FED, Dr Yellen, Brunner discussed on Overnight re-air of day's programming
A different conclusion, we wouldn't hesitate to make a change if we came to the view that that that the balance sheet normalization plan or any other aspect of normalization was part of the problem. We wouldn't hesitate to make a change. Let's Brunner conversation. Now, Dr Yellen if this expansion last next summer, it'll be the longest on record you played for enrolling in making that the case. How are you that this economy is on track to keep going through twenty nine thousand nine how worrying you find these latest moves in markets and some of the survey data? Well, I agree with care Powell's assessment that he just offered up. Suggest we have a pretty strong economy consumers consumer spending is two thirds of all the spending in the economy. With strong job growth and income growth. Burdens having been reduced substantially housing prices having risen oil prices down putting some money in consumers pockets. Consumer spending. And we just looks is is those spending over Christmas with strong. That's strong base for the economy next year. I don't think that expansions just die of old age to things usually in them. One is financial imbalances, and the other is the fed and usually when the fed into recession. An expansion is because inflation has gotten out of control and the fed needs to tighten to bring it down. And I think the fit is down very well positioned with inflation low and inflation dynamics feeing favorable in the sense that the linkage so I believe that there is a linkage between slack in the labor market in product markets inflation, but the strength of that linkage is not very great. So we have relatively flat Phillips curve is another way of putting that. And in addition inflation expectations seem will rancor in. So inflationary dynamics are very favorable it gives my former colleagues the opportunity to be careful to move gradually to be dated dependent to manage the risks. And I have confidence to fill. Able to do that. And I don't really see financial imbalances in the economy at this point. Did look to be threatening course who have headed tightening, the financial conditions markets are obviously worried about downside risk there. Are we are seeing some slowing in the global economy? I believe growth is likely to slow quite a bit next year, but still likely end up being above the growth rate of potential, which is consistent with a strong labor market. And maybe even some further tightening doctrinaire you spoke once a Wylie Coyote effect as this fiscal stimulus impact of the tax cuts. Fades, we might find ourselves in a bad spot over cliff looking down. Are we are we looking at that? Now is that part of what's being priced in? And how much is that fear something imminent? Well, I think we have an excellent chance of breaking the all time record for an expansion tenure expansion in the middle of next year. Is likely that the economy will grow more slowly in two thousand hundred then in two thousand eighteen and maybe even more slowly in twenty twenty. This is not something that is news. I mean, we've had this for a long time because the fiscal policy in particular that was enacted close to a full employment starting point. We knew that barring changes in the law that stimulus was going to be dying down over time. And that's that's certainly going to be. Slowing growth LLC equal. Financial conditions were anything a little bit of Bouillon in two thousand seventeen early twentieth. Eighteen to some extent what we've seen this tightening. We've seen as a take back of some of that particularly with concerns about geopolitical considerations trade wars in the light. And then of course, you know, the perfect confluence of synchronized growth, we saw in two thousand seventeen is also globally has also been a little bit less strong. So all these things do suggest some some moderation. But Janet says expansions don't diabled age. I'd like to say to get murdered instead..