Tom Barkin on Why Central Banking Is on Hard Mode Now
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What is the context of the Jackson Hole event and why is Tom Barkin featured?
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Hello and welcome to another episode of the All Thoughts Podcast. I'm Tracy Alloway.
And I'm Joe Weisenthal.
Joe, we are still at Jackson Hole.
Yes.
By the time this episode comes out, the dust will have settled over the entire event. And we will have gotten well, we already had the speech from Fed chair Jerome Powell, right? And this afternoon, as we're recording, we're seeing markets surging. Um everyone, it seems, has interpreted this as pretty dovish.
Yeah, that's right. Uh Ann Wong at Bloomberg had an interesting piece, and maybe it wasn't as dovish as people think, but It felt dovish in the context of You know, a recent chat with Austin Goolsby. Recently he was concerned about uh he's starting to look at that inflation data a little bit more. Felt Dovish in the context of our recent episode with Kansas City Fed President Jeffrey Schmid. He too was talking about how, you know, things are maybe still looking a little warm on the city. You could be talking about
if you look at the Taylor rule, you know, you could argue maybe rates should be a little higher.
Anyway, I think we should continue on our our survey of as many Fed presidents as we can.
All right. Uh well, we do have the perfect guest on that note. Uh friend of the pod, Richmond Fed President Tom Barkin. Welcome back. It's good to see you.
Yeah, good to see you guys too.
Thanks so much for doing this, taking time out of your, you know, hiking and conferencing schedule. So we appreciate it. Why don't we just start with the obvious question, which is I guess you talked earlier this week that the balance between employment risks and inflation risks is really unclear at the moment. Pal seemed to err on the side of the labor market, right? He kind of chose to prioritize that. That do you think that's the right move?
Well, as you said, I've been saying I'm confused about everything. I'm confused about the labor market and the and the inflation side. And I think there's lots of people who come up with different views of how to weigh the risks. Here's the interesting thing. We've been hearing from uh businesses for a year and a half that they haven't been hiring. We've been seeing in the number that they haven't been hiring. They also haven't been laying people off. And when we get into the jobs numbers, they kept coming in at 130,000 a month or 120,000 a month. That seemed strange, but it was good news. I mean, there's nothing wrong with a lot of jobs. And so what we saw last month was a different jobs report with a jobs revision that now sort of says, hey, we're growing at 35,000 jobs a month.
That actually makes a little more intuitive sense to me, uh, given what I'm hearing in the marketplace. If you're not hiring, then where are the new hires coming from? And by the way, we'll get a revision, uh QCW in September that probably will take those numbers down again. And so if you're dealing with a 130,000 job market, that's a very different uh level of confidence than if you're dealing with a 35,000 or even maybe even a zero uh job growth market. And I think that's where the concern. comes from. What holds you back from being overly concerned is the unemployment rate, which still is at four point two percent. perfectly really good unemployment rate, you know, at any time in any cycle. And so, you know, how much how lucky do you feel?
Delphil, did you feel on the jobs growth? How much do you feel on the unemployment rate? The gap between the two obviously is driven by we're not having net migration, you know, into the country the way that we used to.
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Chapters
7 chapters
1
What is the context of the Jackson Hole event and why is Tom Barkin featured?
0:00–7:00
2
Why does Barkin say the balance between employment and inflation risks is unclear right now?
7:00–11:02
3
How does Barkin interpret the recent jobs‑report revisions and what do they imply for the labor market?
11:02–15:29
4
What are the main drivers behind the current inflation pressures, according to Barkin?
15:29–20:33
5
How does Barkin assess the Fed’s recent policy stance and the “restrictiveness” of rates?
20:33–24:15
6
Why does Barkin compare monetary policy to driving in fog, and what does that mean for future moves?
24:15–27:26
7
What does Barkin say about consumer spending trends and the potential for a re‑acceleration of the economy?
27:26–30:15
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