# Instant Reaction: Jay Powell on the Fed Decision

An episode of [Bloomberg Daybreak: Asia Edition](https://invisiblenetwork.ai/podcast/1663863437), 29 Apr 2026, 21 min.

Audio: https://podtrac.com/pts/redirect.mp3/traffic.omny.fm/d/clips/e73c998e-6e60-432f-8610-ae210140c5b1/8e704079-ca57-4eac-9741-ae27003e2b7f/505785d5-79de-4a82-910f-b43b014a5833/audio.mp3?utm_source=Podcast&in_playlist=27143354-63aa-4ac5-965d-af80014dc0d3

Bloomberg's Tom Keene and Jonathan Ferro and Lisa Abramowicz discuss remarks from Fed Chair Jay Powell following the Federal Reserve's latest policy decision on a special edition of Bloomberg Surveillance. Federal Reserve Chair Jerome Powell said he’ll remain at the central bank as a governor after his term as chair ends. “After my term as chair ends on May 15, I will continue to serve as a governor for a period of time to be determined,” Powell said Wednesday at a press conference. While Powell’s term as Fed chair ends on May 15, his seat on the Board of Governors doesn’t expire until 2028. “I plan to keep a low profile as a governor,” he said. “There is only ever one chair of the Federal Reserve Board. When Kevin Warsh is confirmed and sworn in, he will be that chair.” See omnystudio.com/listener for privacy information.

## Transcript

[0:02] Speaker 1: Bloomberg Audio Studios, Podcasts, Radio News.
[0:09] Speaker 2: This is a breaking news update from Bloomberg instant reaction
[0:14] Speaker 2: and analysis from our three thousand journalists and analysts around
[0:17] Speaker 2: the world.
[0:19] Speaker 3: In the next twenty minutes. On this program, we need
[0:21] Speaker 3: to discuss two things. The future of Chairman Paw One
[0:24] Speaker 3: the easing bias at the Federal Reserve. Two on the
[0:27] Speaker 3: future of Chairman pow staying one as a governor of
[0:30] Speaker 3: the Federal Reserve. He was asked why this is what
[0:33] Speaker 3: he had to say.
[0:35] Speaker 2: My concern is really about the series of legal attacks
[0:38] Speaker 2: on the FED. These attacks are battering the institution and
[0:42] Speaker 2: putting at risk the thing that really matters to the public,
[0:45] Speaker 2: which is the ability to conduct monetary policy without taking
[0:48] Speaker 2: into consideration political factors.
[0:50] Speaker 3: The Federal Reserve Chairman Jay Powell on independence. I think
[0:53] Speaker 3: FED independence is at risk. So what about the easing
[0:56] Speaker 3: buss Let's talk about monetary policy. A question coming into
[0:58] Speaker 3: this decision is whether this reserve would move to a
[1:01] Speaker 3: more symmetrical reaction function. That's the juket. This is a
[1:04] Speaker 3: plane speak. Isn't just as likely they'll hike as they'll cut.
[1:07] Speaker 3: They didn't do it this time around, but there was
[1:09] Speaker 3: some descent. This vote was eight to four. Four descents
[1:11] Speaker 3: haven't seen that since the nineteen nineties. Of those four
[1:14] Speaker 3: to three wanted to get rid of that easing bus.
[1:16] Speaker 3: This is what the chairman had to say on that issue.
[1:20] Speaker 2: You know a number of people on the committee who
[1:22] Speaker 2: either could support that language change, changing to a more
[1:26] Speaker 2: neutral stance so that a hike is as likely as
[1:29] Speaker 2: a cut. That number has increased over the inter meeting period,
[1:33] Speaker 2: and it's easy to see why we had the discussion.
[1:35] Speaker 2: The majority are still on the page of not feeling
[1:39] Speaker 2: the need to move to that level, and that's where
[1:41] Speaker 2: I am.
[1:42] Speaker 4: I get it though.
[1:43] Speaker 2: You know at a certain point you would move, and
[1:46] Speaker 2: that that conceivingly could come as soon as the next meeting.
[1:48] Speaker 3: They're getting closer, but they're not there yet. So much
[1:51] Speaker 3: to learn apparently over the next thirty to sixty days.
[1:54] Speaker 5: I thought that was the most market moving aspect of
[1:57] Speaker 5: the news conference, the idea that it wasn't just the
[1:59] Speaker 5: three dissenters who are to shift to a more neutral
[2:01] Speaker 5: kind of positioning symmetric kind of positioning, but that it
[2:05] Speaker 5: was a bigger group that just didn't feel like there
[2:07] Speaker 5: was a need to move right now, because ultimately, why
[2:09] Speaker 5: move now, and so much can change. Nonetheless, this goes
[2:12] Speaker 5: on for as long as people are might be thinking
[2:14] Speaker 5: based on the oil prices in the future. This is
[2:16] Speaker 5: something that clearly will come back on the table.
[2:18] Speaker 6: I like the way on the Bloomberg Professional Service we
[2:20] Speaker 6: have a way to see the president's tweets quickly. I
[2:23] Speaker 6: am waiting to see a president and tweet wheeler. Do
[2:26] Speaker 6: we get it by the time the clock turns around?
[2:28] Speaker 6: Or do we get it by metas earnings here in
[2:31] Speaker 6: X number of mini.
[2:32] Speaker 3: Things have softened somewhat around this institution just a little bit.
[2:36] Speaker 3: We heard from the Treasury Secretary scope person who said
[2:39] Speaker 3: it's understandable if this fed remains on hold for some time.
[2:42] Speaker 3: But the last thing we had from the President was
[2:44] Speaker 3: something like this, if the chairman doesn't leave on time,
[2:47] Speaker 3: I'll fire it now.
[2:49] Speaker 4: What is on time actually mean?
[2:50] Speaker 3: Because he can stay on as the Board of governors,
[2:53] Speaker 3: he can stay on that board until twenty twenty eight.
[2:55] Speaker 4: Is that on time? Or is the president looking for
[2:57] Speaker 4: something else?
[2:58] Speaker 5: Are we entering a new standoff? We're dealing with a
[3:00] Speaker 5: standoff of the Middle East. We were dealing with the
[3:02] Speaker 5: staring contest between Tom Tillis and Donald Trump, and now
[3:05] Speaker 5: might be dealing with President Trump versus j Powell the governor,
[3:09] Speaker 5: to see who blinks first, who's going to drop the
[3:11] Speaker 5: legal cases, who's going to step away? And this could
[3:14] Speaker 5: potentially get pretty tense, especially if the bar is that
[3:18] Speaker 5: much higher. Right now for FEED chair Jay Powell.
[3:20] Speaker 3: My mccame is in that news conference. He'll join us
[3:22] Speaker 3: in just a moment. I want to start with Jimpanco
[3:24] Speaker 3: of Pianco Research. Jim, Welcome to the program, buddy. I
[3:28] Speaker 3: think FED independence is at risk. The chairman's words, I'll
[3:31] Speaker 3: continue to serve as a governor for a period of time.
[3:33] Speaker 3: Recent events have left me no choice but to stay.
[3:36] Speaker 1: Your reaction, please, I think it's one of the most
[3:40] Speaker 1: disappointing things that he's done during his chairmanship. That is
[3:44] Speaker 1: a political decision. The decision was made to push the
[3:48] Speaker 1: investigation of the building to the Inspector General. The Inspector
[3:51] Speaker 1: General finds some malfeasans or wrongdoing with the building, they'll
[3:54] Speaker 1: have a criminal referral. That is appropriate. He seems to
[3:58] Speaker 1: be saying that has billions of dollars in building construction
[4:03] Speaker 1: and no one's allowed to ask any questions about it,
[4:05] Speaker 1: and he's going to stand in the doorway and disrupt
[4:08] Speaker 1: the FED as long as they're going to look into
[4:10] Speaker 1: this building. I think that that is a big, big disappointment.
[4:13] Speaker 1: I would have expected more from him, to be very honest,
[4:16] Speaker 1: and I'm a guy that liked him. I'm a guy
[4:17] Speaker 1: that would have reappointed him, and I think this is
[4:20] Speaker 1: a big disappointment that I've seen from him.
[4:22] Speaker 5: Jim, do you think that it has longer term ramifications
[4:25] Speaker 5: for the institution based in the fact that he is
[4:28] Speaker 5: saying he does think that this is an independent institution,
[4:31] Speaker 5: a committee, but does want to avoid some of the
[4:34] Speaker 5: attacks that he says are battering the institution.
[4:38] Speaker 1: Marin or Eccles is the only other FED chairman that
[4:40] Speaker 1: stayed on in the late nineteen forties, and his memoirs
[4:43] Speaker 1: say that he stayed on because he saw, with Bretton
[4:46] Speaker 1: Woods and with the World Bank and the IMF in
[4:49] Speaker 1: the post World War two period, change was coming and
[4:51] Speaker 1: he wanted to marshal the world through those changes. It
[4:55] Speaker 1: seems like what Chairman Paul is saying is we're eighty
[4:58] Speaker 1: years later and changes coming. I want to stand in
[5:00] Speaker 1: the doorway and prevent those changes. He said he wants
[5:03] Speaker 1: to see a more traditional move back to the FED.
[5:06] Speaker 1: He wants to see the FED institution remain the way
[5:09] Speaker 1: it is and not evolve. Now, as far as independence goes,
[5:13] Speaker 1: I think we've solved the independence pro problem with the
[5:16] Speaker 1: vote today eight four. We have twelve independent voters. The
[5:20] Speaker 1: Chairman is one of those voters. That is how you're
[5:23] Speaker 1: going to get a truly independent FED. The Chairman cannot
[5:28] Speaker 1: dictate the policy like he has for the last forty years.
[5:31] Speaker 1: He needs six other people to agree with him in
[5:34] Speaker 1: order to get that policy across. What's going to happen
[5:37] Speaker 1: if we continue to have these descents. I'll remind you
[5:39] Speaker 1: last year the Bank of England had a four to
[5:41] Speaker 1: four to one vote. If we get to a six
[5:43] Speaker 1: to six vote with this FED we're already at eight four.
[5:46] Speaker 1: That gives Chairman Powell all the power to decide what
[5:49] Speaker 1: the policy's going to be. Even though he said he's
[5:51] Speaker 1: not going to give any speeches and he's going to
[5:53] Speaker 1: remain in the background, or is he saying that he
[5:56] Speaker 1: will just do whatever to Chairman wash tells him to
[5:59] Speaker 1: do and that's the way he's going to vote and
[6:01] Speaker 1: he's not going to vote independently, So it's a big
[6:03] Speaker 1: problem that he needs to define and try to explain,
[6:07] Speaker 1: and he didn't did this press conference, Jim.
[6:10] Speaker 6: I look at this simplistically. I got oil at one
[6:12] Speaker 6: nineteen sixty one in this announcement that I saw on
[6:15] Speaker 6: the Bloomberg that we're leaving an aircraft carrier from the
[6:18] Speaker 6: Middle East, the gerald Ford, with five four hundred sailors.
[6:22] Speaker 6: I believe it as is coming home exhausted. Is Jerome Powell,
[6:26] Speaker 6: simplistically in the same way, just staying to block a
[6:31] Speaker 6: Trump appoint period.
[6:35] Speaker 1: I hope he's not, you know, and I hope that
[6:37] Speaker 1: you know he's he's trying to be fair minded in
[6:41] Speaker 1: his decision, and I disagree with the decision, and we
[6:44] Speaker 1: can have disagreements in it, and that is it being
[6:47] Speaker 1: as political as that that he doesn't want Trump to
[6:50] Speaker 1: have another appointee. And by the way, we'll get the
[6:53] Speaker 1: Leasa Cook decision by June when the court adjourns, and
[6:58] Speaker 1: if they do allow him to fire Lisa Cook for cause,
[7:01] Speaker 1: I would assume probably the same day he'll fire j
[7:04] Speaker 1: Paul and we'll have to and then he'll get two
[7:07] Speaker 1: votes or he'll get two open seats to be able
[7:09] Speaker 1: to replace Now. Of course the court could rule otherwise,
[7:13] Speaker 1: but that's coming as well too. But I hope it's
[7:15] Speaker 1: not that. I hope that it is more that he
[7:18] Speaker 1: has a view about the institution not changing in a
[7:22] Speaker 1: world where I think we're changing and it needs to evolve,
[7:25] Speaker 1: and he's preventing that.
[7:26] Speaker 4: Jim, stay close. I've got Miama Cay standing by it.
[7:29] Speaker 3: Just hopped out of the news conference and one of
[7:30] Speaker 3: his reactions to one of this as well, Mike here
[7:32] Speaker 3: in the room. Have you got a different perspective on things?
[7:36] Speaker 7: Yes, I think I do. I was listening to what
[7:38] Speaker 7: Jim said. I don't think Jay Paul is staying because
[7:40] Speaker 7: he's trying to stand in the way of progress at
[7:43] Speaker 7: the FED. I think Jay Powell is staying because he
[7:45] Speaker 7: doesn't trust the Department of Justice. He noted at the
[7:48] Speaker 7: top that the Justice Department had said that they were
[7:52] Speaker 7: dropping the probe, but he referenced back to Janine Piro's
[7:55] Speaker 7: comment about we could file another criminal complaint and he
[7:59] Speaker 7: doesn't know, oh what the Justice Department will do, whether
[8:02] Speaker 7: or not there would be validity in what the Justice
[8:06] Speaker 7: Department might do, So he wants to make sure that
[8:09] Speaker 7: that is the case, and he will at least probably
[8:12] Speaker 7: stay through the Inspector General's report. It is also possible
[8:15] Speaker 7: he would stay on beyond that in order, as you did,
[8:19] Speaker 7: mention that in order to deny the President the possibility
[8:22] Speaker 7: of another seat if he thinks what the President wants
[8:25] Speaker 7: to do is take political control of the FED.
[8:28] Speaker 3: Said Jim, I want to give you a chance to
[8:29] Speaker 3: respond to that. If anything, the Chairman's been consistent, he
[8:33] Speaker 3: said a bah. He said this needs to be rapped
[8:35] Speaker 3: up with transparency and finality, and based on the comments
[8:37] Speaker 3: we've had, according to the Chairman, he thinks the full
[8:40] Speaker 3: and short of that bound.
[8:41] Speaker 1: Jim, Yeah, I think he thinks that. Senator Tillis does
[8:46] Speaker 1: not think that. That's why he voted today to advance
[8:48] Speaker 1: his nomination. And I agree with Mike that he does
[8:52] Speaker 1: not trust the Justice Department. But it's not his call.
[8:57] Speaker 1: It's the Justice Department that the American public elected through
[9:00] Speaker 1: the election of Donald Trump. And if he doesn't like it,
[9:03] Speaker 1: he's going to then stay as a disruptive force to
[9:07] Speaker 1: the FED to prevent them from making any kind of
[9:09] Speaker 1: changes or referrals or even looking in Remember this is
[9:13] Speaker 1: all about the building cost and why it's been taken
[9:16] Speaker 1: several years and his run so expensive, and it seems
[9:19] Speaker 1: like he's saying we're not allowed to ask.
[9:21] Speaker 3: I've got another disruptive force to talk about, Jim a
[9:23] Speaker 3: labor to jump in one twenty on Brent just breached
[9:26] Speaker 3: that level moments ago, high on the session by eight percent.
[9:29] Speaker 3: Let's just take a step back. The chairman's future is
[9:31] Speaker 3: one part of the discussion. These market moves are something else.
[9:34] Speaker 3: At the moment, Brent at one twenty just sit on
[9:37] Speaker 3: that yields high at the front end of the curve,
[9:40] Speaker 3: retesting the highs of the last two months or so,
[9:42] Speaker 3: and equities bring up the equity screen. At the moment,
[9:45] Speaker 3: equity is this afternoon, in the face of these moves
[9:48] Speaker 3: and fixed income, these moves in commodities doing almost nothing.
[9:52] Speaker 3: Bramo hardly moved, not even phased ahead of these earnings
[9:55] Speaker 3: later this so afternoon.
[9:56] Speaker 5: And this was what the Fed was talking about. Right,
[9:59] Speaker 5: we have the NASDAK that actually up four tens ofiven
[10:01] Speaker 5: percent ahead of those earnings. As we look to the
[10:04] Speaker 5: strength that fetcher J. Powell was talking about it as
[10:06] Speaker 5: last press conference. But this is where it becomes tricky.
[10:10] Speaker 5: At what point do those higher oil prices that might
[10:12] Speaker 5: be leaving big tech unphased become an inflationary pressure that
[10:17] Speaker 5: can be withstand what we could be withstood simply because
[10:20] Speaker 5: there is enough momentum in this economy.
[10:22] Speaker 4: Jim, let's get to the price section.
[10:23] Speaker 3: Not so interested in should should an interested in market consequences.
[10:28] Speaker 3: Here's a Federal Reserve debates in dropping its easy bass
[10:31] Speaker 3: pressure building the commodity market rice repricing yields higher. What
[10:34] Speaker 3: are the consequences, Jim, I think.
[10:37] Speaker 1: The consequences are huge because if you look at the
[10:39] Speaker 1: way that oil is trading. You're right that the June
[10:42] Speaker 1: contract went over one twenty a few minutes ago, and
[10:44] Speaker 1: that's the highest it's been since June of twenty two.
[10:47] Speaker 1: What about the long term? Okay, let's look at the
[10:49] Speaker 1: December contract. The December contract is making new all time
[10:52] Speaker 1: highs too, and it's saying to us, at least if
[10:55] Speaker 1: you want to take it at phase value, that the
[10:57] Speaker 1: price of oil is going to stay elevated at least
[11:01] Speaker 1: through the end of the year. As Chairman Paul said,
[11:03] Speaker 1: we already have he said, three and a half percent
[11:06] Speaker 1: on PCE inflation. That's their measure, and if it's all
[11:10] Speaker 1: driven by energy, it's going to stay there right now,
[11:13] Speaker 1: and it's going to be problematic for the Fed to
[11:16] Speaker 1: even talk about an easing with that level of inflation.
[11:20] Speaker 1: It's not going to disappear and go away unless there's
[11:23] Speaker 1: some resolution in the war. And the problem is the
[11:27] Speaker 1: market doesn't see the resolution in the war. That's why
[11:30] Speaker 1: both the June all the way to the December contract
[11:33] Speaker 1: continues to move higher.
[11:34] Speaker 3: Ay, Jim, going to see you. I appreciate your opinion,
[11:36] Speaker 3: Jim of Biancore Research. Mike always go to see you, buddy.
[11:39] Speaker 3: Great work in the news conference. Mike mckaye down in Washington,
[11:41] Speaker 3: d C. If you're just joining us, welcome to the program.
[11:44] Speaker 3: We have set out for quiet an afternoon now in
[11:46] Speaker 3: the next sixty minutes so sun, we should hear from
[11:48] Speaker 3: four of the biggest companies on the planet, Microsoft, METSA Alphabet, Amazon.
[11:52] Speaker 3: Before we get there, some big market moves to talk
[11:54] Speaker 3: about eight consecutive days of high crude prices Brent crude
[11:57] Speaker 3: through one twenty. Just briefly, we've taken out the heighs
[11:59] Speaker 3: of the year closing basis. If we close at these
[12:02] Speaker 3: levels one nineteen ninety five. Look at that WCI comfortably
[12:05] Speaker 3: into triple digits. This move in the bond market off
[12:07] Speaker 3: the back of it yields high at the front end
[12:09] Speaker 3: of the curve, up by ten basis points. Not just
[12:11] Speaker 3: about oil, also about this feeder reserve. If you missed it,
[12:14] Speaker 3: here's a summary an eight to four vote. Haven't seen
[12:17] Speaker 3: that level of descent since nineteen ninety two. Of that four,
[12:20] Speaker 3: three hawkish descents a conversation about dropping the easing bias.
[12:25] Speaker 3: They haven't got enough people on site just to do
[12:26] Speaker 3: that just yet, but we're losing support for that easing
[12:29] Speaker 3: bias at this feeder reserve.
[12:30] Speaker 5: And potentially if this conflict in the Middle East doesn't
[12:33] Speaker 5: get resolved, then all of a sudden, you will have
[12:36] Speaker 5: a consensus to move to asymmetric risk. We have now
[12:38] Speaker 5: priced out a rate cut for twenty twenty six and
[12:41] Speaker 5: the Fed Fund's futures. At what point do we start
[12:44] Speaker 5: repricing in hikes, because ultimately, this is an economy that
[12:46] Speaker 5: can would stand oil prices at this level, rates at
[12:48] Speaker 5: this level, and that was the ward that we heard
[12:50] Speaker 5: from the Federal Reserve.
[12:51] Speaker 6: Repricing here is hard because it's a war. Somebody mentioned
[12:54] Speaker 6: there it's a war. We forget we're in a war.
[12:57] Speaker 6: And within that, I don't know what the unknown known
[12:59] Speaker 6: is tomorrow or out to June seventeenth. Nobody knows. We're
[13:03] Speaker 6: just going to take in the data and take in
[13:05] Speaker 6: the war news. And what I'm waiting for John is
[13:07] Speaker 6: to take in the next marginal.
[13:08] Speaker 3: President Trump tweet the S and P five hundred down
[13:11] Speaker 3: by a tenth of one percent. If you looked at that,
[13:14] Speaker 3: it's a snoozy afternoon and nothing happened at this Federo's
[13:16] Speaker 3: Eerve meeting. That's just not the case. Jeffrey Rosenberg of
[13:19] Speaker 3: Black Rock joined us now for more. Jeff, what's the
[13:21] Speaker 3: bill case in the face of what's brewing elsewhere?
[13:26] Speaker 8: Well, you know, you highlighted it well between trying to
[13:30] Speaker 8: disconnect what's going on between oil prices and the committee
[13:33] Speaker 8: meeting today and what we heard, and you know, I
[13:36] Speaker 8: want to highlight, you know, the thing that I found
[13:39] Speaker 8: most interesting about Powell's comments were explaining the I think
[13:44] Speaker 8: the second main point and takeaway at the meeting, which
[13:46] Speaker 8: is this this theme of a divided committee that comes
[13:49] Speaker 8: out of the eight to four vote, and he framed
[13:52] Speaker 8: it as a natural consequence of the conflict in the
[13:56] Speaker 8: FEDS objectives between growth and inflation, which is the one
[13:59] Speaker 8: hundred and twenty oil you know? Is that is that you
[14:02] Speaker 8: know point? And he got asked the question about pass
[14:06] Speaker 8: through and this is I think what the markets are
[14:08] Speaker 8: really struggling with is he basically made the point it's
[14:11] Speaker 8: all about the time of which the Straits of Hormuz
[14:16] Speaker 8: remains closed, and no one knows what that will look like.
[14:18] Speaker 8: So Jim just talked about the forward curve. Uh, you know,
[14:21] Speaker 8: December contract making its new highs, but it's it's significantly
[14:27] Speaker 8: lower than the front end of the curve. So there's
[14:29] Speaker 8: an expectation here that at some point that's opening up.
[14:32] Speaker 8: We don't know what that is, and I think Divided
[14:34] Speaker 8: Committee is likely to be the continuation because of this
[14:39] Speaker 8: point that Powell highlighted that when you're faced with the
[14:42] Speaker 8: conflict of the dual objectives, that people are going to
[14:45] Speaker 8: see that in different ways. Some are going to be
[14:48] Speaker 8: arguing for the growth impact, some are going to be
[14:49] Speaker 8: arguing for the inflation impact, and that might be the
[14:52] Speaker 8: more expected outcome as opposed to what we've seen and
[14:56] Speaker 8: the historical comparisons of this being you know, very unusual,
[15:00] Speaker 8: will maybe get used to that being a little bit
[15:02] Speaker 8: more usual.
[15:02] Speaker 5: Jeff, it seems like the conflict of the Middle East
[15:04] Speaker 5: isn't necessarily that close to wrapping up. Maybe it is,
[15:08] Speaker 5: and we just all are getting mixed signals. Do you
[15:11] Speaker 5: think this market needs to price in a greater chance
[15:13] Speaker 5: of a rate hike as the next move by the
[15:15] Speaker 5: Federal Reserve?
[15:17] Speaker 8: Well, it's already done that. And to this discussion about
[15:20] Speaker 8: the easing bias and the language, you know, the market
[15:23] Speaker 8: already took the easing bias out. It did that at
[15:26] Speaker 8: the onset of the oil price impact from the Iran war.
[15:30] Speaker 8: So I don't think that as a catalyst for sort
[15:33] Speaker 8: of the next move that's made. Mostly, you know, the
[15:36] Speaker 8: Fed is a deliberate a body getting the right number
[15:39] Speaker 8: of people willing. You heard Powell talk about that they're
[15:42] Speaker 8: slow to move that bias. The market is not, and
[15:45] Speaker 8: it's moved the bias to easing out of the market pricing.
[15:49] Speaker 8: So I don't think that's really the market event. The
[15:51] Speaker 8: market event is really the uncertain unknown question that he
[15:55] Speaker 8: was asked, what's the pass through from headline inflation to
[15:59] Speaker 8: core inflation? You heard Worsh talk about it in terms
[16:03] Speaker 8: of trimmed mean and not looking at core PCE as
[16:06] Speaker 8: a measure. That's a very particular way of looking at
[16:10] Speaker 8: the potential for pass through. Will he get and move
[16:13] Speaker 8: the rest of the committee onto that view. If so,
[16:17] Speaker 8: that's a very dubvish implication, and you bring the bias
[16:20] Speaker 8: back in. But as Powell highlighted, we really just don't know.
[16:24] Speaker 8: So you're going to have to see whether or not
[16:26] Speaker 8: those pass through of headline into core shows up, whether
[16:29] Speaker 8: Worsh is more dubbish interpretation shows up, and whether you
[16:33] Speaker 8: can push the committee towards his direction, and that will
[16:37] Speaker 8: bring the bias back into market pricing. But right now
[16:39] Speaker 8: we're pricing.
[16:40] Speaker 1: Yeah, Jeff, I.
[16:41] Speaker 6: Got eight questions in time for one, and it's just
[16:43] Speaker 6: simple for our listeners interviewers across this nation and worldwide.
[16:48] Speaker 6: What is the best tool to use in the bond
[16:51] Speaker 6: market to study the potential dynamics? Don't you know the
[16:55] Speaker 6: benchmark tenure or that, or is there a unique Rosenberg spread?
[17:00] Speaker 6: It makes sense. What is the efficacious way to study
[17:03] Speaker 6: the pulse is seen in fixed income?
[17:07] Speaker 8: Yeah? You know, Tom, the kind of historical rule of
[17:11] Speaker 8: thomb is if you want to keep it simple, it's
[17:13] Speaker 8: about the five year maturity point on the treasury curve.
[17:18] Speaker 8: That's kind of impacts the best estimations of where you're
[17:22] Speaker 8: looking for current and forward looking FED expectations, and that
[17:26] Speaker 8: kind of is your benchmark for looking at you can
[17:28] Speaker 8: look a little bit shorter. Two year is going to
[17:30] Speaker 8: be the more near term expectations. I think that's a
[17:33] Speaker 8: really good metric. And then on the inflation side, remember inflation.
[17:38] Speaker 8: You know, headline inflation is going to impact shorter maturities.
[17:42] Speaker 8: You want to look a little bit further out, you
[17:45] Speaker 8: can look at the slope of the curve five year,
[17:47] Speaker 8: five year forward measures on break even inflation is better
[17:50] Speaker 8: when looking at longer term market expectations of the impact
[17:55] Speaker 8: on inflation, and so far, you know that's been relatively benign,
[17:59] Speaker 8: and so that's kind of supporting you know, Powells comments
[18:02] Speaker 8: in terms of market longer term expectations not being unduly impacted.
[18:07] Speaker 8: If you started to see that change, that's going to
[18:09] Speaker 8: be a major signal for FED policy pivoting more towards
[18:14] Speaker 8: the inflation concern. If you start to see that show
[18:17] Speaker 8: up in that metri Jeff.
[18:18] Speaker 3: Last question from US last time we had to yo
[18:21] Speaker 3: it at these levels close to them was the end
[18:23] Speaker 3: of March, and every person we spoke to and fixed
[18:26] Speaker 3: income on Wall Street had a very favorable interpretation of
[18:28] Speaker 3: these moves. They said we were creating value and they
[18:32] Speaker 3: wanted to buy it. Jeff, do you think we're creating
[18:34] Speaker 3: value this afternoon and do you want to buy.
[18:38] Speaker 1: Well?
[18:38] Speaker 8: I think the move in the front end is creating
[18:41] Speaker 8: some value. You know, you're seeing a big curve flattening again.
[18:46] Speaker 8: A lot of it is conditional on that pass through
[18:48] Speaker 8: of inflation, but stepping out of the curve into the
[18:52] Speaker 8: front end, we're having Warsh come in. He's already signaled
[18:55] Speaker 8: that he wants to look through that and take a
[18:57] Speaker 8: more dubvish interpretation, be able to bring the committee along
[19:01] Speaker 8: with them. You know, when you start pricing hikes in
[19:05] Speaker 8: it depends on the oil move and it's persistent. But
[19:07] Speaker 8: I think there's a little bit of value there. A
[19:09] Speaker 8: completely different answer really to the opposite side. When you
[19:12] Speaker 8: look in the long end of the curve, the long
[19:14] Speaker 8: end needs to build term premium. We got a savings
[19:18] Speaker 8: glut that's turning into a savings deficit, particularly as we
[19:22] Speaker 8: need to reshure, rebuild, reallocate in global savings around the
[19:27] Speaker 8: implications of this Iran war, all at the same time
[19:30] Speaker 8: as fiscal deficits are increasing the demand for that borrowing.
[19:34] Speaker 8: I think there you see a different story, and that's
[19:36] Speaker 8: a that's less of a buying opportunity and more of
[19:39] Speaker 8: something we're going to need to see increase in terms
[19:41] Speaker 8: of the term premium to bring investors back into the
[19:44] Speaker 8: long end of the curve.
[19:44] Speaker 3: He jeff got to see you a great answer, Jeffrey
[19:46] Speaker 3: Rosenberg there of Black Crock breaking down its views, not
[19:49] Speaker 3: because I think it's the right answer, just it's an
[19:50] Speaker 3: important answer to a very difficult question. Right now to
[19:54] Speaker 3: ya yields high by ten basis points tens full forty one.
[19:57] Speaker 5: If you think that right now there's a great opportunity
[19:59] Speaker 5: to buy and the tenure, give us a call, because
[20:01] Speaker 5: right now everyone who we ask seems to say go
[20:03] Speaker 5: right to the front end and saying that's where I'm
[20:05] Speaker 5: going to get some yeals. But right now on the
[20:06] Speaker 5: long end, things might be changing, and ultimately we just
[20:10] Speaker 5: can't get ahead of it. And that seems to be
[20:12] Speaker 5: a theme again and again.
[20:13] Speaker 6: Bob just emails in he's on his way to Step
[20:15] Speaker 6: one in Miami's here, and Bob's looking at and he's going.
[20:19] Speaker 6: The price of guests went up ten cents yesterday, twenty
[20:21] Speaker 6: two cents this week. People are needing out at restaurants.
[20:25] Speaker 6: That's got a lot more to do with us than
[20:26] Speaker 6: any of the.
[20:26] Speaker 3: Things that flight got more expensive. This afternoon is not over.
[20:30] Speaker 3: Big tech coming up after the close, coming up tomorrow
[20:32] Speaker 3: on Bluebacks, tav On Bloembock surveillance. We'll kick things off
[20:35] Speaker 3: with Jutying and Manuell. I've ever Call, will catch up
[20:37] Speaker 3: with Mike Wilson, I've Morgan Stanley, and a whole lot
[20:39] Speaker 3: more from New York City this afternoon.
[20:41] Speaker 4: Good afternoon,

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