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Speaker 3: This is the FED decides on Bloomberg Television and radio
Speaker 3: fetcher J Powell wrapping up his news conference, the last
Speaker 3: news conference of twenty twenty five. A FED that's divided,
Speaker 3: but not as divided as it could have been. In
Speaker 3: a chair Powel that was trying to be somewhat hawkish,
Speaker 3: but wasn't as hawkish as he could have been. In fact,
Speaker 3: the market is taking this as more of a dubvish
Speaker 3: tilt than expected. You could see the markets take off
Speaker 3: around two forty four pm when he talked about productivity.
Speaker 3: You could see the Russell two thousand up almost two
Speaker 3: percent on the heels of his comments, NASDAC up six
Speaker 3: tens of percent, s and P up eight tens of percent.
Speaker 1: In the bond space.
Speaker 3: A huge bid into the front end, A disproportionate bid,
Speaker 3: especially because this is a federal reserve that's going to
Speaker 3: forty billion dollars of T bills on Friday.
Speaker 1: This is earlier than people expected.
Speaker 3: It's a seven seven basis point drop at the front
Speaker 3: end to three point five to.
Speaker 1: Four, much more muted at the long end.
Speaker 3: Bigger questions here with a thirty year at four point
Speaker 3: seven eight percent, and when you bleed it through the
Speaker 3: currency space, it is a weaker dollar marketly so with
Speaker 3: the euro almost breaking one seventeen one sixteen ninety two,
Speaker 3: up about half a percent on those comments, take a listen,
Speaker 3: fed chair speaking just a moment ago in particular about
Speaker 3: productivity and its effect on the economy, Take a listen.
Speaker 2: The implication is obviously higher productivity, and some of that
Speaker 2: may be ai. It just also, I think productivity has
Speaker 2: just been almost structurally higher for several years now, So
Speaker 2: if you start thinking of it as two percent per year,
Speaker 2: you can sustain higher growth without more without more job creation.
Speaker 2: Of course, higher productivity is also what enables incomes to
Speaker 2: rise over long periods of time, so it's basically a
Speaker 2: good thing. But that may be. That's certainly the implication.
Speaker 3: The idea of productivity underpitting the ability for goldilocks to
Speaker 3: take hold, where essentially inflation can remain in check while
Speaker 3: the GDP continues to expand at the level that we've.
Speaker 1: Seen so far.
Speaker 4: We brought it up earlier, and it came up twice
Speaker 4: in the press conference. I'm looking at the data and
Speaker 4: it tells me the bond vigilanties are out this afternoon.
Speaker 5: There's no question about that.
Speaker 4: So where's the happy happy and the happy is?
Speaker 5: Is this American.
Speaker 4: Economy different than we used to know and even different
Speaker 4: than what we perceive right now that the gloom is
Speaker 4: just unfounded. Is we bet on this productivity down the road?
Speaker 3: This is the reason why this is a fad that
Speaker 3: can increase its GDP expectation. There's some cover unemployment rates
Speaker 3: relatively low and still cut. Maybe once more next year,
Speaker 3: maybe once more in twenty twenty seven. Also talking about
Speaker 3: the potential for some sort of ongoing easing even though
Speaker 3: they're in the neutral range because of the softness that
Speaker 3: they see in the labor market. The other aspect of
Speaker 3: this press conference, and I do want to highlight that
Speaker 3: is qi and no one's going to call it QE,
Speaker 3: certainly not the federal Reserve, but they are going to
Speaker 3: start buying bills sooner than they expected. Take a listen
Speaker 3: to what he had to say about that.
Speaker 2: Reserve management purchases will amount to forty billion dollars in
Speaker 2: the first month and may remain elevated for a few
Speaker 2: months to alleviate expected near term pressures in money markets. Thereafter,
Speaker 2: we expect the size of reserve management purchases to decline,
Speaker 2: though the actual pace will depend on market conditions.
Speaker 3: Joining in us now to talk about all of this
Speaker 3: is Stephanie Roth of Wolf Research.
Speaker 1: Stephanie would love.
Speaker 3: Your take on what the most important part of this
Speaker 3: news conference was. Was it the emphasis on productivity or
Speaker 3: is it the emphasis on quey light.
Speaker 6: I mean the combination of the two. I think the
Speaker 6: productivity thing is important. We saw GDP get revised up.
Speaker 6: Of course, some of that had to do with government shutdown,
Speaker 6: but even taking that out, the twenty basis points out
Speaker 6: for twenty six that stills higher GDP numbers, the median
Speaker 6: dot looking the same for FED funds, and unemployment rate
Speaker 6: remaining where it is, in which case we're talking about
Speaker 6: a productivity boom to some extent, I think he was
Speaker 6: trying to say that perhaps we're going to get a
Speaker 6: job less pick up and growth next year, which could
Speaker 6: at the margin be a little bit more dumbast And
Speaker 6: then of course the market is reacting to the surprise
Speaker 6: in terms of the FED buying bills, which was a
Speaker 6: notable in terms of timing, and then notable in terms
Speaker 6: of email. So it was overall, even though it was
Speaker 6: supposed to be a hawkist cut base in many expectations,
Speaker 6: but it ended up being fairly Dovas.
Speaker 4: Cross currents here of a non snooze fest. And I
Speaker 4: think the summary here for everyone, including the President of
Speaker 4: the United States is.
Speaker 5: The mandate is two percent. This goes back ages.
Speaker 4: Are we really jaw boning our way to a new
Speaker 4: mandate which is two point x percent?
Speaker 5: Or dare I say three point zero percent?
Speaker 1: I don't think so.
Speaker 6: I mean in their projections they have lower inflation numbers.
Speaker 1: I think that's right.
Speaker 6: I think we're going to be in an environment where
Speaker 6: inflation is gradually moving lower. If you were to ask
Speaker 6: most forecasters by this point, would inflation actually be running
Speaker 6: just around three percent?
Speaker 1: I think no.
Speaker 6: I think the pass through on inflation has been a
Speaker 6: lot less than many had anticipated. Marges have been kind
Speaker 6: of okay, It's gone a lot better than most part
Speaker 6: we had have saw it.
Speaker 5: One of my interviews of the year was Nancy Lazar.
Speaker 4: We had Nancy Lazarre at the beginning of the show,
Speaker 4: and she nailed it when she said, there's all this
Speaker 4: FED mumbo jumble, but it's just a cyclical slow down.
Speaker 4: Do you bet at Wolf Research in a cyclical recovery?
Speaker 5: Here is Ana Wong alluded to today.
Speaker 6: Yeah, I think that's right, and I think we're starting
Speaker 6: to see signs of it. Of course, it's mixed at
Speaker 6: this jolts opening starting to pick up, You're seeing temp
Speaker 6: hiring start to look a little bit better. It seems
Speaker 6: to be just a cyclical slowdown apart driven by tariff
Speaker 6: related uncertainty. As that uncertainty starts to fade, you're likely
Speaker 6: to see an improvement and growth. The Fed's probably not
Speaker 6: going to cut through the first half of next year,
Speaker 6: and it's going to be an environment where the Emmy's
Speaker 6: running fairly firm.
Speaker 1: Something that you noted is that this had a sort
Speaker 1: of dubvish tilt to it.
Speaker 3: I think it's really important to note that that's certainly
Speaker 3: the response that we're seeing in markets across the board.
Speaker 3: They talked about weakness in the labor market. J Powell
Speaker 3: was talking about forty thousand jobs getting created each month.
Speaker 1: Say you can downgrade that by about sixty thousand Yeah,
Speaker 1: looking back, thank you for bringing this all of a sudden.
Speaker 3: You're looking at implied weakness that they're sort of bringing
Speaker 3: forward from the report that we're going to get next week.
Speaker 3: How credible do you see that, especially given the guidance
Speaker 3: that he kept emphasizing that they hear from the regional
Speaker 3: fed districts.
Speaker 6: I mean, I was surprised by his estimates on QCW,
Speaker 6: the assumptions that it's going to be a sixty thousand
Speaker 6: downard revision. My estimate is about.
Speaker 7: Half of that.
Speaker 1: So that was a that was a pretty duvish statement.
Speaker 6: That was the sort of the higher end of what
Speaker 6: it could have been, suggesting that at least his view
Speaker 6: on the labor market is we've been running minus twenty
Speaker 6: thousand non farm payrolls for quite some time.
Speaker 1: That's pretty dubbish.
Speaker 6: I think what will surprise most folks is in the
Speaker 6: next couple of months you'll probably see a bit of
Speaker 6: a bounce back.
Speaker 4: Into You were on the phone talking to your children
Speaker 4: about Alonzo from the Mets to the Orioles, and you
Speaker 4: missed when he talked about the job adjustment.
Speaker 5: The market moved.
Speaker 4: Yeah, I mean, the fact is the market, the bond vigilant.
Speaker 4: He's walked away, and they got to price up yield
Speaker 4: down at that moment.
Speaker 3: Yeah. I mean my son actually messaged me, could I
Speaker 3: please have money for more food to cope with Alonzo
Speaker 3: signing with the Orioles, And I.
Speaker 1: Gave them two dollars because.
Speaker 5: In true o big spender, two dollars is.
Speaker 1: All that that's worth to me.
Speaker 3: So anyway, we're looking though, at essentially a message from
Speaker 3: the Fed that you can have your cake and eat
Speaker 3: it too. That this inflation from the most part was
Speaker 3: driven maybe by the tariffs, but that is transitory, for
Speaker 3: lack of a better word, and going forward there is
Speaker 3: going to be this productivity boom that's going to help
Speaker 3: support things. How much does this really line up with
Speaker 3: two more rate cuts in twenty twenty six twenty twenty seven,
Speaker 3: and how much does this line up to either more
Speaker 3: rate cuts or potentially a rate hike.
Speaker 6: I certainly don't think there'll be a hike, and it
Speaker 6: seems like Powell dismiss that too. I think you could
Speaker 6: see some more rate cuts in the back part of
Speaker 6: next year, because what you'll likely see is the first
Speaker 6: part you might elevate. Inflation should still be a little
Speaker 6: bit elevated. You're going to see that sickle goal pickup.
Speaker 6: In the back part of next year, you might start
Speaker 6: to see the economy cool down a little bit, and
Speaker 6: then inflation's likely to slow back down because that's where
Speaker 6: you're passing that peak of teriff related inflation. And that
Speaker 6: could be an environment where they could cut a couple
Speaker 6: more times, albeit slowly. And that's because you're going to
Speaker 6: see this sort of a fairly sluggish job trajectory, and
Speaker 6: if they're chopping off an extra sixty thousand off fat,
Speaker 6: they're going to be even more cautious on the labor
Speaker 6: market than the payroll's number would suggest.
Speaker 4: As we speak, Lee, so the two ten vanilla spread
Speaker 4: goes out to a new steeper yield curve.
Speaker 5: Yeah, the bond market's speaking.
Speaker 3: Here in space speaking that frankly, this is a FED
Speaker 3: that's going to lower the front end as much as
Speaker 3: they can, but on the long end yield there is
Speaker 3: less control over that. Let's bring back Bloomberg's Michael McKee,
Speaker 3: who is in that room asking questions, Mike. Potentially the
Speaker 3: last press conference with a rate cut from FED Chair
Speaker 3: J Powell a notable one for its somewhat dubbish tilt.
Speaker 8: Well, I'm not sure it was a dubbish tilt. I
Speaker 8: think the chair tried to keep his option as open
Speaker 8: as possible. You noted that he suggested that there may
Speaker 8: be some data accuracy problems with the numbers for the
Speaker 8: Jobs Report and the CPI that we're going to get
Speaker 8: next week and.
Speaker 5: Into January, the catch up from the.
Speaker 8: Bureau of Labor Statistics and the Bureau of Economic Analysis
Speaker 8: as they get out the data that we missed during
Speaker 8: the government shutdown. And so I think they don't want
Speaker 8: to put themselves in a position of saying that we're
Speaker 8: leaning one way or another. And by doing that, because
Speaker 8: they've cut so many times in a row, it sounds
Speaker 8: a bit like they're still dubbaged. But I don't think
Speaker 8: that's the case anymore. And you do have some people,
Speaker 8: and I noticed what Stephanie just said, but you do
Speaker 8: have some members of the committee, the overall committee, who
Speaker 8: suggested we might see rate increases next year.
Speaker 6: The thing I think.
Speaker 8: Maybe out of all of this that you want to
Speaker 8: pull out is Poal's emphasis when he was answering my
Speaker 8: question about we need to see wage increases, and wage
Speaker 8: increases are going to depend on the status of the
Speaker 8: labor market. If wages are going up, then people are
Speaker 8: less concerned about inflation. If wages are not going up,
Speaker 8: then that's a problem for the American public, and it
Speaker 8: also is a problem for the overall economy.
Speaker 3: Michael McKee, thank you so much, as always for all
Speaker 3: your work at the FED Press conference and before. Right now,
Speaker 3: we are getting comments from President Trump who's speaking at
Speaker 3: a round table in the White House.
Speaker 1: He's talking about his.
Speaker 3: Ongoing criticism of Jerome Powell, saying we should be able
Speaker 3: to do more than three percent or four percent GDP.
Speaker 3: He has said repeatedly too late Powell has talked about
Speaker 3: that guy. He's not doing a very good job, and
Speaker 3: they would have fired him. And ultimately this just sort
Speaker 3: of reiterates the split screen of Jerome Powell on one
Speaker 3: hand and President Trump on the other. Really highlights the
Speaker 3: political pressures coming down the pike in twenty twenty six.
Speaker 5: We've got a great headline team. Here's the headline.
Speaker 4: The President don't see why we can't have twenty percent
Speaker 4: to twenty five percent GDP growth. I think all of
Speaker 4: the adults, whatever their belief descent here descent there are
Speaker 4: dealing with the president, who's got a very vociferous cacophony
Speaker 4: of opinions on the economy. You don't plan on Donald
Speaker 4: Trump's economic vision.
Speaker 5: That's all there is to us.
Speaker 1: He's a dead guy. He's a developer.
Speaker 3: Of course, he wants rates to be lower here and
Speaker 3: the met interust rates could have been doubled in terms
Speaker 3: of the amount of cuts. I'm just wondering, as Stephanie,
Speaker 3: from your perspective, if you had gotten fifty basis points
Speaker 3: of rate cuts, how much would that have turbocharge twenty
Speaker 3: twenty six.
Speaker 6: It would have, but then I'd be afraid that the
Speaker 6: long end of the bond market would have backed up
Speaker 6: even more than it has been most recently. That would
Speaker 6: be not a great outcome because that's an environment where
Speaker 6: we're truly turbocharging sort of the economy from rape perspective,
Speaker 6: but then you have long ends backing up. That's not
Speaker 6: good for markets. We're not in an environment where we
Speaker 6: need to be a fifty basis point cuts. It's a
Speaker 6: question whether they should have been cutting twenty five basis
Speaker 6: points today, let alone should they be cutting even more
Speaker 6: than that?
Speaker 3: Joining us now to join the conversation, Aditya Bjave of
Speaker 3: Banks America Aditya just before we get started, kind of
Speaker 3: a dubvish tilt. Certainly, that's the way it's being received
Speaker 3: by markets.
Speaker 1: Do you think that this is the right call? As
Speaker 1: the Fed accelerates the.
Speaker 3: Timeline for Bill's purchases and talks about the ongoing to
Speaker 3: ceration and the labor market.
Speaker 7: Good afternoon, Thanks for having me.
Speaker 5: So.
Speaker 7: We were skeptical going into the meeting about whether Chair
Speaker 7: Powell would really be able to deliver a hawkish cut
Speaker 7: given how much data we're getting between now and the
Speaker 7: January meeting, and indeed he didn't. They kind of nudged
Speaker 7: in the direction of, Okay, we should probably stay on hold,
Speaker 7: or our base case for January is a hold, but
Speaker 7: they can't close the door on January. We thought the
Speaker 7: one arrow in Powell's quiver that he hadn't fired at
Speaker 7: his hawkish press conferences at July and October, which by
Speaker 7: the way, didn't change the policy path at all. The
Speaker 7: one thing he had left to say was policies at neutral,
Speaker 7: and he got very close to saying that. He said,
Speaker 7: we're within the plausible range of estimates of neutral. But
Speaker 7: then when he gave his own opinion. He said we're
Speaker 7: probably at the higher end of that range, so I
Speaker 7: think he still left the door open for January. But
Speaker 7: they really want to tell us that the base case
Speaker 7: is a hold for January.
Speaker 4: Then if we're at that tip point, which will matter
Speaker 4: more an analysis of inflation or an analysis of the
Speaker 4: job market.
Speaker 7: I think there's still more focused on the label market,
Speaker 7: A simple way to think about it, which maybe he
Speaker 7: muddied the waters a little bit by talking about the
Speaker 7: measurement issues with the unemployment rate. But we're going to
Speaker 7: get not only the November unemployment rate but also the
Speaker 7: December unemployment rate before the January meeting. If that December
Speaker 7: unemployment rate is up to four point seven percent, I
Speaker 7: think they're going in January four point five or lore
Speaker 7: they're going to stay on hold, and four point six
Speaker 7: is going to be a close Cain really well said.
Speaker 4: But then what's so important here within this? And let's
Speaker 4: look at the Bank of America now GDP report? I
Speaker 4: got Atlanta at three point five. Where is the economy
Speaker 4: right now? Just say, in terms of nominal GDP it's
Speaker 4: a boom economy.
Speaker 5: Isn't it? Yep? It is.
Speaker 7: We have around five percent nominal GDP growth for next year,
Speaker 7: and that's well above consensus. We were very happy to
Speaker 7: see that the FED is coming very close to our view.
Speaker 5: Now.
Speaker 7: The GDP upgrades were quite significant, but honestly, it's not
Speaker 7: that hard to get into the low to mid twes
Speaker 7: next year. As Powell mentioned, you'll get about two tenths,
Speaker 7: maybe even three tenths just from the shutdown. You're going
Speaker 7: to get another three to four tenths from the big
Speaker 7: beautiful Bill.
Speaker 1: So the hurdle for the rest of GDP growth.
Speaker 7: Is only about one point seven one point nine percent,
Speaker 7: which frankly is what we did this year, even with
Speaker 7: all the trade disruptions. So we should be in the
Speaker 7: twos next year.
Speaker 3: In my view, Stephanie, it strikes me that there's a
Speaker 3: new psychology taking hold of a FED, and it has
Speaker 3: been for the past six months. And it goes to
Speaker 3: Tom's point about productivity, this idea that at times of transition,
Speaker 3: it pays to run the economy hot to avoid some
Speaker 3: of the job's losses that do come into effect in
Speaker 3: these huge technological shifts that take hold. Do you think
Speaker 3: that that is what's going on, That this is a
Speaker 3: FED that is to running the economy hotter than otherwise
Speaker 3: would because there are job losses during times like this,
Speaker 3: and those job losses are hard to replace even as
Speaker 3: productivity comes back.
Speaker 6: Yeah, I think that's exactly what's happening. And that's kind
Speaker 6: of what Powell alluded to today, that this is productivity
Speaker 6: enhancing backdrop that we're seeing. They're certainly coming across, as
Speaker 6: you know, more dubvish than generally expected to, and they're
Speaker 6: going to take a haircut off the job numbers that
Speaker 6: we're getting. And whether or not sixty thousand is the
Speaker 6: right number, so any numbers that we get from a
Speaker 6: job perspective, you have to, in your mind take that
Speaker 6: down even lower, which then is at the margin going
Speaker 6: to make them more dubvish and running the economy hotter
Speaker 6: than one otherise be the case.
Speaker 4: The sum totally here, Lisa, is what the gentleman from
Speaker 4: Bank of America said. You get a four point seven
Speaker 4: percent unemployment rate. None of the cement analysis matters into
Speaker 4: midterm elections. Four point seven is getting up there, and
Speaker 4: I can't imagine four point nine or five zero.
Speaker 3: Which is the reason why Aditya to bring you back in.
Speaker 3: You're talking about the chance of a potential rate come January,
Speaker 3: should we get that kind of employment stress, what are
Speaker 3: you seeing? Were you surprised, just to pick up the
Speaker 3: conversation we were having with Stephanie, were you surprised at
Speaker 3: how negative Jerome Powell was in his interpretation of the
Speaker 3: labor market and the job losses that we've seen over
Speaker 3: the past few months.
Speaker 7: That was definitely a dubbish surprise to talk about. You know,
Speaker 7: we're going to mock down forty thousand a month by
Speaker 7: sixty thousand per months and now you're looking at negative twenty.
Speaker 7: And then at the same time he says that he
Speaker 7: doesn't expect the unemployment rate to go up a lot
Speaker 7: further from here, So what is his read on break even?
Speaker 7: He had previously told us his read on break even
Speaker 7: was between zero and fifty thousand, So a little bit
Speaker 7: of inconsistency there in our view. If they stick with
Speaker 7: the view that break evens between zero and fifty and
Speaker 7: we're only growing at negative twenty, then either you need
Speaker 7: to see payrolls bounce back or they're going to continue
Speaker 7: to worry about downside risk to the unemployment rate.
Speaker 1: And again it's not.
Speaker 7: Our base case that they're going to keep cutting rates,
Speaker 7: but they might well be inclined to do so.
Speaker 3: Aditi Bijave, thank you so much for being with us
Speaker 3: this morning. Joining us now is Jeff Rosenberg of Blackrock.
Speaker 1: Jeff always great to speak with.
Speaker 3: You want to get your take about whether what we
Speaker 3: have just heard in that press conference makes you incredibly
Speaker 3: more risk on in terms of going out double fisting it.
Speaker 3: QI light is coming back, they're buying bills. They're also
Speaker 3: potentially looking to weakness in the labor market.
Speaker 1: Is this risk on?
Speaker 9: Well, you said one of my three takeaways, which is
Speaker 9: number three of today's meeting, which i'll call QWI confusion.
Speaker 9: I'll come back to that. The first takeaway is the
Speaker 9: pause is in. We kind of knew that. The second one,
Speaker 9: which you've already talked about, is why because we're in
Speaker 9: the realm of neutral. And the third is getting a
Speaker 9: little bit of confused about the QWI confusion. It was
Speaker 9: a little bit more dubbish than maybe expected, as the
Speaker 9: previous commentators talked about, but it's not that far off
Speaker 9: of expectations. The markets at about a ninety percent expectation
Speaker 9: for the twenty five basis point cut expected for Pause.
Speaker 9: It'll be data dependent, as you were previously discussing. If
Speaker 9: it's four to seven, you know that's a different set
Speaker 9: of circumstances. And tom as you said, you know you
Speaker 9: can throw the rest of this analysis out the window
Speaker 9: because the facts have changed, but we don't know that
Speaker 9: is happening. So given the trajectory that we have today,
Speaker 9: the Fed's on pause because we've gotten to the realm
Speaker 9: of neutral and the other side of the debate inflation, wages,
Speaker 9: growth all basically say, this hasn't been a particularly restrictive FED.
Speaker 9: Even if they think they're on the high end. Now
Speaker 9: they're you know, in the neutral ends, so they can
Speaker 9: wait and we'll see how the data evolves. To your
Speaker 9: point on QI, he only gave you half the story
Speaker 9: in terms of expanding the balance sheet because the other
Speaker 9: part of the balance sheet is contracting because the mortgages
Speaker 9: run off. But that technical detail got left off. I
Speaker 9: think it was an accidental, dubbish commentary.
Speaker 1: On the QC.
Speaker 9: You kind of dismissed and said, hey, everybody knows this,
Speaker 9: this is a technical factor. And the preamble ahead of
Speaker 9: the Huey comment was, please disregard everything I'm about to
Speaker 9: say in terms of its implications for monetary policy. Of
Speaker 9: course nobody did that, and they hear the Fed's buying
Speaker 9: treasuries and so there's the meee jerk response to that
Speaker 9: from what we were taught over the POSTGFC environment. So
Speaker 9: there's a little bit of a misread there, but it
Speaker 9: is what it is. It's a little bit less of
Speaker 9: a hawkish hold than the market was expecting.
Speaker 4: Here, Jeff, twelve minutes ago, I was thinking of Alan
Speaker 4: Meltzer of your Carnegie Mellon University. How far are we
Speaker 4: from a traditional FED analysis, whether it's Meltzer at Carnegie Mellon,
Speaker 4: Clarida at Columbia, John Taylor out at Stanford, how far
Speaker 4: are we away from conventional theories plural.
Speaker 9: Well, I think the key thing that kept coming back
Speaker 9: over and over again in this meeting, and it happened
Speaker 9: in October, was the difference in FED policy today. It
Speaker 9: came up around the questions of the comparisons the mid
Speaker 9: nineteen nineties, the challenges to FED monetary policy when its
Speaker 9: dual mandate is in conflict. Right, there is no divine
Speaker 9: coincidence of monetary policy. There is no environment that we
Speaker 9: had over that prior thirty year period of too little inflation,
Speaker 9: so there is no risk free path and that's really
Speaker 9: the biggest difference here, and they're still navigating that. And
Speaker 9: I think the discussion about how everyone on the panel,
Speaker 9: on the committee agrees to the facts, but we disagree
Speaker 9: on how to deal with the risks, and that's getting
Speaker 9: to the heart of inflation versus growth and which way
Speaker 9: do you emphasize. I'd add the piece that's missing to
Speaker 9: this conversation, however, is that is financial conditions, and that
Speaker 9: if your goals are conflicting and it's sort of a tie,
Speaker 9: then I think you break the tie with financial conditions.
Speaker 9: But they're just not discussing that at all anymore, which
Speaker 9: I think, you know, could come back to haunt them.
Speaker 9: But I think that's the piece of the conversation.
Speaker 6: McGee.
Speaker 9: Maybe next press conference would be interesting to ask that question.
Speaker 9: Because they used to talk about all the time. The
Speaker 9: whole point of the balance sheet was portfolio rebalance, the
Speaker 9: impact of the K shaped recovery. They've had a lot
Speaker 9: to do with that in terms of the wealth effect
Speaker 9: is supported by the balance sheet and the FEDS activities,
Speaker 9: they absolve themselves of any of that. I think there's
Speaker 9: more there to unpack Jeff Rosenberg.
Speaker 3: Indeed, especially as we see markets climb close to all
Speaker 3: time highs once again, Jeff Rosenberg of Black Rock, thank
Speaker 3: you so much as always for being with us, Stephanie
Speaker 3: to that point. Right now, we're seeing a surge in
Speaker 3: futures equities. Excuse me, I'm used to early shifts as
Speaker 3: well as a decline in bond yields. At what point
Speaker 3: is this a liability for the Federal Reserve that will
Speaker 3: keep consumption elevated and fuel any mason inflationary pressures.
Speaker 6: I mean, it's hard to be worried about the consumer
Speaker 6: and then concerned that they're going to consumer's going to
Speaker 6: be too strong. At the same time, I think we're
Speaker 6: in an environment where the consumer has slowed down a lot,
Speaker 6: so an easy and financial conditions isn't necessarily the worst
Speaker 6: thing we're worried about the cake consumer. Of course, the
Speaker 6: bottom of the k doesn't necessarily benefit from a lot
Speaker 6: of this, but the middle of the consumer has also
Speaker 6: slowed down. So if we see a bit of a
Speaker 6: pick up on the back of this, plus next year,
Speaker 6: we're going to get a decent amount of fiscal stimulus
Speaker 6: coming around tax season. That's a reason why we're probably
Speaker 6: going to see a bit of a pickup in growth
Speaker 6: for next year. So not necessarily the worst thing, just
Speaker 6: given we have seen a pretty big slowdown, but to
Speaker 6: the extent this continues to remain for quite some time,
Speaker 6: then you might get concerned.
Speaker 3: On the other side, just real quick, does this press
Speaker 3: conference and this meeting make you upgrade your inflation forecasts
Speaker 3: longer term.
Speaker 1: At the well at the margin.
Speaker 6: Plus the combination of you know, we know we're going
Speaker 6: to get a more dubvish chair, it's likely going to
Speaker 6: be hascid, in which case, you know, that sort of
Speaker 6: adds that argument.
Speaker 3: Stephanie Roth, wonderful to see you as always. Thank you
Speaker 3: so much for being with us here. Stephanie Roth.
Speaker 6: There.
Speaker 1: Honestly, this was a fascinating meeting. This was snooze fast.
Speaker 1: We just saw the best forms FMC day.
Speaker 3: When you look at market performance going back to March
Speaker 3: and the most ascent is going back to two thousand
Speaker 3: and five.
Speaker 5: Can I use my Peter Fisher hands that mine here?
Speaker 4: Three months thirty year bond, it's steeper, it's about fifty
Speaker 4: one basis point since October sixteenth, and we're buttressed right
Speaker 4: up at new wides on the broad yield curve is
Speaker 4: given us that steeper and that always creates attention within the.
Speaker 3: Economy from Tom Keem and myself from New York, for
Speaker 3: our TV and radio audience worldwide, that does it.
Speaker 1: From us, this was the feticides. This is Bloomberg.