INDUSTRIALS UP 464 POINTS THE
CLOSE YESTERDAY, ONE AND A
HALF PERCENT JOINING ME
MOODY’S CHIEF ECONOMIST MARK
ZANDI AND HEATHER ZUMARRAGA,
JOSEPH PINION MARK KICKING OFF
WITH YOU YOUR THOUGHTS ON
WHERE WE ARE, WITH THIS
ECONOMY, AS THIS MARKET
CONTINUES TO RESPOND, TO SO
MUCH STIMULUS AND ROCK BOTTOM
LINE INTEREST RATES.
>> YEAH, MARIA, GOOD MORNING,
I THINK ECONOMY IS SET TO TAKE
OFF HERE, GOING TO BE A -- A
RIP-ROARING YEAR, WITH
PANDEMIC WINDING DOWN, WE’VE
GOT 1. 9 TRILLION-DOLLAR IN
FISCAL SPORT COMING.
WE HAVE A LOT OF PENT-UP
DEMAND IN HIGHER INCOME
HOUSEHOLDS A LOT OF CASH SAVED
DURING THE PANDEMIC A JUICE
GOING TO BE A VERY STRONG
ECONOMY.
>> MARK YOU’VE STUDIED THIS SO
LONG, WHERE DOES THIS GO FROM
HERE?
>> I MEAN, YOU MENTIONED ALL
OF THIS JUICE YOU ARE RIGHT
YOU ARE TALKING ABOUT 5.3
TRILLION DOLLARS, IN NEW MONEY
THROWN AT THIS ECONOMY JUST
THE LAST YEAR.
SO YOU KNOW, AS PART OF 1.9
TRILLION-DOLLAR SPENDING
PACKAGE, THE DEBT IS BEING
WIPED OUT IN NEW YORK, THE
DEBT WIPED OUT IN SAN
FRANCISCO, I MEAN YOU WERE
TALKING ABOUT
11-BILLION-DOLLAR HOLE IN NEW
YORK, THAT NOW GOES AWAY GIVEN
THE 350 BILLION GOING TO THE
STATES, IN THE 1.9
TRILLION-DOLLAR PACKAGE I MEAN
WHERE DOES THIS GO?
I MEAN ARE WE JUST GOING TO
PRINT MONEY?
WHERE DOES MONEY COME MARK IN
TELL ME WHEN THIS BECOMES A
PROBLEM.
>> I DON’T THINK IT WILL MARIA
THIS IS THE AMOUNT YOU WANT TO
SPEND GETS ECONOMY BACK TO
FULL EMPLOYMENT SHORTER PERIOD
OF TIME ARITHMETIC, ON
PANDEMIC ECONOMY BACK TO FULL
EMPLOYMENT 18, 24 HUNDREDS
FROM NOW IN A TIME WHEN YOU
HAVE VERY HIGH UNEMPLOYMENT,
INTEREST RATES ARE SHORT-TERM
INTEREST RATES AT ZERO, THIS
IS THE TIME TO BE VERY
AGGRESSIVE PROVIDING THAT
FISCAL SUPPORT, THE FEDERAL
RESERVE HAS FOOT FLAT ON
ACCELERATE COMPACT RIGHT THING
TO DO MOREOVER IMPORTANT
SUPPORT GOES TO FOLKS THAT HAT
HIT HARDEST BY PANDEMIC
GENERALLY LOWER INCOME
HOUSEHOLDS TAKE A LOOK WHERE
MONEY IS GOING, SO TO ME IF
KING FOR THE DAY WOULD I HAVE
DONE THINGS SOMEWHAT
DIFFERENTLY, PROBABLE BUT
GIVEN POLITICAL CONSTRAINTS I
THINK LANDED IN A PRETTY GOOD
PLACE GOING TO GET ECONOMY
BACK TO FULL EMPLOYMENT
QUICKLY.
>> WE ARE TALKING WITH KEVIN
MCCARTHY IN A WHILE GOP
MINORITY LEADER LIKELY GOING
TO ZBROE WITH ALL YOU SAID
THIS IS NOT TIME TO PUT FOOT
ON GAS THINGS THAT ARE NOT
RELATED TO COVID HE MADE THE
POINT MANY TIMES, ONLY 9% IS
ACTUALLY DIRECTLY COVID
RELATED, AND YOU LOOK THROUGH
SOME NUMBERS, YOU’VE GOT, 3
HUNDRED MILLION DOLLARS GOING
TO, YOU KNOW, HUMANITIES, ARTS
YOU’VE GOT 350 BILLION GOING
TO STATES WHAT DO YOU SAY
ABOUT THAT PRETTY MUCH THE
DEMOCRATS ARE SAYING LET’S NOT
WASTE A CRISIS JAM IN AS MUCH
SPENDING AS WE CAN YOU SAY NOT
EVER GOING TO BE A PROBLEM
WHAT ABOUT 28 TRILLION DOLLARS
IN DEBT.
>> YEAH, WELL I MEAN I AM SURE
YOU CAN PICK OFF, YOU KNOW,
THING HERE OR A THING THERE
THAT YOU ARE IN SURE OF, YOU
DON’T LIKE BUT I MEAN MOST IS
GOING TO COVID RELIEF, I MEAN
UNEMPLOYMENT INSURANCE, THE
STIMULUS CHECKS, GOING TO
PEOPLE GENERALLY IN BOTTOM
HALF INCOME DISTRIBUTION THAT
IS WHERE UNEMPLOYED ARE UNDER
EMPLOYMENT IS.
FOOD ASSISTANCE, RENTAL
INSULINS FOR PEOPLE WHO HAVE
WALK RENT, TO HELP WITH HEALTH
CARE PREMIUMS, FOR LOWER
INCOME HOUSEHOLDS, SO IF YOU
CAN ADD IT YOU WILL -- AND, OF
COURSE, A LOT GOING TOWARDS
THINGS LIKE VACCINATIONS,
TESTING, TRACING
DISENFRANCHISING THE PANDEMIC
ITSELF TO MAKE SURE THAT WE DO
BRING IT INTO THE PANDEMIC GET
TO THE OTHER SIDE RELATIVELY
SOON YEAH, I AM SURE YOU CAN
FIND THINGS BIG BILL I AM SURE
YOU CAN FIND THINGS, MAYBE --
>> RADIO AND I AM SURE YOU CAN
FIND THINGS, YOU ARE TALKING
ABOUT 91% NOT RELATED TO
COVID.
SO WHEN YOU SAY YOU ARE SURE
-- IT IS NOT THAT HARD TO FIND
THINGS ONLY 9% COVID SO REALLY
NOT THAT HARD TO FIND THINGS
THAT ARE NOT RELATED TO COVID.
BUT IN ALL OF THIS YIELDS HAVE
BEEN SPIKING RECENTLY I
RECOGNIZE 1.5% IN 10-YEAR IS
REALLY LOW IS A GOOD NUMBER,
FOR THOSE WHO WANT TO TAKE OUT
MORTGAGES FOR THOSE WHO WANT
TO INVEST ELSEWHERE.
THIS IS WHERE WE ARE SEEING
HUGE RALLY IN STOCKS WHAT
ABOUT THE ISSUE OF INFLATION?
FEDERAL RESERVE CHAIRMAN JAY
POWELL SAID LAST WEEK THE FED
WILL NOT RAISE RATES UNTIL
EMPLOYMENT IS HIGHER LEVELS
ECB LEFT RATES UNCHANGED SAID
BANK WILL BUY MORE BONDS
FASTER PACE IN RECENT MONTHS
YOUR TAKE WITH WHERE WE ARE IN
ROADS ARE TO IMPACT ON
INFLATION YIELDS WHERE THEY
ARE.
>> -- CAN ACCELERATE I VIEW
THAT AS A FEATURE NOT A BUG, I
MEAN INFLATION HAS BEEN
UNDESIREBLY LOW 20, 25 YEARS
FED EVERY CENTRAL BANK ON THE
PLANET HAS BEEN WORKING
OVERTIME TO TRY TO GET NATION
UP TO THIS POINT WITHOUT
SUCCESS, DAY WELL BELOW TARGET
YESTERDAY I SURE YOU COVEREDS
CONSUMER PRICE INFLATION CORE
CPI 1.3% YEAR-OVER-YEAR A
POINT BELOW WHAT YOU WANT, SO
WE WANT MORE INFLATION, NOW,
CAN A AT SOME POINT WE GET
ABOVE THINGS THAT PEOPLE FEEL
UN-- FEEL FSHL WITH WELL ABOVE
FED TARGET POSSIBLY I THINK
OUTSIDE RISK NOT IN ANY ONE’S
BASELINE WE KNOW HOW TO SOLVE
OUR PROBLEM FEDERAL RESERVE
CENTRAL BANKS KNOW HOW TO
SOLVE INFLATION UNDESIREBLY
HIGH THEY DON’T KNOW HOW TO
GET INFLATION UP FROM WHERE IT
HAS BEEN UNDESIRABLE LOW HE
LEVELS I THINK BRING IT ON,
YOU KNOW REALLY PUTTING THE
CART BEFORE THE HORSE HERE HE
LET’S GET BACK TO FULL
EMPLOYMENT INFLATION BACK AT
LEAST CLOSE TO FED TARGET IF
ABOVE TARGET WE KNOW HOW TO
GET IT BACK DOWN AGAIN.
MARIA: THAT SOUNDS RIGHT MARK
I AGREE WITH THAT JUST I GUESS
THE MOVE HAPPENED SO QUICKLY
HAS UNNERVED MARKETS
AS MARKETS LOOK AHEAD TO WHAT
IS NEXT, GREAT TO GET INSIGHTS