Gardner: ‘Would Give the Fed Chair an A’ After Jackson Hole Speech

**SPEAKER_1** (0:00)
Let's go back to our macro discussions. We broadened out and welcome in our next guest, that's Rick Gardner. He's the Chief Investment Officer at RGA Investments. And there was a lot of hype around this speech. And I would say for the first time, maybe we got a little bit more information from Mr. Warsh, but I'll leave it pretty open-ended. What was your takeaway, Rick, from what we heard from the Fed Chair?

**Rick Gardner** (0:24)
Well, you know, 2026, there's never a dull moment. And so this speech was something that was much anticipated. And I think, for me, I got kind of what I was expecting.
He did commit to doing what was necessary to manage the inflationary pressure that we have, but he also indicated that he doesn't want to tell us what his interpretation of the market is. He wants to let the markets determine where things are going and then react. And so that is definitely a different tactic coming out of the Fed that we've seen in a long time.

**SPEAKER_1** (1:06)
And when you look at some of the things that he said, I thought some notable differences, and tell me if you agree or disagree, please, is that he did kind of quell, I think, concerns that he maybe was going to, even though he kind of said this already, immediately maybe scrapped that 2% target with PCE. It seemed like he at least committed to that again for now.
But also, that the primary and probably most important tool was short-term interest rates. To me, that was the one thing that really made the market react, and probably in a way that he was happy to see. What did you think of that?

**Rick Gardner** (1:44)
Yeah, I completely agree with that. I think he showed, on the short end, a commitment to really trying to let interest rates, if they have to, go up a little bit. But it's more about price stabilization. That 2% target is a target that they're looking at.
I think we saw the market flatten out, or the bond market flatten out, and then we saw US equities and the equities markets respond favorably to that speech. So yeah, I think what we got from this, I would give the Fed Chair an A right now. I think he had a good speech.

**SPEAKER_1** (2:29)
We also got some different, I guess, data inputs. Maybe they're not different to those who are really analyzing this from a macro standpoint, but at least we got an idea of sort of the functions, I guess you could say, or the data inputs that him and the committee might be focusing on are a little bit different. I think we got like a second derivative of basically the rate of change of earnings.
We got some different sort of private spending metrics. We got some credit spread stuff. Do you think it's important that he said some of those so that the market can start building some models and give the inputs that are at least sort of in the right camp for what Warsh and team are actually looking at?

**Rick Gardner** (3:10)
Yes, I think the task force initiatives, especially since he's talking about coming at things from maybe a little different perspective than his predecessor. I think the initiatives he's putting forward and some of the data points he's bringing forward really illustrate that it's not business as usual at the Fed.
They're looking at doing things a little bit differently. I think he wants to get consensus from the other Fed governors, and I think he's putting together a strategy to get that.

**SPEAKER_1** (3:44)
Yeah, and I think the market is starting to warm up a little bit, perhaps too, when we get him outside of the official kind of Fed meeting press conference too, he'll open up a little bit more, give more of his thoughts as he's not representing the committee. Thought that was a little bit maybe different today as well. But I want to ask you about some of the other inputs, which commodities of course are a big one.
Crude oil might be the biggest of them all. It's been kind of eerily quiet on that front the last couple sessions, we know that market is anything but quiet. How are you assessing the landscape sort of geopolitically and what that might mean for broader risk assets, perhaps monetary policy as well?

**Rick Gardner** (4:25)
Sure.
The fact that we are literally in economic warfare right now is something that we haven't seen a lot of, at least during my time. And so right now the situation in Iran, the rate of Hormuz and the impact of that on oil prices, while it really drove not only oil prices, but the overall market back in the first half of the year. What we've really seen is kind of a decoupling, where things have quieted down. We are in a financial war trying to kind of strangle out the regime, I think, in Iran. But it has kind of taken the temperature down to the point where oil prices, I don't want to say they've moderated, but we're kind of staying in a range, and the market seems to be focused a lot more on earnings right now than it does on those crude oil prices. But that's because we've been able to stay relatively in this range.