00:00Probably should start with that DOJ investigation being dropped, as we were discussing earlier in the show.
00:06There's still, you know, a lot of question marks, not necessarily a done deal when it comes to Kevin Warsh
00:11getting that confirmation.
00:12But we'd love to hear how you're thinking through things, especially as we get closer and closer to May here.
00:20So I think it's really good news. It's good news for the Fed.
00:23And it certainly demonstrates the commitment to go ahead and get Kevin Warsh through.
00:28I think Senator Scott was very smart to have the hearing. Kevin did well in the hearing.
00:34And so I don't think I haven't seen anything we've heard from Senator Tillis.
00:39But if this clears the way for Senator Tillis to allow the confirmation to go through, I think he'll be
00:46confirmed.
00:46And hopefully he'll get some Democratic votes.
00:49Yeah, I think we would all love to hear from Senator Tillis at this juncture.
00:54But, I mean, if you look into the future, I am curious what you think a Kevin Warsh Fed might
01:00look like.
01:01You know, a discussion we were having earlier was not so much around interest rates.
01:05That debate has been had and had again.
01:07But, you know, the idea that we could see a Fed that holds fewer press conferences, we get much less
01:13in terms of forward guidance.
01:15Do you think that that's a possibility?
01:17I think a little bit of that is more semantics.
01:20So the number of press conferences that the chairman has is up to the chairman.
01:24The chairman will decide that.
01:27And Kevin may realize after he starts down that road that that's a chance for him to make his voice
01:34heard over all of the other conversations from all the other members of the FOMC who are also out making
01:40speeches.
01:40So Kevin may decide to do more press conferences than he thinks right now.
01:45As far as the forward guidance, the the economic projections have been in there since the Greenspan days.
01:53And so they may stay.
01:55I've never been a huge fan of the dot plots.
01:59And Kevin may decide to get rid of those.
02:02Yeah. And I'm curious also about that, too, given just kind of the complexities that we're in right now with
02:06the economy, Betsy, just what purpose the dot plot, even some of the forward guidance really serves.
02:13I mean, it kind of felt like at the last press conference, Powell even kind of quicked about about the
02:17idea of, you know, don't put too much stock in all this.
02:19Do you think, given what we don't know about the economic impact of the war in Iran, that this might
02:25actually keep the Fed at bay with regards to doing anything for the next few meetings?
02:32I think it's going to be very hard for the Fed to do anything right now with not knowing about
02:36the war, not knowing how the gas shock is going to feed through to inflation.
02:41And not still not really knowing how tariffs are affecting inflation and staying in a labor market that's steady.
02:48It's low, higher, low fire, but still pretty steady.
02:52So when they go in there, well, obviously next week they're going to have this debate.
02:56But really, over the next couple of meetings, that debate will probably intensify as we get more economic data.
03:02I know there's been always this talk about, you know, kind of, you know, trying to balance that dual mandate.
03:06But where do you think this Fed will lean?
03:08Do you think they will pay a little bit more attention to labor market weakness, potentially at the expense of
03:14inflationary pressures?
03:16So for each individual person in that room, that tradeoff is different.
03:21And so right now, the discussion in the room probably is not necessarily what are we going to do now,
03:29but each person in the room saying this is the way I'm looking at it.
03:32And these are the signs that were these are the catalysts that would make me change my stance.
03:38And feel like we should go in one direction or another.
03:42But when you take a look, you know, on on either side, you know, a hike or a cut, when
03:48you take a look at all those different cross currents,
03:50it seems like the consensus in markets is that this is a Fed that's going to be on hold for
03:55a while or they should be.
03:57Do you agree with that analysis?
04:00I do agree that they should be.
04:02I think they need some sort of sign one way or the other as far as where they might go.
04:08And to go back to your comment on forward guidance.
04:11So forward guidance, when I was there, referred to forward guidance that usually was in the statement itself.
04:17And it would say, you know, we are not going to move rates up until this condition.
04:23That was forward guidance.
04:24It's the dot plots are something different and they are just sort of each individual's estimate of where things might
04:33go.
04:33And they're they're quite confusing.
04:35If you notice, J-PAL has used them in that if he if they agree with what the conversation in
04:40the room was, he'll tend to point to them.
04:43And if they don't agree with what the conversation in the room was, he tends to discount them.
04:47Well, I am curious, though, too, I mean, there was a lot of talk.
04:51I feel like it was back in the Bernanke days about going to kind of some kind of staff forecast
04:56format.
04:56And I know that's kind of bubbled up from time to time again.
04:59I haven't followed it closely enough.
05:00Whatever happened with that idea?
05:02Was that just was that kind of dead on arrival?
05:04Has there been sort of any potential progress that maybe that might be an avenue of sort of providing some
05:10sort of public guidance without necessarily being as rigid as maybe some people view the current guidance system?
05:17There were a lot of attempts to do a staff forecast, a consensus forecast, something.
05:24But but there are just so many different voices in there.
05:27It was really not possible.
05:29There was discussion of should you identify what the chairman's projections were aside from others or should you identify everybody's
05:37projections?
05:37There just isn't a good way to do that, frankly.
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