Janet Yellen, Betsy Stevenson, FED discussed on Bloomberg Radio New York Show


Through, that the interest rate cuts are still having an impact out there. And will that be enough? Will they need to raise rates even further? We don't really know yet. We're going to sort of have to look at the next two months of data. And the same thing, one of the things that caused the contraction in the first two quarters was government spending really came down in 2022. So when the government spending less, that's less demand and that's a big component subtracting off GDP and you were just talking about we now see that there's a deficit reduction plan out there that again that's thinking about shrinking the bringing in more revenue, all of that's about reducing demand. We I think doing it through a combination of increasing taxes, decreasing government spending and increasing interest rates is probably the way to go. We were talking with professor Betsy Stevenson and theaters in Michigan and we are waiting for a news conference from the secretary of treasury, Janet Yellen, which is supposed to begin any moment. Now we'll keep our eye on that and go to it immediately. Apologize in advance, professor if I interrupt you when we see Janet Yellen. Have we ever been able to get our arms around inflation without having substantially higher unemployment? I think that it is absolutely possible. And I don't think that this inflation actually looks like the kind of inflation we had in the 1970s. So you said, have we ever been able to, we don't actually have a lot of history there to say, well, what have we done in the past? I think what we want to look at is where are we today and what are the conditions that we have? We still have people expect inflation to come back down. That's crucial. That's still with us. And that's working in the fed's favor. What's working against the fed, but for families is that people have a lot of built up savings from the pandemic and that sounds kind of crazy, but the government passed out a lot of money. People didn't spend it all at once, so they've got this built up savings. So even though they're seeing higher prices and they're hearing news of a recession, that's a normally cause people to pull back a bit more. We should see the savings rates start to go up. We haven't seen that yet. And that's partially because people have got this built up savings. We've never really gone into a period like this like that before. If you want to compare it to the 70s, you go back to the 70s and we were in this period that had been really rocky and people had didn't have buffer stocks and they were there was rising unemployment and they were there was an oscillating between do we boost the economy because of the recession or do we try to get inflation under control? Right now we understand what we need to do is slow the economy and the question is will we slow it too much? We're not simultaneously fighting a separate set of forces that are pushing us into a recession. We're trying to bring an economy that's been overly hot, too hot down to the just right Goldilocks temperature. Right, once again, we are waiting for a news conference from Secretary of the Treasury Janet Yellen, who's walking right right now and thank you so much to professor Stevenson. And here is the treasury secretary Janet Yellen

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