June 18, 2025 • 24 mins
Bloomberg's Tom Keene and Lisa Abramowicz discuss remarks from Fed Chair Jay Powell following the Federal Reserve's latest policy decision on a special edition of Bloomberg Surveillance.
Federal Reserve officials left interest rates unchanged and continued to pencil in two rate cuts in 2025, saying uncertainty over the economic outlook was still high but had diminished.
The Federal Open Market Committee voted unanimously on Wednesday to hold the benchmark federal funds rate in a range of 4.25%-4.5%, as they have at each of their meetings this year.
Officials also downgraded their estimates for economic growth this year while lifting their forecasts for unemployment and inflation.
Speaking to reporters following the decision, Chair Jerome Powell repeated his view that the central bank was “well positioned to wait to learn more about the likely course of the economy before considering any adjustments to our policy stance.”
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Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:14):
This is a FED.
Speaker 3 (00:15):
He's a lot more certainty ahead, but not yet enough
to make any moves. While Powell said that peak uncertainty
happened in April and we are getting some clarity, there's
still a lot to learn until the data becomes clear.
They're on hold and are in a good place.
Speaker 2 (00:28):
Take a listen.
Speaker 4 (00:30):
We feel like the right thing to do is to
be where we are, where our policy stance is, and
just learn more. In particular, we feel like we're going
to learn a great deal more over the summer on tariffs.
We hadn't expected them to show up much by now,
and they haven't. And we will see whether to the
extent to which they do overcoming months, and I think
(00:50):
that's going to inform our thinking.
Speaker 3 (00:53):
Trompewell also asked about the situation in the White House,
dismissing questions around the future for him on FED to reserve.
Speaker 5 (01:02):
I need to ask, assuming you are not reappointed, would
you stay on as governor when you're term as chair?
Speaker 4 (01:08):
And I'm not thinking about that. I'm thinking about this.
Speaker 3 (01:12):
Is a retlacement of some of the earlier moves we
are seeing. Bond yields actually climbed back to basically where
they were, and then some from before the press conference
tom It seemed like this was a FED chair saying
that we are past peak uncertainty, but we probably will
get more information leaders to stop at It's.
Speaker 6 (01:29):
Sure the press conference looking at the correlation of equities, bonds, currencies, commodities, so.
Speaker 7 (01:33):
Sort of up and downy and up and downy.
Speaker 6 (01:36):
I didn't get any real conviction out of it. The
one tone I saw from him that I hear in
some conversations is what if we're underestimating the power of
this American economy. There's a gloomy call that GDP numbers
come down, inflation's up, Woe is me? But and that
(01:56):
butt was just there for a bit where he said,
on what it is a resilient economy?
Speaker 3 (02:03):
You have said the phrase that I think about all
the time, which is that companies adapt and adjust. And
we hear that from so many companies that are doubling
down on some of their forecasts. Your own tariffs, yes, exactly,
because they have to look past that and they can
handle some of these tariffs. What I thought was interesting
was that this was a FED chair that actually said
if we were backward looking at the data, we probably
would be cutting more quickly. But because of the tariffs
(02:25):
and the forward expectation for more inflation, it does create
a greater degree of uncertainty, which is the reason why
we still are happy to stand tight.
Speaker 6 (02:33):
You don't see this, folks, but Lisa during the press conference,
she's got one of those little clicker things like in
a movie theater, and every time they say uncertainty, you're
moving your thumb around, and it.
Speaker 8 (02:42):
Was drinking one hundred and fifty.
Speaker 6 (02:44):
Well, it's surveying on his beverage time. The issue here, Lisa,
is the uncertainty issue was given to them. They didn't
invent it. The president's comments today outrageous comments. Do you
see what he did to McKee? He slammed Michael McKee
after those rude McKee like questions tarriffs, Bob Michael saying
(03:07):
do we know what tariffs will raise? We have no
clue what they will raise, which.
Speaker 3 (03:13):
Is the reason why they aren't necessarily going to make
any big moves right now. Joining us now is Stephanie
Roth of Wolf Research. So pleased to say that you're
here in studio. Stephanie, what was your take on a
press conference with this FED chair so that he had
more certainty.
Speaker 2 (03:27):
But there'll be more later on.
Speaker 9 (03:29):
I think the single most important line that he said
is rates aren't very high, and when we're thinking about
the next couple of months, what we're going to learn
is more information about the reconciliation bill, So then they're
going to incorporate that fully into SEP, in which case
that's going.
Speaker 8 (03:41):
To look a lot more hawkish.
Speaker 9 (03:43):
So our base case is this year they're not cutting,
and the two cuts are going to eventually get get
sort of rolled away. At this point, they were very
close on the edge of between one and two, and
they're probably going to eventually not end up cutting this
year because the economy will be resilient and fine and
inflation's elevated.
Speaker 6 (03:57):
On the core GDP equation is there, where's your Do
you have any conviction at all? And c IG or NX,
I mean, I don't know how you do it. I
don't know how you come up with a real GDP statistic.
Speaker 9 (04:09):
Yeah, we're looking for one point four percent GDP this year,
so not that different from the FED. But I think
the important thing to focus on is for twenty twenty six,
we're my forecasts are a lot higher than what the
FED has. I'm looking for something that's close to two percent,
if not a bit above our forecast. Is that reconciliation
bill could boost the economy by but forty basis points,
So that could be a notable acceleration versus where we
(04:29):
are today. And that's what the market's going to start
focusing on.
Speaker 6 (04:32):
Is Lisa helped me. Is a reconciliation build a big,
beautiful thing.
Speaker 3 (04:35):
It's one basic, beautiful bee, It's one big.
Speaker 2 (04:38):
One three B. Yes, we can cary gotten more uncertainty. Well,
that's the problem.
Speaker 3 (04:42):
And I really was struck by the idea that Fetcher
Powell brought to the four, which is in response to
Nick tim moros As the Wallstreet Journal's question, why aren't
you looking at some of the weakening trend that we're
seeing in inflation and say, you know what, we're actually
quite restrictive. Why are you saying that this is actually
an appropriate n And the FED chair said, well, the
reason why is because we have to look forward and
(05:04):
we have to say this could potentially be inflationary. We
don't know, and we will learn more in the next
couple of months. But we're not sure how much we're
going to learn. Is that good enough for you? Does
that ring true to you that that is an appropriate
stance for this FED.
Speaker 9 (05:17):
I think it's fair for them to be in wait
and see. They know that the tariffs will be inflationary.
He very much emphasize someone's going to be paying the
cost and eventually they're going to try to get it
to the consumer, and I think that's the right way
to think about it. It's going to eventually flow through
some portion of it to the consumer. Our numbers are
similar to the fed's forecast that inflation should be close
to three percent at the end of this year, and
at this point we don't know how much. It's hard
(05:38):
to forecast these things, but I think the main takeaway
is inflation will be elevated this year, but growth should
probably hold up.
Speaker 3 (05:44):
Just fine, which is essentially what they were saying, albeit
at a slower pace.
Speaker 2 (05:48):
Right now, we're so.
Speaker 3 (05:49):
Lucky to have Torston's Slock of Apollo joining us. Tourston,
thank you so much for being here. What was your
take on the press conference on the FED stance and frankly,
the market taking this based in stride saying that they're
getting much new information here.
Speaker 1 (06:03):
I think the banner hanging over this entire press conference
and the forecast is stackflation. They've revised down GDP growth
to one point four and they revised up inflation to
three percent. That's telling you that they are beginning to
worry about the things that are hitting the US economy.
And is no longer just trade and teriffs. That's stackflationary.
All prices are also stackflationary, meaning higher inflation, lower GDP growth,
(06:25):
and restrictions and immigration is also stackflationary. We already saw
in the last mpotant report upward pressure on wages, and
of course that ultimately means downward pressure unemployment if we're
going to do, in particular deportations at the current pace.
Speaker 7 (06:37):
So the conclusion is.
Speaker 1 (06:39):
It is not surprising that the fittest beginning to worry
about their mandate being torn in the opposite direction because
inflation higher says that you'd be hiking GDP growth lower
says that should be cutting.
Speaker 7 (06:49):
So that's why at the moment the stay put and.
Speaker 1 (06:52):
The conclusion therefore is that he didn't really give much
other than say we will likely be cutting. And that's
what's in the dot plot but the conclusion is this
is a very difficult situation for them when there's both,
as he said, meaningful expectations of upward pressure on inflation
and at the same time ever vision down on GDP growth.
Speaker 6 (07:09):
Turstan he alluded to their data capture which is perhaps
showing a more resilient GDP, a better stronger America. Steve
Shuta Mizuo is heated about this that we could see
GDP better. Is that in any probability for you?
Speaker 1 (07:29):
Well, I think that when it comes to a particular trait.
Forgive the picture here, but the pig is coming through
the python. Someone needs to pay for the tax increase
on impulse. Tariffs have gone up, and if companies are
not passing this on to consumers.
Speaker 7 (07:43):
Let's say that inflation does not go off as much
as we would have expected.
Speaker 1 (07:46):
Then the conclusion is, well, then earnings will simply be
going down more because this tax increase beats because that
it will begin to see some downward pressure on GDP
and potentially some more downward pressure on earnings.
Speaker 7 (07:57):
So that's another way of saying.
Speaker 1 (07:59):
We saw effective tarry frates go up from three percent
in January to now eighteen percent today and that effect
will still be playing out, and he said very clearly
he does expect a meaningful increase in inflation over the
coming months. So combining that with he said, we could
also see you cooling down on the label market. It
does mean that just maybe inflation will not go up
so much, but the consequence of that will be well,
(08:19):
then we will instead see Terry's coming through instead through
lower GDP growth and a bigger hit to earnings.
Speaker 3 (08:25):
And he expects to see some data on that front
in the upcoming months. Right now, let's bring back in
Bloomberg's Michael McKee, if you are just joining us. We
did just conclude the FEDS press conference for Mike. You
put him on the spot there with the political question.
I don't know that he loved answering it. We were
all glad that you asked it. What was your takeaway
from the press conference in terms of what you felt
(08:45):
was the most new information that we gleaned.
Speaker 5 (08:49):
Well, I think the takeaway is fairly obvious here, and
I'm not sure that my economist's friends all agree with me,
But I think the line that you want to look
at is how many time Jay Powell said nobody on
the committee has a lot of conviction about these forecasts.
In other words, this is all going to change and
we had to write down something, so we did. So
(09:12):
don't take us seriously in terms of the number of
rate cuts. Don't take us seriously in terms of the forecast.
It's the best we can do at the moment. But
we know this is all going to be different, so
don't I would translate that into don't invest on the
idea that the Fed is going to be doing two
rate cuts by the end of the year.
Speaker 3 (09:29):
Michael McKee, thank you so much for being with us,
and Stephanie. We were kind of laughing around the table
when he said We just kind of turned to each
other and say, what did you write down?
Speaker 2 (09:36):
You know, I don't know. I'm kind of throwing a
dart at the dartboard.
Speaker 3 (09:40):
But it does feel like they are trying to message
something to markets. And do you think that this is saying, ultimately,
we understand our dual mandate and we are going to
respond potentially to a weaker jobs picture.
Speaker 9 (09:53):
I think it's saying there are risks to both sides
of our mandate. We don't know if it's going to
be on the inflation or the growth side. We're in
wait and see mode. I think the ultimate destination will
be that the economy holds up. Okay, inflation does pick up.
I totally agree with Torson's comments. If it doesn't pick up,
that's almost a bad sign because that's going to come
from company margins. But at the end of the day,
we'll come through this okay, and then the focus will
(10:14):
be on twenty twenty six for markets, which is an
economy that's just fine.
Speaker 6 (10:18):
Your core ability is the math and the dynamics of
our math. The toughest math is productivity. Is productivity still
in play? Is there a total factor productivity right now
that we underestimate?
Speaker 8 (10:31):
Yeah.
Speaker 9 (10:31):
I think that's certainly the case, and hopefully it's the case,
especially given that our labor supply is shrinking, so we
kind of need that to some extent. And our base
case is that the productivity should be fairly solid throughout
the course of this year into next year. It is
hard to estimate, but I do think AI is going
to slowly have that impact over the course of the
next couple of years.
Speaker 2 (10:51):
With productivity gains.
Speaker 3 (10:52):
Tors And I'd love you to wait on this because
you've been really good on this, We're not necessarily going
to get recession. A lot of people say that's not
their base case, but we are going to get slow
down at a time of increasing inflation.
Speaker 2 (11:03):
People seem to think.
Speaker 3 (11:04):
If there's a recession, that's really bad. If there's not
a recession, that's really good. What is that breaking point
where you have growth slowing enough that it becomes really
terrible for companies in terms of where inflation is and
growth just not keeping up.
Speaker 1 (11:21):
The chocol world is at the moment, Namy, we do
have a number of things that are weighing on growth,
as we're talking about here in naming higher oil prices,
higher terriffs were now also have restrictions on immigration, meaning
removing labor. All those things would argue for GDP growth
slowing down as the consensus expects over the coming quarters.
But at the other end of the robe, in this
talk of wall, we have definitely the productivity increases that
(11:42):
we potentially could seem. It did respond to the question
around whether this be labor replacing or labor augmenting, and
we still just really don't know the answers to that question. Yes,
it is the case in the census surveys when businesses
are asked have you adopted AI in the last two
weeks that about ten percent of companies and a rising
(12:02):
share is saying, yes, we are new using today's AI
tools to improve our productivity. But this speed with with
productivity gains and to Tom's point, total fatster productivity naming
how well laiban capital work together, the speed with which
we'll see that in the data is probably going to
take quite a bit longer. So I worry more about
the cyclical downward pull on GDP growth. I do think
(12:22):
that at what time we will see the AI gains,
but it's just not probably not going to come quick
enough relative to some of the downward pull coming from
the cyclical forces of tariff's higher oil prices, and at
the same time also the restrictions on immigrations we're.
Speaker 3 (12:35):
Seeing given that backdrop towurstin, do you think that, based
on what this FED said, they are just moderately restrictive.
Do you think they're more restrictive than that, or do
you think that this really is closer to neutral than
many people think.
Speaker 1 (12:46):
Well, that's why this discussion, Lisa around, as we have
all talked about for so many years now, our style
and where are we related to that? Note how he
didn't bring that up today. This conversation about where are
we related to neutral has almost become a back seat
issue us now there are some cyclical issues that are
overwhelming the structural discussion around where neutral rates are. So,
but I do think that the fed's on framework and
(13:07):
the New York FEDS estimates would certainly say that neutral
is lower, and as it did, hint a little bit
that we are in slightly restrictive territory.
Speaker 7 (13:14):
But the issue is still here is they are battling.
Speaker 1 (13:17):
The major issue is that, as you said, they expect
to see meaningful upside pressure on inflation, and that makes
sense not only headline inflation because of all the prices,
but also because of terriffs and again because of the
emerging pressure we're seeing on wages. So the short answer
to your question is, I think that this discussion of
restrictive or not restrictive is taking a little bit of
a back seat because we now have some cyclical forces
(13:38):
pushing inflation up over the coming months.
Speaker 3 (13:40):
Torson Slock of Apollo, thank you so much for being
with us and for those comments.
Speaker 2 (13:44):
Joining us now as Sebadro or Jappa SoC Gen.
Speaker 3 (13:47):
Just curious to Bodra what you make of this idea
that rates are not very high, that policy is monestily restrictive,
but not necessarily causing the restraint that many people would expect.
Speaker 2 (13:58):
Do you think that this was an appropriate fat.
Speaker 10 (14:00):
Meeting, You know, let's call a spade a spade. I
must say I didn't get a lot of new information
out of this meeting. I think Mike McKey summed it up.
There's a lot of uncertainty. The first half of the year,
the economy has been extraordinarily resilient. There's a chance that
we get higher inflation in the second half.
Speaker 2 (14:19):
There's a chance.
Speaker 10 (14:20):
That the growth could slow down as well. But that
doesn't really give us a lot of information or exactly
what they're going to do on the policy front. Yes,
the dots are showing two cuts for this year, but
there's a good chance that they don't cut at all
this year, or they have to cut as early as
the September meeting is the data deteriorates, So for me,
(14:42):
the informational value was very little. I think that there's
a lot of uncertainty, which was highlighted again and again
during the press conference, and I think that they're going
to wait till they have enough information to confirm a
rate cut.
Speaker 2 (14:55):
So for me, this is status quo.
Speaker 10 (14:57):
The market pricing hasn't really changed. The market really has
reacted much. So it's it's it's we need more information.
Speaker 7 (15:05):
So padre, is the.
Speaker 6 (15:06):
Information going to come in the yield curve? A really
informed question come in about the vanilla twos ten spread
or all you pick the spread that matters. Are we
going to go back to yield curve steepness as we
saw many years ago?
Speaker 10 (15:22):
Yeah, the five to thirties part of the yell curve
has been steepening.
Speaker 2 (15:25):
The FED.
Speaker 10 (15:26):
You know, the front end is pegged to policies of
the two years is kind of stuck between three seventy
five and four percent, and the five thirties part of
the yell curve has the potential to steepen. But again,
a lot depends on what we get out of that
big beautiful bill. If it is actually more deficit inducing
than what we are anticipating, then there's a potential that
(15:48):
we could see a rebuild in term premiere. But you
know that those negotiations are still ongoing, and really it's
the fiscal side that determines what the shape of the
yel curve is, not so much how much the FED
is going to cut, because cuts between now and the
middle of nextsuare are quite modest. You're looking at maybe
seventy five to one hundred basis points of cuts at
(16:08):
the most.
Speaker 6 (16:08):
Stephanie, where are you on the fiscal space? I mean,
I think this is about Michael brought it up in
others before, but this is a huge mystery that's unspoken.
We don't have a clue where our debt and deficit
is doing. We have no clue.
Speaker 9 (16:21):
We have one clue, and that's not good. So it's
not heading in a very good direction. We all know that,
but I think the bond market has largely internalized it.
Speaker 8 (16:30):
So what we're.
Speaker 9 (16:31):
Talking with clients about is, at this point, once they
actually passed the reconciliation bill base cases, there's not a
big sort of.
Speaker 8 (16:38):
Bond market riot as a result.
Speaker 9 (16:39):
It's a risk, but I think maybe over the summer,
the bigger news is going to be the inflation prints,
which could be a headwind for equities, and the employment
data which might seasonally surprise, plus the downward sort of
projection on immigration that could be sort of the bigger
news over the summer. I don want to anticipate it's
going to be surprised on the deficit front, because we
largely know what's going to be in the and they're
(17:00):
going to kind of negotiate from here. But I don't
expect it to be a major surprise at this point.
Speaker 2 (17:04):
All I can say is this feels a little bit.
Speaker 3 (17:06):
I keep saying this like when you put too many
commands into a computer and it says I'm buffering, I'm buffering,
and it just kind of we have no idea what
the headlines they are going to be in a couple
of months. To baj Or Jappovsacchen, thank you so much
for joining us and for really being honest, which is
we didn't really learn all that much joining us now
is Jeff Rosenberg of Black Rock.
Speaker 2 (17:23):
The one thing that did stand out.
Speaker 3 (17:25):
Was this idea that this is not a FED that
feels urgency to cut rates, even though you have a
president basically jaw owning them and you have people in
the market saying we are seeing cracks.
Speaker 2 (17:36):
What was your take, Jeff from this meeting. Yeah, you know, there's.
Speaker 11 (17:41):
Something we're not talking about which could have been you know,
the headline, which is this is the first statement of
economic projections posts the tariff uncertainty, and mostly he got
away with not really talking about that. Torsten just highlighted
a second ago it's stagflationary. I don't think anybody raised
(18:01):
that once that word ever came up, So we really
kind of pivoted away from what might have been kind
of an interesting storyline to the storyline that we're hearing,
which is watching paint dry. And I think that's an
excellent outcome for the FED. That's what they want us
to talk about, paint drying, and not the FED opining
on the impact of policy. They really ended up pivoting
(18:24):
the conversation towards a repeat of nothing to see here,
and you know, we don't know, and it's much more
about the uncertainty than it is about the forecast that
we just wrote down.
Speaker 2 (18:37):
I think that's kind.
Speaker 7 (18:38):
Of an interesting takeaway.
Speaker 11 (18:39):
I think, as your previous guests just highlighted, that is
the takeaway that the markets are, you know, having from today.
And when you listen to the opening press conferences, I do.
I pull up last month's press conference and you can
follow along. It's almost verbatim with the exception of the
insertion of the SEP changes, which you downplayed, and maybe
(19:01):
the introduction of, you know, waiting for more information as
opposed to waiting for the uncertainty to clear. This is
very much a repeat of what we got last month.
Speaker 6 (19:11):
And Jeff Rozenberg, when you look at what the president
said in the lawn today, we're benumbed by presidential criticism
of your own Powell, is this a fad as we're
all half asleep in a snoozefest representing the haves in
the financial industry, or are they actually representing a good
part of America that does not agree with this dialogue
(19:33):
and says they're flat on their backs right now?
Speaker 11 (19:39):
There are There are a lot of questions in there,
Tom for me to avoid answering, So I don't do
my best imitation of Powell to pivot to answering it
the way he answered Mike McKee's question and basically restating
what you know he wanted to answer, which is they
believe they're they're following, you know, the right path, they
(20:00):
are answering the right questions, they're pursuing the policy for
the benefit of the economy overall that benefits the most
of Americans.
Speaker 8 (20:09):
And I think kind of he.
Speaker 11 (20:10):
Answered that question the way I am answering that question,
the way Power Answeredi's question.
Speaker 3 (20:14):
Absolutely gorgeous, Jeff, very well done. I will answer this.
Speaker 2 (20:17):
I will ask it.
Speaker 6 (20:18):
Oh, it's compliance from Black Lives.
Speaker 3 (20:20):
You're doing great, So, Jeff, you passed that compliance test.
I guess another way to ask the question a little
bit more directly is, to your point, this was not
a FED who is challenged a Fetschhair who is challenged
on this diyflation point, who said, when your dual mandate
really comes called into question, would you tolerate higher inflation
for longer in order to protect a labor market that
(20:41):
has left a lot of people to Tom's point out,
and that has left people behind in a participation rate
that is lower than we previously had. Were you surprised
that that wasn't asked, That this is a FED that
really hasn't had to address that thorny question.
Speaker 11 (20:56):
Yeah, and it's going to be the more interesting conversation.
I feel like this is the period where we're kind
of between two environments where the kind of pre tariff
environment and he got asked the question. You know, hey,
back in December, you were cutting rates. Why aren't you
cutting rates now given the inflation is even lower than
it was in December, And he very kind of clearly
(21:19):
laid out there's been a change in information, and the
change in information is the impact the uncertainty of much
higher than.
Speaker 2 (21:26):
Expected tariff policy.
Speaker 11 (21:29):
What we're waiting for is it to show up in
the data now. When he got pushed back from one
of the questions of well, are you data dependent? Sounds
like you're forecast dependent. Why are you now saying you're
forecast dependent when you always tell us your data dependent,
And he gave the answer on what we have to
be forward looking, not necessarily forecast dependent. And so we're
going to get to this period where the inflation does
(21:51):
show up in the data. And now I think the
question is in everybody on this show so far has
been calling it the inflation increase. Let's be careful here.
Powell is not calling the rise in inflation and inflation increase.
He's calling it a temporary or one time passed through
with the expectation that it goes back down. That's not inflation.
(22:14):
That's a one time pass through. The difficulty we're going
to have is how do you know while you're seeing
the increase in the prices passing through that it's one
time and how long are you going to be willing
to wait to figure that out? That's going to be
the more interesting challenge. And then listen to your question.
It's going to press on the dual mandate because if
(22:34):
they're seeing the increase in inflation at the same time
as we're seeing which we're starting to see the very
early signs of right now, the slowdown in the labor markets,
if that accelerates now, you're going to have this tension
between the two policy goals. They kind of address it
a little bit with like the distance between the two
goals and the time expected to meet those two goals,
(22:56):
but they're going to have a lot more questions to
answer how they're balancing those two trade offs.
Speaker 3 (23:01):
Jeff Rosenberg of Black Rock, thank you so much as
always for being with us. Stephanie Roth of Well Research
still with us, and I'm curious for the final word,
how you see this dual mandate as playing out. And
you had a great question for the FED chair that
was not asked, especially at a time of such confusing
frankly data, Yeah.
Speaker 9 (23:20):
And I think The question we want to know over
the summer is when we start to see payroll gains
slow down, potentially below one hundred thousand, with the unemployment
rate remaining largely steady, how does the FED react to
that and our base cases at this point and could
certainly after today there seemed to be very much in
wait and see mode and they're probably going to do nothing,
which then means that two cuts are going to have
to fade to no cuts.
Speaker 6 (23:42):
Is a four point two percent unemployment rate now the
same as a four point two percent unemployment rate thirty
years ago. I'm not sure it is. There's a lot
of noise in there. I'm not sure it is.
Speaker 8 (23:55):
Yeah, that's that's totally fair.
Speaker 9 (23:56):
And of course they're going to think about the directionality
here and they're expecting it go to four five. I'm
worried it goes down to closer to four percent with
the impact of it might go the other way. And
I think that's the thing that is going to be
a really interesting dynamic for the FED to potentially watch here.
Speaker 8 (24:12):
This is a real tightening of the labor market.
Speaker 9 (24:14):
You have the cross currents with the slowing economy and
then the real tightening of labor supply. We had five
hundred and thirty thousand people from Cuba haiting Nicaragua Venezuela.
Speaker 8 (24:22):
The visas are expectively expired overnight.
Speaker 3 (24:25):
Stephanie Rotha Fullf Research looking forward to continuing this conversation
on Friday, su
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:14):
This is a FED.
Speaker 3 (00:15):
He's a lot more certainty ahead, but not yet enough
to make any moves. While Powell said that peak uncertainty
happened in April and we are getting some clarity, there's
still a lot to learn until the data becomes clear.
They're on hold and are in a good place.
Speaker 2 (00:28):
Take a listen.
Speaker 4 (00:30):
We feel like the right thing to do is to
be where we are, where our policy stance is, and
just learn more. In particular, we feel like we're going
to learn a great deal more over the summer on tariffs.
We hadn't expected them to show up much by now,
and they haven't. And we will see whether to the
extent to which they do overcoming months, and I think
(00:50):
that's going to inform our thinking.
Speaker 3 (00:53):
Trompewell also asked about the situation in the White House,
dismissing questions around the future for him on FED to reserve.
Speaker 5 (01:02):
I need to ask, assuming you are not reappointed, would
you stay on as governor when you're term as chair?
Speaker 4 (01:08):
And I'm not thinking about that. I'm thinking about this.
Speaker 3 (01:12):
Is a retlacement of some of the earlier moves we
are seeing. Bond yields actually climbed back to basically where
they were, and then some from before the press conference
tom It seemed like this was a FED chair saying
that we are past peak uncertainty, but we probably will
get more information leaders to stop at It's.
Speaker 6 (01:29):
Sure the press conference looking at the correlation of equities, bonds, currencies, commodities, so.
Speaker 7 (01:33):
Sort of up and downy and up and downy.
Speaker 6 (01:36):
I didn't get any real conviction out of it. The
one tone I saw from him that I hear in
some conversations is what if we're underestimating the power of
this American economy. There's a gloomy call that GDP numbers
come down, inflation's up, Woe is me? But and that
(01:56):
butt was just there for a bit where he said,
on what it is a resilient economy?
Speaker 3 (02:03):
You have said the phrase that I think about all
the time, which is that companies adapt and adjust. And
we hear that from so many companies that are doubling
down on some of their forecasts. Your own tariffs, yes, exactly,
because they have to look past that and they can
handle some of these tariffs. What I thought was interesting
was that this was a FED chair that actually said
if we were backward looking at the data, we probably
would be cutting more quickly. But because of the tariffs
(02:25):
and the forward expectation for more inflation, it does create
a greater degree of uncertainty, which is the reason why
we still are happy to stand tight.
Speaker 6 (02:33):
You don't see this, folks, but Lisa during the press conference,
she's got one of those little clicker things like in
a movie theater, and every time they say uncertainty, you're
moving your thumb around, and it.
Speaker 8 (02:42):
Was drinking one hundred and fifty.
Speaker 6 (02:44):
Well, it's surveying on his beverage time. The issue here, Lisa,
is the uncertainty issue was given to them. They didn't
invent it. The president's comments today outrageous comments. Do you
see what he did to McKee? He slammed Michael McKee
after those rude McKee like questions tarriffs, Bob Michael saying
(03:07):
do we know what tariffs will raise? We have no
clue what they will raise, which.
Speaker 3 (03:13):
Is the reason why they aren't necessarily going to make
any big moves right now. Joining us now is Stephanie
Roth of Wolf Research. So pleased to say that you're
here in studio. Stephanie, what was your take on a
press conference with this FED chair so that he had
more certainty.
Speaker 2 (03:27):
But there'll be more later on.
Speaker 9 (03:29):
I think the single most important line that he said
is rates aren't very high, and when we're thinking about
the next couple of months, what we're going to learn
is more information about the reconciliation bill, So then they're
going to incorporate that fully into SEP, in which case
that's going.
Speaker 8 (03:41):
To look a lot more hawkish.
Speaker 9 (03:43):
So our base case is this year they're not cutting,
and the two cuts are going to eventually get get
sort of rolled away. At this point, they were very
close on the edge of between one and two, and
they're probably going to eventually not end up cutting this
year because the economy will be resilient and fine and
inflation's elevated.
Speaker 6 (03:57):
On the core GDP equation is there, where's your Do
you have any conviction at all? And c IG or NX,
I mean, I don't know how you do it. I
don't know how you come up with a real GDP statistic.
Speaker 9 (04:09):
Yeah, we're looking for one point four percent GDP this year,
so not that different from the FED. But I think
the important thing to focus on is for twenty twenty six,
we're my forecasts are a lot higher than what the
FED has. I'm looking for something that's close to two percent,
if not a bit above our forecast. Is that reconciliation
bill could boost the economy by but forty basis points,
So that could be a notable acceleration versus where we
(04:29):
are today. And that's what the market's going to start
focusing on.
Speaker 6 (04:32):
Is Lisa helped me. Is a reconciliation build a big,
beautiful thing.
Speaker 3 (04:35):
It's one basic, beautiful bee, It's one big.
Speaker 2 (04:38):
One three B. Yes, we can cary gotten more uncertainty. Well,
that's the problem.
Speaker 3 (04:42):
And I really was struck by the idea that Fetcher
Powell brought to the four, which is in response to
Nick tim moros As the Wallstreet Journal's question, why aren't
you looking at some of the weakening trend that we're
seeing in inflation and say, you know what, we're actually
quite restrictive. Why are you saying that this is actually
an appropriate n And the FED chair said, well, the
reason why is because we have to look forward and
(05:04):
we have to say this could potentially be inflationary. We
don't know, and we will learn more in the next
couple of months. But we're not sure how much we're
going to learn. Is that good enough for you? Does
that ring true to you that that is an appropriate
stance for this FED.
Speaker 9 (05:17):
I think it's fair for them to be in wait
and see. They know that the tariffs will be inflationary.
He very much emphasize someone's going to be paying the
cost and eventually they're going to try to get it
to the consumer, and I think that's the right way
to think about it. It's going to eventually flow through
some portion of it to the consumer. Our numbers are
similar to the fed's forecast that inflation should be close
to three percent at the end of this year, and
at this point we don't know how much. It's hard
(05:38):
to forecast these things, but I think the main takeaway
is inflation will be elevated this year, but growth should
probably hold up.
Speaker 3 (05:44):
Just fine, which is essentially what they were saying, albeit
at a slower pace.
Speaker 2 (05:48):
Right now, we're so.
Speaker 3 (05:49):
Lucky to have Torston's Slock of Apollo joining us. Tourston,
thank you so much for being here. What was your
take on the press conference on the FED stance and frankly,
the market taking this based in stride saying that they're
getting much new information here.
Speaker 1 (06:03):
I think the banner hanging over this entire press conference
and the forecast is stackflation. They've revised down GDP growth
to one point four and they revised up inflation to
three percent. That's telling you that they are beginning to
worry about the things that are hitting the US economy.
And is no longer just trade and teriffs. That's stackflationary.
All prices are also stackflationary, meaning higher inflation, lower GDP growth,
(06:25):
and restrictions and immigration is also stackflationary. We already saw
in the last mpotant report upward pressure on wages, and
of course that ultimately means downward pressure unemployment if we're
going to do, in particular deportations at the current pace.
Speaker 7 (06:37):
So the conclusion is.
Speaker 1 (06:39):
It is not surprising that the fittest beginning to worry
about their mandate being torn in the opposite direction because
inflation higher says that you'd be hiking GDP growth lower
says that should be cutting.
Speaker 7 (06:49):
So that's why at the moment the stay put and.
Speaker 1 (06:52):
The conclusion therefore is that he didn't really give much
other than say we will likely be cutting. And that's
what's in the dot plot but the conclusion is this
is a very difficult situation for them when there's both,
as he said, meaningful expectations of upward pressure on inflation
and at the same time ever vision down on GDP growth.
Speaker 6 (07:09):
Turstan he alluded to their data capture which is perhaps
showing a more resilient GDP, a better stronger America. Steve
Shuta Mizuo is heated about this that we could see
GDP better. Is that in any probability for you?
Speaker 1 (07:29):
Well, I think that when it comes to a particular trait.
Forgive the picture here, but the pig is coming through
the python. Someone needs to pay for the tax increase
on impulse. Tariffs have gone up, and if companies are
not passing this on to consumers.
Speaker 7 (07:43):
Let's say that inflation does not go off as much
as we would have expected.
Speaker 1 (07:46):
Then the conclusion is, well, then earnings will simply be
going down more because this tax increase beats because that
it will begin to see some downward pressure on GDP
and potentially some more downward pressure on earnings.
Speaker 7 (07:57):
So that's another way of saying.
Speaker 1 (07:59):
We saw effective tarry frates go up from three percent
in January to now eighteen percent today and that effect
will still be playing out, and he said very clearly
he does expect a meaningful increase in inflation over the
coming months. So combining that with he said, we could
also see you cooling down on the label market. It
does mean that just maybe inflation will not go up
so much, but the consequence of that will be well,
(08:19):
then we will instead see Terry's coming through instead through
lower GDP growth and a bigger hit to earnings.
Speaker 3 (08:25):
And he expects to see some data on that front
in the upcoming months. Right now, let's bring back in
Bloomberg's Michael McKee, if you are just joining us. We
did just conclude the FEDS press conference for Mike. You
put him on the spot there with the political question.
I don't know that he loved answering it. We were
all glad that you asked it. What was your takeaway
from the press conference in terms of what you felt
(08:45):
was the most new information that we gleaned.
Speaker 5 (08:49):
Well, I think the takeaway is fairly obvious here, and
I'm not sure that my economist's friends all agree with me,
But I think the line that you want to look
at is how many time Jay Powell said nobody on
the committee has a lot of conviction about these forecasts.
In other words, this is all going to change and
we had to write down something, so we did. So
(09:12):
don't take us seriously in terms of the number of
rate cuts. Don't take us seriously in terms of the forecast.
It's the best we can do at the moment. But
we know this is all going to be different, so
don't I would translate that into don't invest on the
idea that the Fed is going to be doing two
rate cuts by the end of the year.
Speaker 3 (09:29):
Michael McKee, thank you so much for being with us,
and Stephanie. We were kind of laughing around the table
when he said We just kind of turned to each
other and say, what did you write down?
Speaker 2 (09:36):
You know, I don't know. I'm kind of throwing a
dart at the dartboard.
Speaker 3 (09:40):
But it does feel like they are trying to message
something to markets. And do you think that this is saying, ultimately,
we understand our dual mandate and we are going to
respond potentially to a weaker jobs picture.
Speaker 9 (09:53):
I think it's saying there are risks to both sides
of our mandate. We don't know if it's going to
be on the inflation or the growth side. We're in
wait and see mode. I think the ultimate destination will
be that the economy holds up. Okay, inflation does pick up.
I totally agree with Torson's comments. If it doesn't pick up,
that's almost a bad sign because that's going to come
from company margins. But at the end of the day,
we'll come through this okay, and then the focus will
(10:14):
be on twenty twenty six for markets, which is an
economy that's just fine.
Speaker 6 (10:18):
Your core ability is the math and the dynamics of
our math. The toughest math is productivity. Is productivity still
in play? Is there a total factor productivity right now
that we underestimate?
Speaker 8 (10:31):
Yeah.
Speaker 9 (10:31):
I think that's certainly the case, and hopefully it's the case,
especially given that our labor supply is shrinking, so we
kind of need that to some extent. And our base
case is that the productivity should be fairly solid throughout
the course of this year into next year. It is
hard to estimate, but I do think AI is going
to slowly have that impact over the course of the
next couple of years.
Speaker 2 (10:51):
With productivity gains.
Speaker 3 (10:52):
Tors And I'd love you to wait on this because
you've been really good on this, We're not necessarily going
to get recession. A lot of people say that's not
their base case, but we are going to get slow
down at a time of increasing inflation.
Speaker 2 (11:03):
People seem to think.
Speaker 3 (11:04):
If there's a recession, that's really bad. If there's not
a recession, that's really good. What is that breaking point
where you have growth slowing enough that it becomes really
terrible for companies in terms of where inflation is and
growth just not keeping up.
Speaker 1 (11:21):
The chocol world is at the moment, Namy, we do
have a number of things that are weighing on growth,
as we're talking about here in naming higher oil prices,
higher terriffs were now also have restrictions on immigration, meaning
removing labor. All those things would argue for GDP growth
slowing down as the consensus expects over the coming quarters.
But at the other end of the robe, in this
talk of wall, we have definitely the productivity increases that
(11:42):
we potentially could seem. It did respond to the question
around whether this be labor replacing or labor augmenting, and
we still just really don't know the answers to that question. Yes,
it is the case in the census surveys when businesses
are asked have you adopted AI in the last two
weeks that about ten percent of companies and a rising
(12:02):
share is saying, yes, we are new using today's AI
tools to improve our productivity. But this speed with with
productivity gains and to Tom's point, total fatster productivity naming
how well laiban capital work together, the speed with which
we'll see that in the data is probably going to
take quite a bit longer. So I worry more about
the cyclical downward pull on GDP growth. I do think
(12:22):
that at what time we will see the AI gains,
but it's just not probably not going to come quick
enough relative to some of the downward pull coming from
the cyclical forces of tariff's higher oil prices, and at
the same time also the restrictions on immigrations we're.
Speaker 3 (12:35):
Seeing given that backdrop towurstin, do you think that, based
on what this FED said, they are just moderately restrictive.
Do you think they're more restrictive than that, or do
you think that this really is closer to neutral than
many people think.
Speaker 1 (12:46):
Well, that's why this discussion, Lisa around, as we have
all talked about for so many years now, our style
and where are we related to that? Note how he
didn't bring that up today. This conversation about where are
we related to neutral has almost become a back seat
issue us now there are some cyclical issues that are
overwhelming the structural discussion around where neutral rates are. So,
but I do think that the fed's on framework and
(13:07):
the New York FEDS estimates would certainly say that neutral
is lower, and as it did, hint a little bit
that we are in slightly restrictive territory.
Speaker 7 (13:14):
But the issue is still here is they are battling.
Speaker 1 (13:17):
The major issue is that, as you said, they expect
to see meaningful upside pressure on inflation, and that makes
sense not only headline inflation because of all the prices,
but also because of terriffs and again because of the
emerging pressure we're seeing on wages. So the short answer
to your question is, I think that this discussion of
restrictive or not restrictive is taking a little bit of
a back seat because we now have some cyclical forces
(13:38):
pushing inflation up over the coming months.
Speaker 3 (13:40):
Torson Slock of Apollo, thank you so much for being
with us and for those comments.
Speaker 2 (13:44):
Joining us now as Sebadro or Jappa SoC Gen.
Speaker 3 (13:47):
Just curious to Bodra what you make of this idea
that rates are not very high, that policy is monestily restrictive,
but not necessarily causing the restraint that many people would expect.
Speaker 2 (13:58):
Do you think that this was an appropriate fat.
Speaker 10 (14:00):
Meeting, You know, let's call a spade a spade. I
must say I didn't get a lot of new information
out of this meeting. I think Mike McKey summed it up.
There's a lot of uncertainty. The first half of the year,
the economy has been extraordinarily resilient. There's a chance that
we get higher inflation in the second half.
Speaker 2 (14:19):
There's a chance.
Speaker 10 (14:20):
That the growth could slow down as well. But that
doesn't really give us a lot of information or exactly
what they're going to do on the policy front. Yes,
the dots are showing two cuts for this year, but
there's a good chance that they don't cut at all
this year, or they have to cut as early as
the September meeting is the data deteriorates, So for me,
(14:42):
the informational value was very little. I think that there's
a lot of uncertainty, which was highlighted again and again
during the press conference, and I think that they're going
to wait till they have enough information to confirm a
rate cut.
Speaker 2 (14:55):
So for me, this is status quo.
Speaker 10 (14:57):
The market pricing hasn't really changed. The market really has
reacted much. So it's it's it's we need more information.
Speaker 7 (15:05):
So padre, is the.
Speaker 6 (15:06):
Information going to come in the yield curve? A really
informed question come in about the vanilla twos ten spread
or all you pick the spread that matters. Are we
going to go back to yield curve steepness as we
saw many years ago?
Speaker 10 (15:22):
Yeah, the five to thirties part of the yell curve
has been steepening.
Speaker 2 (15:25):
The FED.
Speaker 10 (15:26):
You know, the front end is pegged to policies of
the two years is kind of stuck between three seventy
five and four percent, and the five thirties part of
the yell curve has the potential to steepen. But again,
a lot depends on what we get out of that
big beautiful bill. If it is actually more deficit inducing
than what we are anticipating, then there's a potential that
(15:48):
we could see a rebuild in term premiere. But you
know that those negotiations are still ongoing, and really it's
the fiscal side that determines what the shape of the
yel curve is, not so much how much the FED
is going to cut, because cuts between now and the
middle of nextsuare are quite modest. You're looking at maybe
seventy five to one hundred basis points of cuts at
(16:08):
the most.
Speaker 6 (16:08):
Stephanie, where are you on the fiscal space? I mean,
I think this is about Michael brought it up in
others before, but this is a huge mystery that's unspoken.
We don't have a clue where our debt and deficit
is doing. We have no clue.
Speaker 9 (16:21):
We have one clue, and that's not good. So it's
not heading in a very good direction. We all know that,
but I think the bond market has largely internalized it.
Speaker 8 (16:30):
So what we're.
Speaker 9 (16:31):
Talking with clients about is, at this point, once they
actually passed the reconciliation bill base cases, there's not a
big sort of.
Speaker 8 (16:38):
Bond market riot as a result.
Speaker 9 (16:39):
It's a risk, but I think maybe over the summer,
the bigger news is going to be the inflation prints,
which could be a headwind for equities, and the employment
data which might seasonally surprise, plus the downward sort of
projection on immigration that could be sort of the bigger
news over the summer. I don want to anticipate it's
going to be surprised on the deficit front, because we
largely know what's going to be in the and they're
(17:00):
going to kind of negotiate from here. But I don't
expect it to be a major surprise at this point.
Speaker 2 (17:04):
All I can say is this feels a little bit.
Speaker 3 (17:06):
I keep saying this like when you put too many
commands into a computer and it says I'm buffering, I'm buffering,
and it just kind of we have no idea what
the headlines they are going to be in a couple
of months. To baj Or Jappovsacchen, thank you so much
for joining us and for really being honest, which is
we didn't really learn all that much joining us now
is Jeff Rosenberg of Black Rock.
Speaker 2 (17:23):
The one thing that did stand out.
Speaker 3 (17:25):
Was this idea that this is not a FED that
feels urgency to cut rates, even though you have a
president basically jaw owning them and you have people in
the market saying we are seeing cracks.
Speaker 2 (17:36):
What was your take, Jeff from this meeting. Yeah, you know, there's.
Speaker 11 (17:41):
Something we're not talking about which could have been you know,
the headline, which is this is the first statement of
economic projections posts the tariff uncertainty, and mostly he got
away with not really talking about that. Torsten just highlighted
a second ago it's stagflationary. I don't think anybody raised
(18:01):
that once that word ever came up, So we really
kind of pivoted away from what might have been kind
of an interesting storyline to the storyline that we're hearing,
which is watching paint dry. And I think that's an
excellent outcome for the FED. That's what they want us
to talk about, paint drying, and not the FED opining
on the impact of policy. They really ended up pivoting
(18:24):
the conversation towards a repeat of nothing to see here,
and you know, we don't know, and it's much more
about the uncertainty than it is about the forecast that
we just wrote down.
Speaker 2 (18:37):
I think that's kind.
Speaker 7 (18:38):
Of an interesting takeaway.
Speaker 11 (18:39):
I think, as your previous guests just highlighted, that is
the takeaway that the markets are, you know, having from today.
And when you listen to the opening press conferences, I do.
I pull up last month's press conference and you can
follow along. It's almost verbatim with the exception of the
insertion of the SEP changes, which you downplayed, and maybe
(19:01):
the introduction of, you know, waiting for more information as
opposed to waiting for the uncertainty to clear. This is
very much a repeat of what we got last month.
Speaker 6 (19:11):
And Jeff Rozenberg, when you look at what the president
said in the lawn today, we're benumbed by presidential criticism
of your own Powell, is this a fad as we're
all half asleep in a snoozefest representing the haves in
the financial industry, or are they actually representing a good
part of America that does not agree with this dialogue
(19:33):
and says they're flat on their backs right now?
Speaker 11 (19:39):
There are There are a lot of questions in there,
Tom for me to avoid answering, So I don't do
my best imitation of Powell to pivot to answering it
the way he answered Mike McKee's question and basically restating
what you know he wanted to answer, which is they
believe they're they're following, you know, the right path, they
(20:00):
are answering the right questions, they're pursuing the policy for
the benefit of the economy overall that benefits the most
of Americans.
Speaker 8 (20:09):
And I think kind of he.
Speaker 11 (20:10):
Answered that question the way I am answering that question,
the way Power Answeredi's question.
Speaker 3 (20:14):
Absolutely gorgeous, Jeff, very well done. I will answer this.
Speaker 2 (20:17):
I will ask it.
Speaker 6 (20:18):
Oh, it's compliance from Black Lives.
Speaker 3 (20:20):
You're doing great, So, Jeff, you passed that compliance test.
I guess another way to ask the question a little
bit more directly is, to your point, this was not
a FED who is challenged a Fetschhair who is challenged
on this diyflation point, who said, when your dual mandate
really comes called into question, would you tolerate higher inflation
for longer in order to protect a labor market that
(20:41):
has left a lot of people to Tom's point out,
and that has left people behind in a participation rate
that is lower than we previously had. Were you surprised
that that wasn't asked, That this is a FED that
really hasn't had to address that thorny question.
Speaker 11 (20:56):
Yeah, and it's going to be the more interesting conversation.
I feel like this is the period where we're kind
of between two environments where the kind of pre tariff
environment and he got asked the question. You know, hey,
back in December, you were cutting rates. Why aren't you
cutting rates now given the inflation is even lower than
it was in December, And he very kind of clearly
(21:19):
laid out there's been a change in information, and the
change in information is the impact the uncertainty of much
higher than.
Speaker 2 (21:26):
Expected tariff policy.
Speaker 11 (21:29):
What we're waiting for is it to show up in
the data now. When he got pushed back from one
of the questions of well, are you data dependent? Sounds
like you're forecast dependent. Why are you now saying you're
forecast dependent when you always tell us your data dependent,
And he gave the answer on what we have to
be forward looking, not necessarily forecast dependent. And so we're
going to get to this period where the inflation does
(21:51):
show up in the data. And now I think the
question is in everybody on this show so far has
been calling it the inflation increase. Let's be careful here.
Powell is not calling the rise in inflation and inflation increase.
He's calling it a temporary or one time passed through
with the expectation that it goes back down. That's not inflation.
(22:14):
That's a one time pass through. The difficulty we're going
to have is how do you know while you're seeing
the increase in the prices passing through that it's one
time and how long are you going to be willing
to wait to figure that out? That's going to be
the more interesting challenge. And then listen to your question.
It's going to press on the dual mandate because if
(22:34):
they're seeing the increase in inflation at the same time
as we're seeing which we're starting to see the very
early signs of right now, the slowdown in the labor markets,
if that accelerates now, you're going to have this tension
between the two policy goals. They kind of address it
a little bit with like the distance between the two
goals and the time expected to meet those two goals,
(22:56):
but they're going to have a lot more questions to
answer how they're balancing those two trade offs.
Speaker 3 (23:01):
Jeff Rosenberg of Black Rock, thank you so much as
always for being with us. Stephanie Roth of Well Research
still with us, and I'm curious for the final word,
how you see this dual mandate as playing out. And
you had a great question for the FED chair that
was not asked, especially at a time of such confusing
frankly data, Yeah.
Speaker 9 (23:20):
And I think The question we want to know over
the summer is when we start to see payroll gains
slow down, potentially below one hundred thousand, with the unemployment
rate remaining largely steady, how does the FED react to
that and our base cases at this point and could
certainly after today there seemed to be very much in
wait and see mode and they're probably going to do nothing,
which then means that two cuts are going to have
to fade to no cuts.
Speaker 6 (23:42):
Is a four point two percent unemployment rate now the
same as a four point two percent unemployment rate thirty
years ago. I'm not sure it is. There's a lot
of noise in there. I'm not sure it is.
Speaker 8 (23:55):
Yeah, that's that's totally fair.
Speaker 9 (23:56):
And of course they're going to think about the directionality
here and they're expecting it go to four five. I'm
worried it goes down to closer to four percent with
the impact of it might go the other way. And
I think that's the thing that is going to be
a really interesting dynamic for the FED to potentially watch here.
Speaker 8 (24:12):
This is a real tightening of the labor market.
Speaker 9 (24:14):
You have the cross currents with the slowing economy and
then the real tightening of labor supply. We had five
hundred and thirty thousand people from Cuba haiting Nicaragua Venezuela.
Speaker 8 (24:22):
The visas are expectively expired overnight.
Speaker 3 (24:25):
Stephanie Rotha Fullf Research looking forward to continuing this conversation
on Friday, su
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