LIVE: Federal Reserve Chair Powell Speaks With Marketplace Host Kai Ryssdal

policy challenges spur better and more relevant research. And that virtuous cycle and exchange of ideas ensures that our knowledge keeps pace with the economy we have and that we're constantly learning and expanding our minds to prepare and work on the economy we want. Now today's conference continues that tradition. We will hear about and discuss research on sustainable price stability, inflation, the labor market, and Federal Reserve communications and policy implementation. One of my favorites actually. And of course we will hear from the chair of the Fed, Jerome Powell. And these discussions and all of the conversations we have here today among us will help us continue the great tradition of ensuring that policymakers and researchers exchange ideas, debate vigorously, and learn from each other. And that is the way we can collectively contribute to creating a sustainable economy that benefits all. Now as you can imagine, conferences like this don't make themselves. And so before I go further I would like to just acknowledge the people who put this year's conference together. Andrew Forrester, Hu Yu Lee, and Fernanda Necchio. And I also want to thank the glue of this conference, Margaret Cliver, and all of the support teams who continue to make this event and all the other ones like it a great success. But without further ado I'm going to get to what you all are waiting for, which is to introduce the chair of the Fed, my colleague, friend, and someone who has really helped us navigate through completely challenging times. Chair Powell has a quite distinguished career of public service. It spans four presidential administrations, which in and of itself is a remarkable accomplishment. In the early 1990s he served as assistant secretary and undersecretary of the U.S. Department of the Treasury. He returned to public service in 2012 when he was nominated to the Federal Reserve Board as a governor. He was first appointed chair of the Federal Reserve in 2018 and reappointed for a second term in 2022. In all the roles he's had in public service he has been a steadfast steward of the U.S. economy, always considering what's best for the most people and what has the most durable lifespan, building something that lasts. In these roles he has also held to a simple thing, that we want to ensure that we're always bringing ourselves back to what matters, the people of the economy and the commitments we make. And I think these qualities have helped him lead the unprecedented and powerful actions the Federal Reserve took to support the economy through the pandemic and ensure we had full access to credit that could help with navigating through that challenging time. And then allowed him to lead us through one of the most aggressive interest rate campaigns in history to bring down the high inflation that came after the pandemic. In all of those journeys the simple truth was that Chair Powell focused on one thing, how do we do the work we have to do with as little hardship on the people of the economy as possible, again building something that was meant to last. But his special talent and you'll hear this today, is his ability to speak plainly about complicated and complex topics. And this has been an especially important attribute in the past few years when so many households and businesses, families across America, have been struggling to manage high inflation, rising interest rates and fears of recession. That's a lot of instability. And hearing from the Chair on a regular basis and in plain English, has conveyed transparency, agility and most importantly, resolute commitment to keep working until the job is well and truly done. Personally I know the Chair, Jay, to be a voracious learner, ever curious, never satisfied and then coupling that with something else that is rarely seen together and that is to be a listener. Equally able to digest and utilize cutting-edge research, market inputs and what the lived experiences are of families and businesses and he takes all of that together to craft the best policy he possibly can to meet our given goals. Always and ever in service to the American people. So leading that discussion with Chair Powell will be Kai Risdahl. Now you all know Kai from his voice on Marketplace and for the way he unpacks economic finance and policy news all of the day into something that is more than just the ticker stream or a thread on Twitter or I guess called X. He also makes it fun, which is more than is often much needed at the end of the day. So what's remarkable about Kai is if you think about his thing, he didn't start in broadcasting. He was actually in the Navy, then in the Foreign Service and finally an intern at KQED where he launched what is now his career. When Kai has this point at the end of Marketplace where he says let's do the numbers, it actually is a very brief segment of the entire program. It's what we expect of him to do the numbers but as you'll hear today in the conversation, what he's really after is to know why are things happening and who is being affected. So with that gentlemen I would ask you to come to the stage for what I expect to be a very important conversation. Thank you. There's the news. Fed chair falls off stage. The chair doesn't fall off stage. That's right. Keeps his footing. Good morning and good morning Chair Powell. Thank you for taking the time. We have give or take 45 minutes. So I'm gonna jump right in with the data of the morning. PCE came out this morning. You had it yesterday. 2.8 percent at the core. Here's my question. You saw it yesterday. What was your first thought? My first thought was that the report that came out this morning is pretty much in line with our expectations. So core PCE as you mentioned is at 2.8 percent on a 12 month basis. Headline is at 2.5 percent. That's what we were expecting and it's it's good to see something coming in in line with expectations. So as you and your colleagues Ed and at the regional banks have been saying we want more data more good data. Is this that? Is this in that bucket? Well so let's take a step back. Over the course of the second half of last year we got what I would definitely consider good data over the course of seven months and then in January of this year we got a very high reading. Much higher reading on inflation. And so February is lower but it's not as low as most of the good readings we got in the second half of last year. But it's definitely more along the lines of what we want to see. What we so what we said is that we we don't see it as likely to be appropriate that we would begin to reduce interest rates until the committee the Federal Open Market Committee is confident that inflation is moving down to two percent on a sustained basis. And what do we need to to get that confidence? It's just more good inflation readings like the ones we were getting last year. With all possible respect you all all of you have been saying the same thing for now six months right? We want more good data. What do you suppose it does to the listening public and to the professionals who are listening to this when you keep saying the same thing? So we're you know we we're steady. Our hand is a steady hand in this. We've been saying all through last year and this year that we're making progress. We've noted that progress. We haven't overreacted to it. We didn't overreact to the good data we had in the second half of last year. You heard us saying that this is good but we need to see more. And and and you won't hear us overreacting to these two months that are higher. The reason that's important is that the decision to begin to reduce rates is a very very important one because the risks are two-sided. If we if we reduce rates too soon there's a chance that inflation would pop back and we'd have to come back in and that would be very disruptive. That would not be a good thing for the economy. There's also a risk that we would wait too long and that that would we would you know in that case it could be unnecessary unneeded damage to the economy and perhaps the labor market. Why would it be terrible if you reduce interest rates by you know 25 basis points quarter percentage point and then the data changes and you have to change your mind? Why is that terrible? It doesn't it wouldn't need to be terrible and you're right we we always have to be humble that we we actually uh it the the outlook is always much more uncertain than than most people think including us. The economy can and often has recently performed in unexpected ways. So we're ready for that and if that's what happens that's what we'll do. But it's important to get this right. The other thing though is with the economy you know growth is strong right now. The labor market is strong right now and inflation has been coming down. We can and we will be careful about this decision because we can be. Say more about because you can be. You got nothing but time basically is that what? No the economy is strong. We see very strong growth. We had growth for last year over three percent. Many forecasters see growth coming down to around two percent this year. That that's about what roughly what the first quarter looks like. That means that we don't need to be in a hurry to cut. It means we can wait and and become more confident that in fact inflation is coming down to two percent on a sustainable basis. So this is kind of a subjective question but then why then do you think people are screaming not for your heads but close but but for you to cut interest rates so much? Well I mean we have I would say we've we've divided our critics into sort of equal sized piles at this point. There there are plenty there's plenty of people who think that you know that we shouldn't be cutting now. But the point is this we haven't reduced interest rates. What we've said is we want to be more confident before we take that step. And and I think I actually think we are monetary policy is well placed to react to a range of different paths for the data. And that's that's really what you want. You want to be in a position where you can react not just to the base case but if you get a case where inflation progress slows or where or where the economy weakens you're also in a position to to react to that. And we are. When you sit around the table at at the Fed or on your Zooms or however you're doing it now do you have conversations about about how your desire to be more confident is received by yes the markets and analysts fine but everybody else? So I'd say yeah the answer is yes of course but the main focus is on getting it right. Getting it right is the most important thing by orders of magnitude. If you get it right then everything else falls into place. So I mean you're talking about market reaction and things like that you know we look at that of course but ultimately monetary policy works with a lag and you want to make the right decisions and you want the committee to be in a place so that if things work out differently than the base case you're you're you're not out of position. And I as I said I think we're in position now where we where we are we can handle whatever case comes. Can we talk briefly about that first cut which you mentioned right that's going to be significant it came up at your last press conference after the meeting. How important is unanimity to you on that? Unanimity as such so I don't I don't know any Fed chairs who who were you know hoping for dissents it's not something you you want but at the same time what the way I think about it is this you you talk to people I talk to all the people in the committee before each meeting in depth and you listen to people you hear them you try to you try to get in their thinking and understand it and you try to incorporate that to the maximum extent you can in the decision in the way we talk about it. And if you do that you know people generally feel feel consulted they feel that that their views are being considered and reflected and they they may choose to dissent that happens all the time it's it's not a problem when people dissent it's happened it happens and and you know life goes on. Do you literally like go knock on their doors or call them on the phone like you call Mary or whoever? Yes I have well I have scheduled calls with every every voter and non-voter on the on the FOMC before every meeting and not infrequently I'll have a I'll have another round of calls before that and not infrequently I will have just calls just I just talk to various people on the committee during that six or seven month six or seven week intermediate period. Yeah let's talk about the Fed as an institution then for a second since we're talking about the people and and and how it all happens. It is some may argue one of the significant economic institutions in this government that actually works right Congress is a whole different deal the president's concentrating on his re-election campaign the Fed as an institution works and you said to Scott Pelley I think on 60 Minutes you know integrity is all we have. How mindful are you of the Fed's credibility at a time which is precarious for you? So the Fed is is a to me is a very important American institution that serves all Americans on a non-political basis and what what people can expect from us is that we will do our work with pains taking care we'll understand the theory we'll understand the data we'll we'll look at the think about the outlook and we'll make our decisions based on that and on nothing else we will not be making decisions particularly about political calendars or anything like that we'll always we'll you know we don't always get it right no one does but that's what we'll do so it's integrity is it it is the is everything for ultimately in life integrity is everything but for us integrity is everything because even if even when we don't get it exactly right people have to believe and it's true that we were we're doing the absolute best we can in a very transparent way based on the data based on our understanding of the economy and the outlook for the economy it's tremendously important that people understand that about the Fed and that we're working to serve all Americans not any particular set of Americans or political parties or leaders you've talked uh previously about humility you've said the word humble already this morning once um i was talking to neil kashkari at the minneapolis fed the other day and he said you know this economy is really tough to diagnose so it's hard for us to know what's going on talk to me about humility in the face of and we were talking about this backstage about an economy that is still um really really hard to figure out what's going on so economic forecasters are a humble lot generally with much to be humble about it's funny that's not my experience with economic forecast so uh but yeah the the pandemic era has of course been uh full of surprises uh if you go back to the beginning i think almost all of mainstream macro analysts thought that the this that this was different and that because of the obvious supply side problems the collapse of the supply chains and things like that there was a group who didn't diagnose it that way but if that's the case then we thought that our very dynamic economy would would recover pretty quickly that people would go back to work kids would go back to school and the economy would be fine and it wouldn't be any much of a need for us to intervene except sort of during that early period to get the economy you know keep it from collapsing during the actual intense phase of the pan acute phase of the pandemic so that that didn't happen uh inflation came up stayed up and it took a long time to heal and then it didn't really heal the supply side didn't really hear on 2022 and we were thinking well maybe it's not going to heal and then did and you so you the labor force labor force participation workers came back into the labor force in 2023 and also the supply chains healed in 2023 so right about the time we were thinking maybe this isn't going to happen it really happened a lot in 2023 which is part of the story of why why the economy did so well last year was was supply side healing so now we have um i mean it's just it's been surprising over and over again so i think we have to be unusually humble about our ability to foresee the future and be ready for for different plausible outcomes i've told you this story i think last time you and i spoke about a conversation i had with with uh then civilian yell and it was between her time as chair and treasury secretary and asked her why the fed hadn't been able to get inflation up to where it wanted she wanted it to be where the committee wanted it to be and she literally looked at me and went i don't know uh and and i guess my question is is it would it be a bad thing for you to say we don't know we're doing the best we can we say that all the time in in in one way or another i'll give you an example we uh we have as i mentioned high inflation in january somewhat less high uh inflation in february and we've been saying that we expect inflation to move down to two percent but on a path that is sometimes bumpy so the question then is are those just bumps or are they something more than bumps is inflation is progress on inflation going to slow for more than you know two months and that's a question and honestly we're just going to have to let the data tell us that there isn't anybody who knows and uh so we're we're our position is we don't know we'll we'll tell you what we will do if inflation does come down and that's sort of the base case that is what we expect we expect inflation to come down on a sometimes bumpy path to two percent but if that doesn't happen then then obviously our rate policy will be different and we for example we can we can hold rates where they are for longer and that's what we would do of course if if inflation doesn't come down if we don't see the progress we're looking at so we kind of say that all the time consensus now is rates are going to be higher for longer they may or may not come down this year depending on what the data says do you think this economy is ready for a four and a half ish percent inflationary sort of economy right not not inflation four percent but your rates at you know 4.6 which is where your projections happen so this is one of the things um you know we've had our policy rated 5.3 which is the highest rate in more than two decades for some time and all of all through the course of 2023 we saw very strong growth so it's um and that's partly because we it's this has happened in a context of supply side healing which makes makes its own growth you know make when potential output goes up so we don't really know where where rates are going to go back to uh when this whole thing is over for many years if you go back to before the global financial crisis it was wasn't unusual to see uh the longer term rates in the in the fours and so are we going to go back to whereas in the in in the sort of time between the global financial crisis and the pandemic rates went lower and lower and lower and it wasn't unusual to see in other countries long-term rates below zero even europe they never went that low in the united states but they went very low so are they going to go back up to those higher levels of the pre-global financial crisis we really don't know i mean we so we think that the factors that that led rates that really came down over a 40-year period mostly related to big slow-moving things like demographics aging population which saves more and and productivity low productivity and things like that those things don't jump around they're sort of slow-moving objects um but the truth is we don't know my own expectation is i don't think rates will go back down to the very very low levels they were at before the pandemic but where they will turn out to settle out it's hard to say this this economy doesn't feel like it's suffering from the current level of rates although in if you look at things like uh inflation sensitive spending then those parts of the economy are really feeling the high rates not to pick at a scab but what i hear you saying is uh while inflation may or may not have been transitory rates are not actually going to be higher for a while and they might just need to get used to that they that might be the case i don't know i don't think late rates will go back to the very historically low levels that they were at before the pandemic hit i do think uh rates will come down from are likely to be lower than they are at least short-term rates are lower than they were right right now but i mean we're going to let the data we're going to have to let the data tell us the answer to that i want to go um to the labor market for a minute something you said at at your last press conference sort of caught a lot of people's ears and that was when you said um we are very attentive to both sides of the mandate which is to say full employment and stable prices and and people picked up on that because you had been very keyed in on on the price stability aspect and i guess i wonder now why you're becoming more aware or publicly saying you are more aware of unemployment i'll tell you why so if um we have we have two mandates as you know maximum employment maximum employment and price stability and when one of those uh mandates is is far from its goal then and the other one isn't you focus on the one that's far from its goal and that's that's actually in our document that codifies the way the our framework so that was the case um from the middle late 2021 until until inflation started coming down and so we focused very hard on inflation and you were just talking about inflation but headline inflation just a year ago was was i guess um 5.2 on a 12 month basis now it's 2.5 and core i think has come down from 4.8 to 2.8 so you've seen really significant progress just as a natural thing then the work's not done our goal is two percent but as that happens that the risks to the two goals come into better balance they're coming into better balance and that means we are a dual mandate bank under law that means that we now we now that that thing we were doing we were just thinking about inflation that's no longer appropriate so we're thinking about both we're thinking about the risks to both now and we should be that's that's that's our job under the law and so uh you know we like we're very committed to getting inflation down to two percent having it down to two percent is critical if we're going to have the kind of long expansions that that really benefit all americans in the workplace at the same time uh if we were to see unexpected weakness in the labor market then that's something that that we would be looking at carefully and could draw a response as well a policy response yes um what's the monster under your bed would keep you up at night other than inflation you don't get the same inflation inflation no you can't do that no i i would say this we are right a place where the economy is strong without question the labor market's in a good place we've we've got you know uh inflation sorry unemployment under four percent for more than two years now for the longest time in 50 years and we've had progress on inflation so we want to use our tools in a way that keeps you know the strength in in the economy and in the labor market but allows for further progress in inflation that's that's our focus and you know we we clearly have a chance at that outcome and you know we're all very very focused on doing everything we can to deliver that outcome it would be a great outcome for the american people and it would be testimony to how unusual the circumstances are soft landing transitory words that i imagine you don't let be said in your presence very much here's another one that hasn't been said at a press conference that you've had since december recession do you think a recession is off the table so there's all there's always an sort of um unconditional probability of a recession in in the next year and so the real question is if you look through history uh it's not possible to rule a recession out for long periods so granted but you know what you know what i meant right yeah no the real question is is the is the possibility of a recession elevated at the current time and i would i would say no i i don't and i don't see forecasters disagreeing with that growth is strong as i mentioned the economy is in a good place uh and there's no reason to think the economy is in a recession or is at the edge of one but humility understood last time you were on the hill somebody asked you whether there was going to be whether you were going to come out and declare victory you're going to say yeah we did it we're done and you said absolutely not that's not what we do will you not at some point though when you get inflation to two percent say inflation's at two percent we've done our job things are stable and life is good i don't want to speculate about that you know we'll jinx it i guess i'm i'm such a superstitious person but no look we'll always we'll always say we'll always tell you what we're seeing in the economy and if if we get to that place that'd be a great that'd be a great outcome for the public that's the main thing we talked uh very briefly backstage about um after the fed what you're gonna because you have two years left give or take um as we sit here in the yellen conference center at the san francisco fed where do you think the powell conference center is going to be um and and what do you think your legacy is going to be first first line of your new york times of it i'll tell you the thing that i that i care about the most and that is the the federal reserve is an institution as i mentioned is an incredibly important american institution especially right now because you know we are that place we aspire to be that place that transcends politics divisive politics and i think in a way we are helping hold this thing together by doing what we do the way we do it and i i want to be i feel accountable and responsible for the institution and delivering it to the next generation of leaders and people uh in a way that it can still serve the american public the way the fed does so i wasn't actually going to go to politics this morning because you have a well-practiced answer to that question but i feel like i kind of have to now that you brought it up twice um it is possible that the fed is likely even that the fed is going to become more politicized this year uh and the first time you and i spoke in 2018 you were uh in in the crosshairs of the president and the administration and i asked you about it and you said you know what control the controllable can't do anything about it so the question is not what are you going to do about the politics of it the question is what is your fear for the economy if the fed becomes politicized it just wouldn't we wouldn't be the fed and but the good news is we are the fed you know you you no no no no that's that's that's that's not answering the question no a a a central bank that is that is uh excessively responsive to you you have to look at other countries basically and which what you see is there's no credibility credibility on inflation and on sticking to your knitting is everything because if if people believe that you are that you will accomplish your goals and and and that you'll and that you won't deviate from them for reasons like that then it'll be easier to do so markets will will react appropriately and in people's thinking uh inflation should be around two percent and if that if they think that way then it probably will be around two percent so if you it's if you look at at other i think of more emerging countries where they have weaker independence or a lack of independence it's just you know it's you can't it's hard to have price stability or maximum employment so that's what would happen if if that were to happen but it's i'll insist upon saying that's not the world we live in fair enough one more question along those lines and then i'll leave it uh b um you don't comment on fiscal policy this is not a question about fiscal policy it's a question about what the fed will do if our current fiscal path which many have called in unsustainable including chair yellen when she was chair and in the interregnum um what do you do if our fiscal path continues what what what does the fed have to think about we're always going to uh do what we need to do with our policy tools to achieve the goals connors has assigned to us and that means maximum employment and price stability so we're we're not going to be thinking g we shouldn't raise rates fiscal reasons we're never doing that we're always going to use our tools and we're always going to assume that the fiscal authorities can run their side of it and can get it under control and i mean i think it's um what i said and what and bernanke said and what janet said and i'm sure alan greenspan said before him is we're not on a sustainable fiscal path that's an uncontroversial statement and the sooner we get on that path the better back on that path uh a word here about the balance sheet you said you're gonna slow the runoff and and um sort of keep an eye on things and and how they go does it suggest a worry about the economy that you're going to slow the runoff of the balance sheet not at all so we we published a the thing about the balance sheet is we want to be highly transparent and predictable it's not the main story about monetary policy the main story is is interest rates what happens is when we get into a very difficult situation like the pandemic or the global financial crisis we buy treasuries to lower interest rates and to support the economy and then we're left with a bigger balance sheet and we start to then when the time is right let it run off and shrink back to where it needs to be that's what we're doing and what we said was at a certain point we would slow the pace and the reason is um it's moving down quickly we've we've decreased the size of the securities portfolio by a trillion and a half dollars over the course of the last while year and a half not even year and a half uh and so we um we've said that we would slow the pace and what we're trying to do there is try to actually get further without without being disruptive the last tightening cycle for the sheet ended when we we suddenly found ourselves that we'd gone too far and it was very disruptive to markets and we had to buy treasuries to create more reserves in the economy so we this time we tried to learn from our first experience with shrinking the balance sheet and this time we said we would slow at a certain point but that's we're going to get to the same point or even lower than we would have and it's not at all in any way related to a concern about the economy it's our plan on that word transparency which you you've mentioned a couple of times um and on on your policy and your predecessor's policy and and those of the committee and the board of governors of of transparency and giving forward guidance and letting everybody know what you're thinking and what your plan is um why this the old school was uh tell them nothing you know be mysterious about it and then a bunch of scholars 40 years ago people like alan blinder and others thought about it and said you know if the public understood your reaction function the way you would react to different kinds of data then that'll make your job easier because markets will they'll go oh i see the data came in let's say that some data comes in hot data comes in hot the fed will do x so we'll react that way so in effect the the markets and the public will understand what you're doing is it's a good thing and that was very novel so that so the the path went from tell them nothing the fed didn't even announce what it did in an fomc meeting until 1994 the first post meeting statement that's saying hey we raised rates or we didn't was 1994 so from there you have a straight line really of increasing transparency to the point where you are now where you see a lot of transparency some people say it's too much but the that's the idea and i think you've gotten to a place where we try to be so clear in what we're doing that the public will understand what we're doing and why and and that that actually helps our policy be more effective humor me what happens if uh in well everybody's anticipating a cut in june but what happens if uh you guys out of nowhere came out and and at 11 o'clock pacific time i know it's different for all of you in different time zones um the statement came out and said we cut 25 basis points today without having given anybody a heads up what do you think happens nothing good i mean i think we would seriously well bullwood goes yay rate cut no no no but we would you know look our we are careful thoughtful we're steady hand we did things like that it would be it would be very much not the way we do business no it wouldn't but play it out for me what do you suppose happens seriously humor me i think i think if we did something like that markets would would say we thought we understood the fed we've spent years someone would go on tv and said i've spent 30 years watching the fed and i don't understand this at all why'd they do it in other words you don't doing an off-cycle rate cut it would like at a time like that it's just something that would never happen i mean if there were a reason so we we you know when the pandemic hit those we all know we did two off-cycle meetings in one cycle and and then we canceled the actual meeting so just look what happened then well that was that was that a pandemic that was what needed to happen that was what needed to happen do you worry that the fed gets covered too much especially now when when we're all trying to parse your every word gets covered too much like a like a horse race kind of there's a little bit of who's in front poll say this what are they going to do yeah i do worry about that i you know i think that the things that really matter for our economy over the long term are not the fed's interest rate decisions but which really have no impact on over the things that matter say that again seriously save for the cameras okay the things that matter for the united states economy over the medium and longer term term are not the decision fed makes if the fed the fed uh tries to guide the economy to maximum employment and price stability through a through a business cycle and can react we do critical things during crises we're we're very very important in crises but things that that add to the productive capacity of the united states things that gives people more skills so they can contribute more to the economy things that increase productivity so that an hour's work is worth more output that's that's the evolution of technology it's also the skills that people have those things investing in those things that's what drives the longer run growth in the longer run economic well-being of our citizens not the things that the fed does what we do is very important in maintaining stability and and smoothing out the business cycle and also crisis response but we don't work on those really far more important longer run issues apologies to those of you on the live stream live stream and we're going to hear this later on the radio is professor swanson in the room sir i'm sorry i'm going to steal your thunder there's a there's a panel coming up this afternoon sir at 125 the title of which is speeches by the fed chair are more important than fomc announcements an improved high frequency measure of u.s monetary policy shocks by professor swanson at the university of california ermine and agree or disagree pass i look forward to i saw that i saw that on the agenda i look forward to i'm not going to come in here and embarrass you by being here but i will uh i will read the paper um but but to that general point do you get too much press it's not for me to say but i do think it is for you to say it's literally for you to say i think there's i do i absolutely think there's too much focus if you if you think about the things that are really important in the economy things like trade and what we should be doing some of the things that we're doing that the administration has done they're far more important over the medium and longer term than monetary policy is although it's important that there be it's important they're fed that has a good framework of monetary policy that's well understood very important that we do our job but don't don't get me wrong it is important but it absolutely the things that the other things that are more important over a long period of time for the people we all serve i uh around the last time you and i spoke in 2022 i also talked to uh chair bernanke about his book and i asked him whether you two ever talk on the phone and he said yeah you know he calls me every now and then mostly he imagines as a courtesy to him and i said well jay pal's a good guy he probably just calls him um and he said you know when when jay was new to the fed he used to come down to my office on a saturday morning uh with another governor or two and and we would just talk about monetary policy as he was trying to learn um and i guess my question is do people come to you now oh well they don't necessarily i don't i don't go to the office on saturday anymore but ben used to ben was in the office on saturday and when i was a new governor so was i so and i i took advantage of the fact that he was there in his office and and we could chat it's a much more relaxed way i talk to people i work at home now on on the weekends and i talk to i talk to all kinds of people all weekend long yeah who do you go to though for for council well i talk to my colleagues on the fomc i talk to senior staff i i talk to the formers i talk to both you know janet is now treasury secretary so that's a different thing but i check in with ben i check in with other former fed people i can't you know you can't you can't get this the group of people that you can really talk to is pretty small but i do take advantage that way wouldn't i back to kashkari for a minute and and the interview i did with him explain that what a little chuckle he said back to kashkari well you know neil's an interesting guy um one of the things we were talking about was uh consensus i mentioned that before do you worry about groupthink around the table talk to me about the strength of the conversations i guess that's the question right the robustness of the debate this is a virtue of our um our federated system so we have 12 reserve banks each reserve bank has its own economic staff and they have traditions some you know that that they follow or don't follow but in any case you you sort of have a guaranteed institutional diversity of perspectives institutionally guaranteed diversity perspectives people come in and they they're going to have different views and i think that's absolutely critical and i do think it you know the fact that we were able to get a unanimous decision on something doesn't mean there wasn't there weren't different views also remember before the vote there's a lot of discussion that goes on to try to arrive at a plan to get that people can get behind so it's not you know that that also tends to minimize sorry let me just pick up on that is it is it is it baked before you guys get in the room on the tuesdays and wednesdays it's not fully baked but yes you do a lot to of course my my part of my job is to know what people think and and uh to come to the committee with something that has really broad support and and i that's that's that's part of the thing that i do but we do have different perspectives um and that that's really healthy you know i was an investor for for quite a while and you know when everyone agrees that something is a great investment you got you got to really worry you want somebody who's really smart to explain why it's not so that you can go through the process of hearing the case against and i think i think it's really helpful to hear uh different views so that you can sort of test your own perspective if everybody agrees that you know it could be kind of flabby it hasn't really been tested mary daly in the introduction was talking about your special talent that you're a listener you're a consensus builder uh what what is your special talent why do you think you have this job why do i have this job uh don't ask me man you know it's uh it's when i got to the fed in 2012 i didn't i of course i had no idea what was to come i you know i will say what i what i try to do on on listening is uh i i think if you again if you if you do listen to people and they understand that you're hearing them and not just kind of explaining things to them and they get that and they feel listened to and heard from for most people most of the time that's going to be enough for them to go along even if they don't like a decision it also it builds relationships so you know i've spent i spent a great deal of time with our uh oversight committees and beyond that on capitol hill and more so than my predecessors and i think you know they they see the fed as i want them to see the fed as what it is which is this non-political agency that doesn't run talking points at them and isn't political and is just doing our work and staying out of the political issues and you know i'm in their offices listening to what they say and i think they really appreciate that yeah but do you think it's working what your effort to get them not to see you as a political agency and just doing the best by the american much much better than you would think i mean i think there's a certain amount of of low noise on that subject but if you talk to people privately i think there's i think that that is an independent that has very broad support in both parties on both sides and sides of the hill i'll appreciate you're going to want to be discreet on this question but what's running through your head when you're at the green table in front of the senate or a house committee i'm trying to like your internal monologue hard to find the the quiet to get the question and you know sometimes the questions are more like speeches you know and or they're not really questions or they're not quite the right question and i so i try to find the good question and give the good answer to that question also respect you know they we in our system of government they they are our oversight and our democratic legitimacy runs right through transparency and right through their um you know their actions of of holding us accountable and and being explained us explaining to them what we're doing and why so we answer any and all questions that they uh that they may have and that's so i work hard to get ready for those with a lot of help from people and we take them very seriously uh banking regulation new regulations are in the works banks are not happy about it from excuse me from wall street down to community bankers that i talked to um what's your confidence level about first of all about the banking system right now uh and then about the need for more regulation can you fix what you think is wrong sure so i would say the banking system is is in a good place now a little over a year ago we had we had a period of stress i think things have settled down significantly significantly and banks are lending i think um you know we focused uh a lot of attention during that period and since on banks that had uh things like creek commercial real estate losses or perhaps funding structures that needed to be supported more and we work with a ton of banks to address those issues and i so i think that i think the banking system is is definitely in a good place i think the commercial real estate problem will be with us for some years but and it is it is just a question that some banks and it's mostly small banks it's definitely not the very large banks have have concentrations of commercial real estate and it looks like they will be realizing losses over time and we're working with them to make sure they have enough capital that they that they do understand the losses and so that they can work through this and so that's what we're doing and you know again that process will play out and i think that'll be okay you know i talked to a community banker every now and then uh up in seattle and she basically i i think she i don't want to put words in her mouth but i will i don't think she would characterize it as working with i think she would characterize it as the feds telling us what to do and i guess i wonder what your response is to that well supervisors you know we have a job which is to make sure that banks are understand and can manage their risks and uh you know it can it can be either of those things it can sometimes certainly supervisors have to at some point say you got to do this and that's that's one of the lessons of the silicon valley bank situation was a need to be forceful when when it's appropriate sorry let me dig in on that just a little bit um forceful is one thing well let me phrase it a different way um how can do you need to convince the banks that you're working with them or can you just say you got to do it sorry so i think i i've never worked as a bank supervisor so but what what i what i what i believe is this bank supervision uh can tend to be pretty process oriented and you know there's a there's a playbook there's a checklist and that's a good thing because you want the banks it wants to be transparent so that they know what's expected so they can do what's expected but it can also be slow when it needs to be fast and so the art of it and there's definitely an element of art in in this thing and some people are just very very good at it and others less so but you can see um the art of it though is to is for them banks to understand generally banks you know that bank banking is different from many other industries they you know they it is a heavily regulated and supervised industry and they you know particularly the larger institutions they have ongoing daily uh interactions with their regulators and supervisors what's what's important is that is that the banks are well capitalized that they understand their risks and they can manage them that they have adequate liquidity that they have good resolution plans and our job is to is to make sure that that's the case the more the banks take that on themselves and do a great job at it without us pushing them the less we need to push the international situation the united states is doing better than every developed economy i believe in the world by a good measure um what do you make of that and how does it affect your decision making so i do you know i do a fair amount of my job is going to these international meetings either in basel or or whoever's running the g7 or the g20 in a given year and uh and that is that is what people are talking about is the you know the sort of exceptionalism right now of the u.s economy how strong the u.s economy is and um there's no question that we we are performing very well i think it you know part of it just is um productivity is a key thing the europeans are very focused right now on not just their short-term low productivity but you know what can they do to have greater productivity growth over time this is a big focus for the european economic officials at the highest level mario draggy draggy is doing a report on it and finance ministers that i talked to from the big countries this is their focus and so it's tremendously important and and you know people so people are thinking about what what can we do some of the things they're looking at doing are sound like the united states like having a having a flexible labor market and having a um a very active uh you know financial sector that can fund you know early stage or small companies well so it's very important and uh so yeah the u.s is doing the performance of the u.s economy the last year or so has been been quite strong does that affect how you do your job yes it does discuss well um seriously currently oh man i know it goes my job is to hit a time post and i can't even do that well apparently not no but i'm i'm your helper i am on stage ready to help you sorry chair powell i'll turn it back to you as i mentioned earlier the fact that the u.s economy is growing at such a solid pace the fact that the labor market is you know still very very strong gives us the chance to just be a little more confident about inflation coming down before we take the important step of cutting rates and so we're not going to take that step until we are confident we don't think it'll be appropriate to do so i should say but um that's that's the way it plays into what we're doing over to you boss okay thank you very much gentlemen it was a terrific conversation i appreciate it thank you appreciate it thanks now at verizon trade in any