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This morning, President Trump calling for the FED to cut interest rates once again, saying it's quote not fed to America. After a soft CPR report out just yesterday, Former New York Fed president built out lely Rights in the following, The Fed has little choice when it doesn't know which way the rescue. It must wait for more information. Right now, any major move would have only a fifty to fifty chance of a positive outcome. Build joins us now for more, but welcome to the program. So why such a negative assessment of the position that they're in right now?

This morning, President Trump calling for the FED to cut interest rates once again, saying it's quote not fed to America. After a soft CPR report out just yesterday, Former New York Fed president built out lely Rights in the following, The Fed has little choice when it doesn't know which way the rescue. It must wait for more information. Right now, any major move would have only a fifty to fifty chance of a positive outcome. Build joins us now for more, but welcome to the program. So why such a negative assessment of the position that they're in right now?

Because they don't know where the terrorists are going to land number one, And too, they don't know what the effects of the terrists.

Because they don't know where the terrorists are going to land number one, And too, they don't know what the effects of the terrists.

Are going to be on growth versus inflation. So they're uncertain about two dimensions.

Are going to be on growth versus inflation. So they're uncertain about two dimensions.

So they can't really just sort of flip a coin and say, oh, we're going to worry about the growth mention because that could turn out to be wrong.

So they can't really just sort of flip a coin and say, oh, we're going to worry about the growth mention because that could turn out to be wrong.

So they have to sit and wait to wait for more information.

So they have to sit and wait to wait for more information.

I mean, if you're driving a car in a thunderstorm, you want to just put the autopilot that you would get through safely, so he pulled to the side of the road until the weather cleared up.

I mean, if you're driving a car in a thunderstorm, you want to just put the autopilot that you would get through safely, so he pulled to the side of the road until the weather cleared up.

And that's what the FED has to do. You know, the FED are going to be criticized for waiting. They have to wait, and because they are waiting, they're probably ultimately going to be late. But it's not the FED fault. I would behave exactly the same way in this in this set of circumstances.

And that's what the FED has to do. You know, the FED are going to be criticized for waiting. They have to wait, and because they are waiting, they're probably ultimately going to be late. But it's not the FED fault. I would behave exactly the same way in this in this set of circumstances.

But what's that definition of light? And what's your definition of light? Because he reflected on the move last summer and he said, in some ways we were a little light, and other people thought he was being preemptive. What's light to you?

But what's that definition of light? And what's your definition of light? Because he reflected on the move last summer and he said, in some ways we were a little light, and other people thought he was being preemptive. What's light to you?

I think, ladies responding only after you've seen a preticizable increase in the unemploying rate, because at that point it's truly hard to avert a recession.

I think, ladies responding only after you've seen a preticizable increase in the unemploying rate, because at that point it's truly hard to avert a recession.

You know, when I evaluate the risks.

You know, when I evaluate the risks.

To inflation versus the risks of growth, here, I guess I worry more about the downside risks of growth.

To inflation versus the risks of growth, here, I guess I worry more about the downside risks of growth.

But the FED can't put all their marbles that on.

But the FED can't put all their marbles that on.

That side of the of the equation because inflation has been running above the fed's target for five years. And if they're wrong and inflation expectations get unanchored, then it's a really difficult problem getting inflation back down. So I think they have to wait. Because they wait, because there will be forced to wait, They'll probably be late. Trump will blame the FED for being late, But rally is Trump creates the conditions that forces the Fed to have to wait.

That side of the of the equation because inflation has been running above the fed's target for five years. And if they're wrong and inflation expectations get unanchored, then it's a really difficult problem getting inflation back down. So I think they have to wait. Because they wait, because there will be forced to wait, They'll probably be late. Trump will blame the FED for being late, But rally is Trump creates the conditions that forces the Fed to have to wait.

Bill, I'm just curious going forward, how much you see the Fed unwilling to move even if the unemployment rate rises by half a percentage point, which is sort of the trigger that a lot of people are looking at. If you do see those inflationary pressures coming back, well, I.

Bill, I'm just curious going forward, how much you see the Fed unwilling to move even if the unemployment rate rises by half a percentage point, which is sort of the trigger that a lot of people are looking at. If you do see those inflationary pressures coming back, well, I.

Think if the unplay rate rose by above four and a half percent, that would change the feds calculus. They would be much more worried about the self reinforcing deterioration and the layer market leading to a full blown recession. So I think the unplaying rate is really the single most important indicator. If it stays around where it is today, if it's going to just sit and wait. If the unplayer rate starts rising quickly, then the Federal Reserve will start to.

Think if the unplay rate rose by above four and a half percent, that would change the feds calculus. They would be much more worried about the self reinforcing deterioration and the layer market leading to a full blown recession. So I think the unplaying rate is really the single most important indicator. If it stays around where it is today, if it's going to just sit and wait. If the unplayer rate starts rising quickly, then the Federal Reserve will start to.

Respond, But I think it's going to take some time.

Respond, But I think it's going to take some time.

I mean, the hard data on the economy shows that the economy is still just fine. I mean, the first quarter report was very misleading because it was mainly the fact that they couldn't count inventories properly to match up with the big surgeon imports bill.

I mean, the hard data on the economy shows that the economy is still just fine. I mean, the first quarter report was very misleading because it was mainly the fact that they couldn't count inventories properly to match up with the big surgeon imports bill.

If you were still on the FED, and you have been on the FED through crises and through really difficult times where the market was moving faster than the underlying economy, what data would you look at to get a real read on what was going on in the United States.

If you were still on the FED, and you have been on the FED through crises and through really difficult times where the market was moving faster than the underlying economy, what data would you look at to get a real read on what was going on in the United States.

Well, I think some of the bank the banks have actually pretty good realtime data in terms of what's happening sort of credit cards, and they're not seeing much of a slowdown at this point, you know, initially unplanted claims. It gives you a pretty high frequency look at what's happening to the labor market that doesn't show any deterioration yet of note, So I think you're looking at things at the margin that suggests that weaknesses that are starting to accumulate. Now what's interesting is the tariffs are actually starting to bring in revenue, so fiscal policy and right now is actually.

Well, I think some of the bank the banks have actually pretty good realtime data in terms of what's happening sort of credit cards, and they're not seeing much of a slowdown at this point, you know, initially unplanted claims. It gives you a pretty high frequency look at what's happening to the labor market that doesn't show any deterioration yet of note, So I think you're looking at things at the margin that suggests that weaknesses that are starting to accumulate. Now what's interesting is the tariffs are actually starting to bring in revenue, so fiscal policy and right now is actually.

Starting to become tighter.

Starting to become tighter.

And I'd also look at low income households because I think that's where the squeeze is going to be the mostative significant. So if you start to see delinquency rates on subprime all loans really start to hit up.

And I'd also look at low income households because I think that's where the squeeze is going to be the mostative significant. So if you start to see delinquency rates on subprime all loans really start to hit up.

I mean they're already high.

I mean they're already high.

If they start to head up even more substantially, that would be also a sign of a growing strain on the growth side.

If they start to head up even more substantially, that would be also a sign of a growing strain on the growth side.

But at some point the Fed will have to update their numbers. On March nineteenth, they put out these forecasts GDP at one point seven percent for twenty twenty five PC at two point a unemployment of four point four On June eighteenth, they'll have to deliver an update. When we get that update, Bill, what do you think it will look like relative to March.

But at some point the Fed will have to update their numbers. On March nineteenth, they put out these forecasts GDP at one point seven percent for twenty twenty five PC at two point a unemployment of four point four On June eighteenth, they'll have to deliver an update. When we get that update, Bill, what do you think it will look like relative to March.

I think I'll show somewhat slower growth to reflect the fact that terists have gone up more than they anticipated, and somewhat higher inflation to reflect the same consequence. So I think he'll be even a more pessimistic forecast in the sense that the FED will be missing both of its deal mandate objectives by a bigger magnitude. But they still want to have clarity on what's happening to terrorists and the impact of terrorists on the economy, and so I think it's going to take a while for that to be realized, and only then will the Fed be able to act.

I think I'll show somewhat slower growth to reflect the fact that terists have gone up more than they anticipated, and somewhat higher inflation to reflect the same consequence. So I think he'll be even a more pessimistic forecast in the sense that the FED will be missing both of its deal mandate objectives by a bigger magnitude. But they still want to have clarity on what's happening to terrorists and the impact of terrorists on the economy, and so I think it's going to take a while for that to be realized, and only then will the Fed be able to act.

One missing piece slower growth, somewhat higher inflation. What does the median dot do? Bill, because I think that implies what their reaction function is, how they respond to that kind of data mix. Do you think it changes?

One missing piece slower growth, somewhat higher inflation. What does the median dot do? Bill, because I think that implies what their reaction function is, how they respond to that kind of data mix. Do you think it changes?

I think that you can make the case that the Fed starts to cut rates in September and maybe we could still get three racuts this year, which would be consistent with the March set some rate economic projections. But obviously, as time passes and the Fed doesn't act, the likelihood is the number of median number of recuts starts to come down just because there's fewer meetings left.

I think that you can make the case that the Fed starts to cut rates in September and maybe we could still get three racuts this year, which would be consistent with the March set some rate economic projections. But obviously, as time passes and the Fed doesn't act, the likelihood is the number of median number of recuts starts to come down just because there's fewer meetings left.

Bill.

Bill.

I appreciate your time as always, sir, and enjoy your pieces on Bloomberg dot Com on Bloomberg Opinion, they form a New York Fed President Bill Dudley, There

I appreciate your time as always, sir, and enjoy your pieces on Bloomberg dot Com on Bloomberg Opinion, they form a New York Fed President Bill Dudley, There