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Hughes-Cromwick on Economy: Early Signs of Improvement (Audio) · Bloomberg Intelligence

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  Speaker 1: Broadcasting live to New York, Bloomberg to Washington, d C,
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  Speaker 1: Bloomberg to Boston, Bloomberg dwell Under to San Francisco, Bloomberg
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  Speaker 1: nine to the Country, Channel one, and around the globe
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  Speaker 1: the Bloomberg Radio PLUSAP and Boomberg dot Com. This is
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  Speaker 1: taking Stock. Coming up on taking Stock. Will be speaking
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  Speaker 1: with Ellen Hughes Cromwick, Chief Economist US Department of Commerce,
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  Speaker 1: and shall be telling us all about Janet Yellen's speech
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  Speaker 1: and remarks at the Conclave of Federal Reserve Watchers and
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  Speaker 1: Jackson Hall, Wyoming, site of the Kansas City Federal Reserves
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  Speaker 1: Annual Symposium. Will also get her comments on Stanley Fisher,
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  Speaker 1: vice Chair of the Federal Reserve, his comments on interest rates. Yes,
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  Speaker 1: Pam are gonna be going to all that and more,
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  Speaker 1: And of course I was gonna talk a lot to
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  Speaker 1: about the the issues that were raised for a low
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  Speaker 1: productivity Connie, what if anything could be done, what could
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  Speaker 1: be done to get the Fed raising it's rate, getting
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  Speaker 1: off of zero bound and moving ahead. A lot to
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  Speaker 1: talk about. We're gonna get right to her, but first
• 1:09
  Speaker 1: to Charlie Pellett. He's back in Bloommick World headquarters. With
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  Speaker 1: the bloom big business flash, and I think of Kathleen,
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  Speaker 1: thank you him watching the numbers for you. We are
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  Speaker 1: seeing a stock market that maybe turning around. Here. We've
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  Speaker 1: gotten as dak now higher by four points, well off
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  Speaker 1: our session lows. The SMP five hundred index down two points,
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  Speaker 1: a drop of one tenth of one percent down, industrials
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  Speaker 1: down thirty two, a drop there of two tenths of
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  Speaker 1: one percent. So stock slipped back into the three week
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  Speaker 1: three week old funk after erasing an earlier rally. Those
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  Speaker 1: comments from Fed Fed Vice Truman Stanley Fisher boost speculation
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  Speaker 1: interest rates could rise as soon as next month. Albroad
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  Speaker 1: Us is the former president of the Richmond Federal Reserve.
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  Speaker 1: He spoke with Bloomberg Television and Radio Today about the
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  Speaker 1: need for higher rates. I would like to see move up.
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  Speaker 1: I think if, if, if the data UH justify that,
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  Speaker 1: and and the Fed can comfortably do that. I just
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  Speaker 1: think a higher level of race would be a good
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  Speaker 1: signal to the public and to the markets that we're
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  Speaker 1: beginning to move back to a more normal environment. So
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  Speaker 1: I sure hope it could happen. Trading in St. Jude
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  Speaker 1: Medical shares halted a day after Carson blocked, the renowned
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  Speaker 1: short seller and founder of research for Muddy Waters take
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  Speaker 1: announced a short position, and St. Jude Medical denouncing the
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  Speaker 1: security of its cardiac devices. Today St Jude is defending
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  Speaker 1: of those devices, reinforcing the security devices, saying it has
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  Speaker 1: a commitment to commitment to safety. Also refuting Muddy Waters
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  Speaker 1: device security allegations, says it's not possible for batteries to
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  Speaker 1: be depleted at a fifty foot range. Now the other
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  Speaker 1: stories making news, Charlie, Thank you from the Bloomberg Newsroom.
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  Speaker 1: I Mark Crumpton. This news update is brought to you
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  Speaker 1: and we thank you. And one additional headline to pass
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  Speaker 1: along to the granddaughter of billionaire sum To Redstone has
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  Speaker 1: Little change now for stocks. The SMP five hundred index
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  Speaker 1: down a point at one seventy one. I'm Charlie Pellett.
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  Speaker 1: That's of Bloomberg Business Flash. You're listening to Taking Stock
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  Speaker 1: with Katherine Hasan pim Fox Mine from the Jackson Hall
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  Speaker 1: Economics and Radio Taking Stock of the Fedder Reservest Annual
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  Speaker 1: Symposium sponsored by the Kansas City fed here in Jackson Hall.
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  Speaker 1: I want to get right to our guests, right, special guest,
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  Speaker 1: who is an attendee at the symposium as I have
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  Speaker 1: been this year. Fascinating discussions, a lot of high level
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  Speaker 1: academic papers. But Ellen Hughes Cromwick is just the right
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  Speaker 1: person to break all of this down for us. She
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  Speaker 1: is the chief economist at the US Commerce Department, formally
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  Speaker 1: the chief economist of Ford Motors. Ellen, welcome, Thank you
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  Speaker 1: very much. Katherine. Now we know that Jenny Allen has
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  Speaker 1: opened the doors like Stanley Fisher did to the conditions
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  Speaker 1: being right for another rate increase. Night other people have
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  Speaker 1: are weighing in on the debate. I want to get
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  Speaker 1: more broadly and deeply into what is important about what
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  Speaker 1: we the things that are debated. At the top of
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  Speaker 1: your list, Ellen is is you leave this conference in
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  Speaker 1: a couple of days, what do you think is most
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  Speaker 1: important you've learned here? Well, Kathleen, great question. I think
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  Speaker 1: this morning's sessions provided us with some really good information
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  Speaker 1: about what's happening in the economy. Chair Yelling gave us
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  Speaker 1: a great summary indicating cautious optimism about the near term
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  Speaker 1: outlook for the economy, and I think she really focused
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  Speaker 1: on the fact that the economy has begun to show
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  Speaker 1: some signs of resiliency um in in the near term,
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  Speaker 1: and uh she mentioned a couple of uh facts around that.
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  Speaker 1: I really urge all the listeners out there to grab
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  Speaker 1: the text of the speech because it is very well grounded.
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  Speaker 1: And I think what we learned over the course of
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  Speaker 1: the morning is that, uh, there is a substantial amount
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  Speaker 1: of research that is underway right now to look at
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  Speaker 1: what is the appropriate monetary policy tool kit for the future.
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  Speaker 1: We know that we had a conventional tool kit. That
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  Speaker 1: tool kit changed measurably during the financial crisis, and UH
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  Speaker 1: the Central Bank did provide a substantial new UH interventions
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  Speaker 1: to help stabilize the economy. And going forward, we need
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  Speaker 1: a new UH and a well research tool kit. And
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  Speaker 1: we talked a lot this morning with these UH sessions
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  Speaker 1: on on a variety of those UH those tools, Ellen Hughes, Chromwick. UH.
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  Speaker 1: We may get some new tools, but they haven't necessarily
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  Speaker 1: repealed the concept of the business cycle. We're about seven
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  Speaker 1: or eight years into an upturn in the business cycle.
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  Speaker 1: Do you foresee a time when the economy will produce
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  Speaker 1: even more sluggish growth than the most recent one point
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  Speaker 1: one percent print for GDP PIM the Yeah. The expansion
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  Speaker 1: we're in the eighth year. This is the fourth longest
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  Speaker 1: expansion since the mid eighteen hundreds, and it has been
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  Speaker 1: quite a modest one average anual growth of about two
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  Speaker 1: point one percent. Expansions don't die of old age. I'm
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  Speaker 1: sure you've heard that from many of your guests, and
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  Speaker 1: I think that's quite accurate. We think that, UH, you know,
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  Speaker 1: we've got good fundamentals, especially in the labor market right now.
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  Speaker 1: So with the non financial business sector representing about two
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  Speaker 1: thirds of g d P with the latest data, um,
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  Speaker 1: you know, we've got some good prospects here for the
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  Speaker 1: second half well. And in fact, when we spoke to
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  Speaker 1: Denni's law carterlier today on Blueberrick Television and Radio, we
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  Speaker 1: addressed specifically the question though business investment has been so
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  Speaker 1: weak quarter upon quarter Ellen, Uh, do you see anything
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  Speaker 1: that is going to turn that around apart from more
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  Speaker 1: aggressive fiscal policy from a government. In fact, with the
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  Speaker 1: revised GDP data this morning, we saw again a reinforcement
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  Speaker 1: of that Kathleen, that the investment picture has been weak,
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  Speaker 1: and we did see as well, you know, a weakening
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  Speaker 1: off on corporate profits in the data that we're released
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  Speaker 1: this morning. Clearly we are seeing some compression in profit
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  Speaker 1: margins in the most recent data, and with the global
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  Speaker 1: economy still slogging around along, Uh, the impetus for investment
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  Speaker 1: is just uh not there at this point. Do you
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  Speaker 1: believe that we are going through a secular change in
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  Speaker 1: the way that the economy works and that we could
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  Speaker 1: be stuck in a slow growth mode for quite a
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  Speaker 1: long time PIM. That's a great question, and I know
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  Speaker 1: Kathleen mentioned low productivity. That is a very important challenge
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  Speaker 1: that we all face. Without that stronger productivity, Uh, the
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  Speaker 1: low growth track is is just more probable and in
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  Speaker 1: current conditions, there's nothing in what we're seeing an incoming
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  Speaker 1: data that would dispute that at this point. So bottom line, Ellen,
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  Speaker 1: as as you look ahead to the rest of the
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  Speaker 1: year early next year, is they're kind of gonna be
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  Speaker 1: strong enough to encourage event sitters at the FED to
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  Speaker 1: say time to make another Reheck, well, I'll leave that
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  Speaker 1: to the experts. I think we've got many here and
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  Speaker 1: you'll be interviewing some this afternoon that might like to
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  Speaker 1: weigh in on that. Suffice to say that with the
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  Speaker 1: incoming and indicators that we are seeing, and I just
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  Speaker 1: want to get this out because a lot of people
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  Speaker 1: haven't seen this wholesale inventories coming down, i S ratio
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  Speaker 1: coming down, so there are some early signs of improvement.
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  Speaker 1: I want to thank you very much for spending time
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  Speaker 1: with us. Ellen Hughes Cromwick, Chief Economist, US Department of
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  Speaker 1: Commerce from Jackson Hall, Wyoming, site of the Federal Reserves.
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  Speaker 1: Annual symposium you're listening to Taking Stock. I'm PIM Fox
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  Speaker 1: My co host Kathleen Hayes, This is Bloomberg coming up.
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