Just a couple of points, and then we'll bring in Bloomberg Steve Matthews for some quick analysis again Semester, saying that the FED hasn't seen any progress on inflation and that the central bank is still too accommodative. He said, there's always a risk when you're tighten to weigh up whether or not you're tightening too much or too little, But at this point, she said, the larger risk comes from tightening too little and allowing very high inflation to persist.
The big fear is it becomes embedded. She shrugged off a question about about slowing down quantitative tightening, saying the FED should stick to its balance. She she run off, let's get to Bloomberg Steve Matthews. Steve, your main takeaway from that interview, Well, there are a couple of things.
She was asked about the meeting in November, and while she would not commit to fifty or seventy five basis points as the hYP for November market car pricing, and obviously seventy, the overall tone of her remarks was very supportive of seventy five basis points. I mean, it was pretty clear from her comments that she viewed not saying
one way or the other. It's kind of a perfunctory thing because well, I want to go into the meeting and hear what other people are saying, and so it's like it's kind of a diplomatic way of some of the MC will refuse to commit in advance because they're listening at the meeting and want to hear what others have to say. But but the reality is the tone of her remarks was very much that we need to do more, we needed more now, and it was very
supportively seventy five. The other thing that really jumped out was the Laurento Smester is a long time Hawks. She worked for the Philadelphia Said before becoming president in Cleveland and was worked for very hawkish president. But she said that we are all well aligned on policy, meaning the entire POEMC And it's like, you know, she's not speaking for everyone else, but she's saying, basically, there are no hawks, there are no dubs right now. Everybody is pretty much
on board. And that was interesting. Yeah, we have seen some few cracks here as well, But I just want to get to what else she was talking about, because she did say that they were monitoring financial markets and saying that financial markets were functioning. Well, you know, how was she How does the FED interpret market action? Is the key point I'm trying to do with a quick question. I'm trying to ask, Yeah, that was interesting because you know,
she was saying markets are fine right now. We don't see problems. We don't see any reason that with market turmoil that would cause us to stop. And I guess the one takeaway from that is one of the levers the FED poles is by raising rates, they want financial
markets to react. I mean they want financial conditions to tighten, and that that means you know, a higher dollar and higher mortgage rates, and you know, presumably lower bond and stock prices, and there's a wealth effect through which, you know, the the economy is slowed. And so I think up until now they have seen these financial market changes and if anything, are placed by it, because that's part of their goal is to slow the economy, and they haven't
seen anything disruptive. The most disruptive thing obviously has been recently out of the Bank of England and what's happening in the in the UK. But that is not alarming enough. Right now, I have to say that Jenny Yellen said pretty much the same thing in a CNBC interview just a couple of hours ago. At the time, I felt like some in the market might think that they're asleep at the wheel, that they're not seeing that some of these things could be visiting US shores. But it seems
at least at the moment, they feel comfortable. Uh. And actually they're not really being very successful in in bringing unemployment up, are they. No. No, you have unemployment at three and a half percent, and you just had, you know, another fairly big jobs report, meaning that job creation ordinarily should be uh, to just account for the trend growth in the labor market would be around a hundred thousand,
and they're going more than twice that. So job growth is too high in their view, and economy is too strong. So alright, Steve, you have a lot more work to be done. That that's the key message. A lot more work to be done, and we are all on the same page. That's what she's been saying. Bloomberg Steve Matthews with us and again our chat with Cleveland President Lauretta Mester here live on Bloomberg Radio and Television.