COMMITTEE REMAINS RESOLUTE.

YOU'VE HEARD THIS BEFORE, BUT

WE WILL DELIVER PRICE STABILITY.

>> JOINING US RIGHT NOW IS

ROGER FERGUSON. HE IS FORMER

FED VICE CHAIRMAN, ALSO A CNBC

CONTRIBUTOR. AND ROGER

OBVIOUSLY A VERY HAWKISH

MESSAGE COMING FROM KEVIN WARSH

AND FROM THE REST OF THE FED ON

THIS. IS THIS A SITUATION WHERE

YOU THINK THEY ARE GOING TO

HAVE TO ACT QUICKLY ON THIS?

>> FIRST GOOD MORNING. I, I

THINK THEY ARE EVENTUALLY GOING

TO HAVE TO ACT. WHAT I FOUND

INTERESTING ABOUT THE VOTE WAS

INDEED A REAL LEAN TOWARDS THE

HAWKISH SIDE, WITH THREE

DISSENTS. WHAT I FOUND

INTERESTING IN CHAIR WALSH'S

PRESS BRIEFING, HOWEVER, WAS IT

DIDN'T SOUND QUITE AS HAWKISH

IN MY EARS AND I THINK TO

OTHERS AS WELL. AND I THINK

THERE'S A LITTLE BIT OF

CONFUSION AS TO WHAT'S LIKELY

TO HAPPEN NEXT. SO I THINK

EVENTUALLY SOME RATE HIKES

BECAUSE THE DATA ARE GOING TO

CALL FOR IT. BUT I THINK

YESTERDAY THERE WAS A LITTLE

BIT OF A MIXED MESSAGE THAT I

AND OTHERS PICKED UP.

>> WHAT, WHAT ARE YOU, WHAT DO

YOU MEAN WHEN YOU SAY IT'S NOT

AS HAWKISH FROM KEVIN WARSH AS

YOU HAD ANTICIPATED? MEANING HE

DIDN'T SIGNAL THAT THEY'RE

DEFINITELY CUTTING NEXT TIME

AROUND.

>> YOU MEAN DEFINITELY RAISING.

YEAH. HE DIDN'T SIGNAL THAT.

RIGHT. HE TALKED A GREAT DEAL

ABOUT SORT OF HOW TIGHTENING

FINANCIAL CONDITIONS ALLOWED

THEM TO SIT AND WAIT THIS TIME

AROUND AND TO HIS TO BE TRUE TO

HIS SIDE. BINANCE CONDITIONS

CERTAINLY TIGHTENED EVEN MORE

AFTERWARDS. HE TALKED ABOUT

RATE HIKES AS ONE OF THE TOOLS,

AND, YOU KNOW, DIDN'T SAY IT

WAS NECESSARILY THE PRIMARY ONE.

SO THERE IS, YOU KNOW, SOME

NUANCED LANGUAGE THERE THAT I

WOULD SAY, AND I THINK MARKETS

ALSO WOULD SAY, CALLED INTO

QUESTION, EXACTLY HOW HE'S

GOING TO DELIVER ON THESE VERY

STRONG WORDS OF BEING RESOLUTE.

AND I THINK THAT'S GOING TO

HAVE TO BE CLARIFIED OVER THE

NEXT PERIOD OF TIME.

>> THERE ARE SOME WHO HAVE SAID,

LOOK, HE WANTS TO BE ABLE TO

SAY HE'S GOT A BAZOOKA IN HIS

POCKET. AND AND THAT SHOULD BE

ENOUGH TO CONVINCE MARKETS. YOU

SOUND LIKE YOU THINK HE'S

ACTUALLY GOING TO HAVE TO SHOOT

THAT GUN AND RAISE RATES A FEW

TIMES BEFORE THE MARKET

ACTUALLY BUYS IT.

>> THAT'S WHERE

>> I STAND EXACTLY RIGHT. YOU

KNOW, WE'LL SEE HOW IT PLAYS

OUT. BUT, YOU KNOW, AS WITH ANY

OTHER SITUATION, YOU KNOW, IT'S

TO KEEP SAYING YOU'RE RESOLUTE

AND THEN TO NOT ACT, CAUSING

THE QUESTION EXACTLY HOW

RESOLUTE YOU ARE. AS ONE OF HIS

COLLEAGUES, CHRISTOPHER WALLER,

SAID, I'M GOING TO INFLATION IS

NOT GOING TO JUST MELT AWAY IN

OUR WITHERING GLARE. I THINK

IT'S SOMETHING OF THAT SORT

THAT THAT GOVERNOR WALLER

MENTIONED, AND I THINK THAT'S

GOING TO START TO TO PLAY OUT.

SO I UNDERSTAND THESE

RESOLUTIONS, BUT I THINK AT

SOME POINT, IF YOU'RE THE FED,

YOU'RE GOING TO HAVE TO EXACTLY

DISCLOSE AND REVEAL WHAT YOUR

STRATEGY IS FOR BRINGING SOME

ACTION BEHIND THOSE WORDS.

OTHERWISE, THE WORDS WILL START

TO SOUND A LITTLE HOLLOW. AND

HE SAYS THE RISK THAT THEY WILL.

>> TOM, YOU GET UP EVERY DAY.

ROGER, DO YOU WATCH SQUAWK BOX?

DO YOU GET TO YOU GOT OTHER

STUFF GOING ON OR. I DON'T KNOW.

YOU GET RECIPES FROM SOME OF

THOSE OTHER MORNING SHOWS OR

DID YOU SEE DID YOU SEE STEVE?

DID YOU SEE STEVE AND MYRON THE

OTHER DAY? THE HE DID THIS,

THIS STUDY WITH NOURIEL ROUBINI,

OF ALL PEOPLE. I THOUGHT THE

VENN DIAGRAM OF THOSE TWO WOULD

BE, YOU KNOW, SOMETHING LIKE

THAT. BUT THEY'RE BACK TO

MONETARY THEORY AND BACK TO

LOOKING AT, YOU KNOW, THE

GROWTH OF THE MONEY SUPPLY

AFTER THE PANDEMIC SHOULD HAVE

BEEN APPARENTLY OBVIOUS TO

EVERYONE THAT INFLATION WAS NOT

GOING TO BE SHORT LIVED.

HOWEVER, THEY COME TO A

DIFFERENT CONCLUSION ABOUT

WHERE WE ARE RIGHT NOW IN TERMS

OF OF MONEY SUPPLY GROWTH, AND

WE'RE ACTUALLY NEUTRAL. DO YOU

THINK KEVIN WARSH ADHERES TO TO

THAT? BECAUSE THERE HAVE BEEN

PEOPLE THAT SAY IT WASN'T

SUPPLY CHAIN AFTER THE PANDEMIC.

IT WASN'T THIS IT WASN'T THAT.

IT WAS ABSOLUTELY TOO MANY

DOLLARS, YOU KNOW, CHASING TOO

FEW GOODS IN

HOW QUICKLY THE BALANCE SHEET

HAD GROWN. MAYBE IT'S MAYBE

THIS TIME IT IS TRANSITORY.

THAT'S REALLY WHAT MYRON SAID

THE OTHER DAY. THIS TIME IT IS

TRANSITORY. THE INFLATION, YOU

KNOW, IF FIVE YEARS IS

TRANSITORY.

>> WELL, THAT'S THAT'S EXACTLY

THE FIRST ANSWER TO YOUR

QUESTION. YEAH, WHENEVER I CAN

I DO LOOK AT CNBC AND SQUAWK

BOX IN THE MORNING. NOTHING

ELSE WITH HER. BUT BUT I THINK

YOU PUT YOUR FINGER ON EXACTLY

WHAT THE DEBATE IS. AND I THINK

THE LAST ROUND OF INFLATION HAD

A NUMBER OF FACTORS, ALL OF

WHICH LED TO THE SAME ISSUE,

RIGHT? THERE WAS VERY STIMULUS,

FISCAL POLICY. THE FED

ACCOMMODATED IT, AND GREW UP

AND BLEW UP ITS BALANCE SHEET,

AS WE'VE TALKED ABOUT. AND

THERE WERE THE BOTTLENECKS THAT

CAME FROM CLOSING. AND SUDDENLY

WE OPENED THE GLOBAL ECONOMY.

ALL OF THOSE THINGS ARE WERE AT

PLAY. I THINK THE ISSUE AT THIS

STAGE IS THE FED'S BALANCE

SHEET IS STILL VERY LARGE. YOU

KNOW, MOST PEOPLE, MANY PEOPLE,

AND CERTAINLY NUMBERS ON THE

COMMITTEE THINK THAT, POLICY IS,

IS NOT IN RESTRICTIVE TERRITORY

AND CAN CROSS INTO RESTRICTIVE

TERRITORY. AND THEN WE ALSO

HAVE, YOU KNOW, TARIFFS AND OIL

PRICES THAT CAN CONTINUE TO BE

SORT OF UNCOOPERATIVE. WE'LL

PUT IT THAT WAY ON THE

INFLATION FRONT. SO I DO THINK

THE, THE QUESTIONS THAT YOU'RE

ASKING THE RIGHT ONES, AND I

THINK YOU'RE GOING TO BE

RESOLVED ALTERNATING WITH THE

FED HAVING TO RAISE RATES. EVEN

THOUGH AT THIS STAGE IT LOOKS

AS THOUGH THEIR CHAIR IS, IS

SORT OF RESISTANT, EVEN AGAINST

THE VOICES OF MANY OF HIS

COLLEAGUES.

>> IN THE WAR.

>> RAISE RATES DURING. I JUST

CAN'T IMAGINE THAT THAT YOU'D

BE HAUNTED FOREVER IF.

>> I THINK THE ISSUE IS

ULTIMATELY, YOU KNOW, FISCAL

POLICY IS STILL RELATIVELY

STIMULATIVE. WE'RE GOING TO

HAVE TO SPEND MORE. WE SEE

QUITE A BIT OF DEMAND FOR

CAPITAL COMING OUT OF OUT OF

SILICON VALLEY. OIL PRICES DO

NOT LOOK LIKE THEY'RE DECLINING.

THEY LOOK LIKE THEY'RE SPIKING.

AND, AND, YOU KNOW, ON AND THE

ECONOMY IS ACTUALLY, YOU KNOW,

DOING WELL AS KEVIN, AS CHAIR

WARD SAID, THE ECONOMY SHOWING

SURPRISING RESILIENCE. AND SO

THE THING THAT'S WRONG WITH

THIS PICTURE IS THEY'VE MISSED

THE INFLATION TARGET FOR FIVE

YEARS. AND NOW, YOU KNOW, THEY

SEEM I DON'T THINK THEY'RE

INDIFFERENT, BUT I THINK

THERE'S A DISCOURSE, A

DISSONANCE BETWEEN THE WORDS

AND THE ACTIONS. AND EVENTUALLY

THOSE THINGS ARE GOING TO HAVE

TO LINE UP UNLESS THEY GET VERY,

VERY LUCKY. AND I WOULDN'T AT

THIS STAGE. WHAT WE CAN HOPE

FOR, LUCK I WOULDN'T BET ON OR

EXPECT THAT IT'S GOING TO BE A

VERY LUCKY OUTCOME FOR

EVERYBODY IF THEY DON'T TAKE

SOME RESOLUTE ACTION TO BACK UP

THEIR WORDS.

>> I GUESS I WOULD ASK WHEN

THIS PROBLEM BECOMES WORSE. I

MEAN, HE'S ONLY GOT TWO

MEETINGS. GOT TIME. IF WE HAVE.

>> THE OLD.

>> GUYS THAT THIS HAS BEEN A

PROBLEM. WHY IS THIS THE MOMENT

THAT WE SAY EVERYTHING HAS TO

HAPPEN? AND I'LL POINT OUT,

MYRON ADDED THE OTHER DAY THAT

IF THE FED DIDN'T RAISE RATES

LAST TIME AND THE CPI NUMBERS

CAME IN COOLER THAN ANTICIPATED

SINCE THEN, WHY WOULD THEY

CHANGE THEIR MIND NOW?

>> SO I THINK THE CPI NUMBER

COMING IN COOLER THAN

ANTICIPATED, SET UP A HOLD AT

THIS MEETING. I THINK ONCE

PEOPLE SAW THOSE CPI NUMBERS,

WHILE THE EXPECTATIONS FOR RATE

HIKE WERE ROUGHLY CALL IT 30,

35%, PART OF THE ARGUMENT FOR

THIS MEETING WAS THAT CPI HAD

COOLED AND IT GIVES EVERYONE A

CHANCE TO BREATHE, SO TO SPEAK.

THE CHALLENGE, I THINK, THAT

I'M STRUGGLING WITH HERE A

LITTLE BIT IS, YOU KNOW, THE

DATA MAY PLAY OUT IN THAT

DIRECTION AGAIN. BUT I THINK

WHAT I WAS MISSING FROM CHAIR

WALSH'S STATEMENT WAS SOMETHING

BEYOND THE RESOLUTE. AND SO, AS

I SAID, YOU KNOW, THE REASON HE

GAVE FOR NOT MOVING WAS THAT

FINANCIAL CONDITIONS HAD DONE

SOME OF THE WORK. THAT'S SO FAR,

SO GOOD. BUT I THINK YOU LOSE

CREDIBILITY. AND THEN, YOU KNOW,

HE WAS, TO ME, A BIT TEPID ON

WHETHER HE'D EVER USED THE

INTEREST RATE TOOL, AS HE

THOUGHT ABOUT MANY OTHER TOOLS.

SO I THINK YOU'RE RIGHT ON WHY

SEPTEMBER MADE SENSE, WHY JULY

MADE SENSE TO HOME WHERE I AM

STRUGGLING. I THINK MANY IN THE

MARKET ARE TALKING ABOUT

CONFUSION IS, A LITTLE BIT MORE

WILLINGNESS TO SHOW ACTION AND

NOT JUST WORDS, AND TO BE

PREPARED TO MOVE IN SEPTEMBER

IF THE DATA DO NOT UNFOLD

CORRECTLY. AND YOU CAN SEE THAT

HE'S GOT A COMMITTEE THAT LOOKS

TO ME PRETTY RESTIVE. YOU KNOW,

THERE ARE THREE DISSENTS. I

COULD HAVE IMAGINED 1 OR 2

OTHER INDIVIDUALS BASED ON WHAT

THEY HAD SAID, MIGHT HAVE BEEN

LEANING TOWARDS A DISSENT AS

WELL. SO I THINK THAT'S THE

DILEMMA. AND, YOU KNOW, WHEN

DOES IT BECOME A WORSE PROBLEM?

I THINK IT IS WORSE PROBLEM.

>> BUT IS THIS AN INDICATION

THAT POWELL DIDN'T DO ENOUGH

THAT WE HAVE BEEN OUT OF THE

REINS FOR FIVE YEARS? AND SO

THAT WAS A FAILURE ON THE FED,

ON THE FED'S PART.

>> OH, YEAH. THE IT'S CERTAINLY

JOE AND MAYBE YOU, BECKY,

YOU'VE HEARD ME OFTEN ENOUGH

THAT, YOU KNOW, I VERY MUCH

BELIEVE THAT, YOU KNOW,

TOLERATING INFLATION OUT OF

TARGET FOR FIVE YEARS, WILL

CERTAINLY BE ONE OF THE THINGS

THAT PEOPLE TALK ABOUT WHEN

THEY TALK ABOUT JAY POWELL

CHAIR TERM. SO I'M NOT ARGUING

THAT NOW. IT'S, CHAIR WALSH'S

PROBLEM THAT IT WASN'T SURE HOW

HIS PROBLEM BEFORE. IT'S JUST

THE ISSUE IS ONCE YOU TAKE THAT

CHAIRMANSHIP, THEN I THINK YOU

INHERIT, YOU KNOW, ALL THE

PROBLEMS. AND IT'S A LITTL