1 00:00:02,520 --> 00:00:08,960 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. Joining us now is 2 00:00:09,000 --> 00:00:11,879 Speaker 1: someone who is very familiar with these types of speeches. 3 00:00:11,880 --> 00:00:15,400 Speaker 1: Saint Louis FED President James Bullard, who recently was in 4 00:00:15,560 --> 00:00:18,760 Speaker 1: the media talking about his preference for one hundred basis 5 00:00:18,760 --> 00:00:22,720 Speaker 1: points of ray cuts this year heading into twenty twenty six, 6 00:00:23,040 --> 00:00:25,640 Speaker 1: also a potential contender. I should say to be the 7 00:00:25,680 --> 00:00:29,120 Speaker 1: next FED chair James Jim, how much are you seeing 8 00:00:29,160 --> 00:00:32,159 Speaker 1: what we heard from Fedchair j Powell and seeing anything 9 00:00:32,200 --> 00:00:34,919 Speaker 1: different that you would really say say if you were 10 00:00:34,960 --> 00:00:36,600 Speaker 1: at that podium. 11 00:00:38,400 --> 00:00:44,800 Speaker 2: He used the speech to solidify expectations for twenty five 12 00:00:44,840 --> 00:00:49,040 Speaker 2: basis points in September. I was expecting that anyway, Marcus 13 00:00:49,120 --> 00:00:50,040 Speaker 2: were expecting that. 14 00:00:51,240 --> 00:00:53,240 Speaker 3: He leaned into the most. 15 00:00:53,000 --> 00:00:57,720 Speaker 2: Recent labor market report, which was very soft, and so 16 00:00:57,760 --> 00:01:01,680 Speaker 2: I think that's a done deal. He didn't say too 17 00:01:01,760 --> 00:01:05,920 Speaker 2: much about beyond that, what you want to do with 18 00:01:06,000 --> 00:01:08,800 Speaker 2: the October meeting or the December meeting. I have set 19 00:01:08,840 --> 00:01:13,080 Speaker 2: one hundred basis points, you know, going into twenty twenty six, 20 00:01:13,120 --> 00:01:16,840 Speaker 2: so I think you could adjust as you go forward 21 00:01:17,520 --> 00:01:20,560 Speaker 2: and eventually get a full hundred basis points. But I 22 00:01:20,560 --> 00:01:23,400 Speaker 2: would go slowly in order to watch the data and 23 00:01:23,440 --> 00:01:27,319 Speaker 2: then on the Framework review. I'm sure much earlier in 24 00:01:27,319 --> 00:01:30,679 Speaker 2: the year they had targeted that they would have the 25 00:01:30,800 --> 00:01:33,759 Speaker 2: framework discussion and that they would use the Jackson Hole 26 00:01:33,840 --> 00:01:35,360 Speaker 2: speech to talk. 27 00:01:35,160 --> 00:01:36,560 Speaker 3: About changes for the framework. 28 00:01:37,000 --> 00:01:40,000 Speaker 2: I thought those were thoughtful and they were well presented 29 00:01:41,000 --> 00:01:45,720 Speaker 2: in this speech, and they're about what many have speculated on. 30 00:01:46,600 --> 00:01:48,320 Speaker 3: So I think they did about as much as they 31 00:01:48,400 --> 00:01:49,520 Speaker 3: can on the framework side. 32 00:01:51,560 --> 00:01:54,560 Speaker 4: Jim Bowler, Tom Keenan, good morning to you. I definitely 33 00:01:54,640 --> 00:01:58,760 Speaker 4: consider this my conversation of the day. You served a 34 00:01:58,880 --> 00:02:03,160 Speaker 4: lengthy term the Saint Louis Fed. You have lived the 35 00:02:03,240 --> 00:02:07,720 Speaker 4: decline of a greater economy decades and decades ago in 36 00:02:07,760 --> 00:02:12,120 Speaker 4: the effort to provide for a resurgence Saint Louis is 37 00:02:12,160 --> 00:02:14,720 Speaker 4: a next chairman of the FED, whoever that may be. 38 00:02:15,480 --> 00:02:19,080 Speaker 4: Do they have to manage for two American economies, a 39 00:02:19,200 --> 00:02:24,679 Speaker 4: technology driven exceptional economy and another, to use a cliche, 40 00:02:24,760 --> 00:02:28,960 Speaker 4: America flat on their back. How would a chairman execute 41 00:02:29,320 --> 00:02:30,800 Speaker 4: those two Americas? 42 00:02:31,680 --> 00:02:35,520 Speaker 2: Everything? Yeah, I think in commonwealth distribution have become more 43 00:02:36,000 --> 00:02:40,080 Speaker 2: salient topics for the FED. It's not that clear how 44 00:02:40,160 --> 00:02:45,280 Speaker 2: much the FED can really do providing interest rate policy 45 00:02:45,400 --> 00:02:49,320 Speaker 2: for the whole economy. If you change the rate structure, 46 00:02:49,360 --> 00:02:53,400 Speaker 2: that affects everyone, not just one particular group that. 47 00:02:53,400 --> 00:02:55,919 Speaker 3: You might be targeting. 48 00:02:56,040 --> 00:02:59,720 Speaker 2: So I think that's been something we've had to wrestle with, 49 00:03:00,040 --> 00:03:03,639 Speaker 2: and I've actually done research on it myself to try 50 00:03:03,639 --> 00:03:05,800 Speaker 2: to understand it better from my point of view. 51 00:03:05,880 --> 00:03:08,920 Speaker 3: So I think there's been been a theme for. 52 00:03:08,840 --> 00:03:12,360 Speaker 2: A while, and that'll be an important theme in macroeconomics 53 00:03:12,720 --> 00:03:13,360 Speaker 2: going forward. 54 00:03:15,320 --> 00:03:17,720 Speaker 4: Mike McKee's got a lot of smarter questions than me 55 00:03:17,840 --> 00:03:19,960 Speaker 4: on the immediacy of this speech. I'm going to ask 56 00:03:20,080 --> 00:03:25,160 Speaker 4: one more distant questions, Jim Bollard. You're at Purdue executing 57 00:03:25,400 --> 00:03:32,079 Speaker 4: online technology education every single day. How do you define 58 00:03:32,200 --> 00:03:37,800 Speaker 4: the new technology productivity that America faces? Is it enough 59 00:03:38,120 --> 00:03:41,080 Speaker 4: to save us? Is it enough to really add on 60 00:03:41,600 --> 00:03:43,480 Speaker 4: to our present GDP. 61 00:03:45,000 --> 00:03:45,400 Speaker 3: Oh yeah. 62 00:03:45,480 --> 00:03:51,000 Speaker 2: I think that the AI boom is, you know, it's 63 00:03:51,040 --> 00:03:55,119 Speaker 2: a general purpose technology that will diffuse through the economy. 64 00:03:55,120 --> 00:03:57,680 Speaker 2: I think the key question is how fast does that 65 00:03:57,880 --> 00:04:02,480 Speaker 2: actually diffuse? And sometimes marcus can get ahead of themselves 66 00:04:02,480 --> 00:04:05,320 Speaker 2: and think it's going to happen sooner. Sometimes they're too 67 00:04:05,400 --> 00:04:09,400 Speaker 2: late and it happens faster than markets think. But nevertheless, 68 00:04:10,520 --> 00:04:13,080 Speaker 2: anyway you look at it, It's an important technology. It 69 00:04:13,120 --> 00:04:17,360 Speaker 2: can drive productivity, and I think in higher education is 70 00:04:17,520 --> 00:04:19,640 Speaker 2: one of the places where you can really have the 71 00:04:19,680 --> 00:04:23,840 Speaker 2: biggest impact. We put a AI requirement in at the 72 00:04:23,920 --> 00:04:27,200 Speaker 2: Dannuel School here for every single student, and we're trying 73 00:04:27,200 --> 00:04:30,919 Speaker 2: to expand that to all produce. So I think that 74 00:04:31,040 --> 00:04:34,599 Speaker 2: just shows you how important this technology is. 75 00:04:35,839 --> 00:04:38,680 Speaker 5: Jim, it's Mike McKee. I have a question about sort 76 00:04:38,680 --> 00:04:42,440 Speaker 5: of the process involved in this speech. The chairman is 77 00:04:42,839 --> 00:04:45,760 Speaker 5: giving his own speech, but basically when he says it's 78 00:04:45,839 --> 00:04:49,520 Speaker 5: time to maybe adjust policy, he's speaking for the entire 79 00:04:49,640 --> 00:04:54,080 Speaker 5: Open Market Committee. Going into a speech like this, would 80 00:04:54,120 --> 00:04:56,359 Speaker 5: he have polled everybody? Does he think he has the 81 00:04:56,480 --> 00:04:59,880 Speaker 5: votes for that, because we've been speaking with FED officials 82 00:05:00,279 --> 00:05:03,239 Speaker 5: in Jackson Hole and there are still some who were saying, well, 83 00:05:03,360 --> 00:05:05,000 Speaker 5: we're not sure that we need to do that. 84 00:05:05,120 --> 00:05:09,960 Speaker 2: Yet He's going to report on the center of gravity 85 00:05:09,640 --> 00:05:12,480 Speaker 2: of the committee, even though there might be people that 86 00:05:12,960 --> 00:05:17,159 Speaker 2: have misgivings. At the June meeting, the committee had a 87 00:05:17,240 --> 00:05:21,040 Speaker 2: median dot dot plot of two rate reductions by the 88 00:05:21,120 --> 00:05:26,479 Speaker 2: end of the year, and I think the minutes, you know, 89 00:05:26,600 --> 00:05:29,440 Speaker 2: suggested something that was more like fifty to fifty, but 90 00:05:29,560 --> 00:05:32,599 Speaker 2: then the labor market report came in. I think that 91 00:05:32,720 --> 00:05:35,760 Speaker 2: tilted the balance, so he could have he could have 92 00:05:35,839 --> 00:05:38,720 Speaker 2: pushed back a little bit. I think financial markets were 93 00:05:38,800 --> 00:05:41,640 Speaker 2: expecting him to come be a little bit more hawkish 94 00:05:41,680 --> 00:05:45,120 Speaker 2: here and try to set up a fifty to fifty 95 00:05:45,160 --> 00:05:49,120 Speaker 2: meeting where you would wait and see for the rest 96 00:05:49,160 --> 00:05:51,599 Speaker 2: of the data to come in. But I don't think 97 00:05:51,640 --> 00:05:54,359 Speaker 2: that's where the center of gravity is on the committee, so. 98 00:05:55,800 --> 00:05:57,479 Speaker 3: He went ahead and leaned in. 99 00:05:58,240 --> 00:06:00,160 Speaker 2: I thought there was quite a bit of talk about 100 00:06:00,160 --> 00:06:03,880 Speaker 2: the labor market at the at the beginning. You know, 101 00:06:03,920 --> 00:06:07,039 Speaker 2: you could have could have been a little more, you know, 102 00:06:07,160 --> 00:06:10,040 Speaker 2: a little more emphasis on the low unemployment rate, for instance. 103 00:06:10,120 --> 00:06:12,480 Speaker 2: And you know he did come out at the end 104 00:06:12,520 --> 00:06:14,040 Speaker 2: of that discussion saying, well, it's. 105 00:06:13,920 --> 00:06:16,240 Speaker 3: In balance, but we're a little bit nervous. 106 00:06:16,279 --> 00:06:22,680 Speaker 2: So I think, you know, I think he's accurately describing 107 00:06:22,800 --> 00:06:24,279 Speaker 2: where the bulk of the committee is. 108 00:06:26,640 --> 00:06:29,640 Speaker 5: Well, where would you be on this question, because we've 109 00:06:29,680 --> 00:06:32,960 Speaker 5: heard FED officials for some time now saying, yes, we 110 00:06:33,080 --> 00:06:36,560 Speaker 5: had poor job creation in recent months, but the unemployment rate, 111 00:06:36,600 --> 00:06:40,040 Speaker 5: as you just mentioned, has been low, and they've described 112 00:06:40,120 --> 00:06:42,560 Speaker 5: the labor market as solid. Now this seems to be 113 00:06:42,600 --> 00:06:45,279 Speaker 5: sort of a major shift in the way they view 114 00:06:45,480 --> 00:06:49,599 Speaker 5: the outlook and the sort of balance between the two mandates. 115 00:06:51,120 --> 00:06:54,040 Speaker 2: Yeah, what he did at the end of that discussion, 116 00:06:54,080 --> 00:06:55,800 Speaker 2: he said, well, it's in balance. 117 00:06:56,200 --> 00:06:58,960 Speaker 3: But I think the committee's nervous. 118 00:06:59,640 --> 00:07:03,120 Speaker 2: I think it has been slowing, and I think the 119 00:07:03,160 --> 00:07:07,520 Speaker 2: policy rate is moderately restrictive. Is maybe you know, one 120 00:07:07,600 --> 00:07:11,200 Speaker 2: hundred and twenty five basis points above the neutral rate. 121 00:07:11,320 --> 00:07:13,920 Speaker 2: Is that really where you want to be in this circumstance. 122 00:07:14,000 --> 00:07:17,000 Speaker 2: I think the answers no, So you can come down 123 00:07:17,120 --> 00:07:22,440 Speaker 2: some and still have moderately restrictive monetary policy that puts 124 00:07:22,520 --> 00:07:26,440 Speaker 2: gentle downward pressure on inflation. And then the other thing 125 00:07:26,520 --> 00:07:30,480 Speaker 2: I think has happened is that this argument from Chris 126 00:07:30,520 --> 00:07:35,480 Speaker 2: Waller and others on the committee that the you know, 127 00:07:35,520 --> 00:07:38,200 Speaker 2: you should look through the one time increase in goods 128 00:07:38,240 --> 00:07:39,920 Speaker 2: prices coming from tariffs. 129 00:07:40,880 --> 00:07:42,320 Speaker 3: I think that's carrying the day. 130 00:07:42,560 --> 00:07:46,200 Speaker 2: And you know, then he emphasized that inflation expectations remain 131 00:07:46,280 --> 00:07:49,600 Speaker 2: anchored and so on, and so I think that sets 132 00:07:49,680 --> 00:07:52,400 Speaker 2: up a modest move downward in September. 133 00:07:54,280 --> 00:07:56,440 Speaker 1: Jim, We've been talking with you for years and you 134 00:07:56,480 --> 00:08:00,320 Speaker 1: are very focused on the discipline of economics. Right now, 135 00:08:00,360 --> 00:08:03,520 Speaker 1: I'm looking at the headlines that are crossing from the 136 00:08:03,560 --> 00:08:06,800 Speaker 1: past hour. The top one, of course, is a Jerome 137 00:08:06,840 --> 00:08:10,040 Speaker 1: Powell FED chair saying that shifting risks may warrant adjusting rates. 138 00:08:10,200 --> 00:08:12,440 Speaker 1: The second one is that Trump says that he'll fire 139 00:08:12,480 --> 00:08:15,600 Speaker 1: the Fed's Lisa's Cook if she doesn't resign as someone 140 00:08:15,680 --> 00:08:18,600 Speaker 1: who is thought to be a contender to become the 141 00:08:18,640 --> 00:08:21,760 Speaker 1: next FED chair. Jim, how much does it concern you 142 00:08:21,800 --> 00:08:25,560 Speaker 1: that there's this increasing political noise around the seat and 143 00:08:25,600 --> 00:08:27,920 Speaker 1: exactly what the path of policy forward looks like. 144 00:08:28,800 --> 00:08:31,720 Speaker 3: Yeah, I want to see due process around something like this. 145 00:08:32,760 --> 00:08:34,920 Speaker 3: I want to see you know, you can make. 146 00:08:34,840 --> 00:08:39,000 Speaker 2: Charges against anybody about anything, I guess, and you know 147 00:08:39,520 --> 00:08:43,680 Speaker 2: the person can answer the charges, and the dojken decide 148 00:08:43,720 --> 00:08:46,280 Speaker 2: what they want to do and so on. So I 149 00:08:46,320 --> 00:08:49,520 Speaker 2: think this has, you know, should have longer to play 150 00:08:49,600 --> 00:08:54,480 Speaker 2: out before you took that step. Otherwise it's just is 151 00:08:54,559 --> 00:08:58,400 Speaker 2: kind of the wild West and sheet reinstated later, I 152 00:08:58,440 --> 00:09:01,120 Speaker 2: guess or something if there wasn't a conviction. 153 00:09:01,280 --> 00:09:03,000 Speaker 3: So seems messy to me. 154 00:09:03,920 --> 00:09:07,719 Speaker 2: I think these kinds of these kinds of charges are 155 00:09:07,720 --> 00:09:11,480 Speaker 2: made from time to time against various officials around Washington, 156 00:09:11,600 --> 00:09:13,959 Speaker 2: but I'd like to see due process there. 157 00:09:15,920 --> 00:09:19,199 Speaker 1: Jim, there's another question here, and aside from Governor Cook 158 00:09:19,240 --> 00:09:23,960 Speaker 1: and what happens there, about how the perception of political 159 00:09:23,960 --> 00:09:28,720 Speaker 1: interference handles the market reaction to Fed policy. There is 160 00:09:28,720 --> 00:09:31,400 Speaker 1: this perception that that could cause the dollar a week 161 00:09:31,440 --> 00:09:33,440 Speaker 1: in more because there is more of an emphasis on 162 00:09:33,480 --> 00:09:36,680 Speaker 1: supporting growth and supporting the label market than containing inflation. 163 00:09:37,120 --> 00:09:39,280 Speaker 1: And some people are worried that if the Fed does 164 00:09:39,360 --> 00:09:42,360 Speaker 1: cut by fifty seventy five one hundred basis points, as 165 00:09:42,360 --> 00:09:45,000 Speaker 1: you were talking about this past week, that you could 166 00:09:45,000 --> 00:09:47,560 Speaker 1: see a move up in long end yields akin to 167 00:09:47,600 --> 00:09:49,880 Speaker 1: what we saw last year. If you are on the 168 00:09:49,880 --> 00:09:53,280 Speaker 1: FED currently and you did see yields along the long 169 00:09:53,400 --> 00:09:57,240 Speaker 1: end moving up in response to near term FED rate cuts, 170 00:09:57,600 --> 00:09:58,319 Speaker 1: what would you do? 171 00:10:00,280 --> 00:10:01,880 Speaker 3: That would definitely be a concern. 172 00:10:02,000 --> 00:10:05,560 Speaker 2: And that's the tricky part of this business is that 173 00:10:06,200 --> 00:10:09,360 Speaker 2: you know, you think you're pursuing a dubbish policy at 174 00:10:09,400 --> 00:10:12,240 Speaker 2: the short end, but the long end goes up because 175 00:10:12,240 --> 00:10:17,720 Speaker 2: inflation expectations start to rise, Markets start to lose confidence 176 00:10:17,760 --> 00:10:20,520 Speaker 2: in the FED and the credibility of the FED, and 177 00:10:20,920 --> 00:10:25,240 Speaker 2: that can go very very badly, and unfortunately fairly quickly. 178 00:10:25,360 --> 00:10:27,920 Speaker 3: So I think you do have to be come. You 179 00:10:27,960 --> 00:10:29,280 Speaker 3: do have to be careful here. 180 00:10:30,040 --> 00:10:32,719 Speaker 2: But I'm saying that I think that committee has room 181 00:10:32,760 --> 00:10:36,400 Speaker 2: to maneuver if they proceed carefully over the remainder of 182 00:10:36,440 --> 00:10:39,160 Speaker 2: twenty five and the first half of twenty twenty six. 183 00:10:40,800 --> 00:10:42,520 Speaker 4: I don't want to get out front of the debate 184 00:10:42,600 --> 00:10:45,040 Speaker 4: here at the moment Jim Bullard, but what I would 185 00:10:45,040 --> 00:10:47,040 Speaker 4: say to Chairman Bullart and Mike McKee, I got to 186 00:10:47,080 --> 00:10:49,040 Speaker 4: turn to you. You and I used to sit and 187 00:10:49,080 --> 00:10:51,760 Speaker 4: look at the dots and go which one is Bullart? 188 00:10:52,360 --> 00:10:53,120 Speaker 3: I mean you and I do. 189 00:10:53,280 --> 00:10:55,439 Speaker 5: It's fairly easy after a while to figure out. 190 00:10:55,520 --> 00:11:00,360 Speaker 4: I've Jim, Chairman Bullard, is your first act if you 191 00:11:00,440 --> 00:11:02,959 Speaker 4: take over the FED as your first act to get 192 00:11:03,040 --> 00:11:04,640 Speaker 4: rid of the dots. 193 00:11:05,520 --> 00:11:07,840 Speaker 3: Yeah. I've threatened to well. 194 00:11:07,840 --> 00:11:10,760 Speaker 2: As president, I threatened to withdraw from the dot plot. 195 00:11:11,240 --> 00:11:13,600 Speaker 3: I think this could be done better. This was discussed 196 00:11:13,640 --> 00:11:16,640 Speaker 3: at the Framework conference and former chair. 197 00:11:16,520 --> 00:11:21,360 Speaker 2: Of Bernanke gave a very nice presentation and talk about 198 00:11:22,160 --> 00:11:26,000 Speaker 2: a quarterly monetary policy report, get more organized about it, 199 00:11:26,040 --> 00:11:27,360 Speaker 2: put out a forecast. 200 00:11:27,640 --> 00:11:29,000 Speaker 3: I think all of that could be done. 201 00:11:29,160 --> 00:11:32,800 Speaker 2: I've advocated that for a long time, and so I 202 00:11:32,840 --> 00:11:35,640 Speaker 2: think that would sort of clear up some of the 203 00:11:35,679 --> 00:11:37,640 Speaker 2: misconceptions around the dot plot. 204 00:11:39,080 --> 00:11:41,040 Speaker 4: Okay, this is really really important for US. Is Jim 205 00:11:41,080 --> 00:11:43,000 Speaker 4: Bullard made He can have a history i'd say a 206 00:11:43,040 --> 00:11:48,439 Speaker 4: decade ago with a small, short paper forceful on regime change. 207 00:11:48,920 --> 00:11:51,880 Speaker 4: How do we get a new FED away from the 208 00:11:51,960 --> 00:11:55,720 Speaker 4: guessing and the certitude and the silly parlor game of it, 209 00:11:55,840 --> 00:11:59,040 Speaker 4: Jim Bullard, with great respect, how do we get to 210 00:11:59,760 --> 00:12:04,240 Speaker 4: that more discipline study around the game of the FED 211 00:12:04,679 --> 00:12:07,880 Speaker 4: and regime change? 212 00:12:08,160 --> 00:12:11,920 Speaker 2: Yeah, I think regime switching is a great way to 213 00:12:12,000 --> 00:12:16,560 Speaker 2: think about the global economy and the US economy and 214 00:12:16,600 --> 00:12:22,000 Speaker 2: how it operates. There are relatively long periods of time 215 00:12:22,200 --> 00:12:26,199 Speaker 2: where you might have let's say, slow growth and very 216 00:12:26,240 --> 00:12:28,600 Speaker 2: low interest rates, and then you might switch to another 217 00:12:28,679 --> 00:12:32,319 Speaker 2: time with faster growth and higher interist rates. I think 218 00:12:32,480 --> 00:12:37,480 Speaker 2: understanding that and understanding how that affects policy choices is 219 00:12:37,480 --> 00:12:41,120 Speaker 2: a great thing to study further and talk about further 220 00:12:42,400 --> 00:12:45,719 Speaker 2: in the years ahead. So you know, I think it's 221 00:12:45,800 --> 00:12:48,120 Speaker 2: very salient for what the Committee does. 222 00:12:50,240 --> 00:12:54,480 Speaker 1: Jim Bullard, FED, former FED President of the Saint Louis Bank, 223 00:12:54,720 --> 00:12:57,440 Speaker 1: will be sticking with us. Right now. In markets, you 224 00:12:57,440 --> 00:13:00,720 Speaker 1: can see a cheering across Wall Street to the opening 225 00:13:00,880 --> 00:13:04,440 Speaker 1: the door to a potential rate cut next month. Potentially more. 226 00:13:04,480 --> 00:13:08,640 Speaker 1: You could see equities surging higher across the different of 227 00:13:08,679 --> 00:13:11,840 Speaker 1: the different indexes, led by some of the more interest 228 00:13:11,920 --> 00:13:15,080 Speaker 1: rate sensitive sectors. The Russell two thousand. You can see 229 00:13:15,120 --> 00:13:18,200 Speaker 1: ten year yields down now about six basis points, even 230 00:13:18,240 --> 00:13:21,000 Speaker 1: more at the front end, down ten basis points. As 231 00:13:21,120 --> 00:13:24,600 Speaker 1: people look to the prospect of the FED looking through 232 00:13:24,840 --> 00:13:27,400 Speaker 1: some of the inflation from tariffs, you could see the 233 00:13:27,440 --> 00:13:31,880 Speaker 1: dollar markedly weaker one p seventeen on the euro dollar cross, 234 00:13:32,080 --> 00:13:35,000 Speaker 1: up on nine tenths of a percent. In terms of 235 00:13:35,240 --> 00:13:38,120 Speaker 1: just the percentage rise up about a basis point. And 236 00:13:38,160 --> 00:13:41,080 Speaker 1: there's a real question here about what this means going forward. 237 00:13:41,160 --> 00:13:43,560 Speaker 1: City Wealth Chief Investment Officer Kate Moore is still with 238 00:13:43,679 --> 00:13:45,760 Speaker 1: us freezing a little bit because it is a little 239 00:13:45,760 --> 00:13:48,280 Speaker 1: bit chilly here, nippy in the morning. I am curious 240 00:13:48,320 --> 00:13:52,440 Speaker 1: though about what you're hearing in terms of prospective FED 241 00:13:52,559 --> 00:13:55,400 Speaker 1: chairs and the politicization of the Federal Reserve. If this 242 00:13:55,559 --> 00:13:58,480 Speaker 1: is a FED willing to air on the duttish side, 243 00:13:58,840 --> 00:14:02,720 Speaker 1: does that mean something that materially is higher with respect 244 00:14:02,720 --> 00:14:05,319 Speaker 1: to returns and with respect to risk appetite. 245 00:14:05,559 --> 00:14:08,800 Speaker 6: Look, markets love certainty, and our investors love certainty, and 246 00:14:08,840 --> 00:14:11,360 Speaker 6: we want a certainty in terms of the process around 247 00:14:11,520 --> 00:14:14,880 Speaker 6: making monetary policy decisions. So I don't have any insight 248 00:14:14,960 --> 00:14:18,000 Speaker 6: into who might be named next FED chair, but what 249 00:14:18,040 --> 00:14:19,920 Speaker 6: I will say is if there is a sense that 250 00:14:20,000 --> 00:14:22,400 Speaker 6: the process is changing, I think that will lead to 251 00:14:22,440 --> 00:14:25,560 Speaker 6: some pause and perhaps some volatility in the market. You know, 252 00:14:25,640 --> 00:14:28,120 Speaker 6: our expectation is that regardless of who takes the next 253 00:14:28,200 --> 00:14:30,400 Speaker 6: chair and what its seats are filled, we'll have a 254 00:14:30,440 --> 00:14:34,040 Speaker 6: continuous continuation of the process of being data dependent, of 255 00:14:34,080 --> 00:14:36,920 Speaker 6: being thoughtful, of having you know, great debate and discussion 256 00:14:37,000 --> 00:14:40,520 Speaker 6: amongst the FED governors and their staff. But if that 257 00:14:40,560 --> 00:14:43,240 Speaker 6: were to change, I think that would introduce volatility. I 258 00:14:43,240 --> 00:14:45,680 Speaker 6: think the most important thing for us right now is 259 00:14:45,720 --> 00:14:48,920 Speaker 6: to recognize that so much of the data is going 260 00:14:49,000 --> 00:14:51,920 Speaker 6: to be mixed through the back half of the year, 261 00:14:52,160 --> 00:14:54,120 Speaker 6: and that's going to have a huge impact, I think 262 00:14:54,160 --> 00:14:56,640 Speaker 6: in terms of investor sentiment, and I would suggest even 263 00:14:56,680 --> 00:14:58,560 Speaker 6: more crowding in some of the favored trades. 264 00:14:58,880 --> 00:15:01,200 Speaker 5: We tend to get reactions like we're seeing in the 265 00:15:01,200 --> 00:15:03,880 Speaker 5: market now on a day when news breaks, But I 266 00:15:03,920 --> 00:15:07,840 Speaker 5: think we're probably going to see extended rally here because 267 00:15:07,880 --> 00:15:11,840 Speaker 5: people are anticipating rate cuts. Does that worry you in 268 00:15:11,960 --> 00:15:17,800 Speaker 5: terms of a bubble forming or some sort of excess 269 00:15:17,880 --> 00:15:22,760 Speaker 5: spending that would push up inflation because of inflated asset prices. 270 00:15:23,080 --> 00:15:25,320 Speaker 6: Yeah, so I have been a little bit worried actually 271 00:15:25,360 --> 00:15:27,880 Speaker 6: about positioning. I feel like I've been a little bit 272 00:15:27,880 --> 00:15:30,200 Speaker 6: more cautious frankly than some of my peers on the 273 00:15:30,200 --> 00:15:33,920 Speaker 6: street and saying, you know, people own the highest quality 274 00:15:33,960 --> 00:15:36,200 Speaker 6: parts of the market. It's quite crowded. Some of the 275 00:15:36,240 --> 00:15:38,120 Speaker 6: shorts when we're looking at some of the fast money 276 00:15:38,160 --> 00:15:42,280 Speaker 6: a community are very similar across the board, and we've 277 00:15:42,320 --> 00:15:45,760 Speaker 6: seen people kind of shrug off concerns around economic growth 278 00:15:45,880 --> 00:15:49,600 Speaker 6: or even the technological disruption across a lot of industries. 279 00:15:49,920 --> 00:15:52,680 Speaker 6: We've seen significant improvements in terms of the earnings or 280 00:15:52,720 --> 00:15:56,520 Speaker 6: vision ratios, City Economic Surprise index has moved up, you know, 281 00:15:56,600 --> 00:15:59,040 Speaker 6: and all of this together, I think sets us up 282 00:15:59,400 --> 00:16:02,720 Speaker 6: for you a little bit of weakness if there was 283 00:16:02,840 --> 00:16:04,720 Speaker 6: a bad data point or if there was a bit 284 00:16:04,760 --> 00:16:09,240 Speaker 6: of a shock where there's a lot of consensus positioning, well, Jim. 285 00:16:09,200 --> 00:16:11,160 Speaker 1: Jim Bullard, I'd love to bring you back in here. 286 00:16:11,360 --> 00:16:13,840 Speaker 1: How much does that concern you that sort of a 287 00:16:13,960 --> 00:16:17,880 Speaker 1: bias to cut rates could cause uset price inflation to 288 00:16:18,000 --> 00:16:20,560 Speaker 1: get ahead maybe of where the economy is. 289 00:16:22,920 --> 00:16:25,960 Speaker 2: Yeah, equities, except for just recently, equities have been doing 290 00:16:26,040 --> 00:16:30,440 Speaker 2: very well as they've digested the new trade policy of 291 00:16:30,480 --> 00:16:32,480 Speaker 2: the US and how that's going to play out. 292 00:16:32,480 --> 00:16:32,960 Speaker 3: Globally. 293 00:16:33,440 --> 00:16:37,040 Speaker 2: You've got the AI boom going on, really a driver 294 00:16:38,600 --> 00:16:42,160 Speaker 2: for the big tech companies, and you know, I do 295 00:16:42,240 --> 00:16:45,920 Speaker 2: get concerned that things we get ahead of ourselves. Sure 296 00:16:45,960 --> 00:16:49,760 Speaker 2: it's a great technology and everything, but how fast is 297 00:16:49,800 --> 00:16:54,280 Speaker 2: it really going to interfuse into actual productivity. 298 00:16:53,840 --> 00:16:56,160 Speaker 3: In the economy. But overall, I would. 299 00:16:55,960 --> 00:17:01,200 Speaker 2: Say, you know, it's possible that we'll get higher productivity 300 00:17:01,240 --> 00:17:05,719 Speaker 2: growth ahead and really a good outcome for the second 301 00:17:05,720 --> 00:17:08,400 Speaker 2: half of the twenty twenties here, much as we had 302 00:17:08,400 --> 00:17:10,240 Speaker 2: in the half of the nineteen nineties. 303 00:17:11,200 --> 00:17:13,920 Speaker 4: All right, let me talk to the chief investment strategist 304 00:17:13,920 --> 00:17:16,200 Speaker 4: Purdue University right now. I'm going to do a double 305 00:17:16,200 --> 00:17:19,400 Speaker 4: barreled question, first to doctor Bullard and then to doctor Moore. 306 00:17:19,520 --> 00:17:22,119 Speaker 4: Jim Bullard as simple as I can all of my 307 00:17:22,240 --> 00:17:27,040 Speaker 4: conversations rather Jakomnagel Bundesbank, Kate Moore City Group and on 308 00:17:27,160 --> 00:17:30,960 Speaker 4: and on is about an elevated or persistent nominal GDP. 309 00:17:31,680 --> 00:17:34,399 Speaker 4: Do you frame out that we're going to have an 310 00:17:34,440 --> 00:17:38,560 Speaker 4: animal spirit in the country, whether it's better real growth okay, 311 00:17:38,600 --> 00:17:43,120 Speaker 4: inflation too much inflation, okay, real growth, But what we're 312 00:17:43,119 --> 00:17:47,240 Speaker 4: talking about forward is an elevated nominal GDP. 313 00:17:51,200 --> 00:17:53,119 Speaker 2: If you think real growth is going to be faster 314 00:17:53,280 --> 00:17:56,760 Speaker 2: than yes, nominal gp growth would be faster even if 315 00:17:56,800 --> 00:17:59,920 Speaker 2: the Fed hits it's two percent inflation target over that period. 316 00:18:00,119 --> 00:18:05,879 Speaker 2: So yeah, you would see faster nominal GDP growth. 317 00:18:07,880 --> 00:18:09,320 Speaker 4: I mean, I look at this, Kate More, and it's 318 00:18:09,320 --> 00:18:11,439 Speaker 4: a higher the matter, I'm really surprised by your comments. 319 00:18:11,440 --> 00:18:14,640 Speaker 4: I think they're extremely important our back to the US quality, 320 00:18:15,040 --> 00:18:17,760 Speaker 4: et cetera. But it sounds like City Group is modeling 321 00:18:17,800 --> 00:18:21,760 Speaker 4: out through all the emotion, the fear, the turmoil, the 322 00:18:21,800 --> 00:18:24,320 Speaker 4: political debate, as we just signed next to the eight 323 00:18:24,320 --> 00:18:27,640 Speaker 4: foot bear in the lobby. The answer here is you're 324 00:18:27,800 --> 00:18:31,040 Speaker 4: modeling out that will be okay and there'll be a 325 00:18:31,040 --> 00:18:34,119 Speaker 4: better nominal GDP. It leads into revenue, et cetera. 326 00:18:34,480 --> 00:18:36,880 Speaker 6: Look, I think we're going to have an okay growth environment. 327 00:18:36,960 --> 00:18:38,600 Speaker 6: But one thing we keep on talking about is sort 328 00:18:38,600 --> 00:18:40,560 Speaker 6: of the K shape right. There are the haves and 329 00:18:40,640 --> 00:18:44,040 Speaker 6: have nots across all the different industries and different consumer groups, 330 00:18:44,359 --> 00:18:47,040 Speaker 6: and so I don't think that we want to assume 331 00:18:47,040 --> 00:18:50,000 Speaker 6: that everyone is going to experience strong growth in the 332 00:18:50,040 --> 00:18:52,200 Speaker 6: second half the year. And we're seeing this, of course 333 00:18:52,200 --> 00:18:54,600 Speaker 6: in the consumer companies. We're seeing this across you know, 334 00:18:54,640 --> 00:18:58,000 Speaker 6: segments of different households. We're seeing this even in technology companies, 335 00:18:58,119 --> 00:19:00,680 Speaker 6: those that have made the investments that are reaping dividends 336 00:19:00,720 --> 00:19:04,280 Speaker 6: from it. So yes, we may have these good headline numbers, 337 00:19:04,320 --> 00:19:06,320 Speaker 6: but I think as investors we have to really pay 338 00:19:06,359 --> 00:19:08,679 Speaker 6: attention to what's going on beneath the surface, and I 339 00:19:08,680 --> 00:19:11,960 Speaker 6: think there's an opportunity for differentiation over the next couple quarters. 340 00:19:12,680 --> 00:19:15,280 Speaker 1: We are looking at a market that is moving, We 341 00:19:15,320 --> 00:19:18,160 Speaker 1: are looking at headlines that are coming. And I want 342 00:19:18,160 --> 00:19:21,199 Speaker 1: to bring this to you that Canada is planning to 343 00:19:21,240 --> 00:19:25,359 Speaker 1: remove retaliatory tariffs on many US products in an olive 344 00:19:25,400 --> 00:19:29,439 Speaker 1: branch to President Trump, and there is this feeling that 345 00:19:29,600 --> 00:19:32,360 Speaker 1: maybe some of the tariffs are fungible, that we are 346 00:19:32,400 --> 00:19:34,800 Speaker 1: going to see some of them removed or used as 347 00:19:34,800 --> 00:19:35,760 Speaker 1: a negotiating routate. 348 00:19:36,000 --> 00:19:38,200 Speaker 4: I strongly agree with what you're saying this was sort 349 00:19:38,240 --> 00:19:40,320 Speaker 4: of out there in the ether last night, but to 350 00:19:40,320 --> 00:19:44,040 Speaker 4: see these headlines is another example we adjust well. 351 00:19:44,040 --> 00:19:45,920 Speaker 1: And that's one of the reasons why there has been 352 00:19:45,960 --> 00:19:48,440 Speaker 1: a focus on the labor market. Fed Chair to Rome 353 00:19:48,520 --> 00:19:53,560 Speaker 1: Powell speaking just moments ago, really focusing on the complications 354 00:19:53,600 --> 00:19:56,320 Speaker 1: for the labor market overall. 355 00:19:56,520 --> 00:19:58,960 Speaker 7: While the labor market appears to be imbalance, it is 356 00:19:59,000 --> 00:20:02,120 Speaker 7: a curious kind of that results from a marked slowing 357 00:20:02,160 --> 00:20:06,359 Speaker 7: in both the supply of and demand for workers. This 358 00:20:06,560 --> 00:20:10,680 Speaker 7: unusual situation suggests that downside risks to employment are rising, 359 00:20:11,720 --> 00:20:14,520 Speaker 7: and if those risks materialize, they can do so quickly 360 00:20:14,600 --> 00:20:17,600 Speaker 7: in the form of sharply higher layoffs and rising unemployment. 361 00:20:19,680 --> 00:20:22,600 Speaker 1: Some people might say that FED Chair J. Powell is 362 00:20:22,640 --> 00:20:25,520 Speaker 1: coming around the Chris Waller view of things, that there 363 00:20:25,600 --> 00:20:29,000 Speaker 1: is this feeling of potentially the weakening and the labor 364 00:20:29,040 --> 00:20:32,240 Speaker 1: marketing taking priority over inflation at a time where some 365 00:20:32,280 --> 00:20:35,280 Speaker 1: of these tariffs are put on taken off, and that's 366 00:20:35,280 --> 00:20:37,640 Speaker 1: what we're seeing a little bit in terms of negotiation 367 00:20:37,760 --> 00:20:38,240 Speaker 1: this morning. 368 00:20:38,280 --> 00:20:39,760 Speaker 4: Well, the given the take and it goes back to 369 00:20:39,840 --> 00:20:42,800 Speaker 4: Kate Moore's optimism on investment in America, and you see 370 00:20:42,840 --> 00:20:45,639 Speaker 4: it a dollar thank you for putting up that wonderful 371 00:20:46,119 --> 00:20:49,640 Speaker 4: dollar Larny chart and you see things adjusts and you wonder, Okay, 372 00:20:49,640 --> 00:20:51,679 Speaker 4: what do we do with China, what do we do 373 00:20:51,760 --> 00:20:57,120 Speaker 4: with Mexico with the produce debate and pharmaceuticals with Europe? 374 00:20:57,320 --> 00:21:01,159 Speaker 4: Guess what there may be constructive supp rises. Is a 375 00:21:01,359 --> 00:21:04,479 Speaker 4: certitude of the tariff debate gives way, It makes it 376 00:21:04,560 --> 00:21:08,080 Speaker 4: easier for the next chairman and maybe maybe I'll get 377 00:21:08,080 --> 00:21:10,240 Speaker 4: out of triple leverge. Doll cash is fifty fifty. 378 00:21:10,400 --> 00:21:12,280 Speaker 1: Oh, now is the time to definitely do it? Yeah, 379 00:21:12,320 --> 00:21:13,720 Speaker 1: for sure, Jim. 380 00:21:13,880 --> 00:21:15,240 Speaker 3: Before we let. 381 00:21:15,040 --> 00:21:17,119 Speaker 1: You get on with your day, I do want to 382 00:21:17,160 --> 00:21:20,880 Speaker 1: finish there that have we seen from tariffs that there 383 00:21:20,960 --> 00:21:23,719 Speaker 1: is this fungibility there that they get put on, they 384 00:21:23,760 --> 00:21:26,240 Speaker 1: get taken off, and that right now the path of 385 00:21:26,280 --> 00:21:29,159 Speaker 1: travel is lower from where we were maybe on April second, 386 00:21:29,280 --> 00:21:32,439 Speaker 1: not higher again, and so you can look through in 387 00:21:32,480 --> 00:21:36,320 Speaker 1: another kind of way some of the inflationary impact. 388 00:21:37,119 --> 00:21:39,680 Speaker 2: Yeah, I mean, I think it was great to reach 389 00:21:39,720 --> 00:21:41,280 Speaker 2: a pluminary deal with the EU. 390 00:21:41,440 --> 00:21:44,480 Speaker 3: That's one of the bigger blocks in the world. 391 00:21:45,320 --> 00:21:50,000 Speaker 2: China put on the back burner markets like that for now, 392 00:21:50,960 --> 00:21:51,600 Speaker 2: and then you've. 393 00:21:51,440 --> 00:21:52,680 Speaker 3: Got Canada and Mexico. 394 00:21:53,720 --> 00:21:59,200 Speaker 2: Looks like we're headed toward renegotiation of the USMCA, which 395 00:21:59,680 --> 00:22:03,080 Speaker 2: I think would be a fine thing to revisit. Was 396 00:22:03,119 --> 00:22:07,720 Speaker 2: scheduled for twenty twenty six anyway, so it's maybe a 397 00:22:07,800 --> 00:22:11,680 Speaker 2: little bit more settled than it was earlier this year, 398 00:22:11,960 --> 00:22:14,960 Speaker 2: and I think markets are liking that. 399 00:22:14,960 --> 00:22:19,080 Speaker 3: That's making it easier to plan. So far, so good 400 00:22:19,200 --> 00:22:19,600 Speaker 3: on that. 401 00:22:22,119 --> 00:22:25,680 Speaker 1: Jim Bullard, former Saint Louis FED president, joining us, Thank 402 00:22:25,680 --> 00:22:28,720 Speaker 1: you so much for being with us. Maybe future FED chair. 403 00:22:28,880 --> 00:22:29,560 Speaker 3: We shall see.