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00:00:00EVENTS WITH LIVE STROME FLOOR PROCEEDINGS AND HEARINGS FROM THE U.S. CONGRESS.
00:00:03WHITE HOUSE EVENTS. THE COURTS. CAMPAIGNS. AND MORE.
00:00:06FROM THE WORLD OF POLITICS. ALL AT YOUR FINGERTIPS.
00:00:09CATCH THE LATEST EPISODES OF
00:00:13WASHINGTON JOURNAL, FIND SCHEDULING INFORMATION FOR
00:00:15C-SPAN'S TV AND RADIO NETWORKS.
00:00:18PLUS A VARIETY OF COMPELLING CONTESTS. THE C-SPAN APP IS AVAILABLE AT
00:00:22THE APPLE STORE AND GOOGLE PLAY. DOWNLOAD IT FOR PRETODAY.
00:00:26C-SPAN, DEMOCRACY
00:00:32FOLLOW EXPLAIN.
00:00:33>> AND NOW, KEVIN WARSH GIVING
00:00:37HIS FIRST KEYNOTE AT THE ANNUAL
00:00:39JACKSON HOLE ANNUAL SYMPOSIUM IN WYOMING.
00:00:43HE SAID, QUOTE, I'M IMPRESSED BY
00:00:45THE OVERALL APPEARANCE OF THE ECONOMY.
00:00:48AND HE ACKNOWLEDGED RISING COST IN INFLATION.
00:00:50THIS IS ABOUT 30 MINUTES.
00:00:58>> GOOD MORNING, KRISTEN. THANK YOU FOR THAT SUPER KIND INTRODUCTION. IT WAS 25 YEARS AGO THAT WE WERE
00:01:03COLLEAGUES. IT'S AN HONOR TO SHARE THE STAGE WITH YOU.
00:01:07IT'S GREAT TO BE BACK HERE IN THE VALLEY AGAIN, SEE SO MANY
00:01:10FAMILIAR FACES FROM ACADEMIA,
00:01:12FROM MY LAST TOUR OF SERVICE,
00:01:17AND FROM MY FIRST 100 DAYS, WHICH IS JUST THIS WEEKEND.
00:01:21I'VE BEEN LOOKING FORWARD TO THIS WEEKEND, AND BEFORE I GO FURTHER, I WANT TO THANK JEFF
00:01:24SCHMIDT AND HIS TEAM FOR THE INCREDIBLE HOSPITALITY.
00:01:27EVERYBODY HERE IS IN DEBT TO YOU AND TO YOUR COLLEAGUES HERE AT THE FEDERAL RESERVE BANK OF
00:01:30KANSAS CITY. JEFF, OUR THANKS TO YOU AND YOUR
00:01:33TEAM. NOW HE AND THE OTHER PLANNERS
00:01:36HERE HAVE SOME RECREATION OPTIONS LINED UP FOR LATER
00:01:39TODAY.
00:01:44I'D ADVISE YOU TO BE VERY
00:01:44CAREFUL WITH YOUR CHOICES.
00:01:49AS I LEARNED YEARS AGO, YOU CAN TAKE TWO DIFFERENT KINDS OF HIKES ON THE TRAILS AROUND
00:01:52JACKSON. I CAN SUM UP MY HIKES WITH
00:01:55FORMER VICE CHAIRMAN DON COHN
00:01:57WITH TWO WORDS, I SURVIVED.
00:02:04THESE STEELY MARATHON DEATH MARCHES REVEALED THE SIGN OF DAWN THAT I WAS NOT READY FOR.
00:02:08BUT THERE'S ANOTHER KIND OF
00:02:10HIKE. THIS ONE WAS WITH FORMER
00:02:14CHAIRMAN BEN BERNANKE, ANOTHER DEAR OLD COLLEAGUE.
00:02:17WITH BEN, IT WAS A MUCH MORE
00:02:20LEISURELY PACE, AN EASY STROLL ALONG THE WANDERING TRAILS OF
00:02:23THE ROCKEFELLER PRESERVE. SO BEFORE SETTING OUT TODAY, MY RECOMMENDATION IS TO DO A
00:02:26WELLNESS CHECK.
00:02:32ASK YOURSELF, IS THIS A COHN DAY
00:02:33OR A BERNANKE DAY?
00:02:37THE BEST THING ABOUT THIS GATHERING IS THAT IT HELPS US ALL GET OUT HERE TO THE
00:02:40MOUNTAINS AND CLEAR OUR MINDS. AND THINK STRAIGHT ABOUT OUR
00:02:44WORLD AND OUR TIME. FOR ME, IT FEELS LIKE THE RIGHT
00:02:48PLACE AND THE RIGHT AUDIENCE FOR
00:02:49A REAL ENGAGEMENT WITH THE IDEAS
00:02:53THAT MATTER MOST. INNOVATION, AS KRISTEN MENTIONED, IS THE CONFERENCE
00:02:57THEME.
00:02:59AND I BELIEVE THE PUBLIC AND THE
00:03:01MARKETS UNDERSTAND THAT
00:03:06INNOVATIONS IN THE CONDUCT OF FED POLICY WILL HELP DELIVER PRICE STABILITY ALONGSIDE FULL
00:03:09EMPLOYMENT. SO HERE'S A QUICK OVERVIEW OF WHAT I'LL COVER IN MY REMARKS
00:03:13THIS MORNING.
00:03:14YOU CAN CALL IT AN OUTLINE.
00:03:19YOU CAN CALL IT A TRAIL MAP, BUT PLEASE JUST DON'T CALL IT FORWARD GUIDANCE.
00:03:23FIRST, I'LL TOUCH ON A FEW OF THE LONGER TERM QUESTIONS WE'RE
00:03:26ASKING AT THE FED ABOUT THE LATEST GENERAL PURPOSE TECHNOLOGY A.I. AND WHERE IT MIGHT TAKE THE
00:03:31ECONOMY.
00:03:34THEN I'LL REFLECT A BIT ON THE PRACTICE OF FORWARD GUIDANCE AND
00:03:37THE INTERACTION BETWEEN THE CENTRAL BANK AND FINANCIAL
00:03:40MARKETS.
00:03:42NEXT, I'LL PRESENT SOME OF THE KEY PRINCIPLES THAT I BELIEVE
00:03:46SHOULD GUIDE THE CONDUCT OF MONETARY POLICY, AND FINALLY,
00:03:49I'LL GIVE YOU MY ASSESSMENT OF WHAT'S HAPPENING IN THE ECONOMY.
00:03:52SO FIRST I THINK WE SHOULD TRY TO PREPARE A BIT FOR FUTURE
00:03:56POLICY CONJUNCTURES.
00:03:59WITH THE UNCHANGING PICTURE OF
00:04:04THE TETONS AS OUR BACKDROP, WE ARE HERE TO SURVEY AN ECONOMIC LANDSCAPE THAT IS ANYTHING BUT
00:04:08STATIC.
00:04:09IT WASN'T SO LONG AGO, INCLUDING
00:04:12IN ROOMS LIKE THIS IN THE RUN UP
00:04:15TO THE CRISIS OF 2008 AND OVER THE DECADE THAT FOLLOWED, WHEN
00:04:20ECONOMISTS AND POLICYMAKERS WERE SPEAKING OF SECULAR STAGNATION,
00:04:23SPEAKING OF A GLOBAL SAVINGS GLUT.
00:04:27IT WAS A WIDELY HELD VIEW THAT AN EXCESS OF CAPITAL WOULD SIT
00:04:30ON THE SIDELINES FOR A VERY LONG, LONG TIME BECAUSE THERE JUST WOULDN'T BE ENOUGH
00:04:33COMPELLING INVESTMENT OPPORTUNITIES.
00:04:36ALL THE GOOD STUFF, YOU'LL
00:04:38RECALL, HAD BEEN INVENTED.
00:04:41SO GROWTH WOULD BE LOW AND SLOW.
00:04:43WELL, TIMES SURE HAVE CHANGED.
00:04:46WE'VE COME TO A HINGE POINT IN
00:04:49HISTORY, TO BORROW A PHRASE, A FRAMING FROM MY FORMER MENTOR
00:04:53GEORGE SHULTZ.
00:04:55TO CITE THE CLEAREST EXAMPLE,
00:04:59PROGRESS IN A.I. THE 80 YEAR OLD NAME FOR THE NEWEST
00:05:03TECHNOLOGY, HAS BEEN FASTER EVEN THAN ITS EVANGELISTS PREDICTED
00:05:08JUST A COUPLE OF YEARS AGO. THE POTENTIAL FOR SUBSTANTIALLY
00:05:10HIGHER GROWTH IS ON THE RISE.
00:05:13EVER EXPANDING POOLS OF CAPITAL,
00:05:19POURING INTO A.I.-RELATED INFRASTRUCTURE OF ALL SORTS.
00:05:22A KIND OF SUPER MOORE'S LAW SEEMS TO BE PLAYING OUT. SCALING LAWS TOO ARE CHANGING
00:05:26BOTH THE METHOD AND SPEED OF INNOVATION.
00:05:30CAPITAL AND LABOR HAVE COMBINED
00:05:31TO CREATE LARGE LANGUAGE MODELS
00:05:36AT THE HEART OF A.I. USERS BUY TOKENS TO GAIN ACCESS TO THESE MODELS.
00:05:40REPORTS PUT ANNUALIZED TOKEN
00:05:41SALES FOR THE TWO LEADING LABS
00:05:47ALONE AT MORE THAN $100 BILLION, AN INCREASE OF 500% FROM JUST 12
00:05:50MONTHS AGO.
00:05:51WE AT THE FED, WE WATCH ALL THIS
00:05:56ATTENTIVELY. WE RECOGNIZE THAT AI IS A NEW VARIABLE.
00:05:59POTENTIALLY A NEW FACTOR OF PRODUCTION. THAT WILL HAVE CONSEQUENCES BOTH
00:06:03FOR THE ECONOMY AND FOR THE
00:06:05CONDUCT OF MONETARY POLICY. IT OPENS UP SOME MAJOR LINES OF
00:06:09INQUIRY.
00:06:13WILL THE APPLICATION OF A.I. CAUSE A SIGNIFICANT SUSTAINED
00:06:16RISE IN PRODUCTIVITY?
00:06:19ACROSS THE ECONOMY. IF SO, WHEN?
00:06:23WILL TOKEN USAGE BE COMPLEMENTARY OR COMPETITIVE TO
00:06:25LABOR?
00:06:32WILL THE NEXT GENERATION OF A.I. MODELS DEMAND EVEN GREATER CAPITAL INTENSITY TOO, OR WILL THE MODELS THEMSELVES HELP
00:06:35DEVISE A CAPITAL LIGHT SOLUTION?
00:06:39AMONG THE OTHER YET UNKNOWNS IS
00:06:41THE RESULTING MARKET STRUCTURE.
00:06:44WHO GETS TO MAKE THE MONEY. IT'S NOT OBVIOUS WHEN THE WHERE
00:06:48THE RETURNS ON CAPITAL WILL LAND
00:06:51OR ON WHAT TIMESCALE. EARLY ON, HOW MUCH OF THE
00:06:53SURPLUS GOES TO OWNERS OF SCARCE
00:06:58ASSETS, THE A.I. LABS OR CHIP MAKERS OR ENERGY PRODUCERS OR CLOUD PROVIDERS?
00:07:02OVER TIME, HOW MUCH OF THAT VALUE ACCRUES TO BUSINESSES AND
00:07:05CONSUMERS? AND IMPORTANTLY, WHAT ARE THE
00:07:09IMPLICATIONS FOR WORKERS AND FOR THE EMPLOYMENT SIDE OF THE FED'S
00:07:12MANDATE?
00:07:16LIKEWISE, WE DON'T YET KNOW THE EQUILIBRIUM PRICE OF THE TOKENS
00:07:19THAT GIVE ACCESS TO THESE MODELS.
00:07:22MIGHT THERE BE A HETEROGENEITY OF TOKENS SUCH THAT GROWING SUMS
00:07:26WILL BE PAID FOR THE ACCESS TO THE BEST MODELS, THOSE AT THE
00:07:30FRONTIER? WILL TOKEN PRICES FOR OLDER
00:07:33MODELS FALL TO THE LEVEL OF THEIR MARGINAL COST?
00:07:37WELL, WE'LL BE THINKING THROUGH THESE MATTERS WITH THE HELP OF A
00:07:41TASK FORCE ON PRODUCTIVITY AND JOBS.
00:07:45MY EARLY CHECK-INS WITH THE LEADERS OF THAT TASK FORCE AND
00:07:47THE REST HAVE BEEN VERY
00:07:50ENCOURAGING. TO BE CLEAR THOUGH, THEIR RECOMMENDATIONS WILL COME LATER
00:07:54AND HAVE NO BEARING. ON DECISIONS WE MAKE IN THE
00:07:57CURRENT POLICY CONJUNCTURE.
00:07:59BUT I BELIEVE THAT FOR FUTURE POLICY CHALLENGES, THIS
00:08:03INTELLECTUAL INVESTMENT TODAY WILL LEAVE US MUCH BETTER
00:08:07PREPARED FOR TOMORROW.
00:08:10NEXT, LET ME SAY A WORD ABOUT
00:08:12FORWARD GUIDANCE AND ITS
00:08:14SUBSTITUTES.
00:08:17AS OUR TASK FORCES GO ABOUT THEIR WORK, AS YOU MIGHT KNOW,
00:08:19I'M NOT WAITING TO INTRODUCE INNOVATIONS AT THE FED TO HELP
00:08:23MAKE US FIT FOR PURPOSE.
00:08:26TO HIGHLIGHT ONE EXAMPLE, I'VE
00:08:29SET OUT TO CHANGE THE FORM AND FUNCTION OF THE FED CHAIRMAN'S
00:08:33SO-CALLED FORWARD GUIDANCE. YOU MIGHT KNOW ABOUT MY LONGTIME DISCOMFORT WITH EARLY
00:08:37PRONOUNCEMENTS OF FUTURE POLICY
00:08:46DECISIONS. I MUCH PREFER ANOTHER PATH, AND NOW WE'LL MAKE THE CASE FOR IT. TRANSPARENCY AND COMMUNICATIONS
00:08:50ABOUT FUTURE POLICY DECISIONS IS
00:08:54NOT AN END UNTO ITSELF. COMMUNICATIONS MUST BE IN
00:08:57SERVICE TO THE FED'S PARAMOUNT
00:09:03RESPONSIBILITY, AND WHAT IS THAT THAT'S GETTING POLICY RIGHT? FORWARD GUIDANCE AS A REGULAR
00:09:07PRACTICE WAS ADOPTED BY MY COLLEAGUES AND ME DURING THE
00:09:11GLOBAL FINANCIAL CRISIS. IT WAS ESSENTIAL AT THE TIME.
00:09:14AND WE INTRODUCED IT WITH MUCH
00:09:16FANFARE. BUT AS WITH OTHER LEGACIES OF
00:09:20CRISES PAST, I BELIEVE THE PRACTICE HAS OUTSTAYED ITS
00:09:24WELCOME. IN NORMAL TIMES, THE ROLE OF FORWARD GUIDANCE SHOULD BE
00:09:28LIMITED AND CIRCUMSCRIBED. OTHERWISE IT RISKS CREATING
00:09:32AMBIGUITY IN THE NAME OF
00:09:34CLARITY.
00:09:37OVERSHARING POLICY DELIBERATIONS AND OVERCOMMITTING TO FUTURE
00:09:42DECISIONS CAN LEAD MARKETS, BUSINESSES, AND HOUSEHOLDS
00:09:45ASTRAY.
00:09:48AND I BELIEVE WHEN POLICYMAKERS MAKE QUASI COMMITMENTS ON
00:09:51INTEREST RATES THROUGHOUT THE
00:09:55CYCLE, WE INHIBIT OUR OWN
00:09:57FREEDOM TO MAKE THE RIGHT CALLS WHEN IT'S TIME TO DECIDE.
00:10:01TO GET POLICY RIGHT, WE ALSO NEED TO GET THE RELATIONSHIP
00:10:04RIGHT BETWEEN THE CENTRAL BANK
00:10:07AND FINANCIAL MARKETS.
00:10:09THE MARKETS, THE EXCUSE ME, THE FED NEEDS CLEAR MARKET SIGNALS
00:10:13AS UNFILTERED AS POSSIBLE FROM
00:10:17MARKET INTERNALS, FROM THE LEVEL AND CHANGE IN ASSET PRICES
00:10:21ACROSS SECTORS. THE PRICES AND TRADING VOLUMES
00:10:25OF TREASURY SECURITIES. THE FOREIGN EXCHANGE VALUE OF
00:10:29THE DOLLAR, THE COST AND
00:10:31AVAILABILITY OF CREDIT.
00:10:34A BROAD SET OF COMMODITY PRICES.
00:10:38THESE AND OTHER INDICATORS SHOULD INFORM THE FED'S
00:10:41NEAR-TERM OUTLOOK ON ECONOMIC ACTIVITY AND INFLATION
00:10:44THROUGHOUT THE BUSINESS CYCLE. THEY SHOULD ALSO REVEAL THE
00:10:47STATE OF BROADER FINANCIAL
00:10:50CONDITIONS AND THE RISKS AND UNCERTAINTIES OF THE FINANCIAL
00:10:54CYCLE. AT THE SAME TIME, MARKET
00:10:57PARTICIPANTS THEMSELVES SHOULD
00:11:00BE TRACKING REAL INFORMATION
00:11:02ABOUT THE REAL ECONOMY.
00:11:05THEY SHOULD DRAW THEIR OWN CONCLUSIONS, FORM THEIR OWN
00:11:08EXPECTATIONS ON THINGS LIKE
00:11:10OUTPUT AND EMPLOYMENT AND
00:11:13INFLATION, AND THEY TOO SHOULD STAY SHARPLY ATTUNED TO RISKS.
00:11:17IN MY VIEW, THE FED SHOULD BE
00:11:20HUMBLE AND NEVER NAIVE.
00:11:22THE FED PLAYS AN ESSENTIAL ROLE
00:11:25IN THE ECONOMY AND MARKETS.
00:11:28OUR TOOLS ARE POWERFUL. WE DETERMINE THE PATH OF SHORT-TERM INTEREST RATES, AND
00:11:32MARKET PARTICIPANTS WILL ALWAYS
00:11:33TRY TO ANTICIPATE WHAT WE WILL
00:11:41DO NEXT, BUT WE SHOULD NOT INDULGE A REGIME IN WHICH MARKET PARTICIPANTS ARE LOOKING
00:11:44PRIMARILY TO THE FED FOR THEIR
00:11:47NEXT TRADE. THE ECONOMIC LITERATURE HAS LONG
00:11:50DESCRIBED THE DISTORTING EFFECTS.
00:11:53WHAT IT CALLED THE HALL OF
00:11:55MIRRORS PROBLEM.
00:11:57IF MARKETS RELY MATERIALLY ON
00:12:02THE FED'S GUIDANCE AND THE FED
00:12:05RELIES ON MARKET PRICES, WE'RE MORE LIKELY TO BE BLINDED TO NEW
00:12:08DEVELOPMENTS, MORE LIKELY TO BE CAUGHT UNPREPARED, AND MORE
00:12:11LIKELY TO COMMIT ERRORS IN
00:12:14POLICYMAKING. NOW, PERVERSELY, MARKET
00:12:17PARTICIPANTS ARE UNLIKELY TO
00:12:19BEAR THE BIGGEST COSTS OF THE
00:12:22HALL OF MIRRORS PROBLEM. THE MOST SERIOUS HARM IS LIKELY
00:12:25TO BEFALL THOSE WITHOUT ANY
00:12:27FINANCIAL ASSETS.
00:12:30IF THE FED GETS INFLATION WRONG
00:12:32AND JUDGES THE ECONOMY WRONG,
00:12:35WHO GETS THE WORST OF IT?
00:12:37NOT THE FINANCIAL HIGH FLYERS. HARD-WORKING AMERICANS ARE THE
00:12:41ONES LEFT TO DEAL WITH INFLATION THAT'S TOO HIGH, OR JOBS THAT
00:12:46SUDDENLY APPEAR LESS SECURE.
00:12:50SO IF FORWARD GUIDANCE IS ILL SUITED TO NORMAL TIMES, HOW
00:12:54ABOUT THE NEW FED CHIEF COMMITS AT A MEETING JUST LIKE THIS TO
00:12:58SOME EXPLICIT REACTION FUNCTION.
00:13:01SURELY HE COULD TELL US HIS INTEREST RATE PATH IF, SAY THE DATA WERE TO COME IN HOT OR
00:13:05COLD. WELL, I WISH OUR UNDERSTANDING
00:13:09OF THE ECONOMY WERE SO PRECISE
00:13:12AS TO PROVIDE A MECHANICAL,
00:13:15TRIED AND TRUE ANSWER. THAT SOME SIMPLE FUNCTION LIKE A
00:13:18TAYLOR RULE COULD BE RIGOROUSLY
00:13:22RELIED UPON. BUT OUR KNOWLEDGE JUST DOES NOT EXTEND THAT FAR, AT LEAST NOT
00:13:26YET. AND OTHER FACTORS MOST RELEVANT
00:13:29TO THE PROPER CONDUCT OF MONETARY POLICY, THEY CHANGE
00:13:33OVER TIME. PROVIDING FORECASTS TO
00:13:37ILLUSTRATE THE FED'S REACTION FUNCTION WORKS BETTER IN THEORY
00:13:41THAN IN PRACTICE. BETTER IN THE LAB THAN IN THE
00:13:44FIELD.
00:13:48I AM NOT ALONE IN NOTICING THAT FORWARD GUIDANCE IN 2021, TO
00:13:52CITE JUST ONE EXAMPLE, MIGHT WELL HAVE SLOWED THE POLICY
00:13:55RESPONSE TO HIGH INFLATION.
00:14:00IN MY TERM AS CHAIRMAN, MY COLLEAGUES AND I WILL ENDEAVOR
00:14:03TO CONSTRUCT MORE RELIABLE MODELS, MORE ROBUST RULES, AND
00:14:07WE'LL DO THIS KNOWING THAT ACCURACY IN FORECASTING IS STILL
00:14:10JUST AN ASPIRATION.
00:14:14WITH SO MUCH CHANGING SO FAST IN
00:14:16OUR GEOPOLITICS, GLOBAL SUPPLY
00:14:20CHAINS, TECHNOLOGY, IT'S WISE TO BE MODEST ABOUT WHAT WE CAN AND CANNOT KNOW AS WE SIT HERE
00:14:24TODAY.
00:14:29IN THE SAME SPIRIT, WE SHOULD RECEIVE THE FULL RANGE OF IDEAS ON MATTERS THAT MAY INFORM THE
00:14:32FED'S MONETARY POLICY
00:14:34DISCUSSIONS.
00:14:39IF THE AIM IS OPTIMAL DECISION MAKING, AND IT SHOULD BE, WE
00:14:41SHOULD NOT CROWD OUT VIEWS ON THE ECONOMY.
00:14:44HOW THEN TO CHART A BETTER PATH
00:14:47TO POLICY.
00:14:51IN THE BALANCE OF MY REMARKS, I WILL SHARE WITH YOU SOME KEY PRINCIPLES THAT GUIDE MY
00:14:55THINKING ON THE APPROPRIATE CONDUCT OF MONETARY POLICY, AND THEN I'LL OFFER MY PROMISED
00:14:59ASSESSMENT OF THE ECONOMY.
00:15:01SO LET'S TURN FIRST TO
00:15:04PRINCIPLES.
00:15:06FIRST, I'VE NOTICED IN THIS LINE
00:15:10OF WORK, YESTERDAY'S NEWS HAS A WAY OF GETTING MISTAKEN FOR
00:15:13WHAT'S HAPPENING RIGHT NOW.
00:15:14THE CHALLENGE IS TO KNOW THE
00:15:18DIFFERENCE. IN OTHER WORDS, WE MUST INTERROGATE REALITY.
00:15:22MAKE SURE WE'RE NOT SETTING FORWARD LOOKING POLICY BASED ON
00:15:26STALE OR INACCURATE DATA.
00:15:28NOR SHOULD WE RELY ON ISOLATED
00:15:31DATA POINTS. TRENDS MATTER MOST.
00:15:35THE FED'S A DECISION MAKING AGENCY.
00:15:39WE MAKE CHOICES AMID
00:15:41UNCERTAINTY, AND THE DATA UPON
00:15:43WHICH WE DRAW MUST BE RELEVANT,
00:15:46CONTEMPORANEOUS, ACCURATE, AND
00:15:49AS ACTIONABLE AS POSSIBLE.
00:15:54SECOND PRINCIPLE, THE FED'S ACTIONS ARE INTENDED TO ENSURE
00:15:58THAT THE AGGREGATE DEMAND SIDE OF THE ECONOMY IS BROADLY
00:16:00CONSISTENT WITH AGGREGATE SUPPLY.
00:16:04HOWEVER, ALL WE OBSERVE DIRECTLY IS ACTIVITY.
00:16:07WE NEVER SEE AND CAN ONLY INFER WHAT'S REALLY HAPPENING ON THE
00:16:10SUPPLY SIDE.
00:16:12HENCE, EVALUATING THE CURRENT AND EXPECTED BALANCE BETWEEN
00:16:16AGGREGATE SUPPLY AND AGGREGATE
00:16:19DEMAND IS IMPRECISE.
00:16:22THIRD PRINCIPLE.
00:16:24THERE SHOULD BE NO
00:16:27MISUNDERSTANDING.
00:16:30THE FED'S PRICE STABILITY
00:16:32OBJECTIVE OF 2% AS MEASURED BY
00:16:35THE PCE PRICE INDEX IS A FIRM
00:16:37FIXED TARGET. LET ME BE EQUALLY CLEAR ABOUT
00:16:40ANOTHER ASPECT OF THIS OBJECTIVE.
00:16:43PRICE STABILITY IS NOT SELF-EXECUTING.
00:16:47NOR IS INFLATION NECESSARILY MEAN REVERTING.
00:16:50IT'S THE FED'S JOB TO DELIVER
00:16:53STABLE PRICES, NO EXCUSES.
00:16:56FOURTH PRINCIPLE. THE FED ALSO BEARS
00:16:59RESPONSIBILITY FOR MAXIMUM
00:17:02EMPLOYMENT. ACHIEVING BOTH SIDES OF OUR
00:17:04MANDATE OVER THE MEDIUM TERM IS
00:17:07NOT AN EITHER OR PROPOSITION.
00:17:09I DO NOT BELIEVE THE FED'S DUAL
00:17:12MANDATE WORKS AT CROSS PURPOSES. AFTER ALL, HIGH INFLATION ITSELF
00:17:15IS VERY HARMFUL TO ECONOMIC
00:17:17PROSPERITY.
00:17:21FIFTH PRINCIPLE. SHORT-TERM INTEREST RATES ARE
00:17:25THE PREDOMINANT TOOL TO ACHIEVE
00:17:27THE DUAL MANDATE.
00:17:30UNCONVENTIONAL POLICIES TO SPUR ECONOMIC ACTIVITY MAY SUIT
00:17:33GENUINE CRISES OF WHICH WE ALL
00:17:35HAVE MUCH EXPERIENCE.
00:17:39BUT THEY SHOULD OTHERWISE BE
00:17:42USED SPARINGLY, IF AT ALL.
00:17:49SIX, MONEY MATTERS. I KNOW IT'S NOT FASHIONABLE THESE DAYS.
00:17:53BUT MY VIEW IS THAT MONEY HAS SOMETHING IMPORTANT TO DO WITH MONETARY POLICY.
00:17:57WE SHOULD PAY ATTENTION TO MONEY CREATED BY THE CENTRAL BANK AND MONEY THAT COMES FROM THE
00:18:01BANKING AND FINANCIAL SYSTEM. IT'S TRUE THAT FINANCIAL
00:18:05INNOVATIONS, THE SUBJECT OF THIS CONFERENCE, AND OTHER FACTORS ALTER THE MECHANICS.
00:18:09THAT LINK THE MONETARY BASE, THE VELOCITY OF MONEY, AND THE
00:18:13BROADER ECONOMY.
00:18:20BUT THAT IS SCARCELY A REASON TO
00:18:21IGNORE THE ULTIMATE EFFECTS OF
00:18:25MONEY ON FINANCIAL CONDITIONS
00:18:27AND PRICES.
00:18:32FINALLY, A QUIETER FED. A MORE PURPOSEFUL FED IN ITS
00:18:34COMMUNICATIONS IS BETTER ABLE TO
00:18:37MEET ITS OBJECTIVES.
00:18:39AND WE CAN BE HELD ACCOUNTABLE
00:18:43FOR DELIVERING ON OUR REMIT. THE ONLY TRUE TEST OF OUR
00:18:47CREDIBILITY. TO BORROW A LINE FROM GENERAL CHUCK YEAGER, AT THE MOMENT OF
00:18:51TRUTH THERE ARE EITHER REASONS
00:18:53OR RESULTS.
00:18:58SO HAVING HEARD A LITTLE BIT ABOUT AI AND GENERAL PURPOSE TECHNOLOGIES, HAVING HEARD A
00:19:01LITTLE BIT ABOUT THE NEXT POLICY CONJUNCTURE, A LITTLE BIT ON
00:19:05PRINCIPLES, LET'S TURN TO THE
00:19:07ECONOMY TODAY.
00:19:09GIVEN THOSE PRINCIPLES, HOW DO I READ THE ECONOMY?
00:19:12WHAT'S REALLY GOING ON OUTSIDE THE WINDOW.
00:19:16IT'S A LITTLE IRONIC THERE ARE NO WINDOWS IN THIS ROOM, BUT,
00:19:18BUT THERE ARE BIG ONES AT THE FEDERAL RESERVE.
00:19:22AND WE'VE BEEN USING THOSE IN MY
00:19:28FIRST 100 DAYS, AND I EXPECT WE'RE GOING TO CONTINUE TO USE
00:19:30THOSE IN THE PERIOD RIGHT AHEAD OF US.
00:19:34NOW YOU MAY HAVE READ IN THE JULY MINUTES THE UNANIMOUS VIEW OF THE FOMC.
00:19:38LABOR MARKETS WERE STABLE,
00:19:40OUTPUT SOLID.
00:19:43BUT INFLATION REMAINED TOO HIGH. A GOOD MAJORITY OF MY COLLEAGUES
00:19:47AND I THOUGHT THE WISER COURSE WAS TO AWAIT NEW INFORMATION IN
00:19:51THE INTERMEETING PERIOD. ESPECIALLY GIVEN POSSIBLE DEVELOPMENTS IN SUPPLY CHAINS,
00:19:55INVESTMENT FLOWS, AND GEOPOLITICS.
00:19:59BEFORE DECIDING WHETHER A CHANGE IN INTEREST RATE POLICY WAS
00:20:03ADVISABLE. AND WE EXPRESSED OUR JOINT
00:20:07READINESS TO ACT AS CIRCUMSTANCES, EXCUSE ME,
00:20:11REQUIRE. FOR MY PART TODAY AS WE SIT HERE, I'M IMPRESSED BY THE
00:20:15OVERALL PERFORMANCE OF THE
00:20:18ECONOMY, WHICH APPEARS TO HAVE
00:20:20STRENGTHENED. ONE INDICATOR OF STRENGTH IS HOW
00:20:24WELL AN ECONOMY HOLDS UP UNDER STRESS, HOW WELL IT HOLDS UP UNDER SHOCKS.
00:20:28ON THAT SCORE, BOTH MAIN STREET
00:20:31AND WALL STREET HAVE BEEN
00:20:33REMARKABLY RESILIENT.
00:20:36SEVERAL OTHER OBSERVATIONS.
00:20:43BUSINESS CAPITAL IS RISING RAPIDLY. THE 4 QUARTER CHANGE IN
00:20:47INVESTMENT IN EQUIPMENT AND INTANGIBLES HAS BEEN AROUND 9%. ITS HIGHEST GROWTH RATE SINCE
00:20:512021.
00:20:53AND MORE THAN HALF OF THE CPE
00:20:56GROWTH CAN LIKELY BE ASCRIBED TO
00:21:04THE BUILDOUT RELATED TO A.I.
00:21:10WHAT ABOUT PROFITS? FOR THE FIRMS IN THE S&P, PROFITS HAVE GROWN MORE THAN 20%
00:21:14OVER THE PAST YEAR ALONE. PROFIT MARGINS ARE QUITE ELEVATED RELATIVE TO HISTORY.
00:21:17OVERALL EQUITY AND MARKET VOLATILITY QUITE LOW. WE'RE STAYING KEENLY FOCUSED ON
00:21:21MARKET INTERNALS, WATCHING
00:21:22PERFORMANCE ACROSS SECTORS.
00:21:27EXPECTATIONS FOR BOTH GROWTH AND
00:21:28CAPE AND CORPORATE EARNINGS ARE
00:21:31RUNNING QUITE HIGH. I CONTINUE
00:21:38TO WATCH THE CHANGE IN THE GROWTH RATES, THE 2ND DERIVATIVE, THE FOLLOW-ON
00:21:42EFFECTS ON ASSET PRICES, BUSINESS CONFIDENCE, CONSUMER INCOMES, AND SPENDING ARE EQUALLY IMPORTANT TO GAUGE.
00:21:45CREDIT SPREADS ON CORPORATE BONDS AND LEVERAGED LOANS ARE
00:21:48NEAR THE LOW END OF THEIR
00:21:50HISTORICAL
00:21:54HISTORICAL AVERAGES. IN ISSUE VOLUMES THIS YEAR QUITE
00:21:58STRONG. LOOKING BEYOND FIXED INCOME MARKETS TO THE BANKING BUSINESS, IN THE JULY SO-CALLED SLU SURVEY, BANKS TELL US THAT
00:22:02STANDARDS FOR CNI LOANS ARE ON
00:22:08THE EASIER END OF THEIR HISTORICAL RANGES. THAT HELPS EXPLAIN THEIR GROWTH
00:22:11THAT WE'VE SEEN THIS YEAR IN THESE LOANS. IN MY VIEW, CREDIT AND LOAN
00:22:14MARKETS ARE SHOWING FEW SIGNS OF POLICY RESTRAINT. NOW CERTAIN SECTORS LIKE HOUSING AND AGRICULTURE ARE SHOWING
00:22:18STRAINS. BUT ON BALANCE, I WOULD BE HARD PRESSED TO DESCRIBE BROAD
00:22:22FINANCIAL CONDITIONS AS
00:22:25RESTRICTIVE. REAL CONSUMER SPENDING HAS BEEN
00:22:29HEALTHY DESPITE THESE SHOCKS,
00:22:30INCREASING MORE THAN 2% OVER THE
00:22:35PAST FOUR QUARTERS. IF YOU COMBINE CONSUMPTION WITH THE BRISK INVESTMENT WE TALKED
00:22:39ABOUT EARLIER, PRIVATE DOMESTIC FINANCIAL PURCHASES HAVE ALSO
00:22:42RISEN. THESE PURCHASES HAVE INCREASED
00:22:45AT A PACE OF NEARLY 3% OR SO SO
00:22:47FAR THIS YEAR. THAT'S A MEASURE THAT TYPICALLY
00:22:52CARRIES MORE SIGNAL THAN GDP.
00:22:57THE TREND HERE TOO POSITIVE. SO ON THE EMPLOYMENT SIDE OF THE
00:22:59FED'S DUAL MANDATE, THE COUNTRY
00:23:02IS DOING WELL.
00:23:03LABOR MARKETS ARE QUITE STABLE.
00:23:08THE JOBLESS RATE AT 4.1% REMAINS LOW BY HISTORICAL STANDARDS AND
00:23:10HASN'T CHANGED MUCH IN A COUPLE
00:23:13OF YEARS.
00:23:18UNEMPLOYMENT CLAIMS ON A FOUR-WEEK MOVING AVERAGE, AN EMPIRICALLY ROBUST REAL-TIME
00:23:21INDICATOR, ARE NEAR THEIR LOWEST LEVEL IN DECADES.
00:23:24IN MY VIEW, THE RELATIVELY LOW TURNOVER IN TODAY'S LABOR MARKET
00:23:27IS PARTLY A RESULT OF THE
00:23:29SIGNIFICANT REMATCHING.
00:23:32BETWEEN EMPLOYERS AND EMPLOYEES
00:23:39THAT HAPPENED AFTER THE POST -- IN THE POST PANDEMIC ENVIRONMENT. BUT WHEN LABOR SUPPLY IS BARELY
00:23:43GROWING, MONTHLY JOB GAINS ARE NATURALLY, NATURALLY GOING TO
00:23:47RUN LOW. THERE ARE ALWAYS AREAS OF CONCERNS IN THE LABOR MARKET, FOR EXAMPLE, AMONG RECENT
00:23:51GRADUATES. IN GENERAL THOUGH, PEOPLE WHO WANT TO WORK BY AND LARGE ARE
00:23:55HOLDING OR FINDING JOBS.
00:23:57THEY MAY WELL BE CONCERNED ABOUT
00:24:00FUTURE LABOR DISRUPTIONS, BUT AS
00:24:02OF NOW, I BELIEVE THE LABOR
00:24:09MARKETS ARE BROADLY CONSISTENT WITH FULL EMPLOYMENT.
00:24:13BUT ON THE PRICE STABILITY SIDE OF OUR MANDATE, THE NUMBERS ARE
00:24:16MORE CONCERNING. THE FED'S PREFERRED MEASURE OF INFLATION, THE ONE I TALKED ABOUT EARLIER, THE 12 MONTH CHANGE IN THE PC PRICE INDEX,
00:24:20STANDS AT 3.7%.
00:24:25WITH THE SIX-MONTH CHANGE A LITTLE ABOVE 4.
00:24:30THE COMPARABLE MEASURES FROM THE CPI INDEX ARE ALSO ELEVATED, AS
00:24:33ARE CORE MEASURES BOTH OF PCE AND CPI INFLATION.
00:24:36AND NONE OF THESE MEASURES ARE PERFECT.
00:24:39BUT THEY ALL TELL A SIMILAR STORY.
00:24:42INFLATION IS RUNNING ABOVE OUR 2% TARGET.
00:24:45SO THE FED'S PREDOMINANT FOCUS
00:24:47RIGHT NOW SHOULD BE ON PRICES.
00:24:50SO WHAT'S OUR JOB? THE JOB FOR POLICYMAKERS IS TO
00:24:54CAPTURE UNDERLYING TREND
00:24:57INFLATION. EASIER SAID THAN DONE.
00:25:01WE WANT TO GAUGE WHETHER UNDERLYING INFLATION IS RISING, FALLING, OR SEEMS TO BE STUCK IN
00:25:05PLACE. WE ALSO WANT TO UNDERSTAND NOT
00:25:09JUST THE DIRECTION OF TRAVEL BUT THE SPEED.
00:25:12EACH OF THESE BROAD INFLATION
00:25:14MEASURES HAVE FALLEN SIGNIFICANTLY FROM THEIR HIGHS
00:25:19OF A FEW YEARS AGO, BUT PROGRESS OVER THE LAST COUPLE OF YEARS
00:25:22HAS BEEN MORE MODEST. AND WHILE THIS SUMMER'S PC AND
00:25:26CPI READINGS WERE BETTER THAN EXPECTED, THEY DO NOT TELL ME
00:25:30THAT UNDERLYING TRENDS HAVE MEANINGFULLY IMPROVED.
00:25:34THE DATA ALSO SHOW MODERATE WAGE GROWTH.
00:25:38BUT IN MY VIEW, IN TRACKING UNDERLYING INFLATION, WAGE GROWTH HAS NOT PROVEN A RELIABLE
00:25:42INDICATOR OF FUTURE INFLATION
00:25:45FOR A VERY LONG TIME.
00:25:49SO TO TRY TO GAUGE UNDERLYING INFLATION, I WANT TO TELL YOU
00:25:52ABOUT A COUPLE OF THINGS I'VE
00:25:54ALWAYS LOOKED TO. I FIND IT INSTRUCTIVE TO
00:25:58DISAGGREGATE THE 199 INDIVIDUAL COMPONENTS OF THE PC PRICE
00:26:01MEASURE.
00:26:08OVER THE LAST 12 MONTHS, 54% OF GOODS AND SERVICES IN THIS
00:26:10BASKET SHOWED PRICE INCREASES ABOVE 3%.
00:26:13THIS IS WELL BELOW THE POST
00:26:17PANDEMIC HIGHS OF ABOUT 77%. BUT IT REMAINS WELL ABOVE THE LEVEL OF 32 IN A COUPLE OF THE
00:26:21DECADES THAT PRECEDED THE
00:26:23PANDEMIC.
00:26:27LOOKING OVER JUST THE LAST SIX MONTHS, THE CONCLUSION IS SIMILAR.
00:26:3049% OF GOODS AND SERVICES IN THE
00:26:33PC BASKET SHOWED PRICE INCREASES
00:26:36ABOVE 3%. THIS IS WELL BELOW THE
00:26:40POST-PANDEMIC HIGHS, BUT STILL ELEVATED, QUITE ELEVATED.
00:26:43THE RECENT RISE IN OVERALL COMMODITY PRICES ALSO BEARS
00:26:47WATCHING. WHAT WE NEED TO JUDGE IS WHETHER THE TRENDS WE SEE INDICATE
00:26:51UPSIDE INFLATION RISKS.
00:26:57NOW IT MATTERS TOO WHETHER THE
00:27:02INFLATION READINGS OF THE PAST FIVE YEARS HAVE SEEPED INTO EXPECTATIONS.
00:27:05THE GOOD NEWS IS THAT MEASURES OF INFLATION EXPECTATIONS IN THE MEDIUM TERM BY AND LARGE LOOK
00:27:09STABLE.
00:27:12AND INFLATION COMPENSATION MEASURES FROM THE SWAPS MARKET
00:27:15SEND A STRONG AND SIMILAR
00:27:17MESSAGE.
00:27:20ESPECIALLY IN LIGHT OF RECENT DEVELOPMENTS.
00:27:23IT'S A CREDIT TO THE FED AS AN INSTITUTION.
00:27:27CONSISTENT WITH THE BEST OF THE FED'S TRADITIONS, THAT MARKET
00:27:31PRICES SHOW CONFIDENCE THAT WE WILL DELIVER PRICE STABILITY,
00:27:35AND I CAN ASSURE YOU THEY'RE
00:27:36RIGHT. THE THING ABOUT MARKET MEASURES
00:27:40OF INFLATION EXPECTATIONS IN ECONOMIC HISTORY, I KNOW SOME
00:27:43ECONOMIC HISTORIANS IN THE
00:27:46AUDIENCE, IS THEY ALL TEND TO LOOK REALLY STRONG AND DURABLE UNTIL THEY DON'T.
00:27:51THESE EXPECTATIONS ARE NOT
00:27:54PUSHED AROUND EASILY, AND RIGHT
00:27:56NOW THEY ARE VERY WELL ANCHORED,
00:27:59BUT THEY MUST BE CLOSELY MINDED. AND IT'S THE FED'S JOB TO MAKE
00:28:03SURE THAT INFLATION EXPECTATIONS
00:28:06DO NOT GET UNANCHORED. NOW THERE IS ONE SIGNAL NOBODY
00:28:10CAN MISS.
00:28:14THE RESPONSIBILITY FOR 65 MONTHS OF SUSTAINED ELEVATED INFLATION SITS SQUARELY WITH THE CENTRAL
00:28:18BANK, AND THAT'S WHERE IT
00:28:22BELONGS.
00:28:25SO HERE IS MY STANDARD. WE MUST BE CONFIDENT THAT
00:28:28UNDERLYING INFLATION IS MOVING TO OUR OBJECTIVE.
00:28:31CLEARLY AND AT SUFFICIENT SPEED. OTHERWISE WE HAVE WORK TO DO.
00:28:35THAT'S OUR JOB. THAT'S OUR MANDATE, AND THAT'S
00:28:39OUR CHARGE TO KEEP. SO I'VE COVERED QUITE A BIT OF
00:28:42GROUND IN THE LAST 25 MINUTES OR SO.
00:28:45LET ME SEE IF I CAN CONCLUDE THIS WAY.
00:28:49I STAND HERE TODAY COMMITTED TO A DISCIPLINE.
00:28:53NOT A DECISION. MY FED COLLEAGUES AND I ARE
00:28:57HARDLY THE FIRST TO HOLD THESE POSITIONS IN A TIME OF GREAT
00:29:00CONSEQUENCE. WE ARE DETERMINED TO REDEEM THE
00:29:03TIME BY DOING OUR VERY BEST
00:29:05WORK.
00:29:16FOR THOSE OF US -- THOSE OF YOU THAT KNOW US, YOU'LL KNOW THE FOLLOWING IS TRUE.
00:29:20WE TAKE OUR RESPONSIBILITY SERIOUSLY, WITH HUMILITY AND WITH RESOLVE.
00:29:23WE KNOW SO MUCH DEPENDS ON THE CHOICES WE MAKE. SOUND MONETARY POLICY HELPS
00:29:28HOUSEHOLDS AND BUSINESSES TO PROSPER. WHEN CARRIED OUT EFFECTIVELY, IT
00:29:32BROADENS AND DEEPENS THE MOMENTUM OF OUR ECONOMY.
00:29:36AND HELPS TO SECURE AMERICA'S LEADERSHIP IN THE WORLD.
00:29:40AND I KNOW THAT OUR COUNTRY NEEDS US TO THINK CAREFULLY AND
00:29:43ACT WISELY, PERHAPS NOW MORE THAN EVER.
00:29:47IT'S A TREMENDOUS HONOR TO SERVE
00:29:48ONCE AGAIN AT THE FEDERAL RESERVE.
00:29:51I'M TRULY GRATEFUL FOR THE
00:29:54ENCOURAGEMENT, GOOD COUNSEL, AND
00:29:56THE WARM RECEPTION I'VE RECEIVED
00:29:59IN MY FIRST 100 DAYS FROM MY COLLEAGUES. I'M ALSO HONORED AND GRATEFUL
00:30:03FOR THE VIEWS THAT I'VE GOTTEN, SOLICITED AND UNSOLICITED, FROM
00:30:07SO MANY OF YOU IN THIS ROOM. FOR THAT AND FOR YOUR KIND
00:30:10ATTENTION THIS MORNING, I SAY THANK YOU. LET'S GET ON WITH THE REST OF
00:30:14THE PROGRAM.
00:30:18[APPLAUSE]
00:30:32>> GINNING US NOW FROM JACKSON
00:30:35HOLE IS DAVID LYNCH, CORRESPONDENT.
00:30:38THANKS FOR BEING WITH US.
00:30:40WHAT DID YOU TAKE AWAY FROMMED
00:30:43SPEECH FROM THIS SYMPOSIUM FROM KEVIN WARSH?
00:30:47>> WELL, I THINK MR. WARSH WAS TRYING TO DO A COUPLE THINGS
00:30:51TODAY. AND HE MADE PROGRESS ON SOME OF
00:30:53HIS OBJECTIVES. INVESTORS HAVE BEEN CONCERNED IN
00:30:57THE WAKE OF HIS PRESS CONFERENCE
00:31:00LAST MONTH WHICH LEFT THEM
00:31:02UNCERTAIN AS TO HOW THE FED WAS
00:31:05EVALUATING THE INFLATION PROBLEM
00:31:09AND THE ECONOMY AND HOW IT MIGHT RESPOND TO IT, AND HOW THE
00:31:13CHAIRMAN IN PARTICULAR WOULD RESPOND.
00:31:15AND I THINK TODAY'S SPEECH MADE
00:31:19CLEAR THAT MR. WARSH IS NOT
00:31:21SATISFIED WITH THE CURRENT STATE OF PLAY WITH INFLATION.
00:31:25HE SAID THE FED STILL HAS MORE WORK TO DO.
00:31:28AND HE TRIED TO PROVIDE A LITTLE
00:31:32BIT OF A SENSE OF HOW HE IS
00:31:34THINKING ABOUT THESE THINGS
00:31:37WITHOUT DOING SOMETHING THAT HE
00:31:39SEES AS INAPPROPRIATE, WHICH IS
00:31:42A TERM CALLED FORWARD GUIDANCE.
00:31:46THE FED HAD GOTTEN IN THE
00:31:48BUSINESS IN 2008 OF TELLING
00:31:51MARKETS EXPLICITLY, WE'RE TAKING THESE STEPS AND THEY'RE GOING TO
00:31:55CONTINUE FOR X PERIOD OF TIME SO YOU CAN COUNT ON THAT
00:31:58ENVIRONMENT.
00:31:59AND WARSH WANTS INVESTORS TO
00:32:03MAKE UP THEIR OWN MIND ABOUT STOCKS AND BONDS WITHOUT GETTING
00:32:06A LOT OF ADDITIONAL INFORMATION
00:32:09FROM THE FED.
00:32:11AND THAT CHANGE OF POLICY IS
00:32:17WHAT'S LEFT A LOT OF PEOPLE UNSETTLED?
00:32:20>> WHAT HAS BEEN INVESTORS' RESPONSE TO THIS?
00:32:24ARE THEY A LITTLE UNSETTLED? >> WELL, THEY TOOK AWAY WHAT
00:32:27THEY SAW AS A HAWKISH TONE IN
00:32:30HIS SPEECH.
00:32:33IF YOU LOOK AT FUTURES TRADING,
00:32:36THERE IS 60% OF TRADERS EXPECT
00:32:38THE FED TO RAISE RATES IN THE NEXT MEETING, WHICH IS THE
00:32:42MIDDLE OF SEPTEMBER. YESTERDAY, IT WAS ONLY A THIRD OF INVESTORS.
00:32:46SO JUST FROM THE SPEECH, INVESTORS HAVE GOTTEN A SENSE
00:32:49THAT THE CHAIRMAN'S FOCUSED ON THIS, AND THAT HE IS WILLING TO
00:32:53GO ALONG WITH RATE INCREASES,
00:32:55EVEN IF HE IS NOT ENTHUSIASTIC, BECAUSE HIS BOSS, THE PRESIDENT,
00:32:59CERTAINLY DOESN'T WANT THE RATES TO GO UP. HE WANTS THEM TO GO DOWN.
00:33:03BUT WARSH MADE IT CLEAR THAT HE
00:33:06WOULD GO ALONG WITH RATE
00:33:08INCREASES IN THE INFLATION DATA
00:33:11DOESN'T IMPROVE PRETTY QUICKLY.
00:33:14>> ALL SUMMER, C-SPAN HAS BEEN
00:33:16BRINGING YOU LIVE COVERAGE OF
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00:33:20AS PART OF THE AMERICA 250 COVERAGE. JOIN US LATER TONIGHT FOR THE
00:33:25LAST OF THE SEASON WITH THE
00:33:27MARINE CORPS BAND, COLOR GUARD
00:33:29CEREMONY AND THE MASCOT, CHESTY
00:33:31THE ENGLISH BULLDOG FROM THE
00:33:34MARINE CORPS BARRACKS IN
00:33:36WASHINGTON, D.C., WATCH LIVE ON
00:33:41SPIN, C-SPAN NOW, OUR MOBILE APP
00:33:45ONLINE AT C-SPAN.ORG.
00:33:49>> C-SPAN'S "WASHINGTON
00:33:54JOURNAL," INVITING TO YOU
00:33:56DISCOVER THE LATEST ISSUES IN GOVERNMENT, PUBLIC POLICY.
00:34:00COMING UP SATURDAY MORNING, WE WILL TALK ABOUT THE TRADE WAR
00:34:03BETWEEN THE U.S. AND CANADA WITH
00:34:07CARLO DADE, FROM THE UNIVERSITY
00:34:09OF CALGARY, AND CONGRESSIONAL
00:34:11AND TRADE ED FOROLIVIA BRIDGES
00:34:13ON THE TRUMP ADMINISTRATION
00:34:17TEMPORARILY LIFTING BEEF TARIFFS
00:34:19IN AN EFFORT TO LOWER TARIFFS,
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00:34:47WE ARE THE ONLY TELEVISION NETWORK PROVIDING THIS
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00:34:53AND THE ISSUES SHAPING 2026.
00:34:56NO COMMENTATORS TELLING YOU WHAT TO THINK. THE ROAD TO THE