Moody's Talks - Inside Economics - David Wessel on the Debt Ceiling

Episode Date: January 13, 2023

Mark, Cris, and Marisa are joined by David Wessel, senior fellow in economic studies at Brookings, to dissect the CPI report, and discuss Fed policy, prospects for recession, and the looming threat of a debt limit breach.Full episode transcript.Come join us at the Moody’s Analytics Summit, March 5th-7th at the Phoenician in Scottsdale Arizona.To learn more & register, click here:  Moody's Analytics Summit 2023. Follow Mark Zandi @MarkZandi, Cris deRitis @MiddleWayEcon, and Marisa DiNatale on LinkedIn for additional insight Questions or Comments, please email us at [e-mail]. We would love to hear from you.  To stay informed and follow the insights of Moody's Analytics economists, visit Economic View. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Welcome to Inside Economics. I'm Mark Zandi, the chief economist of Moody's Analytics, and I'm joined by my two co-hosts, a trustee co-host, Marissa Dina Talley and Chris Doretties. Hi, guys. Hi, Mark. So what's going on? What's going on in your part of the world? And Marissa, you're out in the, oh, Marissa, are you getting inundated by rain out there in Southern California? It's been raining basically since Christmas. And it stopped yesterday. And we're supposed to get another storm this weekend. And where I am in Southern California by the beach, it hasn't been that bad. We haven't had flooding like further north where it's been terrible.

So things are green here. Oh, wow. I don't think I've ever seen it green in Southern California. Yeah, it gets green in the winter because this is when we get rain. Just like two weeks around Christmas, we get rain and then don't see it again for the rest of the year. No, is it just me? But I don't really hear any conversation around what this all means for the drought.

I mean, what does it mean for the drought? Anything at all? Not much, apparently. So there are big reservoirs that attempt to capture rainwater around the state, and they've filled up a bit, but it's not put that much of the dent in it, I guess. I heard the snowpack, though, is... The snowpack is like a record. So, yeah, I think...

That'll help. I think it remains to be seen. So I've seen some things that say that this could... bring us through the next year. But I don't know. It depends how much they can capture. Well, I was hearing stories of they're finding bodies and reservoirs now. The water's so low.

That does sound scary. Oh, like Lake Mead. Lake Mead. Yeah. Anyway. And Chris, how are things in, you holding down the fort there in suburban Philly? Yeah, a little bit typical gray day here. but all good.

I had an event yesterday in Philadelphia. I spoke to the Philadelphia Business Journal at an event. And I had to actually... Oh, that was Pat Harker was there, wasn't he? The president of the Philly Fed? Didn't he speak at that? No. He spoke last year.

I stood in for him. No. You stood? Oh, okay. Okay. Very good. So I had to actually commute from Westchester, PA, down to Philadelphia. And I can appreciate why folks don't want to commute out to our house.

And so... It was eye opening. Right. The traffic. Traffic was pretty terrible. It was raining, so there were a couple accidents. Yeah. Did you see that article that might be here to say?

Did you see that article that said that the traffic in Philadelphia is worse than the traffic in L.A.? No. No. Yeah, they did a traffic study across all the major metro areas. And they said the traffic in Philly is now worse than the traffic in L.A. How's that possible? It just doesn't feel right. I'll send you the link.

Yeah, could you? Yeah. All right, I'd be very curious on that. I'm waiting for those infrastructure funds to kick in here. Hopefully we get our fair share in Philly. Well, very good. And we have a guest, David Wessel. David, good to see you.

Good to see you, Mark, and we're at said, Chris. Yeah, and I see you had made your way into the office there in D.C. You're at the Brookings Institution, and how do you feel about remote work? Are you, we have this question to everybody who comes on. I think that I don't like coming in every day. This has been an unusual week where I had to come in every day, and this morning I almost didn't make it. But I think that for my team,

being here two or three days a week has proved very successful. And I think without that, we lack the kind of serendipity and especially for our younger staff. I have to say that, like, yesterday was one of the coolest days I've had at Brookings. I have the honor of having Ben Bernanke part of our team, and he brought in to show us his $12,000 gold Nobel Prize and passed a lunch table yesterday. So I was thinking like, okay, this does make it worthwhile coming down to. Yeah, that does sound cool.

Better than an Oscar or Golden Globe, that's for sure. Yeah, that's wonderful. And David, you, before you joined Brookings, you were a journalist, columnist for the Wall Street Journal for many, many years. When did you join the Journal? I joined the Journal in 1994. I spent 30 years at the Wall Street Journal before I came to know. Wow. Wow.

And I remember we would talk, probably not, though, in the first 10 years of that. I was still in school. I started in Boston in the Boston Bureau. And I came to Washington to cover economic policy right after the stock market crash in 1987. And I spent all the rest of my career at the journal in Washington writing about economic policy, except for about a year and a half where I was in the Berlin Bureau of the Journal. Right. And I remember always getting nervous when you called. When I got a little, you know.

Why is that, Mark? You were a tough interview. You know, you remember, young people don't know. this, but back in the day, you'd get little telephone slips, right? And you, you're, the, the receptionist would say so-and-so called and would write that and put it in your little box, you know, you had your old name there. And every time I come back from lunch and I see David's name, I go, oh, I started sweating. I don't, I don't believe. Oh, yeah, you were tough. You were tough. I don't believe this, but I'll take it. Yeah, you were great. You were very good. And I think we, we talked on and off for a couple of decades.

few decades. And when did you went to Brookings, what? I went to Brookings at the very beginning of 2014 to be the first director of the Hutchins Center on fiscal and monetary policy. And our mission is to improve the quality and efficacy of fiscal and monetary policy and public understanding of it. So I've been here for nine years. Is Wendy, Wendy, Wendtelberg with you at Hutchins? No, Wendy is a colleague of mine in economic study. She runs something called the Hamilton Project. Oh, the Hamilton Project. Like a sister center of ours. Yeah. Right, right. She's very good as well.

And are there specific issues, topics that you're grappling with right now? Is there things that are top of mind? Or is it mostly focused on monitoring fiscal policy, different monetary and fiscal policy? We have a very broad definition of fiscal and monetary policy. Okay. You can talk about anything you want. Let's see. I have a particular interest in place-based policies.

I did a book on Opportunity Zones, which are a provision of the 27th. tax bill that created 8,764 tax havens across the U.S. So I'm working with some colleagues to think about how do we evaluate all the various place-based policies. There's a huge amount of money in the recent legislation that's targeted at sending federal money to individual distress communities. So that's one basket. Can I ask on that, David?

Are you pro or con? because there tends to be two camps here on the opportunity zones. Folks are really like it. I think the opportunity zones are well-intentioned disaster. Oh, yeah. Okay. I think the bill was not crafted in a way to achieve the aspirations of the people who started it. I could talk about this a lot.

But on the fiscal monetary front, we're thinking a lot about, you know, in the military, when they do an operation and it doesn't go well, they do an after-action report to figure out, what do we get wrong? The Federal Reserve does not seem to subscribe to this approach to retrospectiveness. So we're thinking about doing it for them. Oh, boy. That sounds interesting. Yeah.

Well, let me ask you that now that you're on that topic, while I have you there, what do you think of their policy this time last year when they, you know, it's hard to remember back, but the funds rate target was still a disease. lower bound this time last year? Well, I think I'm not alone. And actually, I've heard Jay Powell acknowledge this, that they were late.

So they should have raised interest rates earlier. I think obviously there's a lot of, with a lot of uncertainty about how the pandemic would play out. But by March 2021, we knew a lot about the pace at which the economy was rebounding and that we saw vaccines. and importantly, the fiscal policy response in March 2021 was, and you can see this in the minutes, much bigger than the Fed anticipated, and they didn't adjust either their rhetoric or their policy. I give them a lot of credit for once they figured out they were wrong for catching up pretty dramatically. I mean, four and a quarter percentage points in one year in raising interest rates is not something we've seen before. and now we get to a really interesting question about when should they stop.

And maybe we can come back to that. It's got to be a good topic. You know, today, this week, we got the Consumer Price Inflation Report, CPI Report, and that's been kind of top of mind at the moment. So we'll dig into that and talk a lot about the different macro issues, job market, monetary policy, and the thing that everyone wants to know, are we going into recession? And then at some point, we're going to play the statistics game, David, hopefully you'll

be willing to play that game. A nice way to kind of digest some tough economic statistics, and we'll do that. But let's get down to it and go right to the CPI report. And maybe, Marissa, can you give us a rundown on your take on that report? By the way, I thought it was a pretty good report, not trying to bias your, you know, your perspective here. I'm just saying. I could almost say it was to script or right in the strike zone. Exactly.

I think it's exactly what you would want to see. Exactly. David, these are Zandiisms. They know me well. Yeah. They know me well. Yeah. So go ahead, Marissa.

Yes, it was a good report. It was a great report. The overall CPI fell 0.1% month over month. and that was the first decline, at least rounded to one decimal place that we've seen since May of 2020. This is the headline CPI. Over the year, prices are up 6.4%. And that's the softest year-over-year increase since October of 2021. The main reason that headline inflation fell is energy prices, which are dropping very rapidly.

They fell 4.5% just over the month. they're still up 7% over the year. Within energy, fuel prices fell 17% over the month. So energy is really the drag on headline inflation right now. Core inflation, which is stripping out food and energy, was up 0.3% over the month. That was a little faster than the 0.2% increase we saw in November. and over the year, core is up 5.7%. That is the slowest pace since December of 21. It does seem like food inflation, which has been in the headlines quite a bit, is slowing. It rose 0.3% over the month. And that's the slowest pace of food inflation since April of 2021. This is despite all the egg headlines I'm seeing, egg prices are up 60% over the year. That's the every article I look at

talks about eggs. Cookies, too. Cookies? So a big increase too. Anyway. Well, I noticed white bread is up something like, I don't know. It's up by a huge amount, biggest increase since 1974 or two. But overall food is.

The whole egg thing is a big deal in my household. My daughter eats like a gazillion eggs. So do I. I eat an egg every day. I try to explain apples and oranges. Can we substitute something? something, you know. She goes, what are you going to substitute for an egg? And I think she's got me there. It's a fair question. An egg is a perfect food. An egg is an egg is an egg, you know?

So yeah. Right. So the egg thing. Yeah. So there's the egg thing, which is not in everybody's mind. But overall, all food, and this is food, both at home and away, slowed over the month. Goods prices are also falling. So they've been falling for three straight months. I mean, I think within goods. The thing everyone likes to look at is vehicle prices. So new car prices actually fell for the first time in a year. It was a small decline. It was 0.1% over the month. They're still 6% higher over the year. Used vehicle prices are really falling. They've fallen for six straight months and they're down almost 9% over the year. Core services accelerated over the month and they're up 7% over the year.

Including housing or not including. Yeah. And so this is what the Fed is really keyed into, right? Now, they're looking at core services, I think, X shelter, excluding shelter. And we can talk about shelter. So shelter prices have been accelerating. They were up over the month, both for rents and owner's equivalent rent. we think that that's going to soften probably in the middle of this year, just given the

incoming private sector data that we see on new rental agreements, which show softening and signings of new rental agreements, that's just going to take a little while to show up in the BLS figures. So rents are really key in the services sector. But what the feds looking at is things that they think they can control through monetary policy, things that are very where prices are influenced by the wages that employers are paying to people. So they're really keyed into the service, core services. One thing there that I was a little confused about. I actually saw, I don't already saw this, but I think core services, including housing, was up, what was it, 0.5?

Yeah. And housing was up 0.8? That's right. So the services X housing felt like it should, it came in pretty strong. It was actually accelerated in the month. Again, that's what the Fed's looking at. So therefore, everyone's looking at that more carefully. Just didn't feel like the arithmetic added up.

Did that, I didn't go back and do the arithmetic. And they must have gotten it right, I guess, but it just looked weird to me. Did that not strike you? That was the core services X housing. It looked like it was a bigger number. They reported a bigger number than you would have thought, given the component. it. So I just, no, no one heard, no one didn't strike you. Okay, forget about it.

I thought it looked okay. I didn't catch that. That looked okay. Yeah, okay. So it was still seven and a half, seven point four percent year or a year. Yeah, right. Still strong. Still strong. Yeah. Yeah. So that's, you know, there's one, one concern we have in the CPI report, it's just looking at these service price inflation because that's, you know, That's really where you get into the wage inflation. And so we're keenly, you know, looking at wage inflation every time we get some metric that we can look at over the year or each month, whether it's the ECI or the BLS report that we saw last months. And it does look like wages are turning over.

You know, they're softening a bit, but they tend to be sticky so it can take some time. So what's the bottom line? What do you mean? The bottom line, yeah, bottom line is, I mean, inflation is clearly, right, clearly softening. Price growth is clearly decelerating, and we see it across goods. We've seen the shift from buying goods to services. You see it in goods. You see it in food and energy have been the main drivers of headline inflation, and those are clearly

softening. Food not as quickly as we would like, but even there, you know, a few months ago, we saw some softening in food inflation and we were reluctant to say this was a trend, but it's clearly a trend now. I mean, it's clearly decelerating, particularly as fuel prices are coming down, right, because that's a big component of food inflation is just shipping and trucking food across the country. So I think it's a great report. I don't think, I think it's exactly what the Fed would want to see. I don't think it changes anything in terms of what we're expecting the Fed to do. Early next month, their next meeting is in February. It will be before the next CPI report. So this is the last report they get before they meet in February. And we're expecting them to raise

rates, 25 basis points, which would be a step down from the pace they've been going at. Hey, David, you heard that kind of rundown. Does that kind of fit with your... I mean, I think, I think Riss has it right. It's like it does suggest that the peak inflation is passed and things are coming down. I think some of this is the normalizing of supply chains. I mean, use car prices were down now, six months in a row. I'm kind of intrigued by the Fed's focused on wages. The Fed seems to think that Powell said at a thing we had here about a month ago that the pace of nominal wage, increases is too high to be consistent with meeting their target. Of course, wages are going to be pretty important in the service sector. So what I'm really curious about is what kind of signal they send in February. Are they sending a signal like we think we're winning the war and we can relax? Or do they send a signal saying, look, we're making progress here, but we're not going to we're not going to relent until we actually see more tangible evidence that prices are approaching our target.

And I don't think they're there yet. Yeah. Hey, Mercer, do you know, when do we get the employment cost index report? We don't get that until after. That's in February sometime, right? That's the quarterly series from BLS that controls for mix and occupations and industries. So we're not going to get that for a while, I think. Yeah, I'm looking at it right now.

I'll come back to you and I'll tell you the date. But yeah, I don't think that they're going to get it before they're going. March 17. Oh, March 17. No, no, I'm sorry. Wait, take it back. Employment cost index for December 22 is scheduled to be released on January 31st. So we will get that.

Oh. Okay. Okay, very good. Just in time. Just in time. Just in time. Because that'll be a key statistic. Yeah.

And I think what's interesting is that, you know, like, it's not very controversial when you have six, seven, eight percent inflation and you're, your interest rates are at zero for everybody on the FOMC to agree, it's time to raise interest rates. But now we're getting to the point where there's going to be some disagreement between people who are going to say, look, we have to err on the side of doing too much, even if that means we have a recession, and others who are saying, oh, come on, monetary policy works with a long and variable lag. We've done a lot. We're starting to see some progress against inflation. The markets think we're winning this war, and so we should not do too much. And I think we'll begin to see that tension

in, I think it'll spill over some in public soon, but certainly it will be going on inside the Fed as we get more into 2023. Well, it almost feels like that it's already started, right? I mean, you saw Pat Harker, the Philly Fed president, kind of put a stake in the ground, supporting quarter point rate increases going forward. He says 50 basis points are 75, certainly, now 50 is done. We're going to quarter point. Right. But I think the question is, what do they think that what people call the terminal rate is? How far do they have to take it? And we won't know, they won't put a number on it until they do their next public forecast. But I think there, there will be some disagreement.

How many quarter point increases? One, two, three, four, six. I think. And I think it, you know, it'll depend a lot on what's going on in the economy. One thing that, if I were them, I'd worry about is they're really going to be, this is taking us in another direction. I don't know if you want to go here, but if there's a fight over the debt ceiling later this year, that could be very disruptive to the financial markets and to public confidence in the economy. And if I were at the Fed, I'd want to get whatever I was doing done before that happens. So I don't have to be raising rates in the middle of that. Oh, that's interesting.

Oh. So that would argue for what? a somewhat higher terminal rate sooner rather than later. Oh, interesting. Oh, interesting. Let's come back to that. Before we go down that path, Chris, is there anything else you wanted to add on the CPI report and also what it might mean for the conduct of monetary policy?

Sure. I think Marissa summarized it nicely. One asterisk I might put around the energy is that although energy prices, gas prices came in, energy services actually went up. So electricity prices. And there's some volatility there, of course. But if I think about the household balance sheet, households are still feeling the pinch in terms of their utility costs.

And those do take some time given regulations to filtering as well. I think the rent and owner's equivalent rent, obviously there's some volatility there as well. It's not a great thing that they bounce back up. Now, we do expect to see the general trend downward. but I think that may color the Fed's decision here in terms of how aggressive. Certainly it takes rate cuts, I think, off the table until we see some decisive declines there. But it may bias, you know, to David's point, maintaining a higher rate for a longer period of time.

So that plus the services X shelter number, I think also would argue for somewhat higher rates for an extended period of time as well, until we really see that coming in. You know what? The report did for me. It didn't change my forecast for inflation. I expect that to come in over time, get back to Target sometime mid-20204. That didn't change. But I'm increasingly more confident in that forecast. I feel pretty darn good that that's going to happen. I mean, assuming oil prices don't spike again, and that's obviously a risk. assuming the pandemic doesn't take us in a direction it hasn't so far and China can get back. The supply chains can normalize here as China winds down. It's no COVID policy.

It just, we, you know, the rent and housing costs, that's increasingly in cement. And it's going to show up in lower cost of housing services here later in the year. And the labor market's cooling. I mean, it's very clear it's cooling. And wage growth has. rolled over. So, you know, there's a lot of script to be written, and that's as Andyism. I've said I say that all the time. Lots of script, but a script feels like it's increasingly indelible ink to me. I guess I guess no one writes with ink anymore, but, you know, you get my drift. You get to my... Do you think we're going to have a recession or not, Mark? Pregnant pause. You're not allowed to say it depends.

Well, no. I think the probabilities of a recession are high. you know, kind of an NBR defined recession or high. I put them, you know, this sounds like a cop out. Some degree it is, 50-50. I'd say that, you know, I can see it going either direction. I wouldn't argue with anyone who says we're going into, well, Chris, I would argue, but, you know, most other people would not argue. But, you know, I have to pick aside, you know, because we produce numbers that we put

into databases that clients use like J.P. Morgan, B of A, Wells Fargo, when they do their loan loss provisioning, they need numbers. So we've got to put numbers in a database. So we have no recession in our, in fact, Chris coined the term. I'm curious, Dave, what do you think of this? Slow session, slow session. What is, Chris, you want to define slow? And actually, Chris, enterprising enough, he went out and bought the URL, slow session.

Oh, geez, really? Exactly. Do you buy it with your money or is it a movie? No, no, his money. His money. $10 a year. I took one for the team, right? I put Mark's paper there even.

Yeah, exactly. So no. But I want to come back and we're going to ask you, and I'm going to put you on notice now, what your probability of recession is, you know, over the next 12 months and see if you want to go, if you want to answer that question. But to me, it feels like inflation is coming in here. And I can see, it just feels I'm just more confident, much more confident in that forecast, you know, going forward.

than that certainly has implications for monetary policy. So, David, when you think about these questions that you asked, you know, what is the terminal rate? You know, how much higher do they have to go, half point, quarter point? Do you have your own kind of expectation and forecast? I mean, if I asked you, David, what do you think the terminal rate's going to be? Do you have you on that? Yes, although I would put more like yes than forecast.

if you don't mind. Well, it's all a guess. It's all a flavor of guess. I think they're going above 5%. I would say 5 and a quarter if I had to put a number on it. And maybe even 5 and a half. And I'm kind of surprised by the market's expectation that the Fed will be cutting rates by the end of 2023.

That suggests to me that the markets must think that inflation is going to come down pretty substantially and that the unemployment rate will go up a lot. And so the Fed will feel the need to ease. I think if you look at the Fed's summary of economic projections and you listen to what Powell in particular says, they pretty much think the unemployment rate is too low and they want to drive it up. And so that leads me to believe that they will be a little bit tighter than some people think. So the terminal rate is, you wouldn't argue with the market. Five and a quarter, five and a half. Yeah, that is kind of what's embedded in the market right now.

But the market. But the market thinks are going to, some people at least think it's going to cut by end of the air. And I think they'll hold it there for longer. Right, right. I think that one thing that I think all the recent fiscal action has kind of made the fit push up the terminal rate a little bit. But they also have, we must have a great deal of confidence that we're not going to get any more fiscal policy in this Congress. I mean, we'll be lucky if we can keep the lights on. So that makes it a little bit easier for them. Because in the past,

they've like been constantly, we've all been surprised at how strong the, how much federal spending Congress has approved. Yeah. Right. Okay. Well, let's go back to the debt limit. And that's kind of the other big news over the past couple of weeks. And I guess the angst here has risen in significant part because we've observed the kind of high level of dysfunction in recently in Congress, given the difficulty Republicans have had coming in with a speaker. How big a deal do you think this is? How worried should we be about a breach of the debt limit, do you think? think we should be worried. I think that there, it's always been, people have often seen this as a lever to get something out of the administration or the other party. But usually they've been

willing to play the game of chicken and at the last minute they flinch and they take some face-saving move. And the problem is this time, it may not be so easy to find that face-saving move. And there are Republicans who believe that like we should just, it's not as bad as everybody says or trying to scare as we should just do it. And so my best guess is it's going to be a lot of tension, a lot of noise. People will be very nervous. The Treasury is about to hit the debt ceiling any day now. And then they'll use this extraordinary measures thing where they kind of move money around to avoid not being able to sell bonds. But sometime in the summer, the fall, they won't have enough money to pay the bills and they won't be able to borrow.

If I had to guess, and this is even less sure than my guess on the terminal rate, my guess is that they'll fail to raise the debt ceiling. There'll be a huge market reaction and they'll come to their census 40 hours later. It'll be like the TARP vote where they did the wrong thing and then the market reacted negatively. Kevin McCarthy made some noises recently. the new speaker suggesting backing away from the idea that we're willing to play this game of chicken. So I took that as a hopeful sign.

And I think one really interesting question is, how did the Democrats play this? The Democrats could come to the rescue of the Republicans and raise that get this debt ceiling out of the House and then it'll pass the Senate. But they will probably wait until the last minute to do that. And so there may be a lot of tension about what are the Democrats want if they're going to vote for a debt ceiling increase or what are the hardcore Republicans want in exchange. So it's all, it's very confusing. But there are a bunch of people in the House of Representatives who are more interested in tearing down things than good policy. And with such a small margin, people are going to be very dangerous this year, I think. Just to make sure I got it right. So you think the most likely scenario is that we actually breach the debt. I would say that I would give, I would say, I'm pretty narrow. I would say 45%, we have a big showdown. They flinch at the last minute and we don't go over. 55% or maybe 60% that they actually can't come to an agreement.

There's a crisis. The government says we can't, we can pay the bondholders. But if you don't do something by Tuesday, we can't write social security checks. That would be so upsetting to the markets that then they'll scare. the pants off the Republicans in the House and they'll do it. That's my, that's my guess. This is based on very little reporting and just trying to read the body language. And a lot depends on what happens over the next couple of months. I mean, is everything a fight in the house or does the House manage to, like they score their points and then they get on to doing

business? I don't think we really know yet. And of course, there's always a possibility that McCarthy loses a person or two. Maybe George Santos resigns and is replaced by a Democrat. then it makes it even harder for him to push something through without the Democrat support. And if he needs the Democrats, then it'll be much more likely to be a truce rather than an Armageddon. Right. You know, whenever we have this debt limit, we come up to the debt limit, discussion quickly goes to what can be done to get around the debt limit. And you always hear these different ideas. I'm just going to throw two of them out there and see, get your reaction.

The first is the 14th Amendment. So that was an amendment passed during the Civil War, and there's a clause in there, I think, Section 4. If you read it, it sounds like it gives authority to the president to continue to pay on the debt. So if there is a debt limit breach, he can say, I'm invoking the 14th Amendment, and we're going to keep, Treasury keep paying your bills. The other is the so-called platinum coin, and in some legal language, the executive Bands has given authority to issue platinum coins of any amount. So the thought is, oh, they could issue a trillion dollar coin, have the Fed effectively buy the coin for a trillion dollars, and the so-called seniorage, the difference between the

trillion dollars and the cost of producing coin, which is inconsequential, is cash that the Treasury can use to pay its bills. What do you think of those? And, you know, it's actually gained some traction. I think back in, I'm making this up, so I might not have exactly right, but, you know, like a Paul Krugman, you know, another Nobel Prize winner, you know, endorsed the idea, I think of a platinum coin, I believe, you know, in that, in that kerfuffle over the, over the debt limit. What do you think of those ideas? I think they're fun to talk about, but I find it really hard to believe that they would do them. But I don't know. You know, what you're saying is, if Congress fails to act, will the administration do something of that they can't be sure is legal and figure we'll figure out the law later?

One thing I'm sure of is they're going to say we can't do this because if they said they can do it, then Congress can be irresponsible. But I think they're kind of gimmicky. And I think especially anything that involves the Fed is really unlikely because the Fed is going to be reluctant to decide with the president over Congress for something Congress should do. So I mean, I'm sure that they're dusting off those old memos and saying, what do we do if? But my guess is that they won't do that stuff because it really does start to look like a banana. Republic more than we are ready. Chris, do you have a view on that, on those, that question about the 14th Amendment and the, on the platinum coin?

It's, it's a tough one. All right, if we really do come down, you know, I can't, it's hard to even contemplate what that financial Armageddon looks like if we're not able to make good on our payment. So I think we would start looking at those other, other options if it really came down to it. I'm assuming that if we go over, the Armageddon is relatively short-lived, that it's so disruptive that they do it. So if Social Security checks go out a day late, it's disruptive. It's not the end of the world.

I don't think it can go on for a month. That would really be like time to amigrate. But even the legality of that payment prioritization is. Yeah, no, it's a big issue. We know a little bit from the Fed minutes about what they were thinking about the last. last time about how they would do it. So we know a little bit about their prioritization thing. And some of it, I mean, I've heard that some of it has to do with like, it's all well and good for us to say, oh, pay this one and pay that one. But their computer isn't set up like that.

It's like the whole problem we had with unemployment insurance during the pandemic. We couldn't figure out. Somebody said to me, the problem is the state unemployment system computers is they can add and not multiply. So we had to add $600. And couldn't say, we're going to pay 100% of your wages. I didn't know that. That's crazy. I think any of us who worked in any company that has turned out that software doesn't always do what you think. Oh, surely you thought of this.

Well, in 1979, there was a case. That was a kerfuffle around the debt limit. They actually increased it in time, but they couldn't get the computer code to settle. And the treasury actually missed a treasury bill payment. And there's a good academic research that showed just that little miss resulted in tens of billions of dollars of taxpayer costs because of the, you know, you multiply one basis point, you know, one 100 to the percentage point times, you know, 31 trillion in debt. That's real money. That's real money. No, no. There's actually, there's a geo report about the last, I think it was 2011, where they actually didn't go over the thing, but the speculation meant that people were afraid to buy really short bills. and that the yield on those went up and that that's a lasting cost. And of course, the whole thing is outrageous.

I mean, Congress is spending in taxes, and now the credit card bill is coming. They say, well, maybe we won't pay it. I mean, it's just, if you want to do something, what I find most frustrating is we do have some fiscal challenges, and Congress should address them, but this becomes an excuse not to address them. We'll fight about the debt ceiling,

and we won't talk about how do we put Social Security and Medicare on a sustainable path, or whether our revenues are sufficient to pay the expectations of what government we want government to do. And that's what's unfortunate. And this does not look like the Congress that will be having thoughtful, long-range fiscal planning discussions. Yeah, unfortunately. I mean, going back to the plan on the 14th Amendment, even if the president decided to go down that path, two big problems. First is investors aren't going to take much solace in that because they're going to say, you know, good chance that gets struck down pretty fast by the Supreme Court.

then what? And by the way, I'm out of here now because I'm not going to stick around for that. So you're going to see markets lose their minds anyway. And the second thing is you're mucking with the DNA of our entire political system, right? Because it goes to the checks and balances between the executive branch and Congress around, you know, who has the power of the purse and also the independence of the Fed. Can you imagine asking them to cash in a platinum coin? And then what happens to the Fed in that situation? So you're really messing with the the DNA here. So the unintended consequences of all of that would be,

I think, you know, pretty consequential. I can't imagine that not happening. But that's interesting. I mean, I, I think if we have that tart moment,

you know, they kind of went across and someone did not get paid. My guess is it would be the electric company that wouldn't get paid. It's not coming. If they can do it, you're right. If they can do the switch with the code. It started in shingling.

think about, so what's a smart strategy if you're a Democrat on this thing? We know that when the government shuts down, that the Republicans have learned that it's hard to blame that. They always got blamed, you know, that famous times in the past. And so the Democrats will be in a very interesting political strategic position. Do we, to what extent do we say, oh, this is too dangerous, it's going to cost the federal government money for the rest of our lives. We're going to make the Treasury security look less secure. So we're going to, like, help them out? Or do they sit there and say, okay, let's see, let's watch you guys twist slowly in the

land. And then after 36 hours, we'll rescue. I mean, remember, that's essentially what happened with talk. Yeah. And they made a few cosmetic changes, and then they passed it. But I, honestly, I don't know. But it's going to be such a waste of time. I mean, I've already started getting questions about this.

and we've dusted off all these points. The only good thing is we wrote all the explainers before. We updated some numbers and dates and here you could read this. Yeah. But it's very frustrating. And I know that tragedy second Janet Yellen is just, she's just frustrated that she has to, we have to constantly.

Go down this path every time. Yeah. Yeah. Well, I think Jay Powell, the chair of the Fed, actually became a fixture in Washington in 2011, wasn't it, around the debt limit? He went around explaining to the Congress of the time. He was at the bipartisan policy center. Yeah.

Not Brookings, not Brookings. No. He was at the bipartisan policy center. And they've done a really good job over the years of keeping track of the cash flow of the government and putting dates on when is it really run out. And Powell was there. And the Obama people realized that they needed someone to go talk to Republicans, that he'd be a good candidate to do that. So he did spend a lot of time trying to convince Republicans that this is nuts. And I think that's one reason why the Obama put him on the Fed, that Geithner was impressed with how well he handled that.

So just interesting how that moves like that can change your career. Now look at him. Right. Or change the nation's history. I'm sure that at the time, if you said to Jay Powell, what are the chances that you'll someday be chairman of the Fed? Exactly. They're a number less than zero? Yeah.

Yeah. Especially because he would have said, oh, I'm a lawyer. I'm not one of those PhD economists, right? So when does that happen? But, you know, very interesting. Okay, let's play the statistics game. I think this is a good place to do it. And the game for listeners is everyone puts forward a statistic.

The rest of the group tries to figure that out through questions and clues and deducted reasoning. The best statistic is one that's not so easy. We get it immediately and not so hard that we never get it. And if it's apropos of the conversation, the discussion, that's a bonus. So that's the statistics game. And I think, Marissa, it's now tradition for me to start with you when Dante's not on. So Marissa, would you like to go? Sure. Can you hear me? Okay. I had to switch my mic. Yeah, you sound great. Okay. All right. I have some construction going on behind me.

All right. So my number is... Literally behind you? Construction is literally gone on behind you? Yeah, I'm renovating my house outside of my house and they're here and they're power washing something. Yeah. Got it. Okay. It's car washing. Mark's favorite.

Power washing. David, do you have a power washer? I do not. I highly recommend you get a power washer. Particularly, you know, you probably can get it cheaply at the moment. And then for the summer months, it's a very therapeutic thing, blasting water. because at anything at anything you get you get instant gratification because you know you got to be careful not to destroy things but you know wearing that but highly recommend it but anyway go

go ahead go ahead marissa that's neither here nor there okay so um there's actually two that i'm that i like and i'm having a hard time deciding okay i'll do this one seven in December Whoa, whoa, whoa, whoa, seven, no units to seven? Seven. It's an economic statistic. Seven, seven percent. Oh, they're okay. Yeah, yeah, yeah.

Sorry. That's a CPI number? I thought it was going to be seven. The number of eggs I could find in a box. I was thinking. The number of eggs now when it does an eggs. The new dozen. Sorry about that.

Seven percent. Seven percent. Is it an inflation statistic? No, it's not. It's not in the CPI report. Not in the CPI. Okay. But it's not an inflation statistic.

No, it's not. Okay. Seven percent. Is it a statistic that came out in the last week? Yes, of course. Oh, of course. Okay. You play both the rules.

Not like me. Of course. The one time I did, I heard about it. So, yes, it came out this past week. Interesting. What do you guys think, Chris? I didn't see the University of Michigan survey, and I know that has nothing to do with 7%, I don't think.

But what did? Oh, there are inflation expectations there. But that's not, if that was 7, I'd be run for the hills. It's not, it's not directly tied to inflation. Okay. It's the wage increase that Marissa wants Moody's Yeah, and David, how did you know we were in the middle of our compensation planning? You said that.

Yeah. It shows insider information. It does, yeah. This weekend, that's exactly what we're doing, which is incredibly painful, let me tell you. Wow. Setting wage increases. Wow. Give us a clue, Marissa.

Okay. If I give you this clue, I think you're going to get it. Well, you'll get the report. So it's a net. percentage increase. Small business? Yes. So it comes from that survey.

Okay. It comes from the NFIB small business survey. Well, it's not compensation. It's not price increases. It's because I know those 20, that's higher. The net of that is higher. Yeah. 7% of reporting they're having difficulty getting credit.

You got it. Oh, David. Yeah. Yeah. How I did that. That is, that's amazing. Just saying. I'm just saying it's amazing.

So net 7% saying that credit is harder to get. And I picked this because it's the highest percentage since 2014. But it's still like nobody. It's 7%. It's a diffusion thing. It's a net. It's a diffusion. So more companies are saying it's harder to get credit than are saying it's the same

or it's easier. And that is so, so it shows for small businesses at least credit is they're feeling a tighter credit environment, more so than they have in almost 10 years. But you wouldn't characterize it as tight, though, would you? 7%. Like what was it in the teeth of the pandemic or, you know, just the context? Tider. She's saying tighter, right? Titer. It doesn't do any.

Tider than the prior month. Right. So it's not a, it's not a, it's not a metric of how tight credit is. it's their perception of how their ability to get credit compared to the previous. Would you guys mind if I take a quick tangent with Chris on a topic that's related? And it goes to bank earnings that are being released. You know, all these banks, J.P. Morgan at the top of the list, is now putting aside very large reserves for loan losses.

And, you know, J.P. Morgan just adopted a recession forecast. They call it a mild recession. I think the unemployment rate goes to almost 5%. in this in this forecast so mild and they put aside a pretty large i think was three billion dollars i'm making that up so i might not have it right but roughly right um and uh they're doing this under the new see the reasonably new cecil accounting standards that was implemented by the big banks back in early 2020 during the teeth of the pandemic and the idea is that you as a bank look forward you have scenarios for where things are headed for the economy and everything else

And based on that, you come up with your loan loss provisions, what your losses are going to be and what your loss. And there's been this debate, long-wring debate, even before Cecil was adopted, that this would be around countercyclical, pro-cyclical. The former way of loan loss provisioning was definitely pro-cyclical. You only took a loss in your provisions if you actually experienced a loss or it was staring you in the face. In this case, you're forward-looking. But this feels like, I'm not so sure. Do you think what's going on now, Chris, is pro-cyclical or counter-cyclical? I guess it depends on if you think their forecast is an accurate representation or not.

Yeah, but now they're tightening down on credit now in anticipation of a recession in the future, and that is reinforcing the slowing in the economy, right? That's pro-cyclical, isn't it? Or is that not? I think it's a matter of, you know, it's a matter of degree, right? Certainly it could be, right? If you turn it off completely, right, anticipating a recession, you could turn off all credit, right? You're going to induce a recession, right? I don't think, even with Mercer's 7% figure, I don't think that's the case, right?

We're moderating credit availability. We're cutting off some of the more risky lending that's going out there. but I don't see a full-scale shift in terms of really cutting off a source of credit to most businesses. So I think it's, oh, sorry, go ahead. So I would say it's still, to my mind, I guess because of my recession outlook, I would say it's more countercyclical than pro-cyclical still. But by the way, I think it's countercyclical in the sense that they're not going to, the JP Morgan's of the world aren't going to be taking loan loss provisions in the later this year because they already took them. Right. Right. So that allows them to provide, you know, continue to provide more credit for longer.

It may be a reason why we don't actually experience a recession, right? Because they're taking their lumps up. Right. Wait, I'm confused. So just because J.P. Morgan is setting aside a lot of money for loan loss reserves, does that tell me that they're going to be tighter in their credit? I thought it was kind of more like almost like an earnings in a good sense, earnings management thing. Let's make a perfect. We have a lot of profits now. Let's settle. side money for the worst case. Of course, if we don't need it, we can always put it back into the income stream. That's what they do. So is there a relationship between loan loss reserves and where they are, what their willingness to land? Well, in theory, kind of, sort of. If I'm taking loan loss provisions, I'm lowering my earnings, I have less capital. If I have less capital,

then I'm going to be tighter in my underwriting. That's the idea. But in the case of J.P. Morgan, they're not capital constraints. So probably not. Right. Probably doesn't. But it might be for someone else. Yeah. Someone else who probably would, but at least in theory. But anyway, sorry to take you on that tangent. I was just, that was bothering me, given these big loan loss provisions at the bank. Chris, you want to go next?

What's your statistic? Sure. It's two statistics really geared towards you and Marissa. That's my clue. Okay. 4.9% and 9.9%. Is it related to- The raise I'm getting and the raise marks getting.

No, no, no. That is dead wrong. That's the We're not going down that path, but you shouldn't shed any tears for me, but maybe a tier, a tier, a tier.

Is there some inflation related? It is inflation related. Is it in the CPI numbers? Indeed. Is that, is that, go ahead? Yeah,

is it a month over month in the year over year of the same thing that you're saying? Nope. They are both year over year statistics. There are different components. We know it's not eggs because we've already established that. It is not a component.

It's not an individual price. That's my next hint. Okay, so it's an aggregate of something. Say the numbers again, four. 4.9 and 9.9. Positive, Chris. Not negative. Obviously.

I'm just checking given, you know. I would throw in the negative. Right. So it's something like 4.9 is, your growth in prices of commodities less energy or something. How about is it geographic? It is geographic. David's good at this game.

It is very good. What are the two geographies? The West and the Northeast. Even more specific. Oh, it's San Francisco. Los Angeles is 4.5. 4.9. 4.9.

Philadelphia? Miami is 9.9. Oh, no, okay. You're associating Mark with Miami. Well, there's no Euro Beach specifically. Yeah, yeah, yeah. So I'm telling you, my, my, I'm paying, my inflation rate's a lot higher than you guys, and I'm getting my pay increases lower.

So what's that? Now you're giving you a fodder for his stuff. Yeah, exactly. Chris, you got a cut of this? Yeah. Oh, that's funny. Okay. Well, I actually noticed.

Those are also the low and the high across metropolitan areas. Oh, is that right? just to give you some sense. I did notice that if you look at regions, the four broad regions, so overall inflation is 6.5% year over year through December. The high is the south at 7. That goes to your Miami. And the Midwest was the low at 6.

And you said the low was who? L.A. L.A. L.A. and San Francisco. Okay. Are these, do you know, is these trends persistent over time or not? So, like, is one region consistently at the high end? No, I don't think so.

I mean, a lot depends on housing, rents, because that's such a big, you know, it's a third of the CPI. So if you're in a part of the country where rent growth is weakened, like I'm sure that's happening in California right now. Yeah. And in Miami, I bet it's still booming. People are still moving into Miami. So the rent, so I think a lot of it goes to rent. Some of it goes to gas prices and how much you drive, right? So if you're in New York, you don't drive.

But if you're in North Carolina, you do. Do they have a different market basket for each region? I don't think so. Yeah, I thought they did. Did they? I thought they did. I thought that's how they came up. Yes.

They used the consumer expenditure survey to see to wait, to wait each component. I got. I'm pretty sure they do. Yeah. So. Okay. Okay, that was a good one. Yeah.

Very good. Why did you say it was for me, though? Miami. Miami and L. Right. Oh, yeah. I'm in Rio Beach. Yeah.

Yeah. Anyway, David, you're up. What's your statistic? Minus 1.7%. Is it an inflation statistic? It's inflation related, but it's not a, not an inflation. It's not a price. Minus 1.7%.

Is it a statistic that came out recently? Yes. It is. it's one we should know. Would you be surprised if we knew it? Yeah, because I like, yeah, but it's not, I'm not going obscure here. You're not going to obscure, okay. It's not like Estonia exports to Russia or something.

It's in the United States. It's the United States. It's a year-over-year figure that came out in the last few. days. Interesting. Is it related to housing, house prices? No, because they're falling. Is it related to financial markets in any way, equity prices?

Is it related to energy prices, David? No. Can you give us a clue? You're going in the, you guys don't think enough about people. So we have workers in the economy. Oh. We do have workers. We do.

Yeah. We do. Question mark. Why claims? So is it related to jobs? Yes. Employment? It's related to jobs.

U.I claims came out yesterday. It's related to jobs, but it's not a jobs count. It's not a jobs count related to jobs. The labor category. Oh, is that? Oh, is it real wage declines, real wages? Exactly. Yeah, real wages.

7% the year over year decline in average hourly. earnings for all workers. I'm like, I'm beating you guys badly here. I'm just saying. I'm being you guys, but that's a good one. So is that what, so how did you measure that? Is that average average earnings less CPI inflation? Is that what that is?

I took the real earnings release from the, uh, oh, real earnings release, which is average hourly warnings minus inflation. Inflage, CPI inflation. So like in December, it was actually positive because obviously we had a negative CPI, I think. So average hourly earnings for all employees increased four tenths of a percent between November and December. But over the year, wages have not kept up with inflation. Yeah. Yeah, of course, that certainly has been a big weight. Fortunately, we've had all that excess saving that people have been drawing down to kind of supplement their real, declining real incomes to maintain their spending.

But that's a good one. Okay, I got one. It's three statistics, all related. It might be a little unfair, but I'm going to go ahead and do it anyway. This week? Is it this week? This week, this week. a little unfair. A little unfair. A little unfair. Three statistics. 1.8%. If you get the first one, that should help you with the rest of them, 3.1%.

And 4.1%. 1.8, 3.1, 4.1%. Inflation related? Yes, they're all inflation related. It's a three-month moving average of CPI, something in CPI, right? That's very good. I'll give it, definitely give it to you. It's the annualized change in overall inflation over the past three months, 1.8%. So, okay, that's a big tell. What's 3.1? That's overall. That's the core. I only know this because this is one of my candidates for a number.

I really, oh, it's still. That's good. Nicely good. I don't know what the, I don't know what the 4. You know what? That's a little tougher. And yeah, he definitely gets a cowbell. In fact, we're going to send this to you, David. Please don't. I'm trying to go. What do you do all these mugs that people give me? This is a cowbell, David. It's not a mug.

It's not a mug. And Ohio State mug. Yes. Please don't. David, do you want one with Mark and Chris's face? No. Creefully painted on it. Actually, it's pretty scary.

It is. Of course, our faces are my face is. All right. Well, 4.1. I don't know. Okay. 4.1. It's not in this inflation CPI report, but it's inflation related.

It's important. Three-month annualized change in, Marissa. Average hourly earnings. Average hourly earnings. Okay. Think about those numbers for a second. Think about it. Chris, you think about them for at least three seconds.

Yeah. 1.8 golden. 3.1. That's core CPI inflation. That's within spitting distance of target. which by my guesstimation is 2.5% and 4.1, you know, clear deceleration, critical to getting service price inflation down like the Fed 1. So this is the last three months. The last three months, the economic statistics have been fabulous. I mean, you know, it's not perfect, but pretty darn close,

right? Yeah. One of my colleagues, Wendy Edinburgh pointed out also that when inflation was running really high. We didn't have to think about the gap between the CPI and the PCE price index, but since the Fed's target is PCE, you don't have to get CPI down to 2% for the Fed to declare victory. So, yeah, I think the question is really whether, you know, these things tend to move around and three months is encouraging, but you could see some, we don't know what the next couple months will be. Absolutely. And I don't think the Fed is going to relax until they see something, they don't want to make the mistake of having stopped too soon. Totally, totally agree.

And also, they're not even going to let on that they're going to do that because they don't want financial. They don't want markets to think this is over, therefore go buy stocks. I know. It's like they have to be hawkish in order to get the markets to help them deliver on their target. I get me a headache. It's like a hall of mirrors. Yeah. Oh, yeah.

They're all looking at each other. But okay, very good. Okay. So let's wind up the conversation. And this, David, we've been doing. I alluded to this earlier and we've been doing this regularly. to kind of sum up things to get people a sense of where we stand. What is the probability that the economy is going to go into a recession,

kind of a National Bureau of Economic Research-defined recession, broad-based, to cost lots of industry persistent, more than a few months, at least a couple, three-quarters in economic activity in 2023. And maybe I'll throw in going into 2024. Let's say over the next year. So go with you, Marissa. What's your probability of recession? 50%.

Oh, that's a change. It is. Yeah. Yeah. Go ahead and explain. Yeah. Yeah. It's come down a bit.

55. Yeah. Yeah. I mean, I agree. I just think all the data, the job market is to script for lack of a better term. I mean, it's clearly slowing, but it's not collapsing. Inflation is clearly coming in. The 50-50 again is because some wild thing can happen and often does that we don't see coming.

And like I've said, I worry about kind of the rest of the world when I think about what could go wrong. I worry about some geopolitical events, some escalation in what's happening in Ukraine, something that crimps supply chains again, how China's going to come out of the COVID situation they're in. So, yeah, I'm down to 50 percent, Mark. with you. Last week, you were at 55. The high point for you, I felt, I think it was 60% at one point. I think it was 65. I think it was right at like two-thirds. Oh, so you've come way in here. Yeah, I have. Yeah. Yeah. You're very data-oriented. Is the data comes in? Yeah, you're not a hedgehog. You're a hedgehog. You're a, remember these hedgehog versus a fox? She's kind of more. Yeah. Yeah. But I, yeah, yeah, I think I was a hedgehog. You were a hedgehog? Okay. I'm becoming more. Yeah.

Fox-like. Box-like, yeah. Since the podcast, I think. Yeah, there you go. Very good. Chris is the bear of the group. Where are you now, Chris? Two-thirds.

Ooh, so he's down again, too. Yeah. Pretty significantly. You were, and he is a hedgehog. Significantly, it was 68, now it's 66. Oh, you were at 65. You were at 75 at some point, though, not that long ago. I was at 70.

75 shadow, but 70 was my official. Now you're down to 66. Yes, two thirds. Can I ask you, Chris, if you were chief economist, and it was on you to decide whether we should have a baseline forecast that had a recession in it, would you have one in it? So what gives me, I would. You would.

But I don't know that it would be an MBR declared official. I would have the unemployment rate a little bit. bit higher than what we have. And with our slow session vocabulary, that's really what I'm advocating. Got it. That's what, but data dependent, yield curve, leaning the economic indicators, consumer sentiment, differential. You have a lot of negative red flags still out there.

That's why I'm sticking with a higher level. Right. Okay. Very good. David, what's your probability of recession? So if you'd ask me a couple months ago, I would have been in the 65% thing. But I've also come down, but I'd be more pessimistic than Marissa. I'd say, you know, 55% range.

55%. I would put, if I were doing your forecast, I would put a recession in. You would. But I'm less confident that we're going to have one than I was before, for all the reasons we've been discussing. Right. Just the data coming. The data is. And the inflation is cooling off and the job market's pretty strong.

So you can sort of the softish landing thing scenario looks a little better. Is your thinking that we go into recession just because of what's already written in reality here that we're going to 5%, 5 and a 5 and a quarter percent. And that's enough by itself to push us in. And the kind of stuff we're talking, a bit of self-fulfilling prophecy here. If every business or if 2 thirds or 70% of businesses think we're going to have a recession. And so each of them does a little less hiring, a little less expansion. If consumers get a little more cautious, I think that's why I think it's likely. But I'm much more optimistic today than if you'd ask me two months ago.

Two months ago. Yeah. And David, when do you think that would happen? When do you think is the most likely point? Of course, the natural next question. What day, David, please. August 13th, 2000. That works.

Yeah. That's when the debt limits. I think that the NBR doesn't give, they don't have to have a date. They do have a month, right? Month. Yes. Yeah. Yeah.

And whether the NBR thing is kind of interesting. I mean, you know, we had a couple quarters of negative GDP growth. It clearly wasn't a recession. Right. They, the, the COVID recession is so abrupt, so sharp. So I don't, I don't, I'm glad I'm not on that committee. But. Yeah.

Yeah. Yeah. Yeah. They got a good group, good group of, a great group of folks on that committee. And I thought was interesting is if you read the latest Fed minutes, the staff says something like, we don't see a recession, but a recession is equally likely to our baseline forecast. So they're pretty much. They're doing what I'm doing. Exactly.

Yeah. Yeah. Yeah. Yeah. 50-50, I have not changed and I still land on no recession. But I feel more confident than I felt in a long time. The data is holding up pretty well here. sticking to script as someone is prone to say.

Well, I think we're going to call it a podcast at this point. I do want to mention one thing that's key, important. We have a summit coming up, the Moody's Analytics Summit. This is going to be in early March. I believe it's March 5th through 7. Someone can check that out for me. That's right. Is it in Scottsdale?

And you're going to be there, right? Marissa, I think. And Chris. And Chris is going to be there, right? So we're going to be, we'll be in Scottsdale. And we're talking about having this podcast at the summit. I don't know if we're going to pull that off. Maybe I even shouldn't mention that because I'm not sure.

But that would be fun if we could have a, you know, do this podcast. A live podcast. We've done one of those and that was a blast. Remember, Chris? That was a lot of fun. We really enjoyed that. Without an audience. This would be a twist.

Oh, yeah. This would be with an audience. That would be really cool. But we hope to see you there, a lot to talk about. and we'll first in-person summit since the pandemic, I think. So this is a pretty big deal for us. So we're looking forward to it. So hopefully we'll see you there.

So with that, dear listener, we'll call us a podcast. Talk to you next week. Take care.