Listen: Bloomberg, Diane Swonk, FED discussed on Bloomberg Best
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I'm Andrew O'day Bloomberg radio from the Bloomberg. Interactive brokers studio. This is Bloomberg best later this week will hear from fed chair Jay Powell as he holds a news conference after the FOMC decision on Wednesday the outlook for the economy has been clouded by cooler global growth and the impact of the US government shutdown. Bloomberg's Tom Keene and Jonathan Farrow spoke with grant Thornton chief economist. Diane Swonk for preview. Do you have confidence that all this back date is to come out? And it's going to be unplanned or you preparing for a readjustment of your view of all this data that didn't appear. Well, that's a good question. I think we're going to see a lot of data that confirmed that the fourth quarter was still on solid footing. It will come out and data dumps in as I said they're just getting back to work out what they can catch up quickly. And they've got to get the components of GDP. We didn't even get retail sales. We didn't get new home sales twice. We didn't get construction spending. We didn't get durable goods orders. All of those things have put together before we can even know what GDP was. But we need to know. It could be p was in the fourth quarter. Okay. Thank you. But does that mean that if we look at say just to pick on one beast, the Atlanta fed GDP now number is it a valid statistic. Or are they guessing too? Well, they're guessing too. I mean. So you know, all of us are sitting out there. Trying to does our DP statistics without a lot of data. So we're doing more of the qualitative data than actually of data. And that's what's really hard because the qualitative data is it usually fills in the colors inside the lines of the hard data. And right now, you don't have the hard lines to color in a lot of people are focused on inventories, Morgan Stanley pointing out this morning that they think that will be a payback of a poll. Fullwood ahead. Let's Harris in the third quarter twenty eighteen to Diane. That's one of the things are going to be really watching closely for because we do know there was this pull ahead in stockpiling. And that's what we're going to be watching very closely four, and again, we didn't get that day either. And so we're certified operating in avoid right now, which the Fed's not gonna get out of before their meeting, and they're gonna have to acknowledge that they shutdown has blurred their view in terms of. Of what's going on? And I think for this fed meeting, and we do have our first pressure after it actually gonna see Jay Powell. He's a quick learner se less rather than Marcus. Frankly, there's not a lot to say we had all the economic data available to us. What do we find it? So difficult to read America in q one. Well, clearly, the shutdown is one issue the collateral damage of it, and we're in we're in record cold territory going into Chicago right now, you can't move to unusually bad weather factor. That's going to complicate it. So I'm a half percent. But this is really hard. There's an on db acute one. How do increase taxes affect GDP in Q one big C is seventy percent of the economy in a lot of people have to revisit Fayka and all that in the first quarter. Is that why we see a damp and Q one as a general rule? We do you know Q one has a seasonality problem. It does seem to. Consumption. But worse yet is this year. Many people thinking they're going to get a big tax refund didn't withhold enough. In fact, many of the big tax companies did deal with your clients are actually training their personnel to be compassionate. So that people don't get too angry when they don't get the refunds that they think they're going to get really where the real sticking point is. I think. Not only do you have those issues, but you're in larger issue of. The reasons they thought educators. Do they move the dots this day? No, they don't they do have a press conference. And I think what we will see is that the fed really talks about takes language about gradual tightening to delete that and talk about patients they did already Mark down their forecast for this year. And I think what they have to really do is talk about caution and lack of information. Claro to shutdown without getting people scared. And I think it also would serve them. Well, not to make an announcement on their balance sheet yet they are Moline something to do with the balance it all the more technical than I think markets understand. And I think less said, it's probably better. I really agree with that from the point of your key phrase lack of information. And folks this goes back into the theories and factually, her university of Michigan is one of the best places. The answer is they're flying more blind here in January thirtieth than we thought on December fifteenth. Right, exactly. And they don't wanna put out something that is misunderstood and misinterpreted has to be corrected later. Exactly. And they also, you know, I mean, the the we already had to do that once and certainly Paul doesn't wanna do it again. And I think the risk of a mission turf protection, given the void of data were in is higher and given that they understand that they're very conscious at this point in time about what they say. And what they don't say. Thank you. Less said is better is forward guidance dead. It's not bad. But it's not useful at the moment. And I think what we have to remember is these ideas of what policy tools work have to be in a context of when they're needed most. And right now forward guidance isn't useful. Because it commits the fit to things that they don't know that they're going to do or not that was grand Thornton. Chief economist Diane Swonk."