Reacting to PCE, GDP, and Kevin Warsh

**SPEAKER_1** (0:02)
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**Tom Keene** (0:27)
Tania Fukui has one of the oddest, most wonderful paths in economics of anybody out there. Darken the Door at Pennsylvania and Wharton years ago with their finance ability. She staggered to Columbia and then she went out to UCLA, which is one of the most twisted programs in the country. One of my heroes, Axel Leonovud was there. I mean, what you witnessed, I should say Tania Fukui with MetLife with us now, you're sitting there yesterday listening to this, and you think about Axel Leonovud at UCLA, or Clarida at Columbia, or Lawrence Summers' father at Pennsylvania.
I mean, how did you distill that, MBA speak?

**Tani Fukui** (1:16)
Yeah, I mean, that's ultimately what it was, right?
There was very little mention of economics, right? And this was the Bloomberg quote of the day was, deciding what not to do is as important as deciding what to do. But deciding how to not do anything was the problem here. Like he, I could have given you any number of economic rationales, reasons, thoughts, you know, develop theses of why not to, why not to hike. We didn't think there should be a hike. But how it was conveyed was what there was a vacuum of economic information there, economic analysis.

**Tom Keene** (1:54)
Are you optimistic he can escape what we witnessed yesterday?

**Tani Fukui** (2:00)
He's going to have to decide whether he wants to double down on his experiment here, of trying to be a next Alan Greenspan, or give up and say, hey, I need to communicate better. I need to communicate my understanding of economic data, what I'm doing, why I've done what I've done.
And I'm not sure he's going to give up on the experiment. And that's the concern.

**Paul Sweeney** (2:31)
Well, one could argue that his disclosure or lack of disclosure of information yesterday or process yesterday was consistent with what he said all along, which is, I don't need to hold the hand. It's not the job of the Federal Reserve to hold the hand of the markets. You guys look at the data, you figure it out, do the same thing that we're doing.

**Tani Fukui** (2:49)
The problem with that is that the markets are trying to figure out what the Fed is doing at all points in time or what the Fed will do at all points in time. And in the absence of a vacuum, we start analyzing, I guess, in green spans time, people analyze the fatness of his briefcase. That's what we're going to go back to do if he doesn't actually communicate. At the very least, two things, he didn't even give us backward guidance, right?
He didn't even tell us his rationale for what he did. And he doesn't say very much about his reaction function.

**Tom Keene** (3:26)
Tani Fukui with us, I heard that phrase a lot yesterday, reaction function, I had to look it up. Tani Fukui with us with the Metropolitan Life, working with Drew Madison, just absolutely spectacular. We're going to continue this conversation. And as she said, we've got to get to the next step. Guess what that is? The economic data we're going to see right now, the usual dump personal income, personal spending, those key PCE without question. Maybe Chairman Warsh knew at the press conference yesterday the data, what do you think, Paul?
Do you think he was front running the data?

**Paul Sweeney** (3:57)
I don't know. I can't imagine.

**Tom Keene** (3:58)
I'm guessing he did not, folks. But we'll see. Look at GDP annualized, 1.5% gets my attention as well, from 2.1 to 2.0. And now off of that survey, 2.0, 1.5%.
We say good morning to all of you as well. Something we're trying right now, bloomberg.com/askradio. bloomberg.com/askradio. We're rolling this out. Carol Masser had a tantrum, said, I have to do it first.

**Paul Sweeney** (4:25)
Okay.

**Tom Keene** (4:26)
So they did it last night with a tech thing with Mendy.

**Paul Sweeney** (4:28)
Did a great job.

**Tom Keene** (4:29)
And they got a huge response. Good morning around the world to bloomberg.com subscribers and terminal users who can now come in. I'm going to be honest, we're going to vet the questions, okay? You know, if they ask me, you know, do I really hate the Yankees that much? We're not going to do that question. Unfortunately, we got a wicked smart question this morning. This is from Andrew at Wisconsin.