Richmond Federal Reserve President and CEO Tom Barkin

Barry speaks with Richmond Federal Reserve President and CEO Tom Barkin. Tom has been a member of the Richmond Fed since 2018. He is also on the Federal Open Markets committee and is responsible for a variety of Richmond Fed technology and bank supervision. Previously, Tom had spent 30 years at McKinsey, where eventually he became chief risk Officer and then Chief Financial Officer. The perfect guest given the recent news of global tariffs, domestic manufacturing, and US monetary policy. 

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Episode Transcript

Speaker 1 (00:02):
Bloomberg Audio Studios, Podcasts, radio News. This is Masters in
Business with Barry Ritholts on Bloomberg Radio.

Speaker 2 (00:16):
This week on the podcast, another extra special guest Richmond
Federal Reserve President and CEO Tom Barkin. He's been a
member of the Richmond Fed since twenty eighteen. He is
also on the Federal Open Markets Committee and is responsible
for a variety of Richmond Fed technology and bank supervision. Previously,

(00:39):
Tom has spent thirty years at Mackenzie where eventually he
became chief Risk Officer and then chief Financial Officer. I
found this conversation absolutely fascinating. He is a super intelligent,
thoughtful guy, very well versed in business economics and monetary policy.

(00:59):
I think you will find this conversation to be both
timely and fascinating. With no further ado, my conversation with
FMC Committee member and President of the Richmond Federal Reserve Bank,
Tom Barkin.

Speaker 3 (01:14):
Very thanks for having me here.

Speaker 2 (01:15):
What a perfect resume and a perfect person to talk
about the state of the world today. Before we go there,
let's just dip into your background. You're a triple threat
bachelor's MBA and jd ole from Harvard. What was the
original career plan.

Speaker 4 (01:33):
Well, it wasn't that. I grew up in Tampa, went
to a public school there, applied to a few Southern
schools and Harvard because it had a good name, and
I thought it was sort of a neat idea, and
then I got in, which was kind of a surprise.
And when I went there, I was going to be
a lawyer and I was going to major in mathematics.
And I took my freshman year math and that all

(01:54):
went great, and my software I ended up in a
class called basic algebra, one that was not basic and
was not in the algebra that I knew anything about.
And it turned out that half of that class had
been the US National Math team, and they had all
competed internationally and they knew stuff I didn't. And I
was at the time taking Introductor to Economics, which I

(02:15):
really liked because it combined history and politics and math
and economics. And so I moved my major into economics
and had a great experience as an economics major. Undergrad,
I was still going to go to law school, and
I applied to law school and got in, but a
bunch of my roommates were applying to business school, and
it felt to me like that was a neat way

(02:36):
to get a master's in something related to economics that
I was interested in. And so I applied also to
business school and got into that and then started that
program once into law school. In business school, I was
able to compare two sets of professions, one the law
and the second being going into business, and it just
felt like the second was much more vibrant, much more interesting,

(02:56):
learned a lot more, and so I made that transition.
But I wouldn't have made that transition if I hadn't
been an economics major. I wouldn't have made that transition.
If I hadn't applied to business school, I just wouldn't
have the confidence to do it.

Speaker 2 (03:06):
So I know Wharton has like a joint CPA, JD
MBA program. Did you were you enrolled as a full
time JD and a full time MBA student at Harvard
or were these was this sort of a combined program.

Speaker 4 (03:19):
It is a combined program. You take a year at
law school a year at business school in two years combined.
I didn't realize there was a program where you could
also get a CPA. Maybe that would have been a
third degree just for extra credit.

Speaker 2 (03:30):
I believe that's Wharton. So you come out of Cambridge
with three degrees, what's the first first job you take.

Speaker 3 (03:38):
I went to work in McKenzie. I mean that was.

Speaker 2 (03:40):
Literally your first year. So you go to work in
McKenzie in eighty seven and you stay for thirty years.

Speaker 4 (03:47):
Yeah, And I was lucky, lucky, lucky to go there.
I joined an office that had about twenty five people
in Atlanta. Felt like an entrepreneurial opportunity to build something,
made a lot of friends there, enjoyed the work, really
enjoyed my clients, and the opportunity to help a bunch
of great leaders improve the performance their organizations.

Speaker 3 (04:06):
Fell in love with.

Speaker 4 (04:07):
McKenzie people, smart, talented, idealistic, and the combination just worked
great for me.

Speaker 2 (04:13):
You've held a number of roles there, eventually becoming a
senior partner, but the two that are most fascinating and
relevant to your current situation is chief risk Officer and
chief financial officer. Tell us a little bit about the
career path to two very important roles at a very
important company.

Speaker 4 (04:34):
Well, starting in ninety nine, I started leading the Atlanta office,
which eventually became the Southern offices of McKenzie. So from
Texas through Virginia. It was sort of our territory and
we had I don't remember the number sixty seventy eighty
partners plus another several hundred associates and we were serving
clients in that geography. So I'll point to that as

(04:54):
a role that I really enjoyed it in one where
I got to spend so much time with so many
business people about what was happening in their business and
opportunities for McKenzie to help. We worked our way through
nine to eleven. That was a very difficult time for
our business, and I think coming out of it, the
folks at McKenzie thought, you know, I knew how to
manage a bottom line and our office got through quite nicely.

(05:15):
And when a new managing partner was named around the
financial crisis, they asked me to be the CFO to
help navigate mckenzy through that, which I'm very pleased with
how well we navigated through that. I did that for
six years and then spent three years trying to help
institutionalize some risk processes at McKenzie, including a lot of
the stuff that has been done to defend against cyber

(05:39):
and in whatever role and there are others that I'm
not going to bore you with. You know, the opportunity
to try to take a partnership and influence it to
become better is a challenge and also a lot of fun.

Speaker 2 (05:52):
That sounds really interesting. So you're at McKenzie for three decades.
How do you end up on the Richmond Federal Reserve.

Speaker 4 (06:03):
First of all, I was very involved civically in Atlanta
and in lots of different organizations, and at some point
I met the president, my equivalent in Atlanta, who then
was Dennis Lockhart, who's a great guy, and Dennis at
some point invited me to join his board from so
from nine to fourteen I was on the board and
then eventually the chair of the board of the Atlanta Fed.

(06:25):
And I stepped down term limited, and three years later
I was in the process of leaving McKenzie. McKinsey is
a mandatory retirement age. I'm very young in my own mind,
but not that young at McKenzie, and I had signed
the papers and agreed to retire, and I got a
call from a head hunter suggesting that I interviewed for
the Richmond job, And of course I called Dennis and

(06:46):
asked if you thought this made sense, and you know,
he encouraged me to do it, and so for me,
it just seemed like a great opportunity to, well, let
me take something. I've really been impressed with the Atlanta
Fed from nine to fourteen, feder Reserve in general, navigating
to the financial crisis, all the innovations that happened in
the early twenty tens. It reawakened an interest in economics

(07:09):
that I'd had since being an undergrad. But I never
thought that that's a job I would do. It just
didn't occur to me until the combination of the headhunter
and Dennis encouraged me to do it, and then I
interviewed and was offered the job.

Speaker 2 (07:22):
So maybe perhaps this is a touch of hindsight bias,
But thirty years at McKenzie Cybersecurity, Chief Risk Officer, chief
financial Officer, the dot com implosion September eleventh, the financial
crisis sounds like your tailor made to be sitting on
the Fed that just never popped into your into your mind, Like,

(07:45):
what was the moment that you said, oh, I have
skills that seemed to apply to this.

Speaker 4 (07:51):
Yeah, you describe me as a very modest person. I'm
not sure, that's true, but I'll just say I'll just
say that I was so impressed with the grounding and
the experience of the people that make monetary policy that
it wouldn't have occurred to me that, you know, I
should go stick my hand up and do that. And

(08:13):
even when you walk into the room of the FOMC,
you've got nineteen people there, they're very impressive. Probably two
thirds are academic economists. They've spent their entire career working
and studying in that. And of course I had taken
four years of economics, you know, forty years well, I
guess thirty five years earlier, and so I think it
would have been, you know, pretty arrogant to imagine that

(08:36):
that would place. That was natural for me, now, you know,
when I got into the process and started thinking about it,
you know, I was able to articulate a model for
how I thought I could add value to the room.
And I think, you know, if your performance oriented or
even competitive, what you really want to do is add
value to whatever job you've got. And so for that job,
for this job, you know, I asked myself what could

(08:58):
I do that would be valuable? And what I thought
I can do and what I spend my days doing
is trying to understand what's actually happening on the ground
with businesses, because that's what I did for thirty years.
I think that's a differential skill within the FOMC, because
anyone can tell you they're raising prices or lowering prices,
but to understand why and how things are going to

(09:20):
play out, and to spend enough time with people and
feel comfortable enough with their businesses that you could understand
the context that is behind whatever choices they're making. I
think that is a place where I can add real value.
And I convince myself that, and I guess I convinced
the board of that as well.

Speaker 2 (09:35):
You know, people often talk about how much they wish
the government was run more like a business, and for
better or worse, that doesn't always apply. But it really
feels like the Federal Reserve is sort of halfway between
a private sector entity and a full governmental agency, almost

(09:55):
has a foot in each camp. Tell us how your
private sector your experience helped to drive FED policy, and
especially at the Richmond Fed, how it affects just the
everyday operation of a large, influential central bank like that
regional central bank.

Speaker 4 (10:15):
Well, let me start by saying. One of the things
that was very attractive to me about the Federal Reserve
when I got to know it in Atlanta was these
banks are private sector entities, which means you have, you know,
a value proposition to highly talented people who have freedom
to work hard and do what they know is right.
But in addition, you've got very mission oriented people. So

(10:37):
very talented and very mission oriented. That's a nice combination
for something that's working for the public interest. And so
that was definitely an attraction.

Speaker 3 (10:47):
To me.

Speaker 4 (10:48):
I'm not trying to mess that up, so I'm not
coming in and saying all right, now, you know, here's
what we're going to do. Because I was in the
private sector, you know, I'm actually I respect the institution
and trying to figure out how to operate within it
as opposed to disrupted and so operationally, the Richmond Fed
overseas technology for the system, and I oversely saw technology

(11:09):
in my old life, and so, you know, making sure
we're better and working better and delivering better. I think
we've done a great job in that. I'm also chairing
the committee that oversees payments within the Federal Reserve, which
is the one business the Federal Reserve runs and trying
to make that a good and even better business. Those
are there are places I bring my business skills to bear,
talent management, all all of that stuff. In addition, as

(11:31):
I said, I think, you know, being able to bring
some insight, for example, on how businesses are going to
behave in the context of volatility and tariff announcements, that's
something that I think I can bring. You know, my
business experience has a lot of benefit in the room,
and that's it's good to just say that you bring

(11:52):
that benefit, but I try to reinforce that by spending
literally five days a week in the market talking to
businesses throughout my district, trying to really dig into what's happening.
I think that's a place I can also add value.

Speaker 2 (12:04):
So you joined the FED in twenty eighteen, and it
was a very consequential seven years. Q four of twenty eighteen,
people were very nervous about a recession. Market dropped about
twenty percent in the quarter, some of which was related
to tariff and do slowdowns back then twenty twenty obviously,
the pandemic once in a generation, maybe even once in

(12:27):
one hundred years event twenty twenty two. First, not only
is the fastest rate increase in modern memory. First time,
I want to say, since eighty eighty one eighty two,
we're both stocks and bonds down double digits. That was
twenty twenty two, and then twenty twenty five. Obviously, all
this volatility and Stuerman drang with tariffs. What is the

(12:53):
biggest occupier of your mental bandwidth? Is it the day
to day operations or is it all of these seemingly
unprecedented disruptions that just turn the whole world upside now,
whether it's just a quarter like it was in twenty eighteen,
or a couple of years like the pandemic.

Speaker 3 (13:14):
Well, so I joked sometimes.

Speaker 4 (13:15):
I was on the board of the Atlanta Fed from
nine to fifteen, and during that six year period, interest
rates did not change once. Nothing happened, right, And look
at where we've been here from you know, raising it
in twenty eighteen, to lowering it in twenty nineteen, to
really lowering it in twenty twenty, then to raising it
again in twenty twenty two, and then lowering it again.

Speaker 2 (13:34):
Are you saying it's your fault since you joined the
FED everything went up?

Speaker 4 (13:37):
Then I'll take whatever credit or fault you want. I
would say the thing I've been reflecting on is the
question of did we in our working careers just benefit
from a period that, with hindsight is an was an
unbelievably low volatility period. You know, the wall fell, while
there were conflicts globally, there weren't very many. Nine to

(13:58):
eleven felt like a big deal at the time, but
you know, Lehman Brothers was obviously a big deal.

Speaker 3 (14:03):
But over a thirty year period, it's pretty calm.

Speaker 4 (14:08):
And you know stat I like to throw out there
is in the twenty tens, inflation was between one and
two percent every single cycle.

Speaker 3 (14:16):
We added jobs every month.

Speaker 4 (14:18):
In the twenty tens, GDP was in the very narrow
range of sort of two to three percent. We just
had a very stable, long term expansion with very low inflation,
and that was a very friendly environment, you know, i'd
say for policymakers. But maybe that if you look at
you know, through the sands of time, that kind of
stability is not what you should expect. And so we've

(14:39):
had significant volatility, the pandemic obviously being example, the inflation
episode being another one, and maybe that's going to be
more like reality.

Speaker 2 (14:47):
You know, it's so funny you say that we did
a study in house and looked at the fifteen year
period from the financial crisis forward. So somewhere in the
middle of last year was the third best fifteen year
rolling period on record. You have to look at the
fifteen years post World War Two and then the fifteen
years up until late ninety nine, which were eighteen and

(15:09):
seventeen percent a year, respectively. The fifteen year period ending
last year was sixteen percent annually. And all anybody did
was complain about or at least a lot of market
participants complained about the FED, complained about deficits, complained about
the economy. It's the single best decade and a half

(15:31):
in modern era for asset prices. So in the face
of that sort of you know, criticism of the FED
and carping about all sorts of policy, how do members
of the FMC. How do members of the FED respond
when the data says, hey, things are pretty good, but
the sentiment, which continues to just get worse and worse,

(15:54):
says things are terrible.

Speaker 4 (15:55):
Well, I'd start, you know, to the people who complain
also by saying, we're given a priv by Congress, which
is the ability and the independence to set monetary policy
on behalf of the economy of this country, and we
take that very seriously. I do think part of the
trade there is that people on both sides get to
critique what we do, and that just is what it is.
And I think you just keep your head down and

(16:18):
do the job you've been assigned and you don't spend time,
you know, worrying about the critiques.

Speaker 3 (16:23):
So that's that part of it.

Speaker 4 (16:25):
In terms of uncertainty involved, I think in sentiments quite
pronounced now. I think business sentiment and consumer sentiment's different.
I mean, business sentiment feels to me like very tied
to outcomes. If businesses are highly uncertain, they're not going
to invest, they're not going to hire, they're going to
defer growth plans. We saw that in twenty nineteen, as
you referenced earlier. I think we're seeing that right now,

(16:47):
certainly the businesses I'm talking to. I've described it as
trying to drive through a really dense fog. It's hard
to put your foot on the gas because you don't
know where the next cliff is. You don't want to
put your foot on the break because you don't know
who's on you, and so the only rational strategy is
to pull over and put on the hazards. And that's
what I hear businesses doing, which is pulling and pulling
over the hazards, pulling over and putting on the hazards.

(17:09):
Now it's different on the consumer side. Historically, consumer sentiment
has been a leading indicator of consumer spending, but we
didn't see that two or three years ago when consumer
centerment got negative, and consumer centerence has got very negative
again recently. I think the reason we haven't seen that
is inflation. It turns out, I mean, we all knew
this in the seventies, but we've all relearned it in
the last three years. It turns out consumers really hate inflation.

(17:31):
Now it doesn't stop them from spending. You know, if
your wages go up and your prices go up, you
have the same spending capability, but you're just much less happy.
And that's what we've seen, and I think today we'll
see if we have more inflation. But I think the
kind of relentless noise about tariffs is leading people to

(17:51):
think that that's going to lead to higher prices, which
is leading people to be more negative about the expectations,
and you can see that in the expectations. Let's say
one year price expectations have elevated significantly, and that's what's
driving sentiment. But so far that doesn't seem to be
affecting spending on the consumer side. I think it does
on the business side.

Speaker 2 (18:09):
Yeah, very much. Businesses have to plan much longer term.
First of all, I love the foggy metaphor. Driving in
the fog is really perfect. But you mentioned inflation expectations,
and I always wonder does the FED put too much
emphasis on expectations, at least in the modern era. If
we look at twenty twenty one twenty twenty two, inflation

(18:32):
expectations were at their lowest just as inflation spiked, and
of course they were at their highest just as inflation
peaked in twenty two and began coming down. My experience
with sentiment is it's always backward looking. You ask people
how they feel about anything, the markets, the economy, inflation,

(18:54):
and they're always telling you here's what the past six
months have been like. Even if you say, what do
you see going forward? How much, how significant, how important
are inflation expectations to FOMC policy?

Speaker 4 (19:07):
Well, I think the theory is very straightforward, which is
that if inflation expectations long term in particular, stay anchored,
then that means that, you know, businesses will quickly return
even after inflationary episode, to prior levels of price increases.

Speaker 3 (19:24):
I really believe in it.

Speaker 4 (19:25):
I mean, in my business experience, I think the expectations
of what inflation would be absolutely governed how business has behaved,
both in terms of their pricing and their wage setting.
You know, if you showed up at your retailer with
an eight percent price increase and inflation was two percent,
they would say, why are you doing that? And if

(19:45):
you didn't have the world's greatest reason, you weren't even.

Speaker 3 (19:47):
Walking in the door.

Speaker 4 (19:48):
And so I think, I think the concept of inflation
expectations is a very powerful concept. I really believe in it,
and I believe it's what happens in the world. What
I don't believe is that we have any good way
to measure it. And so, you know, you talked about
market based inflation expectation. There's a lot going on in

(20:09):
those market based expectations, including liquidity and a bunch of
other things, you know.

Speaker 3 (20:14):
Survey based expectations.

Speaker 4 (20:16):
It turns out you know, if you ask someone a
survey question and you bias it in any way, then
they end up with different biases, and different surveys have
different ways of managing that, and so I think it
really matters. But I don't think our metrics are very good.
And my shorthand, for whatever it's worth, is I think
there are two competing things in every business's mind, in

(20:39):
every consumer's mind about inflation. One is what is it today?
Because the best indicator of tomorrow is today. And the
second is do you trust the Federal return it to
two percent in the long term?

Speaker 3 (20:50):
And it's almost that simple of a question.

Speaker 4 (20:52):
You try And as long as you trust the Fed
in the long term and market expectations are reasonable proxy
for that, then I think what you should expect for
near term inflation is some combination of today versus tomorrow,
and you get there over time. And if the if
you go back to the eighties and nineties, after Volcar
and through green Span, you know, we didn't go to
two percent inflation in nineteen eighty six or eighty seven

(21:13):
or eighty eight. We were at four, and then we
were at three and a half, and then we're at three,
and then we're two and a half. I think you
get there over time. You don't get there quite as
quickly as sort of a purest model would suggest.

Speaker 2 (21:24):
So let me get a little wonky with you, since
you brought up the two percent target. Former Federal Reserve
Vice Chairman Roger Ferguson, I believe, did a paper on
the two percent inflation target, and he was kind of
critical of it, saying it's a made up round number
that comes from New Zealand in the nineteen eighties. It's

(21:45):
not relevant to a modern era versus it was. But
to kind of flesh out his thoughts a little more, Hey,
the post financial crisis period, really, the post nine to
eleven period was driven in large part by very low
monetary policy, very low rates, and then the pandemic led

(22:06):
to the single biggest fiscal stimulus at least as a
percentage of GDP since World War Two. So we had
that regime change from monetary to fiscal. Is two percent
still the right target. We couldn't get up to two
percent during the twenty tens where deflation was a bigger concern.
Now you have the Okay, admittedly the pig is mostly

(22:27):
through the python, but we still have all this fiscal
stimulus around is two percent? Like why two? Why not
two and a half or three?

Speaker 4 (22:37):
So I would ask the first question is is it
a good idea to have a target? And I'd want
to make the case that it's a really good idea
to have a target, because it anchors the public in
terms of where you're trying to go, and it builds
commitment and credibility among the FMC that you'll take the
initiatives you need to take when you're absent from a target.
In terms of what should the target be, the original

(22:59):
debate in the nine was actually between zero and two.
Zero was price stability. That's price stability, right, and two
was an alternative that gave you a little bit of room.
Eventually they settled on to our predecessors, and as you
were suggesting, pretty much every central bank in the world
has settled onto and by the way, we've delivered to

(23:19):
or just around two for almost all of the last
thirty years. And so it doesn't strike me that it's
a ridiculous target. Is an achievable target, it's a global target.
It makes sense to people. By the way, you know,
we're at two point three percent. I think headline right, now,
so we're not even very far away from it, so
I see no reason to move the target. Of course,

(23:39):
you could argue about whether two is the right number,
two point two or one point eight or some other number. Also,
two things about that one is one of the reasons
why you go with two as opposed to zero is
you don't like deflation. Deflations when prices go down every
year and then no one wants to buy anything is
going to be cheaper tomorrow, and two gives you a
little bit of room against deflation. It's also the case

(24:00):
that there's some mismeasurement. Take encyclopedias for example. Let's assume
encyclopedias were in the index in the nineties. Well, they're
free today, they're on your phone, and so that's deflation
that doesn't show up in the numbers, and so it
just gives you a little bit of room there. So
that's why too, you know, you sort of said we're
not at two today. We weren't at two a decade ago.
And I think I personally do think of false precision

(24:23):
as being a concept worth considering here, which is I
definitely didn't criticize myself that much when we're at one
point eight. I mean, you're trying to get to two.
The economy is not something that you manage. So finally
that in each and every month of each and every
year inflation comes in in exactly too. That's something that
doesn't exist. Two's a target, and if you're off too
on the above or on the below, you try to

(24:44):
manage yourself toward it, and you recognize that you're not
always going to be right on it right.

Speaker 2 (24:49):
It reminds me of the old joke economists use decimal
points to reveal they have a sense of humor.

Speaker 3 (24:54):
So something has something has to make that case.

Speaker 2 (24:58):
So let's pivot a little bit to the Richmond Federal Reserve.
The Federal Reserve Bank of Richmond District covers South Carolina,
North Carolina, Virginia, d C, West Virginia, and Maryland. That
seems like a fairly unique group of states, especially with

(25:20):
the nation's capital right in the middle. Tell us a
little bit about what makes that region so special.

Speaker 4 (25:25):
So three things I like about it. One is DC
Metro unique. There's no other place in the country like that, obviously,
and all that's implied there. Second is we have nine
or ten i'll call them really fast growth New South regions, communities,
cities Charlotte, Greenville, Raleigh, Richmond, Northern Virginia. They're really very,

(25:50):
very vibrant, fast growing. You know, North and South Carolina,
for example, are two of the four fastest growing states
in terms of population in terms of housing growth over
the last several years. And then you've got a lot
of rural markets, and that would be you know, west
of the Appalachian part of the district in North Carolina,

(26:10):
West Virginia, and Western Virginia. But that would also include
up and down you know, I ninety five. There are
a lot of small towns there, and so I kind
of think about as three different economies, and I think
it's very interesting to be able to represent a community
with three so very different economies.

Speaker 2 (26:27):
You know, you mentioned Charlotte. My office has we have
dozens of office across the country, but we have three hubs,
New York, Chicago, and Charlotte. And every time I visit Charlotte,
it feels like the city is twice the size it
was a year earlier. The area it's become a finance
center and a banking center. How do you look at

(26:50):
such a diverse area where some parts are a little
more rural, a little more sleepy, and growth is just
normal agricultural progression, and other areas are just absolute boom towns.

Speaker 4 (27:03):
Well, the biggest thing I try to do is show
up in all of them.

Speaker 2 (27:05):
And so you go to a lot of parts of
your district all the time.

Speaker 3 (27:10):
Right everywhere.

Speaker 4 (27:11):
And if you're bored on the website, they've even got
a map, kind of a ware's waldo. But no every
I mean, last week I was in Marion and Roanoke, Virginia.
Then I was in Arlington, Virginia. Then I was in
d C. And I'm trying to get into the big cities,
into the small towns, because you actually do hear about
the economy differently in big cities versus small towns. For example,

(27:31):
labor markets. You know, the the labor markets in the
small towns are unbelievably stressed still, and if you have
a national conversation, you say, hey, labor markets sort of
in balance unemployment's four point two percent, wage growth sort
of moderate. It's still the case in these small towns
that they can't find workers at restaurants and certainly in
manufacturing facilities. You also hear, you know, you get a

(27:54):
lot easier access to small businesses when you're in the
small town. So when I was in Marion last week,
I actually spent an hour and a half just wandering
up and down main Street and I talk to every
small business on main street about you know, what does
demand look like? Are you seeing any impact from tariffs?
What are you going to do with your pricing? So
it's a forcing device to help you see that part
of the economy, which of course employs so many And

(28:15):
so I think if you're on the ground, you'll see
and I've got red parts and blue parts and purple parts.

Speaker 3 (28:21):
Statisticts.

Speaker 4 (28:22):
You hear what's on people's minds in very different ways
based of where you are, and I really appreciate that
part of my district.

Speaker 2 (28:29):
How do you balance the anecdotes you hear from the
man or woman in the street, the business owner, the shopkeeper, whatever,
with the hard data that you know, both the Richmond
Fed and the Federal Reserve proper have an enormous staff
of researchers crunching numbers. How do you balance data versus anecdote?

Speaker 4 (28:50):
Well, so the data is better than the anecdotes because
you know it's a bigger sample. It's done in a
serious and approach statistically appropriate. It also comes in about
six weeks late and is revised three times, and so
the data really matters. But if you just count on
the data, you're going to miss turning points and you're
going to miss explanations. And so I don't make the

(29:12):
mistake of talking to one company and saying, oh, okay,
everything in the data is wrong. But I do try
to understand what the data is telling me by testing,
you know, with the conversations we're having in the field,
and so you know, a good example would have been
May first of twenty twenty when I talked to a
real estate developer in western Virginia who was telling me

(29:33):
that Tennessee has just opened the malls in Bristol and
they're packed, and of course Virginia was still closed down.
And that was my first indicator that you're going to
see this big wave of spending when the lockdowns started
to open up. And so that's a turning point that
you wouldn't otherwise have gotten if you weren't in the markets.
We heard the same thing with household furnishings. Yeah, there's
a big boom and furniture during COVID, but about twenty

(29:57):
twenty two, it backed off. We heard that from the
furniture manufacturers, we before you saw that in the data.
And then I think explanations matter a lot too. And
if you're trying to understand how it could be that
we've had all this news from Washington, yet the unemployment
statistics don't seem to show that much of a tick
up in unemployment in Washington, well, there are lots of explanations,

(30:17):
including how those programs have been rolled out and what
the timing of it is. And so if you're in
the market talking about we actually understand the data in
a fundamentally more sophisticated way.

Speaker 2 (30:28):
Since you mentioned the pandemic, let's talk about two issues
post pandemic, wages and real estate, and we'll just start
with there have been substantial wage gains across every economic strata,
and impressively very much so in the bottom half of

(30:48):
earners since the pandemic, although that is now starting to
slow down. How do you look at the wage situation
as part of employment and what's happened with that trend
towards wage pressures beginning to ease off.

Speaker 4 (31:03):
Well, I do think you've described accurately. You know, what's
happened to wages. It's definitely bigger increases at the lower
end and less at the higher end. You know, I
should add that inflation also hits lower income earners the
hardest because they spend the greatest amount of their pay,
and so nobody has this mental ledger that says, my
wages went up x percent, my prices went up y percent,

(31:25):
and so i'm you know, it's not like operating margin
for a business. Those are two different ledgers in humans minds,
And so to a lot of lower income people doesn't
feel like their wages have gone up as much because
inflation's gone up, and also because they don't they discount
the wages when they measured against inflation. You know, going forward,
it definitely looks like we've got a labor market that
is much more in balance, maybe even starting to loosen,

(31:46):
than the one we had a year or two or
three years ago. You still hear tightness, as I said,
in small towns. You definitely hear it in the skilled trades.
I think there are a set of professions out there
that used to be a wall with employees that now
seem to be systemically short of employees. And you know,
a lot of that skilled trades, but I'd also put

(32:06):
a lot of the care professions, nurses, teachers, elder care, childcare.
A lot of people found those professions to be pretty
unattractive during COVID and moved into other jobs, and there
hasn't been a way, you know, to replace them. And
there's not that much money to available to increase the
compensation to account for it. So you hear shortages there.

(32:27):
You hear shortages in state and local government still. So
there's still places where the impact of the pandemic on
the labor market has not yet. We're not back to
where we were at the beginning, and you know, some
combination of training and development of people and compensation of
people is going to have to happen if we're going
to staff these appropriately.

Speaker 2 (32:46):
So let's talk about remote work and both commercial real
estate space and residential real estate. The US continues to
have a substantial number of workers that are either high
or full time remote. I used to be in the
city four or five days a week. Now I'm in
the city two or three days a week. If you

(33:07):
were in Bloomberg today, I would have been in Bloomberg.
But it didn't make sense to come in to have
a remote conversation, and the US continues to have a
higher level of remote work than other similar industrialized societies
like Europe. What's going on with remote work? What does

(33:28):
this mean for FED policy? What does this mean for
a variety of different aspects. It seems to be fading
as a topic, but it's still a pretty significant issue.

Speaker 4 (33:40):
We have flexibility we didn't know we had. That's where
I start, and you can't bury that. And so I
think there's a whole bunch of workers in a whole
bunch of days who found out that, like you and
like May, you could work from home this day as
opposed to working somewhere else. It's also true that there's
a bunch of employees who discovered that they actually prefer
to be at home rather than come into the office.

(34:03):
By the way, there's another set that would prefer to
come in the office. But there's certainly a segment there.
And so we're in a marketplace. People will compete it out,
and there are executives who believe passionately that their business
is not going to deliver unless their people are there
five days a week, every week, and their businesses who
believe they'll get access to better people if they just

(34:25):
allow them to be remote. And those two often those
two are in the same sector, and so they'll compete
it out. One will have lower property costs, one will
have higher collaboration. We'll see what happens. One thing I
tried to look at when all this started was how
did we ever end up with the five hour, five
day a week, forty hour work week. And the answer

(34:45):
is that was General Motors and Alfred Sloan back in
the mid twenties just decided it, and five or ten
years later everybody was doing it. But none of us
who were doing it thought that was perfect if we
stopped to think about it. It's just what we did.
And so you know, different sectors, different businesses, they'll evolve
toward different models. I do think their implications, as you say,
on real estate, on the residential side, if some set

(35:07):
of people are going to spend more of their time
in their house, then they're going to value their house more.
They're going to value their office, they're going to value
their space, their garden, whatever. And so we saw that
during COVID, people got shut up in their house, they
decided they no longer liked their house. They also decided
they didn't like their roommates, and so the economists call
that household formation. So you have a lot more households

(35:28):
out there for the same amount of houses, and that's
what's led to the price increase that we've had in housing.
And unless we build a lot more housing, you're going
to have that out there for some time.

Speaker 3 (35:38):
It's a bigger part of the basket.

Speaker 4 (35:40):
And maybe you know, public transit or parking is a
lower part of the basket, but housing will be a
bigger part of the basket. On the commercial real estate side,
you know, folks are still trying to adapt, and you know,
it's much less flexible than the housing side because some
of the space is very much built for purpose, built
for an institution at least for fifteen years, as you know.

Speaker 3 (35:59):
And so I think think we're still midway.

Speaker 4 (36:01):
Through an adjustment process where some amount of that commercial
real estate is used more because people come back to
the office, some is redeployed into other uses, whether it
be anything from data centers to residential, and some has
eventually taken off the market. But I think I think
we're still very much mid process on that.

Speaker 2 (36:20):
So let's talk a little bit about real estate, and
in particular residential real estate. We seem to have this
chicken and egg problem where prices are up because there's
so little supply on the market. And while some of
that is a little bit of nimbi, and some of
that has been post financial crisis builders tilted towards multifamily

(36:44):
and apartments versus single family homes. But the largest chunk
seems to be the golden mortgage handcuffs. Something like sixty
seventy percent of people have mortgages under five percent and
some huge, crazy number under four percent mortgage rates. So,
on the one hand, if we lower yields too fast, well,

(37:06):
that could set off another round of inflation. On the
other hand, all of this supply is locked up, and
either we're going to wait for those people to age out,
or if rates come down enough, they could trade up
or trade to a downsize or whatever, but move to
a different property. How does the FED think about this,

(37:29):
you know, sort of conundrum where damned if you do,
damned if you don't.

Speaker 3 (37:32):
Well, I think I wouldn't I wouldn't buy.

Speaker 4 (37:35):
I do buy your story that there are a lot
of people who have decided not to move because they
can't give up their mortgage. But I don't buy the
story that if all we did was lower rates, then
they would all give up their mortgage and the housing
market would free up, because every one of those people
who moved is a seller and a buyer, and so
they're going to be increasing their demand at the same
time that they're increasing supply. So you're still going to

(37:57):
have a shortage of supply versus demand. I should also
note that just because we raise lower short term rates
as necessarily lower mortgage rates, as we learned in the
fourth quarter of last year. But I think again, the
demand for housing is much higher, and it's much higher
because the generations decided they want a house and household
formation as I talked about earlier in people valuing their house.

(38:19):
As you say, we underbuilt housing for a generation coming
out of the Great Recession, and so we have more
demand than supply. The answer to that is to build
more supply. And as in my district, if you drive
down ninety five and you look at Wilson or Smithfield
or Clayton or Rocky Mount, you know these are exurban
areas that are not Raleigh, but not that far from Raleigh.

(38:41):
You see you know, development after development of two hundred
and seventy five to three hundred and twenty five thousand
dollars houses, you know, going up in what used to
be farmland there. If you drive to exurban Charlotte or
Greenville or Richmond, you'll see the same thing. I mean,
houses are getting built. But there are communities, you know,
Metro DC would be one of them where you don't

(39:02):
see housing getting built. And so you know, you have
to ask the question of why that is part of
its cost, part of its land, and part of its
you know, resistance to growth by the inhabitants of various markets.
And it again, one of the benefits of having the
six states that have is you can see places that
are growing and housing is getting built, and you can
see places where it's not.

Speaker 2 (39:22):
So is it fair to say the headwind for putting
up more houses is not a national set of policies
but mostly state, local, regional both regulations and just hey,
you know they the fewer houses that are built, the
more my house is worth. There's a little bit of

(39:44):
self interest amongst the people who oppose more home construction.

Speaker 4 (39:49):
Well, what I keep saying is we're in a competition
for developers. There are only so many There are only
so many construction people, and you want them to come
to your neighborhood and build houses in your places.

Speaker 3 (39:58):
So how do you do that.

Speaker 4 (40:00):
Well, all of your local regulation and policies matter, permitting zoning,
amount of time to get approvals, certainty as to construction time.
So that's one big piece of it. Another big piece
of it is land availability. And once you start thinking
about land availability, you almost don't stop. I mean, I
drive into some community colleges and they've got a huge

(40:21):
plots of land, and then I find out that the
state doesn't allow the building of dorms on community college campuses,
and you go, now, okay, wait a second, you can
get student housing built. Why can't we get that built.
You go to some of these older world towns that
have been depopulated over the years, and they've got all
this land that's dilapidate housing, but they can't fix it
because there's absentee landowners.

Speaker 3 (40:42):
I mean, once you start.

Speaker 4 (40:43):
Thinking about the role of land in making this attractive
for developers, you almost can't stop thinking about it. And
I think that really is the lever of communities can
provide real assurance that they can provide land, and that
land can get built on at a predictable and reasonable
time period.

Speaker 3 (41:00):
Think, then it.

Speaker 2 (41:00):
Works really really interesting. So now let's pivot to your
work on the FOMC and the state of monetary policy today.
Starting with let's talk a little bit about that fiscal
stimulus during COVID. If you total all the programs up,
CARES Act one and two under President Trump, CARES Act

(41:23):
three under President Biden, all the Infrastructure Bill, all the
other ten year legislative acts that pass some form of
fiscal stimulus, you know, you can get that up to
about four trillion dollars or more. Uh, that's a huge,
huge amount of money coursing through the system. How did
that impact inflation? And is it fair to say that

(41:48):
maybe transitory has gotten a bad rap because it seemed
to be kind of transitory. It just transitory took longer
than everybody expected.

Speaker 4 (41:58):
Well, though there's been a lot of papers and about
what drove the inflation, you know, to me, it's in
all of the above. I mean, you had a surge
and demand that came from fiscal policy and monetary policy
and vaccines. You know, as people got out of their
house and felt the freedom to spend. You had constraints
in supply which came from you know, labor constraints, people

(42:21):
driven by the crisis, by the health crisis, maybe labor
constraints caused by policy and supply chain constraints. As demand
sort of overwhelmed supply, and so then you saw you know,
demand surge well and excess of supply that led prices up.
I think the most interesting question for entree policy is
why did it last so long? Because you know, to
your point on transitory, okay, that's fine, you have more

(42:43):
demand than supply. Expectations are anchored, so price went up,
they should have come back down. And I just think
it goes back to what I described earlier as how
I think about people's inflation expectations, which is it's part
today in part tomorrow, and it just takes time to
get back to tomorrow after you've had a surge today. The
real life way to think about it is, Okay, now
you're you know, somebody's lawn service, and you don't really

(43:07):
have big cost increases, but everybody else has raised their price.
Maybe you look around you go, huh, maybe I can
raise my price. And so there's a lot of attempts
to raise prices that go through in the aftermath of
an inflationary episode that might not have been they might
have the courage to do without an inflationary episode, And
so I think it was this. The inflation way that

(43:29):
we saw was definitely time bound. I mean, we have
seen the supply chains heel, we've seen people back in
the workforce, and we have seen prices come down. But
the question of what the definition of transitory is is
challenging because the word first got used, I think in
March twenty one or April twenty one, and now it's
four years later, and so a lot of people think

(43:50):
transtory means like a minute, where in fact, the original
meaning of it was in our lifetimes. And so probably
the right definition is somewhere between those two.

Speaker 2 (43:58):
On a long enough time line, everything that's transitor. You
have a quote from earlier this year that I'm a
big fan of because I have a buddy who is
a commodities trader and he says the exact same thing
all the time, and the quote is the cure for
high prices is high prices. Explain that because I'm just
such a fan of that line.

Speaker 4 (44:20):
Well, so it's a great economist line. It has two
meanings and both of them matter. One is that if you,
as a consumer get high prices, the first thing you
want to do is look for an alternative. Maybe you
go to private label, maybe you go to from beef
to chicken, maybe you go from a department store to
a Walmart. But you're looking for some are alternative. And

(44:42):
so if a company raises its price is too high,
then its customers are going to do something else and
that'll teach the company that that price is too high.
The other version of it is a supply side point,
which is that if prices are high and successfully passed on,
then new competitors will come in, you know, to increase
or lower prices and so and I really want to

(45:03):
say this has happened. I mean, this has happened in
this economy. If you look at earnings reports from all
the major retailers, you know you'll hear this. You know,
customers are tapped out, customers are trading down. You can
see a big move in terms of where people are
buying their groceries today, private label, e commerce, like I said,
beef to chicken, all these things are happening. And I

(45:23):
think it's because, you know, consumers having gotten through the
COVID period where they were exhausted. It was all coming
at once, and by the way, they had lots of
money because of repress spendings or in COVID or elevated
stock market or stimulus checks. They just spent it and
they paid it, and that's what we got the inflation
of twenty twenty two.

Speaker 3 (45:42):
We're not in a period.

Speaker 4 (45:43):
Where consumers feel like they have extra money. And so
those people who are out there trying to raise prices
for whatever set of good and bad reasons, they're facing
a consumer that doesn't want to pay it now, and
it's got the time and the mental energy to make choices,
and so I think you know that do that will
fix high price is over time.

Speaker 2 (46:01):
So during the pandemic, we kind of pivoted from a
service driven economy to very much a stuck at home,
can't travel, go to restaurants, go to sporting events, so
we're gonna consume more goods. That very much was a
key driver of inflation, along with all these other issues

(46:21):
including snarled supply chains. Feels like that's mostly returned back
to normal. The Summer of Revenge travel everybody seems to
be out about, at least in my area. I book
restaurant reservations three weeks in events. So we seem to
be in a place that's kind of normalized. How is

(46:42):
the FMC looking at the state of the economy today?
Are we in a normal post inflation environment or is
there something else that we're going on that we should
be aware of.

Speaker 4 (46:55):
Well, I think there's today and tomorrow. Today we're in
the closing stages of bringing the economy back to normal.

Speaker 3 (47:03):
That's how I put it.

Speaker 4 (47:04):
I mean, unemployment's four point two, that's a historically low number.
Inflation headline two point three, that's very close to a
two percent target GDP if you adjust for the one
timers that we're in the first quarter is still growing
in the two and a half percent range. So think
of it as a very strong, stable economy. The challenge

(47:25):
we all have is the uncertainty about you know, where
we're headed, and you know, you or I could articulate
an upside to that or a downside of that. I'm
not making a comment on it, but it is elevated uncertainty.
It's what I was describing as the fog. And so
you know, we're sort of on the brink of a
different environment, and that different environment will have different terarif
rates and different levels of immigration and different levels of

(47:47):
government spending and different levels of regulation and different energy policy.
You know, all that is I think locked in. I mean,
we know the direction, we just don't know the destination.
And it turns out people kind of I want to
know where they're headed before they pack, and so that's
that's the challenge we've got right now, is just determining
what's the destination so that you know, businesses and consumers

(48:09):
can make the choices they make.

Speaker 2 (48:11):
So, given this fog, driven in large part by uncertainty
over tariffs, how does the FMC make policy if there's
such a lack of clarity as to we understand today?
But really, tariffs are on, tariffs are off. Wait, European tariffs,
oh wait, we're going to put them on hold until

(48:33):
mid July. That must be incredibly challenging to make long
term policy decisions in light of these very short term
policy swings.

Speaker 4 (48:44):
I'd say, sometimes our job is very straightforward and sometimes
it's not. It's very straightforward when unemployment's high, inflation is loow,
because you know which direction to go, and it's you know,
relatively straightforward. When the forecast seems pretty clear, that you
have stability and confidence in the forecast. You know, in
today's world, neither one of those is true. I mean,
inflation has come down but is not yet at our target.

(49:05):
Employment unemployment is low, but either risk to it, and
the forecast is unclear, and so you have to reflect
on where you are. You know, where I think we
are is modestly restrictive. In other words, a four point
three percent overnight rate is constrained the economy a modest amount,
but not a significant amount at a time where inflation
is still over our target and unemployment is low, And

(49:28):
then you just have to I mean, you could choose.
If you had conviction in the forecast, then you might
choose to move whichever way you felt you had to
move given that forecast. But if, like me, you don't
have that much conviction in the forecast, then you say,
let's wait and see where we go.

Speaker 2 (49:44):
So let's talk about conviction. Another quote of yours that
I'm fond of is monetary policy, and I'm going to
paraphrase monetary policy needs to balance both conviction and humility.

Speaker 4 (49:58):
Discuss well, my dad said, used to say, Tom, I
want you to be humble because I know you well
and you have a lot to be humble about. And
I think the point he was making is don't be
too full of yourself here, and so you could, you know,
stand up pound the table and say, you know, by God,
I see where this is going, and inflation's rising or

(50:19):
unemployments rising, and therefore we need to move you know,
left or move right and support of one of those
parts of our mandate. I mean, I listened to my colleagues.
You have many different points of view on this. I'm
humble enough about my own forecasting ability. It just makes
me think that, you know, I'll learn more. I'll learn
more with time.

Speaker 2 (50:39):
So talking about your colleagues and the rest of the
folks on the FMC board, one of the things I've
noticed through history is that they are very deliberate. They
don't surprise the markets with anything. Everything is always very calculated.
And hey, we're going to be raising rates in a

(51:00):
few months. Hey next month. Look at the dot plot.
We're looking at PC and CPI. Okay, here it comes.
There are never shocks to the market. At the same time,
the criticism has been seems to be a little late
to the party sometimes. We saw that spike of inflation

(51:22):
late twenty twenty early twenty one. It took the FED
a while before they began raising rates, and then CPI
peaked June twenty twenty two, took a while before we
went on to pause and then cutting. How do you
balance the lack of clarity, the need for humility with
the latest noisy data and trying to be not too

(51:46):
far behind what you're actually is happening on the ground.

Speaker 4 (51:50):
Well, so you started with, you know, being methodical, and
that's probably accurate. Bernanki had the insight which he published
back in the early two thousands that markets can do
a lot of work for us if they have a
good sense of the path, then we don't have to
do as much in policy because they'll you know, work
the rate path for you. And I think there is

(52:11):
some effort made to try to communicate clearly certainly why
you know, I and my peers try to talk as
much as we do to see if we can't you
bring some clarity to that situation. And so I think
it's fair to say, you know, trying to do it,
but we will move faster than people expect when we
need to, as we proved in twenty twenty two, in
terms of getting it right, I'll just go back to

(52:31):
what I said about false precision a little bit ago,
which is, I think we're always going to be wrong.
I mean, you know, you're never going to precisely, you know,
get the peak of inflation or the peak of unemployment
or the trough of either. You make your best efforts,
and I think if the standard is that you know
every decimal on every forecast actually played out, then I

(52:52):
think we're all guilty of missing that.

Speaker 2 (52:55):
Yeah, to say say the very least. We talked earlier
about transitory, Let's talk for a moment about the nineteen seventies,
which was clearly very structural. How similar are the twenty
twenties to the nineteen seventies and how different are they.
As someone who was a kid during that era, I
kind of remember just being parents being freaked out about stuff.

(53:20):
I remember going to get gas. I had a little
side business mowing lawns, and the guy at the gas
station asked me, you do you have an even license
plate or an odd license I don't know, I'm twelve.
I just need a gallon of gas to mow the lawn. Yeah,
So how similar is is are the twenty twenties and
what are the key differences.

Speaker 4 (53:40):
So there's a chart that makes the rounds that you know,
adjust the scales, but sort of puts the sixties and
seventies up against you know, the last five years and
says there's just about to be another big bout of inflation.
And you know, I find that chart annoying, but you know,
I understand the fear. You know, a reminder for all
your listeners that in the early seventies there's a strong

(54:04):
historic sense that there was a set of mistakes made
by the FED of not being tough enough on inflation
that were then exacerbated in the middle and late seventies
by two big oil spike price spikes. And you know,
I can't predict an oil price bike, and neither can
anybody else, and so who knows, you know, how that'll
play out. The fact that I've found interesting about the
seventies is how elevated long term bond rates were, you know,

(54:29):
how the term premium was, and basically how much inflation
expectations were embedded in long term rates. And that's an
interesting thing to look at because it sort of gets
to this question of expectations. We had price shocks like
the oil price spike in seventy four or the one
in seventy eight, and who knows whether we'll have those again.
But those price shocks didn't just affect today's prices. It

(54:53):
also affected the market's views on tomorrow's prices. And I say,
I would just say that's a huge difference between the
seventies and today's that you know, metrics of long term
expectations feel very grounded, even if you do have short
term price backs. I think that's because of an expectation
that the Fed will do what we need to do
if you were to see that inflation, which I hope

(55:13):
we validated in twenty twenty two.

Speaker 2 (55:16):
So it seems like the street, Wall Street in particular,
Wall Street and the bond market in particular have been
erroneously forecasting Fed rig cuts for I don't know, two three,
maybe even almost back to when the FED started raising
rates this cycle. What is the Fed looking for in

(55:39):
order to feel comfortable? Okay, we've wrestled inflation into submission
and the economy is starting to show a little signs
of some minor stress let's take rates down one or
two more times. I'm not asking you for a date,
I'm asking you for what are you looking at? What
is the FMC looking at? That would make them comfortable

(56:01):
saying all right, we could we could ease a little
bit off the brake and tap the accelerator a little bit.

Speaker 4 (56:07):
Okay, So first of all, I wouldn't be so tough
on the professional forecasters. Another joke is that you know,
economic forecasting was created to make weather forecasting look good.

Speaker 2 (56:16):
I heard it to make to make astrologists look good.
But another and actually, the weather forecasters are getting better
and better.

Speaker 3 (56:24):
That's the difference, as are the economics.

Speaker 4 (56:27):
But whenever, whenever you look at the market quote unquote
market's view on the number of rate cuts, you have
to remember that in that assessment includes tail risks. And
so you know, if you think at any given point
in time, there's a twenty or twenty five percent of
a recession, at which point the FED might you know, respond,

(56:48):
then that's embedded in that. So when the you know,
the the SEP forecast has two rate cuts, let's say,
and the market has three, I'm not sure I view
that as a difference. I just think one's got one
a modal and one's a weighted average, and I think
those aren't the same things, just in defensive economic forecasters.

Speaker 2 (57:06):
But if we look, you know, look at twenty three,
twenty four to twenty.

Speaker 3 (57:09):
Five, sometimes they're different.

Speaker 4 (57:11):
Sometimes they're different, and wildly I was gonna say, in
terms of your other question, what would I want to see?
You'd want to see inflation sustainably under control, or you'd
want to see you know, the economy, you know, tipping
to a level that that amount of downturn would have
an impact on inflation and bring it into control. And
so you can get inflation on of control through rates,

(57:32):
and you can get it through economic you prefer to
do it through rates.

Speaker 3 (57:35):
But we'll see.

Speaker 2 (57:36):
And I only have you for another two minutes, so
let me throw you a curveball question. Okay, I was
just out in La Joya on Tory Pines. I know
you're an avid golfer in your Federal reserve district. What
are some of your favorite courses? I used to be
on the USGA board. I'm assuming you still play. Where

(57:57):
do you like to play in? What's your home?

Speaker 4 (58:00):
Of course, i'd play Kidlock and Richmond and We have
a place in Paully's Island where I play the w Club,
which is a Pete Die course down there. And thank
you for mentioning you know golf golf is a lot
like monetary policy, and that I wish I were better
at both of them.

Speaker 2 (58:16):
Well, that's the perfect quote on which to end this.
Thank you, Tom for being so generous with your time.
We have been speaking with Tom Barkin. He is President
and CEO of the Richmond Federal Reserve Bank, as well
as a member of the Federal Open Market Committee that
helps set federal reserve rates. If you enjoy this conversation, well,

(58:39):
be sure and check out any of the five hundred
and forty six we've done since twenty thirteen. You can
find those at Bloomberg, iTunes, Spotify, YouTube, wherever you find
your favorite podcasts. I would be remiss if I not
thank the crack team that helps me put these conversations together.
My audio engineer is Steve Gonzalez. Anna Luke is my producer.

(59:03):
Sean Russo is my researcher. Sage Bauman is the head
of podcasts at Bloomberg. Be sure and check out my
new book How Not to Invest The ideas numbers and
behaviors that destroys wealth, and how to avoid them. Wherever
you buy your favorite audio, e and hardcover books. I'm
Barry Richdolts. You've been listening to Masters in Business on

(59:27):
Bloomberg Radio.