RUSH TRANSCRIPT Control Here ░░░░░░░░ things are trending Well ░░░░░░░░ cleveland he s a ░░░░░░░░ and chief economist adan ░░░░░░░░ regal He joins us ░░░░░░░░ Jeffrey love to get ░░░░░░░░ thoughts here on cutting ░░░░░░░░ take away from the ░░░░░░░░ print The equity market ░░░░░░░░ to like it not ░░░░░░░░ much as they did ░░░░░░░░ this morning but seem ░░░░░░░░ like it What s ░░░░░░░░ takeaway Good news to ░░░░░░░░ months now in a ░░░░░░░░ point two percent For ░░░░░░░░ EPA month a month ░░░░░░░░ like to look at ░░░░░░░░ median cgi from the ░░░░░░░░ fed which came in ░░░░░░░░ point two month a ░░░░░░░░ A good sign that ░░░░░░░░ looks like the underlying ░░░░░░░░ of of inflation is ░░░░░░░░ into that point Two ░░░░░░░░ range what s that ░░░░░░░░ Well it you that ░░░░░░░░ you right around here ░░░░░░░░ two percent lay little ░░░░░░░░ higher on encore cgi ░░░░░░░░ if if we maintain ░░░░░░░░ I guess that of ░░░░░░░░ key thing for me ░░░░░░░░ be If those month ░░░░░░░░ month of percent changes ░░░░░░░░ re going to math ░░░░░░░░ bloomberg radio When Do ░░░░░░░░ get pull out three ░░░░░░░░ on it on a ░░░░░░░░ on year or two ░░░░░░░░ trailing 11 month basis ░░░░░░░░ we keep getting These ░░░░░░░░ is I think that ░░░░░░░░ in the first quarter ░░░░░░░░ next year which is ░░░░░░░░ because I I think ░░░░░░░░ Fed wants to see ░░░░░░░░ a to handle So ░░░░░░░░ point seven two point ░░░░░░░░ to point something like ░░░░░░░░ a to handle and ░░░░░░░░ they be more comfortable ░░░░░░░░ hey we done it ░░░░░░░░ know that the inflation ░░░░░░░░ behaving is moving in ░░░░░░░░ back towards target Jeffrey ░░░░░░░░ they could I had ░░░░░░░░ can the feds day ░░░░░░░░ until then without raising ░░░░░░░░ because everybody seems that ░░░░░░░░ more live meeting in ░░░░░░░░ but it s too ░░░░░░░░ to speculate about that ░░░░░░░░ we don t know ░░░░░░░░ the readings of the ░░░░░░░░ to CPR reports but ░░░░░░░░ what else can they ░░░░░░░░ to stay hawkish besides ░░░░░░░░ the key rate while ░░░░░░░░ was so I gave ░░░░░░░░ the best case scenario ░░░░░░░░ so the getting We ░░░░░░░░ to see that current ░░░░░░░░ readings continue Now Is ░░░░░░░░ likely to happen I ░░░░░░░░ t know I I ░░░░░░░░ think there some of ░░░░░░░░ items in this report ░░░░░░░░ might surprise that the ░░░░░░░░ side in the fall ░░░░░░░░ we could get a ░░░░░░░░ three or even a ░░░░░░░░ for something like that ░░░░░░░░ then this story might ░░░░░░░░ a little bit so ░░░░░░░░ it Keep keep that ░░░░░░░░ mind out and that ░░░░░░░░ don t need a ░░░░░░░░ case scenario If we ░░░░░░░░ below three percent by ░░░░░░░░ you want how can ░░░░░░░░ stay hawkish Well they ░░░░░░░░ going to keep repeating ░░░░░░░░ of what their which ░░░░░░░░ that the Fed funds ░░░░░░░░ is elevated that in ░░░░░░░░ real terms and conditions ░░░░░░░░ tight and that they ░░░░░░░░ t need to be ░░░░░░░░ too tight make it ░░░░░░░░ maintain restrictive policy and ░░░░░░░░ will have an impact ░░░░░░░░ that that story they ░░░░░░░░ been kind of telling ░░░░░░░░ on On the labor ░░░░░░░░ Here we got another ░░░░░░░░ Little bit higher than ░░░░░░░░ expectation higher than last ░░░░░░░░ but still a reasonable ░░░░░░░░ their you expect unemployment ░░░░░░░░ this country To I ░░░░░░░░ t get it is ░░░░░░░░ to go meaningfully above ░░░░░░░░ any time soon We ░░░░░░░░ is a below below ░░░░░░░░ through the end of ░░░░░░░░ year any the know ░░░░░░░░ is the sort of ░░░░░░░░ landing scenario The course ░░░░░░░░ on a year on ░░░░░░░░ basis has decelerated to ░░░░░░░░ point Seven in today ░░░░░░░░ report from six six ░░░░░░░░ same time the unemployment ░░░░░░░░ is is lower Actually ░░░░░░░░ s three point five ░░░░░░░░ so we haven t ░░░░░░░░ a rise in the ░░░░░░░░ but inflation has decelerated ░░░░░░░░ is the greats This ░░░░░░░░ a great scenario for ░░░░░░░░ or the Fed I ░░░░░░░░ for investors If you ░░░░░░░░ back a year ago ░░░░░░░░ the thinking was you ░░░░░░░░ to see meaningfully higher ░░░░░░░░ to get inflation down ░░░░░░░░ well we ve seen ░░░░░░░░ last 11 months that ░░░░░░░░ hasn t been necessary ░░░░░░░░ we ve had a ░░░░░░░░ here So you everything ░░░░░░░░ re seeing on the ░░░░░░░░ market front looks pretty ░░░░░░░░ solid so we think ░░░░░░░░ unemployment rate will stay ░░░░░░░░ through through the end ░░░░░░░░ the year At least ░░░░░░░░ you ever go back ░░░░░░░░ mean you re a ░░░░░░░░ guy Make you a ░░░░░░░░ from two thousand and ░░░░░░░░ two thousand eight even ░░░░░░░░ Bernanke He saying you ░░░░░░░░ what I think we ░░░░░░░░ get kind of a ░░░░░░░░ landing here and that ░░░░░░░░ t happen Here thinks ░░░░░░░░ re state I m ░░░░░░░░ I m I was ░░░░░░░░ at paid in regal ░░░░░░░░ that that era that ░░░░░░░░ that era so at ░░░░░░░░ time I was I ░░░░░░░░ say a I was ░░░░░░░░ stiff about a you ░░░░░░░░ real estate bubble That ░░░░░░░░ my my view So ░░░░░░░░ I heard bernanke is ░░░░░░░░ ale housing is a ░░░░░░░░ share of the economy ░░░░░░░░ spill over it s ░░░░░░░░ have you I thought ░░░░░░░░ was absurd at the ░░░░░░░░ I really did so ░░░░░░░░ I remembered that period ░░░░░░░░ very vividly of it ░░░░░░░░ than than this This ░░░░░░░░ plane out we have ░░░░░░░░ for a long period ░░░░░░░░ time actually the housing ░░░░░░░░ my view Pete and ░░░░░░░░ and we had already ░░░░░░░░ house price slow activity ░░░░░░░░ housing starts so we ░░░░░░░░ of saw that rolling ░░░░░░░░ well before lehman brothers ░░░░░░░░ that that was already ░░░░░░░░ this time This is ░░░░░░░░ this different need to ░░░░░░░░ those words you re ░░░░░░░░ supposed to you Growth ░░░░░░░░ six percent year on ░░░░░░░░ that that s that ░░░░░░░░ going to give the ░░░░░░░░ spending power of ironically ░░░░░░░░ we ll probably see ░░░░░░░░ add to GDP in ░░░░░░░░ Three because house has ░░░░░░░░ week and we don ░░░░░░░░ have enough inventory we ░░░░░░░░ see some building activity ░░░░░░░░ back so I think ░░░░░░░░ the economy s I ░░░░░░░░ pretty good footing year ░░░░░░░░ the next six months ░░░░░░░░ so What If it ░░░░░░░░ something right Let s ░░░░░░░░ the other way than ░░░░░░░░ if the economy the ░░░░░░░░ is too good You ░░░░░░░░ we had neil done ░░░░░░░░ this morning saying he ░░░░░░░░ Show and housing prices ░░░░░░░░ rising gonna keep pushing ░░░░░░░░ rents in the in ░░░░░░░░ mid term right New ░░░░░░░░ City forty four hundred ░░░░░░░░ as the average cost ░░░░░░░░ an apartment and he ░░░░░░░░ that inflation could rear ░░░░░░░░ s ugly head again ░░░░░░░░ go back in the ░░░░░░░░ direction In the beginning ░░░░░░░░ That down A rank ░░░░░░░░ scenarios the soft landing ░░░░░░░░ that we talked about ░░░░░░░░ where inflation just gonna ░░░░░░░░ cooling Mean that s ░░░░░░░░ I think that s ░░░░░░░░ possible scenario I think ░░░░░░░░ scenario though that would ░░░░░░░░ the no landing scenario ░░░░░░░░ accelerates and you can ░░░░░░░░ a case for that ░░░░░░░░ up a q q ░░░░░░░░ were seen three to ░░░░░░░░ percent growth right now ░░░░░░░░ the for the quarter ░░░░░░░░ s good That s ░░░░░░░░ You can see inflation ░░░░░░░░ maybe later in the ░░░░░░░░ after Back I think ░░░░░░░░ s a pot that ░░░░░░░░ a possible scenario that ░░░░░░░░ mice my second most ░░░░░░░░ scenario playing out What ░░░░░░░░ that do I mean ░░░░░░░░ the Fed my in ░░░░░░░░ situation out that do ░░░░░░░░ that probably isn t ░░░░░░░░ for the equity market ░░░░░░░░ I honestly don t ░░░░░░░░ that s a bad ░░░░░░░░ It s not the ░░░░░░░░ but it s not ░░░░░░░░ two thousand and then ░░░░░░░░ and for subprime is ░░░░░░░░ scenario It s it ░░░░░░░░ a great scenario continued ░░░░░░░░ low unemployment a little ░░░░░░░░ more inflation than I ░░░░░░░░ like but it s ░░░░░░░░ s not bad That ░░░░░░░░ not be a bad ░░░░░░░░ had Jeffrey over Your ░░░░░░░░ in Los Angeles has ░░░░░░░░ us economy in southern ░░░░░░░░ These days we ll ░░░░░░░░ unemployment rate is one ░░░░░░░░ that is op so ░░░░░░░░ look at nationwide I ░░░░░░░░ it s three five ░░░░░░░░ unemployment rate is up ░░░░░░░░ half a percentage point ░░░░░░░░ we have had We ░░░░░░░░ more of the direct ░░░░░░░░ in the last