Instant Reaction: Jay Powell Talks Fed Policy

Bloomberg Audio Studios, podcasts, radio news. 0:00:11.880 --> 0:00:15.000 This market got the dubvishness it wanted to hear. The 0:00:15.040 --> 0:00:17.439 equity market's positive by close to two percent on the 0:00:17.520 --> 0:00:19.280 S and P five hundred on the NAS NAK one 0:00:19.400 --> 0:00:22.520 hundred up by three point three. We're moving closer to 0:00:22.560 --> 0:00:25.439 cunning interest rates. September could well be on the table. 0:00:25.520 --> 0:00:28.240 Push that through the bond market. A fifth consecutive day 0:00:28.680 --> 0:00:31.120 of gains for the ten year tracery yield to lower. 0:00:31.240 --> 0:00:33.159 We're down by four basis points on a ten year. 0:00:33.200 --> 0:00:35.320 It's a break of four point one percent. So we've 0:00:35.360 --> 0:00:37.239 all got the same question. Just how low is the 0:00:37.280 --> 0:00:40.159 bar for a rate cut in September. This is what 0:00:40.240 --> 0:00:41.440 the chairman had to say. 0:00:43.600 --> 0:00:46.880 The question will be whether the totality of the data, 0:00:47.040 --> 0:00:50.599 the evolving outlook in the balance of risks are consistent 0:00:50.640 --> 0:00:54.320 with rising confidence on inflation and maintaining a solid labor market. 0:00:54.560 --> 0:00:57.320 If that test is met, a reduction in our policy 0:00:57.400 --> 0:00:59.600 rate could be on the table as soon as the 0:00:59.600 --> 0:01:00.960 next meeting in September. 0:01:01.320 --> 0:01:02.720 So let's talk about the calendar. 0:01:02.920 --> 0:01:07.399 The next meeting September eighteenth, the data in between August second, 0:01:07.560 --> 0:01:11.840 This come in Friday payrolls August fourteenth, CPI report, September sixth, 0:01:12.040 --> 0:01:15.559 the jobs report on the eleventh, another CPI report, going 0:01:15.600 --> 0:01:18.200 into a Federal Reserve decision week, and most people are 0:01:18.160 --> 0:01:21.000 seeming after that, Lisa, we're like this far away from 0:01:21.000 --> 0:01:22.640 that interest rate cup, especially at. 0:01:22.560 --> 0:01:25.319 A time where there was a different type of language 0:01:25.360 --> 0:01:29.080 in this communication. We are not data dependent. They are 0:01:29.280 --> 0:01:32.080 or they are data dependent, They're not data point dependent. 0:01:32.120 --> 0:01:34.959 They want to draw distinction that one data point isn't 0:01:34.959 --> 0:01:38.320 going to throw them off materially. They repeated the totality 0:01:38.400 --> 0:01:41.200 of the data as well as how they just need 0:01:41.240 --> 0:01:43.400 to see the same kind of good data that they've 0:01:43.400 --> 0:01:44.039 already been seeing. 0:01:44.120 --> 0:01:47.040 Turn continuum to me was critical that Steve Leisman's question 0:01:47.200 --> 0:01:50.240 was great about measured alluded to this their slaves to measure. John, 0:01:50.320 --> 0:01:52.240 that's other is to it. I just don't know what 0:01:52.280 --> 0:01:54.720 else to say. You know, I'll talk to Dudley about 0:01:54.760 --> 0:01:56.600 it here. This to have Clarena and Dudley with. 0:01:56.600 --> 0:01:59.680 Us today is fantastic last lights out and I really 0:01:59.760 --> 0:02:01.200 for you a global Wall Street. 0:02:01.240 --> 0:02:04.680 What's coming up here with doctor Dudley is required listening. 0:02:04.760 --> 0:02:07.520 There was a fantastic line that came from evercause Krishnakua, 0:02:07.760 --> 0:02:09.560 I want to share this quote with you. He thinks 0:02:09.560 --> 0:02:11.960 they've laid the foundations for a rake Caunt September. I 0:02:11.960 --> 0:02:14.920 think a lot of people observing that news conference would agree. 0:02:15.040 --> 0:02:18.120 But this quote's interesting. We think in practice it's not 0:02:18.280 --> 0:02:21.160 very data point dependent and view the cautious evolution of 0:02:21.200 --> 0:02:24.560 the statement as intended to carry hawks along and avoid descents, 0:02:24.919 --> 0:02:28.600 as was indeed the case today. Expect a clearer signal 0:02:28.840 --> 0:02:31.560 a month from now at Jackson Hole. I'm thinking about 0:02:31.600 --> 0:02:34.320 the minutes as well. I just wonder how well set 0:02:34.400 --> 0:02:36.960 the stage is for the doves to dance and sing 0:02:37.080 --> 0:02:39.160 very loudly in these minutes that come out in a 0:02:39.240 --> 0:02:40.040 number of weeks time. 0:02:40.160 --> 0:02:42.400 I was very happy that the reporter asked him to 0:02:42.440 --> 0:02:45.400 elaborate on the fact that at this particular meeting they 0:02:45.520 --> 0:02:49.079 did discuss the possibility of cutting reeds, that there were 0:02:49.120 --> 0:02:52.200 a few members but not the vast majority. Here is 0:02:52.240 --> 0:02:55.200 the question, how loud was that voice and what did 0:02:55.240 --> 0:02:57.600 they have to give to those people to get on 0:02:57.639 --> 0:02:59.280 board with them in terms of this decision? 0:02:59.280 --> 0:03:01.239 Did you bring the dark to Dudley? Moments ago the 0:03:01.280 --> 0:03:03.399 ten yure yield broke down to a four oh eight 0:03:03.520 --> 0:03:06.320 ninety two. It's a new low yield. Could you imagine, John, 0:03:06.760 --> 0:03:08.240 what our shows are going to be like with a 0:03:08.240 --> 0:03:11.720 three ninety nine ten year I can't get. 0:03:11.560 --> 0:03:13.880 There where we're going to be in September. Where's the 0:03:13.919 --> 0:03:16.640 unemployment rate going to be in September? That's the big question. 0:03:16.680 --> 0:03:19.320 I have gone into the payrolls report this Friday. Bill 0:03:19.360 --> 0:03:21.480 Dudley got a shout out in this news conference. Bill 0:03:21.520 --> 0:03:23.639 dut Lee joins us now the former New York Fed 0:03:23.639 --> 0:03:27.520 president and Bloomberg opinion columnist as well. Bill, I want 0:03:27.560 --> 0:03:29.160 to go to your column that you wrote in the 0:03:29.280 --> 0:03:31.800 last week or so. It was quoted in this news conference. 0:03:31.840 --> 0:03:33.359 I'm sure you heard it. What did you think of 0:03:33.360 --> 0:03:34.639 the chairman's response to it? 0:03:36.000 --> 0:03:37.880 I thought it was a fair response. I mean, this 0:03:37.960 --> 0:03:41.760 is my opinion and is reaching a slightly different opinion. 0:03:41.760 --> 0:03:44.400 I mean, we're at a point where the risks are 0:03:44.400 --> 0:03:47.080 pretty closely balanced, and so the question is do you 0:03:47.080 --> 0:03:48.960 go a little earlier or do you go a little later? 0:03:49.000 --> 0:03:51.480 I think you know the reason why I thought it 0:03:51.520 --> 0:03:53.400 makes more sense to go is that if the market's 0:03:53.400 --> 0:03:56.000 already pricing in September with a high degree of certainty. 0:03:56.640 --> 0:03:59.120 What are you really waiting for at this point? Why 0:03:59.240 --> 0:04:02.680 take the additional risk of you know, the community deteriorating further, 0:04:03.040 --> 0:04:04.560 so you know, end of the day, it's probably not 0:04:04.600 --> 0:04:06.800 going to make a big bit a lot of difference. 0:04:06.920 --> 0:04:09.000 But I think you know, given the fact that the 0:04:09.000 --> 0:04:11.800 market expects the Fed to cut once that decision is 0:04:11.880 --> 0:04:13.680 mostly made, and I think you heard today it was 0:04:13.720 --> 0:04:15.640 mostly made, then why are you waiting? 0:04:16.320 --> 0:04:19.000 Bill Dudley, your essay heard around the world, the single 0:04:19.080 --> 0:04:22.560 sentence the Fed doesn't want to be fooled again. You've 0:04:22.760 --> 0:04:26.239 held court at Princeton, where the late wonderful Daniel Kahneman 0:04:27.080 --> 0:04:30.920 held court. Here's common with Taversky. Decision makers know they 0:04:30.960 --> 0:04:34.400 are prone to regret, and the anticipation of that painful 0:04:34.400 --> 0:04:38.680 emotion plays a part in many decisions. How is regret 0:04:38.920 --> 0:04:45.360 aversion playing in to this massive data dependency x post ballet. 0:04:46.839 --> 0:04:49.000 What maybe happening here is the fact that they got 0:04:49.000 --> 0:04:51.360 fooled on inflation, you know, earlier this year where the 0:04:51.440 --> 0:04:55.000 data came in bad makes them overly cautious that they're 0:04:55.000 --> 0:04:56.960 going to make this and that they they can make 0:04:56.960 --> 0:04:59.839 the same mistake again by going early. I think it's 0:05:00.000 --> 0:05:02.000 you know, kind of has talked about recency bias, you 0:05:02.000 --> 0:05:05.039 put too much weight on the most recent experience. So 0:05:05.080 --> 0:05:07.080 this may be a case where they're not putting enough 0:05:07.080 --> 0:05:09.520 weight on the on the fact that, you know, things 0:05:09.520 --> 0:05:12.520 are slowing and the inflation's coming down, and maybe now 0:05:12.520 --> 0:05:14.119 it's the time to act. I think it was interesting 0:05:14.160 --> 0:05:16.680 you got a question about the sombrule. You know that 0:05:16.760 --> 0:05:19.640 the fact when the unemployery climbs above zero point five 0:05:19.640 --> 0:05:22.719 percent on a three month moving average basis you always 0:05:22.720 --> 0:05:26.080 have recession. He said he's aware of it, but clearly 0:05:26.240 --> 0:05:28.400 the FED doesn't put a lot of weight on that risk. 0:05:29.120 --> 0:05:31.559 Do you feel like we're getting closer to the moment 0:05:31.560 --> 0:05:34.400 where we will see real dissent on a committee that's 0:05:34.440 --> 0:05:36.440 being cobbled together and you can kind of feel the 0:05:36.520 --> 0:05:39.320 strains in some of the community case. 0:05:40.160 --> 0:05:43.360 Now, I think what happened, you know today was basically 0:05:43.440 --> 0:05:47.279 the Doves got a pretty dubbish statement and a pretty 0:05:47.320 --> 0:05:50.480 dubblish press conference, and so you know, they're sort of 0:05:50.600 --> 0:05:53.919 set on board, and the Hawks got more patience. And 0:05:53.960 --> 0:05:56.400 so when you arrive at the center Tamber meeting, assuming 0:05:56.440 --> 0:05:58.560 the outlook doesn't change in the material way and That's 0:05:58.560 --> 0:06:00.520 basically what pub was saying. It's not about a single 0:06:00.600 --> 0:06:03.160 data point. The outlook has a change in a fundamental 0:06:03.200 --> 0:06:05.000 way for the FED not to go to in September. 0:06:05.400 --> 0:06:08.280 At that point, you have something to basically you give 0:06:08.320 --> 0:06:10.240 to both the doves and the hawks. The doves, you 0:06:10.400 --> 0:06:13.520 thank you for being patient. The Hawks, we waited, So 0:06:13.640 --> 0:06:17.080 let's go together unanimously at the September meeting. So I think, 0:06:17.560 --> 0:06:19.760 you know, I think it's a good, good possibility that 0:06:19.800 --> 0:06:22.159 you'll see an unanimous vote at September for a twenty 0:06:22.160 --> 0:06:23.960 five base point recud. 0:06:24.279 --> 0:06:26.800 But you brought up the Psalm rule. The chairman also 0:06:26.839 --> 0:06:29.240 brought up the yield curve in this news conference as 0:06:29.240 --> 0:06:31.880 well and highlights it the false positives we're getting from 0:06:31.920 --> 0:06:34.680 traditional indicators. Just to reflect back on that piece that 0:06:34.720 --> 0:06:37.120 you wrote for Bloomberg Opinion, can you walk us through 0:06:37.160 --> 0:06:39.920 why you do think actually the Psalm rule does matter, 0:06:40.279 --> 0:06:42.800 that maybe we should have a little bit more of 0:06:42.839 --> 0:06:45.880 a focus on these traditional indicators still and not completely 0:06:45.880 --> 0:06:47.600 ignore them. 0:06:47.800 --> 0:06:49.400 Well, if I can start with the yelkur the reason 0:06:49.400 --> 0:06:51.120 why I don't think the ill curve is necessarily a 0:06:51.120 --> 0:06:53.760 good predictor is the US curves is inverted because people 0:06:53.760 --> 0:06:57.000 think monetary policy is tight. So it's not that you'll 0:06:57.080 --> 0:06:59.480 cruise shape that causes the economy to week it weaken. 0:06:59.520 --> 0:07:02.480 It's the prison sumption that monitary policy is restricted because 0:07:02.520 --> 0:07:04.719 of the economy weaken. Most of the time when the 0:07:04.720 --> 0:07:07.560 occurs inverted, monitary policy is tight, and so the he 0:07:07.560 --> 0:07:10.120 occurs a good predictor The soumrule, I think is a 0:07:10.160 --> 0:07:12.760 little bit different and basically saying once the libor market 0:07:12.760 --> 0:07:17.200 deterioration goes beyond a certain point, it becomes self reinforcing. Essentially, 0:07:17.240 --> 0:07:20.160 why I think happens is business households here about the 0:07:20.200 --> 0:07:23.160 liver market weakening, they pull back on their consumer spending. 0:07:23.680 --> 0:07:26.840 That causes businesses to pull back in terms of investment 0:07:26.880 --> 0:07:29.720 and hiring, and that leads to further weakness and consumption. 0:07:29.800 --> 0:07:31.840 And then for the rises in the unemployer rate, it's 0:07:31.840 --> 0:07:35.960 a pretty amazing statistical regularity that either rises less than 0:07:35.960 --> 0:07:38.400 a half a percent or next stop is a full 0:07:38.400 --> 0:07:41.480 blown recession. There's nothing in between. The smallest increase in 0:07:41.480 --> 0:07:46.040 the unemployer rate trough to peak is either between zero 0:07:46.120 --> 0:07:48.480 point five and one point nine percentage points. There's nothing 0:07:48.520 --> 0:07:51.280 in the middle, which I think is pretty interesting statistically, 0:07:51.440 --> 0:07:54.200 Now he did recognize that as a statistical just a 0:07:54.240 --> 0:07:57.400 statistical result. There's nothing sort of there's no economic law 0:07:57.440 --> 0:08:00.400 behind it. But the track record is thirteen and oh. 0:08:00.440 --> 0:08:02.240 So you know, think about the odds of flipping a 0:08:02.240 --> 0:08:04.440 coin thirteen times and coming up heads there every time 0:08:04.720 --> 0:08:06.320 after a Why you're starting to believe that the next 0:08:06.320 --> 0:08:08.480 flip is going to generate the same result? 0:08:08.680 --> 0:08:11.960 Bill take us back to first principles. Why can't they 0:08:12.120 --> 0:08:15.080 just cut and say one and done and will observe 0:08:15.800 --> 0:08:18.000 versus our addiction to measured? 0:08:19.560 --> 0:08:21.760 Well, I think what will happen is once they start 0:08:21.960 --> 0:08:24.440 start to cut, they'll probably keep going. You know, once 0:08:24.440 --> 0:08:26.960 they start to do the first rate cut, they basically 0:08:27.000 --> 0:08:29.680 decide that mantre Paul's that we've accomplished our mission in 0:08:29.760 --> 0:08:33.480 terms of inflation and unemployment. Policies restrict us, so we 0:08:33.520 --> 0:08:36.160 know now have to go back to neutral. Neutral's not 0:08:36.240 --> 0:08:39.200 twenty five bases points away. So if you have a 0:08:39.280 --> 0:08:41.240 rate cut in September, it's probably gonna be followed by 0:08:41.280 --> 0:08:44.640 raycuts at least one or two more raycuts later this year. 0:08:45.120 --> 0:08:48.480 Well, it seems like this was a setup for Jackson Hall. 0:08:48.559 --> 0:08:50.800 We've been talking about that. It seems like there will 0:08:50.840 --> 0:08:54.319 be some sort of policy regime shift that we will 0:08:54.360 --> 0:08:57.120 observe in August. What do you think it will be. 0:08:59.640 --> 0:09:02.280 I think that Paul really needs to save much more 0:09:02.320 --> 0:09:04.280 than what he said today, frankly, and I think the 0:09:04.400 --> 0:09:06.720 changes in the statement and the press conference the day 0:09:07.040 --> 0:09:09.760 basically tell you that September is going to happen unless 0:09:09.760 --> 0:09:14.200 the economic outlook changes materially. Now that's possible, you could 0:09:14.200 --> 0:09:17.360 get a whole string of bad inflation numbers, or the 0:09:17.520 --> 0:09:20.480 economy could come in hot, but I think, you know, 0:09:21.000 --> 0:09:24.080 in the next six weeks or seven weeks, is the 0:09:24.240 --> 0:09:26.600 outlook going to change materially? I doubt it. So I 0:09:26.600 --> 0:09:29.720 think regardless of what happens in Jackson Hole, I think 0:09:29.880 --> 0:09:31.720 the Fed's going to cut in September. I think, you 0:09:31.720 --> 0:09:35.760 know this, Paul will sort of check in at the 0:09:35.840 --> 0:09:39.199 Jackson Hole and basically, you know, probably confirm that we're 0:09:39.240 --> 0:09:42.280 still on track for this this result for Ray cut 0:09:42.360 --> 0:09:44.720 in September. But I don't I don't think it's you know, 0:09:44.880 --> 0:09:46.120 I don't think he has to use. 0:09:46.000 --> 0:09:49.080 It for that well, although it's not just about September, 0:09:49.160 --> 0:09:51.040 it's not just about whether they're going to move again 0:09:51.320 --> 0:09:54.120 one more time this year. It's about what the destination is, 0:09:54.200 --> 0:09:57.240 it's about the pace, it's about what the goal is. 0:09:57.360 --> 0:10:00.880 In terms of just the view of where the economy is, Bill, 0:10:00.920 --> 0:10:02.880 do you expect there to be any discussion about the 0:10:02.960 --> 0:10:05.600 terminal rate, about what it means to be neutral at 0:10:05.640 --> 0:10:08.000 a time or this is a very different economy than 0:10:08.000 --> 0:10:08.760 pre pandemic. 0:10:09.720 --> 0:10:12.400 Well, I would assume that once you get inflation, you know, 0:10:12.960 --> 0:10:15.200 highly common the inflation is going back to two percent, 0:10:15.280 --> 0:10:17.160 and you think the labor markets and balance, then you 0:10:17.200 --> 0:10:19.800 presume you want to go back to a neutral manitrate policy. 0:10:20.040 --> 0:10:23.000 And the question is what's neutral? And that comes down 0:10:23.000 --> 0:10:25.440 to that whole question of what is the level of 0:10:25.480 --> 0:10:29.199 our star the neutral federal fund rate. I think that 0:10:29.280 --> 0:10:32.480 neutral is clearly lower than where we are today, But 0:10:32.640 --> 0:10:35.120 is it one hundred basis points lower or two hundred 0:10:35.160 --> 0:10:37.520 basis points lower. That remains to be seen. So the 0:10:37.559 --> 0:10:39.760 Feds can be sort of feeling its way now. Obviously, 0:10:39.800 --> 0:10:42.800 if we fall into recession, then the whole story changes 0:10:43.160 --> 0:10:45.400 because in a recession environment, the Fed doesn't want to 0:10:45.400 --> 0:10:47.480 go to a neutral manitrate policy. They want to go 0:10:47.480 --> 0:10:50.880 to a stimulative mantarate policy. So if we actually, if 0:10:50.880 --> 0:10:53.200 it turns out, with the benefit of hindsight, that the 0:10:53.200 --> 0:10:55.719 FED is late and we have a mild recession, then 0:10:55.720 --> 0:10:57.720 the Fed's going to cut rates much more dramatically. 0:10:58.160 --> 0:11:01.960 Bill, I've never said this. I've got Dudley, Krugman and 0:11:02.080 --> 0:11:05.320 Blinder on the same page. Never did I think i'd 0:11:05.360 --> 0:11:09.160 say that the money paragraph from your good friend Alan Blinder, 0:11:10.280 --> 0:11:13.720 any such early cut should be accompanied by a warning 0:11:13.800 --> 0:11:16.839 not to expect a steady stream of rap cuts. He 0:11:16.880 --> 0:11:20.480 alludes to the ECB. Do we need some MECB religion 0:11:20.520 --> 0:11:21.520 at the Eccles building? 0:11:23.000 --> 0:11:25.559 Now? I think that the FED will probably cut more 0:11:25.600 --> 0:11:28.200 than one, because once you start to cut, you're basically saying, 0:11:28.240 --> 0:11:32.040 I think it's time to remove montary restraint. And Monterey 0:11:32.080 --> 0:11:34.199 restraint is not going to be removed with just one 0:11:34.280 --> 0:11:35.679 twenty five base point raycut. 0:11:36.480 --> 0:11:38.520 Bell great to get your thoughts, appreciate it, go down 0:11:38.600 --> 0:11:41.160 be there. The former New York Thanking President Wengan on 0:11:41.200 --> 0:11:43.280 this Federal Reserve decision. As you got a lot of 0:11:43.320 --> 0:11:45.120 people talking over the last week about the need to 0:11:45.160 --> 0:11:47.480 move in July and the mat thing this just passed, 0:11:47.520 --> 0:11:49.360 I want to bring you a headline comes from the 0:11:49.400 --> 0:11:52.720 New York Times and it reads as follows around Supreme 0:11:52.800 --> 0:11:57.800 leader ordering a retaliatory attack on Israel. The New York Times, 0:11:57.840 --> 0:12:01.840 citing three Iranian officials, brief on the order. This is 0:12:01.840 --> 0:12:03.839 what I can tell you about crude. Crud's been rallying 0:12:03.840 --> 0:12:05.640 all day, and the price of crude looks like this 0:12:05.679 --> 0:12:09.120 at a moment, Brent crude by four percentage points TK. 0:12:09.160 --> 0:12:11.800 You would off to say, overtaken by events. The last 0:12:11.840 --> 0:12:14.199 thing that FED needs other next month or so is 0:12:14.240 --> 0:12:15.200 an energy price shock. 0:12:15.320 --> 0:12:17.439 I'm so glad you brought this up. Jan We let 0:12:17.480 --> 0:12:19.960 off the show this morning with Ethan Bronner, our Tel 0:12:20.000 --> 0:12:25.400 Aviv Nears news bureau chief encyclopedic in the region, and 0:12:25.400 --> 0:12:28.640 he says the position here now is unprecedented, and he 0:12:28.760 --> 0:12:31.760 made clear there's going to be immediate news following both 0:12:31.840 --> 0:12:34.440 from the north to Lebanon. In the news that you 0:12:34.600 --> 0:12:35.480 just have from Tate Ryan. 0:12:35.720 --> 0:12:37.640 As we get those updates, we'll bring them to you. 0:12:37.679 --> 0:12:39.600 I just want to reset if you are joining us. 0:12:39.600 --> 0:12:41.400 We've just had a federal reserve decision in the last 0:12:41.440 --> 0:12:45.480 couple of hours. Interest rates unchanged, incremental changes to the statement. 0:12:45.760 --> 0:12:47.680 There was a sense that in September the Federal Reserve 0:12:47.760 --> 0:12:49.840 chair would set us up for a rake cut. In September, 0:12:50.040 --> 0:12:52.240 he took a baby step towards doing so, and the 0:12:52.240 --> 0:12:55.600 market picked up on things accordingly, big rally across equities 0:12:55.720 --> 0:12:57.760 on the NASTAC on the s and P on a rustle, 0:12:57.840 --> 0:12:59.800 it looks like this right now. It fades just to touch, 0:12:59.840 --> 0:13:02.080 but we're still higher by one point four percent on 0:13:02.120 --> 0:13:04.640 the SMP. Bear in mind, the Nasdaq was poised for 0:13:04.640 --> 0:13:06.920 the worst month of the year, and at one point 0:13:06.920 --> 0:13:08.440 in the last couple of hours was on course for 0:13:08.480 --> 0:13:11.040 its best day of twenty twenty four. That fades, We're 0:13:11.040 --> 0:13:13.480 back down to about two point seven percent higher on 0:13:13.520 --> 0:13:15.880 the session on the Nasdaq. We reference this stat a 0:13:15.920 --> 0:13:18.760 little bit earlier on today a few times. We are 0:13:18.800 --> 0:13:23.079 now on course for the seventh consecutive Fed decision day 0:13:23.160 --> 0:13:25.520 rally on a two year bond at least, so that 0:13:25.600 --> 0:13:27.640 yield is lower by six basis points. 0:13:27.720 --> 0:13:30.280 How much is this just that Jerome Powell tends to 0:13:30.480 --> 0:13:33.200 skew dubvish And how much is this that the market 0:13:33.240 --> 0:13:38.000 still has a probability or a possibility baked into what 0:13:38.040 --> 0:13:41.120 the yield is that the Fed could maybe surprised in 0:13:41.160 --> 0:13:43.920 a hawkish manner. Either way, this is a market that 0:13:44.120 --> 0:13:46.720 likes to hear FED shero Powell to speak, and today 0:13:46.960 --> 0:13:47.560 was no different. 0:13:47.679 --> 0:13:49.720 Mike McKee was in the room with a Federal Reserve 0:13:49.800 --> 0:13:50.959 chair down in Washington, d C. 0:13:51.080 --> 0:13:52.520 He joined us from the nation's capital. 0:13:52.559 --> 0:13:54.640 Now, might you've just got outside walk us through your 0:13:54.640 --> 0:13:57.280 biggest takeaway from that news conference this afternoon. 0:13:58.040 --> 0:14:00.280 Well, I think what you walk away with is what 0:14:00.320 --> 0:14:03.160 Bill Dudley was talking about. If the economy doesn't do 0:14:03.240 --> 0:14:07.640 something weird, change positions, change directions, then the Fed is 0:14:07.679 --> 0:14:09.199 going to be cutting in September. 0:14:09.400 --> 0:14:10.560 But there are a lot of. 0:14:10.600 --> 0:14:14.400 Potential twists and turns between now and then. Friday is 0:14:14.400 --> 0:14:16.680 e at risk with the jobs report, and of course 0:14:16.679 --> 0:14:20.120 you just mentioned the situation with Iran. I don't think 0:14:20.120 --> 0:14:24.320 the Fed was taking those things into consideration today as 0:14:24.440 --> 0:14:28.680 reasons not to move today, but they do have to 0:14:28.760 --> 0:14:29.640 worry about. 0:14:29.360 --> 0:14:31.440 Them and what might happen. 0:14:31.560 --> 0:14:36.040 So they will at this point be on a cutting 0:14:36.120 --> 0:14:39.880 course unless something significantly changes. And I think that was 0:14:39.920 --> 0:14:42.320 the message that Paul wanted to deliver, and I think 0:14:42.320 --> 0:14:44.160 Bill put it well when he talked about how the 0:14:44.240 --> 0:14:47.760 statement was skewed to the doves a little bit, and 0:14:48.280 --> 0:14:52.080 the news conference maybe to the hawks, and both sides 0:14:52.120 --> 0:14:53.040 get something out of it. 0:14:53.280 --> 0:14:55.400 Mike, you've been doing this for a few years. Back 0:14:55.440 --> 0:14:58.840 to mcchestney Martin, we almost printed a four h six 0:14:58.960 --> 0:15:02.520 ten year moment. Go Can the bond market tell the 0:15:02.560 --> 0:15:04.080 Fed what to do? 0:15:06.240 --> 0:15:08.960 Probably not. And one of the things that you have 0:15:09.000 --> 0:15:11.560 to keep in mind is that we have all this 0:15:11.760 --> 0:15:15.360 international news going on, and the US bond market is 0:15:16.000 --> 0:15:18.920 the haven market. So a certain amount of what's going 0:15:18.960 --> 0:15:23.240 on today is probably in reaction to Israel and Iran, 0:15:23.800 --> 0:15:26.760 and a certain amount of it is the politics going 0:15:26.800 --> 0:15:29.560 on in this country. And then on top of that, 0:15:29.840 --> 0:15:32.800 what the FED is considering and what the economic data 0:15:32.840 --> 0:15:35.960 are showing. But I suspect today's less about the Fed 0:15:36.040 --> 0:15:38.680 and the data than it is about other things. Because 0:15:38.680 --> 0:15:41.680 the market had pretty much priced for a September breake cut, 0:15:41.680 --> 0:15:44.200 they didn't get any surprises out of the Fed today. 0:15:44.720 --> 0:15:47.200 Mike, you're referring, of course, to the news that John 0:15:47.440 --> 0:15:51.560 broke about Uranian Supreme leader ordering an attack on Israel 0:15:52.040 --> 0:15:55.760 for the two assassinations that Israel carried out. Right now, 0:15:55.800 --> 0:15:58.800 we're seeing crude markedly higher, particularly Brent crud Mike. I 0:15:58.840 --> 0:16:01.720 wonder how this relates to Fedchair Powell has been talking 0:16:01.720 --> 0:16:05.320 about that this is actually better inflation data today than 0:16:05.360 --> 0:16:08.040 it was, say late last year or earlier this year, 0:16:08.080 --> 0:16:10.600 simply because it is not being driven by goods, It 0:16:10.640 --> 0:16:13.880 is being driven by the employment market, is being driven 0:16:13.960 --> 0:16:17.680 by services. How much do you believe based in those comments, 0:16:17.680 --> 0:16:19.840 this is a FED that is willing to look through 0:16:20.320 --> 0:16:23.520 good side inflation and focus much more on something else. 0:16:24.760 --> 0:16:27.600 Well, I think they are, especially if oil prices go 0:16:27.720 --> 0:16:30.560 up only temporarily. The problem is if oil prices go 0:16:30.640 --> 0:16:33.600 up for quite some time, then that feeds through into 0:16:33.640 --> 0:16:37.040 the real economy, particularly on the services side. See surch 0:16:37.080 --> 0:16:40.840 charges by delivery companies. Airline affairs might go up, that 0:16:40.880 --> 0:16:42.840 sort of thing. So they're going to have to keep. 0:16:42.680 --> 0:16:43.360 An eye on that. 0:16:43.400 --> 0:16:46.280 But their general instinct would be to look past any 0:16:46.400 --> 0:16:50.400 kind of energy price change that comes about that they 0:16:50.440 --> 0:16:53.560 think might be temporary. And at this point we have 0:16:53.640 --> 0:16:57.880 been waiting for a major shift in energy prices since 0:16:57.920 --> 0:17:00.920 October seventh, when the first attack on Israel game. 0:17:01.320 --> 0:17:02.880 So we haven't seen it yet. 0:17:03.200 --> 0:17:05.879 Let's see whether this holds or not, and then the 0:17:05.920 --> 0:17:07.520 FED would have to take it into account. 0:17:07.800 --> 0:17:09.080 If it's still going up. 0:17:09.240 --> 0:17:11.600 Five percent rally in crew today might make great work. 0:17:11.640 --> 0:17:13.760 As always, sir, appreciate it. We'll catch up with you 0:17:13.800 --> 0:17:16.440 a little bit later. This week's not over. Still got 0:17:16.440 --> 0:17:18.920 some work to do. The FED decision behind us. Tomorrow 0:17:19.080 --> 0:17:22.000 we'll get jobless claims. On Friday, we'll get a payrolls 0:17:22.040 --> 0:17:24.080 report and we'll be catching up with Jeff Rosenberg of 0:17:24.160 --> 0:17:26.359 black Rock. We can do that now, Jeff at eight 0:17:26.520 --> 0:17:30.639 thirty one on Friday, Will this decision today to do nothing? 0:17:30.840 --> 0:17:32.040 Will that look like the right one? 0:17:34.280 --> 0:17:36.240 Well, you know, it might look like the right one. 0:17:36.240 --> 0:17:38.159 But I think the point you're also getting to is 0:17:38.200 --> 0:17:40.720 that Friday, and we'll see on Friday as well, is 0:17:40.720 --> 0:17:41.080 going to be. 0:17:41.119 --> 0:17:42.160 Much more consequential. 0:17:42.200 --> 0:17:45.159 But I think the important point about how it's going 0:17:45.240 --> 0:17:48.160 to be more consequential is what we've heard from everybody 0:17:48.200 --> 0:17:50.919 so far. We've heard from the chairman and in the 0:17:51.000 --> 0:17:54.440 statement is this is very much setting the table for September, 0:17:55.080 --> 0:17:58.399 and the bond market had already priced that outcome. And 0:17:58.480 --> 0:18:01.639 so what you look at into and the payroll is 0:18:01.920 --> 0:18:04.919 you're setting up the bond market, perhaps broader markets for 0:18:04.960 --> 0:18:10.160 a very asymmetric outcome. If the data is much much stronger, 0:18:10.840 --> 0:18:13.760 then you're going to have some disappointment. If the data 0:18:13.800 --> 0:18:18.720 comes in along lines of what Chairman Powell was talking 0:18:18.720 --> 0:18:22.680 about in terms of gradual normalization, or even a little 0:18:22.680 --> 0:18:25.760 bit weaker than that, the market will continue to price 0:18:25.800 --> 0:18:29.120 in this path of a cut in September, a cut 0:18:29.119 --> 0:18:32.119 in December, and even more into twenty twenty five. So 0:18:32.160 --> 0:18:34.720 I think Friday, the risk is really on the upside 0:18:34.760 --> 0:18:38.880 that you get a surprisingly strong payroll report, and that 0:18:39.160 --> 0:18:43.800 has to call into question whether or not policy is 0:18:43.920 --> 0:18:47.040 really as tight as it is, and that's really the issue. 0:18:47.080 --> 0:18:50.399 Everyone's kind of saying, hey, this is right. The Fed's 0:18:50.440 --> 0:18:53.359 got it right. The Fed saying we've got the soft landing. 0:18:53.400 --> 0:18:55.960 We want to secure the benefits of soft landing. But 0:18:56.000 --> 0:18:59.679 he kept report repeating PDFP at two point six percent. 0:19:00.000 --> 0:19:01.800 You look at the GDP number that just came out, 0:19:01.840 --> 0:19:05.080 You look at Atlanta Fed GDP now forecast for third quarter. 0:19:05.359 --> 0:19:10.080 We are well above in growth terms anything associated with 0:19:10.160 --> 0:19:13.560 long term sustainable growth. And so yes, we've seen some 0:19:13.720 --> 0:19:18.000 signs of restrictiveness, but how much of that restricted because 0:19:18.160 --> 0:19:20.119 that's where the asymmeturity. 0:19:19.359 --> 0:19:21.840 Against the grain totally against the grain. And I think 0:19:21.880 --> 0:19:23.760 you know you well, most of the people coming on 0:19:23.800 --> 0:19:26.359 this show right now, if they're going against the Federal Reserve, 0:19:27.040 --> 0:19:29.160 they're saying it's because they think this FED is too tight, 0:19:29.840 --> 0:19:32.560 not restrictive enough. You're making the point, hey, Jeff, that 0:19:32.600 --> 0:19:34.840 might be they're not as tight as they think they are. 0:19:35.040 --> 0:19:36.879 Now that really goes against the grain, Jeff. Is that 0:19:36.880 --> 0:19:37.720 the point you're trying to make? 0:19:39.080 --> 0:19:41.720 That is the point exactly that I just made. No 0:19:41.800 --> 0:19:44.600 one's really talking about it because the Fed's not talking 0:19:44.600 --> 0:19:47.680 about it, But the data is what your question was 0:19:47.720 --> 0:19:50.360 about what happens on Friday and how does that make 0:19:50.600 --> 0:19:51.639 this moment? 0:19:51.840 --> 0:19:52.080 Look? 0:19:52.160 --> 0:19:57.120 Well, if the data comes in continually stronger, then we're going. 0:19:57.119 --> 0:19:58.640 To have to start to talk about that. 0:19:58.720 --> 0:19:58.920 Now. 0:19:59.080 --> 0:20:01.639 I'm not saying that that's where we're going. Where we 0:20:01.840 --> 0:20:04.280 have been, and what we tend to do is to 0:20:04.400 --> 0:20:08.400 extrapolate where we just have been. So we're extrapolating out 0:20:08.480 --> 0:20:12.480 the benefits of the gradual slow down in labor markets. 0:20:12.520 --> 0:20:15.520 The normalization ecis another great data point. 0:20:15.680 --> 0:20:17.879 There's nothing in the crystal ball that says that that 0:20:17.960 --> 0:20:18.560 won't happen. 0:20:18.600 --> 0:20:21.359 But your question was, what if it does then you 0:20:21.480 --> 0:20:24.040 start to think about these things. And my point is 0:20:24.280 --> 0:20:27.359 everyone is so one sided on this point that the 0:20:27.400 --> 0:20:30.720 asymmetry to the market reaction is much greater to the 0:20:30.840 --> 0:20:34.159 upside surprise and strength on Friday than it is to 0:20:34.200 --> 0:20:36.880 coming in in line or even being weaker. 0:20:37.040 --> 0:20:38.840 So let's put a call around that, Jeff, are you 0:20:38.840 --> 0:20:41.040 basically selling to your notes right now, trying to lock 0:20:41.080 --> 0:20:42.680 in because you think that this could be the highs 0:20:42.720 --> 0:20:44.919 given that they are not recognizing the risk of an 0:20:45.000 --> 0:20:47.400 upside surprise to the job's report. 0:20:48.600 --> 0:20:50.600 No, I wouldn't say I'd go that far, But what 0:20:50.640 --> 0:20:53.200 I would say is it tempers some of the enthusiasm 0:20:53.320 --> 0:20:57.240 for adding to two years at this point when it's 0:20:57.400 --> 0:21:00.399 all in the price and even more so, releive to 0:21:00.440 --> 0:21:02.400 what the Fed is saying that you're going to get. 0:21:02.440 --> 0:21:06.159 So the bar is a little bit higher to what 0:21:06.200 --> 0:21:09.240 do I do with this information in my portfolio when 0:21:09.280 --> 0:21:11.440 you look at well, you know, the bond market's really 0:21:11.520 --> 0:21:13.879 quite a priced a lot of that in so it 0:21:14.000 --> 0:21:16.720 makes it a little bit more tricky than just saying, Oh, 0:21:16.760 --> 0:21:19.440 the Fed's going to cut rates and I should back 0:21:19.520 --> 0:21:21.880 up the truck and buy a whole bunch of duration well, 0:21:22.200 --> 0:21:24.520 a lot of that trade has happened in the last month. 0:21:24.680 --> 0:21:28.560 So if you're just talking about maintenance cuts and the 0:21:28.640 --> 0:21:31.439 degree of maintenance cuts that are required is what you 0:21:31.480 --> 0:21:33.520 were talking about with Bill Dudley a minute ago. We 0:21:33.600 --> 0:21:36.240 don't really know where that neutral is. So how do 0:21:36.320 --> 0:21:38.439 we know where neutral is? You know it when you 0:21:38.520 --> 0:21:40.600 see it, meaning you know it when you see it 0:21:40.640 --> 0:21:45.120 in the data. So if the economy doesn't slow and 0:21:45.200 --> 0:21:48.760 that unemployment rate doesn't continue to rise, and it says 0:21:49.040 --> 0:21:52.040 you're not so restrictive as you think you are, and 0:21:52.359 --> 0:21:54.719 I think, you know, we just kind of have a 0:21:54.840 --> 0:21:57.560 pile up on one side of the debate here when 0:21:57.560 --> 0:22:03.320 the data is still saying two point six percent PDFP. 0:22:03.600 --> 0:22:07.400 He said it twice during the press conference. 0:22:07.600 --> 0:22:09.920 He also said the other thing that has been supportive 0:22:09.960 --> 0:22:13.600 of restrictedness interest rates, sensitive sectors and the slowdown in 0:22:13.640 --> 0:22:16.679 the labor market. But it's a more balanced view around 0:22:16.680 --> 0:22:19.320 this debate around how restrictive we are than where the 0:22:19.320 --> 0:22:21.439 market is kind of lining up, and that sets up 0:22:21.440 --> 0:22:22.800 in asymmetry to the outcome. 0:22:22.920 --> 0:22:25.399 And Jeffrey a great student of history, and if we 0:22:25.480 --> 0:22:28.320 have the headlines that John Farrell was talking about, there 0:22:28.359 --> 0:22:32.359 of Tehran and Israel, and for that matter, up to 0:22:32.440 --> 0:22:35.840 Lebanon as well. How far out the full faith and 0:22:35.960 --> 0:22:41.440 credit curve does politics does war do our fears play in? 0:22:41.640 --> 0:22:43.800 Is it short term, is it out to the two 0:22:43.880 --> 0:22:46.560 year pinch, or is it out even further to the 0:22:46.600 --> 0:22:47.359 ten year note. 0:22:49.080 --> 0:22:51.600 So I'm going to frame that in that question or 0:22:51.960 --> 0:22:54.880 my answer to that question, in terms of how does 0:22:55.040 --> 0:22:59.760 the kind of flight quality response in the bond market 0:22:59.760 --> 0:23:02.560 place out in this environment. I've said this on the 0:23:02.600 --> 0:23:04.720 show maybe a couple of times. We've written about it, 0:23:05.000 --> 0:23:08.880 that flight to quality during the q zero interest rate 0:23:08.920 --> 0:23:10.440 policy environment was. 0:23:10.400 --> 0:23:11.359 A curve flattener. 0:23:11.560 --> 0:23:13.920 If you're very close to zero rates in the front 0:23:14.040 --> 0:23:17.280 end and you're looking for portfolio protection, you buy it 0:23:17.320 --> 0:23:20.159 in the long end. Today we're in a very different environment. 0:23:20.240 --> 0:23:21.960 Five and a quarter to five and a half. There's 0:23:22.040 --> 0:23:24.800 plenty of room for the front end to go down, 0:23:24.880 --> 0:23:28.240 and so it's more of that pre GFC kind of 0:23:28.320 --> 0:23:32.320 bond market reaction, where flight to quality is a steepener 0:23:32.400 --> 0:23:33.880 and it's in the front end of the curve. 0:23:33.960 --> 0:23:36.120 So I think you see the most powerful reaction. 0:23:36.560 --> 0:23:39.879 It's hard to disentangle the high frequency between the news 0:23:39.880 --> 0:23:41.080 that Jonathan Broke and. 0:23:42.840 --> 0:23:44.720 The result of the press conference. 0:23:44.960 --> 0:23:47.199 But you do see a little bit of a steepener 0:23:47.280 --> 0:23:50.480 move into the market. Again, hard to disentangle the two, 0:23:50.840 --> 0:23:52.800 but I think when you take a step back, flight 0:23:52.840 --> 0:23:56.080 to quality now is the steepener trade, and your better 0:23:56.200 --> 0:23:58.680 yield response is going to be more in the front 0:23:58.760 --> 0:23:59.960 end in this kind of environment. 0:24:00.080 --> 0:24:03.080 What's interesting to me today, Jeff, is what's not rallying 0:24:03.119 --> 0:24:05.399 on the heels of some of those headlines, especially in 0:24:05.480 --> 0:24:08.240 light of the fed's dubbish tilt. Yes, but they did 0:24:08.240 --> 0:24:10.840 not cut rates, is that the dollar is not catch 0:24:10.880 --> 0:24:12.919 it a bit. It's weakening pretty dramatically. You're seeing the 0:24:12.920 --> 0:24:15.120 Bank of Japan very happy today. They're getting what they 0:24:15.119 --> 0:24:18.560 wanted in terms of a little bit more yen strength. 0:24:18.600 --> 0:24:21.439 How much is this sort of the new narrative that 0:24:21.480 --> 0:24:23.679 in a flight to safety type of moment, if the 0:24:23.720 --> 0:24:26.720 FED is going to cut rates and not recognize that 0:24:26.880 --> 0:24:30.560 upside risk, you will see persistent dollar weakness heading into 0:24:30.560 --> 0:24:31.000 next year. 0:24:32.520 --> 0:24:34.840 It's a tricky one, Lisa, because you know, on the 0:24:34.840 --> 0:24:38.840 one hand, you've got kind of interest rate differentials driving 0:24:38.880 --> 0:24:42.680 some of those dollar moves. Clearly with the yen a 0:24:42.760 --> 0:24:46.000 balanced against the other side of flight to quality, which 0:24:46.000 --> 0:24:49.640 is which is the pure risk off trade, is usually 0:24:49.680 --> 0:24:55.639 dollar strength. You go for the strongest institutional protection in 0:24:56.160 --> 0:24:59.280 terms of wealth, and so I think I think initially 0:24:59.359 --> 0:25:02.080 the move is much more about interest rate differentials, and 0:25:02.080 --> 0:25:03.760 that's why you're not seeing so much of the move 0:25:03.800 --> 0:25:06.359 on the dollar. I think it's too soon to say 0:25:06.440 --> 0:25:08.159 whether or not you're going to see a bid to 0:25:08.240 --> 0:25:10.200 the dollar from political risk. 0:25:10.840 --> 0:25:12.080 But I think if it was a. 0:25:12.640 --> 0:25:17.040 Larger issue that spreads, you're going to think more Traditionally 0:25:17.080 --> 0:25:18.200 that's going to be dollar strength. 0:25:18.280 --> 0:25:20.919 You got to jump down and gold up forty one dollars. 0:25:20.520 --> 0:25:22.199 Got a big running in the bond market too, and 0:25:22.280 --> 0:25:24.520 equities as well. Jeff, just find a question before I go. 0:25:24.600 --> 0:25:27.119 There's people watching listening to this program right now. They 0:25:27.200 --> 0:25:28.800 just want to know, can I buy the S and 0:25:28.840 --> 0:25:31.439 P five hundred and take a vacation? Is there anything 0:25:31.480 --> 0:25:33.359 to worry about between now and September. 0:25:35.760 --> 0:25:38.280 Well, you know, you never want to say take a vacation. 0:25:38.840 --> 0:25:41.919 You know, buying equities you've got some risk, but you 0:25:42.000 --> 0:25:44.959 take the totality of what the chairman went over, and 0:25:45.000 --> 0:25:46.960 this is a lot of good news. I mean, this 0:25:47.160 --> 0:25:51.000 is a chairman, basically saying without saying it, we've achieved 0:25:51.000 --> 0:25:56.080 the soft landing. That's a great outcome for the equity market, 0:25:56.200 --> 0:25:57.960 it's a great outcome for the economy. 0:25:58.000 --> 0:25:59.600 It's a great outcome. 0:25:59.800 --> 0:26:02.800 More more broadly, So I think that's the takeaway and 0:26:03.000 --> 0:26:05.679 generally that's going to be pretty supportive. I think the 0:26:05.720 --> 0:26:08.399 other thing, just to mention, obviously, you know you're not 0:26:08.440 --> 0:26:09.960 really buying the S and P five hundred. 0:26:10.000 --> 0:26:11.040 It's not the economy. 0:26:11.359 --> 0:26:13.600 It's a collection of stocks that has a very high 0:26:13.680 --> 0:26:17.320 weight to a secular technology theme. And that secular technology 0:26:17.359 --> 0:26:21.240 theme is playing out again today following Microsoft's earnings and 0:26:21.240 --> 0:26:23.760 you're seeing a bid back to Semis. So you've got 0:26:23.800 --> 0:26:27.639 like the micro story there a lot as well as 0:26:27.920 --> 0:26:30.320 the policy story, and we've got to keep that in 0:26:30.359 --> 0:26:32.439 mind when we're looking at this high frequency data, and 0:26:32.440 --> 0:26:34.199 if you're buying the S and P five hundred with 0:26:34.280 --> 0:26:38.440 a very high historical share to tech, it's really also 0:26:38.520 --> 0:26:40.520 buying into that tech story as much as it is 0:26:40.800 --> 0:26:42.000 about the macro economy. 0:26:42.080 --> 0:26:43.080 Just trying to take a vacation. 0:26:43.320 --> 0:26:46.199 Jeff, appreciate it, Jeff Rosenberg, the frank Row Jeff, thank you, 0:26:46.280 --> 0:26:49.320 deeply thoughtful stuff go into payrolls on Friday. We should 0:26:49.320 --> 0:26:52.200 share with you the numbers that we're looking for on Friday. 0:26:52.280 --> 0:26:55.000 Just another peak snap peak of the payrolls survey here 0:26:55.040 --> 0:26:58.600 at Bloomberg. The meeting estimate, it's one seventy five on Friday, 0:26:58.640 --> 0:27:02.479 the previous number two of six. Unemployment coming into focus 0:27:02.560 --> 0:27:04.200 much more for many of you, I know. So here's 0:27:04.200 --> 0:27:06.840 the estimate for unemployment four point one percent, in line 0:27:06.840 --> 0:27:09.639 with the previous number previous month of four point one percent. 0:27:09.680 --> 0:27:09.960 Lisa. 0:27:10.080 --> 0:27:13.040 And the reason why it matters that unemployment read possibly 0:27:13.040 --> 0:27:14.760 more than anything else, is because of a guest to 0:27:14.760 --> 0:27:15.600 four point two percent. 0:27:15.640 --> 0:27:16.520 It triggers a S rule. 0:27:16.560 --> 0:27:20.160 Bill Dudley talking about why that's important at that point, 0:27:20.480 --> 0:27:24.200 Historically it becomes a self reinforcing mechanism of weakness. 0:27:24.320 --> 0:27:26.720 The difference is you and I are taking vacation like 0:27:26.800 --> 0:27:30.720 eighteen hours. Pharaoh's taken eighteen days. That's the difference here. 0:27:30.800 --> 0:27:32.919 Actually, I'm missing Fridays. I'm going to be on vacation. 0:27:33.119 --> 0:27:37.119 Thank you you're missing it's on American It had to 0:27:37.119 --> 0:27:38.040 do a kid's schedule. 0:27:38.440 --> 0:27:40.200 That's a manager here. 0:27:39.880 --> 0:27:44.040 As a manager, here are I track everyone's vacation. You 0:27:44.440 --> 0:27:47.720 absolutely correct, you've both taken much more than I have. Okay, 0:27:48.440 --> 0:27:51.080 just for the bar chart of it I do at home. 0:27:51.119 --> 0:27:53.439 It's a spreadsheet I let up with the Boomberg terminal 0:27:53.480 --> 0:27:55.280 and a monochy vacation at the same time. 0:27:55.640 --> 0:27:56.520 That's productivity. 0:27:56.560 --> 0:27:58.280 Miss this, haven't we appreciate? 0:27:58.280 --> 0:28:01.000 It's going to see its TK Please, thank you, sir, Lisa, 0:28:01.040 --> 0:28:03.000 thank you, thank you. You're going to bless us with 0:28:03.040 --> 0:28:05.240 some of your criticism of the Federal Reserve tomorrow. 0:28:10.640 --> 0:28:12.000 That's the line of the press conference. 0:28:12.040 --> 0:28:12.560 That really is 0:28:15.640 --> 0:28:17.919 M m hm