AFFORD THE SAME GOODS AND SERVICES THEY COULD PRE-COVID,
PLUS AN ADDITIONAL $1000. HOW IS THIS POSSIBLE?
>> THE MAIN POINT WAS MAKING THE OBSERVATION, WAGES ARE
RISING FASTER THAN COST. THAT IS A FACT.
A LOT OF TIMES WE LISTEN TO THE NARRATIVE OF WHAT IS HAPPENING
WITH THE ECONOMY. THE TREASURY REPORT WAS PUTTING
A NUMBER TO AFFECT. FOR MOST AMERICANS, WAGES ARE
RISING FASTER THAN PRICES. THIS IS UNIQUE TO THE U.S.
IF YOU LOOK AT COMPETITORS IN EUROPE AND JAPAN, THAT'S NOT
TRUE FOR THEM. THIS IS UNIQUE. ANNMARIE:
CONSUMER PRICES, GASOLINE IS ONE OF THE BIGGEST ISSUES.
IT'S OVER THREE DOLLARS PER GALLON.
FORMER PRESIDENT TRUMP WAS IN IOWA LAST NIGHT, WHAT HE SAID
WAS NOT TRUE. WHY IS THIS NOT LANDING?
BEN: ECONOMY BY ANY MEASURE IS LOOKING TERRIFIC IN WAYS WE
COULD NOT IMAGINE THREE YEARS AGO. GAS PRICES ARE PART OF IT.
THE DECLINE IN INFLATION AS PART.
THE CONTINUED POSITIVE STATE OF HOUSEHOLD BALANCE SHEETS IS
PART OF THAT. WHY ISN'T IT SEEPING THROUGH?
INFLATION HAS CROWDED EVERYTHING OUT.
IF I STARTED MAKING POINTS ABOUT HOW GOOD THE ECONOMY
LOOKED, EVERYONE WOULD SAY YEAH, BUT INFLATION.
NOW INFLATION IS UNDER 3% FOR THE LAST SIX MONTHS. JOE:
UNION WORKERS PREFERRING DONALD TRUMP TO THE GUY WHO WALKED THE
PICKET WITH THEM AND HELP TO THEM GET A 30% RAISE WITH HIS
SUPPORT AS PART OF THE DEAL. HAS TO BE PRETTY NOISY TO NOT
HEAR THAT. BEN:
UNION MEMBERS VOTE FOR PRESIDENT ON SOCIAL AND
ECONOMIC FACTORS. SOME PEOPLE PREFER CANDIDATE
TRUMP OVER CANDIDATE BIDEN FOR REASONS NOT RELATED TO THE
ECONOMY. JOE: PEOPLE SAY, LOOK WHAT WE ARE
LEFT WITH? A 30% RAISE. BEN:
PEOPLE IN THE ADMINISTRATION CAN START MAKING THE ECONOMIC
CASE. 4-10 REGISTERED VOTERS HAVE
NEVER HEARD OF THE INFLATION REDUCTION ACT. CRAZY.
I THINK YOU WILL SEE OFFICIALS SELLING THE PRESIDENT'S
ACCOMPLISHMENTS AND THE STATE OF THE ECONOMY. ANNMARIE:
THE FED. HOWELL WAS DOVISH.
FRIDAY, WE HAD THIS JOBS REPORT. PRESIDENT BIDEN WAS IN A ROOM
WITH DONORS AND HE SAID " STABLE GROWTH AND LOWER
INFLATION. NOT ENCOURAGING THE FED TO
RAISE INTEREST RATES." JANET YELLEN HAD A SIMILAR TONE.
DOESN'T NEED TO MESS AROUND WITH IT.
THEN JAY POWELL WAS DOVISH.
BEN: HAVING SAT IN THE TREASURY
DEPARTMENT FOR THE FIRST 2.5 YEARS OF THE BIDEN
ADMINISTRATION, THERE IS NO COORDINATION.
HE ADMINISTRATION STUCK TO THIS FIREWALL BETWEEN THE FED AND
ADMINISTRATION AS MUCH AS IT WAS TEMPTED TO DO OTHERWISE.
JAY POWELL TURNED DOVISH BECAUSE IT WAS THE RIGHT THING
TO DO. ANNMARIE: WITHIN TWO WEEKS? BEN:
WE HAD A LOT OF GOOD PRINTS COMING OUT. ANNMARIE:
WE WILL GIVE YOU THAT.
BEN: THIS IS THE DEFINITION OF A SOFT LANDING. JOE:
YOU CAN READ THAT A COUPLE WAYS. I'M NOT ENCOURAGING THE FED.
FOUR DID HE MEAN THE DATA? -- OR DID HE MEAN THE DATA?
IT IS A LITTLE CHOPPY. HE IS AD-LIBBING.
DID HE MEAN DATA? BEN: I STAFFED HIM FOR A LONG TIME.
I DON'T KNOW WHAT HE MEANS ALWAYS.
HE HAS AN ESTABLISHED RECORD AS RESPECTING THE FIREWALL.
I DON'T THINK HE IS GOING TO BREAK IT AT THE END OF '23.
ANNMARIE: LET'S TALK ABOUT WHAT YOU
EXPECT FROM THE FED NEXT YEAR. THIS COULD BE A HUGE BOOST IF
THEY CUT RATES. BEN: THE ECONOMY IS ALREADY LOOKING
BETTER. THE WAY I READ THEIR STANCE NOW
IS THE DEFAULT OPTION IS A CUT BUT NOT GUARANTEED.
THIS FED HAS TRIED HARD TO BE A POLITICAL.
JAY POWELL WAS APOLITICAL WHEN TRUMP WAS MAKING PERSONAL
ATTACKS. IF YOU ARE NOT GOING TO JUMP IN
THE RING THEN, YOU ARE NEVER GOING TO DO IT.
CREDIT TO JAY POWELL FOR MAINTAINING THAT.
MY READ IS THEY WILL CUT RATES NEXT YEAR IF DATA DEMANDS.
THAT'S HOW THEY BEEN ALL ALONG. JOE: IS THE DROP TO WAIT?
THE BIDEN CAMPAIGN HAS TO BAKE THIS CAKE.
THE LAG EFFECT ON RATES AND BIDENOMICS. BEN:
I FELT THE TERM WAS RISKY. IT WASN'T JUST ABOUT WHAT THE
ADMINISTRATION ACCOMPLISHED. IT WAS THE STATE OF THE
MACROECONOMY. IF YOU FIND YOURSELF IN THE
SUMMER OF '24, THE MACROECONOMY DOESN'T LOOK GOOD, YOU WILL
HAVE REGRETTED TYING IT. NOW IT LOOKS REALLY GOOD.
WHAT THIS ALLOWS THE PRESIDENT AND HIS TEAM TO DO IS TO SELL
THEIR ACCOMPLISHMENTS. FOR PEOPLE WHO HAVE NEVER HEARD
OF THE IRA, WHO WERE UNAWARE OF THE CHIPS ACT, OF THE BENEFITS
OF THE ARP, THEY CAN NOW SELL THAT WITHOUT HAVING TO DEFEND
INFLATION. ANNMARIE: THE TERM HAPPENED BECAUSE OF AN
EDITORIAL CRITICIZING BIDEN. THE WHITE HOUSE EMBRACED IT.
YOU THINK THEY SHOULD HAVE HANDLED IT DIFFERENTLY? BEN:
NOT NECESSARILY. SOMETIMES THEY TAKE SOMETHING
NEGATIVE LIKE LET'S GO BRANDON, AND TURN IT POSITIVE. ANNMARIE:
WHAT'S BETTER AS A SLOGAN? JOE: [LAUGHTER] BEN: I DON'T KNOW.
ANNMARIE: AS A SERIOUS QUESTION, WHAT DO
YOU THINK VOTERS KNOW MORE OF? BEN:
I THINK VOTERS STILL THINK THE ECONOMY IS IN ROUGH SHAPE
BECAUSE THEY ARE BEING TOLD IT IS NOT BY LEGITIMATE NEWS
SOURCES LIKE BLOOMBERG, BUT BY SOURCES THEY GET ON SOCIAL
MEDIA. THIS IS NOT ABOUT HOW THEY FEEL.
THIS IS ASKING THEM TO DESCRIBE THE MACROECONOMY.
SEE LARGER SHARES SAYING WE ARE IN RECESSION. THAT IS NOT TRUE.
VOTERS CAN DESCRIBE THE ECONOMY IS EXPANDING, REALIZING WE HAVE
A 3.7% ON A PLENARY, HISTORICALLY TIGHT LABOR MARKET.
THEY MIGHT BE GETTING THE MESSAGE NOW. JOE:
OBAMACARE STARTED AS A DISPARAGING REMARK AS WELL.
HE DECIDED TO OWN IT. THIS MAY BECOME A COMPLEMENT.
BEN: THIS IS THE DEFINITION OF A SOFT LANDING.
EXPECTATION IS THE FED WILL CUT RATES THREE TIMES.
IF THEY WANT TO CUT, THEY WILL HAVE TO START IN SPRING.
I'M BETTING ON THE AMERICAN ECONOMY IN '24.
THAT CAN ONLY BE GOOD NEWS FOR THE INCUMBENT.