8 Burst results for "Mckesson Martin"
Bloomberg Radio New York
"mckesson martin" Discussed on Bloomberg Radio New York
"We think that the appropriate thing to do now is to move to a slower pace. It will depend on a variety of factors, including the incoming data in particular. State of the economy, the state of financial conditions. I wouldn't see us considering rate cuts until the committee is confident that inflation is moving down to 2% in a sustained way. It's the market buying what the fed is selling, Lisa will tell you absolutely not. That was chairman Powell in yesterday's news conference, going into the ECP a little bit later this morning. We look like this on the S&P by one four percentage point Dan Rather by one four percentage point with down by about 40 points on the S&P, you able to run changed on a ten year three 47 18, you're a dollar, negative 6 tenths of 1%, stronger dollar in the mix against the Euro. If you're looking at pound Sterling this morning, off the back of a 50 basis point hike from the team on threadneedle, straight wind negative 9 tenths of 1%. Tom cable, one 23 ten. How old there? And William Dudley advances conversation yesterday with us brilliantly. 2%, except as Dudley pounds the table on, we spent a lot of time under 2%, so to come down to 2% is not to come down to where we were in the great disinflation, the great moderations, an important point. Getting some complaints from Congress and I'm sure you can guess who those complaints are coming from. Senator Warren speaking with the HuffPost, saying the following. He's pushing hard to get more people fired because he thinks that is one way to help bring down inflation. Tom, she goes on to say, it's short painful for the families who lose their jobs. Yeah, this is always there. It's never going away And it's just part of the dialog as well. If he was to be renominated today, would she vote for it? Well, she had a problem this time around. It's just always been there. It's been there back to McKesson Martin and frankly, before this point. They believe and they're trying to communicate this. If they don't do this, it's worse. That it's more that it's more complex and more painful. If you allow inflation to carry on, rip in the way it has done in the last 12 months. That was basically the argument of chairman Powell delivered in Jackson hole. It clearly does not resonate with the whole of the country. Well, and that economic research is perhaps more salient when people still have their jobs. And this is what we keep talking about. That political pressure, but also the internal pressure of how difficult it is to make policies that do cause people to lose their jobs. When you actually see it happen, becomes a lot more difficult, which is the reason why so many people are pushing back and not buying what the fed is selling. That comes to the risk management question as well, Tom. Well, I think we talked about that recently. I think the risk of doing too little is still great in the risk of doing too much. And I would have to say, that came into balance a little bit more. Relative to the last meeting something's coming to be. Absolutely. To me, that's a major, major thrust here is the linear vector, the trend that we've had from ultra accommodative out to where we are now is this meeting changed, where we are, we're here. And the nuance there onto February 1 is this level of restrictive. And that's where you get this phrase from Dominic constant super restrictive ban ammons alter restrictive and Michael McKee brought it up and there was the dreaded R word with chairman Paul yesterday. Are we getting closer to chairman thinks we are close? Yeah, I mean, there's just no question. That's where we are. Right now, we have with us Emory horden, Bloomberg, Washington correspondent stealed for a football game on Sunday morning. She joins us now on the ballet into the Sunday talk shows as well. You know, we're late in the week. We're heading for the holiday season. I guess we're doing budgets. We're doing a fed meeting, ECB, all the rest of it. But what is the theme? Seriously, Emory, what is the theme in Washington into the weekend? I think we've lost track of disparate stories versus what really matters to get through the Sunday talk shows. Well, really, what we're waiting for, of course, and that could happen today is that the Senate will sign off on basically the date change to hammer out a spending agreement. And while there does seem to be a top line figure and overall a framework that Republican and Democrats agree on, there is going to be a little bit of a behind the scenes fight, right? So now I'm going to say that they have till December 23rd just before Christmas to hammer out this agreement and what you have on the Senate leadership on the Republican side is that they want to go along with this. They're getting more defense spending than they never really would normally with a democratic controlled government. And at the same time, they're just going to hammer out some of these details that they say doesn't get the domestic spending side with the Democrats want. The more interesting story is in the house because what you have right now is the potential's new speaker, Kevin McCarthy next year. You have Republicans that want to vote against this. They think that all you have from the midterm elections is a mandate that the Republicans control the house and that they should use it as a bargaining chip. But what you have from representative McCarthy that at the same time he's doing this, he's also trying to acquiesce the calls from those hard right liners in his party because he also needs their vote for the speakership. So you see him doing this double dance, really. He's one hand fighting the spending on the democratic side and also using that
Bloomberg Radio New York
"mckesson martin" Discussed on Bloomberg Radio New York
"And for the English as well So yeah that's certainly going to be a factor These are going to go away All right for sure oil prices are not going to continue to rise And again as we saw back both in 2008 and in 2020 if the economy gets slammed hard oil prices can go from a $140 a barrel to $35 a barrel and 6 months They can fall just as fast as they went up and that's I think going to be part of everybody's thinking Well the thinking goes that the cure for higher prices in the commodity complex eventually is higher prices That eventually demand destruction will kick in We have seen sentiment waning Carl and yet you haven't necessarily seen the robust demand destruction when it comes to actual consumption to consumers being willing to spend their money When does that start to happen in a more robust way Yeah hi good morning Kelly Yeah I mean we just have to be a little bit patient to see it work out right now We see evidence consumers in the United States are running up their credit card debt We see evidence that they're reducing their savings These are always the cushion the impact that would drop in real income which is what's being caused by the higher energy prices and other prices that households are facing But that can't go on forever And I think we just have to be patient that it's coming Everything you know about economics is it's in the works It's just not here just yet What should they do tomorrow Carl You've been doing this for decades You've got tons of experience back to Arthur burns and even McKesson Martin What should Jerome Powell do tomorrow Well I think he's got to pursue the course of convincing people that the fed is going to do whatever it takes to fight inflation to not let inflation expectations become entrenched in wage demands and consumer spending behavior Ben Bernanke had a piece in The New York Times today saying exactly that And I got to agree with a former chair Bernanke that that's the most important thing that the fed can do You know we've been teasing high frequency readers with an article from the economic bulletin of the ECB from May of 2010 written by the bundesbank explaining why Germany fared better in the great inflation of the 70s than the United States And their answer was they established a credible target for monetary growth or credible target for inflation and they stuck to it And I think that's the most important thing that the fed can do right now Carl Weinberg thank you so much Great briefing here as we go to the fed show tomorrow We'll have that for you in the 1 p.m. Our Michael McKee in Washington Lisa I love this sentence Michael lens you CFO a federal express The increased dividend we announced today is the culmination of our boards thoughtful efforts over many months Hogwarts total absolute Hogwarts DE Shaw went after FedEx announced today a new use of cash with a 7 and a half percent move in the stock and the dividend explodes higher How much is this going to be an increasing strategy for companies that are being buffeted by all the uncertainties and don't see a place to put their money elsewhere I point to target and caterpillar among those companies that have also boosted their dividends target being most interesting among them after cutting their forecasts several times in the same number of months How much are we looking at companies that do not see an optimistic place for their cash and they're going to return it to shareholders to be disciplined and support the valuations I mean buffeted by the pandemic no question about that But the model for FedEx out right now on free cash flow and importantly cash from operations Lisa This is not coinbase This is a money making machine as we all know when we send the package out And it wants to remind its shareholders of that by saying here you go you can have some and how much is this getting ahead of what's to come in terms of the turmoil to bolster their position but also again where else are they going to put it if people are not confident in the future Where do investments go And that's going to be something that you've been asking a lot about Tom Where do they put their cash What do they do with their credit What do they do with it in the catalyst here of DE Shaw I mean FedEx announces actions to enhance stockholder value and updates to board governance So an important announcement there and maybe we'll see much much more of this in the coming months I guess Kaylee I'm not going to see that announcement from coinbase Yeah no it's not looking likely Brian Armstrong says that reigning in costs in this environment is really what the company has to prioritize as a result They're cutting their workforce It was a different environment just a month ago That is what he said He has said things have rapidly deteriorated over the last month and coinbase isn't the only one that's feeling that I'm FedEx DE Shaw agreed to some customary standstill provisions So I guess they've come to an agreement We agree to stay with you here on most eventful morning Futures lift futures up 27 a better tape.
Bloomberg Radio New York
"mckesson martin" Discussed on Bloomberg Radio New York
"To front load these rate hikes as much as possible because we know that there's only so much they're going to be able to impact some of the supply chain disruption factors that we've had Energy prices given that there's such a again geopolitical component to that I would tell them to front load And then take a very data dependent approach come September come December The reality is I don't think they're going to be able to raise as much as markets have priced in Laura why are we not seeing consumers pull back at all Why are we seeing spending to be so robust despite some of the sentiment reads that have been negative You know we'll get the other consumer confidence data later today I do think that you're having this tug and pull between households that are badly concerned about inflation but are still supported by a healthy job market That said the components of spending are clearly shifting I think we have less spending on durable goods going forward Less spending on non durable goods there is going to be a focus on services over the summer I think it's the back half of the year that gets very uncertain And that's where I'm concerned that people are going to have their summer vacation They've been waiting for it And the kids are clamoring to go to Disney World but come to fall with food and energy prices still sticky and high People really at that point change into savings mode and try to rebuild that same So it has to do with the labor market We get the latest read on the labor market this Friday 2021 was notable for revisions For the upward revisions that changed everybody's view dramatically of a labor market that looked like it was decelerating to one that seemed like it was red hot all through the summer What kind of revisions can we expect What do we see in some of the second and third reads of what we've seen so far this year You know the data collection I think is still problematic during COVID so revisions have been larger I think it's just important to remember that the employment data are already a lagging indicator of the business cycle I think we get another strong data I think we get another strong employment report It just takes that rate hikes quarters to impact the economy And we often don't see the unemployment rate keeps climbing well after the fed has stopped raising rates at long after it stopped trying to slow the economy down So I think we get another strong payroll report My canary in the coal mines always initial claims which have stayed very low If that starts backing up we get a 5% 10% increase in claims to me that would be a really hard sign that company behavior around employees has changed radically but you know we have been resilient in this job market wave after wave of COVID depending on what's hitting us you know employers are holding on to their bodies Laura I got to go back to first principles Laura trying to reopen What does a dollar do I think the dollar continues to strengthen across the majors Tom and I think and I think it could stay strong against the yuan I think that the exchange rate is going to be one of the last things that the Chinese authorities do to try to right size the fact that they need to continue to stimulate the economy I actually think we can see more dollar strength against the Southeast Asian complex and against the renminbi Laura thank you Laura right there of FS investments on an FX market that I think the next stop for this one Lisa away from payrolls in the U.S. data It's got to be the ECB Next week and president Lagarde after speaking to francine LaCroix last week in Davos really teamed up This ECP to do something it has not done for a long long time And that's raised interest rates 9 days away I think that this ECB meeting is actually going to be one of the most pivotal in its history especially in light of record inflation in light of some of the disagreements to hearing from ECB officials Not about whether to raise rates but by how much and whether a 50 basis point rate hike is on the table If we establish whether that is Euro negative or Euro positive Absolutely Still totally divided on that issue Unclear what that actually means at a time when it really has to do with the momentum and the economy just as much as rate positioning And frankly the ECB is going to remain behind what the Federal Reserve does It's just about whether it raises rates to support the economy and create some sort of ceiling for inflation or whether it actually dampens growth in a material way that's going to be harmful And that's a complex one Tom With this economic backdrop for this this ECP to raise interest rates What does it mean for this currency positive or negative I don't have a clue because you've got a fold in the war I think the war over the weekend John This has been under reported was absolutely brutal There were drone images somewhere out in the zeitgeist that looked like something out of World War I I think the news flow is so extraordinary that Lagarde just has to get to the meeting Policymakers in a tough spot around the world time in about three minutes time let's call it 5 or 6 brandis the national economic council director joining us on this show just 5 minutes away Tom Big conversations that I had You know he's going to talk to a lot of the media today but we need to ask him John pointed questions about the history of the fed sitting in the Oval Office and what the president's going to do about fed independence We know for certain president Trump would approach this differently A difficult one in many ways Lisa and how many times have we said that so far this morning The optics of this What do you make of the optics of this meeting Later this afternoon between the president chair Powell and secretary Yellen How much is this going to be a blame game I don't think this is going to be kumbaya This is going to be President Biden saying to the fed get on this This is your job This is what you need to do to control this How much does it actually put pressure on fed chair Jay Powell to go more aggressively or frankly to show his independence because right now there's a credibility issue on both sides getting inflation under control as well as being independent from a political bodies Are you suggesting still the fed pivot wasn't down to the ECI data and it was down to the chairman get in a second term I wasn't going there but I am sure that you know I like to go I love to go there Unfortunately chairman power won't sit down with me and have that conversation Wouldn't that be nice You don't agree with that You think it was the ECI data point I think the fed is going to do what the fed does in the president knows that this is a president that has a very clear history of LBJ and McKesson Martin Bill Martin in the middle 1960s But John it's okay Lisa and I didn't agree on Velveeta cheese fondue and Davos either I imagine I would take the other side of that one too I'd be firmly on team Brahma on that issue Just a log of Velveeta melted It says disgusting Gorgeous Brian thinks he's going to be joy I guess the national economic castle director from The White House 5 minutes away from New York This is Bloomberg.
Bloomberg Radio New York
"mckesson martin" Discussed on Bloomberg Radio New York
"The S&P by four tenths of 1% TK big day ahead big week ahead too You're a big weekend head up to the jobs report here We're getting some June date out tomorrow What is the matter And as you mentioned in the last hour John the changes in our so abrupt the day to data really doesn't matter I'm really not going to matter about case schiller et cetera What I want to know is the pulse right now and you know in the Oval Office this morning That's what the president's going to ask Inflation Inflation nothing else matters right now and it's not just an America it's Europe too We talked about it earlier this morning The numbers out of Germany out of Italy had a France out of Spain out of Europe the Eurozone and 8 handle Tom an 8 handle in the Eurozone Yeah JPMorgan had been reading their hundred page Opus Maybe the research piece of the year from Christian may look in the team and John GDP of hydrocarbons is about 9% globally So every time you see that oil price tick up it permeates throughout the system Bramo driving season starting in America crude one 18 on WTI gas prices they keep climbing the wrong way for this White House There's a new record highs and a lot of people are trying to frame out a $6 a gallon gallon of gas We're already seeing that and beyond in certain areas in the United States what does this do to the buying power to the willingness of American consumers to absorb higher prices Because right now the CEO is that we spoke to last week and frankly even the business owners that I speak to casually day to day say that there really is no limit to how much they can hike up prices And that's a bad thing for the fed They can't get a read on this economy though Let's be clear about that We've seen it from company to company across industries that they're struggling to gauge where we are in this cycle They've set up their companies for where we were 12 months ago We're not there anymore We saw that at target we saw that a warm up We saw that across the retailers from being understaffed to overstaffed and they were clamoring for supply laser and maybe in some places they've got too much of it now And this is the reason why you asked really good question about what it means to see a massive price swings in some of these shares after a downside surprises and margin pressures appearing on their earning statements How much are we starting to see them actually gauge out a more optimistic future for the reality We saw the opposite of that for so many years Are we starting to see now The CEO is unable to get out ahead of just how much they're going to have to pay workers in just how much the commodity costs are going to bite And their operational expenses Without a doubt across the whole range of issues Tom can they provide any guidance right now whatsoever Absolutely not And you know the guests we have coming up here to lead off please stay with us for Peter op and I have a John I'm going to suggest it goes right to the revenue line which is a unit dynamics and the price dynamics in this high inflation environment and is Chris Christie mentioned earlier Christmas ranji rather with Gabelli mentioned When was the last time we talked about lifo fifo inventory were in a new era which hearkens back to an old era and again the president knows that old era That president has a key meeting a little bit later this afternoon We'll get to the details of that a little bit later Let's get you up to speed on what's happening with the price action as Wall Street gets back to work this Tuesday morning and good morning to you Futures negative a third of 1% on the S&P on the NASDAQ 100 Pretty flat right now Considering what we're seeing in the bond market may be surprising somewhat you'll try it by 7 or 8 basis points on a ten year two 81 33 Last week bramo it was president bostick saying maybe we have a pause later after the summer and governor Waller have none of it yesterday afternoon Frankly looking at the inflation data and just to give you a sense of that we saw mortgage levels come down mortgage rates come down last week the most going back to 2020 And yet we are continuing to see the price pressure go to the upside We're going to get the latest read on that at 9 a.m. with a slew of housing data including the FHFA as well as S&P core logic house price data year over year We have seen record increases in housing prices despite mortgage rates that are increasing despite all in costs that are creating a real prohibitive environment for a lot of a lot of potential clients a very concerning mix Meanwhile we are going to get 10 a.m. a read on consumer confidence We get the conference board U.S. consumer confidence data how much do we see an ongoing decline in how much the American public has in terms of optimism is we continue to get downside surprise on the economic data after downside surprise And at one 15 p.m. U.S. President Biden is meeting with fed chair Jerome Powell as well as treasury secretary at Janet Yellen on inflation How much can they talk about bringing up the unemployment rate This is the unpopular reality of rate hikes How much does this actually end up with more people unemployed or a worse hiring environment John that seems like the only potential outcome How do you dovetail that message If you're the leader of what a lot of people think to be the free world As Tom said repeatedly through the morning the lads getting together in the oval a little bit I'm still getting my head around that in the Oval Office a little bit later later Yeah and honestly I do wonder whether this is just a photo op or whether this actually creates I actually would agree because if it's a photo op it actually creates a liability for a Federal Reserve that's facing off with accusations of being overly political of being behind the ball How does this get positioned Excuse me into a kumbaya moment There's no kumbaya 32nd history Truman and McKesson Martin invented the modern fad I'm going to guess 1951 John flash forward to the same inflation worries of Vietnam War LBJ and again McKesson Martin pressured pressured pressured and then you go over once twice Nixon and the rest this is a reoccurring theme in Powell's got to stand his ground and frankly he's working with a president who's gracious and will let him do that without at that time This administration has blamed everything under the sun Price gouging supply chains Putin Russia take your pick They seem Milan Not Milan but none of it sticks Tom None of his sticks and you've seen what it says in the polls That's how people feel about this White House when it comes to this issue Now let's get to our guest John but this inflation is entrenched and we saw that this morning in Europe Joining us now is Peter Oppenheimer chief global equity strategist at Garmin Saxon Peter You put out the note yesterday so let's start with your research What happens after you've seen peak inflation So work through it with us Have we seen that What happens next Well I think that if you look at the history for markets at least when you get peak inflation you do tend to get a recovery in risk assets and that's generally because it starts to alleviate pressures on interest rates By that stage you've usually had markets already pricing in an economic downturn So at the point where people think that things are bad for getting less bad you tend to get a recovery but it's important to say that there are variations around this theme After all an inflation peaked in 2001 markets were still falling because of the fallout from the tech bubble And similarly that was true around the financial crisis So I think we've got a little bit be a little bit circumspect about this Generally I think if inflation peaks it will provide some relief but there's still the ongoing uncertainty about the scale of the slowdown in growth And until we get more evidence that the rate.
Bloomberg Radio New York
"mckesson martin" Discussed on Bloomberg Radio New York
"Bloomberg best I'm Denny's Pellegrini Inflation continues to be just a huge focus at the fed right now And that may have even more dovish thinkers at the Federal Reserve and elsewhere thinking that may be the fed should take some liquidity off the table fast And we had a chance to ask former Richmond fed president Jeffrey lacquer about it and he tells Bloomberg's Tom Keane and Lisa bromo he's not surprised to see doves or even moderates adopt a more hawkish view It's certainly striking that a number of people that you would historically think of is on the dovish way to come around to this But in a way it's not surprising And I think it's because of how far out of bounds of historical pattern The fed's reaction to this inflation surge has been People forget that the reason we got inflation under control teamed it and then brought it down to 2% It was by reacting with alacrity to inflation scarce Little blips in the bond market that signaled the possibility of increased inflation expectations Instead this fed seems to be willing to let him run and Jeffrey Let's take a Jeffrey right now to the immediate debate at hand and I do this in honor of Thomas Humphrey of course and all the history you've done Paul krugman has gone back to the history of 1947 the post World War II spike down we came with massive disinflation Eisenhower deflation and then there's the late 60s which was a little bit different You basically suggest mister krugman may be off and mister lacquer may be on with a more pernicious inflation of the late 60s discuss Well I can see why the 47 48 episode is attractive for those who are sanguine about the surge But for me it seems like the 1960s and early 70s is the more apt comparison Inflation is ultimately about fiscal and monetary policy And at that time period you had two very significant shifts a shift in fiscal policy with president Johnson running a great society program but also running an escalation in the war in Vietnam that busted budgets And then on the monitoring policy side you had the gradual and then sudden abandonment of the bretton Woods system which tied the value of the dollar However loosely but in the long run to gold and tied down longer run inflation expectations In addition you had the subservience of fed chairman William McKesson Martin and Arthur burns to prevailing political wins a subservience that tilted them in the direction of reducing unemployment and setting inflation pressures aside Today now we obviously have a very striking and large change in the fiscal outlook It's a period over the last couple of years And on the monetary policy side the fed rewrote its framework it rewrote its philosophy last year And again it tilted towards greater concern about employment and less of a concern about inflation more of a willingness to let it run Just do you agree Do you agree then that the remedy is going to be a very quick series of rate hikes or perhaps a jump or we could get three to 4% up and policy rates or peak policy rates in the cycle Three to 4% wouldn't surprise me Really Yeah I think they're on track to a major policy blunder And recovering from that realizing they've waited too long It's going to cause them to have necessity raise rates sharply and try and engineer a cooling of the labor market And that very rarely turns out well It's Bill Dudley's pointed this out publicly that and others as well that the fed rarely is able to get the unemployment rate to go back up a little bit without it filling up a fairly large amount It's very hard to calibrate just how much to take out of the system and it seems to me plausible that we get to three and a half 4% And in addition that we pushed the economy into a recession Yeah well that's exactly where I was going to go with this Jeff and I are looking at the average high yield bond yield The average junk bond yield in the United States is currently at 4.23% That is all inclusive You get the overnight rate at three and a half to 4% What does that do to the valuations of these securities What kind of recession are we looking at and won't the fed be reluctant to move in that kind of manner because of the torpedoing effect on markets Yeah I think they're in a situation where they need to avoid an error They need to pivot recalibrate pretty rapidly Accelerate the taper get rate increases started earlier next year in the first half And they're going to need some good luck And I think a lot of markets seem to me priced for a lot of good luck I want to take the freshwater heritage here of the wonderful Marvin good friend and of course his mentor Alan Meltzer and Carnegie Mellon Alan melzer lectured me like you lectured me We've got to look all in at the macro data in America as an entirety Or are we so polarized now that the president's studying inflation has to look at it as two chords The haves and the have nots It's a good question We typically have it don't have a lot of data on inflation rates by cohorts I think more broadly differential effects of inflation translated into different political implications for the fed different levels of political system dissatisfaction for the fed On the employment side I think the fed's redefined maximum employment has brought an inclusive that's all well and good but it's really hard to measure and by adding more essentially more goals you sort of weaken your attachment to any of them and it raises serious questions I think the fed has been A slave to a deeply flawed and outmoded conception of maximum employment And I think they missed an opportunity to update that Jeff one last question because you're gonna throw me off air Who is closer to the flawed concept Governor brainard or chairman Powell I don't see much daylight between them on this I think that they're both strongly aligned with the house view that the word staff and others in the system promulgate If you use maximum employment as this timeless parameter that we get to at the very end of.
Bloomberg Radio New York
"mckesson martin" Discussed on Bloomberg Radio New York
"Is Bloomberg best I'm Denise Pellegrini Inflation continues to be just a huge focus at the fed right now And that may have even more dovish thinkers at the Federal Reserve and elsewhere thinking that maybe the fed should take some liquidity off the table fast And we had a chance to ask former Richmond fed president Jeffrey lacquer about it and he tells Bloomberg's Tom Keane and Lisa Brahma he's not surprised to see doves or even moderates adopt a more hawkish view It's certainly striking that a number of people that you would historically think of is on the dovish way to come around to this But in a way it's not surprisingly I think it's because of how far out of bounds of historical pattern It feds reaction to this inflation surge has been People forget that the reason we got inflation under control teamed it and then brought it down to 2% It was by reacting with alacrity to inflation scarce Little blips in the bond market that signaled the possibility of increased inflation expectations Instead this fed seems to be willing to let run Jeff Francis and let's take a Jeffrey right now to the immediate debate at hand and I do this in honor of Thomas Humphrey of course and all the history you've done Paul krugman has gone back to the history of 1947 the post World War II spike down we came with massive disinflation Eisenhower deflation and then there's the late 60s which was a little bit different You basically suggest mister krugman may be off and mister lacquer may be on with a more pernicious inflation of the late 60s discuss Well you can see why the 47 48 episode is attractive for those who are sanguine about the surge But for me it seems like the 1960s and early 70s is the more active comparison Inflation is ultimately about fiscal and monetary policy And at that time period you had two very significant shifts a shift in fiscal policy with president Johnson running a great society program but also running an escalation and the war in Vietnam the busted budgets And then on the monitored policy side you had the gradual and then sudden abandonment of the bretton Woods system which tied the value of the dollar However loosely but in the long run to gold and tied down longer run inflation expectations In addition you had the subservience of fed chairman William McKesson Martin and Arthur burns to prevailing political wins a subservience that tilted them in the direction of reducing unemployment and setting inflation pressures aside Today now we obviously have a very striking and large change in the fiscal outlook It's great over the last couple of years And on the monetary policy side the fed we wrote its framework It rewrote its philosophy last year And again it tilted towards greater concern about employment and less of a concern about inflation more of a willingness to let it run Jessica do you agree Do you agree then that the remedy is going to be a very quick series of rate hikes or perhaps a jump or we could get three to 4% up and policy rates or peak policy rates in the cycle Three to 4% wouldn't surprise me Really I think they're on track to a major policy blunder And recovering from that realizing they've waited too long It's going to cause them to have necessity raise rates sharply and try and engineer a cooling of the labor market And that very rarely turns out well It's Bill Dudley's pointed this out publicly that and others as well that the fed rarely is able to get the unemployment rate to go back up a little bit without it filling up a fairly large amount It's very hard to calibrate just how much to take out of the system and it seems to me plausible that we get to three and a half 4% And in addition that we pushed the economy into a recession Yeah well that's exactly where I was gonna go with this Jeff and I am looking at the average high yield bond yield The average junk bond yield in the United States is currently at 4.23% That is all inclusive You get the overnight rate at three and a half to 4% What does that do to the valuations of these securities What kind of recession are we looking at and won't the fed be reluctant to move in that kind of manner because of the torpedoing effect on markets Yeah I think they're in a situation where they need to avoid an error They need to pivot recalibrate pretty rapidly Accelerate the taper get rate increases started earlier next year in the first half And they're going to need some good luck And I think a lot of markets seem to need price for a lot of good luck Chip flicker I want to take the freshwater heritage here of the wonderful Marvin goodford and of course his mentor Alan Meltzer and Carnegie Mellon Allen melzer lectured me like you lectured me We've got to look all in at the macro data in America as an entirety Or are we so polarized now that the president's studying inflation has to look at it as two chords the haves and the have nots It's a good question We typically have it Don't have a lot of data on inflation rates by cohorts I think more broadly differential effects of inflation translating to different political implications for the fed different levels of political system dissatisfaction for the fed On the employment side I think the feds redefined the maximum employment as broad and inclusive that's all well and good but it's really hard to measure and by adding more essentially more goals you sort of weaken your attachment to any of them and it raises serious questions I think the fed has been A slave to a deeply flawed and outmoded conception of maximum employment And I think they missed an opportunity to update that Jeff one last question 'cause you're gonna throw me off air Who is closer to the flawed concept Governor brainard or chairman Powell I don't see much daylight too between them on this I think that they're both strongly aligned with the house view that the board staff and others in the system promulgate If you use maximum employment as this timeless parameter that we get to at the very end of a long expansion if we're not if in the event that we're not hit by any shocks in the meantime and you have to ask yourself the question what was maximum employment in the third quarter of 2021 Well whatever it was we surely got there and went beyond So the modern view that corresponds to the modern view which is that maximum employment the natural rate call it what you will is something that fluctuates substantially over the business cycle fluctuates with a lot of different conditions And the fed needs to take that on board And you've been listening to former Richmond Federal Reserve president Jeffrey lacquer with Bloomberg's Tom Keane and Lisa Brahma And coming up oaktree capitals Howard marks on investing in this volatile environment Plus Minneapolis fed president.
Bloomberg Radio New York
"mckesson martin" Discussed on Bloomberg Radio New York
"Bloomberg best I'm Denise Pellegrini Inflation continues to be just a huge focus at the fed right now And that may have even more dovish thinkers at the Federal Reserve and elsewhere thinking that maybe the fed should take some liquidity off the table fast And we had a chance to ask former Richmond fed president Jeffrey lacquer about it and he tells Bloomberg's Tom Keane and Lisa Brahma he's not surprised to see doves or even moderates adopt a more hawkish view It's certainly striking that a number of people that you would historically think of is on the dovish way to come around to this But in a way it's not surprising I think it's because of how far out of bounds of historical pattern The fed's reaction to this inflation surge has been People forget that the reason we got inflation under control teamed it and then brought it down to 2% is by reacting with alacrity to inflation scarce Little blips in the bond market that signaled the possibility of increased inflation expectations Instead this fed seems to be willing to let him run Jeffrey Let's take a Jeffrey right now to the immediate debate at hand and I do this in honor of Thomas Humphrey of course and all the history you've done Paul krugman has gone back to the history of 1947 the post World War II spike down we came with massive disinflation Eisenhower deflation and then there's the late 60s which was a little bit different You basically suggest mister krugman may be off and mister lacquer may be on with a more pernicious inflation of the late 60s discuss Well I can see why the 47 48 episode is attractive for those who are sanguine about the surge But for me it seems like the 1960s and early 70s is the more active comparison Inflation is ultimately about fiscal and monetary policy And at that time period you had two very significant shifts a shift in fiscal policy with president Johnson running a great society program but also running an escalation in the war in Vietnam that busted budgets And then on the monitoring policy side you had the gradual and then sudden abandonment of the bretton Woods system which tied the value of the dollar However loosely but in the long run to gold and tied down longer run inflation expectations In addition you had the subservience of fed chairman William McKesson Martin and Arthur burns to prevailing political wins a subservience that tilted them in the direction of reducing unemployment and setting inflation pressures aside Today now we obviously have a very striking and large change in the fiscal outlook It's a period over the last couple of years And on the monetary policy side the fed rewrote its framework It rewrote its philosophy last year And again it tilted towards a greater concern about employment and less of a concern about inflation more of a willingness to let it run Just do you agree Do you agree then that the remedy is going to be a very quick series of rate hikes or perhaps a jump or we could get three to 4% up and policy rates or peak policy rates in the cycle Three to 4% wouldn't surprise me Really cool I think they're on track to a major policy blunder And recovering from that realizing they've waited too long It's going to cause them to have necessity raise rates sharply and try and engineer a cooling of the labor market And that very rarely turns out well It's Bill Dudley's pointed this out publicly that and others as well that the fed rarely is able to get the unemployment rate to go back up a little bit without it going up a fairly large amount It's very hard to calibrate just how much to take out of the system and it seems to me plausible that we get to three and a half 4% And in addition that we pushed the economy into a recession Yeah well that's exactly where I was going to go with this Jeff and I are looking at the average high yield bond yield The average junk bond yields in the United States is currently at 4.23% That is all inclusive You get the overnight rate at three and a half to 4% What does that do to the valuations of these securities What kind of recession are we looking at and won't the fed be reluctant to move in that kind of manner because of the torpedoing effect on markets Yeah I think they're in a situation where they need to avoid an error They need to pivot recalibrate pretty rapidly Accelerate the taper get rate increases started earlier next year in the first half And they're going to need some good luck And I think a lot of markets seem to meet priced for a lot of good luck Chip flicker I want to take the freshwater heritage here of the wonderful Marvin good friend and of course his mentor Alan Meltzer and Carnegie Mellon Alan melzer lectured me like you lectured me We've got to look all in at the macro data in America as an entirety Or are we so polarized now that the president's studying inflation has to look at it as two chords The haves and the have nots It's a good question We typically have it Don't have a lot of data on inflation rates by cohorts I think more broadly differential effects of inflation translated into different political implications for the fed different levels of political system dissatisfaction For the fed on the employment side I think the feds redefined the maximum employment as broad and inclusive That's all well and good but it's really hard to measure and by adding more essentially more goals you sort of weaken your attachment to any of them and it raises serious questions I think the fed has been A slave to a deeply flawed and outmoded conception of maximum employment And I think they missed an opportunity to update that Jeff one last question because you're gonna throw me off air Who is closer to the flawed concept Governor brainard or chairman Powell I don't see much daylight between them on this I think that they're both strongly aligned with the house view that the word staff and others in the system promulgate If you use maximum employment as this timeless parameter that we get to at the very end of a long expansion if we're not if in the event that we're not hit by any shocks in the meantime and you have to ask yourself the question what was maximum employment in the third quarter of 2021 Well whatever it was we surely got there and went beyond So the monarchy That corresponds to the modern view which is that maximum employment of the natural rate call it what you will is something that fluctuates substantially over the business cycle fluctuates with a lot of different economic conditions And the fed needs to take that on board And you've been listening to former Richmond Federal Reserve president Jeffrey lacquer with Bloomberg's Tom Keane and Lisa brahmas And coming up oak tree capitals Howard marks on investing in this volatile environment Plus Minneapolis fed president Neil.
Bloomberg Radio New York
"mckesson martin" Discussed on Bloomberg Radio New York
"Best I'm Denise Pellegrini Inflation continues to be just a huge focus at the fed right now And that may have even more dovish thinkers at the Federal Reserve and elsewhere thinking that may be the fed should take some liquidity off the table fast And we had a chance to ask former Richmond fed president Jeffrey lacquer about it and he tells Bloomberg's Tom Keane and Lisa Brahma he's not surprised to see doves or even moderates adopt a more hawkish view It's certainly striking that a number of people that you would historically think of is on the dovish way to come around to this But in a way it's not surprising And I think it's because of how far out of bounds of historical pattern the fed's reaction to this inflation surge has been People forget that the reason we got inflation under control team did and then brought it down to 2% It was by reacting with alacrity to inflation scarce Little blips in the bond market that signaled the possibility of increased inflation expectations Instead this fed seems to be willing to let him run and Jeffrey And let's take it Jeffrey right now to the immediate debate at hand and I do this in honor of Thomas Humphrey of course and all the history you've done Paul krugman has gone back to the history of 1947 the post World War II spike down we came with massive disinflation Eisenhower deflation and then there's the late 60s which was a little bit different You basically suggest mister krugman may be off and mister lacquer may be on with a more pernicious inflation of the late 60s discuss Well you can see why the 47 48 episode is attractive for those who are sanguine about the surge But for me it seems like the 1960s and early 70s is the more apt comparison Inflation is ultimately about fiscal and monetary policy And at that time period you had two very significant shifts The shift in fiscal policy with president Johnson running a great society program but also running an escalation and the war in Vietnam the busted budgets And then on the monitor policy side you had the gradual and then sudden abandonment and the bretton Woods system which tied the value of the dollar However loosely but in the long run to gold and tied down longer run inflation expectations In addition you had the subservience of fed chairman William McKesson Martin and Arthur burns to prevailing political wins a subservience that tilted them in the direction of reducing unemployment and setting inflation pressures aside Today now we obviously have a very striking and large change in the fiscal outlook It's a crude over the last couple of years And on the monetary policy side the fed we wrote its framework it rewrote its philosophy last year And again it tilted towards greater concern about employment and less of a concern about inflation more of a willingness to let it run Just do you agree Do you agree then that the remedy is going to be a very quick series of rate hikes or perhaps a jump or we could get three to 4% up and policy rates or peak policy rates in the cycle Three to 4% wouldn't surprise me Really Yeah I think they're on track to a major policy blunder And recovering from that realizing they've waited too long It's going to cause them two of necessity raise rates sharply and try and engineer a cooling of the labor market And that very rarely turns out well It's Bill Dudley's pointed this out publicly that and others as well that the fed rarely is able to get the unemployment rate to go back up a little bit without it going up a fairly large amount It's very hard to calibrate just how much to take out of the system and it seems to me plausible that we get to three and a half 4% And in addition that we pushed the economy into a recession Yeah well that's exactly where I was going to go with this Jeff and I are looking at the average high yield bond yield The average junk bond yields in the United States is currently at 4.23% That is all inclusive You get the overnight rate at three and a half to 4% What does that do to the valuations of these securities What kind of recession are we looking at and won't the fed be reluctant to move in that kind of manner because of the torpedoing effect on markets Yeah I think they're in a situation where they need to avoid an error They need to pivot recalibrate pretty rapidly Accelerate the taper get rate increases started earlier next year in the first half And they're going to need some good luck And I think a lot of market seem to need priced for a lot of good luck Chef Flickr I want to take the freshwater heritage here of the wonderful Marvin good friend and of course his mentor Alan Meltzer and Carnegie Mellon Allen melzer lectured me like you lectured me We've got to look all in at the macro data in America as an entirety Or are we so polarized now that the president's studying inflation has to look at it It's too chords The haves and the have nots It's a good question We typically haven't don't have a lot of data on inflation rates by cohorts I think more broadly differential effects of inflation translated into different political implications for the fed different levels of political system dissatisfaction for the fed On the employment side I think the feds redefined the maximum employment as broad and inclusive that's all well and good but it's really hard to measure and by adding more essentially more goals you sort of weaken your attachment to any of them and it raises serious questions I think the fed has been A slave to a deeply flawed and outmoded conception of maximum employment And I think they missed an opportunity to update that Jeff one last question because you're gonna throw me off air Who is closer to the flawed concept governor brainard or chairman Powell I don't see much daylight between them on this I think that they're both strongly aligned with the house view that the word staff and others in the system promulgate If you use maximum employment as this timeless parameter that we get to at the very end of a long expansion if we're not if in the event that we're not hit by any shocks in the meantime And you have to ask yourself the question What was maximum employment in the third quarter of 2021 Well whatever it was we surely got there and went beyond So the modern view that corresponds to the modern view which is that maximum employment the natural rate call it what you will is something that fluctuates substantially over the business cycle fluctuates with a lot of different economic conditions And the fed needs to take that on board And you've been listening to former Richmond Federal Reserve president Jeffrey lacquer with Bloomberg's Tom Keene and Lisa Brahma And coming up oaktree capitals Howard marks on investing in this volatile environment Plus Minneapolis fed president Neil kashkari.