WEBVTT - Bloomberg's Condon on Yellen Remarks: More of the Same (Audio)

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<v Speaker 1>Bloombo Business News twenty four hours a day at Bloomberg

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<v Speaker 1>This is a Bloomberg Business Flash from Bloomberg World Headquarters.

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<v Speaker 1>I'm Catherine Cowdery. Stocks are climbing and light pre holiday trading,

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<v Speaker 1>with the SMP five funded on course for its biggest

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<v Speaker 1>weekly game since March. There's growing confidence that the economy

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<v Speaker 1>is strengthening enough to handle higher borrowing costses early as

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<v Speaker 1>this summer. Equities trim gains after Federal Reserve here. Janet

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<v Speaker 1>Yellen signaled a willingness to raise interest rates. Speaking at

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<v Speaker 1>Harvard University, she said she expects the economy to improve

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<v Speaker 1>after a week first quarter, and a rate increase would

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<v Speaker 1>probably be appropriate incoming months. We check the markets every

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<v Speaker 1>fifteen minutes throughout the trading day. Dow Industrial leverage up

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<v Speaker 1>twelve points, trading at seventeen thousand, eight hundred thirty nine.

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<v Speaker 1>S and p f i've funded up four points an

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<v Speaker 1>eighth of a percent at two thousand ninety three. The

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<v Speaker 1>Nazak is higher by twenty points, a gain of four

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<v Speaker 1>tens of a percent, trading at one West Texas Intermediate

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<v Speaker 1>crude oil down twenty two cents a barrel, four tens

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<v Speaker 1>of a percent at s about gold down ten dollars

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<v Speaker 1>fifty cents announced at twelve twelve thirty the tenure Treasury

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<v Speaker 1>down six thirty seconds with the yield of one And

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<v Speaker 1>that's a Bloomberg Business flash stock with Kathleen Hay on

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<v Speaker 1>Bloomberg Radio. Another interest rate increase will be appropriate in

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<v Speaker 1>coming months. That's what fed A Reserve chair Janet Gallen

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<v Speaker 1>said today at a really delightful one on one conversation

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<v Speaker 1>with Harvard economist Gregory Manque. She was there for Radcliffe Day.

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<v Speaker 1>She received the Radcliff Medal, and it's for people who

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<v Speaker 1>have made a big contribution to society in their field. Now,

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<v Speaker 1>what she contributed today in the market is is a

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<v Speaker 1>little bit of a pairing of the games and stocks

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<v Speaker 1>which really weren't that much higher anyway, and a little

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<v Speaker 1>bit of a selloff in bonds. Was this warranted? Did

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<v Speaker 1>Janet Yellen say anything that we wouldn't have expected her

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<v Speaker 1>to say? Well, let's ask somebody who was there covering

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<v Speaker 1>this for Bloomberg News are owned Christopher Condon. He's part

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<v Speaker 1>of our Federal Reserve team based in Washington, d c. So, Chris,

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<v Speaker 1>you are covering the day in and day out, how

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<v Speaker 1>would you characterize her remarks today, Hello, Kathleen. Well, I

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<v Speaker 1>would not say that we heard anything from her that

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<v Speaker 1>was markedly different from what others on the committee has

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<v Speaker 1>said in recent day, recent days, or week. But it's

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<v Speaker 1>entirely different coming from the chair. It's who she is

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<v Speaker 1>in addition to what exactly she says, and and and

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<v Speaker 1>so it is meaningful when you care Janet Yell and

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<v Speaker 1>say that it will probably be appropriate in the coming

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<v Speaker 1>months to raise interest rates. Chris, and wondering if you

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<v Speaker 1>could comment about other aspects of the conversation having to

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<v Speaker 1>do not only with her experience, but the economists that

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<v Speaker 1>have mentored her and her role at the Federal Reserve. Well,

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<v Speaker 1>you know something that did come out, uhuh, and that

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<v Speaker 1>come out when I and Rich Miller profiled her, is

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<v Speaker 1>that a very important mentor Janet Yellen was the great

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<v Speaker 1>economist Tobin, whom she studied under Yale, And she talked

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<v Speaker 1>about his sort of uh inclusion of moral and social

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<v Speaker 1>concepts in his economic thinking. And that I think it

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<v Speaker 1>tells us a lot or confirms a lot of what

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<v Speaker 1>we feel about Janet Yellen when she when she does

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<v Speaker 1>her research, when she makes policy, she also tries to

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<v Speaker 1>apply what she called a moral compass, the moral compass

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<v Speaker 1>that that Tobin applied. So I think that tells you

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<v Speaker 1>something about Janet Allen as well. Oh, and how she

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<v Speaker 1>praised Ben Bernanke for his masterful work to be innovative

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<v Speaker 1>and and to save us from credit drawing up and

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<v Speaker 1>going into another great recession. Although I think she said

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<v Speaker 1>and she meant to say into into another great depression

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<v Speaker 1>when she is when she was praising Beam bern Ake, Yeah,

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<v Speaker 1>I thought they were going to give Ben bern apiu metal. Well.

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<v Speaker 1>But but Chris, uh, you know, if you wanted to

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<v Speaker 1>be nitpickyes, I was being It seems to me that, uh,

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<v Speaker 1>maybe the reason we had a little bit of move

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<v Speaker 1>in the market is people didn't realize that Greg manqu

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<v Speaker 1>would be so direct with her and ask her about

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<v Speaker 1>current economic conditions and about the meetings, and so they're

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<v Speaker 1>surprised that she said anything. But she said another interest

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<v Speaker 1>rate increase, another rate hike, I think she said will

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<v Speaker 1>be appropriate over the next few months. Interesting that she

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<v Speaker 1>didn't say hikes. She said a hike right right right?

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<v Speaker 1>That is that is potentially meaningful. It's very difficult to

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<v Speaker 1>you know, we're doing a bit of a bit of

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<v Speaker 1>crystal ball work. You know, what does she mean by

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<v Speaker 1>this word or that word? Very difficult to tease out

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<v Speaker 1>of that anything really explicit. But you're right, she didn't

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<v Speaker 1>talk about the plural. She talked about singular. But but

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<v Speaker 1>she she used the word in the coming months. I

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<v Speaker 1>don't think any buddy would expect multiple increases in the

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<v Speaker 1>coming months unless you include that expending out to December. Um,

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<v Speaker 1>that could be surprised. I mean, could the could the

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<v Speaker 1>FED chair be maybe not in step with others who

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<v Speaker 1>are urging a rate hike sooner rather later, even as

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<v Speaker 1>early as June. UM. I think people are entirely unsure

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<v Speaker 1>about how you know, we heard from a lot of

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<v Speaker 1>FED presidents recently and and J Paula, Governor John pol yesterday. UM,

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<v Speaker 1>and there was this question mark, how close are they

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<v Speaker 1>to the chairs thinking? UM. I think you know, she

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<v Speaker 1>did signal something close to that today, But it was

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<v Speaker 1>very much a conditional expression of wanting to raise rights,

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<v Speaker 1>conditional on continued improvement in the labor market, continued signs

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<v Speaker 1>of growth, even uh continued stability, and oil and the dollars.

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<v Speaker 1>So there are a lot of caveats there that could

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<v Speaker 1>make one thing. There is space between jan and Allen

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<v Speaker 1>and some of the other effllency members who have spoken

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<v Speaker 1>somewhat hawkishly recently. CHRISI. She also spoke about a three

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<v Speaker 1>to five year time horizon and the low level of

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<v Speaker 1>interest rates historically. What if you can comment on that, Well,

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<v Speaker 1>it's true for many reasons, what people see as the

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<v Speaker 1>what they call the natural rate of interest or the

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<v Speaker 1>neutral interest rate is historically low. Um and even once

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<v Speaker 1>as said, condums like to say, once we get back

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<v Speaker 1>to normal, at normal will be quite a bit lower,

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<v Speaker 1>perhaps only uh something like two and a half three percent,

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<v Speaker 1>as opposed to historically uh well above three. And that

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<v Speaker 1>speaks to the lower levels of productivity we're seeing in

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<v Speaker 1>our economy and other factors. So it's she she does

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<v Speaker 1>also think along those lines as well. Thank you very

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<v Speaker 1>much for spending time with us. Chris Condon is Bloomberg's

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<v Speaker 1>Federal Reserve reporter. He was speaking about Federal Reserve Chair

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<v Speaker 1>Janet Yellen and her conversation at the Radcliffe Institute for

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<v Speaker 1>Advanced Study at Harvard University. Janet Yellen reiterating that she

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<v Speaker 1>believes rates should be raised slowly, and she said that

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<v Speaker 1>a rate increase would be appropriate probably in the coming months,

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<v Speaker 1>if the economy and labor market continued to strengthen. You're

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<v Speaker 1>listening to Taking Stock. I'm pim Fox, my co host

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<v Speaker 1>Kathleen Hayes, and this is Bloomberg Radio. GDP grew less

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<v Speaker 1>than one percent in the first quarter. Is that fast

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<v Speaker 1>enough for Janet Yellen to get on board with a

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<v Speaker 1>rate huck in June or July. That's what we're gonna

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<v Speaker 1>find out, coming up now on Bloomberg Radio.