Richard Clarida

But I think we're a long way away from any formal accord.

Well, first, we have to get the chair confirmed.

And that's not a foregone conclusion, right?

I think once he has a hearing, he will get confirmed because he's very well qualified.

But it may be a while before he has a hearing.

I think it's important to note that the PALFED in December, when they released those dots, those famous or infamous dots, the PALFED or at least a majority of the Fed in December thought at least one rate cut this year would be appropriate.

And I think eight folks thought maybe two rate cuts would be appropriate.

So I do think that when Warsh gets in, if the economic data play out the way that I and others expect, I think he'll be able to persuade the committee to continue to cut rates down to around 3%.

Tom, fantastic question because I do think that based upon what Kevin has said with his very voluminous paper trail over the last 15 years, I think that will be a discussion.

I think Kevin has expressed some skepticism for reliance on what he believes are flawed models, too much of a backward-looking approach.

What I would point out, at least during my four years,

is the PALFED and certainly the declarative vice chair was not handcuffed to the models, even though I developed many of them.

Well, and in fact, my first speech in October of 2018, I basically made the case that the economy appeared to have stronger growth potential and a potential for lower unemployment than the Fed models thought, and that the pal Fed should be willing if the labor market was continuing to blossom and inflation didn't appear.

to allow that to happen.

In fact, I think I said, you know, monetary policy is not a problem if too many people are working.

Right.

And indeed, the power fed cut rates in 2019 with an unemployment rate at a 50 year low.

So I think the Fed has probably been less handcuffed to models than Kevin's remarks might suggest.

But I certainly think based upon that, there will be a discussion of of the best way to incorporate modeling into that analysis.

They do.