WEBVTT - Jerome Powell 0:00:02.840 --> 0:00:05.840 The most important figure traditionally in monetary policy in the 0:00:05.920 --> 0:00:08.119 United States is the chairman of the Federal Reserve Board. 0:00:08.400 --> 0:00:11.360 The current chairman is JPW someone I've known for many years. 0:00:11.520 --> 0:00:13.200 I had a chance to sit down with him recently. 0:00:13.200 --> 0:00:16.320 You talk about interest rates, inflation, and the overall economy. 0:00:16.560 --> 0:00:19.439 There are a few billion people in the world are 0:00:19.440 --> 0:00:21.720 waiting to see what interest rates are going to be doing. 0:00:22.720 --> 0:00:25.400 Do you have any insights on where interest rates might 0:00:25.440 --> 0:00:25.799 be going? 0:00:28.920 --> 0:00:32.440 So I'm going to take that as a great opportunity 0:00:32.440 --> 0:00:34.120 to talk a little bit about the economy and then 0:00:34.240 --> 0:00:36.879 talk about where that leaves us with policy. So I 0:00:36.880 --> 0:00:39.559 would just start by saying that the US economy has 0:00:39.600 --> 0:00:42.560 performed really remarkably well over the last couple of years. 0:00:42.920 --> 0:00:45.480 Twenty twenty three. Last year was a year in which 0:00:45.479 --> 0:00:49.840 the economy grew well above three percent. The labor market 0:00:49.840 --> 0:00:53.280 remained very strong, unemployment remained very low, and inflation came 0:00:53.320 --> 0:00:56.440 down at quite a sharp pace, particularly in the second 0:00:56.480 --> 0:01:00.960 half of the year by a very large amount. That 0:01:01.040 --> 0:01:05.039 forecast was almost unheard of. It was unheard of before 0:01:05.120 --> 0:01:08.640 twenty twenty three, so big upside surprise that year. This year, 0:01:08.680 --> 0:01:11.560 we had expected the economy to slow a bit gradually, 0:01:11.600 --> 0:01:14.960 the labor market to continue to gradually cool off after 0:01:15.000 --> 0:01:17.560 being overheated a couple of years ago, and inflation to 0:01:17.560 --> 0:01:21.560 continue to make progress. And something like that is basically 0:01:21.600 --> 0:01:25.039 what has happened. The economy is growing now at about 0:01:25.040 --> 0:01:26.720 one and a half percent in the first half of 0:01:26.720 --> 0:01:29.480 the year. Most forecasters have about a two percent growth 0:01:29.560 --> 0:01:32.360 rate for the full year. The labor market again has 0:01:32.440 --> 0:01:34.679 moved into better and better balance, to the point where 0:01:34.720 --> 0:01:37.360 I think you can now say it's essentially no tighter 0:01:37.440 --> 0:01:40.880 than it was in twenty nineteen before the pandemic. Remember 0:01:40.880 --> 0:01:43.360 that the labor market of twenty nineteen was a very 0:01:43.400 --> 0:01:46.120 strong labor market, So we're back to that place, no 0:01:46.200 --> 0:01:50.680 longer overheated on inflation. In the first quarter, we didn't 0:01:50.680 --> 0:01:54.240 make any more progress. The second quarter, actually we did 0:01:54.360 --> 0:01:57.000 make some more progress. We've had now three better readings, 0:01:57.720 --> 0:02:00.880 and if you average them, that's a pretty good So 0:02:01.000 --> 0:02:04.400 turning to policy your question, what we've said is that 0:02:04.480 --> 0:02:07.040 we didn't think it would be appropriate to begin to 0:02:07.080 --> 0:02:10.160 loosen policy until we were more we had greater confidence 0:02:10.160 --> 0:02:13.239 that inflation was moving sustainably down to two percent. We've 0:02:13.240 --> 0:02:15.960 been waiting on that and I would say we didn't 0:02:15.960 --> 0:02:18.320 gain any any additional confidence in the first quarter, but 0:02:18.360 --> 0:02:20.360 the three readings in the second quarter, including the one 0:02:20.360 --> 0:02:23.919 from last week, do add somewhat to confidence. We've also 0:02:24.040 --> 0:02:27.960 said that, you know, we're a dual mandate bank. For 0:02:28.000 --> 0:02:30.760 a long time, since inflation arrived, it's been appropriate to 0:02:30.760 --> 0:02:33.959 focus mainly on inflation. But now that inflation has come 0:02:34.000 --> 0:02:37.359 down and the labor market has indeed cooled off, we're 0:02:37.400 --> 0:02:39.800 going to be looking at both mandates there. They're much better, 0:02:39.960 --> 0:02:42.360 in much better balance, and that means that if we 0:02:42.360 --> 0:02:45.200 were to see an unexpected weakening in the labor market, 0:02:45.440 --> 0:02:49.000 then that might also be a reason for reaction by US. 0:02:50.200 --> 0:02:54.480 Okay, I think I understand, So to put it in 0:02:54.600 --> 0:02:59.280 terms I can for sure understand, the markets are suggesting 0:03:00.600 --> 0:03:04.320 the future's markets that there's a ninety percent chance that 0:03:04.360 --> 0:03:09.000 the FED will lower its discount rate in September. Do 0:03:09.040 --> 0:03:11.120 you think the markets know what they're talking about? 0:03:11.480 --> 0:03:15.480 So I'm so today I'm not going to be sending 0:03:15.520 --> 0:03:18.800 any signals one way or the other on any particular meeting. 0:03:18.880 --> 0:03:21.240 So just to ruin the fund right at the beginning, 0:03:22.320 --> 0:03:24.800 I simply you know, we're going to make these decisions 0:03:24.880 --> 0:03:26.720 meeting by meeting, and we're going to make them on 0:03:26.760 --> 0:03:28.640 the basis of the data as they come in, the 0:03:28.680 --> 0:03:32.040 evolving data, the evolving outlook, and also the balance of risks. 0:03:32.120 --> 0:03:35.440 Now that the two mandates are basically close to being. 0:03:35.280 --> 0:03:37.520 In balance, right, there are some people who say that 0:03:37.560 --> 0:03:39.920 the FED would not like to lower interest rates in 0:03:39.960 --> 0:03:43.040 a presidential campaign period because you could be criticized for 0:03:43.080 --> 0:03:45.440 helping one party or another. Do you have any comment 0:03:45.480 --> 0:03:46.920 on whether that's an accurate view. 0:03:47.160 --> 0:03:50.720 I do so. Our undertaking at all times is that 0:03:50.840 --> 0:03:54.400 we'll make our decisions based on the incoming data, the 0:03:54.400 --> 0:03:57.880 evolving outlook, balance of risks, and only on that. We 0:03:57.960 --> 0:04:00.720 don't take political considerations into accoun We don't put up 0:04:00.720 --> 0:04:04.240 a political filter on our decisions. That would It's hard 0:04:04.320 --> 0:04:07.640 enough to make these decisions based on the appropriate factors. 0:04:07.640 --> 0:04:09.560 If you're going to add a whole different filter in 0:04:09.600 --> 0:04:12.200 an area where we're not experts, that's not going to 0:04:12.200 --> 0:04:15.000 improve the quality of our decisions. And it's also not 0:04:15.280 --> 0:04:17.640 the orders we have from Congress or orders from Congress. 0:04:17.640 --> 0:04:20.520 Sort of use our tools to foster maximum employment and 0:04:20.560 --> 0:04:24.440 price stability, and to do so without political considerations. That's 0:04:24.480 --> 0:04:26.080 what we're always going to do if you look at 0:04:26.080 --> 0:04:28.760 the modern record, that is what we do, and we 0:04:28.800 --> 0:04:31.440 don't think about election cycles or anything that's political. 0:04:31.680 --> 0:04:36.599 Many people use the phrase hard landing to describe hard 0:04:36.640 --> 0:04:38.520 landing is a euphanism for recession. 0:04:38.560 --> 0:04:39.839 I guess people. 0:04:39.600 --> 0:04:42.080 Thought in twenty twenty three we might have a hard landing. 0:04:42.320 --> 0:04:44.120 People thought in twenty twenty four we might have a 0:04:44.160 --> 0:04:47.520 hard landing. And none of these people were economists, professionally 0:04:47.520 --> 0:04:50.159 trained economists, but they seem to be wrong. So do 0:04:50.200 --> 0:04:52.680 you rely on these economists very much in the future 0:04:52.720 --> 0:04:56.720 when you're get projecting whether you should listen to their 0:04:56.800 --> 0:04:59.479 views and where the economy is going, or how do 0:04:59.520 --> 0:05:01.200 you react the fact that we haven't had a hard 0:05:01.279 --> 0:05:05.160 landing and disappointed all those economists. 0:05:05.839 --> 0:05:10.960 So I'll just say that, you know, as someone famously said, 0:05:11.000 --> 0:05:14.520 predictions are very difficult, especially about the future. On the 0:05:14.520 --> 0:05:18.600 hard landing question, I have always felt like that there 0:05:18.720 --> 0:05:21.840 was a pathway to getting inflation back down to our 0:05:21.880 --> 0:05:26.760 two percent goal on a sustainable basis without the kind 0:05:26.839 --> 0:05:29.279 of pain in the labor market, the kind of high 0:05:29.320 --> 0:05:33.760 unemployment that has been typical of tightening cycles and getting 0:05:33.760 --> 0:05:37.000 inflation down. And the reason why. My colleagues and I 0:05:37.080 --> 0:05:40.600 thought that was that the labor market was so overheated 0:05:40.880 --> 0:05:43.839 that it could cool down quite a bit without having 0:05:43.920 --> 0:05:47.680 to There still is apparently no slabor, no slack in 0:05:47.720 --> 0:05:50.960 the labor market. The labor market does not have slack. Essentially, 0:05:50.960 --> 0:05:53.880 you're at equilibrium now, but look where inflation is. Inflation 0:05:53.960 --> 0:05:56.440 is at two and a half percent. So this was 0:05:56.480 --> 0:05:58.760 in defiance of a lot of conventional wisdom. But we 0:05:58.760 --> 0:06:02.479 thought that was right, and that says that you have 0:06:02.560 --> 0:06:05.480 to be one thing that you learn as humility and forecasting. 0:06:05.839 --> 0:06:07.479 So I wouldn't rule it out, but I would say 0:06:07.480 --> 0:06:11.400 that the kind of hard landing scenario is not certainly 0:06:11.400 --> 0:06:13.440 not the most likely or a likely scenario. 0:06:14.040 --> 0:06:18.279 I think you have said somewhere that when the Fed 0:06:18.400 --> 0:06:22.120 does lower interest rates, not saying that you're saying it's 0:06:22.120 --> 0:06:23.560 going to do that, but if the Fed does lower 0:06:23.560 --> 0:06:25.640 interest rates, at some point you didn't think it was 0:06:25.680 --> 0:06:27.240 ever going to go back to kind of the free 0:06:27.279 --> 0:06:30.400 money practically of years ago, when the interest rates are 0:06:30.400 --> 0:06:32.599 on the zero. Is that a fair statement that you 0:06:32.600 --> 0:06:34.400 don't think it's a good idea to go back to 0:06:34.600 --> 0:06:36.520 interest rates as low as they once were. 0:06:37.120 --> 0:06:41.200 The period between the global financial crisis and the pandemic 0:06:41.480 --> 0:06:44.880 was his historically unusual from the standpoint that we had 0:06:45.279 --> 0:06:49.120 ever lower interest rates through that era, including a part 0:06:49.160 --> 0:06:52.320 of the era when, for example, sovereign debt of major 0:06:52.360 --> 0:06:56.640 European sovereigns was trading at a significantly negative rate. And 0:06:56.680 --> 0:07:00.000 still even with rates that low, inflation was very low 0:07:00.120 --> 0:07:02.880 below target. So and so the question, where you know, 0:07:03.000 --> 0:07:05.720 is what caused that? And are the forces that cause 0:07:05.800 --> 0:07:09.880 that gone for now? And I think most people attribute 0:07:10.160 --> 0:07:16.000 the low inflation era to slow moving forces like demographics, globalization, uh, 0:07:16.280 --> 0:07:21.080 technological evolution, things like that, and those may or may 0:07:21.080 --> 0:07:24.320 not have changed. But I but nonetheless, I look at 0:07:24.440 --> 0:07:26.440 where we are now or our funds rate is a 0:07:26.480 --> 0:07:29.800 five point three percent roughly give or take, and it 0:07:29.840 --> 0:07:32.480 seemed it feels like it's restrictive, but not not, you know, 0:07:32.680 --> 0:07:36.760 severely restrictive. So it tells me that rates, at least 0:07:36.760 --> 0:07:39.800 for now are the neutral rate must have risen, probably 0:07:39.800 --> 0:07:43.600 has risen from where it was during the inter crisis period. 0:07:44.320 --> 0:07:47.480 And I mean, I think instinctively I can't prove this. 0:07:47.560 --> 0:07:50.040 We're gonna, we're gonna we're going to learn about this empirically, 0:07:50.080 --> 0:07:52.240 but but it seems to me that the neutral rate 0:07:52.320 --> 0:07:56.640 is probably higher than it was during the inter crisis period, 0:07:56.640 --> 0:07:57.760 and so rates will be higher. 0:07:57.960 --> 0:08:01.000 The Fetish set its target for inflation of two percent. 0:08:01.560 --> 0:08:04.520 Now can you clarify does that mean that the inflation 0:08:04.640 --> 0:08:06.760 rate has to be at two percent before you're ready 0:08:06.800 --> 0:08:08.920 to move if you are ready to move, or does 0:08:08.960 --> 0:08:10.720 it have to be within sight? And what does it 0:08:10.760 --> 0:08:11.800 mean to be within sight? 0:08:12.440 --> 0:08:16.920 So when we change interest rates, that tightens financial conditions, 0:08:16.920 --> 0:08:20.720 and that in turn affects economic outcomes, you know, growth, 0:08:21.200 --> 0:08:24.440 labor markets, and ultimately inflation, but with lags that can 0:08:24.480 --> 0:08:28.320 be long and variable, as Milton Freeman famously said. And 0:08:28.600 --> 0:08:30.960 the implication of that is that if you wait until 0:08:30.960 --> 0:08:33.160 inflation gets all the way down to two percent, you've 0:08:33.160 --> 0:08:36.680 probably waited too long, because you know, the tightening that 0:08:36.720 --> 0:08:38.640 you're doing, with the level of tightness that you have, 0:08:39.120 --> 0:08:42.000 is still having effects which will probably drive inflation below 0:08:42.040 --> 0:08:45.080 two percent. So we've been very clear that you wouldn't 0:08:45.120 --> 0:08:46.840 wait for inflation to get all the way down to 0:08:46.840 --> 0:08:51.080 two percent. Our test has been for the past quite 0:08:51.080 --> 0:08:53.640 some time that we wanted to be to have greater 0:08:53.720 --> 0:08:56.880 confidence than inflation was moving sustainably down toward our two 0:08:56.920 --> 0:09:01.080 percent target. And what increases that in that is more 0:09:01.120 --> 0:09:04.120 good inflation data, and lately here we have been getting 0:09:04.120 --> 0:09:04.440 some of that. 0:09:04.679 --> 0:09:08.360 So if you go back in history when inflation began 0:09:08.559 --> 0:09:13.960 to arise after COVID, at some point people said had 0:09:14.000 --> 0:09:17.679 include a year, that it was transitory. In hindsight, what 0:09:17.720 --> 0:09:21.000 do you think people missed about the nature of the inflation? 0:09:21.360 --> 0:09:24.000 Why was it more enduring than people initially thought? 0:09:24.880 --> 0:09:27.600 So, these are this is a question that people will 0:09:27.600 --> 0:09:30.280 be writing papers about and debating long after all of 0:09:30.320 --> 0:09:33.120 us are gone. So and it's early to say it's 0:09:33.120 --> 0:09:35.600 actually kind of kind of soon to be answering it, 0:09:35.640 --> 0:09:38.040 but I think it's So here's my answer to that question. 0:09:39.000 --> 0:09:42.160 When inflation arrived, it was really coming out of the 0:09:42.200 --> 0:09:45.079 goods sector, and it was connected to really high demand 0:09:45.160 --> 0:09:49.199 for goods. And it was and you know, the supply change, 0:09:49.240 --> 0:09:53.360 global supply change, which account for most manufactured goods, collapsed 0:09:53.400 --> 0:09:55.640 because of too much demand and because of COVID, and 0:09:55.679 --> 0:10:00.160 you know, so and to us that looked like a 0:10:00.160 --> 0:10:04.400 a temporary fleeting situation. We also lost several million people 0:10:04.480 --> 0:10:07.400 out of the labor force, so wages went way up 0:10:07.559 --> 0:10:10.720 as the economy really boomed when we reopened the economy, 0:10:11.120 --> 0:10:13.800 and we thought, you know, there we were getting vaccines 0:10:13.800 --> 0:10:16.680 were coming in, and we thought that that would fix 0:10:16.720 --> 0:10:19.400 itself too, kids would go back to school. We essentially 0:10:19.480 --> 0:10:24.200 overestimated how quickly the economy would return to normal. Finally, 0:10:24.320 --> 0:10:27.920 these things finally did happen in twenty twenty three, but 0:10:28.080 --> 0:10:30.400 they didn't happen in twenty twenty one or two. And 0:10:30.559 --> 0:10:33.160 what we meant by transitory was that it would go 0:10:33.200 --> 0:10:37.160 away fairly quickly without the need for our intervention. You 0:10:37.200 --> 0:10:40.720 don't want to intervene with interest rates if something is 0:10:40.760 --> 0:10:44.120 going to go away quickly without us intervening, because you know, 0:10:44.280 --> 0:10:47.480 monetary policy, as I mentioned, works with long and variable legs. 0:10:47.520 --> 0:10:50.560 So the lore is you look through things like a 0:10:50.600 --> 0:10:53.400 temporary oil shock. So that was the mistake was that 0:10:53.480 --> 0:10:57.360 it actually it actually didn't reverse itself. The problems with 0:10:57.400 --> 0:11:01.199 the supply side didn't reverse themselves until twenty twenty three, 0:11:01.200 --> 0:11:02.719 when they really did. When we got it, we got 0:11:02.720 --> 0:11:06.320 a big burst of employment and also the supply chains 0:11:06.320 --> 0:11:06.720 were fixed. 0:11:06.760 --> 0:11:09.680 So in hindsight, now knowing everything you now know, would 0:11:09.720 --> 0:11:11.840 you have done anything differently? Would you have had less 0:11:11.920 --> 0:11:15.400 quantitative easing? Would you have changed interest rates differently? What 0:11:15.440 --> 0:11:17.920 would you have done differently? Now knowing everything we now know, 0:11:18.600 --> 0:11:22.520 You know, it's almost unfair. Hindsight's always twenty twenty, right, 0:11:23.360 --> 0:11:25.800 you know, we remember what we were doing in real time. 0:11:26.840 --> 0:11:30.240 We went from a really nice economy in December of 0:11:30.280 --> 0:11:34.760 twenty nineteen to a global partial shutdown of the economy, 0:11:35.200 --> 0:11:38.640 and we were contemplating there was no thought that vaccines 0:11:38.640 --> 0:11:41.080 were around the corner, the economies closing down. 0:11:41.440 --> 0:11:46.600 We were looking at severe and perhaps prolonged downside risks. Literally, 0:11:46.640 --> 0:11:48.760 people thinking and doing work on or are we going 0:11:48.800 --> 0:11:50.240 to have another depression? Is it going to be the 0:11:50.280 --> 0:11:53.640 nineteen thirties. So governments around the world, and in particularly 0:11:53.679 --> 0:11:57.520 the United States government really went to work to provide 0:11:57.760 --> 0:12:00.000 a lot of support to the economy. We did everything 0:12:00.040 --> 0:12:02.680 thing we could, including many things that were right. You 0:12:02.679 --> 0:12:05.480 know that we read lines that we'd never cross. We 0:12:05.520 --> 0:12:08.679 crossed them to support the economy and support the financial system. 0:12:09.080 --> 0:12:12.040 And it was all done because we were managing severe 0:12:12.080 --> 0:12:14.960 downside risks which did not materialize. We did not have 0:12:15.000 --> 0:12:17.480 a depression, and part of that is because of what 0:12:17.520 --> 0:12:22.439 we did. Then the economy reopens and demand is very, 0:12:22.559 --> 0:12:25.640 very strong, and we saw basically, we saw a big 0:12:25.679 --> 0:12:29.080 burst of inflation everywhere, including in the United States. It 0:12:29.120 --> 0:12:33.000 was different in different places, but so that's what happened, 0:12:33.000 --> 0:12:36.480 and you know it's not that's how I would answer that. 0:12:36.480 --> 0:12:39.320 Okay, but so what you did, You're happy with what 0:12:39.360 --> 0:12:42.520 you did in hindsight, you would say, in foresight. 0:12:42.960 --> 0:12:45.359 I think that the work that we did in twenty 0:12:45.480 --> 0:12:49.520 twenty in response to the pandemic will stand up very 0:12:49.559 --> 0:12:51.680 wealth in history. I think people will look at the 0:12:51.720 --> 0:12:57.080 things that we did, and essentially the financial system was 0:12:57.120 --> 0:12:59.400 grinding to a halt all around the world. We acted. 0:13:00.440 --> 0:13:02.200 We were the first central bank, and we were the 0:13:02.240 --> 0:13:05.800 most you know, supportive, and you know, I think that 0:13:05.840 --> 0:13:09.440 work will hand we'll hold together when historians are looking 0:13:09.480 --> 0:13:10.640 back on it in a long time. I think when 0:13:10.679 --> 0:13:14.400 you get to the inflation era, that becomes a different question, 0:13:14.520 --> 0:13:16.240 and you know, people are going to be arguing about 0:13:16.280 --> 0:13:17.200 that for a long time. 0:13:17.280 --> 0:13:22.000 The FOMC, for those who don't follow Washington acronyms, stands 0:13:22.040 --> 0:13:23.720 for what what is the FOMC. 0:13:24.040 --> 0:13:27.160 It's the Federal Open Market Committee. And who is on 0:13:27.240 --> 0:13:31.080 that committee. It's a little bit complicated. Our structure is 0:13:31.120 --> 0:13:34.200 we have seven governors here in Washington, all nominated by 0:13:34.240 --> 0:13:37.680 the President and confirmed to staggered fourteen year terms. And 0:13:37.720 --> 0:13:40.920 we have twelve reserve Bank presidents at reserve banks around 0:13:41.559 --> 0:13:46.280 around the country, all nineteen seven plus twelve our participants 0:13:46.280 --> 0:13:49.520 on the FMC. In any given year, all of the 0:13:49.559 --> 0:13:52.840 seven governors vote, and five of the twelve reserve bank 0:13:52.880 --> 0:13:55.200 presidents vote, but one of the voters is always the 0:13:55.200 --> 0:13:55.800 New York FED. 0:13:56.720 --> 0:13:58.840 And so when you have an FOMC meeting, how many 0:13:58.840 --> 0:13:59.520 do you have a year? 0:14:00.120 --> 0:14:02.679 We have eight a year, so you have eight a year. 0:14:02.760 --> 0:14:05.040 And when you get together, you get together for two 0:14:05.120 --> 0:14:07.080 days or so we do. 0:14:08.080 --> 0:14:10.839 So generally starts at noon or in the morning of 0:14:11.200 --> 0:14:14.480 a Tuesday, and we go all day. We generally talk 0:14:14.520 --> 0:14:18.480 about the economy, the financial stability issues, whatever special topics 0:14:18.480 --> 0:14:20.600 there may be. And at the end of the day, 0:14:20.840 --> 0:14:23.440 each person speaks on those things, and I speak at 0:14:23.440 --> 0:14:26.520 the end of that day. Then there's a brief presentation 0:14:26.600 --> 0:14:29.040 on monetary policy, and then we go to dinner upstairs 0:14:29.080 --> 0:14:31.440 in the Martin Building and we come back the next morning. 0:14:31.520 --> 0:14:34.000 We come in at nine o'clock and we talk about 0:14:34.040 --> 0:14:37.840 monetary policy until we're satisfied with the outcome on monetary policy, 0:14:38.200 --> 0:14:40.000 and that usually takes most of the morning. 0:14:40.960 --> 0:14:45.840 So when you go into an FOMC meeting that the 0:14:45.880 --> 0:14:47.920 first day, do you pretty much know where you want 0:14:47.960 --> 0:14:49.600 to come out at the end of the second day 0:14:49.680 --> 0:14:51.640 or you want to listen to everybody and you haven't 0:14:51.640 --> 0:14:52.560 made up your mind yet. 0:14:53.000 --> 0:14:56.000 You know, the way it works is that you know, 0:14:56.040 --> 0:14:59.200 I talk to the other eighteen participants regularly, and I 0:14:59.240 --> 0:15:01.400 talk to all of them at least once in the 0:15:01.560 --> 0:15:04.480 ten days before the meeting, and I'm thinking about this 0:15:05.240 --> 0:15:07.360 three or four weeks before the meeting. You know, what 0:15:07.360 --> 0:15:09.400 what should we want to achieve? What data do we 0:15:09.400 --> 0:15:11.920 need to see, how do we want to change our communications? 0:15:11.960 --> 0:15:14.520 All those things? And so I talk to people, listen 0:15:14.600 --> 0:15:16.600 to them, and I try to I try to put 0:15:16.640 --> 0:15:20.080 together an answer that has broad support on the committee. 0:15:20.120 --> 0:15:22.600 And so when we go into the committee on Tuesday morning, 0:15:23.200 --> 0:15:27.640 you know, I'm confident usually that I know where this 0:15:27.760 --> 0:15:30.000 is going to go. But you know, things happen. We 0:15:30.040 --> 0:15:33.680 get data during the meetings, sometimes events happen, but largely 0:15:33.720 --> 0:15:36.800 you go in kind of knowing what's what the likely 0:15:36.840 --> 0:15:40.160 outcome is, and that's that's that's that's the design of it. 0:15:40.760 --> 0:15:43.200 So a lot of people in Washington government agencies are 0:15:43.280 --> 0:15:46.120 very good at leaking, leaking things. You're not that good 0:15:46.120 --> 0:15:49.120 at that. Why don't't the Fed? Why doesn't the FED 0:15:49.200 --> 0:15:49.640 leak more? 0:15:49.800 --> 0:15:50.400 Why don't you. 0:15:50.440 --> 0:15:51.960 Kind of leak a lot more about what you're going 0:15:52.000 --> 0:15:53.360 to do? You just don't leak that much? 0:15:54.040 --> 0:15:57.320 I am. I'm kind of proud of that. Actually, we 0:15:57.320 --> 0:16:01.080 we do take our obligations to confidentiality very very seriously, 0:16:01.760 --> 0:16:04.920 and because we know, you know, how consequential it would 0:16:04.960 --> 0:16:08.120 be for someone at the FED to be leaking. You know, 0:16:08.360 --> 0:16:13.840 just our whole success depends on having the public's confidence 0:16:13.880 --> 0:16:16.840 that were ethical and that we're working on behalf of 0:16:16.840 --> 0:16:19.560 all Americans and not on behalf of ourselves. And we're 0:16:19.560 --> 0:16:22.120 not leaking in that kind of thing. So we do 0:16:22.200 --> 0:16:25.400 have a culture when we're working on a for example, 0:16:27.120 --> 0:16:31.280 a regulatory matter or or some matter involving one of 0:16:31.280 --> 0:16:33.120 the banks, it never leaks out of the FED. So 0:16:33.520 --> 0:16:34.640 I am proud of that record. 0:16:34.880 --> 0:16:38.240 Some people have suggested that the Fed's independence is not 0:16:38.360 --> 0:16:41.040 as good as people talk about it a being, and 0:16:41.080 --> 0:16:43.960 that maybe we better have more White House coordination with 0:16:44.040 --> 0:16:44.400 the FED. 0:16:44.720 --> 0:16:49.880 I'm sure you've heard about this I think that any 0:16:49.920 --> 0:16:54.200 comments on that, I'm happy to comment on what independence. 0:16:54.440 --> 0:16:57.480 On the point of central bank independence, so I think 0:16:57.520 --> 0:17:01.240 a long time ago people that learned that a central 0:17:01.240 --> 0:17:04.040 bank that's independent of political consideration does a better job 0:17:04.080 --> 0:17:07.000 getting inflation under control, and that is now that has 0:17:07.040 --> 0:17:10.200 accepted wisdom in all advanced economies around the world. It's 0:17:10.240 --> 0:17:13.280 also a principle that has very very strong and broad 0:17:13.320 --> 0:17:16.720 support where it really matters, which is in Congress. You know, 0:17:16.840 --> 0:17:21.560 you talk to senior leaders in both chambers, in both 0:17:21.600 --> 0:17:25.600 political parties, and they all understand that you want an 0:17:25.640 --> 0:17:29.920 independent central bank that doesn't run monetary policy to support 0:17:30.040 --> 0:17:33.119 or oppose any particular politician or political party. 0:17:33.440 --> 0:17:35.400 Do you ever get a call from the President, I'd say, 0:17:35.560 --> 0:17:38.080 saying interest rates are too high or something like that. 0:17:39.160 --> 0:17:44.280 So Ever, no, I would say that, you know, meetings 0:17:44.280 --> 0:17:48.159 with the president are rare and appropriately so. 0:17:49.240 --> 0:17:53.399 You are you are originally appointed to the Board of 0:17:53.440 --> 0:17:56.400 the Fed and by President Obama, and you're appointed chair 0:17:56.480 --> 0:17:59.720 by President Trump and reappointed by President Biden, and your 0:17:59.760 --> 0:18:02.920 turn mischair goes through I think May of twenty twenty six. 0:18:03.720 --> 0:18:05.600 So any thought. 0:18:05.400 --> 0:18:08.800 About staying through all the way through May twenty twenty six, 0:18:08.880 --> 0:18:13.480 you're going to do that? Yes, And if some president 0:18:13.520 --> 0:18:15.360 came along and said, well, you did a great job, 0:18:16.160 --> 0:18:18.880 I'd like you to reappoint you, would you consider that. 0:18:19.400 --> 0:18:24.280 I have nothing for you on that today, Okay? Right? 0:18:25.119 --> 0:18:30.440 And is being chair of the FED a enjoyable job 0:18:30.560 --> 0:18:31.359 or not so much? 0:18:32.680 --> 0:18:38.480 It is? Actually I think I enjoy it. I enjoy 0:18:38.480 --> 0:18:39.840 it quite a bit. I do. It's a first of all, 0:18:39.880 --> 0:18:42.720 it's a great honor. It's incredibly interesting. I love the 0:18:42.760 --> 0:18:46.240 people we work with, I love the institution. At this 0:18:46.320 --> 0:18:48.640 time in my life, it's just been a great thing. 0:18:48.880 --> 0:18:50.919 I'm in my thirteenth year there now and it's just 0:18:50.960 --> 0:18:54.119 been it's been, you know, really challenging and all that. 0:18:54.160 --> 0:18:56.120 But what else would you want? You know, I'm very 0:18:56.119 --> 0:18:57.440 happy doing the job now. 0:18:57.480 --> 0:18:59.919 The Federal Reserve is over one hundred years old, was 0:19:00.040 --> 0:19:05.000 created under Woodrow Wilson. If you were around then, what 0:19:05.000 --> 0:19:07.040 would you have suggested they do better than they did? 0:19:07.119 --> 0:19:09.000 And creating the system where you think the system works 0:19:09.040 --> 0:19:11.000 pretty well after one hundred years and you wouldn't change 0:19:11.000 --> 0:19:11.720 it very much. 0:19:11.920 --> 0:19:15.480 So I'm giving myself perfect hindsight here. I would do 0:19:15.600 --> 0:19:20.280 what Congress did in nineteen thirty three. So the original 0:19:20.320 --> 0:19:24.359 FED didn't have an FOMC, and it really didn't function 0:19:24.520 --> 0:19:28.320 very well during the early parts of the depression or 0:19:28.400 --> 0:19:32.680 during other So in nineteen thirty three the current structure 0:19:32.760 --> 0:19:35.119 was put in place, and that's with the FOMC, with 0:19:36.080 --> 0:19:39.119 the number of governors and the voting arrangements, and I 0:19:39.119 --> 0:19:42.520 think that arrangement is fine. It works really well. In 0:19:42.560 --> 0:19:46.720 the seventies, the dual mandate was added. But ultimately we're 0:19:46.760 --> 0:19:48.520 not looking for any law change. We think we have 0:19:48.600 --> 0:19:50.560 the authorities that we need. We think that the law 0:19:51.040 --> 0:19:52.359 is in just a fine place. 0:19:52.800 --> 0:19:55.639 So basically, do you think the system works reasonably well 0:19:56.040 --> 0:19:57.119 as it is today? 0:19:57.720 --> 0:19:58.400 And today? 0:19:59.359 --> 0:20:03.040 What is the the biggest economic challenge you think facing 0:20:03.040 --> 0:20:03.520 the country? 0:20:03.640 --> 0:20:04.360 Is it growth? 0:20:04.840 --> 0:20:09.240 Is it inflation, hard landing potentially or what are you 0:20:09.440 --> 0:20:11.119 most worried about what keeps you up at night of 0:20:11.200 --> 0:20:12.280 anything in the economy. 0:20:12.840 --> 0:20:15.439 So I'll say in the short term, that's what keeps me. 0:20:15.560 --> 0:20:18.120 But like literally, you know, the thing I'm thinking about 0:20:18.160 --> 0:20:20.520 in the middle of the night is always this balance 0:20:20.560 --> 0:20:23.320 we have between not wanting to if we ease too early, 0:20:24.000 --> 0:20:25.920 you know, we can undermine the progress on inflation, and 0:20:25.960 --> 0:20:28.879 if we wait too late. We can undermine economic activity, 0:20:28.920 --> 0:20:31.840 we can undermine the expansion, and you know, so we 0:20:31.920 --> 0:20:34.800 want to get this right and getting it right is 0:20:34.800 --> 0:20:37.199 incredibly important for the people we serve. So that is 0:20:37.320 --> 0:20:39.560 really that's that's what I spend a lot of my 0:20:40.200 --> 0:20:42.520 you know, thinking time on you know, longer term. There 0:20:42.560 --> 0:20:45.320