Lots More on What We Just Learned at Jackson Hole

SPEAKER_1 (0:03)

Bloomberg Audio Studios, podcasts, radio, news.

Tom Keene (0:10)

It's Gattabot Gattas and Grand Tetons Fishing. Our guest today, Tracy Alloway, catcher of the fish.

Tracy Alloway (0:18)

Let me tell you, Tom, I have strong opinions on Euro-nimphing, which we can talk about.

Tom Keene (0:23)

Very impressive.

Joe Weisenthal (0:25)

I had never heard that term until Tracy and I went fishing, but that Euro-nimphing is a thing, so Google it, folks.

Tracy Alloway (0:33)

Also, Finfluencers, people who are on Instagram, impressively catching fish, but also cheating in the way they're doing it.

Joe Weisenthal (0:43)

Have you done any fly fishing, Tom?

Tom Keene (0:45)

Very little. We had a close family friend who's had a research for Eastman Kodak, really important in the chemistry of developing all the films that we know and use, was Jack Penney. Basically, he worked so he could fly fish, and I would sit there and watch Mr. Penney-

Tracy Alloway (1:01)

Everyone has to work for something. It sounds reasonable.

Tom Keene (1:04)

Watch Mr. Penney make the flies. That's about as close as I got.

Joe Weisenthal (1:10)

I did a deadlift. One, two, three.

Tracy Alloway (1:12)

Hegemony.

Tom Keene (1:13)

Okay, go.

Tracy Alloway (1:16)

Barges.

Joe Weisenthal (1:17)

This is an after-school special, except-

Tracy Alloway (1:19)

I've decided I'm going to base my entire personality going forward on campaigning for a strategic pork reserve in the US.

Joe Weisenthal (1:25)

Where's the best squid ink pasta?

Tracy Alloway (1:27)

These are the important questions. Is it robots taking over the world?

Joe Weisenthal (1:30)

No. I think that in a couple of years, the AI will do a really good job of making the Odd Lots podcast, and people will say, I don't really need to listen to Joe and Tracy anymore. We do have-

Tracy Alloway (1:41)

Cha-ching. The perfect guest.

Joe Weisenthal (1:45)

Welcome to Lots More, where we catch up with friends about what's going on right now.

Tracy Alloway (1:49)

Because even when Odd Lots is over, there's always lots more.

Joe Weisenthal (1:53)

We really do have the perfect guest. Can we talk a little monetary policy?

Tracy Alloway (2:00)

Yeah, let's do it. One thing I'm curious to hear your opinion on, Tom, you've been at multiple Jackson Hole Economic Symposiums at this point. What's the vibe of this year, especially compared to two years ago, Powell basically stood up and said it might be painful to bring down inflation. Then last year, they were very much talking about progress on inflation and maybe complications from the real world economy. Then fast forward to today and it's all about the labor market.

Tom Keene (2:29)

I was in Davos a million years ago.

I was standing with three Nobel Prize winners and blah, blah, blah, blah, blah. One of their wives said after me, this is in the heart of the crisis. She said, Tom, they're just bewildered. I think there's a lot of bewilderment here about the future of America, witnessing the Milwaukee and Chicago and that what we got today, which I was blown away by the speech, I literally will go back and reread it. Trust me, I never do that, is this was a real statement by Powell about the bewilderment that's out there, and clearly was at this Jackson Hole this year.

Joe Weisenthal (3:11)

One of the things just on the pure macro front that struck me is right up top saying, we're not going to tolerate any more labor market weakness. I found that really striking, and you saw it in the market reaction. By the way, we're talking with Tom Keene of Bloomberg TV. It is just the Tom Keene, just in case I guess we haven't formally introduced him yet. But clearly, everyone expected that this speech would be used to announce something about the September rate cut cycle. But there's still been in the Fed chat over the last couple of weeks, still this seeming like not total sure, maybe this sort of willingness to say like, we could rise into the high 4 percent unemployment and that still be sort of consistent with what we're going for. I sort of feel like the market reaction was to like, no, we're done with letting the labor market weakness. He added another line, it's not just normalization. By some measures, the labor market is worse than pre-COVID, and you see that in things like the hiring rate. So I found that to be pretty powerful.

Tom Keene (4:14)

Yeah, as we talked about as we walked over here to your luxurious abode, it was incredible. The view is stunning. And I think that the unemployment rate chart, I think Colby Smith had it in the FT, it's curvilinear. It's what we call convex, where it's showing an accelerated tendency. And I asked any number of guests today, I said, OK, where's the number that hurts? I don't think it's 4.9% or even 5, 5.1%. I think it's much more towards 4.7%.