저자: ChristopherWaller · 외국인
요약 보기
Waller는 인플레이션이 2% 목표를 여전히 크게 웃돌지만 디스인플레이션 신호가 나타난다고 진단. 9월 FOMC에서 금리 동결을 지지하되 8월 물가가 되돌림이면 인상 가능성 언급. 고용은 안정(실업률 4.1%), 실질GDP 2% 내외 성장 전망. 3개월 근원 PCE 3.05%(2월 4.76%에서 하락). 금리 인상 여부는 8월 물가에 달림. 주식 상승에 따른 자산효과가 소비를 지지한다고 봄.
다듬은 글
Hello everyone. I'm Howard Schneider. I write about the Federal Reserve and the economy for Reuters, working from Washington. Thank you for joining this conversation with Federal Reserve Board Member Chris Waller. Chris joined the Fed in 2020 after being appointed by President Trump and has become one of the Fed's leading voices on monetary policy and the economic debates that inform thond .
Immediately before that, he was among several people President Trump was also considering for the position of Fed chairman. We will have a conversation with him . I hope few opening words to start the discussion. Chris, you have the floor. Good. Well, of the economic outlook and the implications for monetary policy toda remains August data shows that this movement was temporary, then there may be a need to raise the rate at the FOMC meeting on September 15-16.
Now, having described my view on economics , I'll aforementioned uncertainties, most of which put pressure on economic growth , real gross domestic product ( GDP) continues to grow remained strong, total real domestic private —grew by is due to the Amazon Prime Day sale in June, which negatively affected the seasonally adjusted data for increa should support consumption growth in the future.
On the business side, business investments related to AI deployment and related technological upgrades. High-tech investment , has risen to almost its long-term historical average. Some might ignored to some extent. ployment, . In a broader sense, one of the signals of continued of non-manufacturing firms firm, which is also in satisfactory condition.
rough July this year . This is close to, and probably even slightly higher than, estimates of . Wage growth has spread to and slightly below the median long-run equilibrium rate of FOMC participants. The number of layoffs and initial unemployment claims are also at low levels. I expect similar figures .
Given that backdrop tributing to a return to 2% inflation. More on that in a moment. above that targes monthly readings we saw earlier in the year, what struck me about the latest . As you probably know, I don't like to exclude certain categories when estimating PCE inflation, real, price changes. So, ignoring this factor, I think core inflation looks even better than last month's core index number currently .
The data suggests that the price impact of tariffs has in the last three months has chang as of July is 3.05% —a level that e reported inflation is an expected change in how measurement of non-market prices, which I expect to be implemented soon, could lower 12- month PCE correction. Now I see a certain risk of rising inflation.
Energy prices have risen again , when adjusted f expectations that inflation will continue to decline to 2%. I am also mindful of the fact that public opinion about future inflation may deteriorat have not seen should begins to decline. announc%. Tomorrow employment data to deviate significantly from what we've seen so far.
So inflation in August. , policy is currently very small acceleration in inflation to persuade me to support tighter policy. stall restart this process. nvey have taken my current political position. If I vote to hold rates, keep rates on hold because we willing to be patient to see if disinflation would continue.
The second way to communicate is to explain how future economic data will shape action function. Thinking about future data, I am making it known that if the data comes in a certain form, I will advocate for setting policies accordingly. The key point is that this is not a commitment to specific actions.
This is a conditional statement of policy. Different economic outcomes would lead me to advocate different political actions. In my remarks today, I outlined what would be needed for me to support a further pause, as well as what would compel me to support a tougher policy. By communicat on policy issues for different outcomes and factor this into their planning.
Is this response function ideal? No. But years of working as a professional economist and politician have given me a solid understanding of how policies should respond to shocks. In this sense, I consider myself like the umpire at home plate in baseball. The pitcher is trying to get the batter out of the game.
The batter tries to hit the ball or get the right to a base. Both want to play, but can't until they learn about the umpire's strike zone. The strike zone is a function of the umpire's reaction. If the ball flies here, it's a strike. If the ball flies here, it's a pain. Players don't expect a perfect strike zone from an umpire.
They just need to understand its parameters and have a guarantee that it will not change with each roll. Perfection is not a requirement for a good game. So, when it comes to my reaction function, I don't let perfection become the enemy of the good. The third and final type of communication is forward-looking indications, which define a path for the discount rate that is essentially independent of input data.
This type of communication is most appropriate when the discount rate is at the effective lower bound and additional signals to the market are needed. For example, in September 2021, it was clear to me that we needed to raise the rate to combat accelerating inflation. But since this could only happen after the asset purchases were stopped, I supported the forward guidance and clearly signaled the end of these purchases, paving the way for a rate hike in 2022.
When we told the markets that a rate hike was inevitable and would happen soon, market rates began to rise. By March 2022, two-year Treasury bonds had risen by 200 basis points, although we had not yet moved the discount rate from the lower bound . So, in this example, forward-looking indications helped strengthen economic conditions long before we actually raised the rate.
It is important to remember that these actions were taken when the discount rate was almost zero. I agree with Chairman Vors that predictive indications are inappropriate now or in many other situations . But when they are really necessary, I believe they should be used. I think I've said enough on this.
So, Howard, let's move on to your questions, which I'm sure will be more valid than most of my answers. Thank you, Chris. We'll move over there, into the chairs. Please, after you. Thank you again for the detailed and, as always, provocative speech . Let me start by saying that this puts a lot of weight on the CPI, and I'm sure the CPI rates are just jumping back and forth right now.
Let's clarify this a little, if we can. The 2% inflation target is set based on consumer spending. This works differently than the CPI. So, you need to convert the CPI to the ISI. Give us a little more detail on what you're going to look at on September 11th in this next CPI report to say, yes, it's going to be bad, or yes, things are continuing to improve.
So, once we get the CPI and the PPI every other day, we have a pretty good idea of what the PPI will be. So that's why we can focus on these two indicators, because they tell us pretty accurately what's going to happen. Now, for over a year now, I have been arguing that tariffs will exhaust their one-time impact on the price level and that this summer we will see a rapid decline in inflation.
The energy price shock at the beginning of the year created some uncertainty about this. But if we go back to January 2025, the core inflation rate of the ISV was about 2.3%. We weren't too far away, were we ? So if we get this decline that I was talking about, and it's almost a whole percentage point, we're going to start seeing pretty low numbers.
So I think that's what we need to start watching. As I said, so far energy prices have not affected other goods and prices. So I think my expectation is that next month we will get acceptable CPI and PPI numbers. Of course. Now people will accuse me based on individual data. I think you've already started doing that.
But what I'm trying to emphasize is that if you only look at the trend, you'll always miss the tipping point. Turning points are not reflected in the trend. This is the main idea. So once you reach what you consider to be a tipping point, you have to pay more attention to short-term data if you want to capture that moment.
In a speech I gave in July, I tried to argue that I thought we might be at a tipping point in terms of inflation. It could either go up, but I thought it would probably start to go down. Two indicators have arrived , they look exactly like this. I'm willing to sit, wait, and be patient, see if the third one comes, but if the trend changes, then know that it's time to act and raise the stakes.
So, regarding the CPI, will core inflation matter compared to overall inflation? Well, definitely the core, because, you know, the headline figure is usually too volatile to predict future inflation. This does not mean that we should ignore energy sources or food. I never said that. But in terms of where inflation is headed, we're trying to factor that in and just the volatility of energy prices this year.
This is a great example of why it's worth looking beyond the overall indicator and focusing more on the underlying one. OK. So, to avoid being too dependent on individual data, give us a benchmark for the monthly or quarterly CPI, and what level do you think would tip you in one direction or the other?
Yes. I mean, I'll just say: if the indicator turns out to be high, and what is " high"—it's up to you to decide. Then you say, "Okay, two percent isn't enough." This has happened to us in the past. We had a few moderate summers, and then inflation spiked again. I got burned on this, for example, in 2024.
So I don't want to give specific numbers, but if the data starts to point to a decline in the three-month figure, which is currently 3.03%. If we can reduce it to 2.8%, that would be good. Then you can start taking action. For now, just stay at your current level. Let's talk about the change in PCE methodology and the index that Chairman Powell mentioned in Jackson Hole last week, where he focused on the share of the PCE basket growing by more than 3%.
Yes? So, first, is this index successful? And second, what is the risk of acting in September, guided by the CPI indicator, if the PCE target may be revised downward two weeks later? Yes, that's exactly what I mean . We all expect that revision will bring this figure down. So, if this adds up to real data, we could see a significant decline in core PCE.
If it is 3.3% now, it will fall to somewhere around 3.1%. Then, if we get good data, this indicator will drop below three on an annual basis, and even lower on a three-month basis . Yes? So I'm willing to take a chance and see, you know, to paraphrase John Lennon: Give disinflation a chance, okay? We can wait for one meeting.
I just don't understand why we have to do this now. The mistake is that if we are indeed at a turning point and disinflation begins as we have long expected, or at least I have expected. You raise rates in a disinflationary environment. You're late, or, I mean, you're just too ahead of the curve, or you're relying too much on the past.
That's why I say: look, what is the price of waiting for one meeting? A rate hike of 25 basis points in one meeting will not currently bring the CPI down to 2%. Of course. So, let's just, I think, it's risk management. You want to take a risk to see if disinflation will continue, but I don't want to take a big risk.
Of course. So, in July, when you were talking about this, it seemed like your position was leaning towards an increase in the near term. It seems your position is shifting a little towards Yes. Because I mean, in July we saw about six months of growth in the core PCE index. Instead of decreasing, it was increasing.
So the trend was saying, "Um, things are bad, get ready to act." But we got a soft report, and then the question was, "Can we wait one session to see if this continues?" And I felt that it was, and it was confirmed. We received another rather mild report. Even, as I said , if you exclude non-market services, the indicator was about 0.12.
so okay, maybe let's see if we get another one like that , and just to make it clear to the audience, these non-market services are, for example, commissions to brokers for portfolios and things that depend on stock market prices. This is not about supply and demand in the economy. And it's also about volumes.
It's like saying, you know, if you buy more shares, you pay more, right? Their commissions, overall commissions, are increasing. So you're mixing up price and quantity when you look at this. So I , you know, welcome the efforts to somehow fix this. In the past, this wasn't a big problem, but for some reason over the last year it's become , I mean, these professional financial commissions account for almost all of this growth in non-market services.
So you're scratching your head if you let one thing control half of PCE, even though it's not even an actual price indicator, right? Maybe you just want to say let's put this aside. And I hate to do it, but this is one of those times where I think it's worth at least keeping an eye on it. Let me move on to a few other aspects of what you just said that relate to the discussion of inflation .
So, growth above 2% is good for the economy. This is above the long-term trend , right? So I guess the question is whether this is a non-inflationary type of growth, or whether it is widening the output gap to the point where there is some underlying pressure in the economy towards higher inflation because we are exhausting our productive capacity .
Yes. I mean, if you increase your production capacity, the potential output increases. So, this is not inflation, right? This is not something new that the Fed discovered. The Fed and research staff have been doing this forever. So when you take production growth, you look at the potential and assess where you are relative to it.
If potential is growing and approaching the actual level, then the output gap, or excess demand, is not so bad. Not so bad. So you can observe disinflation even with fairly good growth. So, do you think the potential is growing now? I think so. We have been watching this for the past few years. We saw growth increase.
Productivity has increased for many reasons besides AI. This started before AI. AI will probably do this at some point in the future . I think this is amazing technology . I watch my wife write code all day long. It's just incredible what she can do with it . What is her best program at the moment? What?
What is her best program? I can't tell you. I don't want to commercially promote what my wife does. Because I'll probably get arrested. But I just watch what she does with it , and I'm really fascinated by what she can do with coding and stuff. So I think this is... I heard a joke recently that, to paraphrase Robert Solow, we see AI everywhere except in corporate earnings reports.
Okay. Right. You know, we think that at some point it will manifest itself, but it hasn't manifested itself yet. Another aspect: you mentioned that you don't think the current monetary policy parameters are too restrictive, but they are a bit restrictive. You and the Fed Chairman seem to be united on this issue.
That's what he said at Jackson Hole. The current policy does not seem to restrict anything. So this is a strong opinion that would seem to indicate that perhaps the stakes need to be raised. Yes. I've said this before. There is a difference between financial conditions on Wall Street and financial conditions on Main Street.
Mortgage rates aren't low, are they? Car loans are not low rates. How many ordinary Americans follow credit spreads and other corporate bonds? They ask: what does this give me? I mean, I don't understand it. I have made this point before: what appears to be soft financial conditions is actually just a reflection of stock market prices.
I'm looking at the macro data, and that's what interests me. If I see that the housing market is in decline, and new cars have become almost a luxury item, not something affordable for the average family. These are not soft financial conditions, and most of the shares are not owned by the bottom half or even the bottom three- quarters of the population.
They are concentrated mainly in the top 25 % of income levels. So given this differentiation of outcomes among households, do you think that the current level of policy could get us back to 2%? Yes, okay. I think so. At least, let's try and see. As I said, I'm not going to say " let's wait until next year." But let's just wait and see if there will be any improvement in this matter.
Let me move on, if I may, I think everything is pretty clear here. Okay, great. I hope so. In any case, bond markets, rising yields . Let me start by saying, I know you're not in the business of fiscal policy , but as a less knowledgeable person to a more knowledgeable person, taxpayer to taxpayer, what do you think about the U.S.
national debt right now? Because I want to provide a little context. Everyone in your position always says: $40 trillion , 6% debt to GDP, three trillion dollars a year spent on interest alone. This is an unstable situation. “Unsustainable” is a strong word, but it is also somewhat empty, because it begs the question: in what timeframe?
So, are we on the brink of an abyss or not? And if not, where is this boundary? Regarding fiscal policy: you have about a 6% nominal deficit, half of which is interest. I don't know the exact numbers, so I don't... Yes. But that means you have about a 3% structural deficit. You can't do this all the time.
You just can't . So it's not so much about the percentage, drop the percentage part. The point is precisely in the structural part, without taking into account interest . It's like you're just spending more than you earn, not including interest payments. Most calculations show that you can't do this for long.
Does this mean you will fall into the abyss? Maybe not. You can see what we're seeing now: yields are starting to rise because people are saying, " Look, you have to pay me more to hold this debt. I'm not going to stop financing it. It just has to earn me more." And this is what I argued is likely to start happening.
So profitability is likely to increase due to fiscal factors and AI competition for funds. Remember, when AI was just starting to develop, they used their own internal funds. They didn't take anything from anyone. Now they have entered the corporate bond markets, competing with the US Treasury. So I think this is a factor that is pushing yields up.
And the last thing that no one focuses on is that interesting research has emerged . US Treasury bonds, as the reserve currency and safe liquid asset in the world, had a premium in the form of a higher price and lower yield. It was interesting work by Hannah Lustig of Stanford Business School and her colleagues that this award disappeared.
Yes? It is negative now. That's why. Yes. So that's another reason. Shield and I gave a speech in Iceland a few years ago about the neutral rate, and my biggest concern about the rise in neutral rates was precisely that there is no longer a premium on safe, liquid U.S. Treasury bonds, and that forces me to raise my estimate of the neutral rate, which means higher policy rates at any given level of inflation.
Maybe you're not as strict as you thought and all that. Yes. Yes. Yes. So, you mentioned math, so let's talk about math for a minute. Mathematically, how difficult is it for the US to get out of the debt hole through growth? Well, it's not that difficult if you can reduce the structural deficit closer to zero.
I mean, this is the best idea since tax reform, right? As I said, all I'm saying is that a 3% structural deficit is unsustainable. How to fix this—I don't have any advice. Of course? This is not my job. And it's Congress' job to figure out how to fix this. I'm just curious how these lines intersect when looking at growth alone.
Yes. I mean, first of all, it's about nominal growth. Remember, the debt-to- GDP ratio is debt to nominal GDP. And I, you know, the bad news of this argument is that you're doing it because of inflation, right? Which is what the US government did after World War II. They "inflated" and thus got rid of a huge part of the debt.
This is not the best result. It doesn't make people richer. You want real GDP to grow. But, you know , that's exactly what I'm saying. If your deficit is growing by 6%, and you have growth of even 3% and inflation at two, this ratio is growing. It's still added to it. It continues to increase it. It's just arithmetic.
It's just arithmetic. There is nothing political here. It's just math. I mean, let's talk about profitability in the world, because there seems to be some...you mentioned it a little bit, but let's go into more detail . You know, there's a kind of positive story, right? What the Treasury Secretary and the Fed chairman seem to be leaning towards is that all this is the result of a sudden influx of investment ideas.
There is real competition for capital directed towards productive purposes, which means that there will be competition for available funds, and as a result, profitability will increase. The bad news scenario is that demographic challenges, the breakdown of the global order and the higher inflation that results from that, and the fiscal deficits that exist not just in the US but almost everywhere in the developed world right now—all of these are piling up.
And it will be a difficult adjustment, which is inevitable. So far, it doesn't look like the Fed will lose control of inflation. Inflation remains stable, but what do you stop at: that "it's great because people are investing in the business" or that "life is too expensive and we are driving ourselves into a hole" ?
Yes. So, in truth, in any standard model of economic growth, without going into detail, real interest rates are determined by two or three key factors. One of them is population or labor force growth. Well , it's zero. This will lead to lower profitability, right? Not to her growth, right ? If you really have good growth, then you will see higher profitability rates because firms can afford to pay higher real rates.
Products are their investments, they are more profitable, and they can afford to pay higher rates, and that's a good indicator of growth as to why real rates are rising. The third factor is what I just said. There is a return on the convenience of this debt, and it is disappearing. Well, that will raise the stakes.
This is not a very good story. It's, well , kind of a bad story if you lose your " convenience protection." So, that's part of the story, but you know, I'm not convinced that's the whole story. There are many other factors. But there is still, you know, the risk of a term premium. If you look at this growth, it's all real risk, term premium, right?
So that means investors are saying: I'm a little unsure about where the world is going. I'm a little unsure about the dollar's status as a reserve currency. Maybe I need to be paid a premium for ownership. This, again, is not very good. But the growth factor is certainly part of it. True. So, some is good news, some is bad news.
And the fact that you can somehow control it is probably a bit on the bad news side, right? To fix some structural problems. Yes. If you fix some of them, you can achieve a lot. True. So, let me ask you about some recent action in the Treasury bond market. I think the Treasury Secretary and the Chairman had to listen to a lot of criticism in Asheville at the G20 about what's going on and also about the recent Treasury interventions, the yen, and also the reverse repurchases.
Did any of this surprise you ? You know, what the Ministry of Finance does is the Ministry of Finance's business. You know, mind you, as an economist, not a politician, I've never believed that such short-term innovations bring much benefit. But you know, if you want to do them, it's the minister's prerogative whether he wants to do it or not.
Of course. Are there any implications for the Fed? Well, if you think these interventions had a very short-term impact on long-term returns, then no, absolutely none. True. If they want to correct it and it somehow works, then maybe there is some correction in the conditions they corrected, and that is good too.
I have no problem with that. So, let's move on to what the chairman mentioned in Jackson Hole about his preference for getting unfiltered views of the market. And if you have a Treasury that is more active in this , you could argue that it's a market distortion, right? So, it's about, uh, and he mentioned it too .
This brings us to the issue of communication. This is a kind of " mirror maze" problem, right? Are you seeing a pure market signal and an undistorted price, or are you in a situation where the Fed is talking to the markets, the markets are talking to the Fed, and you're not getting a truly objective view of the world.
So, uh, is this a problem now? Are you in this cyclical world of the "mirror maze"? Well, I'll give you an example to set the stage: as many of you know, I lift weights. Yes. And my wife is my weightlifting coach . Of course. This is an application . Yes. And the first thing she told me when I started training was to not look in the mirror.
And I asked: why not? She replied: because if you start looking in the mirror, you'll worry more about how you look than what you're doing. So don't look in the mirror. Focus on technique, do the exercise, and don't worry about how it looks . I'll tell you what it looks like. So this is similar to the situation with the " mirror maze" problem in communication.
Just don't look in the mirror. And if you noticed, I said almost nothing about financial conditions in my speech, right? I'm looking at macro data. Macrodani is not part of the " mirror maze". So, if you focus on your work and the variables that really matter, you can look at the financial market as an indicator of what's happening.
But ultimately, our mandate is price stability and full employment, not financial conditions. That's how I've always avoided it—I just look at the macro data. So just don't look in the mirror. By the way, former Vice Chairman Rich Klar, I think, kind of had the same explanation a few years ago. He wrote about this and said that it's not a problem because you can compare what you get from the markets with survey data, econometric data, a lot of information to see if they agree with each other.
So, in your speech today, you laid out very clearly what you call your response function. The chairman at Jackson Hole said, “I’m not going to do it because it can’t be perfect.” You're using a baseball metaphor to, well, say that, actually, it doesn't have to be perfect. It should be, you know, just parametrically outlined to establish general boundaries, right?
So, what is the optimal way to do this? Yes. Well, as I said, part of it is that if you take any standard macro market model for forecasting, you need to have a rule of thumb for how the Fed is going to act, otherwise you can't solve the model. You won't be able to make a prediction. So I think every forecasting firm on Wall Street has some kind of built-in reaction function.
And there are many different reaction functions that you can use, but the main thing is that you want them to be consistent in how they respond to events. If inflation rises, you raise rates. If GDP is growing, look at inflation to understand whether it needs to be compensated. If unemployment rises significantly, rates may have to be lowered.
These are just the basics of economics. You don't give any weird advice. That's what I mean by reaction. I'm just using economic theory to understand what I should do as a central banker if unemployment exceeds its long-run maximum, or if inflation starts to rise or fall. So, it is in the exact quantity that sometimes lies the imperfection.
I can't necessarily tell you what the exact number is , but at least I can give you a qualitative indication of the direction things are going to go, right? Because it occurred to me that you're not just talking to the financial markets, you're also talking to the public. Shaping public expectations.
So if we all act blindly on this issue, it's probably worse than if we had some awareness. Yes. You want to have a certain, as I said, that's the point of a strike zone. Yes. She is not perfect. It is not, and it varies from judge to judge. Right. Right. Right. But the players just say, " Just tell me what it is." "I don't care which one, the main thing is that I know, and then I can continue." Right.
So, is the head, as you called it, is the head now allowing the perfect to get in the way of the good. What do you think? Well, I think that's exactly what he said in his statement. You know, it's like : I'm not going to provide it because it's so complicated that we can't really do it. OK. I mean , that's good, but I just have a completely different perspective on it.
Yes. So, let's talk about communications more broadly, because there was, and I think you can look at it from two perspectives. more than Kevin Warsh, more than the head. Some say that too much chatter becomes too confusing. One person says one thing, another says another. However, if we go back to the 1980s and 1990s, there were really significant political battles in the US over the transparency or secrecy of the Fed.
There were bills introduced, there were attempts to expand the use of the Freedom of Information Act (FOYA), all of that, and since then the trend has been to say more, not less, right? Quite consistently. So, have we reached a point where you think this movement towards transparency and more information has reached a point of diminishing returns, or is that a problem?
Again, I studied academic literature, the 80s and 90s—that's where it all started. Yes. It's like, why do you want to surprise people? What is the benefit of this ? I used this example for years when I taught intermediate-level macroeconomics . If you were the state department of transportation and you were going to close three lanes of a highway due to construction, right?
You can do two things about your communication. You can say nothing and let people just drive into this construction zone and get into trouble. Or you can put up signs in advance, saying: " Look, construction is coming." " Look, alternative routes." Which of these two worlds do you want to live in? I think we would all prefer to have information in advance to make better decisions.
So that's my take on communication, I don't want to call it " forward guidance," but it gives some idea of what's ahead so you can make any important decisions. So, I mean, if we expect this from the state department of transportation, I think there would be nothing wrong with expecting this from the central bank, right?
Do you think that in this era, when suspicion is the typical mood, it's a good idea to step back and say, " Listen, we're better off." " Trust us if you'll just let us stay out of the way." Well, that was the old model, just, you know, never explain, never apologize, right? Oh, good luck in your return to the other world.
It just doesn't work. and it is not a good model for thinking about economic well-being . So I try to communicate as best I can so people can make the best decisions for themselves . Surprising people has never been my goal when I think about certain things. Now, that doesn't mean you won't be surprised.
Sometimes it's just inevitable, but my goal is not to say, " Look, whatever I do, it's going to be a surprise." Um, let me sum it up . We're running out of time, we're almost at the end, but in terms of working groups, Fed Chairman Warsh announced five working groups: communications, balance sheet, AI and productivity, inflation strategy , and I forget the fifth one.
Ahem. or something like that. Yes. Yes. So, many of these issues have already been discussed a lot. Data was the fifth point. Many of them are quite new. You know, AI and productivity—this is something that's coming into focus for the first time . in a quite acceptable way. Which of these topics do you think has the greatest chance of producing quick results in the form of actionable recommendations from various committees that the FOMC could adopt so that in six months or a year people will say: yes, this is a better way to do things.
Yes. I mean, communications, we've talked about them throughout my 17 years at the Fed, and as you just pointed out, it goes back to the 90s. I mean. You are only making minor improvements. But we just did a review of the whole strategy where we talked about communications, and you know , people have very strong views on how to communicate, what is right; just take the scenario analysis that Chairman Bernanke promoted last year.
The resistance from people was ...I appreciated it, but the resistance was quite strong. Of course. So I'm not sure anything really new will come out of this . As for the balance, in my personal opinion, that is where there will be the most disagreements in views on how to proceed. If you want to reduce the demand for reserves, but remain at a sufficient level, I don't mind.
But if you want to say that we should move to a reserve deficit, I would be strongly against that. Regarding private data, great. We use private data all the time. Well, what I fear is that you will start making decisions based on closed data that is not available to the public. Then the public, and especially the market, will pay too much attention to your words, thinking that you know something that I don't.
You also risk losing confidence in yourself. If I can't verify what you say with data, I'll have a trust issue. This, this is not good for AA1. Who knows? So this is still a matter of the future, and we are not necessarily developing monetary policy for two years ahead right now, right? Epic. Yes. And the issue of inflation may turn out to be, frankly , the most interesting.
That is, I don't know. I know the people on this committee. They have very different views. So I'm curious what they'll come up with, but if they have a new inflation model that will help me predict better, give it to me. I am ready with open arms to try to do it better. True. Good. Well, that concludes this.
Thank you so much, Chris, for being here, and thank you for watching and listening.
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