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Speaker 1: Who you put your trust in matters. Investors have put

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Speaker 1: their trust in independent registered investment advisors to the tune

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Speaker 1: of four trillion dollars. Why learn more and find your

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Speaker 1: independent advisor dot com. Welcome to the Bloomberg Surveillance Podcast.

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Speaker 1: I'm Tom Keane. Always with Michael McKee. Daily we bring

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Speaker 1: you insight from the best in economics, finance, investment, and

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Speaker 1: international relations. Find Bloomberg Surveillance on iTunes, SoundCloud, Bloomberg dot Com,

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Speaker 1: and of course, on the Bloomberg Brad Hints is thrilled

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Speaker 1: to Brad Hints with us. With New York University, he's

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Speaker 1: been in an interesting position really, I sort of think

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Speaker 1: of Peter Fisher Blackstone like you, where you've really had

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Speaker 1: substantial experience in academics in the devil's playground known as

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Speaker 1: Wall Street, and also in American industry, which makes it

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Speaker 1: a pretty rare combination. If I go on the Bloomberg

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Speaker 1: Brad Hints JP Morgan Equity and look at their financials,

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Speaker 1: we forget the ginormous nous. That's a c F A

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Speaker 1: word you learn that. I know. It's like later on

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Speaker 1: in Stern school, the genormous nous of Mr Diamond's effort

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Speaker 1: nine two billion in revenue, bringing down plus to operating

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Speaker 1: income total assets two point five trillion dollars. We forget

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Speaker 1: how big these things are. Does Janet Yellow know how

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Speaker 1: big they are? My guess is she's got a lot

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Speaker 1: more of awareness than I do or our listeners do. Yes,

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Speaker 1: she's she's very much aware how big they are. And

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Speaker 1: that's one of her that's one of her challenges, right.

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Speaker 1: I mean, if you think of what has happened since

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Speaker 1: Dodd Frank, the Fette has gotten much more involved in

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Speaker 1: the regulation of the banks than it did in the past.

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Speaker 1: And so now she has regulatory responsibilities and she has

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Speaker 1: her running an economy responsibilities that you don't really really

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Speaker 1: match up perfectly all the time. Uh So, in the

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Speaker 1: case of the big banks, you know they are they

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Speaker 1: are large, and we don't want them to get larger.

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Speaker 1: But and all of the regulations are telling them to

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Speaker 1: get smaller. They can't merge, can they. I mean, I'm

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Speaker 1: doing some quick math here, and I've got JP Morgan's

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Speaker 1: total assets is thirteen points seven percent of one year

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Speaker 1: nominal GDP and that's amazing, that's right. So you know,

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Speaker 1: if you're if if you're Jamie, You've got to get

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Speaker 1: the most down of what you've got because you can't

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Speaker 1: go out and do material puisitions. He can do technology acquisitions.

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Speaker 1: And you're probably going to see that over time, which

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Speaker 1: is the banks, despite the evaluation of their stocks, really

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Speaker 1: aren't going to allow the some of these startups in

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Speaker 1: the shadow banking system to get away from They'll buy

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Speaker 1: technology in that way, but these are going to be

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Speaker 1: small acquisitions. You're not going to see the Manny Hanny's

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Speaker 1: and the chemical roll ups and the chase the things

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Speaker 1: are the old n c NB story over Brad. You

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Speaker 1: you and I are the only two listening that know

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Speaker 1: what Manny he is. Michael, No, Actually we were h

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Speaker 1: You know. I was up fishing with Dennis Lockhart of

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Speaker 1: the Atlanta Fed the last couple of days, and he

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Speaker 1: was talking about running into somebody who worked for JP

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Speaker 1: Morgan down in Georgia who said they've been with the

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Speaker 1: firm for some thirty years. And Tennis started ticking off

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Speaker 1: every bank that has been merged into JP Morgans, and

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Speaker 1: which one did you start with? And I think the

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Speaker 1: guy he started, he said with the National Bank of Detroit.

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Speaker 1: So you don't have that anymore. Uh. But is the

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Speaker 1: new environment, um brad changing the calculation for banks in

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Speaker 1: terms of how they want to make profits because the

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Speaker 1: least profitable thing is what we think of as banking

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Speaker 1: at this point. And do the regulations of the added

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Speaker 1: costs imposed on the banks maybe work counter to what

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Speaker 1: the regulators would like driving people into the businesses that

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Speaker 1: the shadow banks do. I think that's fairy, that's very true, um,

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Speaker 1: But there's actually another problem that exists. You know, with

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Speaker 1: the changing regulations over the last five, six, seven years, um,

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Speaker 1: the banks have been spending all of their development money

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Speaker 1: in their technology on regulation. And so you really say,

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Speaker 1: I haven't seen the banks keeping up on the technology

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Speaker 1: of their core businesses. They've delayed it. And that's natural, right,

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Speaker 1: because they have a more pressing need in in terms

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Speaker 1: of the and so that's one of the reasons why

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Speaker 1: you've seen all the little startups popping up and they've

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Speaker 1: done very very well. And it strikes me that that

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Speaker 1: what will happen over time as a federal reserve is

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Speaker 1: going to encourage the banks to go out and buy

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Speaker 1: some of these startups and and bring them in because

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Speaker 1: they don't want to lose control they don't want to

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Speaker 1: have a giant shadow banking system. Taking off your observation

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Speaker 1: about the about the banks looking for a different business model. Absolutely,

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Speaker 1: you know their business model and capital markets is broken.

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Speaker 1: You know you can't take risk, you know, I think

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Speaker 1: of the old model of capital markets. You know, if

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Speaker 1: you were a large institutional investor and I was a bank,

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Speaker 1: I would give away free trades, free liquidity to you.

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Speaker 1: You'd send your trades to me. I'd see all the trades.

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Speaker 1: There would be some I'd be able to to take

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Speaker 1: positions against that flow. I'd make money from the from

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Speaker 1: the profitability of my trading business. That model is broken.

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Speaker 1: The trading businesses aren't generating well, if they're generating single

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Speaker 1: digit at r o e s, that's spectacular. It's they're

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Speaker 1: they're they're actually, by my estimate more like a five

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Speaker 1: per cent or are we pulling down the returns of

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Speaker 1: the of the entire operation? And so what you have

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Speaker 1: in the banks right now is banks clinging to business models,

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Speaker 1: waiting for their competitors to throw in the towel and

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Speaker 1: uh and and they're not there. Where we have we've

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Speaker 1: seen banks cut back. Morgan Stanley U B. S On

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Speaker 1: their on their capital markets business credit suite. But no

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Speaker 1: one is throwing in the towel at this, which unfortunately

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Speaker 1: leads to this prolonged period of low r O E s. Well,

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Speaker 1: has anybody figured out a way to to beat that?

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Speaker 1: I mean, Tom says Jamie Diamond can do a quarter here,

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Speaker 1: in a quarter there, But has anybody figured out a

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Speaker 1: long term strategy for what the bank's profit center is

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Speaker 1: going to be? Well, you could look at Wells Fargo

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Speaker 1: and you can say Wells Fargo may look at its

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Speaker 1: trading part of me, it's it's capital markets business is

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Speaker 1: sort of opportunistic. I want to go after profitable parts

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Speaker 1: of the other business US. I have a large retail

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Speaker 1: business that's perfectly fine, um and and and you can

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Speaker 1: see Royal Bank of Canada. I have a profitable business

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Speaker 1: in Canada. I do opportune. I'm going to be large

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Speaker 1: enough in capital markets to execute traits for my for

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Speaker 1: my clients, but I don't want to get too large.

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Speaker 1: I think the problem is we don't have the larger

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Speaker 1: banks that built the the global banking model. There's no

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Speaker 1: there's no h there's no prescription for how you shrink

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Speaker 1: one of those models. I agree with that. It's never

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Speaker 1: been done before. Give us the calendar here into the

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Speaker 1: end of the year. They come back from labor Day,

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Speaker 1: nobody's taken off August. They're all working wherever they are.

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Speaker 1: They gotta figure out structure, income statement, and figure out

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Speaker 1: the bonuses. Every bank has to keep an upper ten

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Speaker 1: percent upper of bodies. Where will we be January one,

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Speaker 1: We'll be shrinking, right, We'll be shrinking exactly. And it

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Speaker 1: may be single digit, it may not be OMG. You know,

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Speaker 1: the humanity may not be the phrase, but nevertheless, it's

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Speaker 1: a shrinking banking system. Is that to the advantage of

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Speaker 1: the boutiques? Of course, it's got to look at someone

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Speaker 1: like a Lazard. They're doing perfectly well. I mean, obviously

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Speaker 1: they have a cyclical business m and A goes up

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Speaker 1: and down. But you know they don't have a capital

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Speaker 1: h they're not carrying a balance sheet, and so you're

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Speaker 1: seeing different models. You're seeing banks that are doing opportunity.

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Speaker 1: We can think of Hong Kong HSBC, HSBC UM. Their

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Speaker 1: approach says, we're going to have operating relationships with corporate corporations,

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Speaker 1: and from those operating relationships, we are going to have

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Speaker 1: a piece of capital markets, and that piece of capital

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Speaker 1: markets can be profitable. So that sounds to be like

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Speaker 1: Global Chemical Bank from ago. I mean basically, that's it.

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Speaker 1: What did HSBC learned when they enjoyed an American experiment

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Speaker 1: fifteen years ago that didn't work out? Did it? Culture matters?

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Speaker 1: Culture matters? I'm seriously, I was. I was screaming about

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Speaker 1: the folks. I was screaming about this last night Bloomberg Boston.

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Speaker 1: I'm sorry, and neinos on Street I had Chicken Jeter.

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Speaker 1: I'm sorry. It's very good, the Chicken Jena and then

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Speaker 1: you fall over the bar onto the floor like that

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Speaker 1: great catch that Derek Jeter made years ago. But but seriously,

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Speaker 1: or HSBC ran up against a culture they weren't ready

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Speaker 1: to deal with in their American soire. Ult matters, and

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Speaker 1: we can think of it in terms of deutscha is

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Speaker 1: there is. It was a classic cultural issue. Bank of

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Speaker 1: America with Mary Lynch another another culture issue, which is,

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Speaker 1: you know they should come on, come on your cell

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Speaker 1: side right now. Did should moyne hand sell Mery Lynch

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Speaker 1: sell the Jewel? I can't here, you know, I think

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Speaker 1: I think that one is come on, boiler up let's go, um,

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Speaker 1: could you structure a retail a standalone merylanch. Yes, you

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Speaker 1: could structure a standalone Maryland. The retail business is a

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Speaker 1: very value, valuable business. But Morninghand knows it, and he's

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Speaker 1: trying to integrate the retail business. And you see that

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Speaker 1: you kind of in the reverse side with Gorman. Yeah, exactly.

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Speaker 1: This has been wonderful. Brandons. We gotta do this. We

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Speaker 1: have to have a Janet yell and speech more often

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Speaker 1: so Brad Hens can come and he is with my

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Speaker 1: original sponsor, the Stern School of New York University. Good morning, Tom.

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Speaker 1: We are here in Jackson Hall with a St. Louis

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Speaker 1: Fed President Jim Bollard, and along with me is Kathleen

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Speaker 1: Hayes from Blomberg Radio. Good morning to both of you,

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Speaker 1: and good morning to Jim. Thank you for getting up

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Speaker 1: so early this morning. He let me ask you, Uh,

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Speaker 1: we've we've heard your views on monetary policy quite a

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Speaker 1: bit recently, but I want to get your views on

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Speaker 1: the FED itself. There is a critique of the FED

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Speaker 1: out there, uh that has grown in recent days that

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Speaker 1: you guys don't know what you're doing any any longer,

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Speaker 1: that the models don't work, the effort to generate inflation

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Speaker 1: isn't working, and that it's time for a total rethink.

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Speaker 1: Where would you put yourself in that debate, it's I

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Speaker 1: think it's time to rethink our normalization plans and the

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Speaker 1: way we're presenting our normalization plans. If you look at

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Speaker 1: that dot plot, which has all those dots going up

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Speaker 1: at any moment, you know, two hundred basis points, I

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Speaker 1: think that's probably not the right characterization of what's going

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Speaker 1: to happen over the forecast horizon. So that's why we

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Speaker 1: came up with this idea about let's not pretend we

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Speaker 1: have a lot of certainty about where the long run

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Speaker 1: outcome is for the U. S. Economy. Let's make policy

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Speaker 1: for where we are today, which is a low productivity

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Speaker 1: growth environment and a very low real rate of return

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Speaker 1: on government paper, and those are the parameters that we're

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Speaker 1: working with, and then make the right monetoried policy for that,

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Speaker 1: and then keep an eye out and see if those

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Speaker 1: things switch in the future. Well, Jim, it seems in

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Speaker 1: a way, you know, after several decades of the FED

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Speaker 1: operating a very simple model, the economy's overheating your raise rates.

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Speaker 1: If it's slowing down, you cut them. And now this

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Speaker 1: discussion of the low neutral rate, how much room to

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Speaker 1: cut in the next recession? You moving to this new

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Speaker 1: regime based model. Have we come to the end of

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Speaker 1: monetary policy as we as we have known it? I

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Speaker 1: don't really think so. You know, you might think it

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Speaker 1: was simple going back, but if you lived through it

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Speaker 1: all like I did, there were always a lot of

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Speaker 1: issues going on. You had the productivity speed up in

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Speaker 1: the in the ninety nineties and Greenspan had to make

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Speaker 1: a call on that. You had, uh, you know, Latin

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Speaker 1: American deck crisis. You had an SNL crisis, so uh,

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Speaker 1: dot com boom, Yeah, all these things that you've You've

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Speaker 1: always got to be thinking about. What's the environment? But

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Speaker 1: one of these people are talking about a lot now.

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Speaker 1: And I was at a conference in the last week

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Speaker 1: where money manager of the audience said, what's going to

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Speaker 1: happen the next recession? I know in the past, how

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Speaker 1: to price what happens in recession? The FED cuts by

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Speaker 1: basis points with the rate already so low, and you're

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Speaker 1: not in favor of raising it until you see a shift.

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Speaker 1: What's going to happen in the recession? Again? The fed

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Speaker 1: seems to be at sort of an impast almost a

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Speaker 1: dead end. Yeah, I'm not one that talks about let's

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Speaker 1: raise interest rates so that we can lower him later.

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Speaker 1: I don't think that's a good way to go. If

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Speaker 1: you look at this paper by Dave Reichschneider, he's a

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Speaker 1: board staff person, he says, it probably is quite a

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Speaker 1: bit of ammunition out there. So I guess that's probably

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Speaker 1: the best way to look at it. Some of it

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Speaker 1: would be lower rates, some of it would be quantitative easing,

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Speaker 1: some of it would be forward guidance. So if we

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Speaker 1: just deployed the things that we've deployed last time, we

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Speaker 1: could probably get through a recession. But is your goal

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Speaker 1: even even do well during the recession. Is your goal

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Speaker 1: just to put a floor under a recession? Because you've

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Speaker 1: done QUEI, you've done forward guidance, the cut rates to zero,

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Speaker 1: and we still don't have any measurable inflation. Yeah, inflation

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Speaker 1: is low, but it's not that low. It's you know,

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Speaker 1: maybe half a percentage point or less below our target.

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Speaker 1: So the PC is at nine tenths right now. Headline. Uh, Yeah,

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Speaker 1: that's that's that's true. That's fair. But you know, some

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Speaker 1: of that's driven by well energy prices and so on.

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Speaker 1: So yeah, it's pretty low. Um, but unemployment has come

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Speaker 1: down below five percent, we're basically right on target for that.

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Speaker 1: Inflation is a little low. We think it's going to

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Speaker 1: come up. So we're really doing pretty well as far

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Speaker 1: as our goal variables. Something not generating inflation, and we're

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Speaker 1: not generating growth right now from monetary policy growth this

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Speaker 1: you know, monetary policy is not drive growth in the

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Speaker 1: medium term. In the long run, it's a it's a

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Speaker 1: temperate you can have a temporary effect, but that temporary

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Speaker 1: effect wears off and the longer, the medium term and

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Speaker 1: longer run is driven by productivity trends and population trends

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Speaker 1: and labor force trends. So uh, you know those things

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Speaker 1: need if you want that to be better, and I

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Speaker 1: do want it to be better, but you can't do

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Speaker 1: that through monetary policy. Monetary policies about cyclical movements. So

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Speaker 1: jim Um. In June, the last summer of economic projections,

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Speaker 1: you flatlined your forecast. But we've had some interesting numbers

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Speaker 1: since then. We've had two pretty good jobs numbers after

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Speaker 1: the week May number. The GDP tracking that the Atlanta

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Speaker 1: Fed does a lot of the economists on Wall Street

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Speaker 1: are doing is looking for a growth of about three

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Speaker 1: and a half percent on GDP and the third quarter.

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Speaker 1: If you were going to make your projections right now,

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Speaker 1: would you change. Is it possible the regime change you've

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Speaker 1: been waiting for is going to start to unfold? Uh? No,

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Speaker 1: I don't think so. The regime that we talked about

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Speaker 1: is the low productivity growth regime, and labor productivity growth

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Speaker 1: has only been about you know, one half of one

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Speaker 1: percent over the last several years. We don't see that

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Speaker 1: changing your term. And also another part of the regime

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Speaker 1: is very low real rates of return on government paper.

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Speaker 1: We don't see that changing anytime soon. So um so

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Speaker 1: those are are kind of the fundamentals. And then we say, okay,

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Speaker 1: let's make optimal monetary policy. And given those two facts,

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Speaker 1: and that's what brings us to the sixty three basis

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Speaker 1: point projection. However, if you do, you're we are saying,

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Speaker 1: more strengths in the economy. Is it possible that if

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Speaker 1: this trend continues, even if the regime hasn't changed, but

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Speaker 1: the growth numbers have picked up, that you're going to

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Speaker 1: be in that camp saying, well, we better debate it

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Speaker 1: pretty seriously in September, and if we don't move, then

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Speaker 1: maybe moving too some right in it. But I haven't

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Speaker 1: seen anything anything in the data that suggests that these

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Speaker 1: this regime, those two factors are really changing in a

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Speaker 1: fundamental way. It's true that tracking forecasts are up for

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Speaker 1: the third quarters of them for GDP growth in the

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Speaker 1: third quarter and an annual rate three, but I would

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Speaker 1: see that as kind of making up maybe for slower

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Speaker 1: growth in the first half of the year. The year

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Speaker 1: over year GDP growth rate in the US is only

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Speaker 1: one point two percent, and that's blow trend growth over

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Speaker 1: the last year. So that's one of the reasons why

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Speaker 1: we ditched our past approach to this, is that we

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Speaker 1: kept forecasting, Oh, we're gonna have above trend growth, and

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Speaker 1: this is going to drive unemployment even lower. We don't

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Speaker 1: have above trend growth now, so I think the cyclical

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Speaker 1: dynamics are played out and we were in this very

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Speaker 1: low growth regime. Do you think that the FEDS low

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Speaker 1: interest rate policy is contributing to that now because of

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Speaker 1: the financial repression against savers, because of the fact that

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Speaker 1: banks profit margins are so low that they may not

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Speaker 1: be interested in making loans right now, would it be

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Speaker 1: better to raise interest rates a little bit and maybe

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Speaker 1: drive the economy through another channel. Well, I guess our

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Speaker 1: basic ideas were pretty close to our goals. And we're

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Speaker 1: also pretty close to a neutral rate, which is going

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Speaker 1: to be a low value. And that's and and we're

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Speaker 1: only talking about over the forecaster rise, and we're not

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Speaker 1: trying to tell you what's going to happen over five

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Speaker 1: or ten years. We're only talking next two years. Thank,

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Speaker 1: it's probably the better way to think about it. Yeah,

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Speaker 1: I want to ask you a bit about the theme

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Speaker 1: of the conference, which is, you know, looking to the future,

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Speaker 1: the FEDS toolkit and having a resilient monetary policy framework.

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Speaker 1: Negative rates, Jim Bullard, Where you come down on that?

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Speaker 1: You know, Japan's gone negative, very mixed results, um rob Kaplan,

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Speaker 1: Dallas FED. It would be too disruptive to the US

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Speaker 1: banking system. What do you see? What do you in

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Speaker 1: your team see at St. Louis. I'll be anxious to

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Speaker 1: hear what the people have to say here at the

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Speaker 1: conference on negative rates, but I'm not I'm not too

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Speaker 1: enthusiastic about them, and I don't think they're likely outcome

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Speaker 1: in the US, as I just described it earlier, we

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Speaker 1: actually have quite a bit of firepower if we need

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Speaker 1: it for recession. I don't think we'd have to go

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Speaker 1: in this direction of negative rates, which has had kind

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Speaker 1: of mixed results as you say worldwide. All right, we've

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Speaker 1: been speaking with the president of the Federals are a

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Speaker 1: Bank of St. Louis, Jim Bullard. Good frigid morning to

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Speaker 1: you from Jackson, Wyoming. But we actually are probably in

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Speaker 1: an environment that Robert Kapler the Dallas Fed likes because

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Speaker 1: you're used to much more heat. Yeah, I know, I'm

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Speaker 1: glad to wear a jacket. That's a nice change of pace.

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Speaker 1: But you're getting a lot of heat here. As a

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Speaker 1: member of the FED, the FED under a lot of

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Speaker 1: criticism lately for its monetary policies, which have not generated growth,

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Speaker 1: not generated inflation. The theme of this conference is is

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Speaker 1: a rethink. But in the short run, what do you

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Speaker 1: think needs to be done? And I have the benefit

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Speaker 1: of being able to answer this question with some objectivity

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Speaker 1: because I've just been at the FED for a year.

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Speaker 1: But my own view is the FED up to now

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Speaker 1: has done uh what it can and used aggressively it's

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Speaker 1: tools to try to generate growth and meet it stool mandate.

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Speaker 1: I think the reality is we also need structural reform

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Speaker 1: and fiscal policy to accomp any monetary policy to meet

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Speaker 1: the challenges we face. So I think people may be

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Speaker 1: disappointed that monetary policy hasn't generated more growth, but it's

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Speaker 1: designed to act along with structural policy and fiscal policy,

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Speaker 1: and we haven't had that for seven years. And I

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Speaker 1: think the period of monetary policy being the main game

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Speaker 1: in town probably needs to come to an end. We need,

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Speaker 1: we need a fuller range of tools. Larry Summers this morning,

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Speaker 1: Kevin Warsh in the Wall Street Journal yesterday, both suggesting

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Speaker 1: the FED is vulnerable to its critics because its policies

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Speaker 1: aren't working right now. You come from a Wall Street

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Speaker 1: in an academic background. What are your friends telling you

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Speaker 1: about FED credibility now? Well, And it's interesting and I

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Speaker 1: know both the gentleman you mentioned one is a critical

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Speaker 1: of the FED. I think because we're even talking about

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Speaker 1: raising rates. That's Larry Summers, and Kevin is critical the

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Speaker 1: FED because we're not raising rates more quickly. So I

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Speaker 1: think it comes with the territory. I think the key

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Speaker 1: thing on our job is to look at the facts

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Speaker 1: UH understand and conditions do our work. We're very integrated

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Speaker 1: with the business community and other leaders. Communicate what we're

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Speaker 1: seeing and act in a way that faces reality, and

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Speaker 1: you're going to get criticism from both sides. Again, I think, UH,

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Speaker 1: to my eye, we need a broader range of tools.

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Speaker 1: Many of the issues we face in the United States

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Speaker 1: have to do with aging demographics, high rates of disruption

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Speaker 1: and industries, increased globalization which makes us a little more

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Speaker 1: vulnerable to China. Also high levels of debt to GDP,

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Speaker 1: which we've been working off since the Great Procession. Many

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Speaker 1: of these issues, like aging demographics, are best addressed through

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Speaker 1: UH policies that grow the workforce, create vocational training. Infrastructure

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Speaker 1: spending would be very helpful, and those policies, along with

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Speaker 1: proper monetary policy, I think are needed. There doesn't seem

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Speaker 1: to be any movement from the fiscal policy makers to

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Speaker 1: do what you're talking about. In the absence of that,

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Speaker 1: do you think the FED feels compelled to try to

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Speaker 1: go beyond its mandate and do more. I think that's

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Speaker 1: the balance, that's the tension UH at the moment, we're

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Speaker 1: trying to UH, We're trying to address the situation as

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Speaker 1: we see it, and we're not anticipating that there'll be

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Speaker 1: other tools used. But I think part of our job,

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Speaker 1: in addition to proper monetary policy, is to call out

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Speaker 1: what we're seeing and if we think there's a need

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Speaker 1: for structure reform and fiscal policy, I think part of

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Speaker 1: my job is to call it out to it, to

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Speaker 1: flag it, and not be silent about it. Wall Street

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Speaker 1: would like Janet Yelling to call out when you're going

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Speaker 1: to raise interest rates. In her remarks today, they perhaps

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Speaker 1: too reliant on the FED right now? Do you think

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Speaker 1: that the Wall Streets putting too much pressure on the

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Speaker 1: Open Market Committee? Well? Um, as someone who spent thirty

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Speaker 1: years in the markets, I think sometimes it pays to

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Speaker 1: take a step back. What what what I've been saying,

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Speaker 1: and I think what others have been saying at the FED.

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Speaker 1: But I'll comment for myself is uh, probably the anticipated

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Speaker 1: path of rates going forward will be much flatter. Um.

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Speaker 1: We've got a number of persistent headwinds. So even though

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Speaker 1: I do think in the near term the case for

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Speaker 1: removing some amount of accommodation has been strengthened, that's in

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Speaker 1: the context of I think a much slower, flatter path

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Speaker 1: of rate increases, and for business people out there and

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Speaker 1: for people in the markets, I think the path of

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Speaker 1: rates is just as important or more important than exactly

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Speaker 1: the exact timing of when the next move is. Do

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Speaker 1: you think the FED has a communications problem in getting

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Speaker 1: those views across. What you're saying is is sort of

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Speaker 1: the consensus on the FED. But you've got people interpreting

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Speaker 1: the remarks of various FEED officials over the last couple

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Speaker 1: of weeks as somebody says raise, somebody says stay, and

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Speaker 1: nobody really knows what's going on. I mean, I think

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Speaker 1: the FED has to improve we we all have to

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Speaker 1: improve our communication. You have to understand when you give

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Speaker 1: a speech or give an interview, a snippet of what

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Speaker 1: you say may be taken, so it may make it

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Speaker 1: look like there's a little more debate on sir and

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Speaker 1: issues than there is. But yeah, I think this is

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Speaker 1: an important challenge for the FED. We have to improve

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Speaker 1: our communication. That falls to all of us. But I

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Speaker 1: think that's something we need to do. If you actually

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Speaker 1: had the time to read all the FED speeches and

429
00:24:12,920 --> 00:24:16,080
Speaker 1: read the minutes, you get a much fuller picture, which

430
00:24:16,119 --> 00:24:18,959
Speaker 1: is which is consistent with the path that I just

431
00:24:19,000 --> 00:24:22,040
Speaker 1: talked about. But often when you watch television, you get

432
00:24:22,040 --> 00:24:26,199
Speaker 1: snippets and and it's somehow it can create more confusion,

433
00:24:26,600 --> 00:24:28,639
Speaker 1: and so I think we need to be cognizant of

434
00:24:28,640 --> 00:24:31,560
Speaker 1: that and adjust our communication accordingly. You do come from

435
00:24:31,560 --> 00:24:34,080
Speaker 1: Wall Street, as as both of us have mentioned. When

436
00:24:34,080 --> 00:24:36,200
Speaker 1: you look at what's going on, do you think there

437
00:24:36,240 --> 00:24:39,560
Speaker 1: are distortions in the markets these days from monetary policy.

438
00:24:39,800 --> 00:24:43,600
Speaker 1: I think there's a cost to having rates this low

439
00:24:43,960 --> 00:24:47,080
Speaker 1: for this long. There are reasons to have rates this low,

440
00:24:47,160 --> 00:24:50,560
Speaker 1: but the but the cost is it hurts savers. There's

441
00:24:50,600 --> 00:24:54,040
Speaker 1: no question if you have any money in in in savings,

442
00:24:54,359 --> 00:24:57,000
Speaker 1: you can't earn on it. Second, it causes people to

443
00:24:57,040 --> 00:25:00,200
Speaker 1: take more risk, and people that would have one type

444
00:25:00,200 --> 00:25:03,720
Speaker 1: of asset allocation are pushed to take more risk institutions

445
00:25:03,800 --> 00:25:06,800
Speaker 1: or take more risks. It can create imbalances, and so

446
00:25:06,920 --> 00:25:10,080
Speaker 1: I think there are some of those imbalances today my experiences,

447
00:25:10,560 --> 00:25:13,119
Speaker 1: there's the imbalances you see and sometimes it's a lot

448
00:25:13,200 --> 00:25:16,360
Speaker 1: easier to see these imbalances in hindsight, but they're building

449
00:25:16,800 --> 00:25:19,000
Speaker 1: and I see them in certain places. That's why we've

450
00:25:19,040 --> 00:25:21,760
Speaker 1: for example, in the commercial real estate area. From a

451
00:25:21,840 --> 00:25:24,160
Speaker 1: macro predential point of view, we've tried to tamp down

452
00:25:24,640 --> 00:25:27,480
Speaker 1: bank exposures on commercial real estate because we see some

453
00:25:27,560 --> 00:25:30,240
Speaker 1: of these imbalances. So they're there. You know, the president

454
00:25:30,240 --> 00:25:32,240
Speaker 1: of Dallas fed Dallas is at the center of the

455
00:25:32,280 --> 00:25:34,959
Speaker 1: oil markets, oils at the center of the inflation debate.

456
00:25:35,200 --> 00:25:37,359
Speaker 1: What are your economists and context telling you who's going

457
00:25:37,400 --> 00:25:41,679
Speaker 1: to happen? Uh? I think we're moving towards global supply

458
00:25:41,760 --> 00:25:44,119
Speaker 1: demand balance. Some people think we're there right now, but

459
00:25:44,200 --> 00:25:47,600
Speaker 1: we we believe will be UH in balance sometime in

460
00:25:47,600 --> 00:25:49,560
Speaker 1: the first or second quarter this year. We still have

461
00:25:49,640 --> 00:25:53,280
Speaker 1: record global inventories to work down. But because we're moving

462
00:25:53,320 --> 00:25:57,440
Speaker 1: toward balance, we would expect prices to firm, and firm

463
00:25:57,520 --> 00:25:59,359
Speaker 1: means they may not go up a lot, but I

464
00:25:59,400 --> 00:26:01,920
Speaker 1: don't think they're uh. I don't think you're gonna see

465
00:26:01,920 --> 00:26:05,199
Speaker 1: a big down leg either. You'll see volatility, but I

466
00:26:05,240 --> 00:26:09,160
Speaker 1: think in in in seventeen eighteen nineteen, you'll see firming.

467
00:26:09,480 --> 00:26:13,000
Speaker 1: I think you'll slowly see rick count coming back. One

468
00:26:13,000 --> 00:26:15,960
Speaker 1: of the issues is in the shale industry, the break

469
00:26:16,040 --> 00:26:18,480
Speaker 1: even costs is as high as sixty dollars or more,

470
00:26:18,840 --> 00:26:20,919
Speaker 1: and so we're well below that, but I think as

471
00:26:20,920 --> 00:26:24,679
Speaker 1: you see prices firm, you'll see somewhat more recount. But

472
00:26:24,840 --> 00:26:27,040
Speaker 1: I think from an inflation point of view, to the

473
00:26:27,040 --> 00:26:29,520
Speaker 1: extent this pulled down inflation, my guess is it will

474
00:26:29,560 --> 00:26:33,200
Speaker 1: be more neutral going forward. That should help with business investment.

475
00:26:33,200 --> 00:26:35,600
Speaker 1: One of the big subtractions from that has been in

476
00:26:35,600 --> 00:26:39,080
Speaker 1: the oil industry, but in general, companies seem reluctant to

477
00:26:39,160 --> 00:26:42,600
Speaker 1: put money to work. Is anybody in your district telling

478
00:26:42,600 --> 00:26:45,920
Speaker 1: you that's going to change? So here the issues that

479
00:26:46,080 --> 00:26:50,280
Speaker 1: to me are driving that. One is weak expected demand,

480
00:26:50,280 --> 00:26:53,879
Speaker 1: particularly globally. People have to understand, uh as much as

481
00:26:53,920 --> 00:26:57,400
Speaker 1: half of SMP revenues come from outside the United States,

482
00:26:57,440 --> 00:27:00,399
Speaker 1: so that's an anticipation of weak demand as a factor.

483
00:27:00,600 --> 00:27:04,119
Speaker 1: And also every single industry is getting I mentioned earlier

484
00:27:04,160 --> 00:27:09,399
Speaker 1: disruptive Amazon versus retail stores, Uber versus taxis, Airbnb versus

485
00:27:09,400 --> 00:27:12,000
Speaker 1: hotels or examples. People know, but it's happening in every

486
00:27:12,000 --> 00:27:15,719
Speaker 1: single industry, and it's hurting pricing power of companies, and

487
00:27:15,720 --> 00:27:17,800
Speaker 1: it's causing c e o s that I talked to

488
00:27:18,119 --> 00:27:21,760
Speaker 1: just to be more cautious. I think this is manageable.

489
00:27:21,880 --> 00:27:25,040
Speaker 1: I think energy firming will help cap X. You saw

490
00:27:25,040 --> 00:27:28,480
Speaker 1: the durable goods orders was stronger, so I think you'll

491
00:27:28,760 --> 00:27:31,480
Speaker 1: I'm hopefully you'll see some improvement in CAP spending. But

492
00:27:31,840 --> 00:27:35,960
Speaker 1: some of this uncertainty comes from some persistent forces that

493
00:27:36,000 --> 00:27:38,159
Speaker 1: are going to be with us for a while. Robert Caplan,

494
00:27:38,200 --> 00:27:40,600
Speaker 1: President of the Dallas FED, Thanks for joining us. Thanks

495
00:27:40,920 --> 00:27:47,639
Speaker 1: good thought. Who you put your trust in matters. Investors

496
00:27:47,640 --> 00:27:51,000
Speaker 1: have put their trust in independent registered investment advisors to

497
00:27:51,040 --> 00:27:55,439
Speaker 1: the tune of four trillion dollars. Why they see their

498
00:27:55,520 --> 00:27:59,399
Speaker 1: role is to serve, not sell. That's why Charles Schwab

499
00:27:59,480 --> 00:28:02,399
Speaker 1: is committed to the success of over seven thousand independent

500
00:28:02,440 --> 00:28:07,320
Speaker 1: financial advisors who passionately dedicate themselves to helping people achieve

501
00:28:07,320 --> 00:28:11,640
Speaker 1: their financial goals. Learn more and find your independent advisor

502
00:28:11,720 --> 00:28:20,160
Speaker 1: dot com. Now to Jackson All Kathleen Hayes with our

503
00:28:20,200 --> 00:28:24,080
Speaker 1: Michael McKee on a beautiful morning, and a beautiful morning

504
00:28:24,119 --> 00:28:27,359
Speaker 1: it is Michael McKee, Kathleen Hayes. At least it's not

505
00:28:27,400 --> 00:28:29,879
Speaker 1: smokey Michael like it was. Yeah, it's a it's the

506
00:28:30,119 --> 00:28:33,159
Speaker 1: view has gotten a lot better. Dennis Lockhart has been

507
00:28:33,240 --> 00:28:35,080
Speaker 1: up in the Rocky Mountains with me for the past

508
00:28:35,080 --> 00:28:37,520
Speaker 1: three days fishing and it certainly does look better than

509
00:28:37,560 --> 00:28:40,600
Speaker 1: it has. The fire smoke, uh moving away, the Hayes

510
00:28:40,640 --> 00:28:43,520
Speaker 1: moving out. But is the Hayes still there in terms

511
00:28:43,560 --> 00:28:46,280
Speaker 1: of monetary policy, in terms of trying to figure out

512
00:28:46,280 --> 00:28:48,720
Speaker 1: when the best time to move on rates? Is a

513
00:28:48,800 --> 00:28:52,560
Speaker 1: good metaphor there, Yeah, I worked on that one. Um Well,

514
00:28:52,640 --> 00:28:54,800
Speaker 1: I would say that they're you know, their elements of

515
00:28:54,880 --> 00:28:57,479
Speaker 1: the data we're seeing that are mixed, you know, And

516
00:28:57,520 --> 00:29:01,640
Speaker 1: we're in a moderate growth economy, and I think it's

517
00:29:01,720 --> 00:29:04,360
Speaker 1: natural when you have an economy that's kind of making

518
00:29:04,480 --> 00:29:08,719
Speaker 1: relatively slow progress that you're going to see data that

519
00:29:08,880 --> 00:29:11,800
Speaker 1: you can take in different directions. And so, yes, there's

520
00:29:11,880 --> 00:29:15,320
Speaker 1: still some haze. So but speaking of of the haze

521
00:29:15,520 --> 00:29:19,560
Speaker 1: on the uncertainty, the labor market growth has slowed. If

522
00:29:19,600 --> 00:29:22,560
Speaker 1: you look at more of a quarterly basis or monthly average,

523
00:29:22,560 --> 00:29:26,360
Speaker 1: a hundred fifty thousand versus two hundred thousand inflation is

524
00:29:26,400 --> 00:29:29,520
Speaker 1: still pretty far from the target. So in a time

525
00:29:29,520 --> 00:29:31,239
Speaker 1: of such uncertainty, and that's one of the things so

526
00:29:31,280 --> 00:29:34,400
Speaker 1: many people are talking about, and the FED not knowing

527
00:29:34,480 --> 00:29:37,280
Speaker 1: quite what the world looks like. Is there right wide

528
00:29:37,280 --> 00:29:39,000
Speaker 1: move now? Is there any rush to move? You have

529
00:29:39,040 --> 00:29:42,160
Speaker 1: said recently that you could see one even two rate hikes.

530
00:29:42,200 --> 00:29:45,520
Speaker 1: Are you looking at September? I can see two ray

531
00:29:45,600 --> 00:29:49,040
Speaker 1: hiks as possibles when I look at the calendar. We

532
00:29:49,080 --> 00:29:52,080
Speaker 1: have three more meetings this year, so that's possible. And

533
00:29:52,120 --> 00:29:56,480
Speaker 1: what I've said recently is that, UM, I can imagine

534
00:29:56,520 --> 00:30:00,200
Speaker 1: circumstances if we continue to see the economy perform m

535
00:30:00,200 --> 00:30:04,520
Speaker 1: as it has been in my opinion, um at least

536
00:30:04,560 --> 00:30:08,640
Speaker 1: one this year. Now. None of that is locked in

537
00:30:08,720 --> 00:30:11,800
Speaker 1: in my in my thinking. We just have to see

538
00:30:11,840 --> 00:30:15,760
Speaker 1: how the economy seems to be performing. I don't think

539
00:30:16,280 --> 00:30:20,360
Speaker 1: the Committee is risking a lot by being cautious and gradual.

540
00:30:20,440 --> 00:30:22,640
Speaker 1: I don't think we're behind the curve in terms of

541
00:30:22,800 --> 00:30:27,640
Speaker 1: either inflation or even risking a big financial instability event.

542
00:30:28,120 --> 00:30:31,640
Speaker 1: So I think the by words that the public should

543
00:30:31,720 --> 00:30:34,560
Speaker 1: understand is cautious and gradual, and there's no gun to

544
00:30:34,600 --> 00:30:38,040
Speaker 1: our head. Einstein famously did not say in the definition

545
00:30:38,080 --> 00:30:40,200
Speaker 1: of insanity is doing the same thing over and over

546
00:30:40,240 --> 00:30:42,920
Speaker 1: again and expecting a different result. People think he did.

547
00:30:44,000 --> 00:30:47,520
Speaker 1: But still we'll have to figure that. Somebody said, But

548
00:30:47,520 --> 00:30:50,160
Speaker 1: but the FED has kept interest rates low now for

549
00:30:50,360 --> 00:30:54,000
Speaker 1: eight years and we're still not generating growth, we're still

550
00:30:54,040 --> 00:30:57,400
Speaker 1: not generating inflation. Is it time for a rethink of

551
00:30:57,440 --> 00:31:01,040
Speaker 1: what monetary policy can do and how it works? Well?

552
00:31:01,160 --> 00:31:03,720
Speaker 1: I I think you've seen signals recently from a couple

553
00:31:03,720 --> 00:31:06,360
Speaker 1: of my colleagues that they are beginning to rethink things.

554
00:31:06,680 --> 00:31:09,960
Speaker 1: John Williams made it talks as well as a paper

555
00:31:10,000 --> 00:31:12,760
Speaker 1: that he posted on his website that suggested maybe we

556
00:31:12,760 --> 00:31:18,080
Speaker 1: should be rethinking some of the basic assumptions around around policy.

557
00:31:18,160 --> 00:31:21,320
Speaker 1: And Jim Bullard has taken quite a different approach than

558
00:31:21,360 --> 00:31:26,440
Speaker 1: the rest of the committee. Uh. I welcome these suggestions

559
00:31:26,480 --> 00:31:32,760
Speaker 1: that periodically, particularly if things are not sort of jelling perfectly,

560
00:31:33,280 --> 00:31:35,520
Speaker 1: that you go back to your basic assumptions and think

561
00:31:35,560 --> 00:31:37,640
Speaker 1: them through again. So I think both of them have

562
00:31:37,760 --> 00:31:44,280
Speaker 1: made a good contribution. Do you trust the Atlanta FEDS models?

563
00:31:41,400 --> 00:31:51,360
Speaker 1: Which I view models as input to a decision process

564
00:31:51,440 --> 00:31:55,520
Speaker 1: that necessarily requires some judgment. I don't let the models

565
00:31:55,560 --> 00:31:57,720
Speaker 1: tell me what to think or what to do, but

566
00:31:57,800 --> 00:32:02,040
Speaker 1: they are useful inputs and we can use models to

567
00:32:02,160 --> 00:32:05,560
Speaker 1: do to test hypotheses, to to run through a certain

568
00:32:05,600 --> 00:32:08,360
Speaker 1: set of assumptions and see what the model tells us.

569
00:32:08,400 --> 00:32:10,239
Speaker 1: And so they're they're very useful and I have an

570
00:32:10,240 --> 00:32:13,680
Speaker 1: outstanding team in Atlanta that does the modeling. So, Dennis,

571
00:32:13,680 --> 00:32:17,240
Speaker 1: are the FEDS dot plot projections or even just the

572
00:32:17,240 --> 00:32:21,240
Speaker 1: you know that the forecast of interest increase becoming a liability?

573
00:32:21,440 --> 00:32:26,240
Speaker 1: Is the FED losing credibility by predicting rate hikes that

574
00:32:26,320 --> 00:32:29,800
Speaker 1: then don't come true, forecasts that have to be cut

575
00:32:29,840 --> 00:32:32,480
Speaker 1: back because this is are we seeing the end of

576
00:32:32,520 --> 00:32:34,520
Speaker 1: the useful as a forward guidance. I'm certainly are not

577
00:32:34,600 --> 00:32:39,600
Speaker 1: going to confirm lots of credibility. I don't think it

578
00:32:39,600 --> 00:32:42,600
Speaker 1: should be taken that way. But there is a nuanced

579
00:32:42,680 --> 00:32:44,520
Speaker 1: point that needs to be made, and that is the

580
00:32:44,560 --> 00:32:47,840
Speaker 1: dot plots are not a commitment. They're not a prediction

581
00:32:47,960 --> 00:32:50,520
Speaker 1: of what's going to happen. There are forecasts, and the

582
00:32:50,600 --> 00:32:55,040
Speaker 1: forecasts are always subject to adjustment. Well, we've had a

583
00:32:55,080 --> 00:32:57,280
Speaker 1: long period of time in which people have suggested that

584
00:32:57,360 --> 00:33:00,320
Speaker 1: dot plots confused them on Wall Street? Did you get

585
00:33:00,400 --> 00:33:02,960
Speaker 1: rid of them? Is it useful to even have? Well,

586
00:33:03,000 --> 00:33:05,320
Speaker 1: we should always be working on how to improve our

587
00:33:05,360 --> 00:33:09,720
Speaker 1: communications so that everyone gets the information they need. The

588
00:33:09,840 --> 00:33:16,240
Speaker 1: dot plots are seventeen individuals views uh in advance of

589
00:33:16,280 --> 00:33:20,680
Speaker 1: a meeting, with the opportunity to adjust the dot plots

590
00:33:20,800 --> 00:33:24,360
Speaker 1: or the dots after the meeting, so that you should

591
00:33:24,400 --> 00:33:27,320
Speaker 1: be taken for what they are. They're not a consensus

592
00:33:27,320 --> 00:33:30,960
Speaker 1: of the committee. They're what individuals are forecasting. When you

593
00:33:31,000 --> 00:33:35,400
Speaker 1: look at GDP, the consumer, thank goodness, has been holding

594
00:33:35,480 --> 00:33:39,600
Speaker 1: up quite well. Uh. Business investment, though, has been weak

595
00:33:39,960 --> 00:33:43,360
Speaker 1: for a prolonged period of time, and there's an argument

596
00:33:43,400 --> 00:33:47,200
Speaker 1: being made that uncertainty over where the FED is heading,

597
00:33:47,280 --> 00:33:50,520
Speaker 1: a view that rates are so low now but they're

598
00:33:50,600 --> 00:33:54,959
Speaker 1: certainly not going to stay this low, are holding back investment.

599
00:33:55,040 --> 00:33:56,880
Speaker 1: That there's a sense that the rate of returns are

600
00:33:56,920 --> 00:33:59,960
Speaker 1: so low that there's no need to go longer term,

601
00:34:00,080 --> 00:34:02,640
Speaker 1: and that's exactly what this economy is lacking and needs

602
00:34:02,720 --> 00:34:06,480
Speaker 1: right now, longer term investments that produce raise the productivity,

603
00:34:06,520 --> 00:34:09,319
Speaker 1: create more jobs, etcetera. Well, absolutely share your view on

604
00:34:09,560 --> 00:34:14,040
Speaker 1: business fixed investment. In fact, in my outlook, I am

605
00:34:14,080 --> 00:34:18,120
Speaker 1: assuming some uptick in business investment in the second half

606
00:34:18,120 --> 00:34:20,640
Speaker 1: and through two thousand and seventeen. Not a lot, but some,

607
00:34:21,360 --> 00:34:24,440
Speaker 1: And that really is an essential point to the picture

608
00:34:24,719 --> 00:34:29,279
Speaker 1: evolving that gives me some confidence in in adjusting the

609
00:34:29,320 --> 00:34:34,160
Speaker 1: policy rate. Yes, uncertainty is a factor. Perhaps uncertainty about

610
00:34:34,160 --> 00:34:35,880
Speaker 1: policy as a factor, But there are a lot of

611
00:34:35,920 --> 00:34:40,919
Speaker 1: other uncertainties out there, long term fiscal balance of the country,

612
00:34:40,960 --> 00:34:44,799
Speaker 1: conceivably the election, and uncertainty around that is having some

613
00:34:45,239 --> 00:34:50,719
Speaker 1: effect um international developments of various kinds. I think when

614
00:34:50,719 --> 00:34:54,000
Speaker 1: you when I talk to business contacts, and principally in

615
00:34:54,040 --> 00:34:58,920
Speaker 1: the Southeast, they do site uncertain conditions as reasons for

616
00:34:59,040 --> 00:35:03,920
Speaker 1: being cautious about capital expenditures. So uncertainty is clearly a factor.

617
00:35:04,080 --> 00:35:07,160
Speaker 1: What are they telling you about their investment plans and

618
00:35:07,200 --> 00:35:10,600
Speaker 1: their hiring plans and their views of inflation going forward.

619
00:35:10,600 --> 00:35:12,640
Speaker 1: We hear a lot from Wall Street economists, but what

620
00:35:12,680 --> 00:35:15,520
Speaker 1: are the people on the ground in the Atlanta region saying.

621
00:35:17,040 --> 00:35:21,399
Speaker 1: They are saying that they continue to invest, but for

622
00:35:21,600 --> 00:35:26,400
Speaker 1: cost takeout, for productivity gains. Very few are saying we

623
00:35:26,480 --> 00:35:28,840
Speaker 1: are investing to place a big bet on the future,

624
00:35:28,880 --> 00:35:30,880
Speaker 1: that that the economy is going to be a lot

625
00:35:30,960 --> 00:35:33,560
Speaker 1: bigger and that demand is going to grow. So what

626
00:35:33,560 --> 00:35:37,960
Speaker 1: we're getting from the business community as of now is

627
00:35:38,680 --> 00:35:42,319
Speaker 1: not a lot of confirmation of the assumption in my

628
00:35:42,560 --> 00:35:45,600
Speaker 1: outlook that we're going to see a pickup. Uh, there's

629
00:35:45,640 --> 00:35:49,200
Speaker 1: a certain amount of continuing investment at any time, But

630
00:35:49,440 --> 00:35:53,320
Speaker 1: what we're really looking for is expansionary investment. That is,

631
00:35:53,400 --> 00:35:57,800
Speaker 1: people who believe that they should be investing for the future.

632
00:35:58,080 --> 00:36:00,760
Speaker 1: Speaking of the future, that's what this wich is all about.

633
00:36:01,000 --> 00:36:05,080
Speaker 1: It's about redesigning, looking at monetary policy frameworks that are

634
00:36:05,120 --> 00:36:07,760
Speaker 1: resilient and could deal with the future. In the present.

635
00:36:07,800 --> 00:36:11,080
Speaker 1: We've seen central banks around the world keeping rates low

636
00:36:11,200 --> 00:36:14,239
Speaker 1: or moving the negative. We've seen bond purchases like we've

637
00:36:14,280 --> 00:36:17,560
Speaker 1: never seen. We've seen Japan by ets and more, and

638
00:36:17,640 --> 00:36:20,799
Speaker 1: yet the needle on inflation is not budging much at all.

639
00:36:20,880 --> 00:36:23,640
Speaker 1: In some cases, it's still even falling further, Dennis, are

640
00:36:23,640 --> 00:36:27,880
Speaker 1: we at the end of one phase of monetary policy?

641
00:36:28,160 --> 00:36:31,320
Speaker 1: Kind of at the end of monetary policy as we knew? It?

642
00:36:31,040 --> 00:36:33,879
Speaker 1: Is that this a whole new approach? Is it called for? Here?

643
00:36:34,080 --> 00:36:37,359
Speaker 1: Are we in a brave new world? That's your question. Um.

644
00:36:37,520 --> 00:36:42,319
Speaker 1: I think the circumstances are are quite extraordinary, with all

645
00:36:42,360 --> 00:36:46,400
Speaker 1: the different policy efforts that have taken place around the world,

646
00:36:46,480 --> 00:36:51,160
Speaker 1: some of which are historically unprecedented. We operate now with

647
00:36:51,239 --> 00:36:53,359
Speaker 1: a very large balance sheet, and we have to think

648
00:36:53,400 --> 00:36:57,440
Speaker 1: about how long we're going to be dealing with those conditions. Uh.

649
00:36:57,520 --> 00:37:00,440
Speaker 1: The subject matter of this of this supposed sam. I

650
00:37:00,440 --> 00:37:03,400
Speaker 1: think it's perfectly appropriate and that what are they? What

651
00:37:03,480 --> 00:37:06,240
Speaker 1: are they? What are they? What's the framework in the future?

652
00:37:06,320 --> 00:37:08,680
Speaker 1: All right, thank you very much. Dennis Lockheart, the president

653
00:37:08,920 --> 00:37:22,840
Speaker 1: of the Atlanta fat thanks for joining us. This is

654
00:37:22,960 --> 00:37:29,120
Speaker 1: a rare treat. Glenn Hubbard goes seven on duties including

655
00:37:29,200 --> 00:37:33,920
Speaker 1: rebuilding and nurturing and gaining strength at the Columbia Business

656
00:37:33,920 --> 00:37:37,480
Speaker 1: School where he is dean uh and folks, really we've

657
00:37:37,520 --> 00:37:40,640
Speaker 1: got first tench knowledge of it at surveillance as members

658
00:37:40,680 --> 00:37:43,640
Speaker 1: of our team have darkened the door of Hubbard's Columbia.

659
00:37:44,360 --> 00:37:47,400
Speaker 1: But also he has been a public servant, typically with

660
00:37:47,480 --> 00:37:52,800
Speaker 1: Republican presidents, and also has been a prolific writer. Glenn

661
00:37:52,880 --> 00:37:56,200
Speaker 1: Hubbard joins us now from Hubbard Dean Hubbard, good morning.

662
00:37:57,239 --> 00:37:59,279
Speaker 1: I want to try to get away from the when

663
00:37:59,320 --> 00:38:02,520
Speaker 1: are they going to raise rates malarkey and actually talk

664
00:38:02,800 --> 00:38:07,120
Speaker 1: about where we are right now. One of the jewels

665
00:38:07,120 --> 00:38:11,520
Speaker 1: of this crisis was a book you wrote with Tim Caine, Balance,

666
00:38:12,080 --> 00:38:18,200
Speaker 1: How close is America to an imbalance or to instability? Well,

667
00:38:18,239 --> 00:38:21,040
Speaker 1: we definitely have a lot of imbalanced Tom. We people

668
00:38:21,040 --> 00:38:24,880
Speaker 1: focus on the cyclical recovery which has been there, but

669
00:38:25,160 --> 00:38:29,520
Speaker 1: we still have labor force participation that's too low, productivity

670
00:38:29,560 --> 00:38:32,799
Speaker 1: that's too low, investment that's too low, and a long

671
00:38:32,920 --> 00:38:36,160
Speaker 1: term fiscal crisis. And no one in Washington seems to

672
00:38:36,200 --> 00:38:38,440
Speaker 1: want to talk to about those things, and nor do

673
00:38:38,520 --> 00:38:41,280
Speaker 1: our presidential candidates want to talk enough about those things

674
00:38:41,680 --> 00:38:45,120
Speaker 1: talking about them, And again we're falling back on central

675
00:38:45,120 --> 00:38:48,600
Speaker 1: bankers to give guidance. One of the things we've heard

676
00:38:48,600 --> 00:38:52,080
Speaker 1: the last forty eight hours on Bloomberg surveillance is don't

677
00:38:52,120 --> 00:38:55,560
Speaker 1: get your hopes up about a fiscal solution. Everyone's talking

678
00:38:55,600 --> 00:38:58,440
Speaker 1: about it. I would assume Cherry Yellen will allude to

679
00:38:58,520 --> 00:39:03,120
Speaker 1: it today. Do you have any faith whoever wins, that

680
00:39:03,200 --> 00:39:07,000
Speaker 1: we're gonna get fiscal assistance? Well, I'd be naive, you

681
00:39:07,000 --> 00:39:10,719
Speaker 1: know if I said it. Obviously, Yes, However, if you

682
00:39:10,760 --> 00:39:13,440
Speaker 1: think about what we need were the economy to slip

683
00:39:13,440 --> 00:39:16,520
Speaker 1: into recession or to address these long term concerns, it

684
00:39:16,680 --> 00:39:20,200
Speaker 1: is fiscal After the election, Even though I don't expect

685
00:39:20,239 --> 00:39:23,799
Speaker 1: some sort of grand solution, I do expect a conversation

686
00:39:23,840 --> 00:39:26,840
Speaker 1: around a handful of areas, business or at least corporate

687
00:39:26,880 --> 00:39:31,920
Speaker 1: tax reform, infrastructure and work support E I T C support.

688
00:39:32,160 --> 00:39:35,400
Speaker 1: Those three things could still form the core of interesting

689
00:39:35,400 --> 00:39:40,480
Speaker 1: fiscal policy. Is anything at Jackson Hole or in your

690
00:39:40,520 --> 00:39:43,400
Speaker 1: teaching of economics to Columbian folks. Just remember with an

691
00:39:43,480 --> 00:39:47,560
Speaker 1: NBA program, there's no such thing as too much economics.

692
00:39:47,560 --> 00:39:51,720
Speaker 1: We all know that. But Glenn, in Economics third edition

693
00:39:51,840 --> 00:39:55,239
Speaker 1: Hubbard and O'Brien, is any of this in there? I

694
00:39:55,280 --> 00:39:58,880
Speaker 1: don't think so. Yeah, well we're actually up the seventh edition,

695
00:39:59,200 --> 00:40:03,520
Speaker 1: excuse Ryan, And yeah, it's definitely front and center. That's

696
00:40:03,680 --> 00:40:07,440
Speaker 1: that's a freshman economics book, and there are long term

697
00:40:07,520 --> 00:40:12,120
Speaker 1: challenges that economies face and policymakers are grappling with. I mean,

698
00:40:12,120 --> 00:40:14,480
Speaker 1: a lot of what's happening here at Jackson Hole is

699
00:40:14,960 --> 00:40:18,879
Speaker 1: discussion of new monetary policy frameworks. What I just wish

700
00:40:19,080 --> 00:40:22,080
Speaker 1: is that we saw discussions of fiscal policy frameworks too.

701
00:40:22,239 --> 00:40:24,839
Speaker 1: But the Fed's problem, but it is the country's. Well,

702
00:40:24,880 --> 00:40:26,640
Speaker 1: you've been a leader on that and from the right.

703
00:40:26,680 --> 00:40:28,600
Speaker 1: You've been someone that's on the left listen to and

704
00:40:28,760 --> 00:40:31,840
Speaker 1: respect in terms of fiscal solutions. And I agree with you.

705
00:40:31,880 --> 00:40:35,239
Speaker 1: It's a bit silent right now within the parlor game

706
00:40:35,320 --> 00:40:38,759
Speaker 1: of Jackson Hole. Mr Bullard has the high ground. I'll

707
00:40:38,760 --> 00:40:43,400
Speaker 1: suggest with a regime to review folks, instead of a forecast,

708
00:40:43,440 --> 00:40:46,719
Speaker 1: which Glenn Hubbard has done for the Oval Office, And

709
00:40:46,800 --> 00:40:51,040
Speaker 1: instead of doing forecasts, we would establish an existing regime

710
00:40:51,600 --> 00:40:54,960
Speaker 1: and sort of wait until the next regime comes along.

711
00:40:55,200 --> 00:41:00,080
Speaker 1: Is the Bullard modest paper, and Bullard admits that is

712
00:41:00,120 --> 00:41:03,759
Speaker 1: a Bullard paper worth further study? Or do we need

713
00:41:03,800 --> 00:41:06,640
Speaker 1: to stick with Harvard like forecasts? You know, I think

714
00:41:06,680 --> 00:41:08,439
Speaker 1: we need to do both. I don't think you'll ever

715
00:41:08,640 --> 00:41:11,799
Speaker 1: be out of the forecasting business, but I do think

716
00:41:11,800 --> 00:41:14,960
Speaker 1: there's something to be studied about leaving regimes in place

717
00:41:15,480 --> 00:41:17,959
Speaker 1: for a period of time. I think what the FED

718
00:41:18,120 --> 00:41:21,320
Speaker 1: is grappling with is how to use monetary policy to

719
00:41:21,400 --> 00:41:24,279
Speaker 1: deal with structural problems. And the answer to that is

720
00:41:24,400 --> 00:41:28,160
Speaker 1: it can't. Within this Uh, let's just go quickly hear

721
00:41:28,280 --> 00:41:30,040
Speaker 1: the speech, and then I want to move on. What

722
00:41:30,160 --> 00:41:33,600
Speaker 1: will you listen for from Cherry Yelling today? Well, I'd

723
00:41:33,600 --> 00:41:37,680
Speaker 1: be surprised if Janet Yelling makes news, at least as

724
00:41:37,719 --> 00:41:39,759
Speaker 1: economists would see it. That's not really the purpose of

725
00:41:39,800 --> 00:41:42,200
Speaker 1: such a speech, but I do think she wants to

726
00:41:42,320 --> 00:41:46,840
Speaker 1: respond to critics about where the feed is, what the

727
00:41:46,880 --> 00:41:49,960
Speaker 1: FED wants to do, and to reassure people that the

728
00:41:50,000 --> 00:41:52,520
Speaker 1: FED has tools, and she's absolutely right. The FED still

729
00:41:52,560 --> 00:41:55,160
Speaker 1: has tools where something to happen. They're just not the

730
00:41:55,200 --> 00:41:57,600
Speaker 1: best tools. Um. I want to finish up. Of course,

731
00:41:57,600 --> 00:41:59,960
Speaker 1: I have to Dr Hubbard with the idea of our

732
00:42:00,040 --> 00:42:03,719
Speaker 1: present politics. You are not actively supporting Mr Trump. You

733
00:42:03,760 --> 00:42:07,439
Speaker 1: wrote scenes of destruction with Peter Navarro of Irvine. He

734
00:42:07,600 --> 00:42:12,000
Speaker 1: is supporting Trump. Economics, what value do you see and

735
00:42:12,120 --> 00:42:16,600
Speaker 1: the little bit of policy we've heard from from Mr Trump, Well,

736
00:42:16,600 --> 00:42:18,239
Speaker 1: one thing I will say is that Donald Trump is

737
00:42:18,280 --> 00:42:21,399
Speaker 1: asking good questions. If you look at his tax plan

738
00:42:21,480 --> 00:42:25,440
Speaker 1: and regulatory plan, they're interesting things there. He's also asking

739
00:42:25,480 --> 00:42:27,560
Speaker 1: the question of what could we do to help people

740
00:42:27,640 --> 00:42:31,480
Speaker 1: who are left behind by certain policies. I don't think

741
00:42:31,480 --> 00:42:34,200
Speaker 1: the answers are necessarily the right ones, but I give

742
00:42:34,239 --> 00:42:38,120
Speaker 1: him credit for really starting this debate. What I moan

743
00:42:38,239 --> 00:42:41,560
Speaker 1: about on both sides is that I'm not hearing the

744
00:42:41,680 --> 00:42:46,279
Speaker 1: kind of solutions that are both realistic politically and will

745
00:42:46,280 --> 00:42:49,960
Speaker 1: actually fix the problem on productivity. In my chart today

746
00:42:50,040 --> 00:42:53,120
Speaker 1: on TV, which I'm sure you saw Glen at four am,

747
00:42:53,239 --> 00:42:56,480
Speaker 1: uh Colorado time. Uh is I was up, by the way,

748
00:42:56,520 --> 00:42:59,399
Speaker 1: at least three decade a three day You're fishing three

749
00:42:59,440 --> 00:43:03,560
Speaker 1: decade look at real GDP and the four year presidential

750
00:43:03,600 --> 00:43:06,560
Speaker 1: moving average. It's down fifty eight percent from morning in

751
00:43:06,560 --> 00:43:09,399
Speaker 1: America from the late nineties, we've gone from a four

752
00:43:09,719 --> 00:43:13,960
Speaker 1: handled down to one four year moving average. What's the

753
00:43:14,040 --> 00:43:20,239
Speaker 1: Hubbard prescription for President Clinton to get that moving higher? Well,

754
00:43:20,280 --> 00:43:23,320
Speaker 1: it breaks into two things. Once productivity. One's hours worked

755
00:43:23,320 --> 00:43:27,440
Speaker 1: on productivity. It's really tax reform and regulatory reform and

756
00:43:27,600 --> 00:43:31,000
Speaker 1: real support for innovation. I do give her credit for

757
00:43:31,120 --> 00:43:34,400
Speaker 1: mentioning infrastructure. I think her program is pretty modest for

758
00:43:35,440 --> 00:43:38,319
Speaker 1: an economy the size of ours on hours work. There

759
00:43:38,320 --> 00:43:42,000
Speaker 1: are lots of ways we discourage work for young people,

760
00:43:42,120 --> 00:43:45,480
Speaker 1: for older people, for secondary workers. A lot of that

761
00:43:45,640 --> 00:43:48,960
Speaker 1: is a tax story and a healthcare reform story. Glen Hubard,

762
00:43:48,960 --> 00:43:51,640
Speaker 1: Thank you so much to Hubbard at Columbia Business School.

763
00:43:52,239 --> 00:43:55,040
Speaker 1: Always interesting. I can't say enough about the set of

764
00:43:55,120 --> 00:43:58,640
Speaker 1: books he's put together over the years. It's wonderful when

765
00:43:58,640 --> 00:44:02,719
Speaker 1: you see both Ken Roy golf In Professor Taylor Stanford

766
00:44:02,800 --> 00:44:17,760
Speaker 1: rave about Glenn Hubbard's writing. Michael, wonderful to have you back.

767
00:44:18,239 --> 00:44:22,800
Speaker 1: Did the PhDs in Jackson Hall care about Michael Pond's world?

768
00:44:23,160 --> 00:44:26,600
Speaker 1: Do they care about something is esoteric is the five

769
00:44:26,680 --> 00:44:31,879
Speaker 1: year view and then five years forward from there of inflation. Well,

770
00:44:32,000 --> 00:44:36,160
Speaker 1: FED officials really think that it's that inflation expectations are

771
00:44:36,200 --> 00:44:40,719
Speaker 1: a big driver of inflation down the road. However, they've

772
00:44:40,760 --> 00:44:45,719
Speaker 1: been discounting uh market signals on inflation expectations for the

773
00:44:45,760 --> 00:44:48,520
Speaker 1: past year and a half because they haven't been telling

774
00:44:48,520 --> 00:44:52,280
Speaker 1: a story that the Fed likes. The market's been telling

775
00:44:52,480 --> 00:44:55,480
Speaker 1: a story of a loss of FED credibility, of loss

776
00:44:55,480 --> 00:44:59,719
Speaker 1: of global central bank credibility, and their willingness or a

777
00:44:59,760 --> 00:45:03,080
Speaker 1: bill you do create inflation. One word that we've really

778
00:45:03,080 --> 00:45:07,560
Speaker 1: been working with today's efficacy, which is a bit a squishy,

779
00:45:07,640 --> 00:45:10,200
Speaker 1: mushy word. Guy like Michael Pond. Folks would never use

780
00:45:10,200 --> 00:45:12,680
Speaker 1: the word efficacy. He'd be thrown out in the street

781
00:45:12,719 --> 00:45:15,839
Speaker 1: at Barclay's. But it does lead Michael to the math

782
00:45:15,920 --> 00:45:20,080
Speaker 1: world that you live in of reaction functions. If the

783
00:45:20,160 --> 00:45:23,520
Speaker 1: FED or if chair yelling says we will do this,

784
00:45:24,360 --> 00:45:27,640
Speaker 1: is the market ready to react to what they say?

785
00:45:27,760 --> 00:45:30,960
Speaker 1: Or is the distortion so great even that could be

786
00:45:31,000 --> 00:45:35,160
Speaker 1: odd Well, it depends on how much caveats she puts

787
00:45:35,160 --> 00:45:38,319
Speaker 1: around the we are likely to do this. So she

788
00:45:38,320 --> 00:45:40,839
Speaker 1: she never liked She probably wouldn't come out and say

789
00:45:40,880 --> 00:45:43,120
Speaker 1: we we will do this. But so, for example, coming

790
00:45:43,160 --> 00:45:45,640
Speaker 1: into the September Apple and Sea meeting, we think the

791
00:45:45,719 --> 00:45:49,759
Speaker 1: next week's pay rolly report, the employment report, will be

792
00:45:50,080 --> 00:45:53,640
Speaker 1: very important in that decision UM. So it really in

793
00:45:53,760 --> 00:45:57,520
Speaker 1: our view the emphasis um, whether she focuses on a

794
00:45:57,640 --> 00:46:00,840
Speaker 1: labor market or whether she focuses on the fact that

795
00:46:00,840 --> 00:46:05,160
Speaker 1: they've been missing on their inflation target where that emphasis lies,

796
00:46:05,360 --> 00:46:08,200
Speaker 1: is very important to the markets here. How does currency

797
00:46:08,360 --> 00:46:10,600
Speaker 1: help you? I mean, that's tangential to what you do,

798
00:46:10,640 --> 00:46:14,040
Speaker 1: But I'm sorry, the textbooks say no, it's not. Currencies

799
00:46:14,080 --> 00:46:18,719
Speaker 1: are linked to Michael's Pond's world. Are we getting a

800
00:46:18,840 --> 00:46:22,719
Speaker 1: restrictive FED even without the FED acting? But I think

801
00:46:22,760 --> 00:46:25,120
Speaker 1: that that's what has happened over the past year and

802
00:46:25,120 --> 00:46:28,680
Speaker 1: a half time, where every time the FED talks up

803
00:46:29,400 --> 00:46:33,080
Speaker 1: rate hikes, the dollar starts to move, and that starts

804
00:46:33,160 --> 00:46:37,120
Speaker 1: to slow the economy weekend inflation, and the FED has

805
00:46:37,200 --> 00:46:41,080
Speaker 1: to backtrack to some extent. Currencies have been a governor

806
00:46:41,600 --> 00:46:44,960
Speaker 1: on the FED. I think that's extremely well said. It seems,

807
00:46:44,960 --> 00:46:47,400
Speaker 1: you know, granted he's got the distraction of Brexit, but

808
00:46:47,520 --> 00:46:50,960
Speaker 1: Governor Carney has been more blunt and said, look, there's

809
00:46:51,000 --> 00:46:54,080
Speaker 1: no inflation. We didn't get that from President Dudley of

810
00:46:54,160 --> 00:46:56,440
Speaker 1: the New York Fed a number of days ago, did

811
00:46:56,480 --> 00:46:59,640
Speaker 1: we We got a lot of hope right, even from

812
00:46:59,760 --> 00:47:03,440
Speaker 1: Vice chair of Fisher, which the market may put up

813
00:47:03,520 --> 00:47:06,239
Speaker 1: put a bit more weight on we He said that

814
00:47:06,880 --> 00:47:11,879
Speaker 1: inflation was in quote unquote hailing distance of their target UM.

815
00:47:12,040 --> 00:47:14,960
Speaker 1: That to me shows a bit a bit too much

816
00:47:15,000 --> 00:47:20,480
Speaker 1: complacency of allowing inflation to run consistently below their target,

817
00:47:20,560 --> 00:47:23,640
Speaker 1: as it has for the past eight years. The Fed

818
00:47:23,719 --> 00:47:28,520
Speaker 1: has missed eight nine times at a ninety three over

819
00:47:28,560 --> 00:47:33,600
Speaker 1: the past uh several years on months on their PC

820
00:47:34,400 --> 00:47:37,880
Speaker 1: core inflation rate. When do they begin to bring the

821
00:47:37,920 --> 00:47:41,680
Speaker 1: green light on the acclaimed Bloomberg dots go chart down

822
00:47:42,280 --> 00:47:46,960
Speaker 1: and do they do it with a substantial second derivative acceleration?

823
00:47:47,320 --> 00:47:50,080
Speaker 1: Are we going to be in for a gradual glide

824
00:47:50,120 --> 00:47:53,920
Speaker 1: out to two again? It really depends on whether they

825
00:47:53,920 --> 00:47:57,440
Speaker 1: put this emphasis on the labor markets, which looks fairly

826
00:47:57,560 --> 00:48:02,279
Speaker 1: fairly healthy um or the their inflation target. If they

827
00:48:02,320 --> 00:48:05,040
Speaker 1: continue to focus on the label markets, then we're we're

828
00:48:05,120 --> 00:48:09,680
Speaker 1: likely to Fed tightening. We're still looking for them to tighten.

829
00:48:09,719 --> 00:48:13,560
Speaker 1: In September but if they don't, that means that they're

830
00:48:13,680 --> 00:48:16,839
Speaker 1: they're focused more on the inflation target, and that may

831
00:48:16,920 --> 00:48:20,520
Speaker 1: mean we don't need a hike for for several quarters. Well,

832
00:48:20,560 --> 00:48:25,719
Speaker 1: I like this idea of September and never and you know, December, December, December, December.

833
00:48:25,760 --> 00:48:28,840
Speaker 1: But the idea here, Michael Pond, is if we pass

834
00:48:28,960 --> 00:48:32,839
Speaker 1: on September, is that in the market now I mean

835
00:48:32,920 --> 00:48:39,560
Speaker 1: Barclay's watches, positioning from institutions, is that there now well

836
00:48:39,560 --> 00:48:43,280
Speaker 1: the markets price for about a thirty five chance of

837
00:48:43,320 --> 00:48:46,400
Speaker 1: a hike in September. That's moved quite a bit. That

838
00:48:46,600 --> 00:48:51,200
Speaker 1: was near zero following the Brexit boat in late June.

839
00:48:51,400 --> 00:48:54,760
Speaker 1: The market is priced for a FED hike UH sometime

840
00:48:54,840 --> 00:48:59,560
Speaker 1: this year about but that could move to the next

841
00:48:59,600 --> 00:49:03,600
Speaker 1: to seven UH pretty quickly. Is that official backtrack from

842
00:49:03,600 --> 00:49:07,360
Speaker 1: their recent pockets runnering. I'm watching our internal camera signal

843
00:49:07,400 --> 00:49:10,440
Speaker 1: to a beautiful grand Teaton tons and Michael Pond, I'm

844
00:49:10,480 --> 00:49:14,480
Speaker 1: watching President Dudley UH standing next to chair yelling with

845
00:49:14,600 --> 00:49:19,640
Speaker 1: Vice Chairman Fisher, chair yelling UH in white UH, President

846
00:49:19,719 --> 00:49:22,840
Speaker 1: Dudley in the typically dour black of the New York Fed.

847
00:49:23,520 --> 00:49:27,120
Speaker 1: And and I believe that that may not be stand Fisher.

848
00:49:27,200 --> 00:49:29,839
Speaker 1: His back is to me. I stand corrected. That may

849
00:49:29,840 --> 00:49:32,359
Speaker 1: not be the Vice Chairman of the FED. It looks

850
00:49:32,360 --> 00:49:34,480
Speaker 1: like him, but I really, to be honest, I can't

851
00:49:34,480 --> 00:49:37,400
Speaker 1: tell anyways. Chair Yelling is taking in the vista. This

852
00:49:37,520 --> 00:49:41,880
Speaker 1: is always a tradition at Jackson Hole for uh the

853
00:49:41,960 --> 00:49:45,080
Speaker 1: Chairman of the Fed to take a promenade. Here they go.

854
00:49:45,120 --> 00:49:48,719
Speaker 1: They're turning around now, this is this is an ancient tradition.

855
00:49:49,080 --> 00:49:53,160
Speaker 1: Photographers and Michael McKee are tethered with Kathleen. He's by

856
00:49:53,239 --> 00:49:55,640
Speaker 1: chain to the wall of the lodge, so they cannot

857
00:49:55,719 --> 00:49:59,320
Speaker 1: go out and ask smart alec questions. And so Dudley

858
00:49:59,440 --> 00:50:02,759
Speaker 1: and Yelling in the center, and Vice Gairman Fisher to

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00:50:02,800 --> 00:50:07,640
Speaker 1: the right walking off after the obligatory photo shoot. I

860
00:50:07,680 --> 00:50:10,600
Speaker 1: believe I see Michelle Smith and the distance who handles

861
00:50:11,000 --> 00:50:14,920
Speaker 1: public relations for the FED, keeping away the Barclays representatives

862
00:50:15,160 --> 00:50:19,200
Speaker 1: from asking rude questions of cherryall you know, Michael Pond,

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00:50:19,239 --> 00:50:24,320
Speaker 1: I'm sorry, It's like a beauty pageant, isn't it. I

864
00:50:24,360 --> 00:50:32,360
Speaker 1: don't know, wearing white indication very good out in front

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00:50:32,360 --> 00:50:34,839
Speaker 1: of the embargo speech at Michael Pond. I'm gonna let

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00:50:34,840 --> 00:50:37,239
Speaker 1: you go. Michael Pond, Thank you so much for your

867
00:50:37,320 --> 00:50:40,600
Speaker 1: value earlier in the week and particularly today, Mr Pond

868
00:50:41,120 --> 00:50:48,080
Speaker 1: looks at inflation and measurements of inflation for Barclays. Thanks

869
00:50:48,080 --> 00:50:52,240
Speaker 1: for listening to the Bloomberg Surveillance podcast. Subscribe and listen

870
00:50:52,520 --> 00:50:57,880
Speaker 1: to interviews on iTunes, SoundCloud, or whichever podcast platform you prefer.

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00:50:58,480 --> 00:51:03,040
Speaker 1: I'm on Twitter at Tom Key. Michael McKee is at Economy.

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00:51:03,080 --> 00:51:06,839
Speaker 1: Before the podcast, you can always catch us worldwide. I'm

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00:51:06,880 --> 00:51:17,759
Speaker 1: Bloomberg Radio. Who you put your trust in matters. Investors

874
00:51:17,760 --> 00:51:21,120
Speaker 1: have put their trust in independent registered investment advisors to

875
00:51:21,160 --> 00:51:25,600
Speaker 1: the tune of four trillion dollars. Why learn more and

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00:51:25,760 --> 00:51:30,160
Speaker 1: find your independent advisor dot com.