WEBVTT - Surveillance: Fed's Barkin Sees Strong U.S. Growth In 3Q 0:00:09.880 --> 0:00:13.800 Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane Jay Ley. 0:00:13.960 --> 0:00:17.560 We bring you insight from the best in economics, finance, investment, 0:00:18.000 --> 0:00:23.520 and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, 0:00:23.600 --> 0:00:27.520 Bloomberg dot Com, and of course on the Bloomberg We 0:00:27.680 --> 0:00:31.400 tend the attention now unlock those debates to policy tomp 0:00:31.440 --> 0:00:33.639 Kate and we sent to Bloomberg's Malcolm McKay for more 0:00:33.680 --> 0:00:36.839 him Mike. Good morning, John, and we are joined this 0:00:36.880 --> 0:00:39.559 morning by Thomas Barkin. He is the President of the 0:00:39.560 --> 0:00:42.720 Federal Reserve Bank of Richmond. And we welcome you to 0:00:42.720 --> 0:00:45.360 Bloomberg Radio and Television worldwide. And I will tell you 0:00:45.400 --> 0:00:47.680 that I will not talk over you or or insult 0:00:47.760 --> 0:00:51.479 you this morning. But one of them, one of the 0:00:51.600 --> 0:00:56.080 questions that is um well sometimes asking Washington these days, 0:00:56.080 --> 0:00:59.320 but always on Wall Street, is has the economy started 0:00:59.360 --> 0:01:02.360 to slow in the latter half of the summer going 0:01:02.480 --> 0:01:05.080 into the fall. From your perch in Richmond, what do 0:01:05.120 --> 0:01:07.560 you see? Well, the economy took a deep dive, as 0:01:07.640 --> 0:01:09.880 you know, and it did come back quickly when we 0:01:09.920 --> 0:01:12.360 open things up, but naturally you would expect to see 0:01:12.360 --> 0:01:15.240 that recovery be a little more gradual. Where I see 0:01:15.280 --> 0:01:18.560 the real challenge now is getting the last five of 0:01:18.600 --> 0:01:21.240 Americans back into the workforce, and that's where I've got 0:01:21.360 --> 0:01:24.160 my focus. Well, is that going to happen? What are 0:01:24.240 --> 0:01:27.840 ceo s business leaders telling you about their plans to 0:01:28.000 --> 0:01:31.760 hire and to invest, to spend more money. Well, there's 0:01:31.760 --> 0:01:34.080 a lot of uncertainties, starting of course with the virus, 0:01:34.120 --> 0:01:36.039 but also what the demand picture is going to look 0:01:36.080 --> 0:01:38.720 like next year. And in that context, I do think 0:01:38.760 --> 0:01:42.440 companies are streamlining um taking the last five or in 0:01:42.640 --> 0:01:45.560 finding those efficiencies. I am starting to hear them in 0:01:45.560 --> 0:01:49.960 the last month or so some amount of pivoting to tomorrow. 0:01:50.000 --> 0:01:52.680 And what I mean by that is, Okay, we're going 0:01:52.720 --> 0:01:54.880 to get this behind us. Let's now talk about where 0:01:54.920 --> 0:01:57.880 we go from here. So I do think they've streamlined, 0:01:57.960 --> 0:01:59.840 but I'm at least hopeful that as we get it 0:01:59.880 --> 0:02:02.080 in next year, you're going to see them starting to 0:02:02.120 --> 0:02:06.640 grow again. Do we see growth, uh, significant growth in 0:02:06.680 --> 0:02:09.799 the coming year? Do you think, oh? Sure? I mean, 0:02:10.120 --> 0:02:13.080 first of all, you've got a significant drop, and so 0:02:13.200 --> 0:02:15.760 we're going to grow out of that significant drop. I 0:02:15.800 --> 0:02:18.960 think you'll see a very strong third core for example, 0:02:19.000 --> 0:02:21.560 But even going into next year. I think part of 0:02:21.560 --> 0:02:24.560 the legacy of rounding over the comps we have from 0:02:24.600 --> 0:02:27.519 this year is you'll you'll see growth numbers that look 0:02:27.880 --> 0:02:31.359 that look strong. Um, I look at more level than 0:02:31.400 --> 0:02:33.880 growth rates, and so I do think then the question 0:02:33.960 --> 0:02:35.600 is going to be what do we look like year 0:02:35.600 --> 0:02:37.920 every year? And I still think, you know, by the 0:02:38.000 --> 0:02:39.560 end of the fourth quarter this year will still be 0:02:39.600 --> 0:02:41.720 down year every year, and it'll be hard to get 0:02:41.760 --> 0:02:44.520 back to where we were until sometime around the end 0:02:44.560 --> 0:02:48.000 of next year. Well is your forecast assuming we get 0:02:48.040 --> 0:02:51.440 a fiscal stimulus package, what happens if we don't. Well, 0:02:51.600 --> 0:02:54.240 I don't try to assume anything in terms of what 0:02:54.320 --> 0:02:58.119 happens in Washington one way or the other. So, um, 0:02:58.520 --> 0:03:01.560 you know they're talking and think we'll let them figure 0:03:01.560 --> 0:03:04.079 out whether it's going to be a stimulus package if 0:03:04.120 --> 0:03:06.880 there isn't one. In the short term, obviously there's some 0:03:07.840 --> 0:03:09.360 people down on their luck who are going to get 0:03:09.440 --> 0:03:13.920 less support then they otherwise need. I'm more focused on 0:03:13.919 --> 0:03:16.760 some of the long term issues, or maybe even medium 0:03:16.840 --> 0:03:18.919 term issues. We have a lot of people who used 0:03:18.919 --> 0:03:22.720 to be you know, waiters or working amusement park who 0:03:22.760 --> 0:03:26.320 now need new jobs, and their classic next job would 0:03:26.320 --> 0:03:29.560 have been working you know, at a retailer or maybe 0:03:29.600 --> 0:03:34.440 working uh at another restaurant. If those places aren't hiring, 0:03:34.440 --> 0:03:37.440 how do we get them redeployed? And issues of job retraining, 0:03:38.320 --> 0:03:41.560 issues of getting pell grants and getting them funded. Those 0:03:41.560 --> 0:03:44.040 are the kinds of things I think that are important 0:03:44.080 --> 0:03:46.960 if we're gonna bring the economy all the way back. Well, 0:03:47.000 --> 0:03:50.000 another major issue, and you have one of America's biggest 0:03:50.040 --> 0:03:53.360 banks in your district, that is whether or not the 0:03:53.360 --> 0:03:56.800 economy can withstand as forbearance comes to an end, and 0:03:56.840 --> 0:04:00.640 we see rising business debts and increased default, particularly for 0:04:00.680 --> 0:04:04.560 commercial real estate. How do you see that playing out? Well? 0:04:04.600 --> 0:04:06.760 I do think this fiscal stimulus that we've done has 0:04:06.800 --> 0:04:11.440 been quite helpful to the financial industry. We ah, there 0:04:11.440 --> 0:04:13.200 are people who have been down in their luck who 0:04:13.240 --> 0:04:16.600 have gotten stimulus payments, and you actually see credit card 0:04:16.600 --> 0:04:19.719 outstandings down. You have some small businesses that would have 0:04:19.720 --> 0:04:22.800 gone under they got PPP money. You've got bigger industries 0:04:22.839 --> 0:04:26.000 like airlines that might have been much more significantly challenged 0:04:26.000 --> 0:04:29.120 if they hadn't gotten the money they've gotten. And I 0:04:29.160 --> 0:04:33.240 think so far, knock on wood, Uh, what at least 0:04:33.279 --> 0:04:37.560 I'm seeing from the banks is still pretty healthy. What 0:04:37.600 --> 0:04:40.680 about in terms of their loans and lending, though there 0:04:40.720 --> 0:04:43.520 have been concerns expressed that, particularly in commercial real estate, 0:04:43.800 --> 0:04:46.680 you're going to have a wave of default. I think 0:04:46.680 --> 0:04:49.320 there will be challenges in commercial real estate, particularly on 0:04:49.360 --> 0:04:53.320 the retail side, as you could imagine um. But then 0:04:53.360 --> 0:04:55.880 the question is just are those defaults going to overwhelm 0:04:56.480 --> 0:04:59.320 the capital of the system. And my senses there's been 0:04:59.320 --> 0:05:01.359 a lot of capital building in the last ten years, 0:05:01.920 --> 0:05:04.359 and the exposures they're compared to the capital in the 0:05:04.400 --> 0:05:08.560 system don't seem to compare. If the economy is slowing, 0:05:08.680 --> 0:05:11.360 if things do turn south, is there anything more the 0:05:11.400 --> 0:05:12.960 FED can do? Or is it pretty much up to 0:05:12.960 --> 0:05:15.880 the folks in Washington. Now, Well, we have done a lot, 0:05:15.920 --> 0:05:18.320 and I like to think, as I learned in college, 0:05:18.360 --> 0:05:20.320 that there's fiscal and there's monetary, and you want to 0:05:20.320 --> 0:05:23.280 pull both of them as strongly as you can. Um 0:05:23.320 --> 0:05:25.679 I'd say, in this particular crisis, you could put public 0:05:25.720 --> 0:05:27.479 health on that list, and I think all three of 0:05:27.520 --> 0:05:30.520 those are levers. Will want to pull as hard as 0:05:30.520 --> 0:05:32.479 we can, and the FED has done a lot. There's, 0:05:32.520 --> 0:05:35.520 of course still more we could either do additionally or 0:05:35.560 --> 0:05:39.760 continue to do. But I'm actually more hopeful on where 0:05:39.800 --> 0:05:42.279 we're headed next year, and I'm hopeful that what we've done, 0:05:42.279 --> 0:05:45.280 and also fiscal and the public health authorities will put 0:05:45.320 --> 0:05:47.279 us in a much better place. Well, are you seeing 0:05:47.279 --> 0:05:51.239 demand for credit out there? There is some demand for credit, Certainly, 0:05:51.279 --> 0:05:55.280 auto credit has been very strong. Mortgage credit has been 0:05:55.360 --> 0:05:59.359 very strong. On the business side. I do think people 0:05:59.400 --> 0:06:03.400 took down their lines in March and April. They've you know, 0:06:03.440 --> 0:06:06.680 now repaid those and I'm not seeing quite as much 0:06:06.680 --> 0:06:09.880 demand on the business side, in part because they spend 0:06:09.920 --> 0:06:12.800 most of the year pretty with pretty strong cash positions. 0:06:13.520 --> 0:06:15.960 One of the big questions about lending is over the 0:06:16.000 --> 0:06:18.560 main Street Learning program that the FED runs. The issued 0:06:18.600 --> 0:06:22.400 a special senior loan officers survey last night that's had 0:06:22.440 --> 0:06:26.480 banks saying overly restrictive terms for borrowers are discouraging them 0:06:26.560 --> 0:06:31.159 from approving more loans, and others cited the unattractive terms 0:06:31.160 --> 0:06:33.760 for lenders for not even making loans at all, not 0:06:33.880 --> 0:06:36.640 offering them. What do you do about that? Well, I 0:06:36.680 --> 0:06:40.200 haven't seen that survey, but we designed the main Street 0:06:40.279 --> 0:06:43.880 Learning facility to play a particular role. Um it maybe 0:06:44.080 --> 0:06:47.200 it'll be a bigger role if you know, bad news 0:06:47.200 --> 0:06:50.559 happens in the economy goes south. But if their loans 0:06:50.600 --> 0:06:53.359 coming into banks, um, they get the option of whether 0:06:53.440 --> 0:06:57.280 to keep them or whether to sell off into our 0:06:57.279 --> 0:07:00.719 main street facility. Um. And I'm not sure it's bad 0:07:00.760 --> 0:07:04.720 news if they're making those loans and keeping them right. Uh. 0:07:04.800 --> 0:07:07.560 The Fed in June banned buy backs by banks and 0:07:07.720 --> 0:07:11.520 cap their dividends into the third quarter. Should that ban 0:07:11.880 --> 0:07:15.800 and cap be extended? Big debate right now? Well, I 0:07:15.800 --> 0:07:19.200 think we've put in place a protocol that allows us 0:07:19.200 --> 0:07:23.360 to have a deep investigation into the quality of the 0:07:23.360 --> 0:07:26.600 capital levels of the various banks. And and my view 0:07:26.680 --> 0:07:28.680 is we ought to do whatever we do want a 0:07:28.720 --> 0:07:32.200 bank by bank basis, and those banks that need to 0:07:32.240 --> 0:07:35.080 conserve capital ought to be conserving capital, and those banks 0:07:35.120 --> 0:07:38.120 that have sufficient capital ought to be free to distribute it. 0:07:38.880 --> 0:07:41.280 And I gotta ask you about the new framework and 0:07:41.520 --> 0:07:43.720 your view that things are going to pick up in 0:07:43.760 --> 0:07:46.320 the economy going forward, does that mean inflation is going 0:07:46.320 --> 0:07:49.680 to pick up as well? Well? There may well be 0:07:49.760 --> 0:07:53.840 some inflation, particularly in the near term, if demand comes 0:07:53.920 --> 0:07:56.520 back stronger than people think at a time where supply 0:07:56.640 --> 0:07:59.800 chains are stretched. But you know, our framework is not 0:07:59.840 --> 0:08:03.560 a round any particular month or quarters inflation. It's much 0:08:03.560 --> 0:08:08.000 more around where we headed in long term inflation expectations, 0:08:08.440 --> 0:08:10.920 and my hope is that those will start to creep 0:08:11.000 --> 0:08:14.160 up back toward our two percent target. Well, the new 0:08:14.200 --> 0:08:18.320 policy is that, of course, appropriate monetary policy, in your words, 0:08:18.360 --> 0:08:22.600 will likely aim to achieve inflation moderately above two percent 0:08:22.840 --> 0:08:26.040 for some time. For Tom Barkin, what does moderately mean 0:08:26.120 --> 0:08:29.600 and how far above two percent? Well, let's see when 0:08:29.600 --> 0:08:32.280 we get there. But I think I gave a speech, Mike, 0:08:32.320 --> 0:08:34.360 you were there in Idaho a year ago where I said, 0:08:34.360 --> 0:08:37.640 I'm very supportive of a range around two percent, in 0:08:37.679 --> 0:08:40.640 a moderate range around two percent, whether that's one and 0:08:40.640 --> 0:08:42.160 a half to two and a half or one to three. 0:08:42.200 --> 0:08:45.160 I think I said, is I'm not that focused on 0:08:45.200 --> 0:08:49.280 the difference between them, but that's something close to or 0:08:49.360 --> 0:08:53.680 is somebody put I think recently the word moderate means moderate. Yeah, 0:08:53.720 --> 0:08:56.720 that somebody was the chairman who also took pains to 0:08:56.760 --> 0:08:59.439 say over and over in his news conference that the 0:08:59.800 --> 0:09:03.000 new guidance is strong and powerful, which does not seem 0:09:03.040 --> 0:09:05.440 to be the read on Wall Street Why do you 0:09:05.440 --> 0:09:08.360 think there's a disconnect there. Oh, I don't know if 0:09:08.360 --> 0:09:13.040 there is a disconnect. The the analysis on Wall Street 0:09:13.040 --> 0:09:16.480 basically is that you can move interest rates, but you're 0:09:16.480 --> 0:09:18.920 not going to have much impact on the economy unless 0:09:19.200 --> 0:09:22.199 demand for credit picks up, unless something is done out 0:09:22.240 --> 0:09:25.240 of Capitol Hill. Well, I just say there's a difference 0:09:25.240 --> 0:09:28.400 between looking backwards and looking forwards. I think for the 0:09:28.480 --> 0:09:32.240 last six months, uh, we've gone pretty strong in terms 0:09:32.280 --> 0:09:34.680 of what we can do to support the economy, and 0:09:34.679 --> 0:09:38.600 now we're looking forward over the next year or two. UM. 0:09:38.640 --> 0:09:42.320 I think the four guidances particularly powerful as the economy 0:09:42.320 --> 0:09:45.280 comes back as I think it's going to. And so 0:09:45.920 --> 0:09:48.599 if you do see a strength and economy, if you 0:09:48.640 --> 0:09:52.040 do see modest overshoots of inflation, I think we're gonna 0:09:52.040 --> 0:09:54.880 be having a different conversation. One of the other things 0:09:54.880 --> 0:09:57.559 that people are watching in terms of overshoots is the 0:09:57.600 --> 0:10:02.480 equity markets lower for longer, raising financial stability concerns, particularly 0:10:02.480 --> 0:10:05.200 with pe ratios getting to where they are. Are you 0:10:05.240 --> 0:10:08.400 worried at all that your money that you're putting into 0:10:08.440 --> 0:10:11.959 the economy maybe ending up in the wrong place. Stimulating 0:10:12.559 --> 0:10:15.920 equity acquisition and share buy backs and things like that 0:10:16.040 --> 0:10:20.400 instead of stimulating growth. Well, I'm not a believer that, uh, 0:10:20.720 --> 0:10:24.520 you know, lower for longer means zero forever. I do think, um, 0:10:24.559 --> 0:10:27.040 I want to normalize at some point, and I want 0:10:27.040 --> 0:10:31.520 to normalize in part as a response to a healthy economy. 0:10:31.600 --> 0:10:34.480 So I watched I don't really watch the equity markets 0:10:34.520 --> 0:10:37.080 as much as I watched leverage levels. And the thing 0:10:37.120 --> 0:10:39.320 I would be nervous about is if you start seeing 0:10:39.840 --> 0:10:43.439 leverage in particular sectors that may be concerned. I don't 0:10:43.480 --> 0:10:46.479 think that's where we are. Yet you're not seeing dangerous 0:10:47.120 --> 0:10:51.040 changes in borrowing patterns, and well, actually credit card outstandings 0:10:51.080 --> 0:10:54.080 are down, um uh. And you know, as I said before, 0:10:54.480 --> 0:10:58.280 the pipelines on the business side aren't overwhelming the bank. 0:10:58.360 --> 0:11:00.040 So I don't think at this moment in time, and 0:11:00.320 --> 0:11:02.240 that's what you're saying. But of course, when you do 0:11:02.280 --> 0:11:03.760 have low rates, that's one of the things you want 0:11:03.800 --> 0:11:07.160 to watch. Um. But again, I think at this point 0:11:07.160 --> 0:11:09.640 the banks are tightening standards, not the other way around, 0:11:09.640 --> 0:11:12.760 and so I don't really see that as today's issue. 0:11:13.840 --> 0:11:15.280 Before I let you go, I gotta ask you, because 0:11:15.280 --> 0:11:16.800 I know this is an area of interest for you. 0:11:17.080 --> 0:11:20.840 Has the financial crisis we're undergoing now changed the dynamic 0:11:21.280 --> 0:11:24.320 for the economy in terms of inequality. A lot of 0:11:24.360 --> 0:11:28.840 talk these days about a K shaped recovery. Well, if 0:11:28.840 --> 0:11:31.800 you look at the last thirty or forty years, the 0:11:31.880 --> 0:11:35.280 mega story has been the decline in middle income jobs 0:11:35.400 --> 0:11:37.559 and the growth of both the high end jobs and 0:11:37.640 --> 0:11:40.600 those at the low end. And the sad part about 0:11:40.679 --> 0:11:44.520 this crisis is those low end jobs which are disproportionately 0:11:45.200 --> 0:11:52.040 UM low income. Personal service, personal contact workers UM, you know, uh, waiters, 0:11:52.040 --> 0:11:57.080 amusement parks, um, you know, pete, retail folks. Uh. Those 0:11:57.080 --> 0:11:59.160 are the jobs that have been hit the hardest. And 0:11:59.200 --> 0:12:01.360 I do worry that that group of people who have 0:12:01.440 --> 0:12:03.960 been brought in off the sidelines over the last five 0:12:04.040 --> 0:12:07.000 or ten years of a healthy economy are now displaced 0:12:07.040 --> 0:12:10.080 and their next best job is also displaced. And so 0:12:10.160 --> 0:12:12.840 this question of you know, what are the things we 0:12:12.880 --> 0:12:15.040 can do to help those people re engage in the 0:12:15.080 --> 0:12:18.920 workforce and rebuild their careers UM into some of the 0:12:18.920 --> 0:12:21.679 places perhaps that are you know, hotter, whether they be 0:12:22.280 --> 0:12:25.760 healthcare or manufacturing, or or construction or whatever. That's a 0:12:25.760 --> 0:12:28.839 pretty important thing for us to work on. And if 0:12:28.840 --> 0:12:30.600 we don't do that. I do worry about what that's 0:12:30.600 --> 0:12:34.360 gonna do for inequality. Tom Barkin, Richmond, Fed President, thank 0:12:34.400 --> 0:12:36.360 you very much for joining us this morning here on 0:12:36.480 --> 0:12:44.280 Bloomberg on Place to site. Joining us now, Lisa Shallott 0:12:44.320 --> 0:12:47.720 markin Stanley, se Lisa griants to catch up with you. 0:12:47.720 --> 0:12:50.520 You're calling this a policy micas correction. What is a 0:12:50.559 --> 0:12:53.840 policy micas correction? Well, look, I mean I think that 0:12:54.120 --> 0:12:58.959 as we know, it's really been the policymakers herculean efforts 0:12:59.600 --> 0:13:03.520 over the last six months that are unprecedented that have 0:13:03.600 --> 0:13:08.640 allowed us to rebound and retrace and and even uh, 0:13:08.679 --> 0:13:12.120 you know, by September two hit new fresh all time 0:13:12.160 --> 0:13:15.800 highs in the spire. But I think that they also 0:13:16.000 --> 0:13:19.320 you know, set the bar very very high, and uh 0:13:19.520 --> 0:13:22.720 many investors expected them to continue to follow through. And 0:13:22.760 --> 0:13:26.760 I think as uh, you know, the days of September 0:13:26.880 --> 0:13:30.520 war on, it became very clear that some of the 0:13:30.559 --> 0:13:34.119 gifts that we were given in March, April and May 0:13:34.720 --> 0:13:37.000 were perhaps gonna going to be a little bit tougher 0:13:37.080 --> 0:13:41.120 to procure. And that's really around the certainty of what 0:13:41.240 --> 0:13:44.679 policy is. And so you know, we've talked about kind 0:13:44.679 --> 0:13:47.720 of three things. Um, you know, We've talked about the 0:13:47.760 --> 0:13:51.240 fact that that we're quite frankly shocked at that that 0:13:51.360 --> 0:13:55.640 the market isn't more tumultuous given what looks like could 0:13:55.679 --> 0:13:59.200 potentially not just be a delay in the Cares acts, 0:13:59.280 --> 0:14:04.160 but but in um, you know, uh, a materially reduced 0:14:04.160 --> 0:14:07.760 and watered down version of it, when so many people 0:14:07.960 --> 0:14:10.320 in the June and July timeframe we're saying, oh, yeah, 0:14:10.320 --> 0:14:12.720 we're definitely going to get another trillion trillion and a 0:14:12.720 --> 0:14:17.400 half dollars UM and that's not forthcoming. And at your 0:14:17.440 --> 0:14:20.720 point that that you all were talking about for unemployed, 0:14:21.480 --> 0:14:26.680 for states, municipalities who've dealt with COVID, for uh, you know, 0:14:26.760 --> 0:14:30.480 many of the small businesses that are now beginning to 0:14:30.480 --> 0:14:34.280 to have to, uh, you know, make decisions about shuttering. Um. 0:14:34.360 --> 0:14:38.640 This stimulus matters, and it matters a lot um and 0:14:39.120 --> 0:14:44.120 it was in most people's forecasts. Lisa, push this forward. 0:14:44.200 --> 0:14:46.600 Does this mean in your view the market needs to 0:14:46.880 --> 0:14:50.080 sell off further in order to adequately reflect the lack 0:14:50.160 --> 0:14:55.000 of additional fiscal support from Washington. Yeah. So, so look, 0:14:55.080 --> 0:14:57.800 we've we've had this pull back from you know, seven 0:14:57.840 --> 0:15:03.200 eight percent from extraordinary which on September two, UM you know, 0:15:03.240 --> 0:15:05.600 our thought was that you know, you could get up 0:15:05.680 --> 0:15:08.480 something you know, much closer to a ten to fifteent 0:15:08.640 --> 0:15:12.000 zip code from those levels you know potentially you know, 0:15:12.120 --> 0:15:17.440 with being more um uh So, so yes, we do 0:15:17.560 --> 0:15:20.680 see that that there's downside to this market. So Carris 0:15:21.080 --> 0:15:23.560 was one of the disappointment on on the timing of 0:15:23.600 --> 0:15:26.360 cares and potentially the size of Carros. Uh is the 0:15:26.400 --> 0:15:29.600 first thing. The second thing is we know um has 0:15:29.640 --> 0:15:32.160 been you know, kind of where the FED is and 0:15:32.160 --> 0:15:36.400 and some of the ambiguity in their in their guidance. UM. 0:15:36.440 --> 0:15:40.240 I think you know clearly at Jackson Hole. Uh. You know, 0:15:40.360 --> 0:15:44.200 Chairman Powell fired a big bazooken and you know you 0:15:44.280 --> 0:15:47.840 all have been been talking about that very thoroughly over 0:15:47.920 --> 0:15:49.960 the last monta. This is you know, the end of 0:15:50.040 --> 0:15:54.440 forty years of of bucer ideology and and you know 0:15:54.480 --> 0:15:57.240 we're we're no longer going to fight to keep inflation 0:15:57.320 --> 0:15:59.880 below two percent. Was going to somehow aim for some 0:16:00.040 --> 0:16:04.280 thing that average inflation targeting, but the FED is not 0:16:04.400 --> 0:16:07.200 yet really specified how we're going to measure that over 0:16:07.320 --> 0:16:10.960 what time period, using what metrics. I think the market 0:16:11.000 --> 0:16:14.400 is frustrated about that, because how do you really try 0:16:14.440 --> 0:16:17.680 to guess at what inflation or inflation expectations are going 0:16:17.720 --> 0:16:21.640 to do and therefore what might trigger a height. Lisa, 0:16:21.640 --> 0:16:24.720 you got one excuse me, Lisa, just this is a 0:16:24.840 --> 0:16:27.720 good morning and I'm just fired up about this. Look, Lisa, 0:16:27.760 --> 0:16:30.360 you've got the best bio on Wall Street. You start 0:16:30.360 --> 0:16:33.320 off with your protest leftist burning of buildings at Brown 0:16:33.440 --> 0:16:36.400 University a million years ago, and how you're working for 0:16:36.520 --> 0:16:40.000 James Gorman on Wall Street. Lisa, it really works. That 0:16:40.120 --> 0:16:42.840 emotion is out there right now. We certainly saw that 0:16:42.920 --> 0:16:46.760 emotion last night. How will the sea officers of all 0:16:46.760 --> 0:16:50.360 our corporations and adapt and adjust to what they witnessed 0:16:50.400 --> 0:16:53.480 last night? Do they make plans? Did they sit back? 0:16:53.720 --> 0:16:56.240 Do they cut CAPEX by half? Or do they go 0:16:56.320 --> 0:16:59.200 out and say, hey there's optimism here, let's go Well, 0:16:59.280 --> 0:17:01.960 I don't know that they that that there was any 0:17:02.040 --> 0:17:05.240 optimism to be seen. Look, you know, without getting into 0:17:05.280 --> 0:17:08.439 the politics of it, you know, my observation is, and 0:17:08.480 --> 0:17:09.920 I think you know, some of the folks said it 0:17:10.000 --> 0:17:12.280 this morning on some of the other you know news 0:17:12.359 --> 0:17:16.080 out with you know that the dignity and democracy are 0:17:16.080 --> 0:17:19.440 the things that took a big hit m night right. 0:17:19.560 --> 0:17:23.320 And so I think from that perspective, you know, if 0:17:23.359 --> 0:17:26.280 I'm sitting in the c suite uh and and talking 0:17:26.280 --> 0:17:28.680 about what does this all mean? You know, I think 0:17:28.720 --> 0:17:33.359 it's it's preparing uh your teams for the fact that 0:17:33.400 --> 0:17:38.159 there could be material uncertainty uh, you know between November 0:17:38.240 --> 0:17:43.480 and January. UM, and that's volatility in markets. And it's 0:17:43.520 --> 0:17:49.120 potentially you know, in decision by your clients, customers, um uh, 0:17:49.400 --> 0:17:53.200 partners in in in in the economy and so um 0:17:53.240 --> 0:17:56.879 That's what I've been talking about. Leaks always guite to 0:17:56.880 --> 0:17:59.240 cash out with you Entertainment, Morgan Stanley, at least shout that. 0:17:59.320 --> 0:18:06.600 Morgan Stanley. See, we are privileged at Bloomberg Surveillance for radio, 0:18:06.720 --> 0:18:09.960 for television worldwide to bring you a lot of fancy people. 0:18:10.359 --> 0:18:14.680 I don't mean fancy meals, fancy dinners. I'm talking fancy economics, 0:18:14.720 --> 0:18:19.040 fancy politics, lots of fancy degrees. None of that matters. 0:18:19.400 --> 0:18:21.480 If you're a kid out of Leon and you're a 0:18:21.600 --> 0:18:26.840 chef and you build a food restaurant empire in this pandemic, 0:18:27.280 --> 0:18:31.560 what you're observing really really matters. This is without question, 0:18:31.600 --> 0:18:35.200 our most important interview of the day for small business 0:18:35.240 --> 0:18:39.080 America and those trying to survive this pandemic. He is 0:18:39.160 --> 0:18:42.239 Daniel Bellud. You know him from his restaurants, UH, and 0:18:42.400 --> 0:18:45.560 he joins us this morning, what are you gonna do, sir? 0:18:45.840 --> 0:18:47.520 And then the good morning wonderful to have you with us, 0:18:47.520 --> 0:18:50.159 what are you gonna do? And the next thirty days 0:18:50.520 --> 0:18:54.439 to keep your team employed, to keep going forward and 0:18:54.480 --> 0:18:58.520 to avoid the reality of this pandemic in New York City. 0:19:00.200 --> 0:19:03.640 We are getting ready for tonight for the opening inside. 0:19:03.680 --> 0:19:10.240 For of course that occupancy is unsustainable when it comes 0:19:10.240 --> 0:19:14.800 to the economic it's unsustainable for any business, and some 0:19:14.880 --> 0:19:17.720 of them not They are not able to reopen period, 0:19:18.840 --> 0:19:23.080 but we are. I decided to transform the restaurant into 0:19:23.640 --> 0:19:26.960 sort of a UH. I missed going in the South 0:19:27.040 --> 0:19:30.000 of France this summer, and I go every year, and 0:19:30.040 --> 0:19:32.159 I said, well, maybe I should bring a glimpse of 0:19:32.200 --> 0:19:34.160 the South of France. So, of course it's always starts 0:19:34.160 --> 0:19:36.639 with the food, but we also put out the decore. 0:19:37.440 --> 0:19:41.800 Young architect and artist stephaniely got to help me set 0:19:41.880 --> 0:19:44.359 up a decore. I raised a little bit of money 0:19:44.480 --> 0:19:47.920 with sponsors to make sure that you know, my priority 0:19:48.119 --> 0:19:50.680 was to protect my staff and to be able to 0:19:50.760 --> 0:19:54.639 bring back more stuff. From a business standpoint, is it 0:19:54.760 --> 0:19:59.200 more efficacious to receive assistance from the government and wait 0:19:59.320 --> 0:20:02.480 for the VACS scene or is it better to struggle 0:20:02.680 --> 0:20:07.320 forward with this limited occupancy. It didn't really think of 0:20:07.440 --> 0:20:10.600 the first. I went for the second, and we have 0:20:10.680 --> 0:20:14.840 been struggling. It has not been easy. We lost a 0:20:14.880 --> 0:20:17.359 lot of stuff and we are we but I'm very 0:20:17.440 --> 0:20:20.640 positive in a sense that having started early by doing 0:20:20.720 --> 0:20:24.920 a lot of initiatives, from doing charity meals with Food 0:20:25.000 --> 0:20:30.200 First Foundation and uh SL Green, to opening two of 0:20:30.240 --> 0:20:33.320 our restaurants in New York, to take one of our restaurant, 0:20:33.359 --> 0:20:38.000 Cafe Blue, to the countryside, I have brought almost certified 0:20:38.280 --> 0:20:41.480 for the certified percent of my staff, and I think 0:20:41.680 --> 0:20:44.399 I am I'm very proud of that. And that's not 0:20:44.560 --> 0:20:47.600 mean the economic and beautiful, but at least we are 0:20:47.720 --> 0:20:51.560 protecting the business and the jobs. Yes, so Chef Blued. 0:20:51.720 --> 0:20:55.600 As you reopen a capacity, there's a lot of discussion 0:20:55.640 --> 0:20:57.960 about the state of New York City, people moving out, 0:20:58.400 --> 0:21:02.440 clients not taking their business members out for dinner, or 0:21:02.600 --> 0:21:06.119 the clients still there for you to eventually reopen to 0:21:06.240 --> 0:21:09.760 the same degree that you once were. One we have 0:21:10.040 --> 0:21:12.960 so many regular customers who say, please let me know 0:21:13.119 --> 0:21:15.880 when we open inside. What we want is our customer 0:21:16.000 --> 0:21:19.920 to be very disciplined, very careful, and we want ourselves. 0:21:19.960 --> 0:21:22.399 I mean, of course, we train our staff, our staff 0:21:22.720 --> 0:21:26.399 and our team to be also very careful and very 0:21:26.440 --> 0:21:31.800 discipline with the process. We have also made alteration to 0:21:31.920 --> 0:21:35.480 our h v a C. We have done, of course, 0:21:35.680 --> 0:21:40.600 many different steps to ensure that safety come first, of course, 0:21:41.359 --> 0:21:44.080 and also for our staff as well. We have a 0:21:44.280 --> 0:21:48.240 regular checkup all the time with our staff. We want 0:21:48.440 --> 0:21:52.359 to make sure and guests and cause guests an employees 0:21:52.640 --> 0:21:56.040 feel very safe to be inside. And I think that's 0:21:56.080 --> 0:21:58.680 the case of every restaurate today. They try to really 0:21:58.800 --> 0:22:05.080 be on par with their responsibility of opening inside. Daniel, 0:22:05.160 --> 0:22:06.800 before we let you go. Forgive me for getting a 0:22:06.840 --> 0:22:09.840 little bit sentimental, but I grew up in this industry. 0:22:10.240 --> 0:22:12.680 I watched my father run several restaurants and how tough 0:22:12.760 --> 0:22:14.600 it is. But I also know what it means to 0:22:14.720 --> 0:22:17.480 people who work in this industry as well. It's a 0:22:17.560 --> 0:22:20.000 sanctuary for people down on their luck. It's where people 0:22:20.080 --> 0:22:22.320 go when they've lost the job. It's where people go 0:22:22.720 --> 0:22:26.080 to get the first job, and for young aspiring chefs 0:22:26.640 --> 0:22:29.320 in their teenage years right now, Chef, I'm just wondering 0:22:29.400 --> 0:22:31.800 what's the message for them as they want to get 0:22:31.840 --> 0:22:33.680 on the chef's side of the past. What do you 0:22:33.760 --> 0:22:36.159 say to them right now as they look around and 0:22:36.359 --> 0:22:41.200 see our world being decimated now, people who love the hospitality, 0:22:41.359 --> 0:22:46.119