WEBVTT - PIMCO's Clarida on Rate Hike: Fed Should Get On With It (Audio)

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<v Speaker 1>Global business news twenty four hours a day. If Bloomberg

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<v Speaker 1>That's a Bloomberg business flash, Charlie Pellot, thank you so

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<v Speaker 1>com to learn more. Bloomberg Stock FED in Focus. There's

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<v Speaker 1>certainly a large discussion about whether or not the FED

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<v Speaker 1>is going to try to hike rate again. To she

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<v Speaker 1>we think the FED by December will be ready to

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<v Speaker 1>do another hike. That sounds like a big difference from

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<v Speaker 1>the markets, but it's not that big a difference. I

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<v Speaker 1>think at this point the FED is going to remain

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<v Speaker 1>on the sideline through and most likely the better part

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<v Speaker 1>of because they have a huge communication problem with the

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<v Speaker 1>public about what's driving their polity decisions. They basically have

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<v Speaker 1>no strategies the FED in Focus on Bloomberg Radio. I'm

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<v Speaker 1>Kathleen Hayes along with pim Fox, and we're very happy

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<v Speaker 1>now to welcome to the show. One of the participants

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<v Speaker 1>today at our Bloomberg Markets Most Influential Summit here at

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<v Speaker 1>our World headquarters, Richard Clarida, Global strategic advisor at Pimco,

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<v Speaker 1>Professor at Columbia University. Rich welcomed back to the show.

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<v Speaker 1>I'm happy to do it. Well, it's a really exciting

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<v Speaker 1>day here at Bloomberg and a kind of exciting day

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<v Speaker 1>on Capitol Hill. I guess if you're Janet yell And

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<v Speaker 1>testifying before the House Financial Services Committee. She's there to

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<v Speaker 1>talk about bank regulation, the health of US banks. But

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<v Speaker 1>she defended, of course, she took quite a being. I

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<v Speaker 1>would say it was a lot of tough questioning on

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<v Speaker 1>what's going on with Wells Fargo and how that FED

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<v Speaker 1>intends to respond. Yes, she did, and I think that

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<v Speaker 1>was the focus. Although during the you know, the back

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<v Speaker 1>and forth with the members of Congress, she did get

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<v Speaker 1>into some comments on monetary policy. For the most part,

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<v Speaker 1>she stuck very closely to the script from the recent

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<v Speaker 1>FED meetings, So no real news there, but yes, understandably

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<v Speaker 1>you know that. Uh, I'm sure there wasn't a lot

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<v Speaker 1>of of concern criticism, and I think in the headlines

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<v Speaker 1>that I read, she also spread concern about these revelations.

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<v Speaker 1>Rich Clarena, what did you take away from Janet Yellin's

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<v Speaker 1>uh comments and also get your view basis points in December.

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<v Speaker 1>I think that's why it's it's it's not a done deal.

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<v Speaker 1>This is the FED that's data dependent. But I think kid,

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<v Speaker 1>it's important that at the last meeting, fourteen of the

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<v Speaker 1>sixteen or I guess actually seventeen fourteen of this havant

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<v Speaker 1>team participants through the blue dots, indicated that they thought

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<v Speaker 1>it would be appropriate to hiking December. So that means

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<v Speaker 1>that I think the FED things that it's going to

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<v Speaker 1>be hiking. But obviously it will depend to some extent

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<v Speaker 1>on the data. And I should note that the recent

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<v Speaker 1>data for the US has been coming in on the

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<v Speaker 1>soft side. Most folks a week or two ago thought

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<v Speaker 1>the US GDP and the third quarter would be north

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<v Speaker 1>of three, and we're we and others are marking down

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<v Speaker 1>our view of third quarter GDP probably to around two

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<v Speaker 1>and a half or so. So obviously you know the

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<v Speaker 1>data will be relevant, but the expectation is that they

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<v Speaker 1>will be hiking in December. Well, Rich cleared, If you

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<v Speaker 1>were a voter, what would you do? Because you're absolutely right,

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<v Speaker 1>the GDP does not look as good as people thought

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<v Speaker 1>it would, and me there's some time left before we

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<v Speaker 1>see what happens with it. And Jenny Ellen herself, even

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<v Speaker 1>though she said she expects the unemplumber rate to fall farther,

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<v Speaker 1>she said, yes, growth has been disappointing, productivity is slow,

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<v Speaker 1>and she doesn't see inflation rising. Why would it vet

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<v Speaker 1>your vote to raise rates? Now? Well, you know, but

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<v Speaker 1>but I think I have Norm's respect for Cherry Yellin,

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<v Speaker 1>but I think she's a little bit selective. So for example,

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<v Speaker 1>if you look at CPI inflation, course, CPI is about

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<v Speaker 1>two percent. If you look at that regirely earnings, they're

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<v Speaker 1>running at about two point eight per cent um. And

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<v Speaker 1>and in particular, I think John Williams, of all the

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<v Speaker 1>Fed officials, is the one that I follow closely. I

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<v Speaker 1>think Williams just in the last day or two of

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<v Speaker 1>new quotas, saying that he would be supportive of a hip.

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<v Speaker 1>We had three descents um at the September meeting. Certainly,

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<v Speaker 1>I think you know right now policy is very very accommodative.

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<v Speaker 1>I think the economic concerning withstand a number another visas

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<v Speaker 1>point move uh, and so I just think they should

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<v Speaker 1>they should get on with it. You know, Rich Clarado,

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<v Speaker 1>one of the things I do to prepare to speak

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<v Speaker 1>with you is I look at some of your previous

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<v Speaker 1>work and you published a piece back in September of

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<v Speaker 1>twenty fifteen, and I have to say, not that you

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<v Speaker 1>would reuse it, but you probably could because not much

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<v Speaker 1>has changed. And even your description about the debate over

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<v Speaker 1>whether to raise twenty five basis points this is as

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<v Speaker 1>Yogi Barris says dejav all over again. Well, thank you.

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<v Speaker 1>You know, I I knew when I was going on

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<v Speaker 1>your show. I wanted to make sure that I hadn't

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<v Speaker 1>said something totally silly, and and you're right, it is.

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<v Speaker 1>It is eerie the parallels between you know, a year

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<v Speaker 1>ago and today, And in fact, I think you can

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<v Speaker 1>actually make a case today that the FEDS um poor

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<v Speaker 1>communication is even more hard to understand. You know, last

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<v Speaker 1>summer you had the China devaluation and the repercussions from that,

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<v Speaker 1>so at least you could maybe say, well, international developments

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<v Speaker 1>are unfamiliar. But um but I'm not quite sure. And

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<v Speaker 1>I don't know if you noticed this today, but Charles Platser,

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<v Speaker 1>who until not so long ago was the president of

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<v Speaker 1>the Philadelphia FED, was also quoted as being critical of

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<v Speaker 1>the communication. I would also know Tim that in the

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<v Speaker 1>minutes of the July meeting, as well as in the

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<v Speaker 1>minutes of the June and April meetings, the minute to

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<v Speaker 1>reveal that FED officials expressed concern that they were not

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<v Speaker 1>communicating very well in the markets didn't understand them. And

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<v Speaker 1>with all due respect, I think that it's the problem

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<v Speaker 1>not the markets. I think that there is not a

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<v Speaker 1>particularly crisp understanding of their reaction function. And it may

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<v Speaker 1>simply be that the FED itself is not an agreement.

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<v Speaker 1>Um And until I think the chair becomes more proactive

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<v Speaker 1>in that, well, we're gonna have this pretty divergent range

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<v Speaker 1>of views, all right, We're gonna have more With Rich Clarida.

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<v Speaker 1>He is Global strategic Advisor at PIMCO. We're broadcasting from

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<v Speaker 1>Bloomberg Markets Most Influential Summit at our world headquarters. This

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<v Speaker 1>is Bloomberg. Continue our live broadcast Bloomberg Markets Most Influential

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<v Speaker 1>Summit with one of the key participants, Rich Clarida, Global

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<v Speaker 1>Strategic advisor at HIMCO. It's not just about the Fed

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<v Speaker 1>these days, it's about the Bank of Japan and their

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<v Speaker 1>year old curve. That's coming up to broadcasting live to

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<v Speaker 1>New York Bloomberg, to Washington, d C Bloomberg to Boston, Bloomberg,

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<v Speaker 1>Well under It to San Francisco Bloomberg nine, to the

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<v Speaker 1>country Channel one, and around the globe the Bloomberg Radio

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<v Speaker 1>plus Dad Bloomberg Got Gone. This is taking Stock coming

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<v Speaker 1>up on taking Stock more with Rich Clarata, Global Strategic

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<v Speaker 1>advisor to PIMCO. Want to find out with negative interest

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<v Speaker 1>rates in Japan and in Europe, will they cause a

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<v Speaker 1>variety of unintended consequences and the regulators holding the bad

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<v Speaker 1>very important question. Let's get to Charlie Pellet here at

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<v Speaker 1>Bloomberg World Headquarters in the newsroom with the Bloomberg Business Flash.

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<v Speaker 1>And I thank you very much, Kathleen Hayes, thank you

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<v Speaker 1>pim Fox. We have seen quite a turnaround for US

0:08:52.040 --> 0:08:55.120
<v Speaker 1>equities in the past couple of minutes. Here FIDAL, the SMP,

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<v Speaker 1>NEZDAC all advancing stocks rising as energy shares rally along

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<v Speaker 1>with crude prices after reports that OPEC reached an agreement

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<v Speaker 1>to limit oil production. This update is brought to you

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<v Speaker 1>by Sector Spider et F s Y by a single stock.

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<v Speaker 1>When you can invest in the entire sector, visits sector

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<v Speaker 1>s p t rs dot com or call one eight

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<v Speaker 1>six six Sector e t F Crude Oil West Texas

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<v Speaker 1>Intermediate now rallying five and a half percent. It is

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<v Speaker 1>up to forty five a barrel thirteen right now on

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<v Speaker 1>w t I brant of four and a half percent,

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<v Speaker 1>gaining two oh eight of arrol forty eight oh seven

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<v Speaker 1>on grant s and P five hundred index climbing eight

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<v Speaker 1>best level of the day. Now again there of four

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<v Speaker 1>tenths of one percent down. Industrial is up eighty seven points,

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<v Speaker 1>a gain of five tenths of one percent, and NASDAC

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<v Speaker 1>is up four points, a gain of one tenth of

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<v Speaker 1>one percent. FED Chair Janet Yellen was back on Capitol

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<v Speaker 1>Hill this morning. She reiterated her view the the US

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<v Speaker 1>Central Bank plans to remove accommodation gradually on current course,

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<v Speaker 1>whilst saying she sees no fixed timetable for raising rates

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<v Speaker 1>as the jobless rate should fall further. And here's what

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<v Speaker 1>you have to say, and remarks carried right here on Bloomberg.

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<v Speaker 1>We're really not seeing meaningful upward pressure on inflation, and

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<v Speaker 1>we haven't seen the unemployment rate fall, but monetary policy

0:10:20.640 --> 0:10:27.000
<v Speaker 1>is accommodative. Eventually, continued job creation at that pace would

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<v Speaker 1>cause the economy to overheat and would push the unemployment

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<v Speaker 1>rate um down to lower levels than now. And right

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<v Speaker 1>now we've got gold down three tenths of one percent

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<v Speaker 1>to thirty two on Wall Street. Now, let's take a

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<v Speaker 1>look at other news from around the world. Thank you,

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<v Speaker 1>Charlie from the Bloomberg news room. I Ramie in essent cio.

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<v Speaker 1>Former Republican Senator John Warner is panning Donald Trump as

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<v Speaker 1>disrespectful of the military and woefully unprepared to be commander

0:10:56.679 --> 0:10:59.760
<v Speaker 1>in chief. Warner appeared with Hillary Clinton's running mate Tim

0:10:59.840 --> 0:11:03.560
<v Speaker 1>k in Alexandria, Virginia to offer his endorsement to Clinton.

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<v Speaker 1>That candidate is one that is fit and ready to

0:11:08.360 --> 0:11:12.240
<v Speaker 1>lead our great free country and to lead the world.

0:11:12.600 --> 0:11:14.920
<v Speaker 1>In the cause of Freedom. The eighty nine year old

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<v Speaker 1>Warner says he's quote distressed by Trump's comments that the

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<v Speaker 1>US military is in bad shape. Republican House speaker Paul

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<v Speaker 1>Ryan spoke at the Economic Club of Washington this morning

0:11:24.880 --> 0:11:27.160
<v Speaker 1>and was asked if he is eyeing a run for

0:11:27.240 --> 0:11:29.320
<v Speaker 1>the White House down the road. You never say never

0:11:29.360 --> 0:11:32.400
<v Speaker 1>to these things, but I've never really had this ambition.

0:11:32.720 --> 0:11:36.920
<v Speaker 1>I have presidential size policy ambition. I've really never had

0:11:36.960 --> 0:11:40.520
<v Speaker 1>presidents of size personal ambition. It's just it just was

0:11:40.640 --> 0:11:43.160
<v Speaker 1>never really in my DNA. A Dutch lead investigation has

0:11:43.280 --> 0:11:46.120
<v Speaker 1>implicated Russia in the shooting down of a Malaysian jet

0:11:46.240 --> 0:11:49.240
<v Speaker 1>liner over Ukraine two years ago. According to the probe,

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<v Speaker 1>the missile system that was used to shoot down the

0:11:51.160 --> 0:11:53.959
<v Speaker 1>plane was brought in from Russia at the request of

0:11:54.080 --> 0:11:58.600
<v Speaker 1>Russian backed rebels. Russia's Foreign minister calls the probe politically motivated.

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<v Speaker 1>All two hundred and eight people on board that plane died,

0:12:02.600 --> 0:12:05.240
<v Speaker 1>and the NYPD is questioning a man in connection with

0:12:05.320 --> 0:12:07.959
<v Speaker 1>that home explosion in the Bronx that killed a fire

0:12:08.000 --> 0:12:11.760
<v Speaker 1>battalion chief yesterday. Michael Faye, a seventeen year veteran and

0:12:11.880 --> 0:12:15.240
<v Speaker 1>father of three, was killed by falling debris while directing

0:12:15.280 --> 0:12:18.599
<v Speaker 1>operations from the street. Authorities are looking into whether that

0:12:18.679 --> 0:12:22.480
<v Speaker 1>building was being used to grow marijuana. Global News twenty

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<v Speaker 1>four hours a day, powered by more than journalists and

0:12:25.120 --> 0:12:28.000
<v Speaker 1>analysts in more than one hundred twenty countries. I'm Ramy

0:12:28.080 --> 0:12:31.559
<v Speaker 1>in Essencio. This is Bloomberg, Charlie, and we thank you.

0:12:31.640 --> 0:12:35.000
<v Speaker 1>And again recapping, we are seeing stock surge SMP five

0:12:35.080 --> 0:12:37.200
<v Speaker 1>hundred index up eight Now that's a gain of four

0:12:37.280 --> 0:12:40.360
<v Speaker 1>tenths of one percent, overcoming earlier losses. UH the now

0:12:40.520 --> 0:12:42.839
<v Speaker 1>up eighty four points. Again there a five tenths of

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<v Speaker 1>one percent. And again have to mention now that crude

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<v Speaker 1>oil closing in on six percent for barrel of West

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<v Speaker 1>Texas Intermediate a five point eight percent now gaining two

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<v Speaker 1>fifty seven to twenty three. I'm Charlie Pellett and that's

0:12:56.200 --> 0:13:02.079
<v Speaker 1>a Bloomberg business flash. This is aging Stock in Focus

0:13:02.360 --> 0:13:05.920
<v Speaker 1>on Bloomberg Radio, the Fed in Focus broadcasting live from

0:13:05.960 --> 0:13:10.199
<v Speaker 1>Bloomberg Market's most Influential summit at our global headquarters here

0:13:10.320 --> 0:13:13.160
<v Speaker 1>in New York. Were speaking with Richard and Claren up

0:13:13.960 --> 0:13:18.160
<v Speaker 1>is the global Strategic Advisor at Pimco. Rich Claren Up

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<v Speaker 1>do you believe that the world is experiencing about a deflation, Well,

0:13:24.200 --> 0:13:27.559
<v Speaker 1>the world's not in deflation obviously, Japan until recently has

0:13:27.640 --> 0:13:30.280
<v Speaker 1>been in deflation. And I think that certainly seven or

0:13:30.320 --> 0:13:32.760
<v Speaker 1>eight years ago, in the depths of the crisis, that

0:13:32.920 --> 0:13:35.640
<v Speaker 1>was a legitimate and real concern. And I think for

0:13:35.800 --> 0:13:38.600
<v Speaker 1>all the criticism that some have offered, we can't lose

0:13:38.640 --> 0:13:42.559
<v Speaker 1>sight of the fact that through through bold and unconventional policy,

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<v Speaker 1>we did avoid deflation in the worst recession in seventy

0:13:46.880 --> 0:13:50.240
<v Speaker 1>five years. So I think, I think outside of Japan,

0:13:50.320 --> 0:13:52.800
<v Speaker 1>and even there in Japan has emerged at least using

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<v Speaker 1>some measures from deflation, I think, uh, I think that

0:13:56.200 --> 0:14:00.400
<v Speaker 1>we've avoided that knock on wood. Well, no deflaced, but

0:14:00.840 --> 0:14:03.839
<v Speaker 1>negative interest rates. And of course, to a certain extent,

0:14:04.000 --> 0:14:06.600
<v Speaker 1>central banks like the Bank of Japan and the European

0:14:06.679 --> 0:14:09.720
<v Speaker 1>Central Bank have been chasing their tails because the more

0:14:09.800 --> 0:14:12.040
<v Speaker 1>they pushed towards negative rates and the more bonds they buy,

0:14:12.080 --> 0:14:13.959
<v Speaker 1>the more they push bond yields down. And even in

0:14:14.000 --> 0:14:16.959
<v Speaker 1>the negative territory, BUJ is trying to reverse that. Now,

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<v Speaker 1>does this is this policy gonna work? What's important about

0:14:19.920 --> 0:14:23.360
<v Speaker 1>it to you? Well, that's an excellent point, because you know,

0:14:23.440 --> 0:14:26.200
<v Speaker 1>we're we're conditioned to think of the FED meeting as

0:14:26.240 --> 0:14:28.200
<v Speaker 1>being the most important, but actually I'd argue that the

0:14:28.240 --> 0:14:31.200
<v Speaker 1>Bank of Japan meeting last week was it was more

0:14:31.280 --> 0:14:34.360
<v Speaker 1>important at least in terms of what they're trying to do. Essentially,

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<v Speaker 1>Kathleen and pim what they said is that there existing

0:14:38.080 --> 0:14:42.320
<v Speaker 1>framework they're basically their negative rateing QWI framework UM is

0:14:42.480 --> 0:14:45.560
<v Speaker 1>reaching some limits UM and so they've pimoted to a

0:14:45.680 --> 0:14:48.640
<v Speaker 1>framework where they're going to essentially say they want to

0:14:48.720 --> 0:14:51.360
<v Speaker 1>put a cap on bond yields on the at the

0:14:51.480 --> 0:14:54.240
<v Speaker 1>ten year point, they're gonna be buying less securities and

0:14:54.320 --> 0:14:57.360
<v Speaker 1>longer drison. They're gonna try to steepen uh the yield

0:14:57.400 --> 0:14:59.880
<v Speaker 1>curve and potentially, and I think this is important, poten

0:15:00.080 --> 0:15:02.840
<v Speaker 1>leap down the road. That could be relevant if the

0:15:02.920 --> 0:15:07.520
<v Speaker 1>administration designs to put in place a big fiscal expansion,

0:15:07.520 --> 0:15:11.320
<v Speaker 1>because as long as they are tagging the putting a

0:15:11.400 --> 0:15:13.720
<v Speaker 1>ceiling on the yield on tenure bonds, you're an effect

0:15:13.760 --> 0:15:16.600
<v Speaker 1>going to be getting money financing of those debts. And

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<v Speaker 1>then finally, the last thing they said they would do

0:15:20.000 --> 0:15:22.760
<v Speaker 1>is they want to anchor inflation expectations. They want to

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<v Speaker 1>increase inflation expectations, and to do that, they're actually aiming

0:15:27.040 --> 0:15:29.640
<v Speaker 1>to overshoot their two percent inflation target. Now, I know

0:15:29.760 --> 0:15:31.480
<v Speaker 1>the skeptic will say, well, they haven't even hit two

0:15:31.920 --> 0:15:34.680
<v Speaker 1>two percent inflation yet, and I do take the point.

0:15:34.800 --> 0:15:36.920
<v Speaker 1>But I think that down the road we may see

0:15:36.920 --> 0:15:40.480
<v Speaker 1>other central banks tivot away from an inflation target towards

0:15:40.560 --> 0:15:42.680
<v Speaker 1>more of a price level objective. So this could be

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<v Speaker 1>a sort of a dry run on that, Rich Claid,

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<v Speaker 1>I don't know whether you've just heard, but oil prices

0:15:49.440 --> 0:15:52.480
<v Speaker 1>are up by a little bit more than six percent today.

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<v Speaker 1>The report from a delicate briefed on the matter says

0:15:56.160 --> 0:16:01.160
<v Speaker 1>that Saudi Arabia and Iran UH they have reached an

0:16:01.200 --> 0:16:05.200
<v Speaker 1>agreement to cut oil production down to thirty two and

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<v Speaker 1>a half million barrels a day. That's nearly seven hundred

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<v Speaker 1>and fifty thousand barrels a day lower from what it

0:16:11.000 --> 0:16:14.480
<v Speaker 1>pumped in August. Do you think, first of all, that

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<v Speaker 1>this kind of agreement will remain in place, given that

0:16:18.320 --> 0:16:21.120
<v Speaker 1>I think the Saudi has just cut their many government

0:16:21.840 --> 0:16:26.080
<v Speaker 1>positions salary by will it stay in place? And what

0:16:26.160 --> 0:16:29.960
<v Speaker 1>are the implications then for dollar and and interest rates

0:16:30.120 --> 0:16:32.360
<v Speaker 1>when you start looking at great, great point. You know,

0:16:32.520 --> 0:16:35.200
<v Speaker 1>this has been, this has been people have been speculating

0:16:35.240 --> 0:16:38.760
<v Speaker 1>on this for a while. Um. And this was this

0:16:39.000 --> 0:16:42.560
<v Speaker 1>was not the typically regularly scheduled OPEC meeting. This is

0:16:42.600 --> 0:16:45.880
<v Speaker 1>a special meeting. You know. I've been looking at the

0:16:46.320 --> 0:16:48.480
<v Speaker 1>internal email traffic on this and I think it's I

0:16:48.560 --> 0:16:53.040
<v Speaker 1>think it's too soon uh to tell, but but potentially uh.

0:16:53.160 --> 0:16:55.120
<v Speaker 1>You know, we've been calling for some time for oil

0:16:55.200 --> 0:16:59.520
<v Speaker 1>prices to firm and and this would be contributing to

0:16:59.680 --> 0:17:03.080
<v Speaker 1>that would move prices, you know, back up around fifty

0:17:03.640 --> 0:17:06.879
<v Speaker 1>uh dollars um and uh. So I think that the

0:17:06.920 --> 0:17:09.920
<v Speaker 1>short answer is right now based upon the report, is

0:17:09.960 --> 0:17:12.480
<v Speaker 1>too soon to tell. But but there does seem to

0:17:12.520 --> 0:17:17.040
<v Speaker 1>be a sentiment uh, and that that OPEC is recognizing

0:17:17.280 --> 0:17:20.719
<v Speaker 1>to try to achieve some stability in oil prices. Uh.

0:17:20.800 --> 0:17:22.920
<v Speaker 1>And they may feel now that they can actually enforce this.

0:17:23.000 --> 0:17:25.080
<v Speaker 1>Of course, as you both know that in the past,

0:17:25.119 --> 0:17:28.320
<v Speaker 1>the trouble with OPEC is that there are huge incentives

0:17:28.359 --> 0:17:31.600
<v Speaker 1>to cheat uh in oil cartels that in life. So

0:17:32.080 --> 0:17:34.520
<v Speaker 1>whether or not at holds there's another issue. But I

0:17:34.600 --> 0:17:36.760
<v Speaker 1>knew think that there does seem to be some movement

0:17:36.840 --> 0:17:40.639
<v Speaker 1>to trying to put in place some production interesting to

0:17:40.880 --> 0:17:43.720
<v Speaker 1>Rich that wouldn't hire oil prices to be viewed favorably.

0:17:44.000 --> 0:17:46.360
<v Speaker 1>Tricoles the bank in Japan at the FED they're trying

0:17:46.400 --> 0:17:48.720
<v Speaker 1>to boost inflation. He was following all prices last You're

0:17:49.040 --> 0:17:51.879
<v Speaker 1>totally made hard for the BOJ to do that. I

0:17:52.000 --> 0:17:54.560
<v Speaker 1>completely agree, and I think Kathleen, a lot of folks

0:17:54.640 --> 0:17:57.840
<v Speaker 1>forget that, and it's easy to criticize the Bank of Japan,

0:17:57.960 --> 0:17:59.720
<v Speaker 1>but the fact is is that they got hit with

0:18:00.000 --> 0:18:02.960
<v Speaker 1>two UH shocks that had nothing to do with Japan.

0:18:03.040 --> 0:18:06.399
<v Speaker 1>One to collapse in oil prices and too obviously the

0:18:07.200 --> 0:18:09.440
<v Speaker 1>sort of flight the safety bid for the yen and

0:18:09.480 --> 0:18:13.399
<v Speaker 1>the dollar after the China devaluation last year UH. And

0:18:13.640 --> 0:18:17.360
<v Speaker 1>it's tougher for them to keep inflation expectations anchored when

0:18:17.400 --> 0:18:19.960
<v Speaker 1>there are these big moves and headline inflation that are

0:18:20.000 --> 0:18:23.680
<v Speaker 1>out of their UH control. So so so yes, I

0:18:23.840 --> 0:18:26.120
<v Speaker 1>I do see the point. And also we know, Kathleen

0:18:26.160 --> 0:18:30.720
<v Speaker 1>in the US that inflation expectations are historically quite sensitive

0:18:30.760 --> 0:18:34.359
<v Speaker 1>to gasoline and oil firms as well. Rich Claire, that

0:18:34.400 --> 0:18:36.159
<v Speaker 1>thank you so very much for joining us here at

0:18:36.160 --> 0:18:39.840
<v Speaker 1>Bloomberg Markets. Most influential as someone in our world headquarters today,

0:18:40.080 --> 0:18:42.359
<v Speaker 1>which is Global Strate Teaching Advisor at PIMCO and the

0:18:42.400 --> 0:18:46.560
<v Speaker 1>professor at Columbia University. Some big news on the Bloomberg

0:18:46.880 --> 0:18:50.840
<v Speaker 1>The California State Treasure is sanctioning Wells Fargo. We'll have

0:18:50.960 --> 0:18:53.920
<v Speaker 1>more details on that coming up in our next Bloomberg

0:18:54.040 --> 0:18:56.920
<v Speaker 1>Business Report. I'm Kathleen Hayes along with pim Fox, and

0:18:57.040 --> 0:19:02.080
<v Speaker 1>this is Bloomberg. The FED in Focus is brought to

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