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Bloomberg's Condon on Yellen Remarks: More of the Same (Audio) · Bloomberg Intelligence

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  Speaker 1: This is a Bloomberg Business Flash from Bloomberg World Headquarters.
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  Speaker 1: I'm Catherine Cowdery. Stocks are climbing and light pre holiday trading,
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  Speaker 1: Yellen signaled a willingness to raise interest rates. Speaking at
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  Speaker 1: Harvard University, she said she expects the economy to improve
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  Speaker 1: after a week first quarter, and a rate increase would
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  Speaker 1: fifty cents announced at twelve twelve thirty the tenure Treasury
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  Speaker 1: down six thirty seconds with the yield of one And
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  Speaker 1: that's a Bloomberg Business flash stock with Kathleen Hay on
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  Speaker 1: Bloomberg Radio. Another interest rate increase will be appropriate in
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  Speaker 1: coming months. That's what fed A Reserve chair Janet Gallen
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  Speaker 1: said today at a really delightful one on one conversation
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  Speaker 1: with Harvard economist Gregory Manque. She was there for Radcliffe Day.
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  Speaker 1: She received the Radcliff Medal, and it's for people who
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  Speaker 1: have made a big contribution to society in their field. Now,
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  Speaker 1: what she contributed today in the market is is a
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  Speaker 1: little bit of a pairing of the games and stocks
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  Speaker 1: which really weren't that much higher anyway, and a little
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  Speaker 1: bit of a selloff in bonds. Was this warranted? Did
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  Speaker 1: Janet Yellen say anything that we wouldn't have expected her
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  Speaker 1: to say? Well, let's ask somebody who was there covering
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  Speaker 1: this for Bloomberg News are owned Christopher Condon. He's part
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  Speaker 1: of our Federal Reserve team based in Washington, d c. So, Chris,
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  Speaker 1: you are covering the day in and day out, how
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  Speaker 1: would you characterize her remarks today, Hello, Kathleen. Well, I
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  Speaker 1: would not say that we heard anything from her that
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  Speaker 1: was markedly different from what others on the committee has
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  Speaker 1: said in recent day, recent days, or week. But it's
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  Speaker 1: entirely different coming from the chair. It's who she is
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  Speaker 1: in addition to what exactly she says, and and and
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  Speaker 1: so it is meaningful when you care Janet Yell and
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  Speaker 1: say that it will probably be appropriate in the coming
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  Speaker 1: months to raise interest rates. Chris, and wondering if you
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  Speaker 1: could comment about other aspects of the conversation having to
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  Speaker 1: do not only with her experience, but the economists that
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  Speaker 1: have mentored her and her role at the Federal Reserve. Well,
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  Speaker 1: you know something that did come out, uhuh, and that
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  Speaker 1: come out when I and Rich Miller profiled her, is
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  Speaker 1: that a very important mentor Janet Yellen was the great
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  Speaker 1: economist Tobin, whom she studied under Yale, And she talked
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  Speaker 1: about his sort of uh inclusion of moral and social
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  Speaker 1: concepts in his economic thinking. And that I think it
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  Speaker 1: tells us a lot or confirms a lot of what
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  Speaker 1: we feel about Janet Yellen when she when she does
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  Speaker 1: her research, when she makes policy, she also tries to
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  Speaker 1: apply what she called a moral compass, the moral compass
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  Speaker 1: that that Tobin applied. So I think that tells you
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  Speaker 1: something about Janet Allen as well. Oh, and how she
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  Speaker 1: praised Ben Bernanke for his masterful work to be innovative
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  Speaker 1: and and to save us from credit drawing up and
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  Speaker 1: going into another great recession. Although I think she said
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  Speaker 1: and she meant to say into into another great depression
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  Speaker 1: when she is when she was praising Beam bern Ake, Yeah,
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  Speaker 1: I thought they were going to give Ben bern apiu metal. Well.
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  Speaker 1: But but Chris, uh, you know, if you wanted to
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  Speaker 1: be nitpickyes, I was being It seems to me that, uh,
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  Speaker 1: maybe the reason we had a little bit of move
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  Speaker 1: in the market is people didn't realize that Greg manqu
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  Speaker 1: would be so direct with her and ask her about
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  Speaker 1: current economic conditions and about the meetings, and so they're
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  Speaker 1: surprised that she said anything. But she said another interest
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  Speaker 1: rate increase, another rate hike, I think she said will
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  Speaker 1: be appropriate over the next few months. Interesting that she
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  Speaker 1: didn't say hikes. She said a hike right right right?
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  Speaker 1: That is that is potentially meaningful. It's very difficult to
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  Speaker 1: you know, we're doing a bit of a bit of
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  Speaker 1: crystal ball work. You know, what does she mean by
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  Speaker 1: this word or that word? Very difficult to tease out
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  Speaker 1: of that anything really explicit. But you're right, she didn't
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  Speaker 1: talk about the plural. She talked about singular. But but
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  Speaker 1: she she used the word in the coming months. I
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  Speaker 1: don't think any buddy would expect multiple increases in the
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  Speaker 1: coming months unless you include that expending out to December. Um,
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  Speaker 1: that could be surprised. I mean, could the could the
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  Speaker 1: FED chair be maybe not in step with others who
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  Speaker 1: are urging a rate hike sooner rather later, even as
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  Speaker 1: early as June. UM. I think people are entirely unsure
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  Speaker 1: about how you know, we heard from a lot of
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  Speaker 1: FED presidents recently and and J Paula, Governor John pol yesterday. UM,
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  Speaker 1: and there was this question mark, how close are they
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  Speaker 1: to the chairs thinking? UM. I think you know, she
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  Speaker 1: did signal something close to that today, But it was
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  Speaker 1: very much a conditional expression of wanting to raise rights,
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  Speaker 1: conditional on continued improvement in the labor market, continued signs
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  Speaker 1: of growth, even uh continued stability, and oil and the dollars.
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  Speaker 1: So there are a lot of caveats there that could
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  Speaker 1: make one thing. There is space between jan and Allen
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  Speaker 1: and some of the other effllency members who have spoken
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  Speaker 1: somewhat hawkishly recently. CHRISI. She also spoke about a three
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  Speaker 1: to five year time horizon and the low level of
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  Speaker 1: interest rates historically. What if you can comment on that, Well,
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  Speaker 1: it's true for many reasons, what people see as the
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  Speaker 1: what they call the natural rate of interest or the
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  Speaker 1: neutral interest rate is historically low. Um and even once
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  Speaker 1: as said, condums like to say, once we get back
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  Speaker 1: to normal, at normal will be quite a bit lower,
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  Speaker 1: perhaps only uh something like two and a half three percent,
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  Speaker 1: as opposed to historically uh well above three. And that
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  Speaker 1: speaks to the lower levels of productivity we're seeing in
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  Speaker 1: our economy and other factors. So it's she she does
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  Speaker 1: also think along those lines as well. Thank you very
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  Speaker 1: much for spending time with us. Chris Condon is Bloomberg's
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  Speaker 1: Federal Reserve reporter. He was speaking about Federal Reserve Chair
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  Speaker 1: Janet Yellen and her conversation at the Radcliffe Institute for
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  Speaker 1: Advanced Study at Harvard University. Janet Yellen reiterating that she
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  Speaker 1: believes rates should be raised slowly, and she said that
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  Speaker 1: a rate increase would be appropriate probably in the coming months,
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  Speaker 1: if the economy and labor market continued to strengthen. You're
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  Speaker 1: listening to Taking Stock. I'm pim Fox, my co host
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  Speaker 1: Kathleen Hayes, and this is Bloomberg Radio. GDP grew less
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  Speaker 1: than one percent in the first quarter. Is that fast
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  Speaker 1: enough for Janet Yellen to get on board with a
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  Speaker 1: rate huck in June or July. That's what we're gonna
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  Speaker 1: find out, coming up now on Bloomberg Radio.