And debates about what we really want. The other thing i would comment on is what is interesting to announcer we will leave this event on economic threats. You can watch our programs online at cspan. Org. We take you live now to the National Economist club in washington, d. C. President of the Federal Reserve bank will be delivering remarks on Monetary Policy on the economy. You are watching live coverage here on cspan. One of our two major events of the year, our summer signature program. I need to thank two friends, two sponsors who have made todays great event worthwhile. First of all, my friends at and forum. In forum is a research and consulting probe affirmed that has been open for 52 years. Greatry much embodies the tradition of innovative Economic Research at the university of maryland. Secondly, our friends at the National Association of realtors. Since 1908, they have been the voice of Real Estate Community in washington and have provided invaluable economic data, research, and in our critical sector of the economy. With of that in mind, with those organizations supporting us and with this large and distinguished audience behind us, we have come to a moment. And i have to tell you, i cannot imagine a better marriage of a moment and a speaker than what we have today. Really a man who embodies the best of our field. One of the joys of doing this, and of course it is a hassle putting together an event like this, but one of the joys is not just to introduce a speaker, but think about what makes a person unique. Theory,used economic highlevel economic theory, to powerfully propel the thinking of the Federal Reserve forward in a way that is going to benefit all americans, that is benefiting all americans. At the same time, he is very much integral and a man of his community. He is a man of the people who are affected by his policies. He is of course the president and ceo of the st. Louis Federal Reserve. Included in activities at the st. Louis headquarters and its branches in little rock, arkansas, louisville, kentucky. I did not realize it had that many branches. He is a noted economist and scholar. Every time he publishes a paper, i think the thinking on the fomc moves forward. Early in his tenure, bullard talked about the possibility of a japanesestyle deflation in a paper. He argued strongly for something that may seem like common sense, but i had never heard before, that fomc deliberations should not be by the calendar, but by data. By the need. During the crisis, he advocated for inflation targeting. Something that may have saved a lot of us. He is an active member in his community. He sits on the board of trustees of the united way, the board of directors of the st. Louis regional chamber, and the board of directors of the concurrent academy and leadership. And a list of other things that we do not have time to get into. He is a native of lake forest, minnesota. Inreceived his doctorate economics from Indiana University in bloomington and holds a bachelor of science degree in economics and quantitative message and Information Systems from st. Cloud university in st. Cloud, minnesota. Now, let me tell you how our program is going to work today. President bullard will speak, and after that, my colleague, ed keane, will do an interview with him. A noted economic correspondent, a long time Federal Reserve expert, and a past president of the National Economist club. After that, we are going to send spend some time taking audience questions. We ask respectfully because president bullards time is limited to, that you keep your questions concise. And we will do our best to address them respectfully. For now, president bullard, we are grateful for your time. We are very aware of the weightiness of the moment and we look forward to your insights. Ladies and gentlemen, jim bullard. [applause] pres. Bullard gosh, what a great introduction. I think i will just sit down. [laughter] pres. Bullard because they can only be downhill downhill from here. I appreciate the opportunity to be here at the National Press club and in front of the nec. Im looking forward to hearing your comments on current Monetary Policy or whatever else you want to talk about, about the u. S. Economy. I call this a seachange in u. S. Monetary policy. Hopefully i can convince you of the dramatic changes that have in 2019 withred respect to u. S. Monetary policy above and far beyond the rate cut that we had last week. Dont want to listen to the whole talk, you can just read the slide. [laughter] we madellard significant changes in Monetary Policy of which many of you are aware. Beginning in january of this year, those changes were made in anticipation of Slower Growth in the u. S. Economy during 2019. Which is materializing. I will talk about that during the talk here. But also, in anticipation of heightened uncertainty with respect to trade policy. I think we anticipated the idea that trade policy was going to be volatile, currently and Going Forward across the forecast horizon. More at thisuld do point, but we have also already done a lot. But i would like to do is take some stock of what we have already done, and see how that impacts the economy, and then make decisions Going Forward. That is my main point here. The third bullet point. We will talk about that in detail, may be too much detail as i go through this talk. In the meantime, inflation pressures certainly are muted in the u. S. Economy. I will talk about that. We also have yield curve issues which i think are still with us. To getlooking for those better as we go through the rest of this year and into 2020. Let me just talk about this argument about a seachange in u. S. Monetary policy and review what has happened since late 2018 when the story begins. 2018, the Interest Rate environment was much different than it is now. That is my point, i guess, to the extent of what i have, and i do have one. I want you to focus on just the two year yield, two year yield, because the two year treasury yield embodies both the current level of the policy rate, but also the immediate outlook for the policy rate. If you look at the two year yield as of november, early november last year, it was almost 3 . The 10 year treasury was trading to yield about 3. 25 . It was a different Interest Rate environment. The 3 on the twoyear reflected the fact that the policy rate had been increasing through 2017 and 2018, and that the committee was projecting further increases in 2019 and 2020. And we still had a positive spread between the two year and 10 year. That was the situation at the beginning of the story. We raised the policy rate at the december meeting and projected further increases in 2019. Then the story began to change with chair powells comments at the American Economic Association Meetings in atlanta on january 4. Gradually, through the First Six Months of 2019, the committee started to project less and less in the way of policy rate increases. We also put together a plan to cease the runoff of the balance being which is fully implemented as of our last meetings decision. We did not change the policy but at the june 19 meeting, we strongly suggested that we would that a rate reduction was forthcoming. At the meeting, that we had last week, we went ahead and followed through on that rate reduction. So, the main point here is that the whole Interest Rate structure is dramatically lower, given the seachange. If you look at the twoyear treasury, it was trading to yield at about 1. 25 percent. That would be a decline of almost 125 basis points from the early november reading. Im pushing back against people, maybe some of you, who said oh, the 25 basis points, that is not enough in this environment, and boy, that is a small chain and that will not move anything. No, that is not the way to read this. There has been a seachange in Monetary Policy. A very large movement which i would characterize by this change in the twoyear, because not only is the level of the policy rate changed, the outlook for the policy rate has changed and that is what the twoyear is telling you. It is combining those two things together. 125 basis points lower. Guess, trading yield, i 186 on august 2. Things are moving quickly here. Today, the twoyear, 10 year spread is still positive. Thats because markets are probably expected a more action from the committee expected more action from the committee. The point is that the structure of shortterm rates dropped by about 125 basis points due to fomc action. In longerterm rates fell tandem. Most of the time when we are describing this to clients and customers, we would say that is more important for investment decisions, but this is a case where the longerterm rate came down in tandem with a short rate. Here we are providing more Monetary Policy accommodation than we did late last year. Bottom line, u. S. Monetary policy, quite a bit more accommodative than it was. Furthermore, lets channel our inner Milton Friedman here. There are long and variable lags in the effective Monetary Policy on the economy. These are developments that just happened over the last six months or so. You would not expect them to show up in the math in the macroeconomic data. But i would expect them to begin to show up in the second half of 2019, about where we are now or later this year. In the first half of 2020. That is when i with think the maximum impact of the seachange in Monetary Policy would occur. Here is a picture that shows this whole sequence of events. You guys have this picture etched in your mind anyway, so you know this. It goes to november 8, 2018. The first vertical line, all the way to the june 19 decision, and again, the june 19 decision, we did not actually lower the policy rate at it sent a strong signal that we would lower the policy rate at the next meeting which we followed through with on july 31. I would not necessarily say that the right things do not happen after the july 31 meeting. That decision was effectively made more or less of june 19 meeting. Anyway, no matter how you want to look at this, this is a big change in u. S. Monetary policy. Let me talk about some of the conditions that drove this. I think the biggest one is probably just that as we have been anticipating for a long time, the u. S. Economy would probably slow down to its potential growth rate. We are talking about an economy that is growing at an above potential rate of growth. I am sure you are all predicting it, that it will slow down to the potential growth rate Going Forward. The revised figures on gdp have the economy growing at 2. 5 in 2018. 2019 growth has been expected to be slower, although i will hold out a little bit of idea that maybe 2019 will not be worse than 2018 as far as growth. I think there is some potential. It is not my base case, but a potential for growth to be 2. 5 or even better in 2019. We will see if that holds up or not. Part of that might come from more accommodative Monetary Policy as i have described it. We have had this key risk on the horizon, and all of you have been coping with this too, that trade uncertainties might cause the natural slowdown to be sharper than anticipated. Andy would get something skirting and you would get something skirting around 1 growth or Something Like that. Here is a picture, i love this picture, so i will dwell on it for a while. This is a picture, starting in march 2017 and continuing out over the forecast horizon. This is the u. S. Real gdp growth rate. It is measured from one year earlier. It has moved out a bit compared to the way we usually look at it. The blue line is the actual data. The dotted line on the lefthand 27 2017 march fomc projection for gdp growth. What did the fomc think in the first half of 2017 . 2 the economy will grow at as far as the eye can see. And on the righthand side, the dots, the dotted line is the current projections from where we are today. He can see the blue line obviously ratcheted up quite a bit during 2017 and 2018. The yearoveryear growth rate did reach 3 middle of last year and Third Quarter of last year. Yearoveryear growth rate has been declining since then as predicted, and as we would have all expected, that growth would come back to the potential growth rate and the dotted line on the right says it is expected to continue to decline back to the potential growth rate. Void, look at the upside 2017ise compared to march about how much more growth we got in the u. S. Economy than what was expected as of that time. That was the upside surprise. On the righthand side is the expected slowdown. The risk here is that the blue line goes down more than you would think. And possibly because of trade uncertainty, and that is why i think the fed has taken out some insurance against that possibility by providing a more accommodative Monetary Policy over the last six months. It certainly seems, based on recent of elements, that it will be hard to get a stable trade regime and environment over the nearterm. Or over the forecast horizon, which i would describe as two to three years. I think there is no question that this is chilling Global Investment and slowing the Global Growth rate. That seems to be factored into almost everyones forecast. If you feed trade restrictions into a model, you will get out that the trade restrictions direct effects are probably small. On, there can be other knock effects, mostly coming through Financial Markets and other sources that can be much larger. There is some risk and uncertainty here about what the effects of this increased trade uncertainty will be. This, we are in a titfortat trade war, and it is not in any titfortat trade war, each side is going to make threats and counter threats at any point in time. These might be daily, might be weekly, might be monthly. The nature of a titfortat trade war is that there are threats and counter threats occurring all the time. Some of these might be implemented. At some of these might not get implemented. The nature of the war is that you have titfortat going on all the time. It is not reasonable for Monetary Policy to respond to all of these threats and counter threats. If you did that, you would get a very volatile Monetary Policy and you would be contributing to the volatility being caused by the trade war. I dont think that is the right think about how Monetary Policy can take the situation into account. I want to think instead of trade regime uncertainty as simply being high. It is just high and it will be high for the foreseeable future, because it is going to be very hard for the various sides to repair trust and to get back to a stable trade regime over the forecast horizon. We have already taken that into account. Trade regime uncertainty is high. And we are putting that into the Monetary Policy calculus. We have used Monetary Policy in reaction to that, through the accommodation that i have described earlier. Particular threats on counter threats are not news because of the way the and certainty plays out over time in a titfortat trade war. Im not expecting the uncertainty to go away but we have tried it to take out insurance of the possible damage the trade war could do to the u. S. Economy. Here is a picture, this uses the baker bloom and davis measure of policy uncertainty with respect to trade. It was low, low, low, low, low, high. That is how i read this picture. It was low all through the to thousands or even before that. 2000s or even before that. I would describe it as the u. S. Leaving the drive to trade liberalization. The culmination in the entry of china into the wto in 2001. And since then, a fairly stable trade regime with reasonable certainty about what the trading arrangements were going to be and what the tariff arrangements were going to be. But that has exploded since trade has become much bigger political issue. I would say not just in the u. S. , not just in the Republican Party or this administration, both Political Parties in the u. S. And politics all around the world now questioning global trade arrangements. That is why i do not think this will go away. You have opened pandoras box. These are difficult issues. You will not be able to put them back in the box. We are going to have trade regime uncertainty as described on the righthand side of this charge for as far as the eye can see. Like i say, that is from our point of view as Monetary Policymakers, we have to take that into account. We have about insurance against the effects this may have on economic growth. We have other concerns meanwhile that are bubbling in the background. One of them is immunity muted inflation. We measure this as pce inflation. Headline inflation. A lot of times, we will look at core inflation to get an idea of some sort of underlying gauge of inflation pressure. Both inflation and Inflation Expectations are below target. I think this is surprising because this is occurring despite the upside surprise in the economy that i described earlier, which has been ongoing from 2017, 2018, and even the first half of 2019. All of that has been above potential growth in the u. S. Economy, stellar performance of labor markets in the u. S. Economy, and nevertheless, our core pce inflation measure from one year ago is only 1. 6 . I think this is a concern. We would like to see inflation at or above target in this environment. Here is a picture. Im experimenting here with the cleveland feds twoyear expected inflation measure. 30 basis points because that inflation expected inflation measure is on cpi inflation, so it translated over to pce inflation, subtracted 30 basis points. Theory tells you the expected inflation over a short horizon like that should correspond to actual inflation pretty tightly. That does appear to correspond pretty tightly in this picture. They are both below target. Both expected inflation and actual inflation are below 1. 5 , 1. 6 percent, 1. 4 range. Why arent we seeing more inflation pressure . Thats a great question for the committee. This is something i would like to csb able to move back toward target more quickly and hopefully our accommodation is helping us do that. Let me just touch on yield curve issues, then i will conclude and we will start our, i guess i get a grilled twice here. I first get a grilled by all of you by ed and then by all of you. Yield curve does contain Important Information for policy marketing majors. I have talked about yield curve inversion. It has tended to predict the onset of recession. However, there is a big lag between the inversion and whatever else might actually happen. That is something to keep in mind on this. You do have some inversion today because the 10 year is treating below the threemonth yield or the federal funds rate. That is concerning. The twoyear, 10 year is not inverted at this point because they twoyear is taking into account likely future actions of the committee. I would say that is mitigating factor in my mind. We are not seeing an intensification of yield curve inversion so far, based partly on anticipated future policy from the fed. I dont think this has gotten any worse here. Heres a picture, various spreads. We have the tenure, twoyear there which i have labeled as still positive. The others i have inverted, but only slightly. Some of that has gotten worse on the last day or so. About this issue, i would like to see a healthier upward sloping yield curve. If you look at the second half of the 1990s, where the fed made policy adjustments in the 1995, 9096 timeframe to find the right level of the policy rate, the yield curve was upward sloping all through the second half of the 1990s. One of the best periods of Economic Performance in the postwar era. Averaged 50 basis points, 100 basis points during that period. I would like to get back to that peer this is too flat for my taste. With the accommodation coming on board, if we see inflation starting to pick up and Inflation Expectations start to pick up, you may get a natural slope to the yield curve and we would be in better shape if that happened. The fomcnclude, continues to face a slowing economy, a naturally slowing economy i would say, with some risk from trade regime uncertainty. We have an inflation rate that continues to fall short, both in actual inflation and expected inflation, continues to fall short of our 2 target. On the other hand, we also have a lot of accommodation that is just now coming on board from the first half of the sea change in Monetary Policy during the first half of 2019. That should push inflation back to target faster or maybe even above target. It is possible that we could take additional action, but i do want to see how the effects of our previous actions play out in the economy Going Forward before we make those decisions. Thanks very much. You guys have been very kind to have me today. Im looking forward to your questions. So thank you. [applause] ed can everybody hear me ok . Ok. This. , jim, for doing we really appreciate it. Im going to first start off by talking about some of the trade issues you highlighted. Since the Interest Rate decision last week, we have seen some reintensification of some of the trade tensions that have gone on throughout the year. How you arefect seeing the Economic Outlook . Are you walking down your forecast settle as a result forecast at all as a result of the announcement of additional tariffs, and the Financial Market reaction to that announcement . Pres. Bullard well, i do think the trade regime uncertainty, it became clear earlier this year i think especially, it became that trade regime uncertainty was just going to be high. And i would agree guard you say intensification, i would say a manifestation of trade regime uncertainty in the last few days. You would certainly expect, if you are going to be in a titfortat trade war, but the two sides are going to be trading barbs and threats and trying to get the other side to come to the table and do all kinds of things. That is may be natural in a negotiating setting. But i would not describe that as intensification. That is just ongoing trade war. That is the nation nature of the trade war. We havend, anyway, already adjusted for the fact that this is going to be trade regime uncertainty will be high, we have put in a more accommodative policy, now it is time to see if we bought enough possible against negative effects of this policy. Ed one other at what other aspect one of the other aspects of the announcement last week was the next round of tariffs, imports from china, a lot of this will apply to consumer goods, whereas until now, a lot of this has been the tariffs have been applied against intermediate inputs. Do you see that changing the dynamic out all of how you believe the effects of this on the economy . Pres. Bullard well, like i said, if you put tariffs into a macroeconomic model and change them, what you will get is relatively small effects, macroeconomic effects. To the extent that there are large effects and there may be, i think they are going to come in Global Manufacturing in the Global Manufacturing pmi has declined into negative territory. U. S. Manufacturers are scrambling to reorient their supply chains. And it iso me, chilling Global Investment because investors are not sure where to invest that will give them shelter from the ongoing trade war. I think those kind of affects might be bigger than the effects directly on consumers. Consumers certainly are not going to sit idly by and pay higher prices, they will probably shift the two other substitute goods. That is the kind of thing that happens inside a model and mitigates these effects. There would be some effects depending on what the goods are that we are talking about. But im not sure i would go from the idea that they are being applied to consumer goods to automatically assume that that is a large effect on the u. S. Economy. Ok. Chair powell described the Interest Rate cut as an adjustment and then went that the fed was not currently anticipating a long series of rate cuts. And yet Financial Markets. Considering further easing. Another percentage point of cuts, how did he expectation square with your overall kindmic outlook and what of outcomes would you need to see to get that kind of using . Think i will give you my take of the idea of a midcourse correction. The 1995 experience. In 1994, we raised the policy rate. In early 19 95 come we raised the policy rate 300 basis points in a single year. It was the worst year for bond markets in the postwar era. Later in 1995 and early 1996, the committee struggled to find the right level for a policy rate. Looks like the economy was slowing down a lot in the first half of 1995 based on realtime data. The committee ended up adjusting down slightly, got to the right rate, and set up the economy for a great second half of the 1990s. That off can pull here. We raised policy rate in 2017 and 2018. Not 300 basis points, but may be 225 basis points. A similar normalization. The level of rate obviously is way lower but that is global trend in Interest Rates. Now what you would like to do now that you have finished normalization is see if you can find the right level of policy rate. Is how i would think of this, as a midcycle correction. , theve put a lot of outlook for Monetary Policy has changed dramatically in the last six months. A lot of implicit accommodation coming back to the economy. Should affect us in the second half of 2019 in the first half of 2020. See how the previous moves are affecting the economy but youll dont want to rule out moves ahead. I do not predict a recession on the horizon. I dont think this is a situation you are not in recession most here, and midcycle. That is why like that language. To find the right level of Interest Rates for this environment. Up tol hopefully set us continue expansion for many years to come. On the other question policy outlook to you run up to the last meeting, there was a fair bit of debate as to whether the cuts should be 25, a quarterpoint cut, or a half cut. He suggested going to a have cut would probably be somewhat overdone. Think about the size of any cuts, to do a halfpoint cut, which tends to be pretty aggressive, what would you need to do Something Like that . I look at the pricing and there is still some element of risk perceived for a halfpoint cut. You can look historically at episodes where the committee has , made that kind of a move. Beingt really see us in in a situation where that was true. One that i can think of off the top of my head is late 2007, early 2008. There, you have really the financial crisis have started in earnest august 9 and 10th of 2007. The committee had done a lot of things during the fall. We guess and data around that time out of cycle that lowered the policy rate dramatically. Were not in that situation. Above they is growing potential rate and has been for the last 2. 5 years. Markets, unemployment is nearly 50 year low. There are a lot of good things even though you have risk out there as you always do. I dont think were in a situation where we have to be quite as dramatic as that would suggest. Lets ok. You touched upon the low inflation being below target. We had a situation in recent years, this has affected other Central Banks as well. Growth,tanding strong and tight labor markets, inflation has been below 2 . Factors in place that are likely to keep inflation so, does that if limit the ability of the fed and other Central Banks to try and get this back to the central target . It is an interesting hypothesis i read about a lot p ryan mott sure if i have a really solid theory in my head about this. It does seem Like Technology has become a lot more important as a fraction of the economy. What do we know about technology prices . They tend to drop over time. That is somehow feeding into the inflation process. I think it is not unusual if you numbersgate inflation to see prices, relative trends in all different types of prices. Medical for example. Technology is a good example. Housing rents are good example. It seems like the overall price level is going up at a constant rate but that does not mean all of these subsectors are going up at the same rate. Relative prices are changing longterm trends over time. If one of those becomes more important, it can have this deflationary impact. Hi ihesitate to say have been able to nail that down. I will stop there with that. Ed following up on the question about inflation, the fed is undergoing a strategy review now. There have been suggestions made on how to enhance the credibility inflation target. There has been talk of moving to average inflation targets, other ideas have come up here what are your thoughts on those . James those that are interested, you might check out the chicago conference that we had. I think it is all available online. Might want to check out the conference that occurred in month before that at stanford university. I give one of the presentations and you can check out what i said about nominal gdp targeting as upon both framework Going Forward. You should think about evolution, rather than revolution. Framework. Policy i think there are a lot of ideas that are related to price level targeting because price level targeting in a lot of different models turns out to be the best thing you could do. I think the ideas of trying to the up, if you missed on low side for a while, you might miss on the high side in the future and vice versa. Work well inside models. Of thinking is becoming more prevalent across Central Banks around the world. You wake up one day in the fed is radically change framework. I dont think there will maybe be some movement in that direction implicitly. One more question before we turn to the audience and this relates to the question of the feds independence. The executive branch has been more directly critical for the number of years i can remember about the feds decision. Is there any concern on your part that the public buses confidence in the independence of the fed is at risk from what is wrecked what is happening here . I appreciated the former chairs coming out with the oped. So we quit paying them, they are still working. I appreciate that. [laughter] james so i think my reading of it was justl was reiterating why american Monetary Policy is set up the latest. There were all these Lessons Learned from earlier interest when it did not work out so well, especially the 1970s. That, we made the changes we did. You have a very large technocratic committee and a lot of viewpoints expressed. You have to get the committee to somehow center p or the Committee Makes better decisions as a committee than anyone individual member would. I think we are really making decisions the way we always have we look at the date on the economy and make a judgment. True there is maybe more buzz around this than there was but my dance in the fed is there is always a debate going on and always people talking about what the fomc should do. I like getting input from all different angles in all different directions. But then the Committee Sits down and goes ahead and makes a decision. I think it is working well. We will open it up for questions. Ok. Over here and then over here next. State your name, affiliation. Ask your question in the form of a question. No speeches. National association of realtors. The component of the cpi where it is accelerating, a housing opponent component, that is. Ue to the housing shortage homebuilders, especially small sized builders that rely on construction local committee banks, that has a right appeared i am not sure if it is loosening up but the lack of housing start is causing a Housing Housing shortage. Do to anything they can stimulate the lending . James i think the market was shaken by the crisis. Were 10 years past that now. The reaction to it seems to be. Ou can tell me more also tastes seem to have changed to some degree as newly formed households maybe are not as these are two in eager to get to the house as they wouldve havehistorically builders pulled back a little bit. I am certainly not trying to limit Community Bank exposure housing. The system somewhat of a market response as opposed to a policy response. I have a question. What about asset prices. That doesnt seem to factor into any of the conversation we have had about whether or not we have inflation. As to whether you can include asset prices in the measure of the standard of living in cost of living. You could certainly make the case and certainly, economist said made the case overtime. I dont think, as a general, i dont think it behooves us to try and react to stock prices, equity prices, with Monetary Policy. It is a losing game to get involved in that. Rapidly,t moves around the prices every day. I think the wisdom has been the market is trying to assess the future of the u. S. Economy and the Global Economy, but the fed is also trying to assess the future of the Global Economy. If they try to start assessing each other, you get into circular movement. Better to think about the goods and Services Prices consumers actually pay. One thing that puzzles me is global and fish in that it inflation that is global. Explaining this to low, too long. They are cutting back. Point doese, at what the situation turn from too low, being stimulative, to being restrictive . A very provocative point. Global inflation is low. A few added up the Central Banks in the world and made them to just one central bank, that was which is justing the opposite of the 1970s. Also global inflation, global inflation was very high all of the world. The unified centralbank of the world had to hire than inflation target and the inflation under control. To put models of exactly how ratesorks and exchange and many other features of the Global Environment is be honest what i think we could do. What you would think is that china is importing u. S. Month her policy because they are managing the dollar per that is keeping inflation low in china. Im not sure we had a great model for how this all works. Facing Monetary Policy due to a change in framework in the sense that the fed funds are no longer the driver of monetary decisions but rather interest paid, and the change from a system of Monetary Policy toward forces to monitor policy. Can you maybe address that . One thing you might check out his we have a series of logs at the st. Louis fed that have talked about a repo facility to complement the facility we have. It might have some benefits to how we operate Monetary Policy. Something that may be gaining traction in the fed and could serve us well Going Forward. But as far as the impact of Monetary Policy on raids, i , someit is pretty clear will say it is too far out the curve but i think that there is no question that the very shortterm yields that are market base are very closely tied to monitor policy. I think that is working the same as it always has. What are your feelings about student debt right now, which seems to be out of control, and how that might impact the economy in the future . My son will be starting Indiana University in two weeks. Go hoosiers. Continues tobt grow. How do you factor that in down the road . 11 or 12 . A reformd like to see of the student debt situation. I think it is getting out of control. I do not like the idea of to a Prospective Student who should not take the money based on the degree they might be getting and will not be able to repay it because they will still still be stuck with this for a long time. I think there should be some process around the initial disbursement. When i my student loan, there were hardly any russians asked at all. It was a guaranteed student loan. No questions were asked. I could have been a good schooling good student or a crappy student. They did not check share this has become a more concerning situation. It is right for reform. I dont see why these cant be just market determined rates instead of determined rates. I would like to see some movement on this. It has been going on too long. When i talk to people on capitol hill, they talk about the issue but i dont see anything happening. Thank you. Susan from the government count billy office. We seem to be in a worldwide negative Interest Rate regime. At some point, there will be another recession. Imply for the ability of Monetary Policy to be a useful tool in that situation . I think it is a great point. Recessions oft the era is that we have been able to normalize rates as much as we have. I note is not as much as others might have been looking for a we have been able to get the policy. Ate up somewhat we get into a recession and the situation will react to that. Others have done that, notably japan and europe. On conventional policies are more tenuous in their fax in the economy. Notwithstanding the other reasons for lowering Interest Rates, he talked a bit about the shape of the yield curve. You recognize the fed has some affect on that in that people are anticipating future fed but potentially one of the dynamics could have to do with the fed change and its portfolio runoff decision, if it was running them off and built off a set of expectations, then took them away, so they both soe the announcement of that the fact of it or the dawning as well as theit fact that you have never been in this situation where you run the. Tuff off and change the rules do you think that could have had any effects on the changes in the yield curve that we are seeing . When i am thinking about the yield curve that up practical level, im thinking not so practical. The market has a lot of influence on the long end of the curve. That is the traditional monitor policy thinking. In global there has qe and because of that, people have said the longest rates are lower. If you look at empirical evidence, the magnitude of the effect is not so large. And should be dissipating because there is countries around the world have stopped doing the qe part. It was also priced in initially so now, as it its unwound it should be going the other way. Yields should be going up. I am not seeing that aspect of it. Like to see a more upward sloping yield curve. It strikes me that the kinds of levels on the tenure talked about today are certainly at the low end of the trading range over the last five years. I would expect with a little more inflation and a little more expected inflation, he would see a more upward sloping yield curve Going Forward. We would have to see if that develops or not. What is the impact of future monitor policy in terms of the chinese devaluation, its potential impact in offsetting price increases in consumer goods, plus the higher savings rate in the u. S. Economy and wages now exceeding the rate of inflation . Looking at the last few days wrong,orrect me if im they did not fix above the seven level. They fixed below. If the policy has not changed, they want to contain an Exchange Rate movements in the exchange they have before. I think it makes sense. It is their policy. I was there policy. Threats coming from the u. S. , the whole reason they had the policy was they wanted to provide stability for the chinese economy. I am not sure i would expect them to abandon the policy in that situation. We will see. Maybe they would. It seems to me the fact that they tried to fix under seven returning to are before. Will have a moderates prerogative to ask the last question. He stressedrks, trade policy uncertainty will remain with us for quite a while. Does that have implications Going Forward as to what we think should be the equilibrium level for Interest Rates . Lets if anything, it would moderate Interest Rates slightly compared to what you would otherwise have, so yes, i would think that would be a factor. A factor really is compared to Everything Else going on in a Global Economy is a good question. So we will have to monitor that situation and keep track of it Going Forward. First of all, we have a gift for you. It is an express of our gratitude. We think it will appreciate 510 per year. [laughter] my colleague did a wonderful job. Or the team to our members, we will announce a big dinner soon. We will have a new website and we will hear about it soon. For now, ladies and gentlemen, thank you for coming. Have a great afternoon. [applause] [indiscernible] [indistinct conversations] [indistinct conversations] the father of a tv reporter in roanoke virginia. We will discuss his concern over protections for Internet Service providers after video of his daughters death was posted and reposted online. Coverage toing live get started momentarily. [indistinct conversations] you are watching our live coverage which has not gotten started yet here in washington, d. C. Reporter who a tv is in roanoke, virginia. He will discuss immunity protections for Internet Service providers after video of his daughters death was posted online. Also, today, the house will be gaveling in a 3 30 eastern time for what is is inspected to be a short pro forma session. Most members are away from capitol hill during the august break. Also live tomorrow, the chair of the House Oversight and reform committee, elijah cummings, will react to president trumps comments to the recent shooting and will talk about the recent investigations into the 2016 election. Join us tomorrow at 1 00 eastern here on cspan. Waiting for this discussion at the National Press club to begin. One, 2, 2, 2, 2. [indistinct conversations] can you give me a 10 count again . Can you hear ok, sir . One, too. One, too
comparemela.com © 2020. All Rights Reserved.