00:00Do you worry about AI eating jobs in some places?
00:04You know, I think, you know, people talk about the K-shaped economy,
00:08and I actually think that visual is not that great because it suggests that the lines are equivalent on both
00:12sides.
00:13I actually think that the economy today is more like a three-month-old birthday cake.
00:17The icing is great, but then you look underneath, which is the bulk of it, and it's actually not doing
00:21so well.
00:22I mean, the thing that is tricky today is I think you're going to displace a lot of workers.
00:26And I think, you know, part of what the Fed's job and otherwise is be a bit anticipatory of where
00:31we're going
00:32and how it affects the broad population at large.
00:35And, listen, I think, I mean, you know, obviously we and every company uses AI aggressively.
00:40And you think about, including this morning, I was going through with a member of the team,
00:44gosh, I could do this now, I could do that now, I don't need to go there.
00:47It is going to change the ecosystem, and you're seeing productivity that's here to four kicked in.
00:52By the way, robotics, automation, all powered by that same ecosystem.
00:57Listen, I think where we're going, and, you know, by the way, when you think about the economy today,
01:01you've also got a big fiscal tailwind.
01:03When you think about where we're going the next few months, you know,
01:06I think you'll have somewhat different disposition around that.
01:09So, anyway, a point I would make, if you're the Fed, I think you've got to pull back.
01:12Maybe, you know, you're on hold.
01:14You know, like you say, I position for, you know, what could be a Fed that's more hawkish.
01:18But, gosh, you know, I think you've got to think about where are we today,
01:22what's being impacted in the economy, the people in the economy,
01:25and then, you know, and give it a bit of time to evaluate the condition.
01:29But are you saying, I mean, it looks like we're adding so many jobs,
01:35and inflation is still way too high.
01:39You don't want to be cutting, right?
01:40You kind of, if anything, you have to raise into this, don't you?
01:45So, my personal view is when you look at the broad construct,
01:48and you look at what the interest rate tool really impacts,
01:51is it affecting the AI spend?
01:53Is it affecting the infrastructure?
01:54Is it expecting, is it really influencing?
01:57Does you move the discount rate?
01:58Does it really influence the hyperscalar demand?
02:01Really not.
02:01It influences housing, where you're seeing that.
02:03It influences, obviously, small business, where you're seeing it.
02:06You look at credit card charge-offs.
02:08Anyway, so what do you do with that?
02:09I think you've got to take the whole equation and say, my personal view is,
02:13obviously, inflation is above target.
02:15Obviously, growth, fiscal tailwind is solid.
02:18I think you've just got to give it a little bit of time.
02:20No, you wouldn't cut, obviously, into this.
02:23Do you need to hike into it?
02:25And by the way, you look at Europe.
02:26Europe's going to hike into a supply shock.
02:28You look at the data in Europe around consumer confidence, ZEW,
02:31like you're seeing a tangible slowdown.
02:33I just think if you're a central bank, you've got to be a bit anticipatory of,
02:37you know, I heard somebody say the other day, you know, what happens with commodities?
02:42You know, price adjusts commodities and demand adjusts in terms of what happens.
02:46And I think you've just got to be a bit thoughtful and look at the whole picture
02:50when you make that decision.
02:51And, you know, quite frankly, I think going forward, I think Chair Warsh,
02:55we're very thoughtful about, do you have to keep moving the funds rate around
02:59to tweak small moves, particularly when it's supply shock driven?
03:03And my perception would be, my perspective would be, look at the whole construct.
03:08You don't have to constantly adjust and be thoughtful about where the puck is going.
Comments