BILLION DOLLARS FROM HURRICANE
FLORENCE WE DO NOT KNOW YET IN
THICK OF THINGS RIGHT NOW
JOINING ME PRESIDENT CEO OF
FEDERAL RESERVE BANK OF DALLAS
FORMER GOLDMAN SACHS VICE
CHAIRMAN ROBERT KAPLAN GOOD TO
HAVE YOU ON PROGRAM THANKS SO
MUCH FOR JOINING US.
STORM ALL MORNING LET ME BEGIN
THERE, THE FINANCIAL TOLL IN
HOUSTON RIVALED THAT YOUR
THOUGHTS HURRICANE FLORENCE
IMPACT OF AN ECONOMY GROWING
QUITE WELL.
>> SO I WILL JUST SAY, HAVING
WEN IN THIS POSITION MIGRATES
A YEAR AGO FIRST THING WE
WORRY ABOUT LOSS OF LIFE
PEOPLE IN HARM'S WAY, SO THE
IMMEDIATE CONCERN MINIMIZING
LOSS OF LIFE HELPING PEOPLE IN
THE PATH OF THE STORM.
AND WORKING WITH FIRST
RESPONDERS TO DO THAT SO MY
THOUGHTS AND PRAYERS AND BEST
WISHES WITH EVERYONE WHO IS
TRYING TO HELP PEOPLE AVOID
BEING IMPACTED BY THIS.
>> I MEAN.
>> AFTERMATH.
>> YEAH?
>> IN THE AFTERMATH OF THE
STORM, THOUGH, IN TERMS OF OF
THE ECONOMIC IMPACT THERE IS
GOING TO BE TWO MAIN THINGS TO
FOCUS ON, AND -- AND I THINK,
WIND DAMAGE, THAT THE WATER
DAMAGE AND THE FLOODING AND
THE ONGOING RAIN CAN BE JUST
FOUND IN RESEARCH ON OTHER
STORMS, THERE IS THE PROPERTY
IMPACT, CARS HOMES, COMMERCIAL
IMPACT IT WILL TAKE SOME
EXTENDED PERIOD OF TIME TO
REPAIR THAT DAMAGE.
IN TERMS OF GDP GROWTH
ECONOMIC ARE GETTING OUR
EXPERIENCING HAS BEEN WITH
HARVEY AS WELL AS OTHER
STORMS, IF YOU ARE GROWING
BEFORE THE STORM THIS WILL PUT
A DENT IN GROWTH FOR A QUARTER
OR TWO, AND THERE WILL BE SOME
TEMPORARY JOB LOSS, THAT
HISTORY HAS SHOWN YOU WILL
REBOUND IN THE NEXT COUPLE
QUARTERS, AND EVENTUALLY GET
BACK TO GDP YOU WOULD HAVE HAD
AND GET BACK TO TREND GROWTH
SO I WOULD BE OPTIMISTIC FOR
THE CAROLINAS OTHER AFFECTED
AREAS THAT THEY WILL GET BACK
ON PATH AFTER A COUPLE THREE
HAND WILL TAKE SOME EXTENDED
PEOPLE WHO STILL NOT MOVED
BACK INTO THEIR HOMES, THE
>> I ASKED YOU BECAUSE I
WONDER HOW MUCH YOU P YOU THE
INTO YOUR MODELS IN TERMS OF
EXPECTATIONS, OF ECONOMIC
GROWTH, ONE TIME ISSUE, LIKE
WHAT WE'RE SEEING RIGHT NOW.
AND IN THE MIDDLE OF IT WHERE
WE DON'T UNDERSTAND HOW THIS
PLAYS OUT HOW MUCH DAMAGE WE
HARVEY WE DID THE DALLAS FED,
DID AN EXTENSIVE STUDY OF
STORMS OVER THE LAST 25 YEARS.
AND AGAIN WILL CONSISTENTLY WE
FOUND WHILE THERE COULD BE
SUBSTANTIAL PROPERTY DAMAGE
CREATES A LOT OF DISLOCATION
FOR SMALL BUSINESSES CARS
HOMES BIGOTS, ET CETERA, THE
GDP IMPACT TENDS TO BE
TRANSITORY THERE TENDS TO BE A
BOUNCEBACK COULD HAPPEN FACIAL
QUICKLY I WOULD BE FACIAL
OPTIMISTIC THAT WILL BE THE
CASE AS A RESULT OF THIS
STORM.
THE PROPERTY REPAIR THOUGH IS
GOING TO DEPEND ON A LOT OF
OTHER FACTORS, ABOUT
AVAILABILITY OF LABOR
CONSTRUCTION, CREWS, AND A LOT
OF OTHER STRESSES, AND THAT
WILL TAKE A MORE EXTENDED
PERIOD OF TIME THERE WILL BE A
LOT OF PEOPLE THAT ARE
>> I WANT TO ASK ABOUT
VEILABILITY OF LABOR REALLY
THE SKILLS SHORTAGE WE HAVE
SEEN I KNOW YOU HAVE DONE A
LOT OF WORK ON THAT LET ME ASK
ABOUT A YEAR AGO, I BELIEVE,
OR MAY BE EARLIER THIS YEAR,
YOU WERE SAYING LOOK, WE ARE
GOING TO SEE GOOD GROWTH
NUMBERS IN 2018 YOU WERE
>> THAT IS RIGHT.
>> YOU SAID IN A VERY SHORT
TIME AFTER PERHAPS THE END OF
'19202020 YOU COLD ME WE COULD
SEE GROWTH DROP 1.9% OR
SOMETHING BY THE TIME 2020
ROLLS AROUND DO YOU FILL FEEL
THAT WAY.
>> YES HERE IS THE VIEW WE
STATED, IN THE FALL, AND I
RESILIENT
RESILIEN
RESILIENT WE BELIEVED 2018
STRONG YEAR A VERY SIZABLE
FISCAL STIMULUS ALSO FROM
BIT 2020 IT WILL FADE FURTHER.
AND WHAT I MENTIONED TO YOU IS
BY THE END OF 2020 OR INTO
STILL HAVE AGING POPULATION
SLOWING WORKFORCE GROWTH, AND
SLUGGISH PRODUCTIVITY GROWTH
WE BELIEVE DUE TO LACK OF
SKILLS TRAINING ALTHOUGH
IMPROVING, AND NEED TO IMPROVE
MATH SCIENCE READING IN THE
UNITED STATES, SO WE STILL
OUT, IS BECAUSE THERE ARE A
IMPROVE THE SITUATION BUT I
THINK PEOPLE SHOULD BE AWARE
YES SOME OF THIS FISCAL
STIMULUS HAS BEEN A GOOD
TAILWIND WILL BEGIN TO FADE IN
AT FEDERAL RESERVE GIVEN WHAT
WE ARE SEEING IN TERMS OF THE
LACK OF INFLATION, WE GOT PPI
AND CPI OUT LAST COUPLE DAYS,
THEY SHOWED LACK OF INFLATION,
WE GOT RETAIL SALES JUST CAME
OUT YOUR REACTION TO WHAT WE
JUST SAW IN RETAIL SALES, UP
1/10 OF A PERCENT EXPECTED TO
BE UP 4/10.
>> TAKE RETAIL SALES FIRST
EVERYTHING I SEE I TALKED TO
ABOUT 30 CEOS A MONTH
THINK THE CONSUMER IS VERY
STRONG IN U.S., I ACTUALLY
THINK RETAIL SALES IS -- IS
STRONG, MY GUESS IS THESE
WOULD OVERREACT TO ONE MONTH'S
NUMBERS.
THEY TEND TO GET REREVIVED
EVERYTHING I HEAR RETAIL SALES
PRETTY STRONG I ACTUALLY STILL
BELIEVE THAT.
IN ADDITION TO YOUR POINT THE
CONCERN ABOUT OUT-YEAR GROWTH
WHAT WE OUGHT TO BE DOING ON
MONETARY POLICY, AND WHAT I
HAVE SAID, I WOULD CONTINUE TO
SAY, IS WE SHOULD ONLY BE
RAISING A FED FUNDS RATE
GRADUALLY PATIENTLY BECAUSE
THIS FISCAL STIMULUS IS GOING
TO FADE I STILL BELIEVE
EMPLOYMENT EVEN THOUGH
BECAUSE OF AUTOMATICS TO SOME
EXTENT GLOBIZATION EVEN THOUGH
A TIGHT LABOR FORCE ABOUT
CYCLE PRESSURES SOME IMPACT ON
TARIFFS I THINK WE ARE
REACHING 2% INFLATION BUT IT
IS NOT GOING TO RUN AWAY SO WE
OUGHT TO BE MOVING THE FED
FUNDS RATE GRADUALLY TO A
NEUTRAL LEVEL, AND THAT THAT
JUST MEANS A LEVEL WHERE
NEITHER RESTRICTIVE OUR
ACCOMMODATIVE I BELIEVE THAT
THEY ARE ETHICAL LEVEL
INHERENTLY UNCERTAIN IN
NEIGHBORHOOD TWO AND ONE HALF
TO TWO 3/4 PLUS OR MINUS I
BELIEVE THAT IS THE PLACE
OUGHT TO BE HE GRADUALLY
MOVING TO --
>> ON TRADE HOW DOES THAT PLAY
INTO YOUR MODEL ADMINISTRATION
GIVING BEIJING ANOTHER CHANCE
TO STAY IS TO STAVE OFF NEW
TARIFFS BY ASKING FOR FRESH
ROUND OF TALKS THIS MONTH WHAT
IS YOUR TAKE WHERE WE ARE ON
TRADE NEGOTIATING HOW THAT
IMPACTS THINGS?
>> WELL, THE MOST IMPORTANT
THING YOU HAVE HEARD ME SAY
AM VERY GLAD THAT WE'RE MOVING
TOWARD GETTING THE
ARRANGEMENTS DONE WITH MEXICO,
AND I AM HOPEFUL ABOUT CANADA
GRAITSDZ SUPPLY CHAINS WITH
ARE MOVING RIGHT DIRECTION I
THINK TRADING RELATIONSHIP
WITH CHINA, IT IS A FINAL
GOODS DEFICIT THERE IS
INTELLECTUAL PROPERTY AND
TECHNOLOGY TRANSFERS I THINK
THOSE ARE VERY LEGITIMATE
ISSUES I THINK APPROPRIATE WE