Fed Chair Powell Speaks LIVE!

you know I'm a hustler hustler you know I'm a hust what up well I'mma break it down one time on a man and I'm letting yall know let y know yeah we getting that that F them shit here stacking that door I said I'm a hustler baby you know I'm a hustler you know I'm the man I'm a hustler baby you know I'm a hustler you know I'm the man know I'm the man I'm the man I'm the man it's been part of the plan I don't think you understand I see them on the ground while they fxing rubber bands I'm working on my foreign exchanges out in Japan c a m out and phly 50 Grand in Michigan a appearance in Atlanta that's another 20 band bring it back to the crib and invested in my daughter yet she only three months but we working on aando y'all can keep the Bando I got a plan to put my baby in a Lambo and buy your properties in LA in Orlando and let her run the family business when I'm 50 I might learn to play the bjo country boy with dope dreams I'm trying to open a clinic for the dopee and drop a MIG on the school and some dope team you see the money ain't the mission but the mission is to make it make a difference I'm the man up well I'mma break it down one time on the man and I'm letting yall know know yeah we getting that that F them chips here we stacking that do I said I'm a hustler baby you know I'm a h know I'm a hustler [Music] baby I'm the man I'm the mo look I think they get it I know I got some critics but still I'm fully committed to building a legacy with my family that's a great team great grands living up bread from 2018 keep the circle small as you can hard as it may seem put the vision down in the paper no time to day dream put the plan out in the motion and make it mainstream we going to get you out of the struggle and help you make cream stra and got no problem with still whipping up some baked beans and rocking chucks with a T-shirt and some straight jeans and take the money that I would have wasted and go open restaurants in we interational and tune them out when they start saying you IR rational you see I'm really setting up for the giving go and get a knowledge to my daughter she going to finish what I started like I told you I'm the Man P well I'mma break it down one time I the man and I'm letting yall know know yeah we getting that that F them chips yeah we stacking that do I'm a hustler baby you know I'm a h you know I'm a hustler baby you know I'm a h you know I'm the man well I'mma break it down one time on the man and I'm letting yall know letting yall know yeah we getting that that F them chips yeah we stacking that D I said I'm a hustler baby you know I'm a hler you you know I'm the a hustler baby you know I'm a h you know I'm the [Music] oh brother oh brother oh brother welcome welcome welcome back to another specialty episode of cooking in the kitchen with KES uh we're cooking up some tendies today as always we are focusing on the best tendy recipes we can POS possibly find on a global scale and today's recipe today's ingredients will be specifically related to Mr J B pal and his speech at some Canadian Institute that's going to be going down in about 5 minutes count them up 1 2 3 4 5 that's when he's scheduled to speak at the Wilson Center which like I said I have it up here I believe the Washington Forum on the Canadian economy and I guess he's chitchatting and then he's also I guess his counterpart he's speaking with Tiff mckam I didn't know Tiff was a name but Tiff the 10th governor of the Bank of Canada so I believe that's his uh Jerome pal the chairman of the FED in the US I believe that's his counterpart um to our neighbors to the north here so that should be going down like I said 1:15 p.m. ET um so if you're watching this live you're going to have to wait 10 minutes 5 minutes excuse me and if you're watching this as a recording you're going to probably just want to drag this forward a little bit and pay attention to uh what's going on them the market running into a bit of volatility before this all goes down let me show you the market just dipped out of nowhere quickly popped maybe it's better to even show you on the one minute here of really uh I mean you could see this like it just the dip the pop options don't know what's going on so some people are getting puts more people are getting zero DTE calls if anything puts were drifting down kind of flat now and recently um you could see this on the the green line right here the zero DTE calls are being purchased ever since about 106 so people are laying down their bets they're laying down their bets on what pal will say won't say is he going to be dobish is he going to be hawkish is he simply just going to reiterate everything he's already been reiterating we the Spy is literally pinned the clo from yesterday we've effectively gone nowhere on the Spy but as a person who sold a bunch of Premium this morning I could tell you premium has not decayed there's a lot of juice there's a lot of juice in this particular lemon for today people are waiting for their reaction they're expecting something volatile so fingers cross that there's huge volatility Crush as soon as he gets talking I don't know though I something I was just in the trading Discord and something about it my my Spidey senses are tingling that I might be on the wrong side of this one so I don't know if I should just dump it now I don't know if I should just wait a little bit into the talk I don't know if I should monitor the options Market basically as we are listening to pal I need to be managing this trade real time I sold some call Premium and I don't know we're gonna the premium has I I think I'm actually down a little bit on it let me double check I am down I sold it at 90 cents and it's currently trading at a a130 so I'm down 40 cents on it and um honestly on this little dip right here I could have got out for break even I was thinking about talking about I put it into the Discord but no one responded in time oh I guess on that note before we get into it uh just because we're waiting for this guy to get going if you want to join the trading Discord uh if you apply the code gooni g o n i this promo code it'll be free just select monthly make sure Goonies apply hit subscribe monthly and you sign up via locals mcor locals.com that's what the link is that's the membership management and then that's how you get connected to the Discord um so if you want to trade with me if you want to trade with other awesome people we do private lectures on the weekend we talk about some Advanced option strategies we talk about some Futures we talk about some systematic trading it's basically just a community of like very awesome serious Traders so if you're in the Discord right now you know what I'm talking about shout out to you guys I do appreciate it and if you want to join an awesome community of people this is how you could do it and this is how you could do it for free once again Pinn to the top of chat in the description of the video now on that particular note I'm watching the market I have bonds up over here on the top right of Bitcoin AKA digital gold in the bottom right the cu's uh slight drift to the upside but really haven't gone anywhere since 11:30 and the Spy hasn't gone anywhere all day um this push down here at 1015 was enough for me to sell call Credit spreads but ever since then the drift back up didn't like that whatsoever but really just kind of stalled out literally at yesterday's close so if you look at the daily chart we've done a great job of doing nothing nothing nothing nothing so that's that's the vibe of the day a whole bunch of NADA and I think the volatility is about to get going now I do have the website up and I'm just concerned about do we have it I think I have it here we go we're L at Rock we're going the elders famous comment about yeah no I just turned the audio on they're not really talking about anything is our largest export Market almost 20% of everything that we in the United States send abroad into this world of 8 billion people goes to the 40 million people in Canada who are only one half of 1% of the world it is the largest and most comprehensive two-way economic relationship among any two countries in the world the evolution of the energy economy of global importance will be heavily influenced perhaps determined by decisions that our two energy producing Nations make we have a unique role in being Advanced Financial economies using a lot of energy but also significant energy producers and can balance the effects on economy and Society of the choices that we make and on top of that Canada is a key us Ally in the International Financial architecture I've spent three different tours of Duty in government service where a big chunk of my job was International Financial diplomacy and we could always count on the Canadians being sane solid and punching way above their weight and yet the US tends to take it for granted and my experience in life is that the good things we take for granted we tend to mess up so my hope is that with this series of events we can be part of helping Focus folks in the United States on the importance to the US of this relationship by finding speakers and topics that will have a very broad appeal Beyond The Usual Suspects who focus on our uh relationship with Canada and we certainly have that with our event today which includes three of the most significant economic leaders of our two countries Bill manau our moderator today is well when you look in Wikipedia under renaissance man there is a inset photo of Bill morau and nobody else uh recognizing his significant achievements across politics and policy and business and philanthropy he's the former finance minister of Canada playing a key role in shaping sustainable economic policies of the judeau administration including Canada's economic response to covid-19 and a key reason for Canada's aforementioned above weight punching in international diplomacy as a business leader he grew the multinational Human Resources firm monno shepnell from a family business to over 4,000 employees and the largest human resources provider in Canada as a philanthropist he's worked to support the Arts help at risk youth improve access to health care and education all around the world including founding a school for Somali and Sudanese girls in a un refugee camp in Kenya and as a policy thinker in addition to his role chairing the Washington Forum he's chaired the CD how Institute a leading Canadian Think Tank and has written where to from here a policy book that I assure it is several Cuts above the typical former officials post-service book I put it up there with Robert Rubin in an uncertain World anyone who has ever served in any government of any country at any level at any time will immediately recognize the honesty and intelligence and Savvy that he's brought to thinking about the lessons of his time in office uh for the issues facing Canada and all of us I highly urge all of you to read it di mcklin is the governor of the Bank of Canada and another of the reasons for Canada's substantial above weight punching in the world in addition to his role as Governor he's the chair of the group of Governors and and heads of Bank supervision that's the oversight uh body of the Basel committee rather high-profile these days and he is co-chair of the financial stability board's Regional consultative group for the Americas he's a distinguished Economist having headed the most important division of the bank's economic staff in the early 2000s having played a critical role in Canada's response to the great financial crisis uh in his post in the Canadian finance ministry in the mid-2000s he's been a senior Deputy Governor of the bank from 2010 until his appointment as Governor he's also been a distinguished academic having served as dean of the rotman School of Management at the University of Toronto and our final panelist is jome Powell chair of the Board of Governors of the Federal Reserve System it is a weird task uh to introduce chair Powell it's like introducing Henry Kissinger how do you do it without looking absurd his doctoral thesis on medick received very high marks um so just let me say this there is an anti- room off the main boardroom in the Eckles building which is the feds 2 headquarters building they're currently slumming it in an Annex uh where the portraits of all the feds chairman hang and as you look around them it is boring in on you that none of them will have been as consequential across as broad a range of matters as Jerome Hayden Powell in managing the remarkably low inflation and high employment of the pre-co period in the world historical response to both a both both nationally and globally to the co event in the first major review and and explanation of a formal monetary policy framework for the fed and in managing the quite effective response to the most significant inflation in almost half a century but one in which many of the traditional guid posts could not be helpful requiring very creative thinking and deaf management of the extremely well-meaning but hydra-headed body that is the Federal Open Market Committee so with that let me thank you again for coming and let's turn to our panel all right let's get the show rocking well I want to start by thanking you Randy for uh for both for that uh very very generous set of introductions and also for your willingness to step forward as the co-chair of the Washington Forum on the Canadian economy so we uh very much appreciate your esteemed leadership and uh one of the key reasons we're here today is is due to that so really appreciate it I'll just say personally one of things I lik most is you said Canadians were sane so uh that's a pretty good starting point I think for our discussion here today um so with uh with two esteemed panelists I won't really be speaking much I want to give both of you gentlemen an opportunity to uh talk a little bit about your respective economies and I guess also recognize that we're here to talk about the Canada US relationship and and what is both distinct and and uh different about our economies but also what we share so so maybe with that I could start with you governor mlam and uh then we'll we'll talk to all right time to rip it let's see what happens thanks Bill and and uh Tiff um it it is a pleasure to be here and thank you and Randy for for launching this for inviting us both uh I am very pleased to be here to say a few words about the Canadian experience and I always enjoy uh comparing notes with chairman poell now as Canadians we invariably compare compare ourselves to Americans and maybe it's human nature but we we tend to focus uh on the differences we've got different system systems of government we we're bilingual in Canada we have three down football uh and and we even we even have very colorful polymer Bank notes uh and and uh certainly our climates uh I think are are certainly the IMF meetings are always a welcome first blast of spring for the Canadians our can our economies obviously have much in in common but again we we often focus on the differences if you look at growth in Canada and the United States over the 20 years leading up to covid remarkably it was the average was exactly the same average 2.2% in both countries the sources of growth though uh have been a bit different in Canada we've grown more by adding workers our participation rate has risen more and we've had proportionately higher rates of immigration in the United States adding workers has also been important uh but increasing output per worker or productivity uh has made a relatively larger uh contribution and and I will admit in Canada we look at us productivity growth with some Envy uh and we do ask ourselves I mean what can we learn from the US experience we we are concerned about productivity growth in our country turning to the financial system we both have strong banking systems but the structure of our our banking systems is quite different in the United States you've got a lot more Banks than we do in Canada uh in Canada we we have um five lar large uh National Banks and a number of important Regional players the structure of our mortgage Market is also somewhat different in Canada the typical mortgage is five years uh in the US typical mortgage is has a term of 30 years and our banks in Canada tend to hold mortgages on their balance sheets uh US Banks securitize a lot of their mortgage despite these differences our systems are very integrated uh and indeed um a number of large Canadian banks have large operations here in the United States our pandemic responses were also mixes of similarities and uh differences you know broadly speaking the the paths of our two economies were pretty similar um we we both cut interest rates uh very dramatically to effectively zero to support the economy through the pandemic uh then we both raised them very forcefully as inflation Rose rapidly and we've both seen inflation come a long way back uh growth has been more resilient in the United States though through this this tightening cycle and I think that's partly related to the stronger productivity growth I mentioned in the United States and it may also be related to the fact that monetary policy may be having a bigger impact on households in Canada because of the different structure of our mortgage Market more of our mortgages have reset in Canada so more people are feeling those higher interest rates and that that has restrained household spending more in Canada you know in each of our countries I do want to underline that you know we're we gear our policy decisions to our domestic monetary policy mandates and in Canada we have our own currency we have a flexible exchange rate so we can run uh our own monetary policy so um simply put you know we we don't have to do what the FED do does we can do what Canada needs I do think though we're looking at the same things and asking ourselves the same questions uh I think we you know we both need to feel confident that we're clearly back on a path to 2% uh before uh it would be appropriate to reduce interest rates last week in Canada we held our policy rate at 5% where it's been since last summer we did stress that we are encouraged by the recent progress uh we've seen on inflation and we want to see it sustained and just this morning statistics Canada published the March CPI as expected headline inflation came in close to 3% we have seen gas prices in both our countries move up uh importantly though measures of core inflation did tick down again and that does suggest that underlying inflationary pressures are continuing to ease so uh we continue to be moving in the right direction um the other thing I want to underline is that in the conduct of monary policy we do spend a lot of time looking and understanding what is going on in the United States US economy has a very big impact on the Canadian economy we also watch the US economy closely particularly through the extraordinary period we've all been through in the last few years because the more we understand what we have in common and our differences the better we can learn from each other's experience and let me just close on a few words uh on just how integrated the Canadian US economy is and and Randy you you highlighted some of the the key facts I I would totally share your perspective I think the the economic relationship really is the model for mutually beneficial open trade and investment uh 77% of Canadian exports flow to the United States uh and as you underlined what with less people know is that Canada is the United States's biggest export Market uh 177% vend or as you said almost 20% of us Goods I know that head north to the to Canada if you look at foreign direct investment there is a similar two-way Dynamic uh in 2022 more than half of Canadian FDI went to the United States by by by large uh by far the largest share of our FDI that was roughly $43 billion uh in the same year $50 billion uh of us FDI came to Canada so it's a pretty balanced relationship and I think what these these numbers underline is just how close that economic relationship is and how it works in both directions and the final thing I'll say is when you look forward we Face many of the same structural challenges our labor forces are aging uh there's going to be a big challenge with new technology training uh and making sure we have the skill skilled workers our economy's needs uh climate change is affecting both of our both our economies we're both grappling with shifting trade and investment patterns globally uh Supply chains uh across both our countries need to build more resilience conflicts internationally are increasing Global uncertainty and for all these reasons uh I am very glad we're having this discussion we do have much in common and Randy as you underlined when we work together we can get a lot more done thank you well thanks that's a great place to start chairman poell really interested in hearing your perspective another place to start is to say why don't you call me Jay and call Tiff okay I know I do it behind the scenes I'll do it in front of the scenes too great um so let me start by uh thanking Randy and Bill and Javi and Tiff for this it's great to be here today um I want to Echo what Randy said about the mutually beneficial respectful great relationship we have with with Canada economically culturally uh and uh I'd also like to Echo uh I thought Tiff did a great job talking about the similarities and differences uh in our economy our financial markets the challenges we face in our policy stance it's almost as though you somehow had a copy of that part of my remarks tip so I'm not going to repeat that but what I will do is talk if I could a little bit about the um the US economy and and where we find ourselves right now so as as I think Randy pointed out the performance of the US economy over the past year has really been quite strong um we had growth of more than 3% uh last year as rebounding Supply supported both robust growth and in spending and also uh employment alongside a considerable decline in inflation the more recent data show solid growth and continued strength in the labor market but also a lack of further progress so far this year on returning to our 2% inflation goal so I'll say a little bit about uh our two mandate goals maximum employment and price stability uh as I mentioned the labor market remains very strong payroll job gains have been strong over the first quarter averaging just a tick above 275,000 per month the unemployment rate has been below 4% for 26 consecutive months which hasn't happened uh in more than a half a century uh the longest streak of its kind strong man demand for workers has been met by a substantial increase in the workforce due both Rising labor force participation and a substantial increase in Immigration as indeed Canada has experienced as well so even by with even with this strength uh by many measures our labor market has been moving into better balance over the past year P the ratio of job openings to unemployed workers was extremely elevated in 2021 and 22 has now moved back down to levels just above the prepandemic era surveys of workers and businesses indicate a normalizing labor market so do the rates of both quits and hires options broader wage pressures also continue to moderate albeit gradually so the overall picture for the labor market is one of real strength but gradual normalization turning to price stability uh our inflation mandate inflation of course declined quite significantly over the second half of last year over the whole year but particularly in the second half but 12 month core pce inflation which is uh one of the most important things we we look at is estimated to have been little change Ed in March over February at 2.8% and the 3 and six month measures of inflation are actually above that level so we've said at the fomc that we'll need greater confidence that inflation is moving sustainably toward 2% before it be appropriate to ease policy you know we took that cautious approach and uh sought that greater confidence so is not to overreact to the string of low inflation readings that we had in the second half of last year uh the recent data uh have clearly not given us greater confidence and instead indicate that it's to take longer than expected to achieve that confidence that said we think policy is well positioned to handle the risks that we face if higher inflation does persist we can maintain the current level of restriction for as long as needed at the same time we have significant space to ease should the labor market unexpectedly weaken right now given the strength of the labor market and progress on inflation so far it's appropriate to allow restrictive policy further time to work and let the data and the evolving Outlook guide us come what may we remain strongly committed to returning inflation over time sustainably to 2% well thank you I think that's a a really important frame for our discussion today um one of the things that I remarked on when I first got into public life was how often I saw my International peers as I as we moved around and when I see the two of you on stage together I know that often you you see each other at G7 at G20 meetings and I think it be quite interesting for the audience to understand you know how collaboration happens or doesn't happen internationally how central banks work together uh or don't work together so uh you know maybe I could ask you Jay to give a perspective on on how that uh how that happens from from U from your Vantage Point sure so um to to give you an idea we do meet quite regularly so Tiff and I attend uh two G7 U meetings per year for ministers that's Finance ministers and Central Bank Governors we don't attend the leaders meeting but we attend I in the United States but we attend the meetings with the finance ministers which which bill was and also two G20 meetings so that's two that's four meetings per year right there we also have six meetings uh at the bank for international settlements in Basel one of those is now virtual but we're in and and that's only Central Bankers no Finance Ministries so it's all Central Banking uh Stu and you know it's it's economics it's Financial regulation all those things we also come here to Washington or every third year we go someplace else twice a year for the IMF World Bank meetings which is kind of what everybody's doing in Washington right now so it's a lot of meetings what do we do at these meetings um fair question essentially uh we the central Bankers are are having an ongoing conversation about what's going on in their own economies and their own financial markets their own regulatory world with each other and we're also talking about the big Global issues of the day as you would expect so U some of which are really the business of the elected government not the business of the central Bankers but we you know we we had that discussion it's more or less ongoing we're seeing each other all the time uh they're very informative these discussions and they they really are for me anyway part of the way that that I get to thinking about what the right policy is for the United States is to hear uh what is going on around the world what what what's happening globally how are people thinking about that so it's it's very very uh useful particularly though given our close cultural financial and economic ties with Canada those discussions are especially fruitful important and you know I have a regular conversation by the way keep very close track of of the actions of the Bank of Canada I read Tiff's press conference transcripts carefully and uh pay pay close attention to that Tiff did mention the similarities and differences um I'll say one more thing which is we we go to Basel as I mentioned five times a year you're a long way from home and there usually is we're there for four or five nights and they're usually one or two nights off so we go looking for someone to have dinner with and very frequently we wind up with the Bank of Canada delegation for who were really good and very funny and and a lot of fun together so we have a very close relationship right back old rtion as rug lately one one other thing I'll point out though U about our relationship is we did do as Randy pointed out our first monetary policy first review of our monetary policy framework really ever and we looked around the Bank of Canada also does regularly I think it's every four years in any case uh we we really looked to the Canadian model and other models of how to do that we talked to people at the Bank of Canada about how their regular framework review went so we we really benefited for that nothing like a that's what I'll stop there 25 Point swings $2 and5 on the Spy that's crazy yes I mean I'll just add a little bit on on uh you as Jay outlined certainly from my perspective one of the best parts about this job is uh we do you know the the International Community the Central Banking Community it it's not like a Commercial Bank where you're competing against your the other bank we're all in this together and if we get it right it we all help each other uh so there is there is a considerable openness and you know J outline I think there there's a few there's a few different functions yes we obviously if you're in Canada you know we have our own group at the Bank of Canada that that analyzes the US economy forecasts the US economy it's very important to Canada but uh you know the feds group is a lot bigger they got a lot more experience uh hearing what the FED has to say is incredibly valuable for us the other thing we do though is it's it's more than just the data and the forecasting it's it's thinking through the scenarios together you know what risks are on your mind Jay uh what do you think could go wrong what are the scenarios how you know how would we handle it if this happened if that happened being able to put your heads together and think through the risks the scenarios the strategy um there are also a number of really I would say sort of behind the scenes very Central Banky technical issues that you know nobody really thinks about except Central Bankers but you know what are the mechanics of QE how do you exit from QT how many settlement balances are we going to need to uh you know fortunately those are things most people don't have to worry about they are critically important for the implementation of of monetary policy uh and that sort of Plumbing working of the financial system and you know being able to talk to people who are thinking about these things as much as you are is hugely valuable and then the last thing I will say is you know there's some things um that we're only going to succeed if we do together the obvious one would be Financial supervision and regulation you know our our financial systems globally are highly integrated we were uh deeply reminded of this in the global financial crisis uh what happens in other countries affects all of us um and money flows money flows across borders so you know we we have to do that together uh or it's not going to work well maybe we can drill into that for a minute U you know obviously we recognize that most of your work is focused on the domestic markets but uh in times of Crisis There's real challenge as you mentioned in the covid period uh the global financial crisis uh you know that you were engaged with Tiff earlier in a different stage of your career and for me it was remarkable the number of of interactions with counterparts around the world during those crisis so maybe a question to both of you is you know what what kind of interaction happens during periods of Crisis uh what doesn't happen are there things that we should be thinking about differently in order to prepare ourselves for those for those challenging moments and making sure that the financial system is resilient so again maybe over to you uh Jay to uh react to that and and hear your thoughts sure so um you know our economies our financial markets all of our institutions are are deeply intertwined and when you when there is a a situation where there's serious stress you need to get a Global Perspective you need to get perspective around the world and you need you have to do that very quickly and and we of course can move effect quickly and effectively on the domestic front but what the the thing that you you figure out in those times is that all the time you spent at bosil and at the G7 and G20 meetings you know your colleagues you know and trust and respect their judgment and you don't have to go through that that phase of gaining trust in people you you understand each other you speak the same language so there's a lot of communication the level of communication is pretty high anyway but during crises it goes It goes very high you're constantly talking to I'm constantly talking to um other Central Bankers around the world and also political leaders ERS uh in in our government and that sort of thing so that that happens a lot um uh the sense of what you're doing again is mostly sharing information and ideas about what to do there may be a proposal that that people are looking at and you're talking about that so it's it's it's very useful um I say uh one thing to point out is it's less about coordination than it is about about talking and understanding for one reason or at least it was during the pandemic and that was because almost every country's interest rates were very close to zero when the pandemic hit and so there wasn't space there wasn't policy space for most economies most central banks to do a big coordinated rate cut we did cut very quickly to zero but we were I think we were higher than almost any other uh uh nation in terms of where our policy rate was but um anyway there's there's a lot of communication and and those those relationships that you built up really do how's the market not dying on this news um in terms of what we've you asked about learning what have we learned you know I I think that the pandemic is going to teach a whole lot of lessons over time I still think it's too early to say what they are with confidence and and I'll point out it look at the pandemic has surprised us over and over again most recently by in the United States the remarkably strong performance of the economy at a time when virtually all economists were expecting a recession so I think if you'd ask asked for the lessons of the pandemic a year and a half ago you'd get a very different answer now I think in I think in a year or so we'll have a lot more answers it's just it is a unique uh set of circumstances and we're still learning I think but we we will try to learn those lessons different point I would say about the bank stresses another crisis at least here in the states I do think we we can and have learned the lessons of the stress of of early early last spring and um I would point to a couple things that we embraced pretty forthrightly one was that supervision was not tightly focused on the right things was not proactive enough was not forceful enough and we've tried to take steps to to remedy that I also think there will be some regulatory initiatives for banks of that size and with those characteristics uh in time so I do think those those are lessons that that we that we have learned and from a Canadian perspective similar lessons or different ones yes I think there are similar l maybe I'll just give a couple of other examples I'll just first though I will just underline you know when when a crisis hits you're you're you're faced with a situation you have to make decisions and you have very limited information the other reality is you have a pretty narrow window to act to be really effective and for both those reasons you know being able to speak you know directly to Jay uh to connect with our other colleagues finding out what's happening in their jurisdiction how are they thinking about it what do they see as the options it is hugely important in a crisis uh and all right Tiff we get it you love them it's a little more though than just information sharing I mean I think it helps us un avoid um unintended consequences of our action sometimes you do something and it works for most parties but not one party and in a crisis you know it's the weakest link that can take you down so you you've got to be careful uh it also I think boosts confidence in the system if we're acting in a in a in a way that is coherent together it boosts confidence it it you know it it looks more like a plan than than a halfhazard policy response um just give you a couple of examples um you know at the I wasn't actually Governor at the start of Co Jay was there but certainly looking at it from the outside the coordinated actions of major central banks to um to reopen fixed in markets uh you know providing liquidity providing Market making of Last Resort in scale uh you know it re it restarted reopen core functioning markets uh and by all doing it essentially at the same time and all working in scale the whole Global Market restarted if that had not happened this crisis would have been a much deeper and more severe crisis and then the the other one I'll highlight is is uh coping with the inflation as we came out of covid uh you know by you know by all uh being Resolute in our commitment to restoring price stability by all matching our words with forceful action raising rates rapidly we did we we all helped each other I mean it it helped reduce Global inflation and goods which was really the first part of the the inflation surge uh and it helped keep inflation expectations in all our countries better anchored and I think it it is a key ingredient in how we have all man to get inflation down a long way back with without causing recessions in our economies and the last point I'll just highlight is something you said um occasionally this this uh coordination is very explicit so for example at the time of the global financial crisis there was a coordinated G7 interest rate cut I remember clearly because it happened at 3 o'clock in the morning in Canada uh which was a little bit of a technical challenge um you know but most of the time it's not explicit cour oration but it is those conversations it is that shared information we have similar objectives similar goals similar tools and we're sharing information and that leads to a coordinated response well maybe you could spend a little bit more time on that from the the Canada US perspective So Randy mentioned in his opening comments uh the idea that when you're in Canada you're living next to an elephant and uh I think a lot of Canadians would assume is that a f has to take into account US policy so maybe could you give us a perspective onto how important that is for uh for your deliberations and um you know how that factors into decision-making the US approach uh well look I think it's pretty clear the our US economic relationship is by far our most important relationship our economies are highly integrated you know 35% of our GDP is exports and 75% of that goes to the United States so multiply you know that's a big chunk of our GDP um our financial markets are also very integrated in fact yesterday I was in in New York uh and when you go to New York you are just reminded how integrated our markets are I was at the New York Stock Exchange and uh you know all over our you know cross-listed Canadian companies on on on many of the screens um our B our financial systems are very integrated our banks have uh most of our large Banks have uh operations in the United States our Pension funds are big investors uh in the United States um so we do spend a lot of time understanding what's going on trying to understand what's going on in the United States and looking at the implications for Canada there are though you know I I highlighted in my opening remarks some differences another important difference I didn't focus on is you know both our economies have big manufacturing sectors big service sectors large commodity sectors but the commodity sector in the Canadian economy is quite a bit bigger uh than it is in the United States oil and gas agriculture forestry mining um fishing uh 40% of our exports 13% of our GDP and the commodity cycle can be quite different and um we have a flexible exchange rate that does help absorb the differences uh and I think it's an important reason why historically sometimes our monetary policy is a do do differ our Cycles are often quite similar and certainly through Co we had a similar shock and a pretty similar cycle and our monetary policy has been quite similar there have been other episodes though where particularly if the commodity cycle is different you'll see monetary policy diverge somewhat from the United States there are limits to how far it can diverge but as I emphasized um we we have our own currency we have a flexible exchange rate and that that allows that absorbs the differences to allow us to gear monetary policy to what we need to do in Canada and Jay from your perspective obviously the US has an outsized role in in the global economy and I guess would be interested in understanding how much time do you deliberate on what your actions will have as reactions and how much do you think about you know what's happening with global markets as you come to your conclusions so I'll just I'll start by saying that each Central Bank serves a domestic mandate which is in the case of fed is using our tools to achieve maximum employment and price stability for the benefit of of the people we serve so it's a domestic mandate but in the case of the United States we fully realize and appreciate that our decisions can have significant effects on not just on Canada but on or Mexico but on countries around the world uh and that's all the more so because the dollar is the reserve principal Reserve currency which strengthens the transmission of our policy through the global economy so we also know that that those effects that effects on global demand um from our uh you know from our policy changes can have an effect on the United States as well looks like we're going down United States so we're very very aware of of all of that and for one thing we try we try to be very transparent and predictable given the flow given the flow of data and events I mean you have to move quickly sometimes but we do realize we have a special obligation to be predictable and transparent and that that benefits Us in doing that as well so International spillovers of course are an important consideration we do track that uh ultimately though we think over over time the most important thing we we can do for to support the global economy is to deliver on our Mandate of price stability and maximum employment here in the United States and and is that you know have there been changes in this current cycle that uh that have drived any differences I mean you've talked about the different drivers for inflation this go around from previous periods of inflation so do you you think about it differently as you as you approach these things options not really doing much specifically on inflation I do think this is different this is not simply the more standard case of overheated demand which has been the typical thing in the postwar era for for the US economy and other major Western economies um there are similarities and differences and I would characterize it that this way that the the the inflation that arose suddenly really in in the early part of 2021 as economies reopened resulted both from constrained Supply and also elevated and rechanneled demand from services to Goods um so if you remember and you I'm sure will there were unexpected widespread shortages and supply chain failures on a scale not seen in in recent memory in the US several million people had left the LA the labor force creating a severe labor shortage that F leading to a huge spike in in wages but also in the ratio of job openings to unemployed workers so very unusual situation households had elevated levels of savings and demand was very very strong as well so we thought what's different is we thought have thought since since we've understood the situation that restoring price stability would would require both the unwinding of the pandemic related distortion to both supply and demand as well as the effects of tight monetary policy on demand which would give the supply side time and space to recover and we think today that we're seeing those two things working together to to bring that end about um and you saw that I think in 2023 which was really uh in a large way a supply Side Story uh what happened was um the supply side really recovered in 2023 we thought that it would recover in 2021 and in 2022 I was beginning to lose hope and then in 2023 you saw the shortages and and the uh issues with uh with with the trade pipelines not fully resolved but largely resolved you saw the US Labor Force shortage alleviated by both higher participation among people who uh had dropped out of the workforce but also from immigration so that was the year of the supply side recovery and you saw the the core inflation rates Dro by two full percentage points in the face a very strong growth so that can only be explained by the enormous increase in potential output the supply side increase over that year um so that that's how I would say it's different this time and and Tiff maybe you can tell us how it's different in other ways in Canada so we you know we're talking about the similarities and the similar approaches to dealing with inflation and the you know the positive results but we've seen a Divergence in Canada with respect to growth so clearly there's some some differ differes too maybe can you reflect for for people what those what those differences look like and what the what the ramifications are for you yeah I will focus on the differences although I I will stress I would I think the main story is the similarities um and as Jay outlined what is so unique about this whole cycle is that supply has play a much bigger role than than we're used to um and from a monetary policy perspective we don't have as good line of sight to to supply as we do as demand and we don't have any tools to influence no they fake out look at these Wicks man um in terms of what what has been different uh if you look at the Canadian economy growth uh was essentially zero in the second half of last year and what that meant was the economy which was very overheated uh Supply caught up with demand in fact it more than caught up with demand the economy moved into excess Supply and we're now seeing the effects of that in terms of relieving price pressure so you know why did demand slow more in Canada United States I think uh that that is a difficult question I pointed to a couple of things in my opening remarks I think productivity growth in the United States has been a lot stronger you've gotten more Supply than we have so you've been able to grow more with less inflation uh or less inflationary pressure um and then the second thing is I think monetary policy is having more traction in Canada because the the structure of our mortgage markets half of mortgages have renewed in Canada uh and even if your mortgage hasn't renewed it's renewing in the next couple of years probably so you're thinking ahead thinking oh when it renews I'm going to have to be paying a lot more uh on my mortgage every month so maybe I should be saving more money now so we're seeing that the that effect we've had weaker consumption growth um and certainly that's been somewhat masked by the fact we''ve had very rapid population growth but if you look on a per capita basis you can see um household spending per per capita per family is actually gone down even though growth uh has not been negative overall I think you know moving forward um we are actually seeing growth starting to pick up uh the first quarter of this year looks pretty strong um probably see some choppiness quarter to quarter but overall we think that that strength we're seeing in the first quarter will be sustained through the year where we we think on a quarterly basis growth is going to be averaging about 2% per quarter through this year that's partly where we expect to see we're starting to see some uh pickup in consumption um partly it is the resilience of the US economy that is supporting our our exports they've been very resilient um and then coming back to inflation I think those broadly speaking the path of inflation has is pretty similar but you are seeing uh um I think some of those differences in the uh dynamics of the real economy in inflation you know our last few inflation readings have been reasonably good um even though totals still close to three uh core has been you know the last few times ticking down and if you look at the more timely three months measures of core inflation there there is some downward momentum in in underlying inflation and I think that reflects the fact the economy is an excess Supply and that is relieving those price pressures we're certainly looking for evidence that that that's going to be sustained that's what we're looking for right now well I I know that uh that both of you realized that one of the key things we were trying to emphasize today was the importance of the the Canada US relationship and uh I also really appreciate all of the comments on the importance of trade to our to both of our economies and trade between our our two countries and and foreign direct investment and so um while you're not trade policy experts and I get that your organizations that's not the focus I really appreciate you giving us a little sense of you know how do you think about uh trade in in in economic terms and the importance of that and um how that factors into your your economic Outlook and specifically we're we're thinking about the importance of the U the agreement between United States Canada and Mexico and wondering how you think about that in terms of its impacts on on trade in General on labor markets on sub Supply um so maybe I could I could ask you Jay to give us any Reflections that you might have on that and deliberations uh impacts so I guess I need to start by saying we don't do trade policy we don't really comment on trade policy other than to say that uh it's clear that we have a mutually beneficial large substantial ongoing healthy trade relationship with with Canada that we very much welcome maybe I'll add one more thing which is I want to focus on a particular export of uh of uh Canada that I think somehow we we just desperately need here in the United States and we can't get enough of it and that is um Canadian com Comedians and comic actors I started to count uh the number of really great funny people I I limited myself to 10 so Jim Carrey Martin Short John Candy Mike Myers nor McDonald Rick Moranis Dan akro Katherine O'Hare and Andrea Martin and I could go on so something's going on up there Americans love Canadian if that's Canadian humor we absolutely love it so send send more we can't get enough of it that's a small but important part of our trading relationship I guess Tiff all jokes aside any comments from your perspective yeah well first of all as Jay underlined we don't said trade policy but but let me just say um try to give you more of a picture I mean first of all you just look at our two countries the East West border is the longest Border in the world and it's a long way across Canada so it often makes a lot more sense to trade north south than to trade across the country and that that's really comes down to geography in some sense I mean that's fundamental to the inner ties we have across our countries many Canadians are closer to fellow Americans than they are to fellow Canadians uh just the nature of the geography you look at what what are the things that we buy and sell well um you some of the biggest things uh in Canada we buy a lot of your consumer goods in the United States um we have a very uh two-way relationship on Motor Vehicles you buy a lot of the motor vehicles we produce we buy a lot of cars and trucks that you produce uh similarly energy um we're both energy producers uh it often makes more sense to trade the energy north south and to ship it across the country so we have a very Dynamic two-way uh energy relationship and you look forward and you look at you think about how much electricity the world's going to need uh I expect that relationship is only going to grow another element that is growing quickly and and maybe that's partly comedians is the fastest part growing the fastest growing part of trade is is trade and services now if you want a haircut you still have to do it in your own country unless you want to go to New York to get a really fancy one but uh um you know buy and but but increasingly a lot of services are highly tradable the internet has completely changed how many things are delivered uh and so you're seeing uh Canadians are increasingly uh importing a lot of Commercial Services from the United States and then the final thing I'll say is um on us MCA um obviously for both countries um the market access is is key the other thing I would underline though it's also the certainty about the market access the certainty that American companies have that they'll have access to Canadian markets and Canadians will have access to American markets that allows businesses to make investments to deploy their risk Capital to commit to the Future uh and it it's that it's that certainty of access that is really key to building you know building investment I'll stop there thank you well I I'd like to uh to thank both of you for taking some time with all of us I think if we had looked back a couple of years ago and and reflected on what we were thinking back then might be the trajectory of our economies uh we probably wouldn't have had an expectation that we would have been where we are today we would have expected more challenges than we've we' faced and I think we need to recognize that the stewardship that uh the Federal Reserve in the United States and the Bank of Canada and Canada have um been responsible for has made an enormous difference in citizens Liv lives I mean we're in a situation that uh is virtually our best case scenario so it's uh probably not often enough that on stage you're recognized for for that important work and I want to thank both of you for all that you're doing for uh all of us in making that the reality and also I want to thank you for taking some time here I mean we are we are uh reflecting on the fact that in a couple of years the um the US Mexico Canadian Trade Agreement will will be looked at again and we want to reinforce the importance of working together the importance of collaboration and cooperation and really great trading relationships so this is a an important way for us to start this off seeing the collegiality between the two of you knowing how uh well people work together is uh is really important for people so thank you very much and uh I know it's a busy week for you so we appreciate also taking the time during this busy week so thank you well well well from from the candidate Institute I'm going to ask zabi Delgado to uh to close off our session today thank you Bill that concludes today's program everybody thank you all everybody in the room and online for joining us today I also want to give a thanks to our various teed panelists and our co-chairs as well as the cidate Institute director Christopher Sans who Vision we're all lucky enough to execute on here folks we're going to ask that you stay seated while the panelists depart at the stage but just one last time this has been the launch of the Washington Forum on the Canadian economy thank you all very much for joining us one last round of applause for our panelist [Applause] please is that it that's all she wrote That's All She Wrote hang on let me go back to this let me delete this we're not picking up any ambient audio um I mean we kind of volatile went nowhere I mean you could see it in the wick in the past half hour here these two 5050 minute bars big Wicks up down and we've kind of gone nowhere the Spy is slightly below its close from yesterday while the cues are slightly above its close from yesterday so uh I guess seemingly the market has no idea what it does or doesn't want to do on this particular day but anyway that's the specialty stream Jerome pal talking with his counterpart in Canada um the most interesting thing I would say was in the remarks and I just retweeted this so you could check it out on my Twitter _ cores you can see that Drome pal said hey oh no like there is a chance we don't cut rates that is a very real thing if inflation doesn't come down so I think the most impactful thing was in those prepared remarks which are now publicly available nothing I don't know I I wouldn't say there's anything too crazy in their actual commentary back and forth I think it's much more in those written remarks of hey we might not get any interest rate Cuts uh I'm actually surprised that on that because when kakari kashari um the mini ianapolis V president when he said that two weeks ago the market took a huge hit uh and we didn't really see that reflected quite yet in drone pal commentary like so forceful and the fact that he's now saying yeah no no no like that's fully right if we don't see inflation come down we might do no rate Cuts I'm actually surprised that the Market's holding on but who knows because there's still another hour 55 left in the day if you're watching this in real time anywh who that's what I have for you right now I'll catch you tomorrow morning 9 a.m. bright and early peace out [Music]

Channel: Matt Kohrs

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Length: 61min 4sec (3664 seconds)

Published: Tue Apr 16 2024