Neel Kashkari Would Be Bill Gross's Choice for Fed Chair

things here with Alan Krueger. It's Professor Krueger Princeton. Let's just do two things here within the time we've got how's the minimum wage experiment going in Seattle? I think the evidence is quite mixed for Seattle. The way I read it, it looks like experience with the minimum wage elsewhere has not had an adverse effect on um minimum wage employers. You know, if you look at the Seattle labor market, it's booming, and I think that makes it a little bit harder to tease out effects of the

minimum wage. But uh, certainly in the aggregate, there's no sign that Seattle's high minimum wage has had a negative effect. Within this is the crushing reality that wait, if you raise the minimum wage, the wages go up above it, not way above it. But there's a sequential, almost bucket brigade effect. Is that still true? There's a spillover effect of the minimum wage there, there's no question about that. And that's one of the challenges for one of the studies,

which cuts off. You know, if people got a raised and got promoted and that was a result of the minimum wage, it makes it look like it was job loss. So I think that's a problem with one of the studies that's gotten a lot of attention. The other two things we need to know Freenzy and I'm gonna bring this in, but jump into your fancy please. I love it. Seventy thousand dollars a year, going up to eighty thousand next year. Prinston, Hi, dad, what are you doing? Oh?

I'm taking the economics of rock music? Are you kid me? Have you got any hate notes from parents about the economics rock music? This is uh the UH. I have to say, the best class I've ever taught. The students are learning so much, they're so engaged. What better way of teaching supply and demand uh than talking about iPods and streaming and um, it's a great way of teaching economics. I have to say, Yeah, And actually This is a

serious point. It wasn't Jay Z the first one to kind of cut the middleman and going straight to Apple music, right? I think it was on surveillance it's Z. Does this help explain inflation dynamics? That's actually question? You know what are the questions I got from the students is what's going on with inflation? Um? And Uh. It's it's a freshman course, Tom and um. It a mussel lot of writing,

which was the goal of the course. And I have been talking about disruption and technological change of productivity growth, and I think you know, what's going on with being able to buy products on the internet had put some doward pressure on inflation. I was in a meeting yesterday with General worst Span and she turned to me and said, well, so what do you think Krueger and Davos? And I said, you have to go to Davos precisely because of this.

The answer is technology is an overlay is evident large and it's a mystery, isn't it? It is? And there's really no better place to study it than the music industry. Think of all the technology that was, including the medium what we're using right now, radio and the role radio played in music. But go back to uh the gramophone and um, Francy can't do that. You and I can do that. I only listen well the students. The students didn't know what I meant when I said eight track.

So in the economics world, in Francine's world across the Atlantic, their short term, medium term, long term. In American economics, with maybe a historic simplicity, there's cheke out, medium term, there's a short term, and long term. In Chicago is just do more microeconomics, and in Princeton it's like do more history. Okay, I get all that. What does transitory mean? Transitory isn't in any of the textbooks I would suggest Transitory is in Chicago, transitory is in uh Princeton. When

Cherry Yellen says transitory inflation, what does that mean? Well, the way I interpret it is that we're not on the path that we think we're on, that the transitory detour, but we're gonna get back to the path that we think we're on. Is the X axis normal? Is it? Is it? Is she thinking short term? Is she's thinking long term? Or is it a new invention on the

X axis. I think it's a short term you know, Uh, my interpretation to transitory, which uh the term I probably used in some of my papers, is that we have shocks which we think are going to fade, and because we think the short term shocks, we can consider it as transitory. In Francy, that would be the two back to back press conferences mentioning wireless cell phone right, and I understand that it's transitory unless it isn't anymore, professor.

In the UK, we had a shock, and of course it's pound so you can argue that we have transitory inflation here. But in the US, how do we know that these phone bills will actually won't stay at the same level. I mean, it's it's kind of it could be more structural. Well, it could stay at the same level, but what's important is the rate of change. So we kind of absorbed the transitory shock from from prices dropping that that that's I think the argument that one could

quite plausibly make. Also, you know, the U S economy is pretty diverse, and as much as the Phillips curve gets criticized, it is the cases the economy gets tighter. Traditionally we see wage growth and we see inflation that's been more sluggish in this recovery, but I think the underlying dynamics are probably there. I think they've probably been blunted by changes in the labor market, by weakness of

labor unions in the US, for example. UM But to my mind, that looks like we're seeing some signs of that dynamics still still operating. If we see the tax overhaul that's been promised to come into something concrete. So I don't know whether we see the details, But what would that actually change. Does it change dynamics and GDP significantly or would that also be transitory. It's a good question. Um.

I think it could have lasting impacts. Um. Of course, it depends upon the shape of the tax changes what's been proposed. You know, if the state local tax deduction is eliminated, that's going to dramatically affects state local investment in infrastructure, hiring of of UM first responders, things like that. Other sectors which we'll get tax cut could potentially expand. Uh So I think the tax proposal and the broad

outlines could have substantial effects on the US economy. Also, I think we need to take into account in the long run, the impact than the deficit. If The proposal from the Trump administration adds two and a half trillion dollars to US debt over over the next decade. I think that's going to affect our borrowing costs. I think it's going to crowd out private sector investment. When we get to Jobs Day today, obviously it's hurricane adjusted, hurricane

aberration and the answers smooth out the moving averages? Do you do that? Do you take three months and divided by three? I believe it's a little too much math for me this morning. How do you adjust to a one off of hurricane data change? How do you How does it pro do that? Well, first of all, I think the first thing to look for is going to be signs of the hurricane. Um Hurricane Katrina had a major impact on employment. Uh, the tropical storm Sandy did

not have much of an impact unemployment. Surprisingly, So I think you look at certain industries that are more weather affected, and you look at regions in the country. But on a Matthew basis, Professor Krueger that I think the trip of the media is to take three months at averaging together. And I'm going to suggest a pro like uses no wait and get more data and then regress it out

to see where we are. So a guy like you can't go out one or two months, you gotta go out six months or twelve months of data and then see where the trend is. A. I right on that. Well, thanks for giving my answer that that's absolutely right, and I think that was an A. That's amazing. I went from a C minus up to a quality C plus. But you know what, I what I would say is, rather than averaging it, I would look for an ad factor and say, for this month, what is it that

we think we need to add to exactly? Yeah, And I guess if if you're in the markets, right, which is the difference between the markets and maybe the pros is that you need to take a shorter term bet because otherwise you're gonna lose money, right, professor, Whereas if you're an academic you can you can take the longer view. Do you believe that the way the markets are working

are are kind of distorting our economic views? Well, I think that's true to some extent, But the markets are also trying to figure out how the fetes going to interpret the job's report. And I think you know, many investors recognized that the fed is going to take a longer run view and try to see through the effects of the hurricanes. I have done this before with you,

and I don't like doing it. Professor. Ku're going to rip up the script and go to an exceptionally important monograph you put out years ago called What Makes a Terrorist? I read every word of it, every footnote. I was thunderstruck at the time of how you wrote about the people that do these terrible things. Can you take your historic work who becomes a terrorist? Where does terror emerge?

What does terrorism accomplish? Can you take that monograph and bring it over to domestic terrorism like what we saw in Las Vegas? Uh? Well, thank for bringing up the book, and you have good timing because the tenth anniversary edition is going to come out by the end of the year, and I wrote a new quite long introduction asking exactly the question you asked me. How the results hold up over the last ten years. Does this apply to domestic terrorism?

I would be hesitant to describe Las Vegas in the same language as we talk about other acts of terrorism, since we don't know the motives yet of this individual and this disturbed individual. Um looking at other incidents of domestic terrorism, both in the US and abroad. The domestic terrorists look like they're more drawn from the middle rather than the elites. They're not the most impoverished, the least educated.

They look like people who were on a path towards middle class, towards college education in many cases, and then they fell off that path and became radicalized. UM. So it's more pushed to the middle when it comes to domestic terrorism. Professor, how has social media changed terrorism in the lost enderts? Uh, it has had a profound effect. It's made it much easier for terrorist organizations to outsourced terrorism, to recruit, uh, to basically franchise terrorism U. UM. I

think that's changed the nature of terrorist attacks. H. They're less catastrophic in their scale um, and they're a little bit more sporadic. So I think it's had I think it has had a major impact. All right, how will it change in the next ten years? Is it actually impossible to study this, as you know, with hard data like economics, because it has more to do with emotions and allegiances. Well, that's a good question. It also has

to do with counter terrorism activities. UM. You know, I think fundamentally terrorist organizations are trying to pursue some type of a goal, and they're using the means that they think are going to be most effective for them in pursuing that goal. I don't think that will change, but I think the means that they have at their disposal could change as technology changes going forward. This has been wonderful. It's so nice to see you. Not after you sat

having coffee. Coffee in Venice, which was the last time You're finally back teaching. I was at a conference. Okay, well, we're never gonna forget coffee with Alan Krueger in Venice while we're in the sweaty confines of Manhattan. Allen Krueger, thank you on this job. Stay always in particularly important perspective on the American labor economy. He is with Princeton University and look for the new UH addition. I guess I should say what makes a terrorist? Now? In Bloomberg

Radio Bloomberg Television Worldwide, William Gross joins us. He is with Janice Henderson as we look at markets on the move. I know that on television, John Fare on the team have been doing the market movement today, but yields higher dollar, stronger Bill gross just simply is at morning in America, well at the early morning, the beginning to be morning here in Newport Age. I think to the extent that your question implies wages are moving higher and that you know,

the average wage journal will make more and spend more. Um, I think that's probably a positive. I note that the wages tom were revised higher in terms of the last month, as though we have a two point seven percent y o Y and perhaps had it higher. So I think that's good for American workers. Within this is a pretty good revisions. I mean we revised up I guess pre hurricane and that how does Janice Henderson and adapt and

adjust to the hurricane distraction? Well, you basically try and throw it out for a month in terms of the employment numbers. You know, we're negative asion mentioned in terms of the the job growth. So you throw that out. You look at the wages and you wonder whether or not that to some extent was affected by distortions. Probably not as much. And and so uh, this is definitely a situation here at Janice with analysis of the Fed.

Looking at the FED rate hike in December. You know, as long as financial markets ring firm, they certainly are as long as wages begin to rise towards uh you know, three percent, they certainly are. And I think the Fed is slam dunk in terms of raising rates in December. You know, John H. David Weston has given me great charts on Bloomberg Daybreak on television. Folks of weaker Japanese. Yeah, you've really got a jump condition to a weaker Japanese uh yen. And the idea here of a regime change

bill gross not. You know what you're gonna do on this Friday morning in Newport Beach, But is there going to be a regime change within your janus unconstrained fund because you're starting to get a little more lift and you're starting to get a little more wage growth. Yeah, I think, you know, unconstrained basically means that you're not constrained in terms of duration. You can do other things

things as well. Um, you know the beauty of the unconstrained fundness that can go negative in terms of duration. That is basically looking for higher rates and making money off of higher rates as opposed to vice versa. And that's what you know we've done over the past few weeks. Certainly in Germany, UM and now in the US. You

know we're approaching critical levels. I think Tom on that tenure for instance, now probably at two forty, I haven't seen it in the last minute, but now at to forty, that we're at a two forty critical level, a long term down trend line. Uh since the early nineteen eighties were interest rates have formed by twenty basis points on average per year, and we're there at two point four percent.

It basically means to me that, you know, if the economy is strong, if wages are intern up moved, then you know, perhaps we can break that trend line and move above to forty. But for the moment to me, technically that's where we stop, at least for this day. And this is so critical, folks. The idea of Bill Grows previously telling is two point even major of HSBC on this morning looking for Yeah, rates could go up,

but then a damper. Let's take the word transitory. Bill grows over from yelling and inflation over to William Gross and you gotta run a bond portfolio. Will these higher yields be transitory? And is it lower for longer? Whatever? That wherever that band maybe? Well, I think we are

lower for longer. There's no doubt about that, and that is what the Fed another Central Banks described as the neutral real The FED funds rate supposedly now around zero with inflation, you know, somewhere around one point five or so um. But but I think it won't be transitory. I think if in fact, we move above to forty instead of to six. They remember I said that interest rates are following by twenty basis points a year, and

at to sixty was about a year ago. But if if we move above two point four, oh, then I think there is a chance that this law term bull market in bonds is broken and that the bond investors should be on the defensive as opposed to the offensive. That's an exceptionally important statement you've heard there from Mr Gross in the over decade that we've spoken to us.

Let's dive into that deeper now, where I'm gonna quote the four digits two point three eight bill with that important statement of a regime change with a two forty print, how do we adapt and adjust? Let's start with the equity market correlated into bonds. Is the stock market linked into your two point four zero percent yield world we'll share. They're all linked. And you know, typical questions and responses, um.

You know, to those types of questions will say, well, we're okay on the stock market until we get to three percent on the tenure or four percent on the tenure. I think we're inexorably linked on a much shorter term basis. Um. You know, it's not to say that five basis points on the tenure will mean a hundred negative points on the Dow. But those things are connected. It's all connected. Um. You know, a recent last night article from The Economist

in terms of the overvaluation of all assets. You know, to my way of thinking is true. You know, the low interest rates everywhere, and they're negative in many parts of the world, still basically have distorted prices in terms of equity, in terms of commercial real estate, in terms of spreads on high yield bonds, etcetera, etcetera. And so yes, this is critically important on the tenure to define other

asset prices. And if we move significantly higher to forty to fifty to sixty, investors have got to understand that the connection is a negative influence on their asset holdings. Bill Then then one final question. You're when I want to come back and really address this important statement for Mr Gross folks on the idea of a regime, a

regime change at two point four zero percent. When we do that, will we do it with light paths of stability or will it be a lot more volatility in those old jump conditions it made you gray years ago. Which is it going to be? Bill? I think stability, because not many people will believe me in terms of

the long term downtrend. They look at other things. They'll look at the Bollinger band, and they'll look at the you know, the near term STA tests, stochastics and so um, and the FED will come in and try and talk markets down. So you know, I think it will be a gradual up move. But to my way of thinking, if to forty to forty five, don't let me hedge it here. But if five is broken, to me, that's a significant sign that the long term bull market is over.

We're gonna come back with Bill Gross. You just heard one of the most important statements I've heard from Mr Growth, Mr Gross and well over ten years, the idea of a regime change and the great moderation if we go above a two forty. I'm a ten year you know, give some wiggle room there. I don't want to nail him right down to that. But two point three eight up three basis points the tenure right now with the two year yield up again another three basis points as well.

This is absolutely critical the idea of a regime change off of a twenty year great moderation. We will do that with Bill Gross from New York from London this morning. This is Bloomberg with us William Gross of Janice Henderson. Bill, what you said in our last section is so important over this crisis and even before the crisis, it would be irresponsible if I didn't have you recapitulated. Let me be clear here, Bill. You go from a two sixty and if we get to sustain to forty yield, you

would suggest that breaks the Great moderation. Yeah, above two forty time. And let me explain that because it seems like a lot of hocus focus. Um. You know that the tenures started out at its peak and early eighties with the Vulcar around, And the fact is we can analyze this, look at it that has come down by twenty basis points a year to this point. It got a little bit lower a few years ago, of course, but that was below trend line. But the trend line

was moving down at twenty basis points a year. And why is that important. It's important because it allowed for refinancing of mortgages, allowed for uh more attractive purchases of homes, that allowed for corporate interest expense to go lower and profits to go higher. It was what the economy needed to sustain a four to five percent nominal GDP rate, which is really what the FEDS targeting. So that was

the magic number per year. The FED didn't mandate twenty basis points per year, but that um, you know, based upon their their FED fund decreases and their quantitative easy purchases, you know, is what it produced. Now they were down to two point four percent and two point three It seems to me that the question is can the economy

sustain itself without lower and lower interest rates? And that will be the question if it breaks two, for investors will be at the assumption that perhaps the economy can survive on its own with without lower and lower interest ry. I know Francine Lakwen London wants to get and really take this globally. He wants to get into your bill. But one more question for me, and then an ample time for miss Laka. This is profoundly important what you're

saying for the FED. And all I can think of, Bill is what you study to do in years and years and years, be careful what you wish for. If Janet Yellen gets a higher yield structure in a little bit higher inflation, what's the outcome that could mess up the central bank cart Well, the outcome is that they go too far in terms of FED funds. And this

is where I joined with the Neil kush carry. It's probably not the next FED chairman, but he has been cautioning for a long time that there's a yeah, there's a limit in terms of what the FED can do uh and and the economy can survive because on the other side of this argument, um into strates can't go too high because it's highly levered and highly levered economy UH with higher and higher interest rates, you know, runs into problems in terms of destruction and infrast rate cover

and the like and the like, and so um you know, a central bank can't go too high right now. Just to add one additional point on other central banks, are not of the same persuasion. They don't have the same stance in terms of raising interest rates, um like the FED will do in my opinion in December. So you have this this cushioning effect by the e c B and by the BOJ where they're putting in a trillion

dollars worth of money every year. And so that's why I say that the increase will probably be gradual as opposed to dramatic going forward. Good morning from London, Mr Bill Gross. Will the next FED chair actually be central bank or to the world or only to the U S? Well, Um, I would hope to the world the U S dollars still the global currency. And as long as it is, you know, there's no doubt in my mind that the interest rates in the US is set by the Fed.

On the short term side, you know, our important consideration going forward depends on the chairperson. Of course, I think Yellen has treated uh, you know, the fit as the global central banker, although she won't acknowledge that. But perhaps we'll get a different persuasion of someone like Cohen or um. I suppose even Powell, although I'm not a Powell advocate going forward, but they seem to be the choices that

the market is talking about. You deeput in charge? Well, I I uh, strangely enough, I joined Jeffrey Gunlock and this one it's not going to happen. I don't think I won't predict it. But Neil Caskari has got great experience in terms of the Layman crisis. We know that he's had experience at Goldmen, he's had experience at PEMCO. I know him for three years. He's a brilliant man. Uh, And he's got ideas that are a little bit different

than other central bankers. He looks at the market a little bit different from a structural standpoint as opposed to simply a statistical Taylor model type of rule. And so yeah, he's young, he's only been there for a year or two. He'd be my choice, but he's not. He's not going to read a choice, Franzy, And I'm confused, Bill, who's a brilliant man, Jeff Gunlock or Neil cush Carry. Oh

excuse me, I wasn't quite sure that. Okay, we've got Jeff Gunlock, and we've got Jeff Gunlock and Bill Gross in the same page, which is always good Benny would suggest Mr gross Sir, that you're talking your book, not that Mr Gunlock has ever been a challenge with the idea of talking his book. What kind of economy would Neil cush Cary give us, say, versus a rules based John Taylor of Stanford University. Well, that's interesting too, because Taylor is a potential choice, and I was looking up

on your Bloomberg system. There's a model there Taylor t Y L O R and you can put in your own inputs. It depends on what. It depends on what Taylor thinks is the natural rate of unemployment. And it makes a huge difference. If the natural rate of unemployment is five and a quarter versus four in a quarter, which it seems to be at the moment, then FED funds,

you know, should be a hundred basis points different. In other words, at UH at four in a quarter uh in terms of a nehru as we call it, and the tailor rule with some modifications in your system, you know, basically suggests that we're there. And in terms of where FED funds should be. So what would Taylor do? Uh, he'd probably follow the tailor rule and UH, you know, at the moment absent modifications, he'd probably raise interest rates a little bit. Cash carry I don't think would Mr Chris.

I'm looking at dollar yen so it seems to be retesting hundred and thirteen. A lot of technical less saying if it close is above, it looks like on fourteen it's next big level. Actually, if the Fed hikes UM in December, what's the hues the central bank that's going to have the toughest time. Well, it depends on if they're fixated on their currency, and I wouldn't deny that they are, although they don't speak to it. UM. I

don't think the b o J is moving. The b o J is the last central bank to move off of their stance. The stance at the moment is a cap on the tenure of ten basis points and basically flat for short term interest rates. They they'll stay there until inflation. Uh, you know sees the whites of two percent or or hiring. That may not happen. Uh. The e c B is changing, as we know, probably will

reduce quantitative easing. UM. So I I'd say the biggest challenge, as your question points out, is uh, just in terms of the b o J, the end will gradually weaken if they seem firm on the stance, and they, to my way of thinking, they will be Bill. One more question, if we could, you have been very generous with your

time this morning. If we get the sea change view of Bill gross above a two point four zero, with the idea of the great moderation being over, can you link that to your historic claim that financial repression will continue? Can you now say we may see an end two retirees financial repression? No, I don't think so. You know, what would it take on the tenure? Would it take three percent four percent? Uh, in order to begin to

compensate savers and not to repress them? You probably, Tom, And you know it's it's a it's a shaky definition in terms of repression. But you know, financial repression existed for thirty or four years after World War Two until the Volker era, and I assume that it's going to continue for ten twenty thirty years here as well. And that means that interest rates aren't going to keep going down, That's what I'm talking about, but they may not go up,

uh significantly. We will continue to be repressed. Savers will continue to get the short end of the stick. Bill, You've been most generous to your time and over the over decade that you and I have worked together. Thank you so much for this perspective this morning, Bill Gross, of Janice Henderson, there really without what I'm going to editorialize as a regime change and what if if we get out over sustained higher rates. That was exceptionally interesting.

Francying just a completely different tone given where we are, and as you mentioned, francing equity futures trade down. Is Mr Gross suggested that's that correlation. Yeah, it certainly is if you look at you know, some of the dynamics is currencies seem to be moving one way and actually futures, you know, don't not liking the job reports, So I wonder whether there's a little bit of dichotomy their tom.

It is always a well timed conversation, and today a more nuanced conversation with our National Economic Director Mr Khne. Of course, formerly with Goldman Sachs. Gary Cone has been I think, very transparent about the politics. Right now, here's David Weston with Home where we're joined by Gary Khne, director of the President's Council of Economic Advisers. Welcome back, to the program. Very very good for you to join us. So we've been reporting extensively on these numbers since they

came out an hour ago. And we've got the problems with the hurricane and affected the overall number of jobs, but you've got really strong numbers on unemployment sixteen year low and also on wage growth at two point nine percent annualized. Let's put these in the larger perspective for us. Has there ever been the case in history that we've had a massive tax cut with this employment situation, that particularly that will involve deficit spending at least in the

short term. Have we ever done that in this country? So so, David, thanks thanks for having me, and I appreciate the opportunity to be here. Look, we at the White House are very excited about the numbers. You're right, there is some some noise in the number because of the hurricane, and uh, as you said, you discount that noise out and you're looking through the numbers and you're looking at the wage growth and you're looking at the

unemployment number, which is the real bright news here. Look, I think what that the numbers are showing you, And the question you're asking me is you're asking about President and Trump's economic agenda and what he's committed to and what we're committed to here in the White House. We believe that the tax cut is essential to continue the economic growth that we've started. Yes, we've started some real

economic growth. We've been rolling back regulations, but we need to continue the economic growth we can need to continue the wage growth here in America. So do you have a reason to believe it will not continue? And and perhaps more pointedly, in history, we've always had deficit spending and tax cuts in in really fallow times, not in the robust times. Right now, we have a pretty robust time. Why doesn't the President say things are going great. We

don't need to really intervene, David. We've had a couple of good quarters of g d P, but we're still not on a sustainable level of growth that we should be and want to be here in the United States. We've been averaging about two percent growth. The President is not happy with two percent growth. He ran on a pro growth platform and he wants to deliver a pro growth economic agenda. We believe the tax reform is necessary. We need to allow American companies to compete on a

level playing field. Our taxes do not allow American companies, American business to compete around the world on a level playing field. Our corporate tax structure and our business tax structure is just too high today. Hey, Gary, No, when we talked to believes you're going to see sustainable two point nine percent growth. Okay, that that you're arguing for our tax cut. What what what I'm saying with the tax cum saying with the tax cut, No one thinks we're

gonna get sustained that either way. What do you say to that? We We completely disagree with that. We completely

disagree with that. We obviously think and and and if you listen to what Kevin Hassett came out yesterday, our ce A director, He came out and talked about the economic growth that we believe, we strongly believe we will have by cutting business taxes and attracting business back to America, attracting capital back to America, growing opportunities here for employees to be employed, creating wage more wage growth in the United States, and keep the sustainable system that we're that

we're at right now. We believe we can have a three plus percent growth with taxes and the regulation that we're in the reform that we're aft there. Now, Hey, Gary, I want to get your take on a Trump tweet. It was about the stock market. He says, the stock market hit and all time high. This is President Trump tweeting yesterday. Unemployment lois in sixteen years, business and manufacturing

enthusiasm at the highest level in decades. Do you really want a White House that's associated with record highs when you know hypercarious that can actually be And we've had like are the six of them for the S and P so far this year? Look, presidents committed to economic growth.

He's committed to a pro growth, pro job agenda. The stock market is representative of what his agenda is and the fact that we're having real impact in tying your success, your tying your success to what the stock market does. Come on, we're tying our success to jobs, job creation, better opportunities for American citizens. The stock market just happens to represent that you. You and I both know how

the stock market is priced. The stock markets price on expectations of future earnings of businesses, and those future earnings are basically representative of what they think businesses are going to be able to accomplish in the future. Gary, I just wonder if it is about the market, how this bleeds ultimately into the decision making out sweb the next FED chair. For instance, as an administration, you're sensitive to the way markets would take the next fix FED chair.

And it might be Look, we as administration are sensitive to everything. We're sensitive to all the policies. The President thinks about economic growth, and he thinks about middle class Americans every day, and middle income Americans every day, and hard working Americans every day, and how he can put them in a better position economically, how it can help improve their life. That's what the President thinks about every day. Gary, I want to know what you think about it most

specifically for the next FED chair. Are you sensitive to how the markets may interpret that individual in their policies. Like I said, we think holistically about everything. We're not myopic on any topic. We in the White House and we're along with the President, have to think about all of the topics together. That's our job is to think

holistically about everything. Well, let's think holistically about this, Um, did you think the next FED chair requires a PhD in economics to really got into the respect of those on the f MC. Gary. You know, I'm not going to talk about the specifics of a search that's going on right now. I don't think that's appropriate. So so very cold. I come back to your tax plan for a moment um. You say you're gonna get to three percent sustained growth. Could you just explain to us exactly

what the next tax plan will generate that? As you know well, economists say growth like that comes from two sources, and that is more people working, demographics, uh, and productivity. What will those taxes if you get your plan the way you want it, how will it either generate more people working or increase productivity? David, we couldn't agree with you more so. When you lower the business tax rate, on the paths through nities, on the corporate rates, we

make ourselves more competitive. We make it that businesses want to locate in the United States. When they locate in the United States, they have to hire labor. They go out and compete for labor, they hire people. We see wages increase because we hire people. We're also going to

see enormous amount of productivity in these numbers. Because as we build new new factories and we build new manufacturing a lot of it's gonna be technologically driven, So the productivity numbers are really gonna grow by the by leaps and bounds because we are a technologicy driven economy here, and we think that we can increase productivity dramatically by creating a tax code that allows businesses to compete here in the United States with their with other countries around

the world. Of the White House, the National Economic Director, they're talking about policy and prescription and also, of course always the politics of Washington. Our policy and prescription is to give you a data check. Dollars stronger yen one eight year old well under one seventeen one, sixteen ninety on the euro sterling one gold. I'm watching carefully now down eight dollars, make it nine dollars this morning. That's really something to watch or I don't have to chart

in front of me. I worked it up and try to give it out to radio first out on social tenure yield now rounded up to point forward zero percent. We have had a weaker tenure higher tenure yield, I should say over the last thirty minutes off the analysis of this important jobs report. Francine and Kuen London. I'm Tom keenan New York on Jobs Day. This is Bloomberg.

Thanks for listening to the Bloomberg Surveillance podcast. Subscribe and listen to interviews on Apple Podcasts, SoundCloud, or whichever podcast platform you prefer. I'm on Twitter at Tom Keene. David Gura is at David Gura. Before the podcast, you can always catch us worldwide. I'm Bloomberg Radio