Bloomberg Odd Lots podcast co host Joe Weisenthal on the ground in Jackson Hole joining us

now. Joe, you're not wearing a vest. We're wearing the vest because Mike McKee did. I

do like the jacket and the the polo vibe. What what what are the vibes like

in Jackson Hole? What did you take away from the conversations after Warsh's speech?

It's interesting. There was so much uncertainty. This is the fundamental thing. There was so much

uncertainty about what, chairman Warsh was going to deliver in his speech because you could imagine

it could have gone in all different kinds of directions. He could have talked about, for

example, his various task forces and what they're going to be working on. He could have

talked about the sort of ostensible theme or the formal theme of the conference, which is,

you know, payments innovation. Who knows? And then, of course, he could have talked in which

he did about the sort of overall state of the economy and sort of how he's

thinking about the Fed's work. You play that clip, and it was quite a, relative to

his press conferences, I would say, a fairly meaty substantive speech. And I think people took

away from it, okay. We have some sort of clarity about how he's thinking about current

conditions, what the Fed needs to do. Still some questions about, okay, how many rate hikes

or rate hikes are definitely coming. But I think everyone came away with it with a

little bit more clarity about how he's thinking about the road ahead.

Joe, I'm kind of fascinated by this whole event having not yet gotten to experience it

myself. But we do wanna show you what I'm told is, like, a seminal moment for

all of these, and this is the what we're calling the perp walk where these guys

like, I've covered a lot of g twenties and g sevens. Like, it's like the class

photo while the leaders stand out in some awkward outfit and take a photo. We're gonna

play a little bit of, this iteration's perp walk for you and our audience. I think

we've got that Jackson Hole. It's lovely. In every way, this year is totally different. I

think it's gonna be one of the most interesting meetings ever. Here's the question. Do they

still look like the inflation chart? Yeah. I think they definitely Hey, guys.

Hey, Mike. Hey, Mike. How are you doing?

You know what? It looks like you're doing here. It looks like you're doing the Fed

perp walk. Oh, nice of you to notice, Mike.

I love that they call it the perp walk.

It's so funny. The Fed doesn't like that too much. Wait. So when did Okay. So

that's Tom Keene. You got Mike McKee out there joining you and your cohost. Yeah. What

is why do we have to walk over to this fence and point at things? Why

is this important? Yeah.

So I didn't realize this until we talked to McKee, which is that for years, the

Fed chairman's speech is not televised. And so therefore, for journalists and so forth looking for

some images, maybe to go on their website, homepages, or newspapers, they didn't have any fresh

material from each meeting. And it turned out, at least according to him, but I believe

him, of course, that it was McKee himself who suggested, why don't you do a little

walk outside? Let the media take some photos, and then they bring in a couple. So,

like, I believe last year or two years ago, you know, sometimes it's like Christine Lagarde

or the head of the Japanese Central Bank, the Bank of Japan. This year, of course,

it was Warsh along with Tiff Macklethwait, the head of the Bank of Canada, and Andrew

Bailey, the head of the Bank of England. And they do a little walk, and everyone

gets some pictures, and then we can use those in articles for a long time. They

then look over the fence at the mountains. I sort of imagine, like, anthropologists 5,000 from

now will talk about this great ritual where the men who set the price of money

stared off at the mountain to draw wisdom, inspiration, and guidance. But it is a very

nice, simple way for the media to get some image of the central bankers and to

make a you know, the central bankers showing some camaraderie as they stare at the beautiful

landscape behind us, which you can't see. It's very cloudy today, but I'm right you know,

if it was a bright day right now, you'd see these extraordinary mountains right behind me

right now.

Well, Joe, the interesting thing We can see it.

Yeah. Was, Joe, you put on, I think, x. Like, I can't believe the

people who look at this and say, you know what would be

great here? A data center. Like, I I look at the shots, and I'm like,

this is beautiful. This is America.

It is a joke. It is a joke. I swear. I don't think anyone actually believed

that. It's funny. In in truth, what's really interesting, though, just while we're talking about real

estate out in Jackson Hole and this, you know, in New York City, there's no space.

Right? So rents are very expensive. It's the same here. I mean, like, there's a really,

if you talk to the people in town, like, people who own the restaurants or people

who work at the restaurants, etcetera, there is this extraordinary vast expanse. No one is talking

about putting, you know, solar panels behind me, but there's so much land out here. But

there really is, housing scarcity here because our, a lot of it is preserved. There are

a lot of, extremely wealthy people with huge tracts of land. And so even it is

a good reminder to come out here and say even, like, where there's more land than

the eye to see, that there's a, housing scare housing scarcity and shortage across all different

types of, geographies.

It's and one of the wealthiest ZIP codes in America now surpassing New York City is

Yeah. Is right where you are. I mean, does that kind of go to the impact

of these economic boondoggles? I think about this one. I think about Davos. I think about

these places that people go every year where these important people meet and what they kinda

do for the local community.

Well, I think it's very interesting. Yes. It brings a lot of, business. You know, I'll

say a couple of things. So first, if if we were to go into the town

of Jackson right now, I don't know if, like, they would really notice the difference. The

conference is still fairly small, etcetera, and there are a lot of tourists here who come

for the hiking and golf and all other sort of just gorgeous, like, summer activities. But

I do think it's interesting. You know, this is the forty ninth year of this event,

and you mentioned Davos as well. You know, twenty or thirty years ago, central bankers would

go. They would meet somewhere like here in those beautiful place. End of August, the most

beautiful time of year, do some fly fishing, etcetera. No one was really paying attention to

it, and they could sort of talk not in secret per se, but without much interest.

Now we're in an age of, like, so much scrutiny, particularly around private things. Anytime where

it's perceived that the sort of elites are meeting this very expensive, very nice, beautiful location,

etcetera, they're making decisions. They're talking about things. A lot of it is behind closed doors

in some respect. I think that we're sort of in an era where people look a

little suspicious on these things. And who knows? But I I do think that the symbolism

is real in the specific sense that people do understand that, you know, very influential people,

very powerful people who weren't necessarily elected, they meet in these in these gorgeous locations, and

they talk about important things. And I do wonder about the sort of, like, the big

politics. Not like, oh, is it gonna go away or is it gonna be banned or

anything like that, But how long whether, you know, people look at these things and they

look askance at the sort of the nature of these big important meetings.

It is kinda crazy. I was at Munich, I think, last year, and it was one

of, like, a small room with with VVIPs. And I literally watched what I guess these

meetings are for. I watched a defense minister meeting up with a COG exec. And within,

like, a five minute conversation, they'd exchange cards and, oh, I need some sort of engine

for my thing. Oh, I'll be in that country. Okay. Let's do the thing. I mean,

it was I guess that's why they matter, but I'm sorry, Bailey. Go ahead.

Was gonna say you've said monetary policy more times in the last twenty four hours than

you've seen.

Who I've become. But, Joe,

I think one of the things that I wanted to ask you about is what's the

bar scene like?

What is what what are people doing after the meetings? You're there for so long.

The the Warsh speaks for, like, twenty minutes.

So,

yeah, it's a it's a the whole thing is very interesting because, again, you're right. Like,

99% of the media attention for this event will be on a twenty minute speech. But

then they're in a conference room all day, and I've never been inside. Only a handful

of journalists even here actually are formally party invited to be inside. But they're sort of

going through standard academic econ things. There were, like, multiple papers this year talking about payments

innovation and tokenization of various assets and so forth. And so, you know, they have this

sort of serious conversation about issues. And then within the lodge where we are right now,

there's, like, a cool little diner, the Pioneer Grill that looks like something literally is out

of the fifties. There's this sort of nice, like, tablecloth restaurant. There's a bar here. And

what is very cool about this event is you will, like, go to any of these

places, and right next to you will be, you know, some the head of, you know,

the head of the Korean Central Bank or whatever it is, and they're just there. And

because it's late August and because it's in this beautiful location, I think everybody comes here

with a sort of half with a very serious expectation. This is just gonna be a

half work trip and a half relaxation trip before their schedule is probably get insanely busy

once the fall comes, etcetera. So I do think it's this sort of extraordinary event where

no one is here, I believe, with the sort of mindset of, like, I'm gonna really,

like, grind and do tons of important meetings. Yes. They do have meetings. Yes. They do

have bilaterals, etcetera. But, also, you'll see them hiking the trails around here, etcetera. And so

it creates a sort of a it's a pleasant atmosphere.

Joe, it sounds like there was a little encroachment on that August lack schedule though because

you've got right after this, you've got the g twenty in Ash Ville this weekend. And

McKee was telling us, actually, some of the usual attendants weren't there because they couldn't be

both places at once. What are we looking forward to? What are we looking for in

that meeting, and what is different about that meeting than what happened in Jackson Hole?

You know, here, it's very technocratic. I mean, this is the key thing with monetary policy

in general, which is everyone tries to, like, keep the discourse cool. They wanna talk about

economics like it's a science, and that's great. And they want to sort of understand, well,

where can we tinker, etcetera, to, like, set the optimal balance of whatever we're going for.

How can we make payments faster? How can we have a central bank that facilitates twenty

four seven payments? What do we have to do with our communication policy in order to

convey and set set the, make money as tight or loose as we want?

I figured, this is fifteen seconds. Sorry, buddy. But yeah.

Geopolitical tension. Tension's higher and so forth. It's a very different vibe.