1 00:00:06,120 --> 00:00:09,119 Speaker 1: This is a Bloomberg Savannah special. The FED decides, I 2 00:00:09,119 --> 00:00:11,080 Speaker 1: think we all need to lie down after the last 3 00:00:11,080 --> 00:00:13,039 Speaker 1: one hour or so. There is three steps to this. 4 00:00:13,480 --> 00:00:16,720 Speaker 1: Step one except you're finished, Chairman Pale saying the policy 5 00:00:16,800 --> 00:00:19,720 Speaker 1: rate is likely at its peak. Step two acknowledge the 6 00:00:19,760 --> 00:00:22,320 Speaker 1: next step it's appropriate to dial back at some point 7 00:00:22,360 --> 00:00:25,520 Speaker 1: this year. And step three attempt to explain the threshold 8 00:00:25,520 --> 00:00:27,160 Speaker 1: to do so. Take a listen. 9 00:00:27,320 --> 00:00:28,800 Speaker 2: What do we want to see? We want to see 10 00:00:29,120 --> 00:00:32,560 Speaker 2: more good data. It's not that we're looking for better data. 11 00:00:33,120 --> 00:00:35,559 Speaker 2: We're looking at continuation of the good data that we've 12 00:00:35,560 --> 00:00:37,960 Speaker 2: been seeing, and a good example is inflation. So we 13 00:00:38,000 --> 00:00:41,000 Speaker 2: have six months of good inflation data. The question really 14 00:00:41,080 --> 00:00:43,519 Speaker 2: is that six months of good inflation data is it's 15 00:00:43,560 --> 00:00:46,240 Speaker 2: sending us a true signal that we are in fact 16 00:00:46,360 --> 00:00:50,720 Speaker 2: on a path, sustainable path down to two percent inflation. 17 00:00:51,159 --> 00:00:53,199 Speaker 1: That's not good enough for this market. It wants to 18 00:00:53,240 --> 00:00:55,920 Speaker 1: know about March March rate cuts. This is what the 19 00:00:56,000 --> 00:00:57,160 Speaker 1: Chairman had to say. 20 00:00:58,280 --> 00:01:01,040 Speaker 2: Based on the meeting today, I would tell you that 21 00:01:02,280 --> 00:01:05,160 Speaker 2: I don't think it's likely that the Committee will reach 22 00:01:05,200 --> 00:01:07,560 Speaker 2: a level of confidence by the time of the March meeting. 23 00:01:08,000 --> 00:01:10,640 Speaker 2: To identifying March as the time to do that. But 24 00:01:10,760 --> 00:01:12,360 Speaker 2: that's that's to be seen. 25 00:01:12,920 --> 00:01:14,479 Speaker 1: And this is what you get in this market off 26 00:01:14,480 --> 00:01:16,400 Speaker 1: the back of it all and equity market this sous 27 00:01:16,440 --> 00:01:18,800 Speaker 1: off on the S and P five hundred session lows 28 00:01:18,840 --> 00:01:21,240 Speaker 1: down one point two percent on the Nastak down one 29 00:01:21,240 --> 00:01:23,520 Speaker 1: point five In the bond market, we had a big rally, 30 00:01:23,640 --> 00:01:25,440 Speaker 1: still got a decent rally, but yields are off the 31 00:01:25,440 --> 00:01:27,360 Speaker 1: loads at a session we're down seven or eight basis 32 00:01:27,360 --> 00:01:29,399 Speaker 1: points on a two year, four to twenty six on 33 00:01:29,440 --> 00:01:33,000 Speaker 1: a ten year down five Lisa three ninety seven eighty five. 34 00:01:33,240 --> 00:01:36,280 Speaker 1: We're talking about cuts kinda. We're just not talking about March. 35 00:01:36,640 --> 00:01:39,000 Speaker 3: We were supposed to hear him hug the statement, and 36 00:01:39,040 --> 00:01:42,200 Speaker 3: he did. He gave this ambiguous answer to pidful necessarily 37 00:01:42,520 --> 00:01:44,480 Speaker 3: anything at all. We didn't learn anything, and that was 38 00:01:44,480 --> 00:01:47,160 Speaker 3: exactly what he was hoping for. And then he said 39 00:01:47,160 --> 00:01:49,639 Speaker 3: the m word March, and he actually answered the question, 40 00:01:49,720 --> 00:01:52,200 Speaker 3: and the market responded to that. You know, whether it's six, 41 00:01:52,240 --> 00:01:55,480 Speaker 3: we shall see. But that's clearly was a signal that 42 00:01:55,600 --> 00:01:57,080 Speaker 3: was not necessarily in the. 43 00:01:57,000 --> 00:01:57,720 Speaker 4: Statement a TK. 44 00:01:57,840 --> 00:01:59,920 Speaker 1: They just did not sound comfortable, or at least chairman 45 00:02:00,320 --> 00:02:03,280 Speaker 1: does not sound comfortable suggesting we're cutting at a time. 46 00:02:03,360 --> 00:02:04,080 Speaker 4: See yeah, Bazarre. 47 00:02:04,120 --> 00:02:06,840 Speaker 5: I mean the clarity there was the March idea, Claudia 48 00:02:06,920 --> 00:02:09,799 Speaker 5: Sawmo on Twitter saying that was the bombshell is clearly 49 00:02:09,880 --> 00:02:13,440 Speaker 5: they've moved March out of the way. What an odd 50 00:02:13,680 --> 00:02:17,880 Speaker 5: press conference they got one word, John Timid. The timidity here, 51 00:02:18,639 --> 00:02:22,480 Speaker 5: the carefulness is extraordinary. I felt like I was looking 52 00:02:22,520 --> 00:02:25,440 Speaker 5: at a Bank of Japan meeting from twenty five years ago. 53 00:02:25,800 --> 00:02:28,560 Speaker 5: The point there they had a data thing is sounded 54 00:02:28,600 --> 00:02:31,680 Speaker 5: like one of our famous sad strings, data to data data, 55 00:02:32,040 --> 00:02:35,600 Speaker 5: and it's just framing out the fear they have and 56 00:02:35,639 --> 00:02:37,119 Speaker 5: the delay that they're going to cause. 57 00:02:37,160 --> 00:02:39,080 Speaker 1: There was something that didn't come up in this needs conference. 58 00:02:39,120 --> 00:02:41,480 Speaker 1: I was surprised there weren't more questions about what happened 59 00:02:41,760 --> 00:02:44,560 Speaker 1: in a banking system today, what happened with one particular bank, 60 00:02:44,680 --> 00:02:46,640 Speaker 1: New York Community Bank, because LISTA, that's what we were 61 00:02:46,639 --> 00:02:49,720 Speaker 1: talking about in anticipation of the decision for much of today. 62 00:02:50,120 --> 00:02:51,959 Speaker 3: It was such an easy question, but I guess it 63 00:02:52,000 --> 00:02:54,200 Speaker 3: didn't sound very sophisticated. How much do you account that 64 00:02:54,360 --> 00:02:56,520 Speaker 3: is that worried about? After in when does that become 65 00:02:56,520 --> 00:02:59,920 Speaker 3: an issue that actually ends up causing you to coverrate 66 00:03:00,120 --> 00:03:00,680 Speaker 3: more quickly. 67 00:03:00,800 --> 00:03:04,560 Speaker 5: The thing to be here, John, is the behavioral aspect 68 00:03:04,720 --> 00:03:07,960 Speaker 5: of this meeting. These are smart people. They put it 69 00:03:07,960 --> 00:03:10,480 Speaker 5: on their pants, one leg at a time, et cetera. 70 00:03:10,680 --> 00:03:13,680 Speaker 5: And the answer is the timidity I heard today was 71 00:03:13,919 --> 00:03:16,799 Speaker 5: just I've never heard that timidity question. 72 00:03:17,160 --> 00:03:20,160 Speaker 1: QT. Let's get the folder out, get to the right page. 73 00:03:20,639 --> 00:03:22,840 Speaker 1: So far it's gone very well. We had some discussion 74 00:03:22,840 --> 00:03:24,320 Speaker 1: of the balance sheet. We're planning to have an in 75 00:03:24,360 --> 00:03:26,840 Speaker 1: depth discussion in March. At the beginning of that process. 76 00:03:27,160 --> 00:03:29,919 Speaker 1: We see rates and a balance sheet as independent tools. 77 00:03:30,000 --> 00:03:31,600 Speaker 1: They're not there yet, and I think that's the frustration 78 00:03:31,680 --> 00:03:34,960 Speaker 1: with Marcus today. Chairman Power is deeply pragmatic. He's trying 79 00:03:34,960 --> 00:03:37,320 Speaker 1: to go through this step by step, have a clear 80 00:03:37,360 --> 00:03:40,440 Speaker 1: sequence of things. The market wants it right now, wants 81 00:03:40,440 --> 00:03:43,440 Speaker 1: to talk about March rate cuts. Wants to move Bramo 82 00:03:43,600 --> 00:03:45,720 Speaker 1: and that's not what you heard in today's news conference. 83 00:03:45,760 --> 00:03:48,120 Speaker 3: Wants to know even what the criteria are. The criteria 84 00:03:48,280 --> 00:03:50,240 Speaker 3: is when we decide what the criteria will be, and 85 00:03:50,280 --> 00:03:52,640 Speaker 3: depending on which member I mean, the idea of the 86 00:03:52,720 --> 00:03:55,120 Speaker 3: data just needs to continue to be good and then 87 00:03:55,160 --> 00:03:57,320 Speaker 3: how long does it need to be good six seven. 88 00:03:57,160 --> 00:03:57,760 Speaker 6: Eight months. 89 00:03:57,920 --> 00:03:59,800 Speaker 3: I don't know. Well, she'll see And that seemed to 90 00:03:59,840 --> 00:04:02,160 Speaker 3: be sort of this feeling, maybe because each member has 91 00:04:02,160 --> 00:04:05,200 Speaker 3: a slightly different view as they try to gauge a 92 00:04:05,200 --> 00:04:06,240 Speaker 3: really uncertain economy. 93 00:04:06,240 --> 00:04:08,120 Speaker 5: Thank you for joining us on television radio. And what 94 00:04:08,160 --> 00:04:10,880 Speaker 5: we're going to do is talk to people with historical 95 00:04:11,000 --> 00:04:15,000 Speaker 5: perspective about this moment as we all stagger into twenty 96 00:04:15,080 --> 00:04:18,359 Speaker 5: twenty four. William Dudley out of Berkeley. I'm tenured at 97 00:04:18,400 --> 00:04:20,800 Speaker 5: Goldin Sachs for years, and of course a former New 98 00:04:20,880 --> 00:04:26,640 Speaker 5: York Federal Reserve President, Bloomberg Economic senior advisor. You know, Bill, 99 00:04:26,920 --> 00:04:28,320 Speaker 5: I feel like I want to go and talk to 100 00:04:28,400 --> 00:04:30,880 Speaker 5: Eiken Green or Brad DeLong right now out in the 101 00:04:30,920 --> 00:04:36,440 Speaker 5: hallways at Berkeley. The timidity I see here, the carefulness. 102 00:04:36,800 --> 00:04:40,920 Speaker 5: Let's start with the why of the moment. Why are 103 00:04:40,960 --> 00:04:46,200 Speaker 5: they so turned data dependent and careful here to begin 104 00:04:46,240 --> 00:04:48,120 Speaker 5: a measured trend of lower rates. 105 00:04:48,600 --> 00:04:51,000 Speaker 6: I think they're so careful because things are actually going 106 00:04:51,160 --> 00:04:54,520 Speaker 6: very well. If n Kyle wasn't as strong as it was, 107 00:04:55,040 --> 00:04:58,279 Speaker 6: they would be much more inclined to cut rates. But 108 00:04:58,360 --> 00:05:00,760 Speaker 6: since we've seen very strong growth in the fourth quarter, 109 00:05:00,880 --> 00:05:04,320 Speaker 6: the Fed's aware of the fact that if they started 110 00:05:04,360 --> 00:05:06,120 Speaker 6: a little bit later, it's probably not. 111 00:05:06,040 --> 00:05:09,040 Speaker 7: Going to have much consequence for the economic outlook. 112 00:05:09,440 --> 00:05:11,640 Speaker 6: The fact that financial conditions have eased over the last 113 00:05:11,640 --> 00:05:13,520 Speaker 6: few months also allows the FED to be a little 114 00:05:13,560 --> 00:05:14,520 Speaker 6: bit more cautious. 115 00:05:14,800 --> 00:05:16,960 Speaker 7: So I think it's really the strength of the economy. 116 00:05:17,240 --> 00:05:20,880 Speaker 7: The easing of financial conditions means the Federal reserves of 117 00:05:20,920 --> 00:05:23,239 Speaker 7: the view that they can be a little bit more patient. 118 00:05:24,120 --> 00:05:26,520 Speaker 6: I thought that with very interesting press conference, because up 119 00:05:26,640 --> 00:05:29,320 Speaker 6: until the points that cheer Paul talked about the March 120 00:05:29,400 --> 00:05:32,520 Speaker 6: meeting specifically, the market was actually taking it as March 121 00:05:32,640 --> 00:05:35,839 Speaker 6: was in play, and then he explicitly took it off 122 00:05:35,839 --> 00:05:39,279 Speaker 6: the table, and the Federal Fund futures contracts went from 123 00:05:39,600 --> 00:05:43,880 Speaker 6: pricing in more than fifty percent probability of a rate 124 00:05:43,920 --> 00:05:47,080 Speaker 6: cut in March two significantly less. So I think that 125 00:05:47,240 --> 00:05:49,440 Speaker 6: was the big surprise at the meeting for me. I 126 00:05:49,440 --> 00:05:51,920 Speaker 6: thought the other interesting aspect of the meeting was with 127 00:05:52,279 --> 00:05:55,440 Speaker 6: the discussion about the quantitative the tightening, so it's clearly 128 00:05:55,600 --> 00:05:56,680 Speaker 6: being put on the table. 129 00:05:57,040 --> 00:05:58,839 Speaker 7: They talked about it today. They're going to have an 130 00:05:58,880 --> 00:06:02,400 Speaker 7: in depth staff in March, so I think we. 131 00:06:02,400 --> 00:06:05,680 Speaker 6: Could expect quantity of tightening deeper and to happen sometimes, 132 00:06:05,880 --> 00:06:07,640 Speaker 6: you know, probably around the first half of this year. 133 00:06:07,800 --> 00:06:09,440 Speaker 1: Bill lets unpack some of that. I gets to QT 134 00:06:09,720 --> 00:06:11,240 Speaker 1: in a moment. I just want to talk about these 135 00:06:11,279 --> 00:06:15,200 Speaker 1: strategic ambiguity. So in the statement, this is what they said. 136 00:06:15,240 --> 00:06:17,359 Speaker 1: The Committee does not expect it will be appropriate to 137 00:06:17,360 --> 00:06:20,600 Speaker 1: reduce the target range until it has grained greater confidence 138 00:06:20,839 --> 00:06:24,600 Speaker 1: that inflation is moving sustainably towards two percent. So obviously, 139 00:06:24,880 --> 00:06:27,040 Speaker 1: our former colleague, good friend Jidis Smilek of the New 140 00:06:27,080 --> 00:06:29,279 Speaker 1: York Times, first question out of the gate wants to 141 00:06:29,320 --> 00:06:31,960 Speaker 1: know what greater confidence actually means. We want to see 142 00:06:31,960 --> 00:06:34,800 Speaker 1: more data. We're not looking for better data, just more 143 00:06:35,120 --> 00:06:38,159 Speaker 1: good data. So Bill darro ask what does it mean. 144 00:06:39,560 --> 00:06:41,039 Speaker 6: I think what he wants to see is more of 145 00:06:41,080 --> 00:06:43,520 Speaker 6: the same. I think that's basically what he said. I 146 00:06:43,560 --> 00:06:45,880 Speaker 6: think they're a little bit of concern that maybe the 147 00:06:46,040 --> 00:06:49,000 Speaker 6: really good inflation news that we're seeing is a little 148 00:06:49,000 --> 00:06:53,920 Speaker 6: bit about goods price weakness and that that may ultimately 149 00:06:53,960 --> 00:06:56,400 Speaker 6: fade away, so that there might be a little bit 150 00:06:56,440 --> 00:06:58,800 Speaker 6: more work to do on the services side. So I 151 00:06:58,839 --> 00:07:02,440 Speaker 6: think that's their I mean, if the inflation is continues 152 00:07:02,480 --> 00:07:04,800 Speaker 6: along the same course for a few more months than 153 00:07:04,800 --> 00:07:07,159 Speaker 6: the FEDERI serve is certainly going to start to cut rates. 154 00:07:07,320 --> 00:07:10,120 Speaker 6: They're just not absolutely confident that that's where we're going 155 00:07:10,160 --> 00:07:11,640 Speaker 6: to be three or four months from now. 156 00:07:11,840 --> 00:07:13,720 Speaker 3: Bill, do you think that it was a mistake for 157 00:07:13,840 --> 00:07:16,680 Speaker 3: freed Shair Powell to say that March was not on 158 00:07:16,720 --> 00:07:17,120 Speaker 3: the table. 159 00:07:18,200 --> 00:07:20,600 Speaker 7: I don't think it's off completely off the table. 160 00:07:20,640 --> 00:07:22,680 Speaker 6: All he said was, we don't think I don't think 161 00:07:22,720 --> 00:07:25,320 Speaker 6: at the current point that will be confident enough in March. 162 00:07:25,680 --> 00:07:29,720 Speaker 7: But you know, we economic data better inflation is than. 163 00:07:29,640 --> 00:07:31,600 Speaker 6: He made evident by the time we get to March, 164 00:07:31,640 --> 00:07:33,800 Speaker 6: and March meeting is still a ways off, so you know, 165 00:07:33,960 --> 00:07:36,000 Speaker 6: his degree of confidence could change between. 166 00:07:35,720 --> 00:07:36,240 Speaker 7: Now and then. 167 00:07:37,080 --> 00:07:39,880 Speaker 5: Bill Dudley, I look at some of the criticisms here 168 00:07:39,960 --> 00:07:43,480 Speaker 5: that they're on trend of disinflation. Jason Firman up at 169 00:07:43,960 --> 00:07:48,160 Speaker 5: Harvard has a wonderful blending of annualized vectors and such. 170 00:07:48,800 --> 00:07:52,080 Speaker 5: Which vector do you use if they're on the vector, 171 00:07:52,560 --> 00:07:55,480 Speaker 5: when do they start? What's the Dudley vector where you 172 00:07:55,560 --> 00:07:56,920 Speaker 5: measure our disinflation? 173 00:07:58,760 --> 00:08:00,720 Speaker 6: Well, I think that I think we're still in a 174 00:08:00,800 --> 00:08:04,120 Speaker 6: very tricky period because we had lots of good inslation 175 00:08:04,400 --> 00:08:07,040 Speaker 6: during the pandemic, then we opened up the economy that 176 00:08:07,080 --> 00:08:10,000 Speaker 6: goods of inflation went away. In fact, we're actually getting 177 00:08:10,000 --> 00:08:13,320 Speaker 6: goods deflation now. And the cual question is how long 178 00:08:13,360 --> 00:08:17,280 Speaker 6: will that good goods deflation last? Because if it ends, 179 00:08:17,520 --> 00:08:21,000 Speaker 6: then inflation pressures could actually start to be more evident. 180 00:08:21,040 --> 00:08:23,480 Speaker 7: Again, I was saying that as the fact. 181 00:08:23,280 --> 00:08:27,360 Speaker 6: That services inflation should also come down as wage games 182 00:08:27,400 --> 00:08:31,920 Speaker 6: become less more modest, and I think the Employment Cost 183 00:08:32,000 --> 00:08:35,880 Speaker 6: Index report today was a positive reading that wage trends 184 00:08:35,920 --> 00:08:39,240 Speaker 6: are becoming more consistent with two percent underlying inflation. 185 00:08:39,720 --> 00:08:41,960 Speaker 1: Bill you mentioned QT, can we just finish that with you. 186 00:08:42,360 --> 00:08:44,120 Speaker 1: Did you get the sense from the chairman that he 187 00:08:44,200 --> 00:08:47,680 Speaker 1: wants to end QT before he starts to reduce interest rights, 188 00:08:47,920 --> 00:08:49,960 Speaker 1: or that we can see those two things play out independently. 189 00:08:51,000 --> 00:08:54,760 Speaker 7: I think they're completely independent. Ending QT is not about, 190 00:08:54,880 --> 00:08:56,800 Speaker 7: you know, loosening monetary policy. 191 00:08:56,840 --> 00:09:00,440 Speaker 6: It's about basically getting the level of reserves and banking 192 00:09:00,480 --> 00:09:03,800 Speaker 6: system down to a level that's low as low as 193 00:09:03,840 --> 00:09:08,320 Speaker 6: possible without the reserve level actually affecting interest rates. So 194 00:09:08,400 --> 00:09:11,320 Speaker 6: this is totally independent of the decision about whether you 195 00:09:11,320 --> 00:09:13,400 Speaker 6: want to make Montet policy more accommodative. 196 00:09:13,920 --> 00:09:15,760 Speaker 7: This is based on the bank's demand. 197 00:09:15,480 --> 00:09:18,080 Speaker 6: For reserves, and the Fed's trying to estimate what that 198 00:09:18,160 --> 00:09:20,520 Speaker 6: demand is, and they want to make sure that there's 199 00:09:20,600 --> 00:09:23,520 Speaker 6: enough reserves in the banking system, but not too much. 200 00:09:23,840 --> 00:09:25,800 Speaker 6: So they want to have a cushion over the banks 201 00:09:25,880 --> 00:09:28,400 Speaker 6: underlying demand for reserves, and they're going to try to 202 00:09:28,480 --> 00:09:30,040 Speaker 6: make you know, they're going to do the taper to 203 00:09:30,040 --> 00:09:34,199 Speaker 6: make sure that they approach approach that place very very carefully. 204 00:09:34,640 --> 00:09:37,599 Speaker 6: They recall what happened in September twenty nineteen, where we 205 00:09:37,760 --> 00:09:40,760 Speaker 6: crashed through the level of reserves that banks demanded and 206 00:09:40,760 --> 00:09:43,520 Speaker 6: we got an upward spike in repro rates and quite 207 00:09:43,520 --> 00:09:45,000 Speaker 6: a bit of turmoil and the money market, and the 208 00:09:45,040 --> 00:09:46,480 Speaker 6: FED wants to avoid that this time. 209 00:09:46,800 --> 00:09:49,199 Speaker 3: Bill, are you surprised that nobody asked about New York 210 00:09:49,200 --> 00:09:51,440 Speaker 3: Community Bank? And how would you have responded to a 211 00:09:51,520 --> 00:09:54,760 Speaker 3: question about how that factors into the FED decision making 212 00:09:54,800 --> 00:09:56,120 Speaker 3: process in the next few months. 213 00:09:57,520 --> 00:09:59,640 Speaker 7: I think the FED is not that worried about some 214 00:09:59,679 --> 00:10:01,920 Speaker 7: of the banking issues. 215 00:10:01,520 --> 00:10:04,680 Speaker 6: Because I think that they're really banked by bank now, 216 00:10:05,080 --> 00:10:07,080 Speaker 6: and I think this is all happening. 217 00:10:06,960 --> 00:10:10,120 Speaker 7: In plain sight. This is not like the Great Financial crisis. 218 00:10:09,720 --> 00:10:14,120 Speaker 6: Where you really couldn't evaluate the situation for individual banks. 219 00:10:14,440 --> 00:10:16,040 Speaker 7: Right now you can sort of see what's happening to 220 00:10:16,120 --> 00:10:17,360 Speaker 7: banks and that interest margin. 221 00:10:17,440 --> 00:10:20,800 Speaker 6: You can see what's happening to the losses on their 222 00:10:21,120 --> 00:10:24,400 Speaker 6: securities portfolio. You can see what kind of earns pressure 223 00:10:24,440 --> 00:10:27,320 Speaker 6: they're under. So I don't think the FED views the 224 00:10:27,400 --> 00:10:32,480 Speaker 6: banking system issue as very important right now. Now that 225 00:10:32,640 --> 00:10:34,719 Speaker 6: could that change, could something great. And I think the 226 00:10:34,760 --> 00:10:36,840 Speaker 6: other thing that makes them a little bit more confident 227 00:10:36,840 --> 00:10:39,000 Speaker 6: about this is long term interest rates. 228 00:10:38,800 --> 00:10:39,360 Speaker 7: Have come down. 229 00:10:39,880 --> 00:10:42,600 Speaker 6: We peaked ten year treasure you'll peaked around five percent, 230 00:10:42,679 --> 00:10:45,800 Speaker 6: now around four percent, and so that pressure on banks 231 00:10:45,800 --> 00:10:47,920 Speaker 6: that took a lot of interest rate risks, they're still 232 00:10:48,000 --> 00:10:51,160 Speaker 6: under pressure, but that pressure is less than it was 233 00:10:51,480 --> 00:10:51,920 Speaker 6: a year. 234 00:10:51,800 --> 00:10:55,200 Speaker 3: Ago going forward. I am curious about J. Powell and 235 00:10:55,240 --> 00:10:58,760 Speaker 3: the March discussion. He didn't hug the statement precisely the 236 00:10:58,800 --> 00:11:01,760 Speaker 3: way that Rich Clarida suggested that maybe he ought to. 237 00:11:02,400 --> 00:11:02,480 Speaker 6: Do. 238 00:11:02,520 --> 00:11:04,520 Speaker 3: You think that this is actually a sign of how 239 00:11:04,720 --> 00:11:07,480 Speaker 3: there is J. Powell the man and J Powell the 240 00:11:07,520 --> 00:11:09,720 Speaker 3: herder of cats that is the FED Committee. I mean, 241 00:11:09,800 --> 00:11:11,880 Speaker 3: is how much is that basically what we're seeing. 242 00:11:13,080 --> 00:11:15,280 Speaker 6: I don't think he really parted from the statement in 243 00:11:15,320 --> 00:11:17,240 Speaker 6: any meaningful way. I think he just gave a little 244 00:11:17,280 --> 00:11:19,800 Speaker 6: bit more nuanced to what the Fed, how the FED 245 00:11:19,960 --> 00:11:24,160 Speaker 6: thinking is evolving. Obviously, the statement is pretty short and 246 00:11:24,200 --> 00:11:26,880 Speaker 6: pretty concise, and the Fed is very careful about the 247 00:11:26,960 --> 00:11:29,760 Speaker 6: changes that they make in the statement, and obviously in 248 00:11:29,760 --> 00:11:32,920 Speaker 6: the press conference you can't be quite the precise. 249 00:11:33,120 --> 00:11:35,280 Speaker 7: So I thought he tracked the statement quite well. 250 00:11:35,400 --> 00:11:38,320 Speaker 1: But what you're thinking, June Coup, what's you feel now? 251 00:11:38,960 --> 00:11:41,319 Speaker 6: I've been thinking May and I don't see any reason 252 00:11:41,360 --> 00:11:41,840 Speaker 6: to James that. 253 00:11:42,679 --> 00:11:45,520 Speaker 1: May Bill Dubby, thank you, sir, forming New York Fed President. 254 00:11:45,600 --> 00:11:45,880 Speaker 4: Take care. 255 00:11:45,920 --> 00:11:48,040 Speaker 1: We've got an answer. He's thinking, Mike, you got to 256 00:11:48,040 --> 00:11:48,360 Speaker 1: the answer. 257 00:11:48,360 --> 00:11:50,120 Speaker 5: You on the answer for mister poul in March too. 258 00:11:50,520 --> 00:11:51,720 Speaker 7: The market move on March. 259 00:11:52,040 --> 00:11:54,040 Speaker 1: Let's get to that market, Maye right now? Could he's 260 00:11:54,040 --> 00:11:55,840 Speaker 1: put him back by one point four percent on the 261 00:11:55,920 --> 00:11:58,400 Speaker 1: S and P five hundred. The Nastack is lower as well. 262 00:11:58,480 --> 00:12:01,680 Speaker 1: Tech earnings were let's say, under yesterday after the close. 263 00:12:01,760 --> 00:12:04,720 Speaker 1: More tech earnings to come tomorrow, Amazon, Meta, Apple still 264 00:12:04,760 --> 00:12:07,920 Speaker 1: to come Thursday after the close. The Nasdaq is down 265 00:12:07,960 --> 00:12:11,040 Speaker 1: by one point seven percent. I've missed you small CAFs 266 00:12:11,080 --> 00:12:13,520 Speaker 1: lower by one point seven percent. Let's turn to the 267 00:12:13,559 --> 00:12:17,200 Speaker 1: bond market two year tenure thirty year, the tenure year 268 00:12:17,240 --> 00:12:19,920 Speaker 1: of down four basis points three ninety nine down six 269 00:12:20,320 --> 00:12:22,640 Speaker 1: on a two year. So the fellow reserve stepped away 270 00:12:22,640 --> 00:12:26,040 Speaker 1: from this tightening bias Bramo. But ultimately, when it starts 271 00:12:26,080 --> 00:12:28,319 Speaker 1: to engage the rate cut conversation, just not in the 272 00:12:28,360 --> 00:12:30,520 Speaker 1: way that this market wanted to see it do it. 273 00:12:30,520 --> 00:12:33,920 Speaker 1: It wanted more than just Okay, things are going well, 274 00:12:34,120 --> 00:12:36,120 Speaker 1: we need to see a little bit more. But ultimately 275 00:12:36,160 --> 00:12:37,600 Speaker 1: the next move might be a cut, and it might 276 00:12:37,640 --> 00:12:39,640 Speaker 1: be this year, just probably not March. Not likely. 277 00:12:39,960 --> 00:12:42,200 Speaker 3: Basically, what you're seeing is the market is now pricing 278 00:12:42,200 --> 00:12:45,080 Speaker 3: in a thirty eight percent chance of a March rate cut, 279 00:12:45,160 --> 00:12:47,960 Speaker 3: down from almost a sixty percent chance of a rate 280 00:12:48,040 --> 00:12:51,840 Speaker 3: cut come just before this press conference. The market adjusted 281 00:12:51,920 --> 00:12:53,800 Speaker 3: will at last we shall see tomorrow shall be a 282 00:12:53,800 --> 00:12:57,520 Speaker 3: whole news story. It seems like the feathers being somewhat 283 00:12:57,559 --> 00:13:00,360 Speaker 3: consistent toward that may kind of timeline, which is the 284 00:13:00,360 --> 00:13:02,440 Speaker 3: reason why I've got ninety one percent chance currently price. 285 00:13:02,600 --> 00:13:04,160 Speaker 1: What was interesting, and we haven't talked about it yet, 286 00:13:04,160 --> 00:13:06,199 Speaker 1: it's just how comfortable he would be with decent growth, 287 00:13:06,400 --> 00:13:08,880 Speaker 1: strong growth. I think it's a change. You go back 288 00:13:08,920 --> 00:13:12,280 Speaker 1: to the Jackson Hole Symposium of what was it twenty 289 00:13:12,280 --> 00:13:16,199 Speaker 1: twenty two in August, pain pain, pain, pain, and now 290 00:13:16,200 --> 00:13:18,440 Speaker 1: we say basically, strength is okay, we something we have 291 00:13:18,480 --> 00:13:19,120 Speaker 1: to work against. 292 00:13:19,280 --> 00:13:22,800 Speaker 3: This is basically the FED not necessarily saying victory, but 293 00:13:22,920 --> 00:13:25,120 Speaker 3: saying we could get victory and we're not going to 294 00:13:25,120 --> 00:13:25,880 Speaker 3: get in the way of it. 295 00:13:26,000 --> 00:13:26,080 Speaker 5: Right. 296 00:13:26,160 --> 00:13:28,480 Speaker 3: I mean, how much is this a sort of acceptance 297 00:13:28,520 --> 00:13:32,600 Speaker 3: of this concept that disinflation is good, regardless of whether 298 00:13:32,600 --> 00:13:35,400 Speaker 3: the strength might suggest that, you know, it could be 299 00:13:35,480 --> 00:13:35,800 Speaker 3: a problem. 300 00:13:35,840 --> 00:13:37,040 Speaker 5: I'll be quicker. I know you want to get to 301 00:13:37,120 --> 00:13:39,760 Speaker 5: Mike McHugh was in the press conference to me, the 302 00:13:39,960 --> 00:13:44,960 Speaker 5: huge overlay here is got fear by monitorist monetary economics 303 00:13:45,000 --> 00:13:48,760 Speaker 5: people about getting this wrong. Were Willie Pessick and Forbes 304 00:13:48,840 --> 00:13:52,480 Speaker 5: used to righte now Denberg nailed it. Willie Pessick wrote 305 00:13:52,520 --> 00:13:56,120 Speaker 5: it on the Bankageapan and I'm sorry. They are scared 306 00:13:56,720 --> 00:13:58,560 Speaker 5: stiff of getting this wrong. 307 00:13:58,760 --> 00:14:00,680 Speaker 1: They want to see more day at home. I'm totally 308 00:14:00,679 --> 00:14:04,680 Speaker 1: with you. You can see they're uncomfortable. Chairman, how ultimately 309 00:14:04,720 --> 00:14:09,160 Speaker 1: is still concerned that inflation stabilizes above tar Kit for him, 310 00:14:09,200 --> 00:14:10,360 Speaker 1: that still seems to be a risk. 311 00:14:10,559 --> 00:14:12,199 Speaker 3: It's a risk for all the people who we speak 312 00:14:12,240 --> 00:14:15,360 Speaker 3: to as well, especially with that strength. What's the bigger fear, though, 313 00:14:15,480 --> 00:14:17,840 Speaker 3: and this I think is different. Is it that inflation 314 00:14:17,960 --> 00:14:20,800 Speaker 3: reaccelerates or is it that they do serious damage to 315 00:14:20,840 --> 00:14:23,120 Speaker 3: a labor market that seems to be in a good place, 316 00:14:23,520 --> 00:14:25,880 Speaker 3: And that to me seems definitely more balanced. 317 00:14:25,920 --> 00:14:28,160 Speaker 1: Mike McKay with us now he was in the news conference, 318 00:14:28,200 --> 00:14:30,840 Speaker 1: Mike McKay, fantastic work as always, sir. What was your 319 00:14:30,840 --> 00:14:32,480 Speaker 1: big takeaway Mike from that presser? 320 00:14:33,800 --> 00:14:36,120 Speaker 8: Well, basically, the Fed has gone to where the market 321 00:14:36,160 --> 00:14:38,480 Speaker 8: wanted it to be, but they didn't go farther. As 322 00:14:38,520 --> 00:14:41,960 Speaker 8: you were talking about, they're not giving us a timetable 323 00:14:42,040 --> 00:14:44,840 Speaker 8: yet but leaving enough ambiguity that you can try to 324 00:14:44,840 --> 00:14:48,080 Speaker 8: figure it out on your own. Basically, may comes into 325 00:14:48,240 --> 00:14:51,280 Speaker 8: the equation then, because by that time they'll have three 326 00:14:51,360 --> 00:14:56,200 Speaker 8: more PCE inflation data releases and they'll have a pretty 327 00:14:56,240 --> 00:14:59,120 Speaker 8: good idea of whether or not we're going to be 328 00:14:59,160 --> 00:15:04,040 Speaker 8: able to maintain this in the two percent range inflation level. 329 00:15:04,400 --> 00:15:07,120 Speaker 8: So I think Powell was just trying to tell people, 330 00:15:07,560 --> 00:15:10,400 Speaker 8: we've heard you, we see what you see, but we 331 00:15:10,440 --> 00:15:12,840 Speaker 8: want to make sure that we're not going to be 332 00:15:13,160 --> 00:15:15,800 Speaker 8: seeing inflation go up again. To what you were just saying, 333 00:15:16,200 --> 00:15:18,800 Speaker 8: I think they still think inflation is a greater danger. 334 00:15:18,960 --> 00:15:21,160 Speaker 8: Growth is not a problem at this point, of course. 335 00:15:21,160 --> 00:15:24,080 Speaker 8: That was my question to him. They're happy with the 336 00:15:24,120 --> 00:15:26,680 Speaker 8: way the economy is going, they're happy with the way 337 00:15:26,840 --> 00:15:29,760 Speaker 8: unemployment is going, and they don't seem to think it's 338 00:15:29,800 --> 00:15:32,320 Speaker 8: going to get any worse. But there's still an issue 339 00:15:32,400 --> 00:15:34,880 Speaker 8: about will inflation continue to come down? 340 00:15:35,120 --> 00:15:36,440 Speaker 1: Mike, he were in the room, so you've got a 341 00:15:36,480 --> 00:15:39,280 Speaker 1: better sense of this than us. I found guarded at 342 00:15:39,280 --> 00:15:42,440 Speaker 1: times very scripted. At least it talked about that form 343 00:15:42,440 --> 00:15:44,440 Speaker 1: of FED Vice chair Richard Kntra talked about that as 344 00:15:44,440 --> 00:15:46,720 Speaker 1: well in anticipation of the news conference. But did you 345 00:15:46,720 --> 00:15:49,480 Speaker 1: get the sense that March comment was unscripted, that was 346 00:15:49,480 --> 00:15:51,440 Speaker 1: off the cuff, that was from the chairman directly. 347 00:15:52,880 --> 00:15:52,960 Speaker 5: No. 348 00:15:53,120 --> 00:15:56,880 Speaker 8: I think that basically he went in ready to say that, 349 00:15:57,200 --> 00:16:01,240 Speaker 8: probably didn't want to unless he had to, because they 350 00:16:01,320 --> 00:16:04,480 Speaker 8: never like to put a time frame on anything. But 351 00:16:04,760 --> 00:16:09,120 Speaker 8: you'll get just one more PCE report before that time, 352 00:16:09,480 --> 00:16:11,920 Speaker 8: and that's probably not going to be enough for them. 353 00:16:12,040 --> 00:16:15,720 Speaker 8: So it was It wasn't that he couldn't say it. 354 00:16:15,720 --> 00:16:18,280 Speaker 8: It's I think he didn't want to, but was asked 355 00:16:18,280 --> 00:16:19,120 Speaker 8: directly about it. 356 00:16:19,160 --> 00:16:23,240 Speaker 5: So did Mike with leguard in the ECB, we parse 357 00:16:23,360 --> 00:16:26,480 Speaker 5: the hawks, We know who the hawks are. Who are 358 00:16:26,480 --> 00:16:31,120 Speaker 5: the hawks pushing against Powell's dubbishness? Who are who are 359 00:16:31,160 --> 00:16:34,080 Speaker 5: the people out there Bush Caffidy? Who are those guys 360 00:16:34,080 --> 00:16:36,040 Speaker 5: out there that are hawks right now? 361 00:16:37,320 --> 00:16:39,600 Speaker 8: Well, we know that Mickey Bowman has been a hawk 362 00:16:39,640 --> 00:16:42,080 Speaker 8: and Lorettamester have been a hawk. But they both have 363 00:16:42,280 --> 00:16:45,320 Speaker 8: said that they don't necessarily think we're going to need 364 00:16:45,480 --> 00:16:48,560 Speaker 8: interest rates to rise anymore. So they've at least come 365 00:16:48,600 --> 00:16:52,320 Speaker 8: to the neutral zone. The question is will they accept 366 00:16:52,320 --> 00:16:55,560 Speaker 8: the idea of rake cuts, And I suspect that's going to. 367 00:16:55,520 --> 00:16:57,240 Speaker 4: Depend on the data between. 368 00:16:56,960 --> 00:16:59,480 Speaker 8: Now and the March meeting, now and the and the 369 00:16:59,480 --> 00:17:02,880 Speaker 8: May meeting. At some point you have to go with 370 00:17:03,560 --> 00:17:06,040 Speaker 8: what the data are telling you, even if you were 371 00:17:06,080 --> 00:17:08,360 Speaker 8: afraid that you were going to have to raise rates earlier. 372 00:17:08,520 --> 00:17:10,320 Speaker 3: Are you surprised, Mike that no one asked about the 373 00:17:10,320 --> 00:17:12,720 Speaker 3: New York Community Bank issue and how much they do 374 00:17:12,920 --> 00:17:16,760 Speaker 3: have confidence the regional banks truly are in a good spot. 375 00:17:17,760 --> 00:17:20,080 Speaker 8: Well, I think the fact that they took the strength 376 00:17:20,080 --> 00:17:22,600 Speaker 8: of the banking system part out of the statement was 377 00:17:22,600 --> 00:17:25,720 Speaker 8: a mere coincidence because the statement would have been drafted 378 00:17:25,800 --> 00:17:29,320 Speaker 8: yesterday and circulated among them, and of course they didn't 379 00:17:29,320 --> 00:17:31,760 Speaker 8: know anything about your community Bank at that point. But 380 00:17:31,800 --> 00:17:34,479 Speaker 8: I think the reason that didn't really come up is 381 00:17:34,560 --> 00:17:37,520 Speaker 8: because think about what happened to New York Community Bank. 382 00:17:37,760 --> 00:17:42,359 Speaker 8: They lost money in a quarter, and stock investors jumped 383 00:17:42,359 --> 00:17:45,199 Speaker 8: on that because they don't like to lose money. This 384 00:17:45,359 --> 00:17:47,480 Speaker 8: wasn't a question of a bank going out of business 385 00:17:47,920 --> 00:17:51,120 Speaker 8: like SVB, which New York Community Bank bought their loans, 386 00:17:51,760 --> 00:17:54,040 Speaker 8: and that's one of the reasons they had problems. So 387 00:17:54,200 --> 00:17:57,080 Speaker 8: it doesn't suggest that there's any kind of systemic problem 388 00:17:57,200 --> 00:18:00,760 Speaker 8: in the banking system like we were worried about last March. 389 00:18:00,960 --> 00:18:03,359 Speaker 1: I might thanks for the update. Great work Mi McKay 390 00:18:03,840 --> 00:18:06,040 Speaker 1: out there down in Washington, d C. Just coming down 391 00:18:06,080 --> 00:18:08,080 Speaker 1: down these conference with Sham and Powell. E could he 392 00:18:08,119 --> 00:18:09,840 Speaker 1: say K in this session? I was down about one 393 00:18:09,880 --> 00:18:11,480 Speaker 1: point five percent on S and. 394 00:18:11,520 --> 00:18:15,399 Speaker 5: P got greater confidence that Microsoft hit a yearly high yesterday. 395 00:18:16,000 --> 00:18:18,320 Speaker 5: You know, the market's off and I really don't know 396 00:18:18,320 --> 00:18:20,440 Speaker 5: what to think about it. The real yield came back nicely, 397 00:18:20,560 --> 00:18:24,040 Speaker 5: gyrating off the nominal ten year yields three point nine 398 00:18:24,160 --> 00:18:26,160 Speaker 5: nine percent. To me and Lista, this goes to your 399 00:18:26,160 --> 00:18:29,199 Speaker 5: concern over the banking system and other properties in New 400 00:18:29,280 --> 00:18:32,800 Speaker 5: York City. They're really coming under you know, individual properties 401 00:18:32,840 --> 00:18:35,560 Speaker 5: coming under pressure. The fact is that ten year yields 402 00:18:35,640 --> 00:18:38,920 Speaker 5: under four percent. That's a real adjustment here, and it's 403 00:18:38,960 --> 00:18:41,879 Speaker 5: the uncertainty that's out there, and maybe that's what in 404 00:18:41,920 --> 00:18:45,280 Speaker 5: the equesibiliting meeting. Maybe that's what they were concerned about 405 00:18:45,280 --> 00:18:46,159 Speaker 5: the timidity of it. 406 00:18:46,240 --> 00:18:48,560 Speaker 3: Although to me it seems like he wasn't that concerned 407 00:18:48,600 --> 00:18:51,040 Speaker 3: about that much. To be completely honest, it's just that 408 00:18:51,080 --> 00:18:52,720 Speaker 3: he didn't want to get it wrong, and he didn't 409 00:18:52,720 --> 00:18:54,720 Speaker 3: want to get it wrong on either side, but certainly 410 00:18:54,800 --> 00:18:57,080 Speaker 3: with the strength also, as you pointed out, the fact 411 00:18:57,119 --> 00:18:59,119 Speaker 3: that he did indicate that March was off the table 412 00:18:59,480 --> 00:19:02,439 Speaker 3: despite some of the signs that people were using to 413 00:19:02,600 --> 00:19:05,280 Speaker 3: justify it was significant for the market and is the 414 00:19:05,320 --> 00:19:06,280 Speaker 3: reason why we're seeing. 415 00:19:06,119 --> 00:19:08,760 Speaker 5: The market move on that we talk he manages money 416 00:19:08,840 --> 00:19:13,120 Speaker 5: joining us now. Jeffrey Rosenberg from Blackrack really really interesting 417 00:19:13,800 --> 00:19:18,800 Speaker 5: here on whither and forward? How does your view adjust. Jeff, 418 00:19:18,880 --> 00:19:24,040 Speaker 5: I was thunderstruck by the timidity, the massive almost comedy 419 00:19:24,119 --> 00:19:26,520 Speaker 5: on the word data. You got to go out and 420 00:19:26,560 --> 00:19:28,800 Speaker 5: run a portfolio. How do you do that given what 421 00:19:28,840 --> 00:19:29,760 Speaker 5: we observe today? 422 00:19:31,080 --> 00:19:33,919 Speaker 9: So, Tom, you're talking about the timidity, and it's in 423 00:19:33,960 --> 00:19:36,879 Speaker 9: the context where the last two meetings was the opposite 424 00:19:36,920 --> 00:19:37,639 Speaker 9: from the chairman. 425 00:19:37,680 --> 00:19:39,080 Speaker 4: There was a lot of confidence. 426 00:19:39,200 --> 00:19:41,280 Speaker 9: Yeah, I characterize it as a little bit of a 427 00:19:41,400 --> 00:19:45,959 Speaker 9: victory lap. He leaned into the positivity, he leaned into 428 00:19:47,280 --> 00:19:50,159 Speaker 9: the good news. And here I think it began with 429 00:19:50,240 --> 00:19:54,240 Speaker 9: the statement. The inclusion of the of the new language 430 00:19:54,280 --> 00:19:57,879 Speaker 9: around needing to have greater confidence was the sign that 431 00:19:57,920 --> 00:20:00,920 Speaker 9: they're going to push back a bit against market expectations, 432 00:20:00,960 --> 00:20:04,240 Speaker 9: and it carried over into the press conference. 433 00:20:04,520 --> 00:20:05,920 Speaker 4: Wasn't clear whether that would happen. 434 00:20:05,960 --> 00:20:09,520 Speaker 9: It clearly did happen, and it's capped off with his 435 00:20:09,560 --> 00:20:13,000 Speaker 9: headline that is absolutely the headline takeaway, which is the pushback, 436 00:20:13,680 --> 00:20:16,760 Speaker 9: hard pushback against the march expectations. And I chalk this 437 00:20:16,920 --> 00:20:22,280 Speaker 9: timidity up, Tom to the concern around financial conditions doing 438 00:20:22,359 --> 00:20:25,920 Speaker 9: too much easing for them and putting at risk the 439 00:20:26,359 --> 00:20:29,080 Speaker 9: good story that they're having in terms of inflation getting 440 00:20:29,119 --> 00:20:33,880 Speaker 9: back down to target and growth holding up and not 441 00:20:33,960 --> 00:20:37,560 Speaker 9: having to have that big decline that Lisa was mentioning 442 00:20:37,600 --> 00:20:39,440 Speaker 9: that they were warning of that we thought was. 443 00:20:39,400 --> 00:20:41,560 Speaker 4: Going to be necessary to get that inflation down. 444 00:20:41,640 --> 00:20:45,280 Speaker 9: So it's the risk of losing financial conditions and markets 445 00:20:45,280 --> 00:20:48,119 Speaker 9: are just primed for the big green light to go 446 00:20:48,160 --> 00:20:50,560 Speaker 9: out and back up the truck, and obviously they're disappointed 447 00:20:50,600 --> 00:20:51,200 Speaker 9: on that today. 448 00:20:51,520 --> 00:20:53,040 Speaker 4: I think that's a little bit purposeful and. 449 00:20:53,080 --> 00:20:55,920 Speaker 5: Jeff Rozenberg Jason Furman up at Harvard Teaching X ten 450 00:20:56,200 --> 00:20:58,000 Speaker 5: with my tweet of the day. I love his single 451 00:20:58,080 --> 00:21:02,040 Speaker 5: sentence observation. I feel like I could be confident enough 452 00:21:02,160 --> 00:21:06,879 Speaker 5: after two more jobs CPI prints, may I suggest that 453 00:21:07,080 --> 00:21:11,359 Speaker 5: Friday at eight thirty we and the chairman will readjust. 454 00:21:12,359 --> 00:21:12,600 Speaker 4: Yeah. 455 00:21:12,640 --> 00:21:16,280 Speaker 9: I mean, look, he wants to delay here, and there 456 00:21:16,320 --> 00:21:18,560 Speaker 9: was something that he said that I think hasn't been 457 00:21:18,600 --> 00:21:23,120 Speaker 9: picked up on, which is the decision to begin cutting 458 00:21:23,359 --> 00:21:26,520 Speaker 9: is of great consequence. And then he also said earlier 459 00:21:27,520 --> 00:21:30,880 Speaker 9: because of that or because of that concern, there's no 460 00:21:30,960 --> 00:21:34,680 Speaker 9: need to rush. So waiting for more data and kind 461 00:21:34,720 --> 00:21:37,360 Speaker 9: of the pushback on what more data do you need 462 00:21:37,560 --> 00:21:40,120 Speaker 9: isn't really the story here. I don't think they need 463 00:21:40,160 --> 00:21:43,400 Speaker 9: more data He kind of said that we have confidence. 464 00:21:42,920 --> 00:21:44,360 Speaker 4: We just want even more confidence. 465 00:21:44,560 --> 00:21:46,960 Speaker 9: I really think it's they don't want to rush into it. 466 00:21:47,200 --> 00:21:50,080 Speaker 9: Jonathan Vero, you asked me after the last payrolls, you 467 00:21:50,119 --> 00:21:52,880 Speaker 9: know what is my expectation? I said, you know, June, 468 00:21:53,359 --> 00:21:55,280 Speaker 9: mainly because I don't see the rush here. And I 469 00:21:55,320 --> 00:21:57,880 Speaker 9: think that's the stories. It may is a June, it's 470 00:21:57,960 --> 00:22:00,720 Speaker 9: not March. It's pushing back. Is they don't want to 471 00:22:00,800 --> 00:22:02,800 Speaker 9: rush into a cutting cycle. 472 00:22:02,920 --> 00:22:05,200 Speaker 3: You said something really interesting there, Jeff, This idea of 473 00:22:05,280 --> 00:22:08,680 Speaker 3: financial conditions being a concern that they see the sort 474 00:22:08,720 --> 00:22:11,320 Speaker 3: of golden pathway and they want to get there so 475 00:22:11,520 --> 00:22:13,600 Speaker 3: bad that they don't want to disrupt it by giving 476 00:22:13,640 --> 00:22:16,119 Speaker 3: any more fuel to this market. Do you get that 477 00:22:16,200 --> 00:22:19,040 Speaker 3: sense just in general that if things sort of say 478 00:22:19,080 --> 00:22:22,040 Speaker 3: subdued for a bit longer, that'll actually make it easier 479 00:22:22,119 --> 00:22:23,240 Speaker 3: for the FED to cut sooner. 480 00:22:25,400 --> 00:22:27,720 Speaker 9: Well, the thing that will make it easier for the 481 00:22:27,720 --> 00:22:30,680 Speaker 9: Fed to cut sooner, and I think Bill Dudley highlighted 482 00:22:30,720 --> 00:22:32,919 Speaker 9: this is is that the problem is that there's a 483 00:22:32,920 --> 00:22:35,439 Speaker 9: little bit too much good news on the on the 484 00:22:35,480 --> 00:22:38,720 Speaker 9: economic growth side and the labor market side. If they 485 00:22:38,840 --> 00:22:42,359 Speaker 9: had some weakening that would make it much easier to 486 00:22:42,400 --> 00:22:44,480 Speaker 9: say now we need to cut. It's hard to say 487 00:22:44,520 --> 00:22:46,639 Speaker 9: you need to cut, and we'll talk about this on 488 00:22:46,720 --> 00:22:49,560 Speaker 9: Friday morning. You know, the expectations around you know, two 489 00:22:49,640 --> 00:22:55,160 Speaker 9: sixty five to eighty that's a pretty gangbuster payroll print. 490 00:22:55,359 --> 00:22:57,800 Speaker 9: You know, hardly the kind of stuff that says this 491 00:22:57,920 --> 00:23:00,440 Speaker 9: FED is too tight. And you saw it in Steve 492 00:23:00,480 --> 00:23:04,280 Speaker 9: Leisman's question. And I think it will emergenly become. 493 00:23:05,840 --> 00:23:07,440 Speaker 4: A greater focus. 494 00:23:08,160 --> 00:23:10,680 Speaker 9: Which is which is on the growth side? Like where 495 00:23:10,720 --> 00:23:14,120 Speaker 9: is the restrictiveness of this policy that you're so confident 496 00:23:14,200 --> 00:23:17,399 Speaker 9: every time you say policies is restrictive. 497 00:23:17,520 --> 00:23:18,960 Speaker 4: Is it really is as restrictive as we think? 498 00:23:19,119 --> 00:23:21,840 Speaker 5: Steve Leison Olways has some smart questions. John Ferrell, let's 499 00:23:21,880 --> 00:23:24,160 Speaker 5: go to the statistics for Friday. I got one hundred 500 00:23:24,200 --> 00:23:27,399 Speaker 5: and eighty five thousand on survey non firm payrolls. I 501 00:23:27,440 --> 00:23:30,240 Speaker 5: got an unemployment rate of three point eight percent. That 502 00:23:30,320 --> 00:23:32,840 Speaker 5: may have a little bit to do with there, Timid. 503 00:23:33,040 --> 00:23:35,040 Speaker 1: Yeah, that's ink. That speaks to their nervousness. So Jeff, 504 00:23:35,080 --> 00:23:38,040 Speaker 1: let's finish on this data. Still looks okay. Payrolls might 505 00:23:38,119 --> 00:23:41,000 Speaker 1: change that on Friday for you right now in this market, 506 00:23:41,080 --> 00:23:43,199 Speaker 1: putting money to work. What are you about for counting for. 507 00:23:44,880 --> 00:23:46,840 Speaker 9: You know, I think there's a lot of hemming and 508 00:23:46,880 --> 00:23:50,520 Speaker 9: haweing today tomorrow around the timing of when do they go. 509 00:23:50,640 --> 00:23:52,400 Speaker 9: But I think if you take a step back from 510 00:23:52,440 --> 00:23:56,080 Speaker 9: this inside baseball story, the broader story is the FED 511 00:23:56,240 --> 00:24:00,080 Speaker 9: has won the battle on inflation. Not totally certain you 512 00:24:00,119 --> 00:24:02,920 Speaker 9: know where we settle in there, but certainly they can 513 00:24:02,960 --> 00:24:05,720 Speaker 9: begin a cutting cycle. And the growth side is much 514 00:24:05,760 --> 00:24:09,080 Speaker 9: more positive than what we had thought, particularly when we 515 00:24:09,160 --> 00:24:12,159 Speaker 9: thought that interest rate sensitivity was going to be greater 516 00:24:12,400 --> 00:24:14,840 Speaker 9: and recession much more likely. So I think this is 517 00:24:14,880 --> 00:24:18,280 Speaker 9: a backdrop that is unchanged for taking on more risk 518 00:24:18,320 --> 00:24:21,919 Speaker 9: in portfolios. It's a better outlook the credit markets, you know, 519 00:24:22,000 --> 00:24:24,399 Speaker 9: despite some of the news today in terms of the 520 00:24:24,760 --> 00:24:28,920 Speaker 9: banking sector that's particular to commercial real estate, and that is. 521 00:24:28,880 --> 00:24:30,479 Speaker 4: Something I think we have to keep an eye on. 522 00:24:30,640 --> 00:24:32,239 Speaker 9: But you look at the corporate side, you look at 523 00:24:32,240 --> 00:24:34,960 Speaker 9: the consumer side, it's very strong, and the credit markets 524 00:24:35,000 --> 00:24:36,760 Speaker 9: here I think are strong. There's not a huge price 525 00:24:36,760 --> 00:24:39,960 Speaker 9: appreciation opportunity, but I think the yield opportunity that you 526 00:24:40,000 --> 00:24:43,120 Speaker 9: can capture there without the risk of the downside of inflation. 527 00:24:43,440 --> 00:24:46,560 Speaker 4: Sorry of recession is still the story here. 528 00:24:46,560 --> 00:24:48,000 Speaker 1: Hey Jeff, thank you sir. I know we're going to 529 00:24:48,040 --> 00:24:49,600 Speaker 1: do this again late this week, so we see a 530 00:24:49,640 --> 00:24:53,240 Speaker 1: Friday after payrolls Jeff Roisenberg there at black Rock, thank you, buddy. 531 00:24:53,400 --> 00:24:55,400 Speaker 1: Equity's in a session. Loves were down one point five 532 00:24:55,440 --> 00:24:58,080 Speaker 1: percent on ESMP, with Dan Hart on the NATSNAK as 533 00:24:58,080 --> 00:24:59,960 Speaker 1: well t can the bond market. The move fights just 534 00:25:00,040 --> 00:25:02,439 Speaker 1: a little bit yield to lower my eight basis points. 535 00:25:02,480 --> 00:25:03,720 Speaker 1: At the front end of the caf. 536 00:25:03,960 --> 00:25:06,480 Speaker 5: Use for the tech juggernaut, you mentioned that John got Amazon, 537 00:25:06,520 --> 00:25:10,239 Speaker 5: I believe in Apple tomorrow, maybe Facebook, And the answer is, uh, 538 00:25:10,440 --> 00:25:13,000 Speaker 5: you know, we're gonna We're gonna get some tech earning, 539 00:25:13,040 --> 00:25:16,280 Speaker 5: some tech joy. But Lisa, I'm sorry to Jason Furman's 540 00:25:16,280 --> 00:25:19,280 Speaker 5: comment here, the jobs report on Friday has a new importance. 541 00:25:19,480 --> 00:25:21,600 Speaker 3: So maybe if it gets strong enough, then everybody will 542 00:25:21,600 --> 00:25:24,840 Speaker 3: go back to maybe you know, going to June. And if. 543 00:25:26,640 --> 00:25:29,639 Speaker 1: I confuse him with Jason Furman as well, yeah, I 544 00:25:29,720 --> 00:25:31,040 Speaker 1: did see Jeff rosenback. 545 00:25:31,520 --> 00:25:34,720 Speaker 5: No, I'm talking about Jason jobs matter. 546 00:25:34,880 --> 00:25:35,359 Speaker 4: I confused. 547 00:25:36,080 --> 00:25:40,119 Speaker 1: They look the same, look the same. 548 00:25:40,560 --> 00:25:44,480 Speaker 5: I'm going to suggest John support it is now really important. 549 00:25:44,520 --> 00:25:46,840 Speaker 3: Not all economists like the same, John, we should do 550 00:25:46,880 --> 00:25:47,280 Speaker 3: this again. 551 00:25:49,400 --> 00:25:52,320 Speaker 1: How much you have to wake up earlier, talk to 552 00:25:52,520 --> 00:25:52,879 Speaker 1: people