CARLETON: FED OFFICIALS MET TO
DISCUSS THE STATE OF THE
ECONOMY.
JEROME POWELL PREDICTED MORE
PAIN FOR HOUSEHOLDS AND
BUSINESSES UNTIL INFLATION IS
BROUGHT DOWN.
WHAT DOES THAT MEAN FOR THE
ECONOMY?
JPMORGAN STRATEGIST DAVID
KELLY, WE ARE THRILLED TO HAVE
YOU IN THE STUDIO, THANK YOU
FOR JOINING US.
GOT TO TALK ABOUT WHAT HAPPENED
FRIDAY.
IN THE SPAN OF 10 MINUTES THE
MARKET TANKED.
WHAT ARE INVESTORS MAKING OF
THE FED’S MORE HAWKISH STANCE?
>> JEROME POWELL’S SPEECH IS
WHAT WE EXPECTED IT TO BE, HE
WANTS TO SOUND TOUGH ON
INFLATION.
HE WILL BRING INFLATION DOWN.
THAT’S WHAT THE SPEECH WAS
ABOUT.
DON’T THINK IT CHANGED THE ODDS
IN TERMS OF SEPTEMBER BUT
BROADLY SPEAKING THEY ARE
SAYING THEY WANT TO FIGHT
INFLATION AND THAT’S THE MARKET
REACTION.
CARLETON: WHAT WILL HAPPEN IN
TERMS OF THE RATE HIKE, 50, 75 BASIS POINTS?
BASIS POINTS?
>> IT’S A CLOSE CALL.
SOUNDS LIKE WE MIGHT GET 75
BASIS POINTS.
THEN JAY POWELL IS SAYING THAT
IS IT.
THE NEXT MOVE COULD BE LOWER.
WE MAY END UP WITH 25 BASIS
POINTS MORE AND ALL SAID AND
DONE WE WOULD HAVE HAD
OTHERWISE, THE DANGER BETWEEN
NOW AND THEN WILL SUPPORT LOWER
INFLATION AND THE MONEY GOING
50.
THEY UNDERSTAND TOUGH, GOING 75
IN SEPTEMBER WOULD SOUND TOUGH.
CARLETON: IS THERE EVIDENCE OF
THAT HAPPENING NOW?
>> GASOLINE PRICES, EVERY
SINGLE DAY SINCE THE MIDDLE OF
JUNE, WE’VE SEEN AIRLINE FARES,
VERY GOOD DATA ON THAT, USED
CAR PRICES SOARED TO HUGE
LEVELS AND BOTTLENECKS IN THE
GLOBAL ECONOMY ARE CLEARING.
FEWER PEOPLE COMPLAINING ABOUT
THINGS ARRIVING SO ALL OF THIS SUGGESTS INFLATION IS COMING
SUGGESTS INFLATION IS COMING
DOWN.
CARLETON: THE DEAL IN THE
AGGREGATE, WHEN DO YOU THINK
HOUSEHOLDS WILL BE SEEING
IMPACT OF LOWER INFLATION?
>> IT IS GASOLINE PRICES.
AND THAT HELPS CONSUMER
CONFIDENCE, AND IT IS GOOD TO
BE THERE.
OTHER THINGS THAT WERE GOING UP
A LOT, MORE AVAILABILITY OF
GOODS, THAT WILL HELP PEOPLE
FEEL BETTER.
CARLETON: HOW DO YOU THINK --
DO YOU THINK THE FED WILL BE
ABLE TO AVOID A RECESSION?
HOW BAD DO YOU THINK IT WILL
BE?
>> IF WE HAVE A RECESSION IT
WILL BE MILD, NONE OF THE
CYCLICAL SECTORS ARE ELEVATED.
WE DON’T HAVE A HOUSING BOOM OR
AUTO BOOM OR INVENTORY BOOM.
IT IS HARD TO INJURE YOURSELF
JUMPING OUT OF A BASEMENT
WINDOW.
IT IS A CLOSE CALL IN A
RECESSION LIKE WANDERING AROUND
THE EDGE OF THE POOL AND A KIDS
PARTY GOING ON AND THE CHANCES
OF SOMETHING BUMPING UN, IT IS
POSSIBLE TO AVOID A RECESSION
IF NOTHING GOES WRONG BUT ONE
BAG CRISIS, THE ECONOMY IS VERY
VULNERABLE TO RECESSION.
CARLETON: EVEN IF IT IS A MILD
RECESSION YOU DON’T WANT TO
MINIMIZE THE IMPACT GOING TO
NEXT MONTH’S JOBS REPORT.
WHAT ARE YOU EXPECTING TO SEE?
>> WITH UNEMPLOYMENT CLAIMS AND
ONLINE JOB ADS, THIS PENT-UP
DEMAND FOR WORKERS, EVEN WHEN
DEMANDS, WE COULD GET 300,000
JOBS ADDED, AND THAT MUCH LOOKS
PRETTY GOOD.
THAT LOOKS GOOD BECAUSE WE WILL
WEAKEN LATER ON THIS YEAR.
CARLETON: LAST TIME YOU ARE ON
SET WITH US YOU MADE A SMART
CALL ON BITCOIN.
>> I DON’T SEE ANY REAL VALUE,
IS A CULT MASQUERADING AS A
CURRENCY.
CARLETON: WHEN WE SEE WHERE
BITCOIN PRICES GO, WE HAVE HAD
SUCH A HUGE DROP.
>> IT STILL HAS GOT NO VALUE.
THE FEDERAL RESERVE RAISES
INTEREST RATES THE COST OF
MAKING THEM GOES UP.
IF YOU BORROW MONEY FOR NOTHING
AS WAS THE CASE MUCH OF THE
LAST 10 YEARS AND INVEST IN
THINGS THAT ARE SPECULATIVE,
BITCOIN IS SPECULATIVE HEAD.
PEOPLE WANT TO PUT MONEY IN AND
IT HASN’T FALLEN BELOW 20,000
RECENTLY BUT THE TRUE VALUE OF
IT IS NOTHING AND THERE’S A LOT
OF VULNERABILITY.
A LOT OF LONG-TERM MONEY INTO