1 00:00:02,520 --> 00:00:07,000 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. 2 00:00:09,200 --> 00:00:13,840 Speaker 2: This is a breaking news update from Bloomberg. Instant reaction 3 00:00:14,120 --> 00:00:17,959 Speaker 2: and analysis from our three thousand journalists and analysts around 4 00:00:17,960 --> 00:00:18,880 Speaker 2: the world. 5 00:00:19,040 --> 00:00:21,720 Speaker 3: This is the FED decides on Bloomberg Television and radio 6 00:00:21,760 --> 00:00:24,920 Speaker 3: fetcher J Powell wrapping up his news conference, the last 7 00:00:24,920 --> 00:00:28,400 Speaker 3: news conference of twenty twenty five. A FED that's divided, 8 00:00:28,720 --> 00:00:30,280 Speaker 3: but not as divided as it could have been. In 9 00:00:30,320 --> 00:00:32,400 Speaker 3: a chair Powel that was trying to be somewhat hawkish, 10 00:00:32,680 --> 00:00:34,880 Speaker 3: but wasn't as hawkish as he could have been. In fact, 11 00:00:35,080 --> 00:00:37,080 Speaker 3: the market is taking this as more of a dubvish 12 00:00:37,120 --> 00:00:39,680 Speaker 3: tilt than expected. You could see the markets take off 13 00:00:40,000 --> 00:00:43,880 Speaker 3: around two forty four pm when he talked about productivity. 14 00:00:43,920 --> 00:00:46,680 Speaker 3: You could see the Russell two thousand up almost two 15 00:00:46,720 --> 00:00:49,599 Speaker 3: percent on the heels of his comments, NASDAC up six 16 00:00:49,640 --> 00:00:52,800 Speaker 3: tens of percent, s and P up eight tens of percent. 17 00:00:52,880 --> 00:00:53,840 Speaker 1: In the bond space. 18 00:00:53,960 --> 00:00:57,400 Speaker 3: A huge bid into the front end, A disproportionate bid, 19 00:00:57,520 --> 00:00:59,920 Speaker 3: especially because this is a federal reserve that's going to 20 00:01:00,240 --> 00:01:02,880 Speaker 3: forty billion dollars of T bills on Friday. 21 00:01:03,000 --> 00:01:04,560 Speaker 1: This is earlier than people expected. 22 00:01:04,600 --> 00:01:07,640 Speaker 3: It's a seven seven basis point drop at the front 23 00:01:07,760 --> 00:01:08,920 Speaker 3: end to three point five to. 24 00:01:08,959 --> 00:01:10,720 Speaker 1: Four, much more muted at the long end. 25 00:01:10,760 --> 00:01:13,240 Speaker 3: Bigger questions here with a thirty year at four point 26 00:01:13,480 --> 00:01:15,360 Speaker 3: seven eight percent, and when you bleed it through the 27 00:01:15,400 --> 00:01:18,720 Speaker 3: currency space, it is a weaker dollar marketly so with 28 00:01:18,800 --> 00:01:22,840 Speaker 3: the euro almost breaking one seventeen one sixteen ninety two, 29 00:01:22,959 --> 00:01:26,720 Speaker 3: up about half a percent on those comments, take a listen, 30 00:01:26,800 --> 00:01:29,759 Speaker 3: fed chair speaking just a moment ago in particular about 31 00:01:29,840 --> 00:01:32,600 Speaker 3: productivity and its effect on the economy, Take a listen. 32 00:01:33,120 --> 00:01:37,720 Speaker 2: The implication is obviously higher productivity, and some of that 33 00:01:37,760 --> 00:01:40,840 Speaker 2: may be ai. It just also, I think productivity has 34 00:01:40,959 --> 00:01:44,399 Speaker 2: just been almost structurally higher for several years now, So 35 00:01:44,440 --> 00:01:46,720 Speaker 2: if you start thinking of it as two percent per year, 36 00:01:47,160 --> 00:01:51,120 Speaker 2: you can sustain higher growth without more without more job creation. 37 00:01:51,760 --> 00:01:54,360 Speaker 2: Of course, higher productivity is also what enables incomes to 38 00:01:54,480 --> 00:01:56,440 Speaker 2: rise over long periods of time, so it's basically a 39 00:01:56,440 --> 00:01:59,280 Speaker 2: good thing. But that may be. That's certainly the implication. 40 00:01:59,520 --> 00:02:02,840 Speaker 3: The idea of productivity underpitting the ability for goldilocks to 41 00:02:02,880 --> 00:02:05,720 Speaker 3: take hold, where essentially inflation can remain in check while 42 00:02:05,760 --> 00:02:08,600 Speaker 3: the GDP continues to expand at the level that we've. 43 00:02:08,480 --> 00:02:09,040 Speaker 1: Seen so far. 44 00:02:09,080 --> 00:02:10,960 Speaker 4: We brought it up earlier, and it came up twice 45 00:02:10,960 --> 00:02:13,440 Speaker 4: in the press conference. I'm looking at the data and 46 00:02:13,440 --> 00:02:16,160 Speaker 4: it tells me the bond vigilanties are out this afternoon. 47 00:02:16,400 --> 00:02:17,720 Speaker 5: There's no question about that. 48 00:02:18,080 --> 00:02:21,120 Speaker 4: So where's the happy happy and the happy is? 49 00:02:21,120 --> 00:02:22,560 Speaker 5: Is this American. 50 00:02:22,080 --> 00:02:27,120 Speaker 4: Economy different than we used to know and even different 51 00:02:27,200 --> 00:02:30,400 Speaker 4: than what we perceive right now that the gloom is 52 00:02:30,520 --> 00:02:34,639 Speaker 4: just unfounded. Is we bet on this productivity down the road? 53 00:02:34,880 --> 00:02:36,560 Speaker 3: This is the reason why this is a fad that 54 00:02:36,600 --> 00:02:41,200 Speaker 3: can increase its GDP expectation. There's some cover unemployment rates 55 00:02:41,480 --> 00:02:45,200 Speaker 3: relatively low and still cut. Maybe once more next year, 56 00:02:45,240 --> 00:02:48,560 Speaker 3: maybe once more in twenty twenty seven. Also talking about 57 00:02:48,600 --> 00:02:53,120 Speaker 3: the potential for some sort of ongoing easing even though 58 00:02:53,120 --> 00:02:55,720 Speaker 3: they're in the neutral range because of the softness that 59 00:02:55,760 --> 00:02:57,760 Speaker 3: they see in the labor market. The other aspect of 60 00:02:57,760 --> 00:02:59,920 Speaker 3: this press conference, and I do want to highlight that 61 00:03:00,400 --> 00:03:02,240 Speaker 3: is qi and no one's going to call it QE, 62 00:03:02,480 --> 00:03:04,680 Speaker 3: certainly not the federal Reserve, but they are going to 63 00:03:04,720 --> 00:03:07,680 Speaker 3: start buying bills sooner than they expected. Take a listen 64 00:03:07,680 --> 00:03:09,360 Speaker 3: to what he had to say about that. 65 00:03:10,240 --> 00:03:13,920 Speaker 2: Reserve management purchases will amount to forty billion dollars in 66 00:03:13,960 --> 00:03:16,760 Speaker 2: the first month and may remain elevated for a few 67 00:03:17,000 --> 00:03:21,440 Speaker 2: months to alleviate expected near term pressures in money markets. Thereafter, 68 00:03:21,480 --> 00:03:25,000 Speaker 2: we expect the size of reserve management purchases to decline, 69 00:03:25,320 --> 00:03:27,760 Speaker 2: though the actual pace will depend on market conditions. 70 00:03:28,200 --> 00:03:30,000 Speaker 3: Joining in us now to talk about all of this 71 00:03:30,080 --> 00:03:32,000 Speaker 3: is Stephanie Roth of Wolf Research. 72 00:03:32,080 --> 00:03:33,200 Speaker 1: Stephanie would love. 73 00:03:33,040 --> 00:03:35,040 Speaker 3: Your take on what the most important part of this 74 00:03:35,080 --> 00:03:37,920 Speaker 3: news conference was. Was it the emphasis on productivity or 75 00:03:37,960 --> 00:03:40,120 Speaker 3: is it the emphasis on quey light. 76 00:03:41,440 --> 00:03:42,960 Speaker 6: I mean the combination of the two. I think the 77 00:03:42,960 --> 00:03:46,040 Speaker 6: productivity thing is important. We saw GDP get revised up. 78 00:03:46,040 --> 00:03:47,800 Speaker 6: Of course, some of that had to do with government shutdown, 79 00:03:47,880 --> 00:03:50,360 Speaker 6: but even taking that out, the twenty basis points out 80 00:03:50,360 --> 00:03:55,040 Speaker 6: for twenty six that stills higher GDP numbers, the median 81 00:03:55,320 --> 00:03:58,920 Speaker 6: dot looking the same for FED funds, and unemployment rate 82 00:04:00,800 --> 00:04:04,320 Speaker 6: remaining where it is, in which case we're talking about 83 00:04:04,360 --> 00:04:08,360 Speaker 6: a productivity boom to some extent, I think he was 84 00:04:08,360 --> 00:04:10,320 Speaker 6: trying to say that perhaps we're going to get a 85 00:04:11,640 --> 00:04:14,680 Speaker 6: job less pick up and growth next year, which could 86 00:04:14,680 --> 00:04:16,200 Speaker 6: at the margin be a little bit more dumbast And 87 00:04:16,200 --> 00:04:18,880 Speaker 6: then of course the market is reacting to the surprise 88 00:04:18,960 --> 00:04:21,840 Speaker 6: in terms of the FED buying bills, which was a 89 00:04:22,760 --> 00:04:25,080 Speaker 6: notable in terms of timing, and then notable in terms 90 00:04:25,120 --> 00:04:27,640 Speaker 6: of email. So it was overall, even though it was 91 00:04:27,640 --> 00:04:30,080 Speaker 6: supposed to be a hawkist cut base in many expectations, 92 00:04:30,080 --> 00:04:32,000 Speaker 6: but it ended up being fairly Dovas. 93 00:04:32,080 --> 00:04:34,640 Speaker 4: Cross currents here of a non snooze fest. And I 94 00:04:34,640 --> 00:04:38,240 Speaker 4: think the summary here for everyone, including the President of 95 00:04:38,240 --> 00:04:39,960 Speaker 4: the United States is. 96 00:04:39,920 --> 00:04:42,920 Speaker 5: The mandate is two percent. This goes back ages. 97 00:04:43,320 --> 00:04:45,400 Speaker 4: Are we really jaw boning our way to a new 98 00:04:45,440 --> 00:04:47,400 Speaker 4: mandate which is two point x percent? 99 00:04:47,720 --> 00:04:49,760 Speaker 5: Or dare I say three point zero percent? 100 00:04:50,600 --> 00:04:51,520 Speaker 1: I don't think so. 101 00:04:51,839 --> 00:04:55,359 Speaker 6: I mean in their projections they have lower inflation numbers. 102 00:04:55,400 --> 00:04:56,200 Speaker 1: I think that's right. 103 00:04:56,520 --> 00:04:57,920 Speaker 6: I think we're going to be in an environment where 104 00:04:57,920 --> 00:05:01,599 Speaker 6: inflation is gradually moving lower. If you were to ask 105 00:05:01,600 --> 00:05:05,760 Speaker 6: most forecasters by this point, would inflation actually be running 106 00:05:06,120 --> 00:05:07,159 Speaker 6: just around three percent? 107 00:05:07,200 --> 00:05:07,560 Speaker 1: I think no. 108 00:05:07,640 --> 00:05:10,640 Speaker 6: I think the pass through on inflation has been a 109 00:05:10,640 --> 00:05:13,960 Speaker 6: lot less than many had anticipated. Marges have been kind 110 00:05:13,960 --> 00:05:16,840 Speaker 6: of okay, It's gone a lot better than most part 111 00:05:16,960 --> 00:05:17,640 Speaker 6: we had have saw it. 112 00:05:17,680 --> 00:05:19,719 Speaker 5: One of my interviews of the year was Nancy Lazar. 113 00:05:19,800 --> 00:05:22,000 Speaker 4: We had Nancy Lazarre at the beginning of the show, 114 00:05:22,080 --> 00:05:24,400 Speaker 4: and she nailed it when she said, there's all this 115 00:05:24,520 --> 00:05:28,320 Speaker 4: FED mumbo jumble, but it's just a cyclical slow down. 116 00:05:28,720 --> 00:05:32,120 Speaker 4: Do you bet at Wolf Research in a cyclical recovery? 117 00:05:32,200 --> 00:05:34,600 Speaker 5: Here is Ana Wong alluded to today. 118 00:05:34,960 --> 00:05:36,640 Speaker 6: Yeah, I think that's right, and I think we're starting 119 00:05:36,640 --> 00:05:38,640 Speaker 6: to see signs of it. Of course, it's mixed at 120 00:05:38,640 --> 00:05:41,520 Speaker 6: this jolts opening starting to pick up, You're seeing temp 121 00:05:41,560 --> 00:05:44,680 Speaker 6: hiring start to look a little bit better. It seems 122 00:05:44,720 --> 00:05:47,000 Speaker 6: to be just a cyclical slowdown apart driven by tariff 123 00:05:47,000 --> 00:05:50,000 Speaker 6: related uncertainty. As that uncertainty starts to fade, you're likely 124 00:05:50,040 --> 00:05:52,280 Speaker 6: to see an improvement and growth. The Fed's probably not 125 00:05:52,320 --> 00:05:54,080 Speaker 6: going to cut through the first half of next year, 126 00:05:54,680 --> 00:05:56,799 Speaker 6: and it's going to be an environment where the Emmy's 127 00:05:56,839 --> 00:05:57,680 Speaker 6: running fairly firm. 128 00:05:58,160 --> 00:05:59,920 Speaker 1: Something that you noted is that this had a sort 129 00:05:59,920 --> 00:06:00,960 Speaker 1: of dubvish tilt to it. 130 00:06:01,040 --> 00:06:03,080 Speaker 3: I think it's really important to note that that's certainly 131 00:06:03,120 --> 00:06:05,359 Speaker 3: the response that we're seeing in markets across the board. 132 00:06:05,920 --> 00:06:08,440 Speaker 3: They talked about weakness in the labor market. J Powell 133 00:06:08,560 --> 00:06:11,480 Speaker 3: was talking about forty thousand jobs getting created each month. 134 00:06:11,560 --> 00:06:14,040 Speaker 1: Say you can downgrade that by about sixty thousand Yeah, 135 00:06:14,680 --> 00:06:16,640 Speaker 1: looking back, thank you for bringing this all of a sudden. 136 00:06:16,680 --> 00:06:19,760 Speaker 3: You're looking at implied weakness that they're sort of bringing 137 00:06:19,839 --> 00:06:22,120 Speaker 3: forward from the report that we're going to get next week. 138 00:06:22,520 --> 00:06:24,880 Speaker 3: How credible do you see that, especially given the guidance 139 00:06:24,920 --> 00:06:27,040 Speaker 3: that he kept emphasizing that they hear from the regional 140 00:06:27,120 --> 00:06:28,160 Speaker 3: fed districts. 141 00:06:28,480 --> 00:06:31,240 Speaker 6: I mean, I was surprised by his estimates on QCW, 142 00:06:31,520 --> 00:06:33,480 Speaker 6: the assumptions that it's going to be a sixty thousand 143 00:06:33,520 --> 00:06:35,679 Speaker 6: downard revision. My estimate is about. 144 00:06:35,520 --> 00:06:35,840 Speaker 7: Half of that. 145 00:06:36,720 --> 00:06:38,640 Speaker 1: So that was a that was a pretty duvish statement. 146 00:06:38,680 --> 00:06:40,000 Speaker 6: That was the sort of the higher end of what 147 00:06:40,120 --> 00:06:42,840 Speaker 6: it could have been, suggesting that at least his view 148 00:06:42,880 --> 00:06:45,360 Speaker 6: on the labor market is we've been running minus twenty 149 00:06:45,440 --> 00:06:47,720 Speaker 6: thousand non farm payrolls for quite some time. 150 00:06:47,760 --> 00:06:48,560 Speaker 1: That's pretty dubbish. 151 00:06:48,640 --> 00:06:51,280 Speaker 6: I think what will surprise most folks is in the 152 00:06:51,320 --> 00:06:53,000 Speaker 6: next couple of months you'll probably see a bit of 153 00:06:53,040 --> 00:06:53,640 Speaker 6: a bounce back. 154 00:06:53,520 --> 00:06:56,160 Speaker 4: Into You were on the phone talking to your children 155 00:06:56,160 --> 00:06:58,680 Speaker 4: about Alonzo from the Mets to the Orioles, and you 156 00:06:58,839 --> 00:07:01,400 Speaker 4: missed when he talked about the job adjustment. 157 00:07:01,720 --> 00:07:02,559 Speaker 5: The market moved. 158 00:07:02,800 --> 00:07:05,840 Speaker 4: Yeah, I mean, the fact is the market, the bond vigilant. 159 00:07:05,880 --> 00:07:08,200 Speaker 4: He's walked away, and they got to price up yield 160 00:07:08,279 --> 00:07:09,080 Speaker 4: down at that moment. 161 00:07:09,240 --> 00:07:11,200 Speaker 3: Yeah. I mean my son actually messaged me, could I 162 00:07:11,200 --> 00:07:13,520 Speaker 3: please have money for more food to cope with Alonzo 163 00:07:13,640 --> 00:07:15,080 Speaker 3: signing with the Orioles, And I. 164 00:07:15,080 --> 00:07:16,400 Speaker 1: Gave them two dollars because. 165 00:07:16,160 --> 00:07:18,440 Speaker 5: In true o big spender, two dollars is. 166 00:07:18,400 --> 00:07:19,320 Speaker 1: All that that's worth to me. 167 00:07:19,480 --> 00:07:22,720 Speaker 3: So anyway, we're looking though, at essentially a message from 168 00:07:22,720 --> 00:07:24,920 Speaker 3: the Fed that you can have your cake and eat 169 00:07:24,960 --> 00:07:27,760 Speaker 3: it too. That this inflation from the most part was 170 00:07:27,840 --> 00:07:30,520 Speaker 3: driven maybe by the tariffs, but that is transitory, for 171 00:07:30,640 --> 00:07:32,560 Speaker 3: lack of a better word, and going forward there is 172 00:07:32,640 --> 00:07:34,640 Speaker 3: going to be this productivity boom that's going to help 173 00:07:34,680 --> 00:07:37,800 Speaker 3: support things. How much does this really line up with 174 00:07:37,960 --> 00:07:41,680 Speaker 3: two more rate cuts in twenty twenty six twenty twenty seven, 175 00:07:42,040 --> 00:07:43,840 Speaker 3: and how much does this line up to either more 176 00:07:43,920 --> 00:07:45,720 Speaker 3: rate cuts or potentially a rate hike. 177 00:07:46,440 --> 00:07:48,040 Speaker 6: I certainly don't think there'll be a hike, and it 178 00:07:48,080 --> 00:07:50,800 Speaker 6: seems like Powell dismiss that too. I think you could 179 00:07:50,800 --> 00:07:52,640 Speaker 6: see some more rate cuts in the back part of 180 00:07:52,680 --> 00:07:54,480 Speaker 6: next year, because what you'll likely see is the first 181 00:07:54,560 --> 00:07:56,800 Speaker 6: part you might elevate. Inflation should still be a little 182 00:07:56,800 --> 00:07:58,640 Speaker 6: bit elevated. You're going to see that sickle goal pickup. 183 00:07:58,880 --> 00:08:00,880 Speaker 6: In the back part of next year, you might start 184 00:08:00,880 --> 00:08:02,440 Speaker 6: to see the economy cool down a little bit, and 185 00:08:02,440 --> 00:08:04,680 Speaker 6: then inflation's likely to slow back down because that's where 186 00:08:04,680 --> 00:08:08,760 Speaker 6: you're passing that peak of teriff related inflation. And that 187 00:08:08,800 --> 00:08:10,560 Speaker 6: could be an environment where they could cut a couple 188 00:08:10,680 --> 00:08:15,200 Speaker 6: more times, albeit slowly. And that's because you're going to 189 00:08:15,240 --> 00:08:17,480 Speaker 6: see this sort of a fairly sluggish job trajectory, and 190 00:08:17,560 --> 00:08:20,080 Speaker 6: if they're chopping off an extra sixty thousand off fat, 191 00:08:20,120 --> 00:08:21,760 Speaker 6: they're going to be even more cautious on the labor 192 00:08:21,800 --> 00:08:23,559 Speaker 6: market than the payroll's number would suggest. 193 00:08:23,960 --> 00:08:26,640 Speaker 4: As we speak, Lee, so the two ten vanilla spread 194 00:08:26,760 --> 00:08:29,160 Speaker 4: goes out to a new steeper yield curve. 195 00:08:29,320 --> 00:08:31,720 Speaker 5: Yeah, the bond market's speaking. 196 00:08:31,440 --> 00:08:34,280 Speaker 3: Here in space speaking that frankly, this is a FED 197 00:08:34,360 --> 00:08:36,040 Speaker 3: that's going to lower the front end as much as 198 00:08:36,080 --> 00:08:39,360 Speaker 3: they can, but on the long end yield there is 199 00:08:39,480 --> 00:08:42,720 Speaker 3: less control over that. Let's bring back Bloomberg's Michael McKee, 200 00:08:42,760 --> 00:08:46,120 Speaker 3: who is in that room asking questions, Mike. Potentially the 201 00:08:46,240 --> 00:08:49,360 Speaker 3: last press conference with a rate cut from FED Chair 202 00:08:49,600 --> 00:08:52,280 Speaker 3: J Powell a notable one for its somewhat dubbish tilt. 203 00:08:54,400 --> 00:08:56,439 Speaker 8: Well, I'm not sure it was a dubbish tilt. I 204 00:08:56,520 --> 00:09:00,760 Speaker 8: think the chair tried to keep his option as open 205 00:09:00,840 --> 00:09:03,800 Speaker 8: as possible. You noted that he suggested that there may 206 00:09:03,880 --> 00:09:08,120 Speaker 8: be some data accuracy problems with the numbers for the 207 00:09:08,240 --> 00:09:10,679 Speaker 8: Jobs Report and the CPI that we're going to get 208 00:09:10,800 --> 00:09:11,360 Speaker 8: next week and. 209 00:09:13,040 --> 00:09:15,520 Speaker 5: Into January, the catch up from the. 210 00:09:15,520 --> 00:09:18,079 Speaker 8: Bureau of Labor Statistics and the Bureau of Economic Analysis 211 00:09:18,360 --> 00:09:20,200 Speaker 8: as they get out the data that we missed during 212 00:09:20,240 --> 00:09:23,360 Speaker 8: the government shutdown. And so I think they don't want 213 00:09:23,440 --> 00:09:26,319 Speaker 8: to put themselves in a position of saying that we're 214 00:09:26,400 --> 00:09:29,880 Speaker 8: leaning one way or another. And by doing that, because 215 00:09:29,920 --> 00:09:32,280 Speaker 8: they've cut so many times in a row, it sounds 216 00:09:33,040 --> 00:09:35,280 Speaker 8: a bit like they're still dubbaged. But I don't think 217 00:09:35,320 --> 00:09:37,880 Speaker 8: that's the case anymore. And you do have some people, 218 00:09:37,960 --> 00:09:40,240 Speaker 8: and I noticed what Stephanie just said, but you do 219 00:09:40,400 --> 00:09:43,600 Speaker 8: have some members of the committee, the overall committee, who 220 00:09:43,679 --> 00:09:46,600 Speaker 8: suggested we might see rate increases next year. 221 00:09:47,440 --> 00:09:48,240 Speaker 6: The thing I think. 222 00:09:48,320 --> 00:09:50,360 Speaker 8: Maybe out of all of this that you want to 223 00:09:50,440 --> 00:09:54,000 Speaker 8: pull out is Poal's emphasis when he was answering my 224 00:09:54,160 --> 00:09:58,800 Speaker 8: question about we need to see wage increases, and wage 225 00:09:58,840 --> 00:10:01,640 Speaker 8: increases are going to depend on the status of the 226 00:10:01,800 --> 00:10:04,280 Speaker 8: labor market. If wages are going up, then people are 227 00:10:04,360 --> 00:10:08,120 Speaker 8: less concerned about inflation. If wages are not going up, 228 00:10:08,160 --> 00:10:12,079 Speaker 8: then that's a problem for the American public, and it 229 00:10:12,160 --> 00:10:14,200 Speaker 8: also is a problem for the overall economy. 230 00:10:14,559 --> 00:10:17,280 Speaker 3: Michael McKee, thank you so much, as always for all 231 00:10:17,360 --> 00:10:20,640 Speaker 3: your work at the FED Press conference and before. Right now, 232 00:10:20,679 --> 00:10:23,160 Speaker 3: we are getting comments from President Trump who's speaking at 233 00:10:23,160 --> 00:10:25,319 Speaker 3: a round table in the White House. 234 00:10:25,400 --> 00:10:26,440 Speaker 1: He's talking about his. 235 00:10:26,520 --> 00:10:30,320 Speaker 3: Ongoing criticism of Jerome Powell, saying we should be able 236 00:10:30,360 --> 00:10:33,640 Speaker 3: to do more than three percent or four percent GDP. 237 00:10:33,920 --> 00:10:36,880 Speaker 3: He has said repeatedly too late Powell has talked about 238 00:10:36,920 --> 00:10:38,920 Speaker 3: that guy. He's not doing a very good job, and 239 00:10:38,960 --> 00:10:41,360 Speaker 3: they would have fired him. And ultimately this just sort 240 00:10:41,360 --> 00:10:44,480 Speaker 3: of reiterates the split screen of Jerome Powell on one 241 00:10:44,559 --> 00:10:47,599 Speaker 3: hand and President Trump on the other. Really highlights the 242 00:10:47,640 --> 00:10:50,080 Speaker 3: political pressures coming down the pike in twenty twenty six. 243 00:10:50,120 --> 00:10:52,280 Speaker 5: We've got a great headline team. Here's the headline. 244 00:10:52,320 --> 00:10:55,400 Speaker 4: The President don't see why we can't have twenty percent 245 00:10:55,520 --> 00:10:58,880 Speaker 4: to twenty five percent GDP growth. I think all of 246 00:10:58,920 --> 00:11:02,760 Speaker 4: the adults, whatever their belief descent here descent there are 247 00:11:02,800 --> 00:11:08,040 Speaker 4: dealing with the president, who's got a very vociferous cacophony 248 00:11:08,120 --> 00:11:11,640 Speaker 4: of opinions on the economy. You don't plan on Donald 249 00:11:11,679 --> 00:11:12,959 Speaker 4: Trump's economic vision. 250 00:11:13,000 --> 00:11:13,920 Speaker 5: That's all there is to us. 251 00:11:13,960 --> 00:11:15,520 Speaker 1: He's a dead guy. He's a developer. 252 00:11:15,600 --> 00:11:17,480 Speaker 3: Of course, he wants rates to be lower here and 253 00:11:17,559 --> 00:11:20,400 Speaker 3: the met interust rates could have been doubled in terms 254 00:11:20,480 --> 00:11:23,199 Speaker 3: of the amount of cuts. I'm just wondering, as Stephanie, 255 00:11:23,200 --> 00:11:25,920 Speaker 3: from your perspective, if you had gotten fifty basis points 256 00:11:25,920 --> 00:11:28,320 Speaker 3: of rate cuts, how much would that have turbocharge twenty 257 00:11:28,400 --> 00:11:28,920 Speaker 3: twenty six. 258 00:11:30,440 --> 00:11:32,120 Speaker 6: It would have, but then I'd be afraid that the 259 00:11:32,320 --> 00:11:34,360 Speaker 6: long end of the bond market would have backed up 260 00:11:34,360 --> 00:11:36,320 Speaker 6: even more than it has been most recently. That would 261 00:11:36,360 --> 00:11:39,040 Speaker 6: be not a great outcome because that's an environment where 262 00:11:39,960 --> 00:11:44,560 Speaker 6: we're truly turbocharging sort of the economy from rape perspective, 263 00:11:44,559 --> 00:11:46,559 Speaker 6: but then you have long ends backing up. That's not 264 00:11:46,600 --> 00:11:49,520 Speaker 6: good for markets. We're not in an environment where we 265 00:11:49,559 --> 00:11:52,079 Speaker 6: need to be a fifty basis point cuts. It's a 266 00:11:52,160 --> 00:11:54,120 Speaker 6: question whether they should have been cutting twenty five basis 267 00:11:54,160 --> 00:11:55,960 Speaker 6: points today, let alone should they be cutting even more 268 00:11:56,000 --> 00:11:56,199 Speaker 6: than that? 269 00:11:56,480 --> 00:11:59,679 Speaker 3: Joining us now to join the conversation, Aditya Bjave of 270 00:11:59,720 --> 00:12:02,959 Speaker 3: Banks America Aditya just before we get started, kind of 271 00:12:02,960 --> 00:12:05,480 Speaker 3: a dubvish tilt. Certainly, that's the way it's being received 272 00:12:05,559 --> 00:12:06,240 Speaker 3: by markets. 273 00:12:06,320 --> 00:12:08,400 Speaker 1: Do you think that this is the right call? As 274 00:12:08,559 --> 00:12:09,960 Speaker 1: the Fed accelerates the. 275 00:12:10,000 --> 00:12:13,800 Speaker 3: Timeline for Bill's purchases and talks about the ongoing to 276 00:12:13,880 --> 00:12:15,359 Speaker 3: ceration and the labor market. 277 00:12:16,880 --> 00:12:18,480 Speaker 7: Good afternoon, Thanks for having me. 278 00:12:18,720 --> 00:12:18,760 Speaker 5: So. 279 00:12:18,880 --> 00:12:21,839 Speaker 7: We were skeptical going into the meeting about whether Chair 280 00:12:21,920 --> 00:12:24,760 Speaker 7: Powell would really be able to deliver a hawkish cut 281 00:12:24,920 --> 00:12:28,520 Speaker 7: given how much data we're getting between now and the 282 00:12:28,640 --> 00:12:32,319 Speaker 7: January meeting, and indeed he didn't. They kind of nudged 283 00:12:32,360 --> 00:12:35,160 Speaker 7: in the direction of, Okay, we should probably stay on hold, 284 00:12:35,240 --> 00:12:37,559 Speaker 7: or our base case for January is a hold, but 285 00:12:37,679 --> 00:12:40,040 Speaker 7: they can't close the door on January. We thought the 286 00:12:40,240 --> 00:12:43,960 Speaker 7: one arrow in Powell's quiver that he hadn't fired at 287 00:12:44,000 --> 00:12:46,920 Speaker 7: his hawkish press conferences at July and October, which by 288 00:12:46,920 --> 00:12:49,000 Speaker 7: the way, didn't change the policy path at all. The 289 00:12:49,080 --> 00:12:51,560 Speaker 7: one thing he had left to say was policies at neutral, 290 00:12:51,760 --> 00:12:53,600 Speaker 7: and he got very close to saying that. He said, 291 00:12:53,640 --> 00:12:56,839 Speaker 7: we're within the plausible range of estimates of neutral. But 292 00:12:56,920 --> 00:12:58,559 Speaker 7: then when he gave his own opinion. He said we're 293 00:12:58,559 --> 00:13:00,400 Speaker 7: probably at the higher end of that range, so I 294 00:13:00,440 --> 00:13:02,439 Speaker 7: think he still left the door open for January. But 295 00:13:02,480 --> 00:13:04,280 Speaker 7: they really want to tell us that the base case 296 00:13:04,800 --> 00:13:05,720 Speaker 7: is a hold for January. 297 00:13:05,800 --> 00:13:09,480 Speaker 4: Then if we're at that tip point, which will matter 298 00:13:09,640 --> 00:13:13,520 Speaker 4: more an analysis of inflation or an analysis of the 299 00:13:13,640 --> 00:13:14,240 Speaker 4: job market. 300 00:13:15,920 --> 00:13:18,480 Speaker 7: I think there's still more focused on the label market, 301 00:13:18,720 --> 00:13:21,160 Speaker 7: A simple way to think about it, which maybe he 302 00:13:21,640 --> 00:13:24,040 Speaker 7: muddied the waters a little bit by talking about the 303 00:13:24,120 --> 00:13:27,040 Speaker 7: measurement issues with the unemployment rate. But we're going to 304 00:13:27,120 --> 00:13:30,079 Speaker 7: get not only the November unemployment rate but also the 305 00:13:30,160 --> 00:13:33,960 Speaker 7: December unemployment rate before the January meeting. If that December 306 00:13:34,040 --> 00:13:37,920 Speaker 7: unemployment rate is up to four point seven percent, I 307 00:13:37,960 --> 00:13:40,680 Speaker 7: think they're going in January four point five or lore 308 00:13:41,040 --> 00:13:42,920 Speaker 7: they're going to stay on hold, and four point six 309 00:13:43,040 --> 00:13:44,640 Speaker 7: is going to be a close Cain really well said. 310 00:13:44,679 --> 00:13:47,720 Speaker 4: But then what's so important here within this? And let's 311 00:13:47,760 --> 00:13:51,000 Speaker 4: look at the Bank of America now GDP report? I 312 00:13:51,080 --> 00:13:54,960 Speaker 4: got Atlanta at three point five. Where is the economy 313 00:13:55,080 --> 00:13:58,240 Speaker 4: right now? Just say, in terms of nominal GDP it's 314 00:13:58,280 --> 00:13:59,839 Speaker 4: a boom economy. 315 00:13:59,480 --> 00:14:01,920 Speaker 5: Isn't it? Yep? It is. 316 00:14:02,040 --> 00:14:05,280 Speaker 7: We have around five percent nominal GDP growth for next year, 317 00:14:05,840 --> 00:14:08,439 Speaker 7: and that's well above consensus. We were very happy to 318 00:14:08,520 --> 00:14:10,920 Speaker 7: see that the FED is coming very close to our view. 319 00:14:11,000 --> 00:14:11,120 Speaker 5: Now. 320 00:14:11,440 --> 00:14:14,640 Speaker 7: The GDP upgrades were quite significant, but honestly, it's not 321 00:14:14,760 --> 00:14:16,800 Speaker 7: that hard to get into the low to mid twes 322 00:14:16,880 --> 00:14:19,600 Speaker 7: next year. As Powell mentioned, you'll get about two tenths, 323 00:14:19,680 --> 00:14:22,520 Speaker 7: maybe even three tenths just from the shutdown. You're going 324 00:14:22,600 --> 00:14:24,720 Speaker 7: to get another three to four tenths from the big 325 00:14:24,760 --> 00:14:25,440 Speaker 7: beautiful Bill. 326 00:14:25,880 --> 00:14:29,400 Speaker 1: So the hurdle for the rest of GDP growth. 327 00:14:29,320 --> 00:14:31,280 Speaker 7: Is only about one point seven one point nine percent, 328 00:14:31,320 --> 00:14:33,520 Speaker 7: which frankly is what we did this year, even with 329 00:14:33,640 --> 00:14:35,640 Speaker 7: all the trade disruptions. So we should be in the 330 00:14:35,680 --> 00:14:36,360 Speaker 7: twos next year. 331 00:14:36,400 --> 00:14:38,600 Speaker 3: In my view, Stephanie, it strikes me that there's a 332 00:14:38,720 --> 00:14:41,120 Speaker 3: new psychology taking hold of a FED, and it has 333 00:14:41,160 --> 00:14:42,680 Speaker 3: been for the past six months. And it goes to 334 00:14:42,760 --> 00:14:46,400 Speaker 3: Tom's point about productivity, this idea that at times of transition, 335 00:14:46,960 --> 00:14:50,280 Speaker 3: it pays to run the economy hot to avoid some 336 00:14:50,440 --> 00:14:53,640 Speaker 3: of the job's losses that do come into effect in 337 00:14:53,760 --> 00:14:57,080 Speaker 3: these huge technological shifts that take hold. Do you think 338 00:14:57,120 --> 00:14:58,960 Speaker 3: that that is what's going on, That this is a 339 00:14:59,120 --> 00:15:02,360 Speaker 3: FED that is to running the economy hotter than otherwise 340 00:15:02,400 --> 00:15:04,720 Speaker 3: would because there are job losses during times like this, 341 00:15:05,160 --> 00:15:08,040 Speaker 3: and those job losses are hard to replace even as 342 00:15:08,200 --> 00:15:09,440 Speaker 3: productivity comes back. 343 00:15:09,880 --> 00:15:11,800 Speaker 6: Yeah, I think that's exactly what's happening. And that's kind 344 00:15:11,840 --> 00:15:15,040 Speaker 6: of what Powell alluded to today, that this is productivity 345 00:15:15,120 --> 00:15:19,280 Speaker 6: enhancing backdrop that we're seeing. They're certainly coming across, as 346 00:15:19,520 --> 00:15:23,200 Speaker 6: you know, more dubvish than generally expected to, and they're 347 00:15:23,240 --> 00:15:25,240 Speaker 6: going to take a haircut off the job numbers that 348 00:15:25,280 --> 00:15:27,440 Speaker 6: we're getting. And whether or not sixty thousand is the 349 00:15:27,520 --> 00:15:29,520 Speaker 6: right number, so any numbers that we get from a 350 00:15:29,600 --> 00:15:31,480 Speaker 6: job perspective, you have to, in your mind take that 351 00:15:31,600 --> 00:15:34,760 Speaker 6: down even lower, which then is at the margin going 352 00:15:34,800 --> 00:15:37,520 Speaker 6: to make them more dubvish and running the economy hotter 353 00:15:37,560 --> 00:15:38,480 Speaker 6: than one otherise be the case. 354 00:15:38,560 --> 00:15:41,200 Speaker 4: The sum totally here, Lisa, is what the gentleman from 355 00:15:41,280 --> 00:15:43,720 Speaker 4: Bank of America said. You get a four point seven 356 00:15:43,840 --> 00:15:48,080 Speaker 4: percent unemployment rate. None of the cement analysis matters into 357 00:15:48,160 --> 00:15:51,640 Speaker 4: midterm elections. Four point seven is getting up there, and 358 00:15:51,800 --> 00:15:54,280 Speaker 4: I can't imagine four point nine or five zero. 359 00:15:54,280 --> 00:15:56,720 Speaker 3: Which is the reason why Aditya to bring you back in. 360 00:15:57,080 --> 00:16:01,640 Speaker 3: You're talking about the chance of a potential rate come January, 361 00:16:01,760 --> 00:16:05,320 Speaker 3: should we get that kind of employment stress, what are 362 00:16:05,400 --> 00:16:07,360 Speaker 3: you seeing? Were you surprised, just to pick up the 363 00:16:07,360 --> 00:16:10,240 Speaker 3: conversation we were having with Stephanie, were you surprised at 364 00:16:10,360 --> 00:16:13,640 Speaker 3: how negative Jerome Powell was in his interpretation of the 365 00:16:13,720 --> 00:16:16,560 Speaker 3: labor market and the job losses that we've seen over 366 00:16:16,600 --> 00:16:17,560 Speaker 3: the past few months. 367 00:16:19,400 --> 00:16:22,360 Speaker 7: That was definitely a dubbish surprise to talk about. You know, 368 00:16:22,920 --> 00:16:25,480 Speaker 7: we're going to mock down forty thousand a month by 369 00:16:25,680 --> 00:16:28,920 Speaker 7: sixty thousand per months and now you're looking at negative twenty. 370 00:16:29,360 --> 00:16:31,120 Speaker 7: And then at the same time he says that he 371 00:16:31,160 --> 00:16:33,360 Speaker 7: doesn't expect the unemployment rate to go up a lot 372 00:16:33,440 --> 00:16:36,440 Speaker 7: further from here, So what is his read on break even? 373 00:16:36,480 --> 00:16:38,560 Speaker 7: He had previously told us his read on break even 374 00:16:38,680 --> 00:16:41,160 Speaker 7: was between zero and fifty thousand, So a little bit 375 00:16:41,200 --> 00:16:43,920 Speaker 7: of inconsistency there in our view. If they stick with 376 00:16:44,040 --> 00:16:46,680 Speaker 7: the view that break evens between zero and fifty and 377 00:16:46,800 --> 00:16:49,880 Speaker 7: we're only growing at negative twenty, then either you need 378 00:16:49,960 --> 00:16:52,280 Speaker 7: to see payrolls bounce back or they're going to continue 379 00:16:52,320 --> 00:16:54,520 Speaker 7: to worry about downside risk to the unemployment rate. 380 00:16:54,760 --> 00:16:55,560 Speaker 1: And again it's not. 381 00:16:55,720 --> 00:16:57,720 Speaker 7: Our base case that they're going to keep cutting rates, 382 00:16:57,800 --> 00:17:00,280 Speaker 7: but they might well be inclined to do so. 383 00:17:00,600 --> 00:17:02,720 Speaker 3: Aditi Bijave, thank you so much for being with us 384 00:17:02,920 --> 00:17:06,400 Speaker 3: this morning. Joining us now is Jeff Rosenberg of Blackrock. 385 00:17:06,600 --> 00:17:07,920 Speaker 1: Jeff always great to speak with. 386 00:17:08,000 --> 00:17:10,240 Speaker 3: You want to get your take about whether what we 387 00:17:10,400 --> 00:17:13,000 Speaker 3: have just heard in that press conference makes you incredibly 388 00:17:13,080 --> 00:17:15,879 Speaker 3: more risk on in terms of going out double fisting it. 389 00:17:16,320 --> 00:17:19,120 Speaker 3: QI light is coming back, they're buying bills. They're also 390 00:17:19,200 --> 00:17:21,560 Speaker 3: potentially looking to weakness in the labor market. 391 00:17:21,920 --> 00:17:22,560 Speaker 1: Is this risk on? 392 00:17:24,359 --> 00:17:27,800 Speaker 9: Well, you said one of my three takeaways, which is 393 00:17:27,960 --> 00:17:31,480 Speaker 9: number three of today's meeting, which i'll call QWI confusion. 394 00:17:31,840 --> 00:17:33,600 Speaker 9: I'll come back to that. The first takeaway is the 395 00:17:33,680 --> 00:17:36,399 Speaker 9: pause is in. We kind of knew that. The second one, 396 00:17:36,400 --> 00:17:39,639 Speaker 9: which you've already talked about, is why because we're in 397 00:17:39,720 --> 00:17:43,720 Speaker 9: the realm of neutral. And the third is getting a 398 00:17:43,760 --> 00:17:46,760 Speaker 9: little bit of confused about the QWI confusion. It was 399 00:17:46,800 --> 00:17:49,040 Speaker 9: a little bit more dubbish than maybe expected, as the 400 00:17:49,080 --> 00:17:52,880 Speaker 9: previous commentators talked about, but it's not that far off 401 00:17:53,000 --> 00:17:56,040 Speaker 9: of expectations. The markets at about a ninety percent expectation 402 00:17:56,240 --> 00:18:00,560 Speaker 9: for the twenty five basis point cut expected for Pause. 403 00:18:01,080 --> 00:18:04,040 Speaker 9: It'll be data dependent, as you were previously discussing. If 404 00:18:04,080 --> 00:18:06,360 Speaker 9: it's four to seven, you know that's a different set 405 00:18:06,400 --> 00:18:09,280 Speaker 9: of circumstances. And tom as you said, you know you 406 00:18:09,320 --> 00:18:11,800 Speaker 9: can throw the rest of this analysis out the window 407 00:18:11,920 --> 00:18:14,680 Speaker 9: because the facts have changed, but we don't know that 408 00:18:14,960 --> 00:18:18,080 Speaker 9: is happening. So given the trajectory that we have today, 409 00:18:18,520 --> 00:18:20,840 Speaker 9: the Fed's on pause because we've gotten to the realm 410 00:18:20,880 --> 00:18:24,400 Speaker 9: of neutral and the other side of the debate inflation, wages, 411 00:18:24,840 --> 00:18:30,480 Speaker 9: growth all basically say, this hasn't been a particularly restrictive FED. 412 00:18:30,880 --> 00:18:32,840 Speaker 9: Even if they think they're on the high end. Now 413 00:18:32,920 --> 00:18:34,919 Speaker 9: they're you know, in the neutral ends, so they can 414 00:18:35,000 --> 00:18:37,719 Speaker 9: wait and we'll see how the data evolves. To your 415 00:18:37,800 --> 00:18:41,159 Speaker 9: point on QI, he only gave you half the story 416 00:18:41,280 --> 00:18:43,280 Speaker 9: in terms of expanding the balance sheet because the other 417 00:18:43,320 --> 00:18:45,600 Speaker 9: part of the balance sheet is contracting because the mortgages 418 00:18:45,920 --> 00:18:48,680 Speaker 9: run off. But that technical detail got left off. I 419 00:18:48,760 --> 00:18:52,159 Speaker 9: think it was an accidental, dubbish commentary. 420 00:18:52,240 --> 00:18:52,800 Speaker 1: On the QC. 421 00:18:53,240 --> 00:18:55,639 Speaker 9: You kind of dismissed and said, hey, everybody knows this, 422 00:18:55,840 --> 00:18:59,720 Speaker 9: this is a technical factor. And the preamble ahead of 423 00:18:59,800 --> 00:19:03,680 Speaker 9: the Huey comment was, please disregard everything I'm about to 424 00:19:03,760 --> 00:19:06,760 Speaker 9: say in terms of its implications for monetary policy. Of 425 00:19:06,840 --> 00:19:09,680 Speaker 9: course nobody did that, and they hear the Fed's buying 426 00:19:09,760 --> 00:19:13,040 Speaker 9: treasuries and so there's the meee jerk response to that 427 00:19:13,640 --> 00:19:17,480 Speaker 9: from what we were taught over the POSTGFC environment. So 428 00:19:17,480 --> 00:19:20,840 Speaker 9: there's a little bit of a misread there, but it 429 00:19:21,000 --> 00:19:23,080 Speaker 9: is what it is. It's a little bit less of 430 00:19:23,119 --> 00:19:24,840 Speaker 9: a hawkish hold than the market was expecting. 431 00:19:24,880 --> 00:19:27,879 Speaker 4: Here, Jeff, twelve minutes ago, I was thinking of Alan 432 00:19:28,000 --> 00:19:32,040 Speaker 4: Meltzer of your Carnegie Mellon University. How far are we 433 00:19:32,400 --> 00:19:36,760 Speaker 4: from a traditional FED analysis, whether it's Meltzer at Carnegie Mellon, 434 00:19:37,359 --> 00:19:42,200 Speaker 4: Clarida at Columbia, John Taylor out at Stanford, how far 435 00:19:42,400 --> 00:19:46,600 Speaker 4: are we away from conventional theories plural. 436 00:19:47,920 --> 00:19:50,280 Speaker 9: Well, I think the key thing that kept coming back 437 00:19:50,440 --> 00:19:53,080 Speaker 9: over and over again in this meeting, and it happened 438 00:19:53,119 --> 00:19:57,760 Speaker 9: in October, was the difference in FED policy today. It 439 00:19:57,840 --> 00:20:00,239 Speaker 9: came up around the questions of the comparisons the mid 440 00:20:00,320 --> 00:20:05,040 Speaker 9: nineteen nineties, the challenges to FED monetary policy when its 441 00:20:05,160 --> 00:20:09,400 Speaker 9: dual mandate is in conflict. Right, there is no divine 442 00:20:09,440 --> 00:20:13,280 Speaker 9: coincidence of monetary policy. There is no environment that we 443 00:20:13,440 --> 00:20:16,920 Speaker 9: had over that prior thirty year period of too little inflation, 444 00:20:17,480 --> 00:20:20,000 Speaker 9: so there is no risk free path and that's really 445 00:20:20,080 --> 00:20:23,040 Speaker 9: the biggest difference here, and they're still navigating that. And 446 00:20:23,080 --> 00:20:25,919 Speaker 9: I think the discussion about how everyone on the panel, 447 00:20:26,359 --> 00:20:29,320 Speaker 9: on the committee agrees to the facts, but we disagree 448 00:20:29,359 --> 00:20:31,200 Speaker 9: on how to deal with the risks, and that's getting 449 00:20:31,240 --> 00:20:34,840 Speaker 9: to the heart of inflation versus growth and which way 450 00:20:34,920 --> 00:20:39,080 Speaker 9: do you emphasize. I'd add the piece that's missing to 451 00:20:39,160 --> 00:20:43,720 Speaker 9: this conversation, however, is that is financial conditions, and that 452 00:20:44,240 --> 00:20:48,520 Speaker 9: if your goals are conflicting and it's sort of a tie, 453 00:20:49,440 --> 00:20:52,119 Speaker 9: then I think you break the tie with financial conditions. 454 00:20:52,400 --> 00:20:55,160 Speaker 9: But they're just not discussing that at all anymore, which 455 00:20:55,560 --> 00:20:57,280 Speaker 9: I think, you know, could come back to haunt them. 456 00:20:57,560 --> 00:20:59,440 Speaker 9: But I think that's the piece of the conversation. 457 00:21:00,080 --> 00:21:00,320 Speaker 6: McGee. 458 00:21:00,720 --> 00:21:04,520 Speaker 9: Maybe next press conference would be interesting to ask that question. 459 00:21:04,640 --> 00:21:07,240 Speaker 9: Because they used to talk about all the time. The 460 00:21:07,320 --> 00:21:11,080 Speaker 9: whole point of the balance sheet was portfolio rebalance, the 461 00:21:11,240 --> 00:21:13,919 Speaker 9: impact of the K shaped recovery. They've had a lot 462 00:21:14,000 --> 00:21:16,080 Speaker 9: to do with that in terms of the wealth effect 463 00:21:16,240 --> 00:21:19,200 Speaker 9: is supported by the balance sheet and the FEDS activities, 464 00:21:19,560 --> 00:21:22,400 Speaker 9: they absolve themselves of any of that. I think there's 465 00:21:22,840 --> 00:21:25,320 Speaker 9: more there to unpack Jeff Rosenberg. 466 00:21:25,440 --> 00:21:28,439 Speaker 3: Indeed, especially as we see markets climb close to all 467 00:21:28,520 --> 00:21:31,800 Speaker 3: time highs once again, Jeff Rosenberg of Black Rock, thank 468 00:21:31,840 --> 00:21:34,000 Speaker 3: you so much as always for being with us, Stephanie 469 00:21:34,280 --> 00:21:36,520 Speaker 3: to that point. Right now, we're seeing a surge in 470 00:21:37,160 --> 00:21:40,280 Speaker 3: futures equities. Excuse me, I'm used to early shifts as 471 00:21:40,359 --> 00:21:43,120 Speaker 3: well as a decline in bond yields. At what point 472 00:21:43,280 --> 00:21:45,760 Speaker 3: is this a liability for the Federal Reserve that will 473 00:21:45,840 --> 00:21:50,720 Speaker 3: keep consumption elevated and fuel any mason inflationary pressures. 474 00:21:50,960 --> 00:21:52,840 Speaker 6: I mean, it's hard to be worried about the consumer 475 00:21:53,000 --> 00:21:55,680 Speaker 6: and then concerned that they're going to consumer's going to 476 00:21:55,680 --> 00:21:57,400 Speaker 6: be too strong. At the same time, I think we're 477 00:21:57,440 --> 00:21:59,520 Speaker 6: in an environment where the consumer has slowed down a lot, 478 00:21:59,800 --> 00:22:02,720 Speaker 6: so an easy and financial conditions isn't necessarily the worst 479 00:22:02,760 --> 00:22:05,720 Speaker 6: thing we're worried about the cake consumer. Of course, the 480 00:22:05,800 --> 00:22:08,200 Speaker 6: bottom of the k doesn't necessarily benefit from a lot 481 00:22:08,280 --> 00:22:10,640 Speaker 6: of this, but the middle of the consumer has also 482 00:22:10,720 --> 00:22:12,280 Speaker 6: slowed down. So if we see a bit of a 483 00:22:12,320 --> 00:22:15,360 Speaker 6: pick up on the back of this, plus next year, 484 00:22:15,400 --> 00:22:17,240 Speaker 6: we're going to get a decent amount of fiscal stimulus 485 00:22:17,320 --> 00:22:20,600 Speaker 6: coming around tax season. That's a reason why we're probably 486 00:22:20,600 --> 00:22:22,200 Speaker 6: going to see a bit of a pickup in growth 487 00:22:22,440 --> 00:22:24,840 Speaker 6: for next year. So not necessarily the worst thing, just 488 00:22:24,880 --> 00:22:27,200 Speaker 6: given we have seen a pretty big slowdown, but to 489 00:22:27,280 --> 00:22:30,640 Speaker 6: the extent this continues to remain for quite some time, 490 00:22:31,000 --> 00:22:31,840 Speaker 6: then you might get concerned. 491 00:22:31,880 --> 00:22:33,880 Speaker 3: On the other side, just real quick, does this press 492 00:22:33,920 --> 00:22:37,200 Speaker 3: conference and this meeting make you upgrade your inflation forecasts 493 00:22:37,280 --> 00:22:37,960 Speaker 3: longer term. 494 00:22:39,400 --> 00:22:41,280 Speaker 1: At the well at the margin. 495 00:22:41,400 --> 00:22:43,560 Speaker 6: Plus the combination of you know, we know we're going 496 00:22:43,640 --> 00:22:46,639 Speaker 6: to get a more dubvish chair, it's likely going to 497 00:22:46,680 --> 00:22:49,080 Speaker 6: be hascid, in which case, you know, that sort of 498 00:22:49,320 --> 00:22:50,160 Speaker 6: adds that argument. 499 00:22:50,359 --> 00:22:52,320 Speaker 3: Stephanie Roth, wonderful to see you as always. Thank you 500 00:22:52,359 --> 00:22:54,280 Speaker 3: so much for being with us here. Stephanie Roth. 501 00:22:54,320 --> 00:22:54,439 Speaker 6: There. 502 00:22:54,520 --> 00:22:58,040 Speaker 1: Honestly, this was a fascinating meeting. This was snooze fast. 503 00:22:58,200 --> 00:23:01,280 Speaker 1: We just saw the best forms FMC day. 504 00:23:01,359 --> 00:23:03,280 Speaker 3: When you look at market performance going back to March 505 00:23:03,320 --> 00:23:04,880 Speaker 3: and the most ascent is going back to two thousand 506 00:23:04,880 --> 00:23:05,040 Speaker 3: and five. 507 00:23:05,119 --> 00:23:07,280 Speaker 5: Can I use my Peter Fisher hands that mine here? 508 00:23:07,760 --> 00:23:12,160 Speaker 4: Three months thirty year bond, it's steeper, it's about fifty 509 00:23:12,359 --> 00:23:16,440 Speaker 4: one basis point since October sixteenth, and we're buttressed right 510 00:23:16,560 --> 00:23:19,879 Speaker 4: up at new wides on the broad yield curve is 511 00:23:19,960 --> 00:23:23,480 Speaker 4: given us that steeper and that always creates attention within the. 512 00:23:23,560 --> 00:23:26,680 Speaker 3: Economy from Tom Keem and myself from New York, for 513 00:23:26,880 --> 00:23:29,480 Speaker 3: our TV and radio audience worldwide, that does it. 514 00:23:29,520 --> 00:23:32,200 Speaker 1: From us, this was the feticides. This is Bloomberg.