31 Burst results for "Dallas Fed"
Bloomberg Radio New York
"dallas fed" Discussed on Bloomberg Radio New York
"This is Bryce dodie, old friend of the program. Joining us here on the stage is senior vice president of appreciate point out and senior portfolio manager over at sit investment associates. All right, let's get right to it, Bryce. You go back to the beginning of this year and you look at some of your worst fears, some of your worst predictions here. Did the markets actually meet that? Did they come in higher than that or lower than that? It was incredibly difficult year in 2022. We were very pessimistic. We saw the fed is way, way, way behind the curve. Just over a year ago, there are 12 month forecast for fed funds was less than 1%. I mean, we knew they were going to have to pivot them, but not to this degree. No. We thought it could be the worst Bond market in history, which we're thinking maybe down 5%, not 13 to 15%. And it is just an incredibly terrible year because the fed was so far behind the curve that by the time they did try to catch up, it was just so extreme that in such a short period of time, they just really blew everyone away. And so that obviously bled over into the stock market and caused the combined market stocks and bonds to just be shockingly bad. Having said that, it does set up for a much better 2023. The fed can't raise rates another 4%, you know? There's so many things that are saying from the afterlife, watch me. You know, I could do that. Well, there is that. And as a bond person, you know, we're just naturally paranoid we're always thinking about the downside. So it's been kind of strange lately to have this sense of optimism for 2023. I'm like, what was that? I forgot what it felt like to be optimistic as a bond, but the one thing I would say is, yeah, I hear you. I mean, it felt so miserable to see both the stock and bond market. Just take a big hit to see that correlation. That's not what's supposed to happen. Having said that, what is it that gives you certainty that you feel like you can start to predict 2023 at this point? Well, I think inflation being a 10% in 22 is just horrific in 23. People are equivalent about it being somewhere between two and four. I'm like, hey, you can buy investment grade bonds at 5. We're automatically at least within you can conceive a real yield. That's a complete game changer. So I see inflation coming down much quicker than I think other people do because they don't really the way the math works is if oil is an 80 and stays at 80, that's zero inflation. So I'm not calling for deflation, like a lot of people think it has to go back to where it was in 21. No, prices could just stabilize where they are and we'd have zero CPI. So those kind of things are what give me a lot of optimism. I think the feds got two more rate increases in them, and that's it. Two more rate increases of 25 basis points, each 50 basis points. What do you see? I'm trying to not be pinned down, man. I think it would be 50 and 25. A very wise man said to me earlier today that, you know, everybody speculating about what's going to happen in terms of the fed and market outlooks, you know, a lot of them got it wrong this year. So what is really the smart conversation? Is there something that you can really kind of hang your hat on here? Who is this wise man? Did you just make this person up? You know him well. Okay, all right. It's not me. Well, the economy is transitioning from zero growth with 10% inflation to stagnation. We're going to have another year zero growth, but we're not going to have 10% inflation. So it's a different animal. And that's a tough, tough market for stocks. Mine for bonds. But stocks were getting earnings boosts by purely inflation. They're not going to get that lift. So the first half of the year is going to be a little tough. And there's going to be some misinterpretation about what's going on. One real real problem with the way that Powell is looking at things is that he sees this cost push inflation from wages. There's just not going to happen. Wage inflation was a wage increases were trailing CPI for the last 18 months. So that's a rare situation where you have negative wage growth. It's going to flip back to positive. That's what it normally is. It normally outpaces inflation because of productivity. And he's going to misinterpret that. He's going to think, oh no, that is, that means it's going to feed into forever inflation. This vicious circle. Cycle, which it doesn't. And so that's what's really going to cause the stock market headaches because people that will wait for the pivot will get disappointed back and forth back and forth. But by the time they finally capitulate and say, oh wow, wages have been going up and it hasn't been showing up in CPI. And in fact, when you use new rents for core CPI, CPI is pretty darn low. Be able to start to look at a three month annualized CPR rate instead of the CPI rate instead of the year over year. And when that transition happens and they'll be like February March, you better be fully invested in stocks because they'll pop. All right, we're going to leave it on that note. Hey Bryce, thank you so much. Bristoe, senior portfolio manager at sit investment associates joining us there via Zoom. You know, I got to say, I feel like we do have a more filled playbook when it comes to 2023, whether it's the war because the war is not going to surprise us. It's either going to end, it's going to continue, but we've kind of got that checked out. I still think we're understanding that global supply chains are too. There are things that are out there that if it hits investors once again, it's going to be like, well, wait a minute. We know that this is going on. Yeah. I mean, you hope so. Well, I hope so, right? You could have said the same thing. The inflation, right? At this point, do we really anticipate it's going to go much higher? No, and it's interesting. One thing I thought that was interesting in Bryce's comments, specifically when we talk about oil prices without actually the new Dallas fed survey where they survey all the big shale executives. It's like a 150 of them or something just came out. You know what their average price is that they're looking at for no idea. 84 bucks
Bloomberg Radio New York
"dallas fed" Discussed on Bloomberg Radio New York
"Prices can drop very much, even if we do spin into a recession. Check this out. These are very eye grabbing numbers precisely because you guys are talking about it. It makes the media headlines. I would argue even in a pretty deep recession, I just don't see all prices going below $80. Maybe even not even $90 because of years of underinvestment, look at the U.S. at $120 a $110 WTI, the Dallas fed survey, all it talked about was labor shortages, equipment shortages, and steel costs. Nobody's actually able to raise production very much. So that's on the one side. If Russia were to actually cut $5 million, but it doesn't even have to do 5. We could do just two or three, given how tied the market is. You can literally pick a number. I mean, three 80, it could be for something. It could be two something. That was amrita sand, director of research at energy aspects. And you know Ed Ed Morse Citigroup global markets global head of commodities research. Well, he also has a lot of interesting things to say about what he thinks will be a drop in oil prices. That's right, including he says, don't expect to see a lot of demand from China. And here's more with Bloomberg's Tom king, Jonathan farrow, and Kaylee lines. I think it's the macro environment that wins. And actually we don't see the burgeoning the burgeoning demand coming out of China. There's a return to be sure, but we have to remember that while China was cutting off about a million barrels a day of oil and real demand. They were importing a record amount of oil. They would stockpile it, and that had an impact on the global market. We had our inventory drawing. They had their inventory building. I don't see the international implications of Chinese recovery, having much of an impact on the global Senate. Well, if that is the case, what do you watching is the dynamic that drives oil down to 90? Are you suggest even lower? What is the single distinction right now that drives us to that shock? I don't know whether there's a single distinction. I think it's called both supply and demand. So I think there's another view of supply. We see over 2 million barrels a day of western hemisphere growth this year, including a 1 million 3 out of the United States. The U.S. is already up a million barrels a day year on year. Canada looks for sure to be up 300,000 barrels a day. Mexico up on a hundred a day. Brazil up a couple of hundred a day. Argentina is up more than people thought. Venezuela is even up 300,000 a day year on year. So we think if you look closely at supply, it really is growing and it's accelerating as we move from here to the end of December. Your scenario work on a recession Ed got a ton of attention in the last couple of days. Can you help me understand what's behind that word recession to you? What is that word? What does it mean? What kind of numbers are you thinking about that get us down to, say, 45 by the end of 23, 65 by yearend? So it really is for supply demand balance, a drag on the demand side. Almost everybody has reduced their expectations of demand for the year. We reduced ours by about a million, 200,000 barrels a day, at the 2.42 .5 million barrel a day level that's similar to where the EIA and the IEA are, and I expect that we'll be seeing further downward revisions in demand. Demand is simply not growing on an empirical basis to agree that people had expected. And we've seen that U.S. demand is down. There was a Bloomberg quote that to somebody at Bloomberg saw demand as low as it was in 2014. We think you've got to go back to 2012 13 to see demand at the levels that we're now seeing when it comes to transport fuels like diesel and gasoline. And if the movement is going to be anywhere, it's going to be downward. We're not going to see this evidence that we're going to see the summer surge in driving and some insurgent demand. The price is too hot as it was in 2012 13. And that's a force in looking at global GDP from the perspective of one of the countries that's growing the fastest and has the most robust growth. The demand simply isn't there as people have thought. But if it's not an outright recession, if it's just growth that slows back toward trend, which is the case of some people out there at how does that change the demand picture? What are we talking about then if it's not 65? Well, we're talking about just starting our base case and we still have recession at lower than 50%. But we're thinking in our base case that oil is going to go down to 85. And that's looking at it purely on a supply demand basis, looking at what the headwinds have been in the tailwinds. We've had a lot of talents underlying oil prices have been. We might have some more. We don't know what the summer weather is going to be. It could be a very volatile period of time. But we're looking at a supply demand balance, the inventory builds from here to the end of the year. And that's based on purely empirical analysis of where we see kind of a 100% 95% probability of supply. We don't know what's going to happen to Iranian supply. We don't know what's going to happen to Russian supply, but south by Russian exports into the market have been higher than people had anticipated and hire what the historical trend was a year ago. That was Ed Morris Citigroup global markets global head of commodities research with Bloomberg's Tom Kane, Jonathan farrow, and Kayleigh lines. And coming up. A closer look at the global economy and those U.S.
Bloomberg Radio New York
"dallas fed" Discussed on Bloomberg Radio New York
"At Bloomberg quick take This is a Bloomberg business An Asian stocks they're squeezing out some gains in the early going here And that's even after a spike in U.S. interest rates really kind of rained on the parade for U.S. stocks earlier In Japan the nikkei right now it is up almost four tenths of a percent in an Australia the ASX it is up about three tenths of a percent Financial markets in South Korea closed for the holidays as well Indonesia having a holiday as well The fed will begin shrinking the balance sheet tomorrow at the U.S. fed officials are equating this to something like a couple quarter point rate hikes so we'll see how trading goes tomorrow President Biden met personally with fed chair Jerome Powell at The White House earlier today Biden saying he plans to address inflation starting with giving the fed the space it needs And treasury secretary Janet Yellen she also said in on that meeting an in an interview afterwards on CNN she said she was wrong when she said rising inflation wouldn't be a problem Lingering supply chain issues you know about a third of Texas based manufacturers say it could take at least a year for supply chains to heal according to the Dallas fed which had buckets for you every 15 minutes here on Bloomberg degradation And now for a look at what's happening all around the globe let's go to San Francisco and our Baxter at all thank you Denise a President Biden says the U.S. will provide Ukraine with advanced rocket systems New York Times also reporting Biden saying that he the U.S. is not.
Bloomberg Radio New York
"dallas fed" Discussed on Bloomberg Radio New York
"And save big because those savings can add up in the future And affiliates national annual average insurance savings on new customer survey to save the progressive in 2020 Potential savings will vary Money minute The world needs Russian oil if it's to avoid a recession a report from the Dallas fed says a global downturn seems unavoidable if most Russian energy is off the market for the rest of the year Oil is little change today at just above $112 a barrel In a separate study the New York fed sees a big increase in federal student loan delinquencies on the horizon once payment requirements resume in May federal student loan payments have been on hold since the start of the pandemic Wall Street is getting back on track after yesterday's stumble that our industrials up 248 the S&P is up 47 the NASDAQ up 257 A group of Midwestern ranchers plans to take on the giant meat packers they blame for holding down cattle prices The Wall Street Journal reports they formed a joint venture that will break ground this spring on a $325 million processing plant Larry kofsky Bloomberg radio Melissa from Michigan I work an extra part time job serving lunch at my child's school But I still can't afford to put food on our table Daniel from California choosing whether to pay the rent or pay to fix the car to get to work doesn't leave us with much at all Now we can't even pay for meals Hunger is a story we can end end it at feeding America dot org brought to you by feeding America and the ad council.
Marketplace with Kai Ryssdal
"dallas fed" Discussed on Marketplace with Kai Ryssdal
"On the program today. Well you're just gonna have to stick around now. Aren't you from american public media. This is marketplace in los angeles. I'm kai ryssdal. It is thursday today. The seventh of october good as always to have a long everybody. We have good news and we have bad news about the debt limit with which to begin today. The good news is the senate. Republicans have decided against driving the economy into a ditch. There is a tentative deal to put off a possible default until december. the third. The bad news is that there's a tentative deal to put off a possible default until december the third which means we will be doing this whole dance all over again in less than two months. So there is that you might remember. If you're the program. Yesterday i had a conversation with mary daly. The president of the san francisco fed talked about a lot of stuff. One of which was the two vacancies in the regional fed. President ranks because of the resignations of robert kaplan from the dallas fed. And eric rosengren from boston about revelations about their legal but unseemly securities trading. So the question is who replaces those two. And who decide fisher. Jerome powell says he is committed to diversifying. The regional. Fed bank so marketplace's nancy marshall genzer takes us on a walk through the process. Each of the fed's regional banks has a board of nine directors..
Bloomberg Radio New York
"dallas fed" Discussed on Bloomberg Radio New York
"Foxconn playing purchase of lordstown motors planted Ohio would make it a contender to build cars for Apple And those are some of the stories are 2700 Bloomberg journalists and analysts are working on this morning around the world It is 5 39 on Wall Street The following is an editorial from Bloomberg opinion This editorial was written by the Bloomberg editorial board The Federal Reserve is scrambling to deal with an urgent question Should its officials be allowed to trade in the securities of companies and other issuers that its decisions might affect The answer ought to be obvious No they shouldn't The Central Bank's conflict of interest rules have come under scrutiny because of the uproar over the trading activity of two officials the Boston and Dallas fed chiefs who each announced their retirements this week Fed chair Jerome Powell has ordered an ethics review Here's a suggestion the Central Bank's top officials should not be allowed to trade or hold securities with only rare exceptions The legitimacy and effectiveness of any government institution depends on trust that goes for judges legislators and anyone in power who claims to act on behalf of the public and it certainly goes for the fed This editorial was written by the Bloomberg editorial board for more Bloomberg opinion Please go to Bloomberg dot com slash or op N go on the Bloomberg terminal This has been Bloomberg opinion And you can hear Bloomberg opinion editorials every weekday at this time Terminal customers.
CNBC's Fast Money
"dallas fed" Discussed on CNBC's Fast Money
"One plus options writer stretching into lululemon ahead of earnings tomorrow but as a name in need of a warm up more on that when fast money returns. Welcome back to pass. We're following a developing story out of the fed. Let's get to birth of the details bertha. Melissa dallas fed president. Robert kaplan made nearly two dozen trades valued at more than a million dollars in two thousand twenty that according to financial disclosures provided by the dallas fed the wall street journal reporting kaplan had twenty seven individuals holdings valued at over a million dollars including popular. Fang names like apple amazon alphabet facebook. And tesla he also held boeing marathon petroleum chevron which was among the trades that he made valued at more than one million dollars now those trades and holdings were approved by dallas fed council that disclosure was more than any of the others in the fed eleven of twelve reported their holdings kaplan of course a former vice chairman of goldman sachs where he worked for more than two decades melissa bertha. Thank you bertha combs. I saw the headline to the store. And i thought what presidents can trade stocks and this guy had all these visions of more than a million dollars each each guy. What do you think well. Let's be very careful here. So let's just assume for a second that everything is to bertha story was above board disclosed. Signed off on all those things without question. Nothing wrong whatsoever. The optics of this are awful in a word. It's off on so people looking at this. Say see the game is rigged. Look what's going on here again. I'm not saying he did anything wrong. We're not suggesting that at all but the optics are terrible. And i in my opinion they all should know better than that he was at goldman sachs for twenty three years. I think it was named partner in nineteen ninety extraordinarily wealthy man which is great but when you take a position like all these men and women have taken. I think there's a certain thing you have to. Rise above certain things and trading stocks to me is one of them again. Not suggesting anything was done wrongfully illegally. Illicitly any of those things but the optics are just awful and and there was nothing wrong and let's underscore this point that the general counsel of the dallas reviewed every single trade. This is all above board. That is not the issue the issue here is should. These traits have been permitted in the first place or should we limit trading activity of sitting fed officials. Tim what do you think well you know. Tell me what fed. Policy's gonna be. And i can tell you what you know. A lot of stocks are going to do and there are stocks that are going to benefit from easier fed policy their stocks that are going to decline from easier fed policy or the opposite so Look ultimately the federal reserve is the most powerful body arguably in the world. I mean. let's be clear You know the the impact on on the globe from the federal reserve over the last three to four decades is nothing short of astonishing So the fact that these folks again The individual stocks and connection to underlying or bottom up elements of those particular stocks. Doesn't bother me at all and again. I'm sure approved and conflicts or vetted and this and that and again. I'll say what we've all just said no no presumed presumed impropriety in any single way But the federal reserve is to me again as we talk about the outlook. This could have been part of our our entire block Tell me what the feds gonna do. And i'll tell you what stocks are going to do you know. We have a lot of these fed officials on constantly. Were always interviewing them. We of late. We've asked him about taper timelines. We should've asked them about their portfolios. Mike i mean that might have provided more insight into where the fed is going. I think probably made assumptions that their portfolio behavior was kind of like alan greenspan's alan greenspan accumulated a decent size portfolio himself. It was all fixed income and really didn't touch it very much but of course my next question would be. Does it really matter what they own. When they've got their finger on the trigger if you own stocks or bonds and you have easy monetary policy. We've seen what the bond market has done for thirty years. Now obviously it's been very good for bonds and has been even better for equities and twenty seven transactions over the course of a year. I mean. I realized that sounds like a lot of people who probably aren't that. Active in the markets but kaplan has a big portfolio to transactions per month. A little bit of perspective his warranted. But you would think that somebody in his position as guy pointed out with. Understand that the optics. This are not great. I like that point. That mike is making dan. It doesn't matter what joan environment everything goes. higher just seems like a needless headline. i would just say this that. I have a lot of friends at financial institutions whether they be investment banks or on the buy side. they can't trade single stocks. There's just too many potential conflicts so they can trade atf's and they may have some holding periods. It just doesn't make any sense. That fed officials people in congress for that matter. Who i think have looser restrict ginger. Maybe even better access on a single stock basis than maybe somebody. The fed might so to me. I think they need to do away. With all trading by congressional people and then in the fed they probably need much stricter rules around it. It just makes no sense in people don't want to take those jobs because they want to trade stocks and options then. They should do that. They can watch fast money every day. At five o'clock they can do that no matter what. By the way coming up we're stretching to lululemon had earnings.
Odd Lots
"dallas fed" Discussed on Odd Lots
"And i think one of our previous guests. It might have been john turmeric. Brought up this idea that as you approach full employment while keeping rates and monetary policy low. You're clearly sort of easing more. And more and more and and when when you look at it through that perspective then robs call to taper. Sooner rather than later. Doesn't look so extreme. Yeah i mean that is very much a john tura point. You're you're spot on. I did think it was interesting. That rob specifically talked about Disassociating the taper the start of the rate hike cycle which is really like because there is going to be. You know we all remember what it was the twenty thirteen tapers and so i do think there is going. You know there's going to be some language trickiness whenever it does begin because the market will interpret that is tightening and in a prison. Just now pointed out. There's two things there's take your foot off the accelerator but there's also hitting the break and his and his point of will we don't necessarily this just because we want to take our foot. The accelerator doesn't mean it's anywhere time to hit the brake. It'll be interesting to see. If and when the fed does begin to taper what sort of communication they have around that basically To affect his point that the market should not read into it. That okay there for the next rate is going to be in six months or whatever totally And it definitely sounds like. It's something that they're thinking about already on that note. The other thing that struck me from the conversation is i. Guess how much of a change. There's been in the feds framework which is kind of but all the new communication problems that that kind of throws up. I guess based on the conversation around full employment and inflation looking through temporary high levels of inflation. It just feels like there's so much more room for interpretation nowadays and is trying to get a better sense of what exactly those two goals average inflation you know over what timeframe full employment measured by what actually mean. Yeah no exactly right. Tons of ambiguity still And new policies in new uncharted territory to us that fascinating time in a fascinating conversation. Yeah uncharted squared okay. So leave it there. Let's leave it there okay. This has been another episode of the odd lots podcast. I'm tracy alloway. You can follow me on twitter at tracy alloway and i'm joe weisenthal. You can follow me on twitter at the stall work and you can follow our guests on twitter. Rob kaplan president and ceo of the dallas fed. He's at rob. S kaplan on twitter. Our producer. Laura carlson she's at laura. Carlson followed the bloomberg head of podcast. Francesca levy at francesca. Today and check out all of our podcast at bloomberg under the handle podcasts. Thanks for listening.
Odd Lots
"dallas fed" Discussed on Odd Lots
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Odd Lots
"dallas fed" Discussed on Odd Lots
"I think that structure of the economy continues to evolve so technology technology enabled disruption and scale was important pre pandemic. It's become even more critical today. I think the importance of access to childcare Early childhood literacy improving an awareness and access to skills. Training is even more important today because I think i'm disappointed. I guess once surprised is disappointment. Is i think some of these supply demand balances on the labor side. Some of it can be addressed with monetary policy but we need a broader action. I think these structural changes in the economy and the persistent supply. Demand imbalances in the labor force is an unfortunate development is surprise we can do something about it but we got a call at first and then take actions broadly to address it and and so i'm hopeful that by me talking about this and talking to local leaders about it national leaders and taking actions here at the dallas fed. We'll take some of those steps to address these issues. But that's probably the biggest challenge and i guess development since the pandemic that is is more Pressing and. I just have one last Real-time question but obviously Cove isn't over and you know there's concerns about new variants that delta variant potentially delivering a setback in terms of some of the return for the services economy that we saw. I'm just curious like from a sort of risk management perspective and you know thinking about the next several the the sequencing of policy going forward. Is that something that you're that you're thinking about and watch we're really are and spend an enormous amount of time and i'm talking infectious disease experts. Every couple of days and doctors and broadly We've been doing this for months as long as it's still the case. Vaccines are effective in minimizing hospitalizations and death. You might get covert but you probably won't get very ill. As long as that continues to be the case i think the impact of the delta variant will be we will not see a step backward in the economy but we might not see the progress we were hoping to see and i think it's gonna delay the matching process between businesses. Who were trying to hire workers and workers step in end to economy and it probably will exacerbate some of these materials. Supply-demand balances labor supply-demand balances. It doesn't mean we grow more slowly. But i think it may. We're going to have to be even more patient in seeing this matching process occurred would be my guess so you mentioned at the very beginning of this conversation. That one of the reasons you were keen on tapering sooner rather than later was because of excesses and risks building up in the market and i just wonder you don't interest rates..
Odd Lots
"dallas fed" Discussed on Odd Lots
"It all. I want to go back to something you said. That was interesting and this idea that if if the fed is committed to keeping rates at say zero until full employment maximum employment is reached then implicitly. It's actually increasing the Stance of accommodation because the neutral interest rate is theoretically going up. Is that approaches. And the nominal rate of fed policy is the same then. You're increasing accommodation. That being said i do feel like in recent years there has been Some growing skepticism. That some of these variables like say the neutral rate of interest are really knowable in real time and i think. Even chairman powell. I don't remember whether it was his twenty and nineteen jackson hole speech or maybe a twenty eighteen twenty eight twenty eighteen speech right questioned whether sort of real time stars so to speak are star and so forth are useful that in real time we can actually sort of like no these things how view personally or have you personally in you know sitting aside the pandemic watching the unemployment rate fall for five and a half percent of four and a half percent to three and a half percent without a meaningful pickup in inflation. Have you personally. I don't know changed any of your views or premises about the nobleness of some of these. Very variables yeah. And i'll start with the background. I'm not a communist business person. So has a businessperson. I was trained over a couple of three decades that Theoretical data points are useful to think about but you gotta be very careful about Understanding there's a great deal of unpredictability uncertainty about having said that. I think the concept that there's an equilibrium rate is is a good concept tried to get to a specific as to what that neutral rate is that. That's the part i'd be careful about. And so i think the concept that there's probably some equilibrium rate and that that by the way that equally liberum rate because of aging demographics. I think has been declining and you can see it in the declines in treasury yields and and government bond yield around the world. That's a pretty good indicator that prospects for future growth are more sluggish and that has de downward impact on the neutral rate and so That helps explain why the fed funds rate and other central banks around the world have had much lower interest rates than they have historically. It's because prospects for future growth or more sluggish. So i think that concept is a useful concept now the other thing. We've done a lot of work here on the dallas fed though regarding.
Odd Lots
"dallas fed" Discussed on Odd Lots
"I don't think you want to get more and more and more accommodative. I think you might be willing to stay highly accommodative but i think I think it's probably appropriate for future. Committees my guess will think so too that you want to make some adjustments to remain highly accommodative. But there's a difference between doing that and keeping rates at zero. So i felt it was too rigid in tying the hands of future committees. And that's why the senate you mentioned the importance of anchoring inflation expectations at two percent. And of course there is some irony that you know as soon as the fed introduced this new framework and said it would tolerate inflation Going above or under two percent Sort of moving in this range of course. After many many years the fed finally seems on track to reach its inflation target at precisely the moment that it said it's less important i wonder how are you thinking about inflation expectations at the moment. And are you seeing any evidence that those are starting to increase yes. So here's what. I'm seeing broadly from from contacts. We're seeing in our work. The dallas fed a broadening of price pressures so on the on the positive side. Some of the extreme moves in say. Use cars lumber other individual items. We're expecting those are may well moderate somewhat but on the other hand what we're seeing is a broadening of price pressures. Why do the semiconductor shortage. That's starting to ripple to a broader range of consumer items material shortages. We think will be more persistent than somebody expect again. The supply demand on labor that in those imbalances. We think you're the dallas fed will take longer and so our expectation for twenty twenty. Two is the headline. Pc number will be in the neighborhood of two and a half percent so won't be. It might not be the eye popping numbers that we're seeing this year but it will be still be elevated what i'm learning. In discussions with contacts. Big businesses will be able to handle Elevated inflation much better than small mid sized businesses big businesses can use scale. They're actively merging they can invest in technology. Small mid sized businesses. Don't have those levers and what. I'm hearing pretty. Broadly is is most businesses. I talked to are are raising. Prices intended to raise prices more and are getting more confident about their ability to raise prices. Also seeing that again if you're a low moderate income person with job higher. Inflation is biting into your share. A wallet more so than it does somebody who's more affluent and i'm hearing a lot from low modern income communities and their representatives that we do extensive outreach rich that they're sane real stress in trying to make ends meet even though their constituents are heavily employed and so what does it tell me tells me..
Odd Lots
"dallas fed" Discussed on Odd Lots
"This amount of liquidity the economy every month has its own set of considerations in its own set aside effects which i think are different than the considerations and side effects of of how we handle the fed funds rate on a slightly related question. But i you know. I'm looking at The terminal right now. And i see the yield on the benchmark ten year. Us treasury is a like one point one percent and the downward trends in bonds has been something. That's confusing a lot of people in a lot of people have been wracking their brains of why this is happening. Is that a concern. For the fed as it starts to discuss things like tapering. maybe not interest rate hikes but tapering. Are you worried at all that the bond market seems to be either anticipating that easing is going to stick around for a long time or that growth might slow in the future. So i'll give you my own take a on. What what. I'm seeing in the market Over the horizon. Another words after we get out of this rebound from the cova pandemic. there's no question that labor force growth we think in the out years is decelerating due to aging and we felt that pre pandemic that trend is still alive and well and is a is a challenge. We have to face. Our our population growth is decelerating. Our labor force for growth is going to decelerate. And then the question is will. Productivity improvements help offset that and so far they haven't and why haven't they are on view at the dallas fed. Is that if you've got a college education. Your technology and technology able disruption is probably helping your productivity if you're one of the forty six million people with a high school education or less technology technology enabled disruption mean. Your job is being regularly either restructured or even eliminated. And we're not seeing the productivity improvements. So we've got improve early childhood literacy skills training and the whole educational ecosystem in order to get the benefits for the whole population of these Of these technology investments. So the house that get to the market. If if productivity growth doesn't help offset slowing labor force growth. The out your growth is sluggish. And i think the bond market is recognizing that out your growth. Not just night states but globally is relatively sluggish because of aging populations and skepticism about productivity. Offsetting that that's number one the other thing thing. You can't quite tell hours a caution myself and my team with the fed purchasing this much treasuries mortgage-backed backed securities the signal. That you might get from the bond market might be a little bit distorted right. Now it's certainly distorted as relates to credit spreads real yields at cetera. And so that's another factor but it. I'm very conscious of what the ten year is saying is something i'm mindful of as we assess the economy and think through what's appropriate monetary policy tape..
Odd Lots
"dallas fed" Discussed on Odd Lots
"I mean it still appears that we have this. Rapid growth is rapid rebound out of Out of the crisis we do have this elevated inflation clearly by Various readings some debates. About whether how transitory it is when when it will normalize. Let's start with your assessment of the macro picture right now so it's still our view at the dallas fed that gdp growth for twenty twenty. One will be in the neighborhood of six nap percent. That growth will moderate as we go into twenty twenty two. You know somewhere. Let's say between two and a half and three percent we think that will trend down toward a four and a half percent unemployment rate by the end of this year. But i'll come back to that. We think will end the year with a p. c. e. inflation reading of something like three point eight percent so very elevated. And i'll. I'll talk more about that The big issues were facing Between now Certainly in the end of the year are more about supply than demand. There's plenty of demand in this economy. You all were talking about it in your conversation but everything we see suggests that consumer demand is strong and demand generally as strong the the issues we have are working out. These supply demand imbalances not just on materials but significantly on labor. We've had substantial number of retirements. We have people who are not in the workforce because their caregivers we still have fear of infection and i think that supply demand imbalance regarding labor is going to be more persistent than people might expect. What can the fed central banks more widely actually do to resolve supply demand imbalances so my own view on that is for starters to be cognizant of them and to be cognizant that that are tools and in particular in the short run. Our asset purchases are much more adept at stimulating demand. They're not so adept at dealing with supply demand imbalances. And so for me. I think patients the way i would define patients would be. You might wanna lower the. Rpm's on the car. Now that we've gotten out of the ditch from twenty twenty and early twenty one and we're on more level land. I think. I think we may want to show patients by reducing the rpm's on the car and be willing to allow the supply demand imbalances time to unfold. But for me that doesn't mean continuing our purchases like we were doing. It means showing some patients by realizing we're gonna different situations than twenty twenty an early twenty one and showing some restraint on our purchases. So i guess we're just jumping right into the big policy questions that everyone wants to do. You agree with your colleague Chris waller then that perhaps it makes sense to begin to taper. Soon maybe as soon as Tober get it finished some time early next year so so to answer that. Let me step back for a moment. People talk a lot about substantial further progress. We have a substantial further progress benchmark. What i've been saying for the last number of weeks and months is there's one other significant criteria and i would i would refer to that as efficacy so the first thing you want to look at and the best analogy i can if you're a doctor. Prescribing medicine.
Odd Lots
"dallas fed" Discussed on Odd Lots
"Hello and welcome to another episode of the odd lots podcast. I'm joe weisenthal salloway. Tracy you hit a great piece. I want to say this morning For blog about some of the interesting dynamics happening in the economy right. Now thank you. I really appreciate that you know. We're we're in this weird moment. Were obviously at least on the headline basis. The economy is still still seems to be growing very rapidly out of the pandemic delta various aside and we'll see how the effects that those have on the other hand we are seeing inflation in a way that we really haven't seen in years and there significant Debate about why that is. The degree to which policy is contributed to that inflation that degree to its policy should millions that inflation and of course as you sort of discussing a very big picture framework in that piece. There's just these sort of like these bigger questions about supply-side capacity and the various log jams in supply chain bottlenecks. That we're seeing really all over the place right now totally so i think i called it. The choke point economy In that piece and the idea is that even though on an absolute level You know economic growth looks pretty good. There's a lot of stuff being produced in the economy on an absolute level. But on a relative basis you can see these blockages shortages showing up in lots of different things And in ways that are not always productive or helpful to society or the wider economy. And so the question then is do governments. And policymakers start to step in to try to relieve some of those blockages. Yeah and there's so many interesting policy things and you know this is of course something that we've talked about a long time. There is the fed's new framework seems to be much more willing to tolerate some periods of higher inflation in the pursuit of full employment. Do is the massive amount of fiscal spending. The likes of which we've never seen before in twenty twenty there's further There's a further infrastructure. Bill being debated so amid all of these sort of moving pieces in the real economy. We're also sort of. I guess you could kind of say uncharted uncharted policy territory as well. Yeah i got that. It's a cliche to say that things are uncharted At this point in time but it's true the economic shock that we just experienced in twenty twenty and twenty twenty one was very unusual and in many ways unprecedented and now we have an unprecedented period of fiscal stimulus. And also that's coinciding with this new framework from the federal reserve in new ways of central banks really thinking about monetary policy and how it works with government spending. Well i think that is the perfect segue into our guest. I am absolutely thrilled to get to speak to our guest today. It's a real treat To have him on a odd. Lots that he'd come on we're going to be speaking with rob kaplan he is the president of the dallas federal reserve Been in that role since late. Two thousand fifteen. So he's seen a lot and he's in the thick of it with all of the policy choices that have to be made right now president. Kevin thank you so much for joining us. Great to be with you. joe tracy. This is really a real treat to have you on. Thank you so much. Let's start Very big picture..
Bloomberg Radio New York
"dallas fed" Discussed on Bloomberg Radio New York
"The words of Dallas Fed President Mr Robert Catholic Catch up with President Kaplan Little Bit later today an exclusive conversations 12 10 Eastern time sitting down with Michael McKay. It's not a small idea. You may I believe John. You did. Maybe Lisa mentioned it earlier. This new, not divide but just as percolation of language and John Michael McKee when he visits Jackson Hole, you know, under where we're going to be the third week of our It's very, very clear. There is some dissent. Yeah, we're going to start to see some formal descent. Lisa, an upcoming meetings. Well, the key is, Are we going to see from the Big three? J. Powell, vice chair Clarida, as well as John Williams of the New York Fed. Are we going to see them reiterate some of the comments from the other members that we're hearing? My question actually is a more nuanced one. And it has to go to the mortgage debt that a lot of people were talking about, including Congressman Bar. Can the Federal Reserve stop buying as many mortgage debt mortgage bonds without disrupting the market? More broadly, can they have a surgical move here? Given the fact that this will foretell this will foreshadow Rate hike and the market will act as such. Governor what is sympathetic to that idea spoke to Bloomberg, and he said that here's the problem President Williams one aware, and he said this in the past week, Tom well aware of the broader signaling that any reduction would provide natural condition, and one of the high points of the first half. Was your interview with John Williams. And it was a non interview. I mean, there's a real delicacy here. Was that? Was that a compliment? Yeah, that's a compliment to you. John Williams didn't want to participate. Thank you Back Tech talent is the composer Joseph Haydn famously said. I listened more than I study. It sounds like a law school Hypothetical here at Bloomberg. It's the same thing. Do you maintain that low rate regime? Can you see out two years? How do you build a strategy with that eventuality in mind? Experts Information news. The push sets up a potential fight. What do we know about how it will go Pop? Click Bloomberg Radio. The Bloomberg business APP and Bloomberg radio dot com. Bloomberg the.
Bloomberg Radio New York
"dallas fed" Discussed on Bloomberg Radio New York
"Generally speaking. Batch of great to catch up now, the estimate in this bond market last year. Really did Samantha. Great to catch up. So back to the Jumper off Sock Jen. Little bit fed speak later. Cleveland Fed President Obama master should be catching up. With the audience a little bit late for that was going on with this Fed and Dallas fed President Robert Campaign as well. We got a 1 2010 year. You telling me the feds not going to start affecting messages and their speeches? I don't buy it for you. We get a 1 2010 year because we've reopened this economy. Your potential Texas there, Tom. What takes us there I get I get that. But, John, they're gonna be giving speeches and you're gonna see say cash and not to pick on Neel Kashkari. But you mentioned him early and pick on their car is going to say one sentence or bullet's going to say one sentence or so and so is going to say one sense and all of a sudden it begins to percolate. And the question is, what level does that happen? What they don't want? It's the price in all the tightening all at once for everyone just to get off to the races and financial conditions title, which is why Tom never tried to establish this so called asymmetric reaction function. And most simple way of explaining that is just to say their message for all of us is that if things get worse with that anymore, and if things get better will step back. This time we'll let it roll for a little bit now that applies to rates and I've been really clear on that where I think some people in fixing comes to struggle, Tom Is on the asset purchase program. We really understand the right story. Do we really understand the asset purchase program in quite the same way? At this point, I would say no. You know, I agree with there's a real mystery out there to ask it. Repurchase. I get all that I am talking, John. About Finally today or even maybe yesterday. I can't remember. To be honest, we're seeing a real linkage here are correlation. The higher yield with these equities gets to stay Amazon Let me stick my neck out. If we take ourselves to 1 50. Us 10 Year I'm wasted in the position we're in right now. I don't think the Fed wants to see you Say 1, 50 or 1 15 1 51 15 with five basis points away. I'm just gets thrown hard day I'm allowed to do that. It's terrible movie. I've had so much feedback about Look, I just read Jenna Maslin's review. From a million Years ago, she had a resident and gentle comedy. Gentle comedy. It was nuanced. So she called it gentle comedy, gentle comedy. Give me a break from New York. Lost in translation P 500 future like the room carpet, marine carpet, Okay, we'll talk more about this. Chris Chris Sanchez coming up. Looking forward to that Am I. Capital Management. This is Bloomberg..
Marketplace with Kai Ryssdal
Congress is scrambling to pass a coronavirus stimulus bill
"Even the unemployment. I just got off the phone with the georgia department of labor. And they said we're literally sitting here at our computers trying to figure out if we have to shut down on employment benefits for millions of georgians in a matter of days or if you have to extend the payments at an extra three hundred for how many weeks you can't just you'd like to think it's all could be done in a matter of seconds but it can't at the moment the statistic that really jumps out at me this week. We just got the latest data from the census that shows hunger in the united states is now at the highest level in this crisis that the pain is real and we have seen the pictures of people lined up at food banks. Well let let let me actually. Now turn to something you. And i were talking about before we actually turn the microphones on and the gong went off the nomenclature that people using to talk about this bill stimulus versus relief. I of the personal opinion. We ought to be calling relief bill right because there ain't necessarily much to stimulate right now. You're one hundred percent right. Kai at stimulus is when we're trying to boost the economy. We're not trying to boost the economy right now. We're trying to get it through the winter and prevent even more devastation. Even more hunger even more addictions even more small business closing so this money this nine hundred billion that's about to go out is really it's the mandate or people keep referring to it as the bridge to get to the other side. It's not some sort of pump up the economy measure. That may be needed next. While speaking of next year people do seem to be banking on another package early in the biden term. You buying that now that. I don't think it depends. Obviously control of the senate will be very key going forward. And i do think there's hope what what i see. More optimism surly from wall street is hope for a some sort of infrastructure package. That could possibly pass later in. Twenty twenty one. I know we all charcoal during the trump skiers but that would certainly be a boost. That would keep us long going for a long time. I really worry a lot kind of due to about march. April may a lot of this aid even if the bill magically gets pass. They're talking about ten weeks of unemployment aid that ends in mid march. Do we really think the vaccines are going to be widespread enough. That people are going to venture out again to restaurants by march or april. That's a really big gamble yet. Let me excuse me. Let me change gears here for a second and and picking up on that february march april thing. There was a fed meeting this week. Sherpao gave his usual press conference. And i will say here. We're talking to rob kaplan of the dallas fed a little bit later in the program. I was struck by though the optimism that seemed inheriting some of the fed's predictions of for you know the next six months once we get through this winter and i wonder if you were as well. That was a huge takeaway. What you hear. What's really odd right now. Is there's more pessimism about the next six months. Chair powell reiterated that can we get through. How many how many job losses are going to happen. And how many businesses are going to close forever. I think about you street musicology. Dc gone forever but at the same time. There's more optimism about the second half twenty twenty one part of the vaccine but part of it also a lot of people who've been working from home like you and i have been saving money. There's over a trillion dollars more of a money sitting in bank accounts and if that starts to get spent next summer that could be another additional boost the economy. So that's why you see wall street.
Chris Krok
Governor Greg Abbott Blasts Dallas City Council For Defunding Police
"Abbott calls the Dallas City Council's decision to reallocate $7 million from police overtime pay. A perfect example of de funding. Police. The Federal Reserve Bank of Dallas predicts continued growth in the Texas economy as the state slowly recovers from the financial impacts of the Corona virus pandemic. Dallas Fed Vice president Pia or any OUS says the pandemic brings positive and negative risks and include a possible resurgence of the virus and prolonged low old prices and upside risk is the arrival of a safe and effective covered 19 vaccine, according to the Dallas Feds. Latest Texas ECONOMIC Report. Texas Economic growth has picked up with the decline of new covert 19 cases since July.
Austin's Morning News
Former Dallas Fed chief calls for people to return to work
"Federal reserves as people have to get backto work, Richard Fisher says Texas has too much of a stake in the national economy for people to remain at home. We produced more than South Korea more than Australia, more than Spain more than Russia. More than Canada and more than Mexico 30 million people who produce and are the job creators in America, and we have to put them back to work when he says putting people back to work also generate more spending and tax revenue, all of which are important components and reigniting the state economy. The pandemic is not
KDWN Programming
Trump Calls for Fed’s ‘Boneheads’ to Slash Interest Rates Below Zero
"Is it a tribe says the U. S. is missing out economically because quote bone heads at the federal reserve will lower interest rates at his insistence now the fed is meeting next week it's expected trim its benchmark rate by another quarter point after cutting it for the first time in a decade in July president trump's been pressuring fed chair Jerome Powell to drop rates to zero or below former Dallas fed president Richard Fisher told CNBC he doesn't expect the pressure will work.
Exchanges at Goldman Sachs
Markets doubt Fed's ability to defend economy, spur inflation
"Here's christine lagarde chairwoman of the international monetary fund and a newly nominated e._c._b. President earlier this year. The bottom line is that after two years of solid expansion the world economy is growing more slowly then unexpected and risks are rising. Growth concerns have been at the heart of the dovish pivot. We've seen from central banks. This year and markets on our economists alike now expect the fed just start delivering rate cuts as soon as this month. Here's fed chair jerome powell testifying on capitol hill just last week and our june meeting. We indicated did that. In light of increased uncertainties about the economic outlook in muted inflation pressures we would closely monitor the implications of incoming information for the economic outlook and would act as appropriate to sustain the expansion the market reaction to all of this has been noteworthy typically growth concerns rise investor demands shifts towards less less risky assets that means investors usually buy bonds causing yields to decline and sell stocks causing equity prices to fall a recently. We've generally seen the reverse with bond yields declining while stock prices have risen to all-time highs many think this is because fed cuts just protecting against a downturn rather than actually responding to one but others things stocks and bonds are sending very different messages about growth with bond investors more worried about recession while equity investors are focusing on the upside of course markets are fickle these days and this pattern between stocks and bonds has waxed and waned but the broader questions remain how concerned about growth growth should we really be and are fed actions which some believe have been too responsive to markets in the end helping or hurting the growth outlook from here the the answer to these questions and implications for asset performance are top of mind. I i turned to legendary investor dollar-euro founder and co chief investment investment officer of bridgewater associates to see what he makes of these developments. Dalia thinks the recent market action makes sense but is worried about an adverse environment for growth in nathen ahead. We're really grappling with the question of whether there is a disconnect between stocks and bonds and what their pricing in terms of growth stock values and fundamental we determine why the present value of expected cash flows and when interest rates go down that's a positive dachshund present value since so when i look at the decline and interest rates and the move to do a more stimulus effect policy i look at that as a temporary positive of effect on stocks by that it is a non sustainable effect on stocks for the long run because there is a limitation as to how far interest rates i can go down and how quantitative easing can work so when interest rates go down causes the present value of assets to rise but <hes> it also means that there's less stimulation in the bottle because you get closer to interest interest rates approaching zero think of this as a stimulus that is in a bottle and it's running out so if you use it yes you can you can get a kick out of the economy and a kick out of the markets but the important shift in the world will be coming when monetary policy is not very effective when they're essentially out of the stimulant is in the bottle dalia was concerned that the fed and other other central banks are running out of stimulus. He also thinks the fed's shift to a more dovish. Monetary policy was appropriate and if anything could have come sooner and he doesn't give much credence to the view that the fed has been responsive to bond market concerns. Here's what he had to say on the fed it worry too much about a strong economy with breath limited capacity to expand and they were worried about the combination of the fiscal stimulation and the low rates of employment and and that inflation would accelerate they were very worried about the classic cycle happening in my opinion too worried about that and so going into two year end they over tighten the ending <hes> then did a sharp reversal opinion and appropriate sharp reversal because the inflation risks and the growth risks are exaggerated but ultimately there is a narrative in the markets now has been overly responsive to bond market pricing so just to clarify you don't agree with that. View doesn't carry much weight with me. I think that people who say that presume that the fed things the bond market is right and one can conjecture at the bond market see something that the fed needs to follow or or one could say that the yield curve becoming inverted and what is discounted and the price means something that the fed should be more cautious. Those was a reasonable statement. Realistically you have to ask what is that something that is causing the long rates to go down while the economy's slowing slowing for a number of reasons and then of course we're fairly late in the cycle we have the greater wealth gap and optimism polarity laverty and geopolitical issues particularly with china so if you were to look at the world economy as a whole you would say say that there should be an easier monetary policy and if you look at the interest rate differentials and the currency movement and what the federal reserve i can do it's reasonable that interest rates would go down and that they would be led by the market at a faster pace <hes> than <hes> the fed goldman sachs strategist agree that recent market actions make sense amid rising growth uncertainty. They actually argue that despite very high index levels you can nc growth concerns reflected across risky assets in the performance of higher quality and defensive sectors in equity credit and commodity markets so bond markets are less of an outlier than they first appear beyond hot seats. The firm's chief economist says these growth concerns are overdone if anything he's more concerned about the direction the fed and is less convinced that the benefits of easing here outweigh the potential costs namely the increased likelihood of so-called hard landing for the u._s. economy. How worried should we really be about u._s. And global growth it seems to me that the growth outlook while clearly not a strong as in two thousand seventeen two thousand eighteen eighteen is still pretty decent. We're looking for growth in the two percent range in the second half of this year and then actually a little bit more than that in two thousand thousand and twenty which would still put us a touch above or estimate the underlying trend pace of growth which is in the 175 range so <hes> yeah we're we're we would say cautiously optimistic that were still going to see decent one reason for this is the easing and and financial conditions which has taken place really for most of this year and again more clearly in recent weeks which should mean that the impulse from financial financial conditions to growth is going to become somewhat more positive as the year goes on that trip b visible and things like homebuilding where there's a very direct impact from for mortgage rates and also personal consumption where equity prices obviously matter so how much should the recent shift toward and even more dovish bias from the fed which has this recently prompted us to assume that we are going to see some cuts this year how much should that temper concerns about growth and inflation disappointments. I mean does that really need on all well. I think it helps easier monetary policy. I think does have real effects. I think in the u._s. It's uh relatively easy to generate positive impulses because the funds rate is two point four percent strictly in positive territory you can law or the funds rate you can thereby generate easing financial conditions that will have an impact on growth and of course some of this is already frontloaded market pricing anticipating fed cuts cuts in the us to me doesn't look particularly necessary. I mean to me it. Actually looks like the economy is fine even without monetary easing so here. It's really not a question of whether monetary easing is effective but whether it's necessary. Do you think the fed is setting up a policy mistake by intending or signaling. They're on the verge of cuts. It's a question of costs and benefits so i think when the economy is generally fine and you're maybe providing a little a bit more additional stimulus. The benefit is relatively limited and it's possible that ultimately over stimulate the economy you push the unemployment unemployment rate down to a level that is too low to be sustained in the longer term with inflation at about two percent and then and you need to increase the unemployment rate over time and historically. It's been very difficult to do that without a recession. There's never been an increase in the average of the unemployment rate of more than thirty five basis disappoints that wasn't associated with the recession and i think that's probably a somewhat bigger issue now than it might have been comparable episodes in the past because because of some of the politics and some of the influence on the fed from the electoral calendar for example we are going into an election year if they we do deliver some insurance cots and two thousand and <hes> nineteen <hes> as we're we're we're projecting it will be much harder to to unwind. Those insurance cuts in two thousand twenty. If it turns out that the not needed or maybe even counterproductive <hes> now if it was a very clear cut that case i think they would hike in two thousand twenty but at the margin it's just going to be a harder as you approach a probably very contentious presidential look so do you think the market is too concerned about growth and maybe not concerned enough that the fed could be heading ultimately atlanta counterproductive jim action. Yes <hes> i. I am concerned about that. I think that the market is somewhat concern. On growth. I think markets to lawn flation asian markets underestimating the extent to which the current weak inflation numbers are driven by more special factors. I think what chairman paul's at at the me press conference not doing press conference but the main press conference about the outliers in the core p._c. A._c. numbers and the much stronger message sent by the dallas fed's trim mean p._c. Index all of those things i thought were correct then and they remain correct saw aw i think we'll see you see a rebound inflation and not as concerned about inflation expectations as many in the markets partly because i think that break even inflation compensation in the bond. The market is not a great measure of inflation expectations. The service actually still look consistent with inflation expectations that are anchored around two percent so yeah i mean i i have a different sense of the relative risks and therefore also a different sense of where you're more likely to make a mistake i think the dominant market view is that the fed's been too slow and they continue to be too slow and they need to move expeditiously in the direction of easier policy. My view is that if they moved too quickly and to aggressively than they are at risk of over stimulating the economy and thereby raising the risk of a hard landing you know maybe not in twenty twenty but <hes> at some point in the future janas also somewhat concerned about the amount of political pressure on the fed which poses a threat to its independence so obviously the other factor here has been the white house's pressure on the fed to keep rates low or cut further. How much do you think that's benefactor. Do you think there there is reason to be concerned about the independence of the fed well. I think there is some reason to be to be concerned. I mean the pressure has been very overt. Coach and the desire to appoint political loyalists to <hes> fed positions has definitely been there so there has been talk about firing or demoting chair paul. It's a little unclear how far that <hes> that wind but you know all of goals things are of course threats to the independence of the of the federal reserve. I think the fed is still independence. Still does act independently leave. I don't think that chair paul and his colleagues take orders from the white house. However i also think that there is sort of an indirect avenue the new for pressure on the fed that goals via the bond market because clearly the bond market is responsive to political chatter and reports of much more dovish appointees appointees for the board of governors or demands for for rate cuts and to the extent that the f._o._m._c. puts more weight on bond market pricing and setting a <hes> its own policy. I think that is way in which the political pressure can actually have some impact so for me. This is another reason to be somewhat skeptical that that we should be putting all that much weight on bond market pricing and be a bit more resistant to the idea of the fed should be just deliver what the bond market's pricing so what would this slightly more optimistic outlook mean for the sustainability of the broader rallies. We've seen in pretty much everything this year even if growth holds up as our economists m._s. expect goldman sachs research things were still likely to see to federate cuts and a broader bond rally prevail but that won't do much to boost stocks going forward according to our achieve u._s. Equities strategist david causton who sees growth and policy uncertainty keeping equities moving sideways through your end as positioning
CNBC's Fast Money
Dow and S&P 500 record worst day in nearly a month
"Us begin with the markets, because if you didn't pay attention all day. We'll first shame on you second. It was a wild ride. The Dow finishing off or starting up, then finishing lower all this because of what else, the Federal Reserve fed chair Jerome Powell and other officials tempering hope somewhat of a rate cut down. The piano posted their worst days the month. But it was the NASDAQ some of your favorite tech stocks. Took the brunt of the beating the FANG bit Microsoft alphabet down three percent. Facebook off two percent. You get the picture guy down, sir. Wellstone practice fracas, what we make of what the action was today, is that how sensitive, this market is to the fed. That's the rhetorical question is, you know, this extraordinarily censor Brian, I think you knew that when you ask the question, I'll say this is well, the fact that we get the twenty nine fifty again and again and fail. I think it's problematic, and we do it when the vix gets down to fifteen can speak to that which has been levels where the last six months, the market is topped out. I think the market is over estimating the power of the fed, and I think unless we get a trade deal, which I don't think we're going to get I think we do roll over at these levels in the SNP. Okay. You just gave a lot of numbers, we're talking about the fed, but it less what we do here, and it sounded like you're saying that it's not just the fed technicals are playing some kind of role, I think you have to take them in. A consideration. I mean, this was a level that we topped out at in the fall with retested it, seemingly topped out again when the vix gets down to these levels. It's stormy been level with Berta market sells off from the Russell hasn't backed up this move to the upside. The transport seven backed up this move the upside gold continues to rally all those things to me, warning sign Seeburg. What do you think? Yes. Mr. Seeburg, the bottom line here is, I think you've got a dynamic where the expectations for the fed, I think, guy, framed it. Well, it's not that the fed is not all powerful. In fact, it's completely the opposite. They are everything right now. And when I hear Bob Kaplan, Dallas fed put out a paper talking about the limitations of monetary policy at this point when I hear, pal step back a little bit. I think he did what he should have done a week ago when, when it looked like the fed gave us more than we could have possibly expected because the bottom line. Here's I don't think that that's going to help this economy. I do think that getting to neutral and staying there on the fed is very important. The most important thing right now remains what we're seeing on macro data. If you look around the world over the last couple of days, it hasn't been good. Hong Kong trade data last night. Not so. Good. French business confidence, not so good following Germany's business confidence. So you name it bond yields. That's what you should listen to having said all that. People wanna look at double tops and this, and that, and I don't I actually think technicals are very important. I think this is all about the fed right
Bloomberg Daybreak: Asia
Fed Pushes Back Against Rate Cuts That Markets Continue to Seek
"Very much. Well, the fed is pushing back a little against rate cuts that the market continues to seek. And so that's why we're saying that, perhaps there's a little bit more of a hawkish tone in the fed minutes that were out today. But Ellen zentner chief economist at Morgan Stanley says the fed is unlikely to move in either direction for awhile. The bar is very high today for them to move up or down. And they're going to keep dismissing trade for the time being saying, we just don't see it in the real data. On the flip side Dallas fed President Robert Kaplan says the yield curve, indicating that expectations for future, growth are
Marketplace with Kai Ryssdal
Growth in China is up
"Yes, fine. It was by and large a political week in the news in this country. But once again, and for the record a this is a global economy and be one neglects economic news at one's peril. So with that five maybe six minutes now on the past five days in business and this economy Jane, smiling late of Bloomberg's soon to be in a couple of weeks the Federal Reserve reporter for the New York Times. The honorable is the markets editor at axios holiday, both ak-. Hey guy. So let me start with you. And the global economy as it were. I wanna talk about China the news we got this week that growth there was actually up a little bit. I actually saw the freeze green shoots about the Chinese economy. Could we perhaps be turning a corner on the much rumored, but never yet arrived global recession and slowdown? Ooh. Yeah. That's a that's a good question. A good way to frame that. I I we could be. But here's the thing. I I don't know. And China was always the big deal. Right. But look out at the world, and you've got gotta take a global view as you said Europe is still slowing Japan is still slowing there. They've said they're going to go ahead and do this raise to ten percent sales tax in the fourth quarter and people are expecting them to potentially vol into recession. You could have Germany and recession Italy in recession. The u k in recession, those are some big issues, and the thing with China is they're pushing the stimulus the whole idea was supposed to be pulling back stimulus unloving or delivering their economy and actually doing just the opposite. They were doing that for reason because they're on an unsustainable debt path. So yes, definitely this is good news. The the data we've seen at a China. Also, I think it is interesting that in a in a while, I think over the past six seven months avenue. Anyone questioned the date out of China as they were for years. Seems like investors have really just kind of forgotten all about that. All right, Gina smile at bringing back home because retail sales were up this week in the American economy, the Americans should shoot consumer is still buying could we perhaps be leading the way avoiding a global slowdown. Yeah. So I think it's an interesting question. And again, I think it's one that you've just gotta take with a grain of salt. If you look at a bar chart of retail sales over the last six months, they have just been gyrating wildly, you know, it's down it's up it's down again. And so I think it's really hard to take a really significant reading from retail sales. Just because we've seen a lot of payback from that really weak December number and we were kind of waiting for that. So it's hard to take too much of a not from that. I think the good news story on the US economy might be the labor market is still chugging along. You know, we saw some signs of slowdown that seems to have abated at this point. And so I think if you continue to see solid wage gains. If you continue to see really low unemployment an initial jobless claims and unemployment you could see a pretty positive consumer story. Dion this week. There were record low first time claims for unemployment and continuing claims for unemployment benefits were down as well. Yeah. And the four-week trend was at its lowest since I think it was November of nineteen sixty nine which I thought was really interesting wrote about that in the Axial markets newsletter. I actually was really interesting is there was a lot. I got a good deal of blowback from that. With people saying, hey, you know, this metric doesn't really isn't Representative of what's going on in the real economy. You also I put it a story earlier in the week about how the gig economy is distorting some of these numbers, you talk, the Dallas fed actually put out a paper saying that the gig economy has a lot of people who are working gigs or who are between jobs, but who still report themselves as employed, and that's actually sort of reducing not just the number of people who are reported unemployed, but the people who file for these kind of benefits, and that's pushing the the number down below where stoically has been. Yeah. Gina can we get away from the the headline numbers for minute here. And and I'm going to get all anecdotal on you inflation in this economy one. Again, not really a huge issue. According to the headline numbers out this week. But if you go out there gas, I mean, you know, here in California, we we run expensive on gas anyway, but I'm paying four zero nine for a gallon. Yes. Tell me about it. So so the consumers are feeling things that maybe you're not Gina shown up in the numbers. Yeah. I think it's an interesting point. I think one thing that is worth keeping in mind is that those sort of those fuel gauges food and fuel they are nosy. That's why the fed doesn't on of attention to them when it's thinking about monetary policy. But of course, consumers do feel them, which is what you can't ignore them entirely. But I think what what really matters is whether those pump prices you're seeing now whether those are sustained or whether those come down later in the year, and I think we'll have to wait and see how that plays out or I I want to do two things about the Federal Reserve number one. Robert Kaplan, the president of the Dallas fed. So this week, you know, what no matter what growth numbers do in this to me. I don't I don't think the Fed's going to change its stance on interest rates, which is as we know right now to sort of take it easy in and sit for a minute. And then I want to know what you say about that just in terms of the cost of money in this economy. Yeah. It makes sense though. Because I think the real change that was made was the fed really step back and said, you know, what inflation's not going up we don't need to keep raising rates. And if you can keep inflation at bay, which is one half of the feds mandate and unemployment isn't taking out which is the other half. Then there's no reason for them to move forward and make these moves. So I I completely understand what he was saying. All right, fair enough, gene. I'm going to turn to you and ask you the political question about the economy this week the markets and generally speaking everybody who's not a political reporter looked at the Muller report and kind of went. Yeah. You know, the economy strong. We're good would that's probably you at all. You know, I think that that's what a lot of communists were expecting going into the mall. A report I think people just kind of thought that we basically knew what we were going to know and markets just weren't anticipating a lot of news out of that. And I don't think that they saw anything that's prize them in a significant way was still making money. Right. The on. So so Soviet, right. So v and you look at what's the worst possible outcome, which is Trump gets impeach which is highly unlikely then you've got president Pence and he's good for the markets too. So I don't really know if there was a lot to take from this the bone at actually and Gina smiling soon to be of the New York Times. Thanks you too. Thank you have a nice weekend. On Wall Street today. Things are actually pretty quiet March closed for Good Friday.
Marketplace Tech with Molly Wood
What does it mean to be "employed" in the gig economy?
"This. Marketplace podcast is brought to you by ultimate software dedicated to putting people first with innovative solutions for HR payroll and talent management. Learn more at ultimate software dot com. Ultimate software people first and by click share with click share, and you're meeting, you can share your screen instantly from any device, click share instantly projects any speakers laptop, tablet or phone onto a presentation screen. So everyone can work together. Share their ideas and create something great. That's the click share effect. Visit click share free trial dot com and learn more and sign up for your free trial. What does it mean to be employed in the gig economy? A new European law. Tries to answer that question from American public media. This is marketplace tech demystifying the digital economy. I may me Scott in for Molly would. This week the European parliament passed a law establishing basic rights for workers in the gig economy that could apply to some three million. People from Uber drivers to careers for the UK's delivery, the law requires companies to pay when work is cancelled last minute or for mandatory training, it also bans exclusivity clauses, which prevent freelancers from gigging for other companies. It's supposed to make working short-term gigs a little more stable. Joe Miller is a business and tech reporter with the BBC who's been following this law. It was mainly targeted at the biz of this. Well, and things like toss grab it essentially at based services that supply on demand sevices such as transport to delivery in reality. The legislation encompasses a fob ruled a section of the economy people who clean offices. Includes people who work for possible delivery companies. So the legislation could apply to a fall fall brought a sector than just those big tech foams that we've all come to know, why are these changes needed? What kinds of abuses were workers talking about that? This law is trying to address. Yes. The range of abuses require massive from people who being booked for work, and then never been given that work, you know, just being left in the lurch with no work, and no pay to people who have worked hundreds of days a year without any holiday pay people not being offered any compensation when they're sick despite working for the same company as intially for many, many months a weeks. So there's been an awful lot of activism around this and an awful lot of legal challenges around this of people coming forward with all sorts of employment concerns, these Member States have up to three years to begin to enforce this seems like a long time with a lot. Out of room for maneuvering, it is a long time. But critics would also point out that this only applies to people who are employed now that tightening up definition of who's employed the saying if you work three hours a week for a company that is considered employment. But of course, the big battlefield between the likes of Uber left and deliver around the weld and various authorities has been they've always claimed that they are just the facilitator between a customer and a self employed contractor now that is not covered by this legislation 'cause this legislation narrowly only applies to people who are employed, and you can expect that to be many many challenges on the definition of who is employed. This doesn't really solve anything in the immediate future. It's just a blueprint of how things may look the BBC's Joe Miller what could this year opean law mean for American workers? Well, Miller says think about what happened with the GDP are. The European privacy regulation that took effect last year. It led a lot of tech companies to change their practices here too. And now for some related links here in the US the rise of the gig economy may be distorting some economic data over at axios frequent marketplace guests Dion Ribaut and wrote about a new paper from the Dallas fed. It says the headline unemployment rate now at three point eight percent may low ball the number of gig workers who are unemployed or under employed because contract workers aren't on the payroll. They aren't counted as unemployed even when they're not working we've got links to John's piece and the Dallas fed paper at marketplace, tech dot org. Also, while you're there, check out another story from the ethica times Cornell University surveyed New Yorkers who use platforms like Uber post mates and grub hub to make a living among the two hundred seventy people surveyed only thirteen percent said they could get by by working for those apps alone, many relied on public assistance and juggled several apps at once to make ends meet Matt Purdy produced this. Tweaks marketplace tech along with Stephanie Hughes eve tro is our senior producer, Dan Powell is our engineer, I'm Amy Scott. And that's marketplace tech. This is a PM. This marketplace podcast is brought to you by click share, an award winning wireless presentation system with click share, and you're meeting you can share your screen instantly from any device. No more awkward small talk or wasted time as you wait. For tech problems to be fixed. Click share instantly projects any speakers laptop, tablet or phone onto a presentation scream. So everyone can work together. Share their ideas and create something great. That's the click share effect. Visit click share free trial dot com to learn more and sign up for your free trial.
Marketplace with Kai Ryssdal
ECB slashes eurozone growth forecasts, interest rates to remain unchanged in 2019
"With the caveat that foreign exchange. Trading can involve significant risk of loss a word as we get going here about the dollar euro trade day, should you be planning a trip over there. The macro economic gods are smiling on you a euro can be had at the moment for just a dollar twelve cheapest. The single currency has been since two thousand seventeen what gives Kawhi I hear you ask. Well, first of all, thanks for asking. But the European Central Bank is what gives the did a completely unexpected about face. This morning promising not to raise interest rates at least through the end of this year and saying it is going to make more loans to European banks. Marketplace's Nancy Marshall genzer explains. What's going on the European Central Bank said today that the economy's at the euro zone. Nineteen countries that use the euro will grow by just around one percent this year, partly due to the trade. Tensions between the US and China. Mark austral is chief economist at ADM investor services. He says if the Chinese economy slows further as the trade talks with the US drag on that's bad news because Europe exports so much to China. Everything from calls down to simple consumer goods as well. As exporting a loss of machinery to China says China will buy less from Europe, if it's a Konomi seizes up President Trump's threat to slap a tariff up to twenty five percent on cars from Europe is also weighing on the euro zone economy. And then there are zombie loans. Loans euro-zone bags made to failing companies that are still on their books. Danielle de Martino booth is a former Dallas fed adviser because they haven't been written off. You're not freeing up the ability the bandwidth in order to make fresh loans that therefore spur fresh economic growth. The European Central Bank is trying to change. Change that by making cheap long-term loans to banks.
Bloomberg Best
Fed’s Kaplan Says It’s Time to Hold Off on Interest-Rate Rises
"So I would be an advocate of taking no action. And for example in the first couple of quarters of this year. The asked me my base case. My base case would be take no action at all that could change if things improve. But my own view right now is we should be patient and give some time to this for the economy and to watch how the situation unfolds. But do you think the markets know something the fed hasn't seen in terms of what's going to unfold this year? I don't know about that. I think we've been watching this very very carefully. I watched the markets very carefully others at the fed watch this carefully. I think we've been trying to balance very tight labor market strong. Consumer. And try to meet our dual mandate. But I think I think it's critical in the job. I'm in that you'll pay very close attention to what the markets are saying. But it's important in in what they tell us about what's going on in the economy and also some of these market forces, including financial conditions can spill over and tighten the economy and caused growth to slow, and it's critical that we are very attend to it. What do you see that happening? Now, I think it may be happening now. Yes, I mean credit spreads since October have widened pretty substantially haven't had a high yield issue for the last number of weeks, very little issuance. And I think it's suggests lack of access I think history is showing us and shows me when you see that kind of action it tends to prolonged could lead to a slowing economy at the Dallas fed. We've we've got an estimate for GDP growth for two thousand nineteen that is a little. Below two percent. You've been hearing me say older in two thousand eighteen the wall. Eighteen would be strong. We think fiscal stimulus the effective. It will Wayne into two thousand nineteen the impact of the Fed's rate increases will take hold. And so we expected some slowing in the nineteen. I think that's slowing is even a little greater than we expected. So I'm watching this very very carefully. We changed your forecast at all our GDP forecast for next year's come down a little bit. We were still close to two. And you've heard me say before spent argue that by twenty twenty we'd be trending back down the potential about one and three quarters, but are nineteen forecast is is come down a little bit. And it's been affected by some of these issues. I just talked about global growth decelerating economically sensitive industries, and what we see going on with credit spreads and the shape of the yield curve is another thing. I watched very very carefully. And all those things are affecting our forecast is apple telling you anything about the state of the. Chinese or global economy. We've talked for some time we've been seen and I hear from context for the last number of months, the Chinese growth has been somewhat weaker. It's massed by the fact that they tend to use leverage investment in state owned enterprises investment and infrastructure to meet their six and a half percent goal. But but a lot of the indicators I'm hearing from businesses tell me that Chinese growth has been weaker. So it doesn't surprise me that we're seeing more indications about weaker Chinese growth and the trade tensions probably have exacerbated. That was apple the tip of the spirit of the iceberg. Above the water. Are we going to see more CEO's coming out with warnings? Like this. I'm not gonna comment on any specific company. But why here for talked about thirty CEO's month? And and what I'm hearing from them as they're seeing some weakness in China. So it doesn't surprise me. You're going to see some further weakness said I've been saying for some time. I don't think China can indefinitely keep using leverage to grow GDP. And also, they're very dependent on trade. And I'm sure these trade tensions have had some effect. And the one comment I'd make why does it matter to us? In reason, I watched so carefully about forty five percent of s&p five hundred revenues come from outside the United States so China growth slowing. We're unlikely to be immune for that. We might be immune to it for a time, but not indefinitely it's likely to spill over into US growth. And and that's what I'm watching very carefully. Okay. You're calling for a pause in monetary policy action. What about the balance sheet J Paul was pretty firm in saying it his news conference that that's going to keep running in the background since the process for the balance sheet, which we set up and started in the fall of two thousand seventeen it's a it's a specific process where we let maturity's laps. We're not selling securities. We're just not replacing maturity's as they expire my own view. And I said this also several times this is unprecedented. There's no textbook for exiting quantitative easing. And my own view is wall. There's a process in place. We should be very vigilant. I'm watching it very carefully and be very open. If necessary to making adjustments in this balance-sheet runoff, if we need to I'm not at that point yet. But I'm watching very very carefully. And I think we should be very open minded about about
Bloomberg Finance
Dollar pressured as Fed officials caution about global growth
"Of global slowing and Dallas fed Bank. President Robert Kaplan told FOX business he is seeing a growth slowdown in both Europe and China and at the same time. Philly fed chief Patrick Harker told the Wall Street Journal at this point he's not convinced a December rate move is the right move. Given the muted readings that we have seen recently on inflation CVS, health Corp and division of Walgreen's, boots alliance have been added as defendants in a lawsuit. Brought by Florida's attorney general is filing is in response to the US opioid crisis
Bloomberg Businessweek
Fed's Kaplan sees two-three more rate hikes to hit 'neutral' level
"On the markets a little bit Dallas fed President Robert Kaplan said in New York that it will probably take three more interest rate hikes to achieve a neutral monetary policy. The percentage of people with no financial backup declined some over the past year, but it remains at a level that raises
US-China trade talks center on rivalry over technology
"Special tomorrow five o'clock eastern carol i'll be thinking with robert kaplan from the dallas fed wanna talk to you about the international aspects of fed policy and also about the us economy good stuff as always kathleen hayes global economics and policy editor at bloomberg news there at on the west coast attending the hoover institution monetary policy conference at stanford and of course our thanks to philippi hernandez latin america economist bloomberg economics inner bloomberg eleven three studio let's get back to world and national news headlines and it's ever to nathan hager bloomberg newsroom in washington dc nathan carol president trump didn't know about the payment to stormy daniels when he said he didn't know about it that's what white house spokeswoman sarah sanders just said at the daily press briefing in the west wing after the president's lawyer rudy giuliani revealed last night that the president has in fact reimbursed his personal lawyer michael cohen for that hundred thirty grand stated and i'll refer you back to his comments this was information that the president didn't know at the time but eventually learn reports that federal authorities wiretapped cohen before the fbi raid on his home and office sanders is deferring questions on that to the president's lawyers and the justice department says the us cannot confirm reports that north korea's releasing three americans ahead of the president's plan to summit with kim jong un but she says if it's true the administration would see it as a sign of goodwill so far so little to say from president trump's economic team when it comes to trade talks with china the latest from bloomberg's irv chapman in washington china's economic policies plus geopolitical ambitions make the negotiations a tough slog elizabeth konami of the council on foreign relations said in a bloomberg interview superpower they want to reclaim the centrality of china on the global stage they want write the rules of the game they're made in china twenty twentyfive program to protect the chinese economy and chinese industry in ten cutting edge technologies is antithetical to getting the us companies in their opening market access and getting a fair deal economy says the administration would have a better shot against chinese cheating if it worked in concert with allies who have the.