Your dual mandate stable prices and maximum employment especially when the unemployment rate for black workers is still roughly double roughly twice the rate for white workers So unemployment rates for all racial groups have come down a lot and are now much closer to where they were before the pandemic hit So That's one thing I would say And that's important But the bigger point is this I do not at this time see the two sides of the mandate as intention I don't because you can see that the labor market is out of balance You can see that there's a labor shortage There aren't enough people to fill these job openings and companies can't hire and wages are moving up at levels that would not over time be consistent with 2% inflation over time And of course everyone loves to see wages go up and it's a great thing but you want them to go up at a sustainable level Because these wages are to some extent being eaten up by inflation So what that really means is to get the kind of labor market we really want to get We really want to have a labor market that serves all Americans especially to people in the lower income part of the distribution especially them To do that you've got to have price stability And we've got to get back to price stability so that we can have a labor market where people's wages aren't being eaten up by inflation And where we can have a long expansion too That's the good thing is you can have as we have We've had several of On a two year to two 65 63 So what have we got Equities are We've got yields lower We've got a dollar that's weaker and later it seems to me that just batting away the question about 75 basis points was sufficient to generate a monster rally in this market What does that tell you I mean honestly the idea that this was an outlier case that people thought that a 75 basis point rate hike was on the table for June to simply taking that off the table led to a rally that's one of the biggest that we've seen in weeks How does this really cohere with this idea that they have I'm sorry but credibility if they're basically turbocharging a market and leading people to basically reduce their near term rate hiking bets at a time when inflation shows no sign of slowing down Alongside Tom Kean and Lisa bravis I'm Jonathan farrow Let's listen to the chairman and south from what he had to say about 75 basis points 75 basis point in an increase is not something the committee is actively considering Assuming that economic and financial conditions evolve in ways that are consistent with our expectations there's a broad sense on the committee that additional 50 basis increases should be on 50 basis points which should be on the table for the next couple of meetings They chairman of the Federal Reserve TK that just goes to show how much was priced in this market And how difficult it is to out hawk this market with expectations so elevated going into this meeting He mentioned the 75 basis points and I would suggest John after that off the question from Colby Smith to the Financial Times he gave some immense nuance of neutrality And the red sticky that Bloomberg produced a 1448 says it all won't hesitate to go higher than neutral if needed and there seemed to be almost a massive instantaneous sigh of relief over the banded Ness the malleability of the study of neutrality And I really think that was something exceptionally important in this huge market move There is a ton of debate as to whether they will go beyond neutral And how much higher they will ultimately go in the end destination as well When I go through some dates with you all now just to work out where we go in here So we've got June and July June 15th July 27th they're the next couple of meetings for the chairman is referring to and basically put in a 50 basis point rate hike on the table We have CPI prints on May 11th June 10th July 13th August 10th And after July you've got a meeting from the Federal Reserve on September 21st This Tom for me for many people at for the moment at least puts the summer to bed Take you to Jackson hole you reset TK you look at the data that's come in and then we can have a bigger conversation about the future because as you point out the move to neutral expeditiously a word they like to use is largely baked in now but what next stuff to that is going to be dependent on what this data looks like through the summer The calculation and neutral is huge huge debate I looked at one paper from the late Robert caplan of the Dallas fed And John they have three measurements of neutral within that paper And I'm not willing to say if neutrals July if neutrals September if neutrals beyond that but what I heard was a chairman who made clear they are going to be very supple as they move forward on the data trying to figure out where that neutrality is Well Wayne witnessed just then the lace over the last hour or so I think it was the chairman Tapping the brakes on a runaway hawkish train What you get in after that as a consequence is an equity market that's higher and arguably financial conditions that are looser It's going to be interesting to see how this evolves for the next few weeks and months because I think we should remind our audience of what happened at the last fed meeting when the NASDAQ absolutely ripped by more than three and a half percent and then the following month was absolutely dreadful So fed day price section doesn't tell you everything Let's just caveat that there But financial conditions tighten for a reason And that was the objective Lisa This I don't know what this is Well you raised a good question Is he going to be happy with this price action since it's basically the equivalent of a 25 basis point rate hike if you take a rate cut I should say based on the easing and financial conditions that basically this is the wrong transmission mechanism whether it will stick is another story The other interesting thing is this comes even though this fed chair seemed a lot less confident about a soft landing He called it a soft dish landing and that it was going to be challenging to get there I mean he seemed to be conceding that this is going to be a struggle Should we get to a man who disagrees with this whole decision Tom The gentleman from Dartmouth David blanche flower joins us of course is wage curb is iconic in the study of the American and indeed the British labor economy is well professor blanche Farr thank you so much for joining This morning one of the great concerns here that we're hearing in every surveillance interview is a labor economy on fire Chairman Paul mentioned that three four times How fully employed is the backdrop as he searches for a neutral rate I thought all that was quite astonishing I'm sitting looking at a labor market where the employment to population rate is 5 percentage points below where it was in 2000 It's a percentage point below where it was in 2020 And what we know about hot labor markets is that actually the unemployment rate is not the right indicator What you need to look at is what happens out in outside the labor force And basically if the labor market was hot and firms wanted to get workers they can find them They've left the labor force and they left the labor force at 18 months ago So I didn't buy really any of that I thought this whole thing about the labor market being hot Didn't make any sense at all with 7 or 8 million jobs below to the equivalent of where we were in 2000 I thought can I just say time I thought it was a couple of things I thought I thought the questioning and the things that have been going on at the fed were just it's like everyone's singing from the same sheet It's as.