FED, Jeremy Stein, Vanguard discussed on Bloomberg Surveillance


Pull off a soft landing. I think in the market, like I was talking to a head of treasuries over at Vanguard and their firm's economists say, you know, fed will get to 5 and change and stay there next year, but he said, you know, there's a lot of uncertainty and he said, one thing we know for sure is it's getting his words like really tough for them to land this plane, meaning a soft landing. I think that risk is growing, even if people aren't who aren't officially calling for a recession. Again, the more this data comes out in the not in the fed's favor, the more bodes for them keeping retire for longer, the odds go up of a recession. I have to ask you this because I was reading this yesterday and I actually thought of you. We've talked about this in the past years ago about what kind of financial Armageddon would happen when we got rates this high. And Jeremy Stein, Harvard University professor, also who served on the fed board of governors from 2012 to 2014. Came out and said, it's astonishing. If you told any one of us a year ago, we're going to have a bunch of 75 basis point hikes. You'd have said, are you nuts? You're going to blow up the financial system. Do you think that it's too soon to say that that is not going to happen or do you think that it is fair to say, you know, it's testament to how much companies have extended financing and have really gotten themselves into shape that we haven't seen more of a disruption. Well, I think and I like Jeremy son a lot. I think what he's saying is true. Nobody thought we'd get here. Nothing has kind of like everyone loves to say something's going to break. But we are seeing issues, right? Well, we won't get into exactly who, but some companies are having troubles. But I think this is where this rub of, if the fed proves out of sticking it, like, say, 5% for a whole year, like more issues, like even just debt service costs, like we recently did a story about that. I mean, maybe not so much in the U.S., but around the globe, there's a lot of consumers who have floating rate mortgages, those are getting reset higher. People with home equity lines getting reset higher, companies, you know, they're not all refinancing today because they termed out debt, but when they start to, I mean, that's when it keeps going like, what else do you see kind of shake out of the water? You know, I don't like to use the zombie thing, but I don't know. I don't know if Jeremy all clear forever. Like, we're probably all clear, obviously, for now, but if the feds at 5, 5 and a quarter for a year or so, we haven't had that. You know, so I don't know about 6 months from now. Yep, good stuff. All right, Liz, thanks so much for taking the time to joining us here. Liz McCormick. She's Bloomberg chief correspondent for global macro markets. Just kind of getting the lay of the land on these PPI data and at least again another busy week next week for eco data and fed watchers, the CPI, obviously on Tuesday, the consumer price index, then we'll have the FOMC rate decision on Wednesday, you know, it could go either way, but I just think people are trying to get a sense of, is this a Federal Reserve that feels like it still needs to be in the aggressive mode, I guess. Sam bankman fried also testifying in front of Congress. And we're going to have on site down in Washington for some live reporting. So that's going to be headline producing, I'm sure as well. So looking at the markets here, a little bit of red on the screen here. Yeah, sbx of futures off about four tenths of 1%, looking at the yields ten year treasury up about four and a half basis points. 3.53 and at least before called WTI crude oil, it's up just slightly $71

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