Now we are just a few days away from the start of the Jackson Hole economic

policy symposium, which I'm told is, without a doubt, the most important mon monetary policy conference

in the world.

Yes. The official theme of this year's gathering is

What's theme?

Drumroll, please.

Okay.

Financial innovation implications for payments and policy.

Put that on a cake.

Okay. Everyone is waiting for is the speech. Fed chair Kevin Walsh is scheduled to deliver

on Friday at 10:00 Wall Street time. That is 08:00 Grand Teton's time. Tom Keene will

be there, and he's back with us before he makes the pilgrimage to the Cowboy State.

We're also joined this morning by Henrietta Treyz, who's the director of economic policy at Veda

Partners. Tom, let me start with you. You've been to this many years running now.

Way too many.

I don't wanna say how many. How highly anticipated is this speech? I think it's a

trope we lean on. Know the Fed chair is gonna speak. The world will be listening.

In this circumstance, is it different?

I would say in twenty five years, there's been three or four times like this without

question. I'll say the summer of o seven right after the four standard deviation move in

LIBOR, that was which I have a clear memory of Stanley Fisher glued to the phone

looking out at the Rocky Mountains, and there was

Trying to get service.

Real tension, real angst. It's a different tension this time, but it's a big deal.

Henrietta, what do investors, what do attendants want to hear? What makes this a success, especially

given everything that's happened in the past week?

You know, the the piece that I'm really interested in is obviously the combination of and

how he is thinking about all the stuff that the treasury department is simultaneously doing. We

basically are also getting at the same time two secret plans from treasury secretary Bessent to

fight the war with Iran and also to fight the war that they have with the

bond market. So it's a fascinating dynamic to see the interplay between treasury and the secretary

there and worse at the Fed. So I think those two combined are amazing.

Henrietta nails it in that we gotta get to Friday.

Yep.

I had this idea that we're gonna saunter out there and have a wonderful time. I

mean, Tracy, Alloway, Joe Weisenthal

They'll have a wonderful time.

With the rest of us, it's this unknown unknown of market data Monday, Tuesday, Wednesday, Thursday,

and even opening Friday.

Henrietta, let me pick up on on what you were saying there. So at the last

press conference, the Fed chair said when asked about this speech, he's looking at a blank

piece of paper and picking up on what Tom said a moment ago. It sounds like

it would be folly for him to start writing this now. Let's hope he hadn't drafted

it before what happened last week.

That's true.

That's how

difficult. How how does he approach what's happened here over the last week? We were talking

in the last hour with Tom and Tony Krizenzi just about the kind of historic roles

historical roles of the Fed and and the treasury. This upends all of that, and I

wonder sort of how you think he's he's approaching the speech that he's gonna give on

Friday.

I mean, I don't envy him. I feel a lot like when I try to prepare

to go on Tom Keene's show on Monday mornings. You have to be ready fifteen minutes

before to see what has just happened. I I think with regards to this specific week,

the scale of what we're talking about is so expansive. So for example, if the treasury

secretary rolls out a plan that imposes massive sanctions on China, what is the reaction function?

Are we now dealing with a situation where we're gonna tariff China again? Are they gonna

retaliate by limiting critical minerals and, rare earths coming back to United States? That is a

huge impact on our inflation numbers, which, of course, is the remit of the Fed. So

there's, as you point out, no way his paper has any writing on it going into

tomorrow, let alone Friday.

Tom, in the pantheon of economic symposium boondoggles, why is this one so important?

They're important. Francine Lacqua would tell you that in Portugal is just as well. Frankly, I

think is more modern, more with it. The Kansas City Fed keeps a tight tight rope

on the procedure here. There are a set of papers. Mike McKee is in the inner

room past the eight foot grizzly bear, And McKee is in the room with the other

elite, and they're going through boring, sometimes brilliant academic papers. Sometimes there's a lot of yelling

and screaming. And then there's a choreography where the global central bankers walk out, and they

do the beauty walk out to the split rail fence, and the American central banker goes,

Wyoming. And, you know, they they do that. There's a whole ballet.

Like a photo op? This is like the g 20 film

photo op.

You'll be there. You'll be right there for that.

I think it was frankly. He's getting much more of a, like, here's the markets. This

is a stew, and then we'll act after the fact. So I think he's, like, halfway

there. He's, like everyone else, including us, has been overcome by events. I mean, Henrietta knows

it. I just I I pulled an all nighter, Christina, just trying to keep up with

Kearny and Trump on Canada. I mean, it's all moving in real time. It's the same

for the chairman.

Henrietta, can we pull back from this a little bit? Because if you're not one of

these cool people, you guys, who knows the ins and outs of these things and and

why they matter, if you're average American going to the polls in November, you may not

be able to track the precise ins and outs of what's happening with the bond buybacks,

with what Roche is doing at the Fed, but you know what's happening at the pump.

You know what's happening to your paycheck, and you see that there's this rattling around. You

know something is going on. How does this filter down to average Americans? Do they care?

Should they care?

It's a fascinating question, Christina. You know, there is actually historical polling trends that show us

it's not necessarily the price of gasoline that is a huge problem for the American voter.

I mean, we're at, what, like, $4.10 right now. That's obviously a steep curve that's very

expensive, so we're gonna pick up on that. And the number one issue for voters right

now is inflation by a country mile. But it's really actually the chaos that voters respond

to, and you can see that backlash building right now. The president's approval rating is as

low as 33% in the latest Reuters poll. The Republican conference is losing special elections nationwide

from Tennessee to Virginia by double digits. And it's really this, fluctuation in, oh my gosh.

Why are we intervening in the bond market? Why are we intervening in the yen? Why

are we intervening in Iran? Why is the strait so closed? It's the chaos of it

all that is driving rep voters away from the Republican conference and specifically the independent voter.

The independent voter is defaulting towards Democrats. And not to bring too much into the table

on this conversation, but you're seeing them at a pivotal time decide that Republicans are not

presenting an opportunity for legislation or policy that they support. And so that's having a ripple

down effect to even how they feel about AI. How do you feel about data centers?

And Democrats are winning that conversation because of, I would argue, a lot of the last

18 of the Trump administration and what they saw seen from the Republican conference. It's a

it's a really interesting moment in time to be asking voters to weigh in.

Tom, pick up on this because so much of the agita in the bond market centers

on the fact that we did surpass this $40,000,000,000,000 threshold in US debt.

Right.

Debt debt to GDP ratio not looking great. And to Henrietta's point, in a moment like

that, customarily, you're not looking at the treasury department. You're looking up to Capitol Hill. You're

looking for some sort of action here. And you know well how long this conversation has

gone on over. There's hand wringing about the US fiscal house and very little gets

It's in the very New Testament, the gospel according to Henrietta. Nobody votes on fiscal policy.

We know that going back and back and back. Is this time different? And I'm hearing

some conversations saying, you know what? 40 trillion's a round number, and this time may be

different. I would focus much more on the gift of the stimulus driven, AI driven boom

economy, which has said, okay. The deficit's where it is. The interest expense is where it

is. But, boy, it's a boom economy. Great. And to me, the absolute hallmark here into

the election is this nominal GDP pullback. To me, that's the number one thing I'm watching.

And, Henrietta, speaking of the Hill, we've got some breaking news from New York Times reporting

that the president's son-in-law, Jared Kushner, has met with Democratic leader representative Hakeem Jeffries to talk

about ways they could possibly find common ground. That sounds like Republicans are planning to lose

in November, but I'm wondering how you take that reporting, if it is indeed factual.

Yeah. I bet they are meeting. There is a lot of risks specifically for the Trump

administration. When I meet with Democratic leadership, one of the core obvious approaches that they're gonna

have and, you know, my forecast is 90% us, the Democrats take the house, but I

still feel like Republicans have a better hand in the United States Senate. So you're not

gonna be in a position to pass legislation. They will have to address the debt ceiling,

avoid a government shutdown. Those really sort of basic things that can nonetheless be economically catastrophic.

But, really, it's the investigation and oversight. And right now, the democratic strategy is to go

after not just Trump officials. You you can do Pete Hager, Seth, or RFK junior, Christine

Ulmer, whomever. But there's also a tremendous amount of focus on the idea that there is

a relationship between the Trump administration and private enterprise, whether that's Apple, Google, Microsoft, NVIDIA. Why

are you getting a special license to sell your chips to China? What's that about? Mhmm.

Are you returning the tariff revenue to consumers, Walmart or Apple? Have you gotten a refund,

and what are you doing with prices? So there's gonna be this affordability lens. There's gonna

be a crypt, a corruption lens. Why are these companies donating millions of dollars to a

ballroom? What's going on there? There's a lot for the administration to be concerned about, and

I Kushner should be with Hakeem Jeffries right now.