Odd Lots - This Is What We Just Learned In Jackson Hole

Episode Date: August 26, 2023

On Friday, Federal Reserve Chair Jerome Powell gave his much-anticipated speech at the Kansas City Fed Monetary Policy Symposium in Jackson Hole, Wyoming. While many were expecting some kind of academic or theoretical discussion, the text was straightforwardly about the current path of monetary policy. So what did we learn? What actually happens at Jackson Hole? And how did this year's event fit in with prior years? On this episode, we turn to two of our colleagues, Bloomberg Surveillance co-host Tom Keene as well as Michael McKee, international economics and policy correspondent for Bloomberg Television. We discuss the speech, the whole event, and how 2023 compares and contrasts with previous editions of the event.See omnystudio.com/listener for privacy information.

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And I'm Tracy Allaway. Tracy, so we are here for you and me the first ever time at Jackson Hall. I know. I always wanted to go, partly for the scenery, but also just to get a feel for some of the economic discussions and wonkery. I've seen this described or heard this described as the Super Bowl for Central Bankers. You know what? I like that description. It's very apt because like when I think of the Super Bowl, I think of like a bunch of like parties and people just hang out. Like there's the game. But seriously, like, you said like partly for the scenery. I would say like for me that's like 95. I was so jaw drop the first time I walked in. It was gorgeous. Like the grand teat. I was just like I'm like totally flabbergasted. Also the chance to to finally break out my cowboy boots. I don't get to do that that often in New York. If anyone saw the photos of me on Twitter this weekend, Wednesday. morning as I was scrambling out of the house, I could not locate my, I have multiple cowboy boots.

I couldn't find any of them that one. Sure, Joe. Sure. They all go conveniently missing right before you need them. No, but it is an amazing event. It's really interesting to sort of witness it for the first time because it is at this kind of unusual moment for central bankers. Yes, right. And so it's like this weird uneasy piece, which is like inflation has come down a lot. The labor market is robust. We had this hiking cycle, but no one really knows why and how it all happened and what exactly the mechanism was. And I think that leads to a little bit of anxiety about, well, will the disinflation persist. I think it leads to a lot of anxiety. I mean, these are central bankers who are steeped in economic theory.

Things like the Phillips curve, which tell you that inflation shouldn't be coming down without a corresponding rise in the unemployment rate. And we've seen the exact opposite happen. And if anything, it seems like there are some signs that the economy is. is accelerating now. You have the Atlanta Fed GDP now. 5.9%. Right, which is kind of crazy after we've seen this huge run-up in interest rates. No, I know. There's something like, I'm trying to think of some gif of like the person like sort of awkwardly smiling and it's like, yeah, things are good, but we totally can't entirely explain why. That's sort of the vibe, I would say, right? Yeah, I think that's right. All right. So what have we learned? We're going to try and do a little

bit of summation of this extraordinary weekend. It's a very special guest for this special episode. We are going to be speaking with two of our illustrious colleagues here at Bloomberg. We're going to be speaking with Bloomberg surveillance co-host Tom Keene, who happened to be the first ever odd lots guest years ago. And then afterwards, we will be speaking to Bloomberg TV's policy correspondent Michael McKee. The legend Tom Keene co-host of Bloomberg surveillance, Tom, Tom, thank you so much for coming back on the odd lot. It's great to be here, but you got to paint us. I mean, you don't have, you don't have a video for this podcast.

No, take a photo. We're sitting here in literally an historic landmark. Back in my Ute, there weren't planes, there weren't trains. Tom Keene and the Utes. You went west in the car with four screaming kids and no air conditioning, and you went out to the national parks, and there were these little gorgeous 1960s, Mad Ben Bungalows. Yes.

And I expect Rock Hudson and Kim Novak to walk. through the door at any moment. These are definitely bungalows. So for people who haven't been to the Jackson Lake Lodge, they're kind of rustic. There's no TV. There's a warning sign in the room saying if you encounter mice or bats, please call staff. Don't try to trap them yourself.

Yeah. John Farrow had ants. No air conditioning either. But it doesn't get too hot, but there's no air conditioning either. Yeah, air conditioning hasn't been to. Option. How many times you've been here, Tom? I have been here roughly.

I haven't kept count like Davo. but I've been here roughly 17 years, what I'll say is off and on. But I've had a good fortune of being here most of the maximum tension years. Tracy, you know what I really like about here? And Tom mentioned Davos, which is why I bring it up. In Davos, you know, they clear out all the civilians. Like when all the, everyone comes, like, you cannot get into that whole town. Here, it's like we're around by tourists.

Like, anyone could actually just sort of come hang out here and sort of like sit on one of the couches in the Jackson Lake Lodge. You just got to, like, buy, like, a hotel room. or something. It's like a much more like peaceful vibe. It's true. I did actually have this older Australian couple that came up to me and they were looking at the Bloomberg TV set up and they sort of tapped me on the shoulder and they were like, what's going on? What's happening? And I was trying to get them very excited about, oh, Jerome Powell is here and maybe even someone from the RBA is around. They were into it. Yeah. Bud Nethel was once on the couch. They're hanging

out with this guy, 65 years old, gray. They're talking about, so how is your trip? And he's all. Wonderful. It's a Mervyn King from the bank of England. Yeah, it's great. What have you learned? What struck you about Paul's speech? Well, not much about Paul's speech. I mean, I listen to it. It's in my ear, and we've got all sorts of production issues going on at the time. So to be honest, I don't hear it word for word like you guys do. And Tracy really sits on it and listens. But different than any other meeting, even Cintra in Portugal, this is a meeting where you have no clue what the zeitguise is going to be until deep into Friday. And the one word for me, this unique moment in our history is complexity. Every one of every shape and flavor is overwhelmed by the complexities of the moment.

I think that's exactly right. And do you, the people you speak to, do they express much anxiety about this current period of economic time? Or is the vibe very much, well, last year, Powell was talking about how we'd have to have lots of pain in order to bring down inflation? That's the media. Yeah, that's the media. That's a media angle. All right. We're comfortable.

No, no. These are people, as you all know, these are the people who were first in their fourth grade class and math. And they had a meeting in June with their parents to say, well, we think he should jump to sixth grade. There were those kind of people. And so they have a huge arrogance about how smart they are, but also a built-in humility. And the humility right now is maxed out. I don't care if they're, you know, Barry Eichen Green of Berkeley or the youngest people. PhD who's lucky to breathe the air here, they're all humbled beyond belief about how wrong they've been.

I mean, the final paragraph, I think, of Powell's speech, he talked about the cloudy skies, which, you know, because the whole question is like, the stars are a star neutral rate, which no one knows what they are. And I think, you know, Powell expressed that in his speech. That's like the skies are cloudy. Even if, even if such stars even exist, it does not seem like we could see them right. I live in New York where there's like one damn star in the sky. It's Arcturists. if you think of Stevie Winwood and Arc of the Diver,

it's one of the stars on the record album. You come out here and it's, the stars were in the sky last night. You know, there'll be a lot of analysis. Frankly, you guys are better at that than me. It'll be hawkish, hawkish in this level in that. I think they're overwhelmed by the non-economic,

non-monetary things. And to me, it's just an extension of the pandemic. And we really don't know where we are in that continuum. Yeah, it seems like, they're struggling with some of the real economy aspects of this. And you saw it in Powell's speech where he was talking about supply chain pressures, starting to ease, what's going on in housing. It feels like that's not their comfort spot. It's decidedly not. I mean, to take it academic and to take a structure like a Hicksey and ISLM structure, which is, you know, blah, blah, blah,

in 1938, I don't think that's in play right now. You let me with a Phillips curve, which it was, what, 52, I'm going to think, London School of Economics. None of this is working right now. Right. I don't know what the 2024 theory is. It awaits odd lots to tell us. You brought up nothing is working right now. And I'm convinced, I mean, I did a TV hit yesterday. We were talking about the disinflation. And someone's like, well, in a year, well, we have more sense. And I kind of think that, like, this is going to be a period that not next year or not 10 years, like for 20 and 30 years, people will be writing papers about this period right now and what happened. And I suspect we are not going to ever really have something that resembles a consensus.

I strongly agree with that. My book of the summer is Olivier Blanchard. Very controversial right now. We don't need to go into it. But the answer is, Olivier has this phrase for all the stuff we don't get called other factors. It's like an academic usage with quotes around it. And that we're overwhelmed by the other factors.

I mean, look at what we have right now, Tracy. We've got labor dynamics, pandemic dynamics. the UAW thing that's happening. Pharaoh's gone. He's going to make $170,000 a year at UPS. and then you got the fact the Red Sox beat the Houston Astros 70 to 1. There are other factors out there that matter.

There's a lot happening, that's for sure. So on that note, If people are going to leave this is going to leave closed at Bloomberg surveillance. This is what I learned from the central bank meeting how to pivot. So on this note, I'm curious, you've been going for a long time.

One thing I was kind of surprised about is so much of the focus from us, you know, reporters here to talk about this event is on the short-term policy outlook. But the event itself is supposed to be discussing the longer-term analytical framework for monetary policy. How has the sort of emphasis of this symposium changed over time? Tom Honig, and I have a nice chat out front of the door here at the lodge, Tom Honig, reinvented. then to Jackson Hole and the Kansas City Fed. This started 40 years ago with Paul Volcker. They said, Paul, I know you hate conferences. You don't want to travel.

There's fly fishing. So Volker showed up. Literally, I kid you not, that's how they started this thing. And off the top of my head, 82. Well, it worked. It worked. And it still works to this day. But it had to get reinvigorated.

And Tomah Honig did that, his head of the Kansas City Fed before Esther George. But what Hanig had to do was police the modern media. And it's sort of been, you know, you see it, you come out of the lodge folks and there's this huge mountain range picture and there's this place where they take the photos of the central bankers. And off to the right, it looks like the Republican National Convention. You know, it's like three networks lined up everything but the satellite trucks. And the answer is the Kansas City Fed has had to police the short term analysis with papers looking out 30 years. Yeah.

It does seem, however, in different. years and obviously the chairman doesn't not every year most years the chairman gives a speech but every once in a while I think the chairman doesn't come back. Yeah I think that's right. I feel like 2013 or something maybe

didn't bother. But it feels like to some extent it's sort of the dial goes back and forth about how academic there's so like right now and last year it was probably more famous you know there was like that Powell gave an eight minute speech in 2022 which I've characterized as like

we're not here to make friends we're here to get inflation down This year, I think the speech was closer to maybe like 15 or 20 minutes or something like that, but still like not a particularly academic speech. But if you go back to 2019 or 2018 and Apollo speech was very much like talking about the different stars. So it feels like you'd sort of get a feel for the moment based on how academic that speech is. And sometimes this happens and it happened, I believe it was a druggie. It may have been trichet, but the moment here is the European Central Bank. And my conversation with Christine Lagarde is an example of the, urgency in ECB to September 16th and beyond, and a complete mystery of the European experiment,

it makes us look like virtual certitude what we're doing. It's insane. So when you come here, what are the goals? Like, what constitutes a good Jackson Hole for you and the surveillance team? Ask Tom Hottig is to get me out of a suit. He came up to me once and he said, can we lose the tie? What do you wear a bowler? I traveled. When I first joined Bloomberg, actually I wore a Bolo once. We interviewed the art director of Madman. And I wore a Bolo that was some endorsement from Mad Men or something. I can't remember. But at Jackson's whole, I travel like I always travel, which is as simple as I can because I used to travel nonstop for the company. And, you know, I started out like Audrey Hepburn and charade with seven suitcases and a hatbox

and then I got done to three suitcases and now it's like you get to one. I did ask Mike McKee, who we are about to speak to, actually, how many hats he typically brings with him to Jackson Hole. I was disappointed to hear it was only one. I imagined him, Audrey Hepburn-style, with like seven hat boxes on the plane. I didn't realize he's a Western man. He's from Colorado, so this is his natural...

No, no, I'm not. Joe, come on. Oh, did I make that up? He's milking every Western junket on the economic calendar. He's like, oh, I'm Western. He's like, this is my natural habitat. Yeah, he's north of here.

He's up by Jellystone Park in Idaho or someplace. He's here. then he'll go down to Arizona or whatever. He's got the whole mountain time thing. He's nailed it. Well, now we have to ask Mike about this next. It's true. Okay, one more question from me.

For people out there who are trying to understand Jackson Hole, what's your most important piece of advice? What should they be looking out for? The thing, and particularly for younger people, this is so true. Social media, podcasts, the blah, blah, I do doesn't cut it. you have to read the material. And the material can be books, obviously. It can be papers.

It can be longer commentaries. You know, what's what we did when we were kids? You read The Economist cover to cover. I mean, that's how you do it. There's no substitute for reading. There's just absolutely no substitute for reading. It's just, it's as simple as that. Did you read all the papers, Joe?

I hate to admit it, but Tom is totally right. And this is like, it's taken me like 43 years of my life to like acknowledge, like, actually, you kind of have to do the reading. And if you read an academic paper, you can't just, like for years, I just read the abstract and then skip to the end and look for a chart that I could screenshot and tweet. And I have to admit that there might be actually some good meat in the middle. The good stuff's in the footnotes. I know. All right.

My last question, you know, a few more months of this year, three Fed meetings before the end of the year. What are you watching for? Like, what are you looking out for for the rest of the year? Both from the macro and the Fed, like what interest you right now? The word I overuse, the TV people will say to me, why are you saying vector? No one knows what that is. I think a lot of people know what a vector is. It's a straight line, essentially, but in a two or three-dimensional space.

To the end of this year, with all that we've got, Joe, it's a massive three-dimensional space right now. I want to know the power of any of these vectors like inflation. I want to know which way they're going. I have no idea what the vector is on jobless claims. No idea at all. But I want to see established to the end. of the year, any belief in these vectors. You know, we make jokes about I'm so pessimistic.

I'm in the triple leveraged all cash fund. I have hugely... Anyway, sorry. It's a good bet. There was a good bet. There's a new offering coming out in February. It's forble leveraged. But the answer is, I have a huge optimism.

It's like Churchill said about America. We'll figure it out at some point. I have a huge optimism forward about our exceptionalism on technology, getting us into 2024. Well, Jackson Hole is definitely a place that makes you believe in American exceptionalism. Oh, 100%. 100%. I was DMing with someone earlier.

I was like, you don't even need to travel. America is so much. It's so nice. Tom, that was a blast. It was great. So much fun. Can I take a nap? Yes.

I'm Francine Lacqua, an award-winning journalist. And I've got a new podcast. Leaders with Francine Lacqua from Bloomberg Podcasts. I've interviewed everyone from heads of state to fashion icons about the news of the moment. but I've always been curious who are these people as leaders. I don't think there's one right way to be a leader. Make decisions. A poor decision is always better than no decision.

Listen to new episodes every other Monday. Follow leaders with Francine Lacroix wherever you get your podcasts. And now let's chat with our colleague Mike McKee. Mike McKeith, thank you so much for joining us. Happy to be here. Mike, really important question to start. So Tom said you're not really Western. and he's like, oh, Mike McKee.

Tom says you're a faux Western. He just pretends to be a cowboy when he's like. What's the truth? What's the real story? I will gladly take Tom out on the range with me. I grew up in Colorado, grew up riding horses. That seems pretty west. Come out here every year and help my friends on the ranch.

And so, yeah, I mean, I can cowboy. Okay. Because for those who have seen the pictures, Mike wears a cowboy. A lot of people like to dress up. But, you know, I think Mike is a little more credible than most. I think Mike probably has the best Jackson Hole wardrobe. Yes. I put it that way.

Yes. It's what I would wear. I mean, this is Jackson Hall. It's Jackson Hall. How many hats do you actually have with you? Oh, I only have one hat with me. I own seven. And how many times have you been out here? I don't know, have an exact count, but the first time I came was 1997, and most years between 97 and now I've been here. So one thing I didn't realize about Jackson Hole, I kind of assumed that, you know, media was invited and that media would have access to the actual conference. But that's not the case. They have a kind of weird. system. Can you describe that to us? Basically, it's one representative from each news media organization, and Bloomberg Radio, TV,

and unfortunately, you guys are lumped under that, gets one, and Bloomberg News gets one, and then the Wall Street Journal, the New York Times, et cetera. And so the media presence is there, but it's not huge. So we were talking about this with Tom earlier, but it feels like the dialed changes from time to time. And some years, it's, this is clear, you know, the interest is in something very academic. And then some years, it feels like the interest is in how fast is the Fed going to raise rates and over the next three or four months. How does, how does this year feel different or similar to past Jackson Hole's who've been to? Well, it's, it's maybe a little more in the middle. Yeah. What happened basically was, it was an academic, it is an academic conference.

Right. People think that something goes on in there that doesn't happen. It's academic, economic papers with econometrics, math in there, and they talk about things that might happen in the future in terms of economics. But the chairman always gets to give a speech. And in 2009, Ben Bernanke had something he wanted to say because this was just before they were going to start QE. And so he announced it here. And then the following year, he announced a round two because they still had the recession and the economic problems. And then that got Wall Street's attention. And then that got Wall Street's attention. And it became obvious to central bankers, to the chairman, that they could make some news or they could steer, because not much else is happening in August anyway. And so some years,

when they've had something to say, they've used this platform. Last year, Jay Powell gave his famous eight-minute slap the markets upside the head speech and got a lot of attention. So that focuses everybody's attention on this year. And he gave an economic outlook speech. I think he wanted to set the predicate for going into September, but we could easily go back to something anodyne next year. What was your favorite Jackson Hole? Is there one that stands out to you as a sort of seminal moment? I think probably the most interesting seminal one was 2005. Alan Greenspan was retiring, and they set this up as a sort of hagiography to Allen Greenspan, because remember we had had the great moderation, and productivity gains and the Fed had its soft landing.

And so everybody was here to praise Alan Greenspan, except for Ragiran, who was at the University of Chicago and then later the governor of the Indian Central Bank. He came here and said, you guys are all missing it. We are going to have a crisis because we've got this borrowing bubble. And he was sort of ostracized by the economic community and the people here until, obviously, he was proven right and came back a couple of years later. So I knew that Rajin had given that speech.

I didn't realize that was a Jackson Hole speech, and I certainly did not realize that it was essentially at, you know, the sort of vague Ellen Greenspan Roast or whatever it is. He was the skunk at the party. I hadn't realized the context of that before. Yeah, it was kind of fascinating because it stood out so much from what everybody else was saying because the John Clark Chichet was the ECB president at the. time came here to talk about how great Allen Greenspan was. Is anyone getting ostracized this year?

Is there someone we should be paying more attention to? I think this year everybody is kind of welcome at the table. Even Esther George, who has retired, is back to see her old buddies. And I talked to her. She said she's very happy to sit in the back and not have to worry about it this year. So something that we were talking about before is that, you know, compared to last year, obviously when I think, you know, CPI peaked around 9%. the Fed probably feels, and many central bankers probably feel better about things.

But there's a few different, you know, there's an uneasiness, right? Because no one really knows why inflation fell as fast as it did, given that we still have three and a half percent unemployment. And no one really knows why GDP growth seems to be accelerating in Q3, despite the Fed having raised rates to 5 percent. And then on top of that, you just have all these other things going on. What was the term that Tom used, sort of just other factors? Complexity.

Other factors. Vectors, I think he said. very time. Vectors matter. That was a terrible Tom King. You have a Tom dictionary somewhere. Can you talk a little bit? Like, you know, it feels like we're just in a period of, it's a cliche, but just like real uncertainty about what is going on. Well, two thoughts on that. One is that coming into this meeting, I talked earlier in the week with a central banker who said, this is a tough one for us because it was easy last year. Right. Inflation was high. We know what we need to say. We know what we need to say. We're going to raise rates. We're going to raise rates. We're going to. to raise rates. We're going to raise rates. This year we don't know what's going to happen.

And it's kind of hard to convince people that we don't know and we don't have a plan and we're going to be dated dependent. That was one thought. The other is if you remember in Jay Powell's speech, he said we're trying to navigate by the stars under cloudy skies. Well, you'll appreciate this, Joe, because you're a musician. It's a little bit like listening to an oldie, maybe an old Grateful Dead song and you remember the lyrics because you were around. That came from his 2008 speech, 18 speech, his first speech here when he talked about R-star, U-Stars, etc. And so I think it was Jay Powell's little inside joke to everybody about we don't really know where we are now. Wait, I have a media-navel-gazing question, which is why did this expectation that he was going to give some big R-star policy stance come about anyway?

Because if you look at the 2018 speech, he was always kind of doubtful about it. And of course, he is not an economist by training. And so I don't know where that expectation came from that he was suddenly going to give a very academic speech about how maybe the neutral rate was higher than we thought. I'm not exactly sure. The estimates of the neutral rate that the New York Fed did got suspended during the pandemic because the data weren't accurate enough to make any kind of determination. They brought it back late this spring in May, I think. And then you had some articles about it, that, and whether or not it was accurate in John Williams' view that we would see the neutral rate fall back to where it was. And then this week, the Wall Street Journal wrote about the R-Star debate and actually suggested it wasn't going to come down like John Williams, but it wasn't in the context of a Jay Powell speech.

But people somewhere picked up and ran with it. And then what happens is the Wall Street economists start writing about it because they're reading it in the paper. And then the people who are writing for the papers pick up the Wall Street economist things and it becomes this circular thing. And if you knew the Fed, you knew who's never going to talk about that because he doesn't like our star and because it's too imprecise. There's just no way to know. This is Tom Keane inviting you to join us for the Bloomberg Surveillance podcast. It's about making you smarter. every business day. I'm Paul Sweeney. We bring you complete coverage of the U.S. market open.

We cover stocks, bonds, commodities, even crypto, all the information you need to excel. And I'm Alexis Christophers. Bloomberg Surveillance also brings you the analysis behind the headlines. We do that through conversations with the smartest names in economics, finance, investment, and international relations. We do all this live each and every weekday, then bring you the best analysis in our daily podcast. Search for Bloomberg Surveillance on Apple. Spotify, YouTube, or anywhere else you listen. On the East Coast, listen at lunch. And on the West Coast, listen as soon as you wake up.

That's the Bloomberg Surveillance Podcast with Tom Keene, Paul Sweeney, and me, Alexis Christophorus. Subscribe today, wherever you get your podcasts. Bloomberg Surveillance, Essential Listening, each and every business day. I think that description of how the news works, which is like, hey, I saw someone else writing about that. And then the economist is like, well, I got to weigh in. And then we write about it is like one of the best descriptions of, I mean, we like, we all hope to avoid group think or echo chambers. But that was probably one of, because people like look at the media and like, everyone's, like, as if it's a conspiracy or like there's some we all get back together. But really it's just a bunch of people looking around at each other as like that person's talking about it.

Well, we better talk about it too. Yeah. And everybody was trying to figure out what to say about Jackson Hole this year because of the uncertainty. there wasn't any kind of obvious speech for Jay Powell to give. So the other thing I wanted to ask you is just on this question of uncertainty and why inflation has come down. I haven't heard anyone here utter the dreaded word transitory for obvious reasons, but it does feel like there is an element of the supply side creeping in here.

So in Powell's speech, for instance, you see him talking about maybe some of the supply constraints are starting to ease, maybe that's a factor. and then one of the papers that was presented was all about the supply chain and reshoring away from China and things like that. Do you see more economists and policymakers paying attention to the sort of real economy aspect of inflation? Well, I think everybody is they're looking for evidence that what they're seeing with inflation is going to last. I heard this phrase the other day, and I thought it was great. after a period of long COVID, we've got long transitory. It is a lot of supply side stuff that the Fed was right would go back down, but they got the

timing wrong. I just want to say, you know, you mentioned the Grateful Dead. So when I walked in, I got here on Wednesday afternoon, and there was like no one here. And in the lodge, I saw Chairman Powell, and he was chatting with CNBC's Steve Leesman. And I had like, I wanted to introduce, but I couldn't think of anything to say. You know, I was like, I don't. But in retrospect, I was like, oh, that's like. That's the Grateful Dead Caucus right there, because I think Leesman.

Leesman plays in a tribute band. Leesman is a deadhead. Powell is a deadhead. So I should have made some crack about it. And Steve, Steve's a competitor, but a friend. And he knows members of the dead. And he talks to them all the time. And so I'm sure he was telling Jay Powell, we could maybe introduce you.

Oh, I should have been my line, a deadline. That was your end. Also, I do think that staring at stars under a cloudy, guy would be like a great 13 minutes. So Robert Hunter, lyric. Instrumental jam, instrumental. So what do you, we asked Tom of this earlier, but you know, like for the coming months and the irony is, of course, this is an academic conference, but like 99% of the media attention is like, yeah, but okay, what does it mean for the next three Fed meetings or whatever? Like the most narrow version of the focus. But I'm going to ask you that in terms of like,

what are you looking for now? Well, I think we will probably see relatively restrained inflation probably rise a little bit just on base effects and things like that. But if we can maintain a sort of level inflation rate, you'll see the Fed on hold for September. We'll watch the inflation rate and the unemployment rate for November. And they might act then. The trick is going to be, if they don't think they need to raise right away, what do they say to keep people from thinking, we're done? If they're still worried about inflation possibly coming back, They have a December meeting, then they meet again in late January. Do they leave a rate increase as a live possibility?

That'll be the thing to watch for, I think. I have just one more question, which is, what's your favorite Jackson Hole moment? I just want to hear the Jackson Hole lore. Did Alan Greenspan once run into a grizzly bear or something like that? No, Don Cohn, who was vice chairman, was known as a slave driver on the trails, because when they would go hiking, he would just power up the trails and people had to follow him. But I think the most fun that people have had is when they've taken us out a couple times to a ranch for the Horse Whisperer, to see Horse Whisper training of horses.

And then, of course, there are those of us who slip away to the Jackson Hole Rodeo and have a great time there. You're taking me and Tracy to the Rodeo tomorrow. All right. We're all going to the rodeo. Thank you, Mike. I just thought of one more question. I heard a rumor that you have a plaque at the bar, the famous bar in Jackson. The million-dollar cowboy bar?

Yeah. Yeah, I try to hide that. No. But there have been some memorable moments there, but we can't talk about them on the show. What happens? As soon as we turn off the microphone, we'll get this. Yeah, there we go. Mike McKee, thank you so much for coming off.

Tracy, I love talking. I love our colleagues. You know what? Do you remember the old ESPN commercials? Did you ever see those where it's like... You're going to have to describe them to me. It's like they're walking through the ESPN grounds and there's all these like famous athletes

just doing stuff like filling up the coffee pot and like raking and stuff like that. I often feel like that working at Bloomberg. It's like I love getting to talk to our colleagues. No, it's absolutely fantastic. And I love hearing the old sort of Jackson Hole lore from Mike and Tom. I gotta say, we need to set up like a satellite odd lots office

here in Jackson Hole. For listeners all weekend, Tracy has just been talking about why can't we have a Bloomberg Jackson Hole Bureau like 24 or 7? I would move here in an instance. Tracy is like, I would live in a Bloomberg dorm, kind of like a Foxcon dorm, if it meant I could just be in Jackson Hole all the time. Joe, what's your favorite Jackson Hole moment? Well, I really enjoyed hiking. I really, every morning the view, I just like have not gotten. over like the view of the Grand Teton's behind the lodge here is incredible. I am looking forward to actually going into Jackson tonight and going to the silver dollar bar and trying to find Mike's plaque.

I'm looking forward to that. Should we talk Econ for a second? Oh, you don't just want to talk about Jackson Hole. Yes. Okay. I actually thought Powell's speech leaned a little bit doveish. And I've seen it. It's sort of like a Rorschach test, I think, for everyone's preferred policy position.

at this point in time, because I've seen some people say it was hawkish and others say it was dubbish. I lean towards the duffish camp. He's saying that policy is restrictive. I think they're going to have to see a really significant deterioration in the data to justify any sort of rate cut. Yeah, and I think like the market is coming around to your view. And like even a month ago, there were like more rate cuts priced in. And I think like, yeah, it's like it would be tough to make, or still the Fed is a long way from feeling like they'd be comfortable. stopping the hikes, let alone cutting rates. I think, like, you know, both Tom and Mike talked about it, but like, it still feels like

if there were a way to measure uncertainty, it would be high. It would be very high right now for so many different reasons. And I do think, like, you brought this up with Tom, which is that, like, things like supply chains, things like the effects of Russia's invasion of Ukraine, et cetera, like climate spending. I don't think this is, like, particularly comfortable ground for monetary economists who are sort of like, it's, you know, navigate these waters, but like, I think this is like kind of uncharted territory for them. Right. You're telling a bunch of economists that used car prices are now a

significant portion of inflation and so they all need to become experts in the used car market. Yeah, and they have to understand like a semiconductors are going to allow for the expansion. Like, there are all these sort of distinct variables. Yeah. All right. Shall we leave it there for now? Let's leave it there. This has been another episode of the Odd Thoughts podcast. I'm Tracy Alloway. you can follow me at Tracy Allaway. And I'm Joe Wisenthall. You can follow me at the stalwart. Follow our guests, Tom Keen.

He's at Tom Keene and Michael McKee at Mekone. Follow our producers, Carmen Rodriguez, at Carmen Armin and Dashel Bennett at Dashbot. And our special Jackson Hole guest producer, Sebastian Escobar, at Underdece. Follow all of the Bloomberg Podcasts under the handle at Podcasts. And for more OddLod's content, go to Bloomberg.com slash OddLod. We have transcripts, a blog, and a newsletter. And check out the Discord. Discord.g.g slash oddlots.

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