Bloomberg's Condon on Yellen Remarks: More of the Same (Audio)

this summer. Equities trim gains after Federal Reserve here. Janet Yellen signaled a willingness to raise interest rates. Speaking at Harvard University, she said she expects the economy to improve after a week first quarter, and a rate increase would probably be appropriate incoming months. We check the markets every fifteen minutes throughout the trading day. Dow Industrial leverage up twelve points, trading at seventeen thousand, eight hundred thirty nine.

S and p f i've funded up four points an eighth of a percent at two thousand ninety three. The Nazak is higher by twenty points, a gain of four tens of a percent, trading at one West Texas Intermediate crude oil down twenty two cents a barrel, four tens of a percent at s about gold down ten dollars fifty cents announced at twelve twelve thirty the tenure Treasury down six thirty seconds with the yield of one And that's a Bloomberg Business flash stock with Kathleen Hay on

Bloomberg Radio. Another interest rate increase will be appropriate in coming months. That's what fed A Reserve chair Janet Gallen said today at a really delightful one on one conversation with Harvard economist Gregory Manque. She was there for Radcliffe Day. She received the Radcliff Medal, and it's for people who

have made a big contribution to society in their field. Now, what she contributed today in the market is is a little bit of a pairing of the games and stocks which really weren't that much higher anyway, and a little bit of a selloff in bonds. Was this warranted? Did Janet Yellen say anything that we wouldn't have expected her to say? Well, let's ask somebody who was there covering

this for Bloomberg News are owned Christopher Condon. He's part of our Federal Reserve team based in Washington, d c. So, Chris, you are covering the day in and day out, how would you characterize her remarks today, Hello, Kathleen. Well, I would not say that we heard anything from her that was markedly different from what others on the committee has said in recent day, recent days, or week. But it's

entirely different coming from the chair. It's who she is in addition to what exactly she says, and and and so it is meaningful when you care Janet Yell and say that it will probably be appropriate in the coming months to raise interest rates. Chris, and wondering if you could comment about other aspects of the conversation having to do not only with her experience, but the economists that

have mentored her and her role at the Federal Reserve. Well, you know something that did come out, uhuh, and that come out when I and Rich Miller profiled her, is that a very important mentor Janet Yellen was the great economist Tobin, whom she studied under Yale, And she talked about his sort of uh inclusion of moral and social

concepts in his economic thinking. And that I think it tells us a lot or confirms a lot of what we feel about Janet Yellen when she when she does her research, when she makes policy, she also tries to apply what she called a moral compass, the moral compass that that Tobin applied. So I think that tells you something about Janet Allen as well. Oh, and how she praised Ben Bernanke for his masterful work to be innovative and and to save us from credit drawing up and

going into another great recession. Although I think she said and she meant to say into into another great depression when she is when she was praising Beam bern Ake, Yeah, I thought they were going to give Ben bern apiu metal. Well.

But but Chris, uh, you know, if you wanted to be nitpickyes, I was being It seems to me that, uh, maybe the reason we had a little bit of move in the market is people didn't realize that Greg manqu would be so direct with her and ask her about current economic conditions and about the meetings, and so they're surprised that she said anything. But she said another interest rate increase, another rate hike, I think she said will be appropriate over the next few months. Interesting that she

didn't say hikes. She said a hike right right right? That is that is potentially meaningful. It's very difficult to you know, we're doing a bit of a bit of crystal ball work. You know, what does she mean by this word or that word? Very difficult to tease out of that anything really explicit. But you're right, she didn't talk about the plural. She talked about singular. But but she she used the word in the coming months. I don't think any buddy would expect multiple increases in the

coming months unless you include that expending out to December. Um, that could be surprised. I mean, could the could the FED chair be maybe not in step with others who are urging a rate hike sooner rather later, even as early as June. UM. I think people are entirely unsure about how you know, we heard from a lot of FED presidents recently and and J Paula, Governor John pol yesterday. UM, and there was this question mark, how close are they

to the chairs thinking? UM. I think you know, she did signal something close to that today, But it was very much a conditional expression of wanting to raise rights, conditional on continued improvement in the labor market, continued signs of growth, even uh continued stability, and oil and the dollars. So there are a lot of caveats there that could make one thing. There is space between jan and Allen and some of the other effllency members who have spoken

somewhat hawkishly recently. CHRISI. She also spoke about a three to five year time horizon and the low level of interest rates historically. What if you can comment on that, Well, it's true for many reasons, what people see as the what they call the natural rate of interest or the neutral interest rate is historically low. Um and even once as said, condums like to say, once we get back to normal, at normal will be quite a bit lower, perhaps only uh something like two and a half three percent,

as opposed to historically uh well above three. And that speaks to the lower levels of productivity we're seeing in our economy and other factors. So it's she she does also think along those lines as well. Thank you very much for spending time with us. Chris Condon is Bloomberg's Federal Reserve reporter. He was speaking about Federal Reserve Chair Janet Yellen and her conversation at the Radcliffe Institute for

Advanced Study at Harvard University. Janet Yellen reiterating that she believes rates should be raised slowly, and she said that a rate increase would be appropriate probably in the coming months, if the economy and labor market continued to strengthen. You're listening to Taking Stock. I'm pim Fox, my co host Kathleen Hayes, and this is Bloomberg Radio. GDP grew less than one percent in the first quarter. Is that fast enough for Janet Yellen to get on board with a

rate huck in June or July. That's what we're gonna find out, coming up now on Bloomberg Radio.