As we have been discussing this morning, three regional FED presidents have reiterated and separate remarks today that curving inflation is their top priority. Joining us now more bigger pattern. To discuss this more, we have Steve Matthews, Bloomberg Economics reporter. So Steve, just to set the scene, summarize the tone for us from John Williams, Thomas Back, and Raphaelbustic. Well, the tone, as you suggest, is very much, you know,
the same from all of them. They're basically echoing what FED share, the FED shared Jerome Powell said on Friday at the Jacks and the whole conference, which is that they're going to do whatever it takes to to reduce inflation, and if it causes some pain, they're okay with that. And if it causes, you know, a period of below
trend economic growth, they're okay with that. And then you know, while you sometimes here FED presidents talk and you know, there's a lot of discussion from bed watchers about Okay, there's a doublish wing that's worried about employment, and there's
a hawkish wing that's worried more about inflation. Right now, it's really hard to separate the hawks from the doves, because everybody is pretty hawkish, and everybody is pretty united and behind the chairman, and so you know, we continue to raise rights and and that kind of sets the states for September. Yeah, and it's it seems tempting to think that the Bears are going to win this battle
in the equity market. And the reason is is that you know, the fit is is kind of defending its manhood here and and really is going to stay higher for longer. They've told us that, and they've rammed it home, but they've also admitted that there's a lag effect to raising interest rates, and so really this process puts us in a position of just giving up on any hope of threading the knee. They're not going to be nuanced. They're not going to be able to be nuanced about
this and try to achieve a soft landing. It's going to go. It's going to be a hard landing. So be it. Well. I think I think that tried. Although I think Neil cash Cars comments yesterday in the podcast with with the the Odd Lots Crew was really interesting, but perhaps you misinterpreted. I think that, you know, I don't think that the FED is definitely trying to lower stock prices. What they're trying to do is to have the investment community aligned with their view of what's going
to happen with rights. And what they saw in July was, you know, the the investment community was saying, the FED is pivoting, the Fed's gonna cut rights and in early next year or something. Some folks were saying as early as the first half of next year. And there's still rate touch that the markets are pricing in for next year, and they're pushing back against that. I take that point,
and Steve, I take that point completely. I don't think that it really addresses what I said, which is basically that you know, we're going to we're going to have to go through a lot of pain here because the FED is telling you it can't afford to be nuanced that that is correct, and they are willing to take some pain. Uh, you know, at least publicly. Uh. For example, the Richmond FED president was saying, was was asked about
recession and you know the risk of recession. He said, yeah, there's a risk of recession, he said, but that's we're not focused on that. We're focused on inflation and you know, we're not trying to raise the unemployment, right, We're just
trying to lower the inflation, right. And he may be, uh, you know, perhaps being diplomatic, but that's kind of the view from a lot of the Fed folks is that the goal is not really to raise the unemployment, right, it's deuced inflation um and they're not necessarily the same thing. Maybe it will be required that that unemployment has to go up, but they're not willing to concede that that's
the only way it's going to happen. And nuance a side though, the market is still going to try and play the usual game of guessing what the next move is going to be fifty or seventy five at the next meeting in September twenty What are the odds saying at the moment, what the odds of the markets are
saying seventy five is the is the high likelihood? It was interesting, you know, if you're looking for some good news out of the Fed talk today, Raphael Boston was that if we get good inflation news, maybe we'll go less than seventy five. So you know, and for that matter, the Richmond Fed President Barkin was saying uh, you know, he's not going to pre judge the meeting. It's all dependent on the data. We'll get employment report, uh in on Friday. In two weeks we get CPI. Those are
the two reports that are royally gonna matter. Yeah, it is really interesting, Steve. I think we probably can sneak this in. Do we need three prints in a row? Is that what we need from the Fed in terms of slowing growth? I think that, you know, you'll definitely need several good inflation reports in a row before they're going to start to you know, at least often the language or something yeah, yeah, to blink a little um, and who knows how they'll present that does Steve, great stuff.
Thank you very much for joining. Steve Matthews, Bloomberg Economics Reporter,