.
JACKIE: WELCOME BACK.
SECOND READ ON SECOND QUARTER
GDP SHOWING THAT THE ECONOMY
CONTRACTED.6% U.S. REMAINS IN
TECHNICAL RECESSION TWO
QUARTERS OF CONTRACTION THE
ATLANTA FED GDP MODEL
ESTIMATING GROWTH 1.6% THIRD
QUARTER JOINING ME AMERICAN
ACTION FORUM PRESIDENT DOUGLAS
GOOD MORNING TO YOU GREAT TO
SEE YOU YOU SAY THAT -- NOT IN
RECESSION PEOPLE ARE OVERLY
FOCUSED ON HEALTH OF
HOUSEHOLDS CONSUMER SPENDING
TELL ME MORE CONCERNS WE HAVE
HAD WINDS.
>> CERTAINLY NOT IN RECESSION
RIGHT NOW RECESSION IS A BROAD
ACROSS ALL SECTORS OF THE
ECONOMY STAINED DOWNTURN
ECONOMIC ACTIVITY WE’VE HAD
TWO RAETHDZ NEGATIVE GDP
GROWTH THAT IS TRUE, BUT THE
FIRST QUARTER WAS DRIVEN BY
NET EITHER PORT STATISTICAL
ARTIFACT, GROWING AT REAL
SOLID PAYS WE HAVEN’T SEEN TWO
CONSECUTIVE QUARTERS AM I
DON’T HAVE BREADTH DEPTH IN A
RESOMETHINGS A COUPLE00,000
JOBS EVERY MONTH HARD TO CALL
THAT RECESSION, NEVERTHELESS
ARE RIGHT ABOUT HEADWINDS THIS
ISN’T A BOON, WE ARE GETTING
MIXED READINGS A FEDERAL
RESERVE PROMISED TO FINISH THE
JOB RAISE RATES TIGHTEN
FINANCIAL CONDITIONS AS
NEGATIVES CONTROL INFLATION
RUNS RISK OF A GENUINE
RECESSION LATE THIS YEAR EARLY
NEXT YEAR CONCERNED ABOUT
THAT.
JACKIE: THAT MAKES A LOT OF
SENSE THERE IS A LAG EFFECT ON
JEROME POWELL RAISING RATES
THE EFFECT ON THE MARKET YOU
POINT TO LABOR MARKET ONE OF
THE STRONG BRIGHT SPOTS RIGHT
NOW I AGREE WE ARE GETTING A
JOBS’ REPORT FRIDAY MIGHT NOT
BE TERRIBLE MAY NOT SEE A
CHANGE BUT COMING MONTHS WHERE
WE COULD SEE IMPACT OF RISING
RATES; CORRECT?
>> NO QUESTION.
ONE OF THE THINGS TO LOOK FOR
TOMORROW IN JOLTS DATA IS
WHETHER A LOT OF JOB OPTIONS
ARE DISAPPEARING LAST MONTH
600,000 JOB OPENINGS
DISAPPEARED BUSINESS ARE
FIGURING IT OUT FUTURE NOT ROSY NOT HAVING AS MANY
ROSY NOT HAVING AS MANY
PEOPLE, PULL BACK ON OPTIONS,
WE HAVEN’T SEEN LAYOFFS THE
PAIN THE CHAIRMAN WAS TALKING
ABOUT INFLATION.
>> INFLATION 8 1/2% MARKET GOT
EXCITED, RIGHT READING INTO
TRYING TO READ INTO WHAT WITH
A JEROME POWELL WOULD OR
WOULDN’T DO, AND THOUGHT
BECAUSE WE SAW TICK DOWN FROM
9.1% THINGS GETTING BETTER BUT
EXPECTATION FROM THE CHAIR
HIMSELF YOU KNOW ESSENTIALLY
REA FIRMED THIS WITH COMMENTS
ON FRIDAY WE’VE GOT PAIN AHEAD
FOR THE AMERICAN CONSUMER.
>> NO QUESTION ABOUT THAT.
HE WAS UNAMBIGUOUS CLEAR
FORTHRIGHT ON FRIDAY, THEY
WANT TO SEE ACTUAL INFLATION
DECLINE, ON SUSTAINED BASIS
NOT ONE MONTH BY GASOLINE
PRICES BUT MULTIPLE MONTHS
ACROSS THE INDICATORS IN THE
ECONOMY SO FOR ME THE ONE I
FOCUSED ON IS THE SHELTER
INFLATION, THAT IS A NUMBER
THAT ENCOMPASSES HOME OWNER
RENTERS YET TO DECLINE SHELTER
INFLATION RISEN STEADILY SINCE
JANUARY 2021 WILL COOL FURTHER
WE NEED TO GET THAT NUMBER
DOWN IF 6% CAN’T GET TO TARGET
OF 2 WITHOUT EVERYTHING ELSE A
ZERO, LOOK FORWARD FED
CONTINUING TO RAISE, THEY WILL
DO THIS AS NECESSARY.
ONE OF THE THINGS THAT POWELL
EMPHASIZED RELIED WAS MISTAKE
THAT WAS MADE IN 60S, 70S WAS
TO DECLARE VICTORY PREMATURELY
INFLATION CAME BACK, HE
PROMISES NOT TO LET THAT
HAPPEN, GET READY FOR THE FED
TO FINISH THIS JOB, MEANWHILE,
KEEP -- HOW BUSINESSES ARE
DOING WHAT INVESTMENT SPENDING
OUTLOOK LOOKED LIKE THAT IS
TYPICALLY WHERE YOU SEE
SLOWDOWN LEADS TO RECESSION
NOT HOUSEHOLD SECTOR.
JACKIE: I HAVE BEEN KEEPING
TRACK AS A MATTER OF FACT WHAT
HAPPENS YOU SEE A HEADLINE
HERE, A HEADLINE THERE NOT
REALLY LOOK AT THINGS IN THE
LARGER PICTURE SCOPE OF THINGS
BUT IN TECHNOLOGY, THERE HAVE
BEEN A LOT OF WARNINGS FROM
TECH COMPANIES ABOUT WHAT
FUTURE LOOKS LIKE, BRINGING
GUIDANCE DOWN EITHER LAYING
OFF, SMALL NUMBERS OR SAYING
WE ARE IMPLEMENTING HIRING
FREEZES WHEN YOU MAKE A LARGER
LIST IT IS PRETTY LONG DOUGLAS
THAT IS MY BIGGEST CONCERN.
>> WELL, I THINK A FAIR
CONCERN, SECOND QUARTER GDP,
SHOWED MARKEDLY WEEK BUSINESS
SPENDING NONRESIDENTIAL
STRUCKS DOWN WEAKNESS IN
EQUIPMENT, PROPERTY INVESTMENT
THINGS TO KEEP AN EYE ON, AND
WE KNOWN REVERSIBLE
CONSTRUCTION IS DEAD IN THE
WATER THERE IS NOT A LOT OF
BUSINESS SPENDING OUT THERE WE
CAN AFFORD TO LOSE THAT IS THE
ISSUE.
JACKIE: WE HAVE SOUND BITE
FROM FED CHAIR SPEAKING AT
JACKSON HOLE ON FRIDAY LET’S
LISTEN TO IT HEAR IN HIS OWN
WORDS.
>> YOU GO RESTORING PRICE
STABILITY WILL LIKELY REQUIRE
MANAGE A RESTRICTIVE POLICY
STANCE FOR SOME TIME, THE
HISTORICAL RECORD CAUTIONS
STRONGESTLY AGAINST
PREMATURELY LOOSENING POLICY.
>> ALL RIGHT THAT WAS
PREMATURE LANGUAGE YOU JUST
MENTIONED HE WENT ON LATER TO
SAY THERE IS PAIN AHEAD, AND
THAT IS TROUBLING TO A LOT OF
PEOPLE WHEN THEY HEAR SOMEBODY
LIKE JEROME POWELL USING THOSE
KINDS OF WORDS THEY’VE BEEN
FEELING PAIN AT GROCERY STORE
THE PAIN AT THE PUMP PAIN IN
HOUSING AS YOU BROUGHT UP,
WEAPONRYING HOW MUCH LONGER
EVEN IF HE DOES RAISE RATES
HOW LONG IT TAKES FOR THAT TO
KICK IN.
>> WELL, I THINK HE WAS QUITE
CLEAR THE BEGINNING OF THIS
CYCLE IT WOULD TAKE YEARS, NOT
MONTHS TO CONTROL INFLATION,
AND SO, ONE CAN LOOK TO
ANOTHER TWO YEARS PERHAPS OF
THE FED HOLDING A RESTRICTIVE
POLICY FED DOESN’T THINK THEY
ARE RESTRICTING IT WE HAVE
NEGATIVE REAL INTEREST RATES,
I THINK THE MOST IMPORTANT
THING ABOUT THAT SPEECH WHAT
JEROME POWELL DIDN’T SAY HE
DIDN’T SAY WE CAN -- A SOFT
LANDING MADE THE POINT WOULD
BE GOAL THAT WAS MISSED
ENTIRELY HE SAID WE ARE GOING
TO HAVE TO BE RESTRICTIVE, GET
READY.
>> I AM GLAD YOU SAID DAY SOFT
LANDING IN PART HE HAS BEEN
HOPING FOR, RIGHT, KEEPING THE
MARKET -- YOU KNOW, POISED
FOR, IS VERY DIFFICULT TO
ENGINEER THE SOFT LANDING IN
SOME WAYS ALMOST FEELS HARD
LANDING IS -- SOMEWHAT ALREADY
BAKED INTO THIS CAKE, CASE
ENGINEERING THAT SPECIFICALLY
IS REALLY, REALLY DIFFICULT
WE’VE GOT AN ADMINISTRATION
THAT ISN’T COOPERATING WITH