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Speaker 1: This is a Bloomberg Business Flash from Bloomberg World Headquarters.
Speaker 1: I'm Catherine Cowdery. Stocks are climbing and light pre holiday trading,
Speaker 1: with the SMP five funded on course for its biggest
Speaker 1: weekly game since March. There's growing confidence that the economy
Speaker 1: is strengthening enough to handle higher borrowing costses early as
Speaker 1: this summer. Equities trim gains after Federal Reserve here. Janet
Speaker 1: Yellen signaled a willingness to raise interest rates. Speaking at
Speaker 1: Harvard University, she said she expects the economy to improve
Speaker 1: after a week first quarter, and a rate increase would
Speaker 1: probably be appropriate incoming months. We check the markets every
Speaker 1: fifteen minutes throughout the trading day. Dow Industrial leverage up
Speaker 1: twelve points, trading at seventeen thousand, eight hundred thirty nine.
Speaker 1: S and p f i've funded up four points an
Speaker 1: eighth of a percent at two thousand ninety three. The
Speaker 1: Nazak is higher by twenty points, a gain of four
Speaker 1: tens of a percent, trading at one West Texas Intermediate
Speaker 1: crude oil down twenty two cents a barrel, four tens
Speaker 1: of a percent at s about gold down ten dollars
Speaker 1: fifty cents announced at twelve twelve thirty the tenure Treasury
Speaker 1: down six thirty seconds with the yield of one And
Speaker 1: that's a Bloomberg Business flash stock with Kathleen Hay on
Speaker 1: Bloomberg Radio. Another interest rate increase will be appropriate in
Speaker 1: coming months. That's what fed A Reserve chair Janet Gallen
Speaker 1: said today at a really delightful one on one conversation
Speaker 1: with Harvard economist Gregory Manque. She was there for Radcliffe Day.
Speaker 1: She received the Radcliff Medal, and it's for people who
Speaker 1: have made a big contribution to society in their field. Now,
Speaker 1: what she contributed today in the market is is a
Speaker 1: little bit of a pairing of the games and stocks
Speaker 1: which really weren't that much higher anyway, and a little
Speaker 1: bit of a selloff in bonds. Was this warranted? Did
Speaker 1: Janet Yellen say anything that we wouldn't have expected her
Speaker 1: to say? Well, let's ask somebody who was there covering
Speaker 1: this for Bloomberg News are owned Christopher Condon. He's part
Speaker 1: of our Federal Reserve team based in Washington, d c. So, Chris,
Speaker 1: you are covering the day in and day out, how
Speaker 1: would you characterize her remarks today, Hello, Kathleen. Well, I
Speaker 1: would not say that we heard anything from her that
Speaker 1: was markedly different from what others on the committee has
Speaker 1: said in recent day, recent days, or week. But it's
Speaker 1: entirely different coming from the chair. It's who she is
Speaker 1: in addition to what exactly she says, and and and
Speaker 1: so it is meaningful when you care Janet Yell and
Speaker 1: say that it will probably be appropriate in the coming
Speaker 1: months to raise interest rates. Chris, and wondering if you
Speaker 1: could comment about other aspects of the conversation having to
Speaker 1: do not only with her experience, but the economists that
Speaker 1: have mentored her and her role at the Federal Reserve. Well,
Speaker 1: you know something that did come out, uhuh, and that
Speaker 1: come out when I and Rich Miller profiled her, is
Speaker 1: that a very important mentor Janet Yellen was the great
Speaker 1: economist Tobin, whom she studied under Yale, And she talked
Speaker 1: about his sort of uh inclusion of moral and social
Speaker 1: concepts in his economic thinking. And that I think it
Speaker 1: tells us a lot or confirms a lot of what
Speaker 1: we feel about Janet Yellen when she when she does
Speaker 1: her research, when she makes policy, she also tries to
Speaker 1: apply what she called a moral compass, the moral compass
Speaker 1: that that Tobin applied. So I think that tells you
Speaker 1: something about Janet Allen as well. Oh, and how she
Speaker 1: praised Ben Bernanke for his masterful work to be innovative
Speaker 1: and and to save us from credit drawing up and
Speaker 1: going into another great recession. Although I think she said
Speaker 1: and she meant to say into into another great depression
Speaker 1: when she is when she was praising Beam bern Ake, Yeah,
Speaker 1: I thought they were going to give Ben bern apiu metal. Well.
Speaker 1: But but Chris, uh, you know, if you wanted to
Speaker 1: be nitpickyes, I was being It seems to me that, uh,
Speaker 1: maybe the reason we had a little bit of move
Speaker 1: in the market is people didn't realize that Greg manqu
Speaker 1: would be so direct with her and ask her about
Speaker 1: current economic conditions and about the meetings, and so they're
Speaker 1: surprised that she said anything. But she said another interest
Speaker 1: rate increase, another rate hike, I think she said will
Speaker 1: be appropriate over the next few months. Interesting that she
Speaker 1: didn't say hikes. She said a hike right right right?
Speaker 1: That is that is potentially meaningful. It's very difficult to
Speaker 1: you know, we're doing a bit of a bit of
Speaker 1: crystal ball work. You know, what does she mean by
Speaker 1: this word or that word? Very difficult to tease out
Speaker 1: of that anything really explicit. But you're right, she didn't
Speaker 1: talk about the plural. She talked about singular. But but
Speaker 1: she she used the word in the coming months. I
Speaker 1: don't think any buddy would expect multiple increases in the
Speaker 1: coming months unless you include that expending out to December. Um,
Speaker 1: that could be surprised. I mean, could the could the
Speaker 1: FED chair be maybe not in step with others who
Speaker 1: are urging a rate hike sooner rather later, even as
Speaker 1: early as June. UM. I think people are entirely unsure
Speaker 1: about how you know, we heard from a lot of
Speaker 1: FED presidents recently and and J Paula, Governor John pol yesterday. UM,
Speaker 1: and there was this question mark, how close are they
Speaker 1: to the chairs thinking? UM. I think you know, she
Speaker 1: did signal something close to that today, But it was
Speaker 1: very much a conditional expression of wanting to raise rights,
Speaker 1: conditional on continued improvement in the labor market, continued signs
Speaker 1: of growth, even uh continued stability, and oil and the dollars.
Speaker 1: So there are a lot of caveats there that could
Speaker 1: make one thing. There is space between jan and Allen
Speaker 1: and some of the other effllency members who have spoken
Speaker 1: somewhat hawkishly recently. CHRISI. She also spoke about a three
Speaker 1: to five year time horizon and the low level of
Speaker 1: interest rates historically. What if you can comment on that, Well,
Speaker 1: it's true for many reasons, what people see as the
Speaker 1: what they call the natural rate of interest or the
Speaker 1: neutral interest rate is historically low. Um and even once
Speaker 1: as said, condums like to say, once we get back
Speaker 1: to normal, at normal will be quite a bit lower,
Speaker 1: perhaps only uh something like two and a half three percent,
Speaker 1: as opposed to historically uh well above three. And that
Speaker 1: speaks to the lower levels of productivity we're seeing in
Speaker 1: our economy and other factors. So it's she she does
Speaker 1: also think along those lines as well. Thank you very
Speaker 1: much for spending time with us. Chris Condon is Bloomberg's
Speaker 1: Federal Reserve reporter. He was speaking about Federal Reserve Chair
Speaker 1: Janet Yellen and her conversation at the Radcliffe Institute for
Speaker 1: Advanced Study at Harvard University. Janet Yellen reiterating that she
Speaker 1: believes rates should be raised slowly, and she said that
Speaker 1: a rate increase would be appropriate probably in the coming months,
Speaker 1: if the economy and labor market continued to strengthen. You're
Speaker 1: listening to Taking Stock. I'm pim Fox, my co host
Speaker 1: Kathleen Hayes, and this is Bloomberg Radio. GDP grew less
Speaker 1: than one percent in the first quarter. Is that fast
Speaker 1: enough for Janet Yellen to get on board with a
Speaker 1: rate huck in June or July. That's what we're gonna
Speaker 1: find out, coming up now on Bloomberg Radio.