
Speaker 4: have a shortage of supply versus demand. I should also

722
00:38:01,239 --> 00:38:03,759
Speaker 4: note that just because we raise lower short term rates

723
00:38:03,800 --> 00:38:06,480
Speaker 4: as necessarily lower mortgage rates, as we learned in the

724
00:38:06,520 --> 00:38:10,600
Speaker 4: fourth quarter of last year. But I think again, the

725
00:38:10,680 --> 00:38:13,279
Speaker 4: demand for housing is much higher, and it's much higher

726
00:38:13,320 --> 00:38:15,920
Speaker 4: because the generations decided they want a house and household

727
00:38:15,960 --> 00:38:19,040
Speaker 4: formation as I talked about earlier in people valuing their house.

728
00:38:19,360 --> 00:38:22,879
Speaker 4: As you say, we underbuilt housing for a generation coming

729
00:38:22,920 --> 00:38:25,080
Speaker 4: out of the Great Recession, and so we have more

730
00:38:25,120 --> 00:38:27,040
Speaker 4: demand than supply. The answer to that is to build

731
00:38:27,080 --> 00:38:30,879
Speaker 4: more supply. And as in my district, if you drive

732
00:38:30,960 --> 00:38:35,040
Speaker 4: down ninety five and you look at Wilson or Smithfield

733
00:38:35,120 --> 00:38:38,239
Speaker 4: or Clayton or Rocky Mount, you know these are exurban

734
00:38:38,280 --> 00:38:41,280
Speaker 4: areas that are not Raleigh, but not that far from Raleigh.

735
00:38:41,680 --> 00:38:46,000
Speaker 4: You see you know, development after development of two hundred

736
00:38:46,000 --> 00:38:47,760
Speaker 4: and seventy five to three hundred and twenty five thousand

737
00:38:47,760 --> 00:38:50,560
Speaker 4: dollars houses, you know, going up in what used to

738
00:38:50,560 --> 00:38:53,600
Speaker 4: be farmland there. If you drive to exurban Charlotte or

739
00:38:53,600 --> 00:38:56,640
Speaker 4: Greenville or Richmond, you'll see the same thing. I mean,

740
00:38:57,120 --> 00:39:00,360
Speaker 4: houses are getting built. But there are communities, you know,

741
00:39:00,480 --> 00:39:02,640
Speaker 4: Metro DC would be one of them where you don't

742
00:39:02,640 --> 00:39:05,400
Speaker 4: see housing getting built. And so you know, you have

743
00:39:05,440 --> 00:39:07,239
Speaker 4: to ask the question of why that is part of

744
00:39:07,280 --> 00:39:11,200
Speaker 4: its cost, part of its land, and part of its

745
00:39:11,280 --> 00:39:15,160
Speaker 4: you know, resistance to growth by the inhabitants of various markets.

746
00:39:15,160 --> 00:39:17,600
Speaker 4: And it again, one of the benefits of having the

747
00:39:17,600 --> 00:39:19,560
Speaker 4: six states that have is you can see places that

748
00:39:19,719 --> 00:39:21,480
Speaker 4: are growing and housing is getting built, and you can

749
00:39:21,520 --> 00:39:22,440
Speaker 4: see places where it's not.

750
00:39:22,719 --> 00:39:26,840
Speaker 2: So is it fair to say the headwind for putting

751
00:39:26,960 --> 00:39:30,879
Speaker 2: up more houses is not a national set of policies

752
00:39:31,000 --> 00:39:37,600
Speaker 2: but mostly state, local, regional both regulations and just hey,

753
00:39:37,920 --> 00:39:40,719
Speaker 2: you know they the fewer houses that are built, the

754
00:39:40,719 --> 00:39:43,480
Speaker 2: more my house is worth. There's a little bit of

755
00:39:44,080 --> 00:39:49,040
Speaker 2: self interest amongst the people who oppose more home construction.

756
00:39:49,560 --> 00:39:51,560
Speaker 4: Well, what I keep saying is we're in a competition

757
00:39:51,600 --> 00:39:53,640
Speaker 4: for developers. There are only so many There are only

758
00:39:53,680 --> 00:39:56,719
Speaker 4: so many construction people, and you want them to come

759
00:39:56,800 --> 00:39:58,760
Speaker 4: to your neighborhood and build houses in your places.

760
00:39:58,800 --> 00:39:59,600
Speaker 3: So how do you do that.

761
00:40:00,120 --> 00:40:03,840
Speaker 4: Well, all of your local regulation and policies matter, permitting zoning,

762
00:40:05,320 --> 00:40:10,439
Speaker 4: amount of time to get approvals, certainty as to construction time.

763
00:40:10,920 --> 00:40:13,319
Speaker 4: So that's one big piece of it. Another big piece

764
00:40:13,320 --> 00:40:16,399
Speaker 4: of it is land availability. And once you start thinking

765
00:40:16,440 --> 00:40:19,239
Speaker 4: about land availability, you almost don't stop. I mean, I

766
00:40:19,320 --> 00:40:21,919
Speaker 4: drive into some community colleges and they've got a huge

767
00:40:21,960 --> 00:40:23,719
Speaker 4: plots of land, and then I find out that the

768
00:40:23,719 --> 00:40:27,520
Speaker 4: state doesn't allow the building of dorms on community college campuses,

769
00:40:27,800 --> 00:40:29,440
Speaker 4: and you go, now, okay, wait a second, you can

770
00:40:29,480 --> 00:40:32,160
Speaker 4: get student housing built. Why can't we get that built.

771
00:40:32,600 --> 00:40:34,880
Speaker 4: You go to some of these older world towns that

772
00:40:34,920 --> 00:40:37,520
Speaker 4: have been depopulated over the years, and they've got all

773
00:40:37,520 --> 00:40:41,239
Speaker 4: this land that's dilapidate housing, but they can't fix it

774
00:40:41,280 --> 00:40:42,760
Speaker 4: because there's absentee landowners.

775
00:40:42,800 --> 00:40:44,040
Speaker 3: I mean, once you start.

776
00:40:43,800 --> 00:40:46,680
Speaker 4: Thinking about the role of land in making this attractive

777
00:40:46,680 --> 00:40:49,080
Speaker 4: for developers, you almost can't stop thinking about it. And

778
00:40:49,120 --> 00:40:51,600
Speaker 4: I think that really is the lever of communities can

779
00:40:52,280 --> 00:40:55,600
Speaker 4: provide real assurance that they can provide land, and that

780
00:40:55,719 --> 00:40:59,280
Speaker 4: land can get built on at a predictable and reasonable

781
00:40:59,280 --> 00:40:59,800
Speaker 4: time period.

782
00:41:00,120 --> 00:41:00,799
Speaker 3: Think, then it.

783
00:41:00,800 --> 00:41:05,359
Speaker 2: Works really really interesting. So now let's pivot to your

784
00:41:05,400 --> 00:41:10,360
Speaker 2: work on the FOMC and the state of monetary policy today.

785
00:41:11,440 --> 00:41:14,720
Speaker 2: Starting with let's talk a little bit about that fiscal

786
00:41:14,760 --> 00:41:19,520
Speaker 2: stimulus during COVID. If you total all the programs up,

787
00:41:19,600 --> 00:41:23,719
Speaker 2: CARES Act one and two under President Trump, CARES Act

788
00:41:23,719 --> 00:41:27,560
Speaker 2: three under President Biden, all the Infrastructure Bill, all the

789
00:41:27,600 --> 00:41:31,440
Speaker 2: other ten year legislative acts that pass some form of

790
00:41:31,480 --> 00:41:33,799
Speaker 2: fiscal stimulus, you know, you can get that up to

791
00:41:33,840 --> 00:41:38,400
Speaker 2: about four trillion dollars or more. Uh, that's a huge,

792
00:41:38,560 --> 00:41:43,439
Speaker 2: huge amount of money coursing through the system. How did

793
00:41:43,560 --> 00:41:48,840
Speaker 2: that impact inflation? And is it fair to say that

794
00:41:48,920 --> 00:41:53,080
Speaker 2: maybe transitory has gotten a bad rap because it seemed

795
00:41:53,120 --> 00:41:57,240
Speaker 2: to be kind of transitory. It just transitory took longer

796
00:41:57,239 --> 00:41:58,320
Speaker 2: than everybody expected.

797
00:41:58,520 --> 00:42:00,399
Speaker 4: Well, though there's been a lot of papers and about

798
00:42:00,400 --> 00:42:02,360
Speaker 4: what drove the inflation, you know, to me, it's in

799
00:42:02,400 --> 00:42:05,040
Speaker 4: all of the above. I mean, you had a surge

800
00:42:05,040 --> 00:42:10,040
Speaker 4: and demand that came from fiscal policy and monetary policy

801
00:42:10,560 --> 00:42:14,200
Speaker 4: and vaccines. You know, as people got out of their

802
00:42:14,200 --> 00:42:17,080
Speaker 4: house and felt the freedom to spend. You had constraints

803
00:42:17,080 --> 00:42:20,520
Speaker 4: in supply which came from you know, labor constraints, people

804
00:42:21,560 --> 00:42:25,160
Speaker 4: driven by the crisis, by the health crisis, maybe labor

805
00:42:25,160 --> 00:42:28,520
Speaker 4: constraints caused by policy and supply chain constraints. As demand

806
00:42:28,560 --> 00:42:32,160
Speaker 4: sort of overwhelmed supply, and so then you saw you know,

807
00:42:32,360 --> 00:42:35,239
Speaker 4: demand surge well and excess of supply that led prices up.

808
00:42:35,400 --> 00:42:38,440
Speaker 4: I think the most interesting question for entree policy is

809
00:42:38,440 --> 00:42:41,080
Speaker 4: why did it last so long? Because you know, to

810
00:42:41,120 --> 00:42:43,640
Speaker 4: your point on transitory, okay, that's fine, you have more

811
00:42:43,680 --> 00:42:46,640
Speaker 4: demand than supply. Expectations are anchored, so price went up,

812
00:42:46,640 --> 00:42:49,160
Speaker 4: they should have come back down. And I just think

813
00:42:49,320 --> 00:42:51,239
Speaker 4: it goes back to what I described earlier as how

814
00:42:51,280 --> 00:42:54,279
Speaker 4: I think about people's inflation expectations, which is it's part

815
00:42:54,280 --> 00:42:56,920
Speaker 4: today in part tomorrow, and it just takes time to

816
00:42:56,920 --> 00:43:00,719
Speaker 4: get back to tomorrow after you've had a surge today. The

817
00:43:00,760 --> 00:43:03,520
Speaker 4: real life way to think about it is, Okay, now

818
00:43:03,560 --> 00:43:07,719
Speaker 4: you're you know, somebody's lawn service, and you don't really

819
00:43:07,719 --> 00:43:10,680
Speaker 4: have big cost increases, but everybody else has raised their price.

820
00:43:11,120 --> 00:43:12,680
Speaker 4: Maybe you look around you go, huh, maybe I can

821
00:43:12,719 --> 00:43:15,640
Speaker 4: raise my price. And so there's a lot of attempts

822
00:43:15,640 --> 00:43:18,840
Speaker 4: to raise prices that go through in the aftermath of

823
00:43:18,840 --> 00:43:22,680
Speaker 4: an inflationary episode that might not have been they might

824
00:43:22,719 --> 00:43:25,799
Speaker 4: have the courage to do without an inflationary episode, And

825
00:43:25,880 --> 00:43:29,440
Speaker 4: so I think it was this. The inflation way that

826
00:43:29,480 --> 00:43:31,880
Speaker 4: we saw was definitely time bound. I mean, we have

827
00:43:31,920 --> 00:43:34,640
Speaker 4: seen the supply chains heel, we've seen people back in

828
00:43:34,680 --> 00:43:38,400
Speaker 4: the workforce, and we have seen prices come down. But

829
00:43:38,480 --> 00:43:41,719
Speaker 4: the question of what the definition of transitory is is

830
00:43:41,840 --> 00:43:44,799
Speaker 4: challenging because the word first got used, I think in

831
00:43:44,880 --> 00:43:47,879
Speaker 4: March twenty one or April twenty one, and now it's

832
00:43:47,880 --> 00:43:50,000
Speaker 4: four years later, and so a lot of people think

833
00:43:50,040 --> 00:43:52,760
Speaker 4: transtory means like a minute, where in fact, the original

834
00:43:52,800 --> 00:43:56,160
Speaker 4: meaning of it was in our lifetimes. And so probably

835
00:43:56,239 --> 00:43:58,279
Speaker 4: the right definition is somewhere between those two.

836
00:43:58,920 --> 00:44:02,640
Speaker 2: On a long enough time line, everything that's transitor. You

837
00:44:02,719 --> 00:44:04,920
Speaker 2: have a quote from earlier this year that I'm a

838
00:44:04,920 --> 00:44:07,840
Speaker 2: big fan of because I have a buddy who is

839
00:44:07,840 --> 00:44:10,439
Speaker 2: a commodities trader and he says the exact same thing

840
00:44:10,480 --> 00:44:13,840
Speaker 2: all the time, and the quote is the cure for

841
00:44:13,960 --> 00:44:18,440
Speaker 2: high prices is high prices. Explain that because I'm just

842
00:44:18,480 --> 00:44:20,280
Speaker 2: such a fan of that line.

843
00:44:20,719 --> 00:44:23,759
Speaker 4: Well, so it's a great economist line. It has two

844
00:44:23,840 --> 00:44:27,759
Speaker 4: meanings and both of them matter. One is that if you,

845
00:44:27,800 --> 00:44:31,279
Speaker 4: as a consumer get high prices, the first thing you

846
00:44:31,280 --> 00:44:33,520
Speaker 4: want to do is look for an alternative. Maybe you

847
00:44:33,560 --> 00:44:35,680
Speaker 4: go to private label, maybe you go to from beef

848
00:44:35,719 --> 00:44:38,520
Speaker 4: to chicken, maybe you go from a department store to

849
00:44:38,560 --> 00:44:42,279
Speaker 4: a Walmart. But you're looking for some are alternative. And

850
00:44:42,320 --> 00:44:45,040
Speaker 4: so if a company raises its price is too high,

851
00:44:45,400 --> 00:44:47,080
Speaker 4: then its customers are going to do something else and

852
00:44:47,120 --> 00:44:49,520
Speaker 4: that'll teach the company that that price is too high.

853
00:44:49,840 --> 00:44:52,200
Speaker 4: The other version of it is a supply side point,

854
00:44:52,239 --> 00:44:56,040
Speaker 4: which is that if prices are high and successfully passed on,

855
00:44:56,560 --> 00:44:59,760
Speaker 4: then new competitors will come in, you know, to increase

856
00:45:00,520 --> 00:45:03,719
Speaker 4: or lower prices and so and I really want to

857
00:45:03,760 --> 00:45:06,279
Speaker 4: say this has happened. I mean, this has happened in

858
00:45:06,680 --> 00:45:09,400
Speaker 4: this economy. If you look at earnings reports from all

859
00:45:09,440 --> 00:45:12,520
Speaker 4: the major retailers, you know you'll hear this. You know,

860
00:45:12,600 --> 00:45:15,719
Speaker 4: customers are tapped out, customers are trading down. You can

861
00:45:15,760 --> 00:45:18,080
Speaker 4: see a big move in terms of where people are

862
00:45:18,120 --> 00:45:21,680
Speaker 4: buying their groceries today, private label, e commerce, like I said,

863
00:45:21,719 --> 00:45:23,920
Speaker 4: beef to chicken, all these things are happening. And I

864
00:45:23,920 --> 00:45:27,680
Speaker 4: think it's because, you know, consumers having gotten through the

865
00:45:27,719 --> 00:45:30,799
Speaker 4: COVID period where they were exhausted. It was all coming

866
00:45:30,840 --> 00:45:32,440
Speaker 4: at once, and by the way, they had lots of

867
00:45:32,480 --> 00:45:35,719
Speaker 4: money because of repress spendings or in COVID or elevated

868
00:45:35,800 --> 00:45:39,800
Speaker 4: stock market or stimulus checks. They just spent it and

869
00:45:39,800 --> 00:45:41,400
Speaker 4: they paid it, and that's what we got the inflation

870
00:45:41,440 --> 00:45:42,160
Speaker 4: of twenty twenty two.

871
00:45:42,239 --> 00:45:43,400
Speaker 3: We're not in a period.

872
00:45:43,160 --> 00:45:45,759
Speaker 4: Where consumers feel like they have extra money. And so

873
00:45:46,400 --> 00:45:48,520
Speaker 4: those people who are out there trying to raise prices

874
00:45:48,520 --> 00:45:51,360
Speaker 4: for whatever set of good and bad reasons, they're facing

875
00:45:51,360 --> 00:45:53,080
Speaker 4: a consumer that doesn't want to pay it now, and

876
00:45:53,160 --> 00:45:56,760
Speaker 4: it's got the time and the mental energy to make choices,

877
00:45:56,800 --> 00:45:59,399
Speaker 4: and so I think you know that do that will

878
00:45:59,440 --> 00:46:00,800
Speaker 4: fix high price is over time.

879
00:46:01,200 --> 00:46:05,080
Speaker 2: So during the pandemic, we kind of pivoted from a

880
00:46:05,200 --> 00:46:09,040
Speaker 2: service driven economy to very much a stuck at home,

881
00:46:09,200 --> 00:46:13,000
Speaker 2: can't travel, go to restaurants, go to sporting events, so

882
00:46:13,120 --> 00:46:17,440
Speaker 2: we're gonna consume more goods. That very much was a

883
00:46:17,520 --> 00:46:21,200
Speaker 2: key driver of inflation, along with all these other issues

884
00:46:21,239 --> 00:46:27,520
Speaker 2: including snarled supply chains. Feels like that's mostly returned back

885
00:46:27,520 --> 00:46:30,759
Speaker 2: to normal. The Summer of Revenge travel everybody seems to

886
00:46:31,280 --> 00:46:34,640
Speaker 2: be out about, at least in my area. I book

887
00:46:34,880 --> 00:46:39,120
Speaker 2: restaurant reservations three weeks in events. So we seem to

888
00:46:39,160 --> 00:46:42,719
Speaker 2: be in a place that's kind of normalized. How is

889
00:46:42,719 --> 00:46:46,520
Speaker 2: the FMC looking at the state of the economy today?

890
00:46:47,040 --> 00:46:51,920
Speaker 2: Are we in a normal post inflation environment or is

891
00:46:51,960 --> 00:46:54,239
Speaker 2: there something else that we're going on that we should

892
00:46:54,239 --> 00:46:54,759
Speaker 2: be aware of.

893
00:46:55,160 --> 00:46:59,920
Speaker 4: Well, I think there's today and tomorrow. Today we're in

894
00:47:00,080 --> 00:47:03,840
Speaker 4: the closing stages of bringing the economy back to normal.

895
00:47:03,880 --> 00:47:04,759
Speaker 3: That's how I put it.

896
00:47:04,800 --> 00:47:08,600
Speaker 4: I mean, unemployment's four point two, that's a historically low number.

897
00:47:09,320 --> 00:47:12,600
Speaker 4: Inflation headline two point three, that's very close to a

898
00:47:12,640 --> 00:47:16,040
Speaker 4: two percent target GDP if you adjust for the one

899
00:47:16,040 --> 00:47:18,360
Speaker 4: timers that we're in the first quarter is still growing

900
00:47:18,800 --> 00:47:21,239
Speaker 4: in the two and a half percent range. So think

901
00:47:21,280 --> 00:47:25,240
Speaker 4: of it as a very strong, stable economy. The challenge

902
00:47:25,239 --> 00:47:28,640
Speaker 4: we all have is the uncertainty about you know, where

903
00:47:28,680 --> 00:47:32,440
Speaker 4: we're headed, and you know, you or I could articulate

904
00:47:32,480 --> 00:47:34,359
Speaker 4: an upside to that or a downside of that. I'm

905
00:47:34,360 --> 00:47:36,719
Speaker 4: not making a comment on it, but it is elevated uncertainty.

906
00:47:36,719 --> 00:47:38,480
Speaker 4: It's what I was describing as the fog. And so

907
00:47:39,160 --> 00:47:40,360
Speaker 4: you know, we're sort of on the brink of a

908
00:47:40,360 --> 00:47:44,560
Speaker 4: different environment, and that different environment will have different terarif

909
00:47:44,600 --> 00:47:47,640
Speaker 4: rates and different levels of immigration and different levels of

910
00:47:47,640 --> 00:47:51,960
Speaker 4: government spending and different levels of regulation and different energy policy.

911
00:47:52,120 --> 00:47:55,200
Speaker 4: You know, all that is I think locked in. I mean,

912
00:47:55,239 --> 00:47:57,719
Speaker 4: we know the direction, we just don't know the destination.

913
00:47:58,800 --> 00:48:00,600
Speaker 4: And it turns out people kind of I want to

914
00:48:00,600 --> 00:48:03,640
Speaker 4: know where they're headed before they pack, and so that's

915
00:48:04,000 --> 00:48:06,520
Speaker 4: that's the challenge we've got right now, is just determining

916
00:48:06,560 --> 00:48:09,480
Speaker 4: what's the destination so that you know, businesses and consumers

917
00:48:09,480 --> 00:48:10,600
Speaker 4: can make the choices they make.

918
00:48:11,360 --> 00:48:16,359
Speaker 2: So, given this fog, driven in large part by uncertainty

919
00:48:16,400 --> 00:48:22,480
Speaker 2: over tariffs, how does the FMC make policy if there's

920
00:48:22,600 --> 00:48:26,200
Speaker 2: such a lack of clarity as to we understand today?

921
00:48:26,840 --> 00:48:30,600
Speaker 2: But really, tariffs are on, tariffs are off. Wait, European tariffs,

922
00:48:30,800 --> 00:48:33,280
Speaker 2: oh wait, we're going to put them on hold until

923
00:48:33,320 --> 00:48:38,400
Speaker 2: mid July. That must be incredibly challenging to make long

924
00:48:38,520 --> 00:48:42,840
Speaker 2: term policy decisions in light of these very short term

925
00:48:42,960 --> 00:48:44,000
Speaker 2: policy swings.

926
00:48:44,440 --> 00:48:47,360
Speaker 4: I'd say, sometimes our job is very straightforward and sometimes

927
00:48:47,360 --> 00:48:50,719
Speaker 4: it's not. It's very straightforward when unemployment's high, inflation is loow,

928
00:48:50,719 --> 00:48:53,840
Speaker 4: because you know which direction to go, and it's you know,

929
00:48:53,920 --> 00:48:57,160
Speaker 4: relatively straightforward. When the forecast seems pretty clear, that you

930
00:48:57,200 --> 00:49:00,239
Speaker 4: have stability and confidence in the forecast. You know, in

931
00:49:00,239 --> 00:49:02,360
Speaker 4: today's world, neither one of those is true. I mean,

932
00:49:02,440 --> 00:49:05,760
Speaker 4: inflation has come down but is not yet at our target.

933
00:49:05,800 --> 00:49:10,120
Speaker 4: Employment unemployment is low, but either risk to it, and

934
00:49:10,160 --> 00:49:13,840
Speaker 4: the forecast is unclear, and so you have to reflect

935
00:49:13,840 --> 00:49:15,480
Speaker 4: on where you are. You know, where I think we

936
00:49:15,560 --> 00:49:18,319
Speaker 4: are is modestly restrictive. In other words, a four point

937
00:49:18,320 --> 00:49:21,960
Speaker 4: three percent overnight rate is constrained the economy a modest amount,

938
00:49:22,040 --> 00:49:24,640
Speaker 4: but not a significant amount at a time where inflation

939
00:49:24,800 --> 00:49:28,640
Speaker 4: is still over our target and unemployment is low, And

940
00:49:28,680 --> 00:49:32,240
Speaker 4: then you just have to I mean, you could choose.

941
00:49:32,360 --> 00:49:35,160
Speaker 4: If you had conviction in the forecast, then you might

942
00:49:35,239 --> 00:49:37,480
Speaker 4: choose to move whichever way you felt you had to

943
00:49:37,560 --> 00:49:40,279
Speaker 4: move given that forecast. But if, like me, you don't

944
00:49:40,280 --> 00:49:42,680
Speaker 4: have that much conviction in the forecast, then you say,

945
00:49:42,840 --> 00:49:44,319
Speaker 4: let's wait and see where we go.

946
00:49:44,560 --> 00:49:47,440
Speaker 2: So let's talk about conviction. Another quote of yours that

947
00:49:47,680 --> 00:49:51,279
Speaker 2: I'm fond of is monetary policy, and I'm going to

948
00:49:51,320 --> 00:49:57,440
Speaker 2: paraphrase monetary policy needs to balance both conviction and humility.

949
00:49:58,200 --> 00:50:01,319
Speaker 4: Discuss well, my dad said, used to say, Tom, I

950
00:50:01,360 --> 00:50:03,200
Speaker 4: want you to be humble because I know you well

951
00:50:03,200 --> 00:50:06,719
Speaker 4: and you have a lot to be humble about. And

952
00:50:06,800 --> 00:50:09,120
Speaker 4: I think the point he was making is don't be

953
00:50:09,160 --> 00:50:12,799
Speaker 4: too full of yourself here, and so you could, you know,

954
00:50:13,040 --> 00:50:15,719
Speaker 4: stand up pound the table and say, you know, by God,

955
00:50:15,760 --> 00:50:18,920
Speaker 4: I see where this is going, and inflation's rising or

956
00:50:19,000 --> 00:50:23,279
Speaker 4: unemployments rising, and therefore we need to move you know,

957
00:50:23,400 --> 00:50:25,359
Speaker 4: left or move right and support of one of those

958
00:50:25,400 --> 00:50:29,400
Speaker 4: parts of our mandate. I mean, I listened to my colleagues.

959
00:50:29,440 --> 00:50:31,680
Speaker 4: You have many different points of view on this. I'm

960
00:50:31,760 --> 00:50:35,319
Speaker 4: humble enough about my own forecasting ability. It just makes

961
00:50:35,320 --> 00:50:37,759
Speaker 4: me think that, you know, I'll learn more. I'll learn

962
00:50:37,800 --> 00:50:38,400
Speaker 4: more with time.

963
00:50:39,040 --> 00:50:43,239
Speaker 2: So talking about your colleagues and the rest of the

964
00:50:43,400 --> 00:50:46,840
Speaker 2: folks on the FMC board, one of the things I've

965
00:50:47,000 --> 00:50:52,520
Speaker 2: noticed through history is that they are very deliberate. They

966
00:50:52,560 --> 00:50:57,760
Speaker 2: don't surprise the markets with anything. Everything is always very calculated.

967
00:50:58,520 --> 00:51:00,680
Speaker 2: And hey, we're going to be raising rates in a

968
00:51:00,719 --> 00:51:04,520
Speaker 2: few months. Hey next month. Look at the dot plot.

969
00:51:04,600 --> 00:51:08,560
Speaker 2: We're looking at PC and CPI. Okay, here it comes.

970
00:51:08,960 --> 00:51:13,880
Speaker 2: There are never shocks to the market. At the same time,

971
00:51:14,280 --> 00:51:18,000
Speaker 2: the criticism has been seems to be a little late

972
00:51:18,360 --> 00:51:22,440
Speaker 2: to the party sometimes. We saw that spike of inflation

973
00:51:22,600 --> 00:51:25,520
Speaker 2: late twenty twenty early twenty one. It took the FED

974
00:51:25,560 --> 00:51:29,760
Speaker 2: a while before they began raising rates, and then CPI

975
00:51:29,960 --> 00:51:33,320
Speaker 2: peaked June twenty twenty two, took a while before we

976
00:51:33,400 --> 00:51:36,279
Speaker 2: went on to pause and then cutting. How do you

977
00:51:36,440 --> 00:51:40,520
Speaker 2: balance the lack of clarity, the need for humility with

978
00:51:40,760 --> 00:51:46,000
Speaker 2: the latest noisy data and trying to be not too

979
00:51:46,040 --> 00:51:49,640
Speaker 2: far behind what you're actually is happening on the ground.

980
00:51:50,120 --> 00:51:54,239
Speaker 4: Well, so you started with, you know, being methodical, and

981
00:51:54,239 --> 00:51:58,600
Speaker 4: that's probably accurate. Bernanki had the insight which he published

982
00:51:58,600 --> 00:52:01,480
Speaker 4: back in the early two thousands that markets can do

983
00:52:01,560 --> 00:52:03,719
Speaker 4: a lot of work for us if they have a

984
00:52:03,760 --> 00:52:05,600
Speaker 4: good sense of the path, then we don't have to

985
00:52:06,120 --> 00:52:08,600
Speaker 4: do as much in policy because they'll you know, work

986
00:52:08,640 --> 00:52:11,160
Speaker 4: the rate path for you. And I think there is

987
00:52:11,200 --> 00:52:14,160
Speaker 4: some effort made to try to communicate clearly certainly why

988
00:52:14,480 --> 00:52:16,480
Speaker 4: you know, I and my peers try to talk as

989
00:52:16,560 --> 00:52:18,000
Speaker 4: much as we do to see if we can't you

990
00:52:18,120 --> 00:52:20,520
Speaker 4: bring some clarity to that situation. And so I think

991
00:52:20,560 --> 00:52:22,680
Speaker 4: it's fair to say, you know, trying to do it,

992
00:52:22,680 --> 00:52:25,440
Speaker 4: but we will move faster than people expect when we

993
00:52:25,520 --> 00:52:28,120
Speaker 4: need to, as we proved in twenty twenty two, in

994
00:52:28,200 --> 00:52:31,239
Speaker 4: terms of getting it right, I'll just go back to

995
00:52:31,239 --> 00:52:33,439
Speaker 4: what I said about false precision a little bit ago,

996
00:52:33,920 --> 00:52:36,399
Speaker 4: which is, I think we're always going to be wrong.

997
00:52:37,080 --> 00:52:39,759
Speaker 4: I mean, you know, you're never going to precisely, you know,

998
00:52:39,840 --> 00:52:42,600
Speaker 4: get the peak of inflation or the peak of unemployment

999
00:52:43,120 --> 00:52:46,000
Speaker 4: or the trough of either. You make your best efforts,

1000
00:52:46,000 --> 00:52:49,600
Speaker 4: and I think if the standard is that you know

1001
00:52:49,680 --> 00:52:52,840
Speaker 4: every decimal on every forecast actually played out, then I

1002
00:52:52,840 --> 00:52:55,000
Speaker 4: think we're all guilty of missing that.

1003
00:52:55,560 --> 00:52:58,200
Speaker 2: Yeah, to say say the very least. We talked earlier

1004
00:52:58,200 --> 00:53:02,400
Speaker 2: about transitory, Let's talk for a moment about the nineteen seventies,

1005
00:53:03,000 --> 00:53:08,600
Speaker 2: which was clearly very structural. How similar are the twenty

1006
00:53:08,640 --> 00:53:11,479
Speaker 2: twenties to the nineteen seventies and how different are they.

1007
00:53:11,960 --> 00:53:14,880
Speaker 2: As someone who was a kid during that era, I

1008
00:53:15,000 --> 00:53:20,920
Speaker 2: kind of remember just being parents being freaked out about stuff.

1009
00:53:20,960 --> 00:53:23,520
Speaker 2: I remember going to get gas. I had a little

1010
00:53:23,800 --> 00:53:27,240
Speaker 2: side business mowing lawns, and the guy at the gas

1011
00:53:27,239 --> 00:53:30,000
Speaker 2: station asked me, you do you have an even license

1012
00:53:30,000 --> 00:53:32,800
Speaker 2: plate or an odd license I don't know, I'm twelve.

1013
00:53:33,120 --> 00:53:35,719
Speaker 2: I just need a gallon of gas to mow the lawn. Yeah,

1014
00:53:36,239 --> 00:53:39,239
Speaker 2: So how similar is is are the twenty twenties and

1015
00:53:39,280 --> 00:53:40,440
Speaker 2: what are the key differences.

1016
00:53:40,960 --> 00:53:43,400
Speaker 4: So there's a chart that makes the rounds that you know,

1017
00:53:43,480 --> 00:53:46,560
Speaker 4: adjust the scales, but sort of puts the sixties and

1018
00:53:46,600 --> 00:53:49,120
Speaker 4: seventies up against you know, the last five years and

1019
00:53:49,200 --> 00:53:51,720
Speaker 4: says there's just about to be another big bout of inflation.

1020
00:53:53,200 --> 00:53:56,560
Speaker 4: And you know, I find that chart annoying, but you know,

1021
00:53:56,600 --> 00:54:00,319
Speaker 4: I understand the fear. You know, a reminder for all

1022
00:54:00,360 --> 00:54:03,960
Speaker 4: your listeners that in the early seventies there's a strong

1023
00:54:04,200 --> 00:54:06,520
Speaker 4: historic sense that there was a set of mistakes made

1024
00:54:06,560 --> 00:54:09,240
Speaker 4: by the FED of not being tough enough on inflation

1025
00:54:09,800 --> 00:54:12,360
Speaker 4: that were then exacerbated in the middle and late seventies

1026
00:54:12,440 --> 00:54:16,040
Speaker 4: by two big oil spike price spikes. And you know,

1027
00:54:16,080 --> 00:54:18,120
Speaker 4: I can't predict an oil price bike, and neither can

1028
00:54:18,160 --> 00:54:20,640
Speaker 4: anybody else, and so who knows, you know, how that'll

1029
00:54:20,640 --> 00:54:23,960
Speaker 4: play out. The fact that I've found interesting about the

1030
00:54:24,000 --> 00:54:29,440
Speaker 4: seventies is how elevated long term bond rates were, you know,

1031
00:54:29,520 --> 00:54:32,640
Speaker 4: how the term premium was, and basically how much inflation

1032
00:54:32,760 --> 00:54:37,120
Speaker 4: expectations were embedded in long term rates. And that's an

1033
00:54:37,160 --> 00:54:40,000
Speaker 4: interesting thing to look at because it sort of gets

1034
00:54:40,000 --> 00:54:43,960
Speaker 4: to this question of expectations. We had price shocks like

1035
00:54:44,000 --> 00:54:46,000
Speaker 4: the oil price spike in seventy four or the one

1036
00:54:46,000 --> 00:54:48,680
Speaker 4: in seventy eight, and who knows whether we'll have those again.

1037
00:54:48,760 --> 00:54:52,960
Speaker 4: But those price shocks didn't just affect today's prices. It

1038
00:54:53,000 --> 00:54:56,359
Speaker 4: also affected the market's views on tomorrow's prices. And I say,

1039
00:54:56,520 --> 00:54:58,960
Speaker 4: I would just say that's a huge difference between the

1040
00:54:59,000 --> 00:55:01,919
Speaker 4: seventies and today's that you know, metrics of long term

1041
00:55:01,960 --> 00:55:05,719
Speaker 4: expectations feel very grounded, even if you do have short

1042
00:55:05,800 --> 00:55:08,279
Speaker 4: term price backs. I think that's because of an expectation

1043
00:55:09,280 --> 00:55:10,680
Speaker 4: that the Fed will do what we need to do

1044
00:55:11,080 --> 00:55:13,440
Speaker 4: if you were to see that inflation, which I hope

1045
00:55:13,440 --> 00:55:14,920
Speaker 4: we validated in twenty twenty two.

1046
00:55:16,320 --> 00:55:20,160
Speaker 2: So it seems like the street, Wall Street in particular,

1047
00:55:20,440 --> 00:55:23,799
Speaker 2: Wall Street and the bond market in particular have been

1048
00:55:24,280 --> 00:55:29,160
Speaker 2: erroneously forecasting Fed rig cuts for I don't know, two three,

1049
00:55:29,280 --> 00:55:32,880
Speaker 2: maybe even almost back to when the FED started raising

1050
00:55:32,960 --> 00:55:39,120
Speaker 2: rates this cycle. What is the Fed looking for in

1051
00:55:39,360 --> 00:55:45,640
Speaker 2: order to feel comfortable? Okay, we've wrestled inflation into submission

1052
00:55:45,719 --> 00:55:48,480
Speaker 2: and the economy is starting to show a little signs

1053
00:55:48,920 --> 00:55:52,160
Speaker 2: of some minor stress let's take rates down one or

1054
00:55:52,200 --> 00:55:54,719
Speaker 2: two more times. I'm not asking you for a date,

1055
00:55:56,000 --> 00:55:58,400
Speaker 2: I'm asking you for what are you looking at? What

1056
00:55:58,520 --> 00:56:01,280
Speaker 2: is the FMC looking at? That would make them comfortable

1057
00:56:01,320 --> 00:56:03,839
Speaker 2: saying all right, we could we could ease a little

1058
00:56:03,880 --> 00:56:07,399
Speaker 2: bit off the brake and tap the accelerator a little bit.

1059
00:56:07,800 --> 00:56:09,439
Speaker 4: Okay, So first of all, I wouldn't be so tough

1060
00:56:09,480 --> 00:56:13,360
Speaker 4: on the professional forecasters. Another joke is that you know,

1061
00:56:13,440 --> 00:56:16,480
Speaker 4: economic forecasting was created to make weather forecasting look good.

1062
00:56:16,800 --> 00:56:19,839
Speaker 2: I heard it to make to make astrologists look good.

1063
00:56:19,880 --> 00:56:23,799
Speaker 2: But another and actually, the weather forecasters are getting better

1064
00:56:23,840 --> 00:56:24,240
Speaker 2: and better.

1065
00:56:24,680 --> 00:56:27,279
Speaker 3: That's the difference, as are the economics.

1066
00:56:27,280 --> 00:56:31,200
Speaker 4: But whenever, whenever you look at the market quote unquote

1067
00:56:31,239 --> 00:56:34,719
Speaker 4: market's view on the number of rate cuts, you have

1068
00:56:34,800 --> 00:56:40,239
Speaker 4: to remember that in that assessment includes tail risks. And

1069
00:56:40,280 --> 00:56:42,439
Speaker 4: so you know, if you think at any given point

1070
00:56:42,440 --> 00:56:44,040
Speaker 4: in time, there's a twenty or twenty five percent of

1071
00:56:44,080 --> 00:56:47,680
Speaker 4: a recession, at which point the FED might you know, respond,

1072
00:56:48,719 --> 00:56:51,040
Speaker 4: then that's embedded in that. So when the you know,

1073
00:56:51,080 --> 00:56:54,640
Speaker 4: the the SEP forecast has two rate cuts, let's say,

1074
00:56:54,680 --> 00:56:57,279
Speaker 4: and the market has three, I'm not sure I view

1075
00:56:57,360 --> 00:56:59,920
Speaker 4: that as a difference. I just think one's got one

1076
00:57:00,000 --> 00:57:02,560
Speaker 4: a modal and one's a weighted average, and I think

1077
00:57:02,600 --> 00:57:06,080
Speaker 4: those aren't the same things, just in defensive economic forecasters.

1078
00:57:06,280 --> 00:57:08,560
Speaker 2: But if we look, you know, look at twenty three,

1079
00:57:08,640 --> 00:57:09,799
Speaker 2: twenty four to twenty.

1080
00:57:09,560 --> 00:57:11,680
Speaker 3: Five, sometimes they're different.

1081
00:57:11,760 --> 00:57:15,200
Speaker 4: Sometimes they're different, and wildly I was gonna say, in

1082
00:57:15,280 --> 00:57:17,560
Speaker 4: terms of your other question, what would I want to see?

1083
00:57:17,840 --> 00:57:21,600
Speaker 4: You'd want to see inflation sustainably under control, or you'd

1084
00:57:21,640 --> 00:57:24,000
Speaker 4: want to see you know, the economy, you know, tipping

1085
00:57:24,040 --> 00:57:27,800
Speaker 4: to a level that that amount of downturn would have

1086
00:57:27,880 --> 00:57:30,160
Speaker 4: an impact on inflation and bring it into control. And

1087
00:57:30,240 --> 00:57:32,760
Speaker 4: so you can get inflation on of control through rates,

1088
00:57:32,760 --> 00:57:34,840
Speaker 4: and you can get it through economic you prefer to

1089
00:57:34,840 --> 00:57:35,439
Speaker 4: do it through rates.

1090
00:57:35,480 --> 00:57:36,000
Speaker 3: But we'll see.

1091
00:57:36,280 --> 00:57:38,120
Speaker 2: And I only have you for another two minutes, so

1092
00:57:38,280 --> 00:57:41,920
Speaker 2: let me throw you a curveball question. Okay, I was

1093
00:57:42,160 --> 00:57:45,560
Speaker 2: just out in La Joya on Tory Pines. I know

1094
00:57:45,800 --> 00:57:50,920
Speaker 2: you're an avid golfer in your Federal reserve district. What

1095
00:57:50,960 --> 00:57:53,880
Speaker 2: are some of your favorite courses? I used to be

1096
00:57:54,000 --> 00:57:57,720
Speaker 2: on the USGA board. I'm assuming you still play. Where

1097
00:57:57,720 --> 00:58:00,000
Speaker 2: do you like to play in? What's your home?

1098
00:58:00,080 --> 00:58:03,880
Speaker 4: Of course, i'd play Kidlock and Richmond and We have

1099
00:58:03,920 --> 00:58:06,800
Speaker 4: a place in Paully's Island where I play the w Club,

1100
00:58:07,120 --> 00:58:09,240
Speaker 4: which is a Pete Die course down there. And thank

1101
00:58:09,280 --> 00:58:11,720
Speaker 4: you for mentioning you know golf golf is a lot

1102
00:58:11,760 --> 00:58:14,160
Speaker 4: like monetary policy, and that I wish I were better

1103
00:58:14,160 --> 00:58:16,600
Speaker 4: at both of them.

1104
00:58:16,960 --> 00:58:20,000
Speaker 2: Well, that's the perfect quote on which to end this.

1105
00:58:20,600 --> 00:58:23,280
Speaker 2: Thank you, Tom for being so generous with your time.

1106
00:58:23,960 --> 00:58:27,440
Speaker 2: We have been speaking with Tom Barkin. He is President

1107
00:58:27,560 --> 00:58:31,080
Speaker 2: and CEO of the Richmond Federal Reserve Bank, as well

1108
00:58:31,120 --> 00:58:34,160
Speaker 2: as a member of the Federal Open Market Committee that

1109
00:58:34,240 --> 00:58:39,320
Speaker 2: helps set federal reserve rates. If you enjoy this conversation, well,

1110
00:58:39,480 --> 00:58:41,480
Speaker 2: be sure and check out any of the five hundred

1111
00:58:41,520 --> 00:58:45,439
Speaker 2: and forty six we've done since twenty thirteen. You can

1112
00:58:45,520 --> 00:58:51,320
Speaker 2: find those at Bloomberg, iTunes, Spotify, YouTube, wherever you find

1113
00:58:51,480 --> 00:58:54,640
Speaker 2: your favorite podcasts. I would be remiss if I not

1114
00:58:54,840 --> 00:58:58,400
Speaker 2: thank the crack team that helps me put these conversations together.

1115
00:58:58,680 --> 00:59:03,120
Speaker 2: My audio engineer is Steve Gonzalez. Anna Luke is my producer.

1116
00:59:03,640 --> 00:59:06,800
Speaker 2: Sean Russo is my researcher. Sage Bauman is the head

1117
00:59:06,800 --> 00:59:09,680
Speaker 2: of podcasts at Bloomberg. Be sure and check out my

1118
00:59:09,760 --> 00:59:13,000
Speaker 2: new book How Not to Invest The ideas numbers and

1119
00:59:13,040 --> 00:59:17,520
Speaker 2: behaviors that destroys wealth, and how to avoid them. Wherever

1120
00:59:17,640 --> 00:59:23,120
Speaker 2: you buy your favorite audio, e and hardcover books. I'm

1121
00:59:23,160 --> 00:59:27,280
Speaker 2: Barry Richdolts. You've been listening to Masters in Business on

1122
00:59:27,440 --> 00:59:28,440
Speaker 2: Bloomberg Radio.