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00:00As you repeatedly emphasize, communication and transparency are very important for the Fed.
00:08The administration, as I mentioned in my remarks, is implementing significant policy changes, and particularly trade now is the focus.
00:17And the effects of that are likely to move us away from our goals.
00:21So unemployment is likely to go up as the economy slows, in all likelihood, and inflation is likely to go up as tariffs find their way.
00:29And some part of those tariffs come to be paid by the public.
00:35So that's the strong likelihood.
00:37And, you know, my hope is that we'll get through this and get back.
00:40We're always going to be aiming for maximum employment and price stability.
00:43That's what we do.
00:44I do think we'll be moving away from those goals probably for the balance of this year.
00:49And then, or at least not making any progress.
00:51And then we'll resume that progress as we can.
00:53When you think about supply disruptions, that is the kind of thing that can be, that can take time to resolve and it can lead what would have been a one-time inflation shock to be extended, perhaps more persistent, and we would worry about that.
01:08In this case, you can look at the car companies, which their supply chains are likely seem to be on track to be disrupted significantly.
01:16And you would worry that that process will take some years and that the inflationary process might be extended.
01:23So these are all, all of this is highly uncertain.
01:26We're just, we're thinking now, really, before the tariffs have their effects, how they might affect the economy.
01:32And that's, that's why we're, we're, we're waiting really to see what the policies ultimately are.
01:36And then we can make a better assessment of what the economic effects will be.
01:41What, part of why growth was so strong in the last couple of years was just very high levels of immigration.
01:47And, and those people went to work.
01:49The, the economy hired them.
01:51You know, there was a lot of demand.
01:52We were still working off the labor shortage.
01:54What's happened since the prior administration changed their policy, as you mentioned, immigration has fallen very sharply.
02:01And therefore, work, work, work, the growth of workers has really stopped.
02:06It's really stagnant.
02:07But at the same time, demand has also fallen.
02:10And so, demand for workers.
02:13So payroll job creation has also fallen.
02:15And they've kind of fallen in tandem, which is why the unemployment rate has been pretty stable for about a year.
02:21So, in a way, demand, and, and coincidentally, perhaps, to some extent, demand and supply for workers has fallen.
02:29In terms of, so, in terms of the effect on the labor market, right now, we're, we're still at full employment.
02:35And labor force participation is still strong.
02:39Wages have moved back down to levels that are, that are now pretty sustainable, given an assumption about productivity.
02:44So, the labor market's in a really good place.
02:46So, it's, it's too soon to say, but what I can say is, of course, the people being laid off in government, this is highly significant to them.
02:55We don't know how big that's going to be.
02:57Right now, it's not big enough to affect a workforce of 170 million people materially.
03:03In terms of the, of the cutbacks in funding and for science and things like that, we do see in areas, particularly in cities that have a lot of universities and research hospitals and research institutions, we're really hearing significant layoffs and, you know, significant impacts on, on employment.
03:25I don't know how much that will total up to.
03:27And, of course, in addition, cutting back on scientific research may have implications for economic growth, for productivity, for health, for all kinds of things.
03:36But those are very difficult to estimate in real time.
03:42Some people believe the Fed will intervene if the stock market plummets, the so-called Fed put.
03:48Are they correct?
03:49I'm going to say no with an explanation.
03:57So what, what I think is going on in markets is markets are processing what's going on.
04:07And, you know, it's really the policies, particularly the trade policy.
04:12And, and really the question is, where is that going to come in?
04:14Where is that going to land?
04:16And we don't know that yet.
04:17And until we know that, you can't really make informed assessments that would still be highly uncertain.
04:23Once you know what the policies are, it will still be highly uncertain what the economic effects will be.
04:27So markets are struggling with a lot of uncertainty.
04:30And that means volatility.
04:32But having said that, markets are functioning.
04:35You know, conditional on being in such a challenging situation, markets are doing what they're supposed to do.
04:40They're, they're orderly and they're functioning just about as you would expect them to function.
04:45Just, just for everyone's knowledge, we have standing dollar swap lines with five large central banks and they, they go to the jurisdictions where there are big overseas dollar funding markets.
04:59And in effect, those are, those are overseas markets where, for example, a European or Asian institution is buying an asset-backed security that is backed by loans to American consumers.
05:11So in effect, the, these are loans to American consumers and we support that, we, we want to make sure that, that dollars are available.
05:18They need dollar funding to hold those dollar assets.
05:21So our, our independence is a matter of law.
05:23Um, Congress has, in, in our statute, we're not removable except for cause.
05:29We serve very long terms, we serve very long terms, seemingly endless terms.
05:35Um, so it's, it's, we're protect, protected in the law.
05:39So, you know, Congress could change that law, but there's, I don't think there's any danger of that.
05:43Uh, Fed independence has pretty broad support, uh, across, uh, both political parties and in, in, um, both sides of the hill.
05:51So, I think that's not a problem.
05:52Um, there's a Supreme Court case, people will have read, probably in today's journal, that, at which the Supreme Court may decide whether independent agencies generally, whether they're authorizing laws, can contain a provision that prevents the president to fire, from firing members of a commission, uh, other than for cause.
06:13And that's, that's, that's a, that's a case that people are talking about a lot.
06:16I don't think that that decision will apply to the Fed, but I don't know.
06:19It's, it's a situation that we're monitoring carefully.