Fed Is in Right Place Now to Respond to News: Vincent Reinhart

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00:00A lot of questions about the quality of this data. Of course, we know that it was impacted

00:04by the government shutdown in terms of collection. So when you take a look at the figures that you

00:09got at 8.30 this morning, how big is the asterisk next to it? Well, I think Bloomberg ran with the

00:16headline the Swiss cheese report, and I think that's right. We lost something by not having

00:23BLS survey takers in the field in October. And so we just don't know what happened.

00:30And there's a bit of smoothing through the two months. What I see is essentially two months worth

00:38of sluggish, further progress and disinflation for the Fed. The sticky prices, services,

00:49things that are tied with contracts. They lost about a tenth or so over the last two months in

00:57terms of their inflation rate. And then we got a bonus that more flexible prices, commodity and

01:03goods prices, their inflation rates slowed more because oil prices have fallen.

01:13So a lot of nuances here. The Swiss cheese report, as you mentioned, a lot of holes here.

01:19But that being said, to your point, it shows good progress here, at least some progress when

01:24it comes to slowing inflation. With that in mind, do you think it's the correct interpretation

01:28by traders to price in slightly more easing when it comes to next year?

01:33No. I think what the last two days was validate the Fed's decision back in September to buy three

01:41quarters percentage points worth of insurance by cutting by a quarter at the last three meetings.

01:49What it says is the Fed's in the right place now to respond to news doesn't tell us what that news

01:57will be. And so I think we've got to be a little more even handed on expecting what the Fed will do in

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