Federal Reserve, Neela Richardson, United States discussed on Marketplace
For being here as it happens is off to London to report on what's going on with Brexit, which we should note is highly uncertain in terms of when or how it might happen. In fact, if we had a theme for today, it's uncertainty between Brexit and global economy some flashing red lights for our economy news that President Trump personally reversed some treasury department sanctions on North Korea that were put into place yesterday. Let's see what we can do with this in the weekly wrap. Neela Richardson is an investment strategist over at Edward Jones. Genus Malik covers the economy for Bloomberg. They're both in our New York studio. Hey there. Hi, molly. Hey, molly. Neela? We talk a lot about the politics and the process of Brexit. But I wonder are we underestimating the economic effect. Right now, we haven't seen the messy nece that is Brexit that's ongoing saga of political negotiations actually affect directly either US equities or international equities. But that uncertainty has weighed on market sentiment overall. And so what I think you'll see is this continued postponed because the the likelihood the outcome of a hard Brexit where Britain leaves the EU without a deal in placed on trade or how people move around the union would actually affect economic growth directly slowing growth across the euro zone. Don't think anyone in parliament parliament, our policymakers in the EU want that outcome. And so what I think you'll see as more postponed. Gina. We had weak economic data from the EU on top of this Brexit uncertainty, and I did read that it's already costing the UK a billion dollars a week. And then we've got the feds caution about the US economy. This dreaded yield curve inversion, which we'll talk about it in a minute. But what is the big picture looking like are we close to recession? I think that's an excellent question. And it is highly dependent on what a Konami you're talking about. Certainly if you look at some of the data coming out of Europe, especially if you look at places like Italy, we are seeing some some pretty nasty numbers that manufacturing print. We saw this morning that you referenced was was looking bad. It was definitely in contractionary territory. I think the question about the US economy is whether it follows the rest of the pack or whether it can hold its have had above water for now, we are seeing some strong numbers some weak numbers. It's really been a mixed bag, and it's hard to get a read this early. But I think definitely a lot of reasons for caution out there. And then I want to ask do, you agree with Neela that you think back to Brexit that it'll keep getting kicked down the road that they'll just be this kind of slow dribble of never actually happens. It absolutely. Looks to be that way. You know, we got this extension from the EU this week that really set up for I think extension down the road and potentially a much longer one because they basically have the option to take the deal that's on the table, a hard Brexit or of much longer extension. It seems like that third option is going to be the most likely out of those alternative they could just give up and stay in the house. To be on the table as well. It. I feel like that is starting to be on the table. How much do you think? How how real do you think that looks? I think it'll become increasingly more likely as time whereas on, but you know, uncertainty has been part of markets, your as you alluded to we've seen it across Europe here in the United States. What's remarkable is that stocks have climbed without a lot of volatility. So this is what's abnormal about this market is not uncertainty. It's the lack volatility in the market. And we're starting to see a little bit of that pickup today. Yeah. Go ahead. Sorry. What's been interesting is how much these markets are moving really on what the Federal Reserve is saying rather than on this underlying data and uncertainty that we're seeing it's gonna be interesting to see if that can persist. I'm so glad you brought up the fed because the other piece of news today, of course, as President Trump nominating Stephen Moore to serve on the federal Federal Reserve Board. I'll start with you Neela. What do we think about this? You know of all the pieces of news coming from the fact this week this one was a surprise in a different way less to do with the actual movements and signaling of the slowdown that more to do with the future of the fed itself. The future fed independence because Stephen Moore has been a critic of the fed one thing I'll just note as having spent some time as a as a graduate student at the fed of how democratic decision making processes and how varying views are valued as inputs to ultimate decisions. So while there may be a critic that joins the fed. I don't think it starts stops this deliberate to process making monetary policy. And then maybe about twenty seconds. She know what do you think? It's gonna be a really interesting thing to watch. Because Stephen Moore has historically been a critic of the fed has in the past called for faster rate hikes. Now is calling for slower rate hike seems to have gyrated with the political cycle. And as you were saying, I really think that this is going to be an important thing to watch. Because if you see any kind of politicization that's really dangerous for the central Bank. Oh, no. We didn't get to the yield curve inversion. Oh, well, thanks so much to the two of you. Thank you. One hundred dollars still I guess I do daily Richardson is an investment strategist at Edward Jones. Genus covers the economy for Bloomberg on Wall Street today. I mean, I already told you write what the Friday. We'll have the details when we do the numbers..