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>> Inflation is basically back to where it

was when the Iran war started. You

didn't like it at that level

>> then.

>> So I assume at this point even the

slight decline that we have seen in

recent weeks is not good enough.

>> Yeah. So first of all, welcome to

Jackson Hole, Mike. I mean, it's always

good to be back. It never gets old, does

it? Yeah. Yeah. It's great to have you.

Thank you.

>> Uh yeah. So, if I'm going to be

consistent, and you know, I was a voting

member last year and decided a couple

descented a couple times. Uh, at the

time, even, uh, the last Q3 Q4 data for

me last year was, uh, I thought we were

if we certainly weren't restrictive and

maybe even a little accommodative. So,

uh, we've got work to do. we there's a

demand element under underneath all of

the supply conversation that that gets

talked about that that I just need to

try to figure out cuz for me uh we we do

a lot of informal surveying around the

district and I would say it's kind of a

little bit like the FOMC meetings you

know you've got you've got a half of the

people that say well it's certainly not

uh restrictive um it it seems like it

might be close to about right but for me

um you know I I think it may be

accommodative on the short end.

>> How do you measure that?

>> So it's a really good question. Uh and

look the data sets are massive, right? I

mean you what you've got to do I think

and I and I even have a tendency to do

this is you got to be careful about

looking at you know one or two prints.

uh you really have to be thinking about

the macro over the micro because uh even

in the district I can get around to

places and some some communities are

booming, some are just doing okay. I

mean I I think even about industries uh

the cattle industry is booming but the

poultry industry is soft. And so you

really do have to be thoughtful about

that cuz what happens to me and this has

been my personal experience over the

last 3 years is we got it to three sub3

and then uh then there's it even gets

harder because you don't want to

overshoot uh with with the policy rate

decision. So uh you want some deflation

down to two uh but you don't want uh you

want deflation but not disinflation. And

so so that that that it gets harder. the

decisioning gets harder. But um for me,

I think there's a lot of demand elements

underneath uh this economy that that I

think a a bit higher rate might make

sense

>> as soon as September 16th.

>> So uh I think for me giving the chairman

some room uh is important. Uh I think

these task forces are going to be

instructive. I think the FOMC is looking

forward in my opinion uh to those. I

think there were some some of my

colleagues descented at the last

meeting. So, so I would uh probably put

myself in in that camp. But uh here

again, there's really good arguments on

both ends of this of this policy

decision. So, uh let's get a little bit

more data. Uh let's see what the task

forces are going to say over the next uh

successive meetings. Uh maybe there's a

bit of a reset that we have to make. Uh

but uh for me, I I I think uh we're a

little on the accommodative side. Well,

if uh you probably can't make this

official pronouncement, but would you

assume as most people do that October

28th is off the table because it's too

close to the election?

>> Uh I I don't think so, Mike. I I I think

the um uh the the we have this

discussion about independence. We get in

that room. Uh we are able to speak our

truth about what we think the economy is

doing. Uh and um you know, I I just

don't think it enters into the equation.

It certainly doesn't enter into my

equation. We have a mandate, you know,

it it's it's keep prices at 2% inflation

and keep employment uh and labor full.

Um that's a pretty simple mandate. So I

I can make decision. I can at least

offer my opinion around that and and be

hopeful that that maybe other thing

other folks on the FOMC think the same.

If you're saying you don't need to raise

rates necessarily immediately and you

want to give the chairman some room,

what's the balance of risks to the

economy given that policy works as we

all know with a lag?

>> It does. Yeah. So that is the classic uh

decisioning and debate, right? So so

here again, not to overshoot. Uh and I

think that but here again we're in the

threes. Uh I think that argument's

better when we were in the mid twos uh

and we were trending nicely. Well then

we had a couple shocks and now we're

trying to work through those shocks. But

now you've got this really interesting

dynamic of technology demand that's

creating uh really issues with a lot of

commodities be it steel or copper. Uh

you've got this kind of flywheel of

development around data centers and AI.

Uh that's creating some demand certainly

creating some inflation underneath the

the the energy shock side of things. So,

we've got to really make it make some

hard decisions about can the policy rate

affect those demand elements without

pushing uh your your economy into uh you

know a slow growth or or no growth area.

>> Well, two questions here and the first

one is does the Fed have a credibility

issue? There's a lot of talk about on

Wall Street that it might.

>> Well, for me, I I just don't see it. I

mean, I think um I think if you look at

the two great cycles that were that

challenged the Fed, be it the post08 and

the post uh COVID cycle, uh you know, we

might have missed a few things early in

the 2122 cycle, but we we used policy

rates to try to push inflation down. We

were trending pretty well. Uh I think we

were doing our job. I think we were

thoughtful in some of those moments

where the labor force was structurally

changing, which it still is. And so for

me, I think we're doing our job. We just

haven't gotten to the point where we can

uh say, "Hey, uh we're at a good place

uh may maybe reminiscent of kind of the

the cycle of the '9s where you get

inflation down to 2%, you have full

employment, and then you start to use

your policy rate in kind of a cycle and

wave to just keep the economy moving

along." Well,

>> well, the second part of that question

then is does Kevin Worsh need to do

something to satisfy the bond

vigilantes?

>> Well, look, uh I I've really appreciated

getting to know Chairman Wars since he

came around. Uh I think uh he has a

large imprint uh in his career about

what he believes and what's important uh

how he views the Fed's mission. uh and

uh so I I I think every time that he uh

has an opportunity to speak, I think

he's going to add to the discussion

about how do we fulfill our mandate uh

and because he believes strongly in it.

So I'm I'm like everybody, I'm looking

forward to it. Uh and uh I think he'll

uh he'll impress. He always does.

>> I'm sure you read the commentary from

the Wall Street analysts who say that uh

Worsh needs to tell us his reaction

function. So to be fair, what's your

reaction function?

>> Uh so I think that that probably is the

focus uh that we're going to talk a lot

about that comes out of these task

forces. I mean I think things like uh

data and communications are going to be

really key of the five task forces to

say, okay, is there a way to reset this

kind of post uh pandemic uh relative to

what we did before and what we need to

do going forward. Uh and so I think I

think we look we've got big issues uh

and and this this uh economic symposium

uh here in Jackson Hole is going to talk

about financial innovation. It's going

to be talking about things like that are

important to to me, things like instant

payments and how the market uh supplies

that instant payment pipe with with

liquidity. Uh and so there's going to be

a lot of things that come out of this in

the next 2 or 3 days, including his

speech, that I think are going to be

very additive to our to how we fulfill

our mandate.

>> Couple of things on communication. Uh do

you think that the chair should continue

to do news conferences after every

meeting?

>> So for me, uh you know, I think about

that as from what I do as a Fed

president and uh I I'm a transmitter uh

of information. So I go around the

district all the time. I have roundts.

Um, for me it, you know, the the Kansas

City Fed's kind of a power uh utility

center. I'm the conduit of information.

So, uh, it it really is kind of a

personal how do we want to fulfill our

duties and our mission. I I I bring

information from the FOMC table to my

constituents here. I take what they say

and I listen to them and take it back to

the FOMC table. I think you know he has

a much more macro role in that and I

think he'll decide how he wants to do

it.

>> What about the idea of moving back to

six meetings a year that was discussed

at the last meeting.

>> So uh here again I think there's uh

around data and communication. I think

there I'm going to be really fascinated

at what things we can do uh relative to

giving us more time between meetings and

bringing that data more more real time.

Uh I I hope we can get there. I hope we

can use some of the technologies that

are that are out there today, be it AI

and other technologies to really pull

information forward and and that and I

think fewer meetings might make us more

effective if we have more information,

but that information is going to have to

be more real time than it is today.

>> Yeah. But everybody uh who works in the

research departments at the regional

banks and the folks at the Fed in

Washington and the folks at the

statistical agencies say we are using

real-time information. We have contracts

with a lot of companies that are giving

us data in real time. What are you

missing?

>> So, so there I think there's I I I would

disagree with that. I think there's uh

too much lag in the information that we

get. I think that there's ways that we

can connect. I'll I'll give you an

example. I'm a former banker. Uh we

would submit call reports every quarter.

By the time the examiners would look and

and analyze that information, it's

probably 6 weeks after the quarter end.

uh if we could connect closer with the

banking industry to to actually maybe

electronically be connected maybe we can

get more real-time data from that from

the indust the banking industry

specifically that would that would

really bring that it would it would

today a call report looks like a

slowmoving vehicle to what AI can do

today. So the connectivity side of it we

can we can do better. One thing as a

last question I want to ask you is you

look around and you see all of the

television set up here and all the

people who come to this event. What do

you think of the symposium and the way

it's evolved over the years? Is it still

true to what the original founders

wanted?

>> So there's a special sauce to this

symposium. Uh no doubt about it. I you

know it's our 50th year next year. I

mean uh so something's working but but I

I I tell people that ask the there are

really three elements to the this

symposium that make this effective. One

is I mean obviously it's it's a great

place to be right. So there we we give

the participants an opportunity to

explore Jackson Hole in the region. two,

uh, it re I I I Joe Gruber, our our

chief economist, has one of the hardest

jobs because he and his team have to

decide what subject matter is going to

be relevant in August and you have to

make that decision in the November

prior. And so, uh, you hope that that

subject matter is relevant. Uh, it he's

knocked it out of the park this year

with this whole financial innovation and

payments business that's really disrupt

going to be disruptive over the future.

and then the the participants and the

way we're able to get in a room and

debate some of these uh things that are

happening. Uh Chairman Worsh's speech on

Friday is going to add to the

conversation on Friday and Saturday and

that and it's going to we're going to

wake up on Monday morning and have new

thoughts about what's happening in this

economy and what the Fed should do. And

so that it's so it seems well timed, but

the sauce is really about the people

involved in it.

>> Do you have any idea what he was going

to say?

>> I wish I don't. I, you know, I'm I'm a

warm-up actor, Mike.