PIIE President Adam Posen Talks Jackson Hole Symposium

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Lisa Abramowicz 0:52
Podcasts. Radio. News. Joining us now, who has been writing fire recently, Adam Posen of the Peterson Institute for International Economics, who has been pretty aggressively talking about some of the harmful ramifications from a new world order. But before we get to all of that, I want to get to how this is set up and how this feels very different than previous Jackson Hole meetings.
Adam Posen 1:17
Thank you, Lisa, for having me back. It's good to be back with you and Tom, and you're right, it is different. It's different inherently because it will be Powell's last speech as chair, and he's had quite the tenure, and there's always the combination now, it so happens, of his potential legacy speech, talking about the framework review, and the fact that the economic situation is genuinely unclear. But then, of course, there's this whole overlay of the Trump administration's variegated attempts to put pressure on the Fed in an overt way using personal attacks and using social media in a way that is unprecedented and harmful.
Lisa Abramowicz 1:56
I know that human nature is such that if someone tells you what to do again and again and again and you have somewhat of a rebellious spirit, you want to do the opposite. And I wonder how academics who get together and who want to do what they think is right are erring on the side of being overly hawkish in order to sort of thumb their nose at what they see as political interference and something that isn't their fault. Do you feel that in some capacity?
Adam Posen 2:21
I feel they're thinking about it. I feel that they're trying to be very self-aware of that. And there is a history, Lisa, of central bank independence, and Tom and I are old enough to remember this, that when the Bundesbank was like the leading bank setting policy outside the U.S., Whenever a left-wing finance minister, or for that matter, a conservative finance minister, would say you're too tight, the central bank would explicitly, Hans Tietemaier, would explicitly say, you yell at me, I'm not doing anything. So there is that element. But I think what Powell has said, what President Collins, who you just had, has said... is they are trying to make the right call on the economy. And in the end, I think, if anything, they're going to bend over backwards to not be hawkish today because they want to show that no matter what the Trumpies do, they're going to make the call on the basis of the economy.
Tom Keene 3:12
Adam Pozen with us for the Peterson Institute. We welcome all of you worldwide. Good morning on Bloomberg Radio and on Bloomberg Television as well. To call this for you in the limited time that we have, Dr. Pozen's essay in Foreign Affairs days ago sets the table for a post-American world. Dr. Pozen, of course, channeling the economist Joni Mitchell from 1970. It was good of you to end the essay looking at a parking lot with the lights turned out. In the 70s, the inflation was 6.8%. We've been running three-ish, four-ish, depending how Jason Furman measures it for me. The answer is, do you fear an inflation back to the time of Big Yellow Taxi?
Adam Posen 3:56
Yeah. Tom, thank you. I know you curate foreign affairs articles for your audience, and I'm grateful you've picked up on mine.

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