Macro Dirt and Warren 3.145926

What do you think about yields, Warren? We just came out of the second FOMC meeting for Warsh.

It was sort of a hawkish pause, if you can call it that.

We just got zero inflation in the headlines today or sort of in line with expe- with expectations.

Where, what do, what's 314's kind of position on that?

So we've been in the camp that, uh...

So you have to always separate out, like, what do you want or what do you think is the appropriate policy when you're talking about the Fed, and then what do you expect the Fed to do? And those oftentimes are different things.

Mm.

I don't know how much people care what I think the Fed should do, right? I mean, but we spend a lot of time talking about it.

Our view is, though, just to set the table, we haven't...

W- I, I think a hold is appropriate.

I think that pausing pol- uh, holding policy here is good.

I don't think you hike into the face of a supply-induced inflation spike.

I, uh, I, I, I think that the labor market, even though we had a few months of stronger numbers, is not, um, it's not a, a very tight labor market.

It's definitely not a labor market that's producing inflation.

I think the Fed's dual mandate, it forces them to really only fight inflation when it's emanating from the labor market.

That's the way it's set up.

It's what I call a Phillips curve framework.

Phillips curve.

Yeah.

It's a Phillips curve framework.

So, you know, when you have a dual mandate, it im- it implies that inflation goes up as the labor market gets tighter.

But when you have the labor market getting modest, like, a little looser, and you have inflation going up because of an AI CapEx build-out and, and a, uh, an oil supply-induced spike, uh, that kind of creates a, a lot of tension in the Fed's mandate, and it creates tension on, like, how do you solve for this? It, it, it honestly calls for a time where you should be very transparent, uh, in explaining your reaction function, and that takes us to what the Fed's doing right now.

I don't think Warsh is the guy for the job.

That's been my, my view, is that he is, uh...

Hi- his, his idea that we don't wanna give forward guidance, there's some...