1 00:00:02,520 --> 00:00:08,320 Speaker 1: Bloomberg Audio Studios, podcasts, radio news that's turn. 2 00:00:08,240 --> 00:00:11,000 Speaker 2: To the Federal Reserve policymaker is remaining divided ahead of 3 00:00:11,000 --> 00:00:14,200 Speaker 2: the December meeting. The San Francisco Fed President Merry Daily, 4 00:00:14,280 --> 00:00:17,040 Speaker 2: writing in a blog this morning, we must ask ourselves, 5 00:00:17,239 --> 00:00:20,080 Speaker 2: are we in the nineteen seventies or the nineteen nineties. 6 00:00:20,079 --> 00:00:23,119 Speaker 2: We can't ignore the seventies or the post pandemic inflation 7 00:00:23,239 --> 00:00:26,280 Speaker 2: run up, but we can't ignore the rest of history either. 8 00:00:26,520 --> 00:00:28,840 Speaker 2: The Fed President Merry Daily joined us now for more. 9 00:00:28,880 --> 00:00:31,200 Speaker 2: President Daddy, welcome back to the program. Always good to 10 00:00:31,200 --> 00:00:33,519 Speaker 2: see you. Let's just start with that question that you 11 00:00:33,560 --> 00:00:36,960 Speaker 2: ask yourself what's guiding your assessment of where we are. 12 00:00:37,520 --> 00:00:40,640 Speaker 3: So I'm looking at both inflation and productivity. And if 13 00:00:40,680 --> 00:00:43,720 Speaker 3: you look at inflation, you're seeing that it's been pretty 14 00:00:43,800 --> 00:00:47,279 Speaker 3: contained so far in the goods prices which have been 15 00:00:47,280 --> 00:00:50,000 Speaker 3: directly tariffed. And then you look at the other parts 16 00:00:50,000 --> 00:00:52,879 Speaker 3: of inflation, you just don't see much of a run up. 17 00:00:52,920 --> 00:00:56,440 Speaker 3: So that's good news, and inflation expectations what people expect. 18 00:00:56,200 --> 00:00:57,639 Speaker 1: Remain very well anchored. 19 00:00:57,920 --> 00:01:00,920 Speaker 3: Look at productivity and you see that activity is rising 20 00:01:00,960 --> 00:01:04,120 Speaker 3: GDP growth is rising, while the labor market is slowing, 21 00:01:04,319 --> 00:01:06,039 Speaker 3: So that tells me there's a little bit of that 22 00:01:06,160 --> 00:01:09,680 Speaker 3: boost coming from firms looking to do more with less, 23 00:01:09,720 --> 00:01:12,039 Speaker 3: but that's also causing a slow down in the labor market. 24 00:01:12,200 --> 00:01:15,160 Speaker 3: So the fifty basis point adjustment we've made has helped 25 00:01:15,360 --> 00:01:19,240 Speaker 3: support the labor market, but still keeps policy restrictive so 26 00:01:19,280 --> 00:01:21,120 Speaker 3: that we can put downward pressure on inflation. 27 00:01:21,959 --> 00:01:24,760 Speaker 4: President Daily, what are you looking at to determine whether 28 00:01:24,800 --> 00:01:27,000 Speaker 4: it's the nineteen seventies the nineteen nineties. 29 00:01:28,200 --> 00:01:30,600 Speaker 3: Well, I'm going to really look at things that improve 30 00:01:30,680 --> 00:01:33,560 Speaker 3: productivity to think about the nineties, And it's more than 31 00:01:33,720 --> 00:01:37,280 Speaker 3: just the stock market valuations for AI companies. It really 32 00:01:37,400 --> 00:01:40,319 Speaker 3: is about the companies out there who might be using 33 00:01:40,360 --> 00:01:43,280 Speaker 3: AI and then asking them, going directly to them and 34 00:01:43,319 --> 00:01:45,840 Speaker 3: asking them, what's it doing for your bottom line and 35 00:01:45,880 --> 00:01:48,200 Speaker 3: how are you using it? And what we're hearing are 36 00:01:48,240 --> 00:01:50,720 Speaker 3: pretty encouraging, but very early signs. 37 00:01:50,920 --> 00:01:52,240 Speaker 1: They see how it can help. 38 00:01:52,040 --> 00:01:54,880 Speaker 3: Their bottom line, how can improve their productivity, even how 39 00:01:54,880 --> 00:01:57,640 Speaker 3: they can be supportive of their workers, give them more 40 00:01:57,640 --> 00:02:00,560 Speaker 3: interesting work, take the less interesting work away. But they 41 00:02:00,600 --> 00:02:02,720 Speaker 3: all tell us it's early days, so more to come 42 00:02:02,760 --> 00:02:05,080 Speaker 3: on that. And then on the inflation part, are we 43 00:02:05,120 --> 00:02:09,720 Speaker 3: in the nineteen seventies, really asking employers and firms what 44 00:02:09,800 --> 00:02:12,480 Speaker 3: are you doing with prices? Are you thinking about raising 45 00:02:12,560 --> 00:02:15,120 Speaker 3: your prices? How are you going to think about losing 46 00:02:15,200 --> 00:02:18,000 Speaker 3: volumes if you do so in a slowing economy, especially 47 00:02:18,080 --> 00:02:21,480 Speaker 3: for consumers you know, from the fiftieth percentile down. And 48 00:02:21,560 --> 00:02:23,720 Speaker 3: putting those two things together, I think we'll get a 49 00:02:23,720 --> 00:02:27,320 Speaker 3: lot of clarity about which direction we're heading. And with policy, 50 00:02:27,520 --> 00:02:30,320 Speaker 3: you know, been slightly adjusted, we are in a good 51 00:02:30,360 --> 00:02:33,240 Speaker 3: place to continue to evaluate the information before we make 52 00:02:33,280 --> 00:02:34,080 Speaker 3: any decisions. 53 00:02:34,200 --> 00:02:35,960 Speaker 1: We can't know x Ante. 54 00:02:36,120 --> 00:02:38,040 Speaker 3: Before the day to come out, and before we get 55 00:02:38,040 --> 00:02:40,800 Speaker 3: that information really what we're facing. We just have to 56 00:02:40,840 --> 00:02:42,920 Speaker 3: have an open mind about which one it could be 57 00:02:43,200 --> 00:02:44,600 Speaker 3: and maybe other periods of history. 58 00:02:44,600 --> 00:02:45,639 Speaker 1: I didn't even mention. 59 00:02:45,680 --> 00:02:48,639 Speaker 4: President Daily how different would the neutral rate be if 60 00:02:48,680 --> 00:02:51,399 Speaker 4: it were, say, more like the nineteen seventies or more 61 00:02:51,440 --> 00:02:54,640 Speaker 4: like the nineteen nineties. Just how different would FED policy 62 00:02:54,680 --> 00:02:58,160 Speaker 4: be in response to one or the other paradigm? 63 00:02:58,800 --> 00:03:01,600 Speaker 3: Well, you know it, there's many nuanced ways it could 64 00:03:01,600 --> 00:03:03,640 Speaker 3: affect the neutral rate. But I can back up from 65 00:03:03,680 --> 00:03:06,520 Speaker 3: that and just ask what were the policy remedies if 66 00:03:06,520 --> 00:03:09,440 Speaker 3: you think we're about to have an inflation run up. 67 00:03:09,720 --> 00:03:12,840 Speaker 3: Then we obviously would have to hold policy tighter for 68 00:03:12,919 --> 00:03:16,560 Speaker 3: longer because we wouldn't want that to occur. You know, honestly, 69 00:03:16,560 --> 00:03:20,600 Speaker 3: Americans have endured already too much inflation, and we really 70 00:03:20,600 --> 00:03:22,880 Speaker 3: need to get that back down to two percent to 71 00:03:23,000 --> 00:03:26,680 Speaker 3: restore price stability, as we've committed to. On the other side, 72 00:03:26,800 --> 00:03:30,720 Speaker 3: if it's productivity, you would start seeing the economy. 73 00:03:30,400 --> 00:03:32,120 Speaker 1: Able to run a little bit longer. 74 00:03:32,400 --> 00:03:34,520 Speaker 3: Maybe if you go back to the debates of the nineties, 75 00:03:34,680 --> 00:03:38,120 Speaker 3: you know, we saw the labor market slow. Workers were insecure, 76 00:03:38,160 --> 00:03:41,080 Speaker 3: but the labor market had unemployment that was fairly low, 77 00:03:41,440 --> 00:03:44,040 Speaker 3: and many at the time were worried that could spur inflation. 78 00:03:44,600 --> 00:03:48,720 Speaker 3: But Greenspan chairman green Span held on with his colleagues. 79 00:03:48,760 --> 00:03:51,400 Speaker 3: They didn't raise rates. And what you saw was, you know, 80 00:03:51,480 --> 00:03:54,160 Speaker 3: the nineties, which was a booming time, and we ended 81 00:03:54,640 --> 00:03:57,480 Speaker 3: around target inflation and we had a productivity boom. So 82 00:03:57,520 --> 00:04:00,240 Speaker 3: you're trying to balance those two things together, and it 83 00:04:00,320 --> 00:04:03,440 Speaker 3: means not looking just at headlined information, but getting below 84 00:04:03,520 --> 00:04:07,760 Speaker 3: that information, talking to firms, talking to consumers, talking to workers, 85 00:04:08,080 --> 00:04:10,480 Speaker 3: really on the ground work, like we do at the 86 00:04:10,520 --> 00:04:12,800 Speaker 3: reserve banks and other places. You know, the FED is 87 00:04:12,840 --> 00:04:15,160 Speaker 3: built to do this on the ground work as well 88 00:04:15,160 --> 00:04:16,520 Speaker 3: as look at the published data. 89 00:04:16,680 --> 00:04:19,200 Speaker 4: President Daily reading the blog post this morning, it seems 90 00:04:19,240 --> 00:04:21,560 Speaker 4: like you're leaning more toward the nineteen ninety side of 91 00:04:21,600 --> 00:04:23,520 Speaker 4: things than in nineteen seventies. Is that right? 92 00:04:24,880 --> 00:04:25,080 Speaker 1: Well? 93 00:04:25,120 --> 00:04:27,400 Speaker 3: You know right now, you know, I'm in the West, 94 00:04:27,560 --> 00:04:30,479 Speaker 3: in I have the nine states in the Western United States, 95 00:04:30,760 --> 00:04:33,760 Speaker 3: and it's not just Silicon Valley that seems interested in AI. 96 00:04:34,040 --> 00:04:36,400 Speaker 3: No matter who we talk to, whether they're you know, 97 00:04:36,480 --> 00:04:42,320 Speaker 3: small businesses, medium or large businesses, manufacturing, tourism, etc. They're 98 00:04:42,480 --> 00:04:45,360 Speaker 3: using AI in a way that they say is going 99 00:04:45,400 --> 00:04:49,000 Speaker 3: to improve their productivity, and they're already seeing parts of it. 100 00:04:49,279 --> 00:04:51,279 Speaker 3: So when I see that, I'm like, Okay, we need 101 00:04:51,320 --> 00:04:54,080 Speaker 3: to think about that. What really will spur this is 102 00:04:54,120 --> 00:04:56,280 Speaker 3: an ongoing thing, is if they start to change their 103 00:04:56,320 --> 00:04:57,280 Speaker 3: business processes. 104 00:04:57,320 --> 00:04:59,080 Speaker 1: So that's what I'm looking at now. 105 00:04:59,360 --> 00:05:01,760 Speaker 3: That means, but I guess a different way to say 106 00:05:01,760 --> 00:05:04,279 Speaker 3: that is we cannot take our eyes off inflation again. 107 00:05:04,560 --> 00:05:07,760 Speaker 3: Americans have endured high inflation too long. That's our mandate. 108 00:05:08,000 --> 00:05:10,640 Speaker 3: So while I'm looking for productivity gains and seeing if 109 00:05:10,640 --> 00:05:14,240 Speaker 3: they're going to continue, I'm also keeping my eye completely 110 00:05:14,320 --> 00:05:16,960 Speaker 3: focused on inflation to make sure that it doesn't pick 111 00:05:17,040 --> 00:05:19,320 Speaker 3: up in a way that would suggest we need to 112 00:05:19,320 --> 00:05:21,080 Speaker 3: do more or we need to hold longer. 113 00:05:21,200 --> 00:05:23,200 Speaker 2: President Teddy, how would you respond to the criticism that 114 00:05:23,200 --> 00:05:25,600 Speaker 2: the Federal Reserve as an institution has taken its high 115 00:05:25,839 --> 00:05:28,320 Speaker 2: off inflation, that inflation is close to the three than 116 00:05:28,360 --> 00:05:29,960 Speaker 2: it is the two, and the Fed's been kind of 117 00:05:30,000 --> 00:05:30,600 Speaker 2: interest rates. 118 00:05:32,080 --> 00:05:34,479 Speaker 3: You know, I don't think that if you unpack the 119 00:05:34,520 --> 00:05:37,640 Speaker 3: inflation data you really see signs of that. It's true 120 00:05:37,640 --> 00:05:40,279 Speaker 3: that headline inflation is printing at that level, but you 121 00:05:40,400 --> 00:05:43,279 Speaker 3: have to take apart that inflation and ask how much 122 00:05:43,320 --> 00:05:45,920 Speaker 3: of it is the effect of tariffs passing through the 123 00:05:46,000 --> 00:05:48,799 Speaker 3: goods prices that we expect to be a one time 124 00:05:49,080 --> 00:05:52,560 Speaker 3: price level adjustment and not a consistent run up in inflation. 125 00:05:52,640 --> 00:05:54,760 Speaker 3: And if you unpack the data, what you see is 126 00:05:54,800 --> 00:05:57,960 Speaker 3: you don't see inflation running up in services or housing, 127 00:05:58,160 --> 00:06:01,920 Speaker 3: and importantly, you don't see it's reading into inflation expectations 128 00:06:02,160 --> 00:06:04,160 Speaker 3: that would be the thing that would continue to run 129 00:06:04,240 --> 00:06:07,040 Speaker 3: up inflation going forward. We also see a labor market 130 00:06:07,080 --> 00:06:09,880 Speaker 3: that's softening, in wage growth that is moderating, so you're 131 00:06:09,920 --> 00:06:12,279 Speaker 3: really not going to see a lot of pressure coming on. 132 00:06:12,160 --> 00:06:13,320 Speaker 1: The cost side of labor. 133 00:06:13,640 --> 00:06:15,880 Speaker 3: So I put those things together, and we don't want 134 00:06:15,880 --> 00:06:18,320 Speaker 3: to make the mistake of holding on too long for 135 00:06:18,440 --> 00:06:20,719 Speaker 3: rates only to find out we injure the economy. 136 00:06:20,839 --> 00:06:22,480 Speaker 2: President any can we just pick up on the cost 137 00:06:22,520 --> 00:06:25,400 Speaker 2: of labor. I think this is really important right now, clearly, 138 00:06:25,839 --> 00:06:27,599 Speaker 2: and it's hard to dispute this. It's in the data. 139 00:06:27,600 --> 00:06:29,680 Speaker 2: We've had a massive step down and pay rolls growth. 140 00:06:30,080 --> 00:06:33,320 Speaker 2: What's behind that is a little bit more confusing. Is 141 00:06:33,360 --> 00:06:36,359 Speaker 2: it demand? Is it cyclical, is it structural? Is it 142 00:06:36,400 --> 00:06:39,800 Speaker 2: something else like immigration? What's your talent right now? What 143 00:06:39,800 --> 00:06:42,200 Speaker 2: can you point to that helps telling you it's one 144 00:06:42,200 --> 00:06:43,000 Speaker 2: thing over the other. 145 00:06:44,400 --> 00:06:47,520 Speaker 3: Yes, you look at prices in this case, the price 146 00:06:47,560 --> 00:06:51,279 Speaker 3: of labor as wages. If it was simply about supply 147 00:06:51,760 --> 00:06:55,240 Speaker 3: and firms were still scrambling to find workers to fill 148 00:06:55,279 --> 00:06:58,920 Speaker 3: what was jobs that were supported by the previous immigrants, 149 00:06:59,279 --> 00:07:01,680 Speaker 3: you would find wages going up as they bid for 150 00:07:01,760 --> 00:07:03,360 Speaker 3: workers to try to fill those jobs. 151 00:07:03,400 --> 00:07:04,800 Speaker 1: But that's actually not what you see. 152 00:07:04,960 --> 00:07:08,680 Speaker 3: You see wage growth slowing even in sectors where immigration 153 00:07:08,839 --> 00:07:09,840 Speaker 3: played a larger role. 154 00:07:10,120 --> 00:07:12,680 Speaker 1: And so that to me says it's. 155 00:07:12,520 --> 00:07:15,560 Speaker 3: A demand shock, a negative demand shock along with just 156 00:07:15,840 --> 00:07:20,160 Speaker 3: a coincidental negative supply shock, so you lost workers, but 157 00:07:20,320 --> 00:07:22,480 Speaker 3: you lost jobs at the same time, or you had 158 00:07:22,640 --> 00:07:26,680 Speaker 3: job growth slowing, and what we're seeing now does that 159 00:07:26,760 --> 00:07:29,520 Speaker 3: continue to net out right? What if the supply of 160 00:07:29,560 --> 00:07:32,080 Speaker 3: workers doesn't keep going down but the demand for workers 161 00:07:32,120 --> 00:07:34,720 Speaker 3: does well, then we'd end up with a rise in unemployment. 162 00:07:34,800 --> 00:07:37,760 Speaker 1: So have to keep squarely focused on those types of things. 163 00:07:37,800 --> 00:07:42,000 Speaker 3: We're definitely in a low firing, low hiring period and 164 00:07:42,320 --> 00:07:45,680 Speaker 3: interrogating that labor market, continuing to watch the information, see 165 00:07:45,720 --> 00:07:46,760 Speaker 3: what firms do next. 166 00:07:47,000 --> 00:07:48,600 Speaker 1: That's going to be the important part. 167 00:07:48,680 --> 00:07:50,360 Speaker 4: And it's something that a lot of people have said, 168 00:07:50,520 --> 00:07:53,080 Speaker 4: really is the case shape the idea that, particularly on 169 00:07:53,080 --> 00:07:55,880 Speaker 4: the lower end, you have not seen wages keep pace 170 00:07:56,320 --> 00:07:58,600 Speaker 4: with the rest of the income spheres. 171 00:07:58,760 --> 00:08:00,680 Speaker 1: I just wonder, though, how much we. 172 00:08:00,680 --> 00:08:03,400 Speaker 4: Are seeing a massive amount of inflation and acid prisis 173 00:08:03,680 --> 00:08:07,000 Speaker 4: and how that feeds into what you're looking at, especially 174 00:08:07,000 --> 00:08:09,480 Speaker 4: at a time that may rhyme with the nineteen nineties, 175 00:08:09,480 --> 00:08:11,960 Speaker 4: and we know what happened after the nineteen nineties. How 176 00:08:12,040 --> 00:08:12,880 Speaker 4: much do you weigh that? 177 00:08:13,040 --> 00:08:14,840 Speaker 1: How much do you have to pay attention? 178 00:08:16,320 --> 00:08:17,680 Speaker 3: Well, you know one of the things that you do, 179 00:08:18,200 --> 00:08:22,040 Speaker 3: so financial market conditions are one input into our decision making, 180 00:08:22,360 --> 00:08:24,600 Speaker 3: one of many inputs. You know, we have two goals, 181 00:08:24,640 --> 00:08:26,960 Speaker 3: price stability, full employment. We're trying to think about what 182 00:08:27,040 --> 00:08:31,760 Speaker 3: inputs affect those two variables, those two goals. But what 183 00:08:31,920 --> 00:08:35,000 Speaker 3: I look at is if you look under the valuations, 184 00:08:35,200 --> 00:08:37,520 Speaker 3: you know, people are really talking about one of two things. 185 00:08:37,720 --> 00:08:41,040 Speaker 3: This is going to be a transformative technology. AI is 186 00:08:41,080 --> 00:08:43,199 Speaker 3: going to change the world to be like electricity or 187 00:08:43,240 --> 00:08:44,199 Speaker 3: the steam engine. 188 00:08:44,280 --> 00:08:46,840 Speaker 1: And then the people who are a little more skeptical. 189 00:08:46,440 --> 00:08:48,920 Speaker 3: Are saying it's going to be a business as usual technology. 190 00:08:48,920 --> 00:08:51,360 Speaker 3: You think of computers in the Internet. The thing that's 191 00:08:51,400 --> 00:08:54,240 Speaker 3: true about both of those is they're both productive. You 192 00:08:54,280 --> 00:08:57,240 Speaker 3: get productivity from both of those. They both help with growth, 193 00:08:57,480 --> 00:09:01,080 Speaker 3: they both help the pie and the expand And so 194 00:09:01,360 --> 00:09:04,320 Speaker 3: we're not talking about a bunch of ideas with no backing. 195 00:09:04,360 --> 00:09:08,480 Speaker 3: We're talking about, you know, equity investors, not highly leveraged 196 00:09:08,960 --> 00:09:12,360 Speaker 3: going in and making banking bets really on whether it's 197 00:09:12,400 --> 00:09:15,320 Speaker 3: going to be transformative or business as usual. But everybody 198 00:09:15,320 --> 00:09:17,840 Speaker 3: agrees on one thing, it will change productivity. 199 00:09:18,120 --> 00:09:20,480 Speaker 4: At the same time, President Daily some people would suggest 200 00:09:20,520 --> 00:09:23,079 Speaker 4: that yes, you will see stocks continue to go up 201 00:09:23,240 --> 00:09:25,840 Speaker 4: in the face of another rate cut, But at the 202 00:09:25,840 --> 00:09:29,800 Speaker 4: same time, the transmission mechanism of the additional cuts are 203 00:09:29,840 --> 00:09:32,640 Speaker 4: slower to take place. It's less efficient in terms of 204 00:09:32,679 --> 00:09:35,000 Speaker 4: the pass through just based on how much lending there is, 205 00:09:35,040 --> 00:09:38,200 Speaker 4: whether it's in the private lending sphere or beyond. How 206 00:09:38,200 --> 00:09:40,480 Speaker 4: do you measure these things at a confusing moment? 207 00:09:41,760 --> 00:09:44,800 Speaker 3: Well, you know, I guess this argument that we've somehow 208 00:09:44,920 --> 00:09:48,520 Speaker 3: lost our power monetary policy doesn't transmit. I simply don't 209 00:09:48,520 --> 00:09:50,880 Speaker 3: see it in the information. If you go out and 210 00:09:50,920 --> 00:09:54,200 Speaker 3: you look at what happened when inflation was running really, 211 00:09:54,240 --> 00:09:58,400 Speaker 3: really high, we raised rates pretty aggressively, and mortgage interest 212 00:09:58,480 --> 00:10:02,720 Speaker 3: rates rose rapidly. Car rates rose rapidly, and the economy slowed. 213 00:10:02,720 --> 00:10:05,440 Speaker 3: Inflation came down. Right now, what I'm seeing is we 214 00:10:05,480 --> 00:10:08,800 Speaker 3: adjust rates, mortgage interest rates come down, not one for one, 215 00:10:09,040 --> 00:10:11,280 Speaker 3: that's not how it works. Usually is less than one 216 00:10:11,320 --> 00:10:13,280 Speaker 3: for one, but they come down. You see a little 217 00:10:13,320 --> 00:10:15,760 Speaker 3: more activity in the housing market, you see a little 218 00:10:15,760 --> 00:10:19,080 Speaker 3: more activity in the borrowing market more generally, and you 219 00:10:19,120 --> 00:10:22,320 Speaker 3: see that dynamic work. So I guess the most important 220 00:10:22,320 --> 00:10:24,760 Speaker 3: thing is just to remember that montary policy acts with 221 00:10:24,800 --> 00:10:27,280 Speaker 3: a lag, and right now we're making decisions not just 222 00:10:27,280 --> 00:10:29,480 Speaker 3: for what's going to happen next week, but what's going 223 00:10:29,520 --> 00:10:31,360 Speaker 3: to happen in the next six months to a year. 224 00:10:31,640 --> 00:10:33,360 Speaker 3: So that's how we have to think about it with 225 00:10:33,480 --> 00:10:36,760 Speaker 3: our forecasts, and then how we adjust policy as those 226 00:10:36,800 --> 00:10:37,680 Speaker 3: forecasts evolve. 227 00:10:37,840 --> 00:10:40,160 Speaker 4: How frustrating has it been not to get government data? 228 00:10:41,920 --> 00:10:45,079 Speaker 3: You know, I really want the information, the fullest amount 229 00:10:45,120 --> 00:10:47,440 Speaker 3: of information we can possibly get. But one of the 230 00:10:47,480 --> 00:10:52,280 Speaker 3: things that I think maybe underestimated in public about what 231 00:10:52,320 --> 00:10:55,800 Speaker 3: the FED does is we're regularly relying on government provided 232 00:10:55,880 --> 00:10:58,200 Speaker 3: data that's the gold standard of data in the world. 233 00:10:58,520 --> 00:11:01,280 Speaker 3: We're also relying on private sector surveys which have been 234 00:11:01,320 --> 00:11:04,800 Speaker 3: collected for many, many years, and we can correlate them 235 00:11:04,559 --> 00:11:07,720 Speaker 3: with the government collected data over time and know exactly 236 00:11:07,960 --> 00:11:10,080 Speaker 3: how they relate to one another. And then of course 237 00:11:10,120 --> 00:11:13,839 Speaker 3: there's really no replacement, especially at inflection points in the economy, 238 00:11:14,160 --> 00:11:20,520 Speaker 3: for talking to businesses, workers, communities, and consumers, asking people 239 00:11:20,559 --> 00:11:21,560 Speaker 3: what they're really doing. 240 00:11:21,800 --> 00:11:22,679 Speaker 1: And then you know, I. 241 00:11:22,720 --> 00:11:24,599 Speaker 3: Like to do this, go to the parking lots of 242 00:11:24,640 --> 00:11:27,360 Speaker 3: your favorite retail stores and look at how many cars 243 00:11:27,360 --> 00:11:29,200 Speaker 3: are in the parking lot and what people are buying. 244 00:11:29,480 --> 00:11:32,520 Speaker 3: That tells you a lot, you know, airports are are full. 245 00:11:32,840 --> 00:11:34,959 Speaker 3: People are out there. You can go to you know, 246 00:11:35,120 --> 00:11:37,080 Speaker 3: go to a sporting event or a concert, see how 247 00:11:37,080 --> 00:11:39,520 Speaker 3: many people are there. What you see as an economy 248 00:11:39,520 --> 00:11:42,600 Speaker 3: that is slower than it was, consumers that are not 249 00:11:42,840 --> 00:11:45,240 Speaker 3: they're more picky about what they spend on, but they're 250 00:11:45,280 --> 00:11:48,040 Speaker 3: still out there participating in the economy. And that's how 251 00:11:48,080 --> 00:11:50,400 Speaker 3: we get the information we need to make the right 252 00:11:50,440 --> 00:11:53,400 Speaker 3: decisions that are according to our mandates, but mostly for 253 00:11:53,480 --> 00:11:54,920 Speaker 3: the American people presidentially. 254 00:11:55,000 --> 00:11:56,920 Speaker 4: You've been working with the FED or on the FED 255 00:11:57,440 --> 00:11:59,960 Speaker 4: Committee for a long long time on these in these debates, 256 00:12:00,160 --> 00:12:02,600 Speaker 4: have you ever seen it more divided than it is 257 00:12:02,720 --> 00:12:03,080 Speaker 4: right now? 258 00:12:03,080 --> 00:12:05,880 Speaker 1: On the FMC? He knows, of course. 259 00:12:06,280 --> 00:12:07,600 Speaker 3: I mean look at that, if you look at the 260 00:12:07,600 --> 00:12:10,120 Speaker 3: transcripts and the meeting minutes, and you know it's helpful. 261 00:12:10,200 --> 00:12:12,320 Speaker 3: Go back and look at the nineteen nineties debates, and 262 00:12:12,360 --> 00:12:15,319 Speaker 3: go back and look at the commentary around the nineteen seventies. 263 00:12:15,600 --> 00:12:18,600 Speaker 3: You know, it is a misnomber to think people always 264 00:12:18,600 --> 00:12:21,240 Speaker 3: agree the right way to think about it. In my judgment, 265 00:12:21,280 --> 00:12:24,080 Speaker 3: this has been my experience, is that the debate we 266 00:12:24,200 --> 00:12:26,800 Speaker 3: have I wouldn't even call a division. I would call 267 00:12:26,840 --> 00:12:29,400 Speaker 3: it differences. Of opinion that are really healthy in a 268 00:12:29,440 --> 00:12:32,680 Speaker 3: debate about trying to make policy in an uncertain time. 269 00:12:32,800 --> 00:12:35,160 Speaker 1: With no truth. We don't have truth. 270 00:12:35,240 --> 00:12:39,400 Speaker 3: We have forecasts, we have our best estimates. We have 271 00:12:39,640 --> 00:12:42,120 Speaker 3: taking the evidence and then taking it again and looking 272 00:12:42,120 --> 00:12:45,160 Speaker 3: through it with different lenses. I see that as a 273 00:12:45,160 --> 00:12:47,800 Speaker 3: strength of the committee, a strength of the Federal Reserve, 274 00:12:48,160 --> 00:12:52,079 Speaker 3: and importantly is it is delivering the best possible decisions 275 00:12:52,120 --> 00:12:55,880 Speaker 3: we can make. So I have seen this many times before, 276 00:12:56,080 --> 00:12:58,240 Speaker 3: and I think it's always at inflection points that you 277 00:12:58,280 --> 00:13:01,520 Speaker 3: see the broadest amount of dis agreement, and it's exactly 278 00:13:01,600 --> 00:13:04,280 Speaker 3: what I hope people would want from a committee making 279 00:13:04,320 --> 00:13:07,640 Speaker 3: decisions on inflation and full employment. It really does help 280 00:13:07,720 --> 00:13:10,559 Speaker 3: us make sure that we're doing the best we possibly can. 281 00:13:10,840 --> 00:13:12,720 Speaker 2: So you're happy to confirm on the records you have 282 00:13:12,760 --> 00:13:15,160 Speaker 2: not seen Governor Maron and President Smith in a fight 283 00:13:15,480 --> 00:13:17,760 Speaker 2: in the sea day meeting. Can we confirm that President 284 00:13:17,840 --> 00:13:19,440 Speaker 2: Daily today that hasn't happened. 285 00:13:21,000 --> 00:13:23,560 Speaker 3: You always try, and yet I'm not a rookie. 286 00:13:24,440 --> 00:13:25,440 Speaker 1: Marry Daily, thank you. 287 00:13:25,600 --> 00:13:26,760 Speaker 2: That's always good to see you.