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• 00:00THE DATA WE GOT TODAY, 206,000 ON PAYROLLS. UNEMPLOYMENT WENT DOWN TO 1.4%. DOES THIS LABOR MARKET NEED MORE SUPPORT OF POLICY? BETSEY: IT DOES NOT NEED MORE SUPPORTIVE POLICY FROM THE FED RIGHT NOW. THE U.S. LABOR MARKET HAS CONTINUED TO SURPRISE OVER THE LAST COUPLE OF YEARS. WE ARE IN A MUCH STRONGER PLACE THAN ANYONE THOUGHT WE WOULD BE EVEN PRIOR TO THE PANDEMIC. I DON ‘ T THINK THE FED HAS TO WORRY THE ECONOMY IS OVERHEATING BUT I DO THINK WHEN YOU COMBINE THE JOB MARKET WE GOT TODAY WITH SUCH A HIGH READ ON CONSUMER INFLATION EXPECTATIONS COMING OUT OF THE MICHIGAN SURVEY, THEY NEED TO SIT ON THEIR HANDS A LITTLE WHILE. JOE: IS THIS THE HIGH WATERMARK? WHEN YOU CONSIDER THE IDEA OF MASS DEPORTATIONS BEGINNING LESS THAN TWO WEEKS FROM NOW, WILL WE LOOK BACK AT THIS AS THE PEAK? BETSEY: OH, THAT ‘ S ASKING FOR A CRYSTAL BALL. THINK EVERYONE HAS A LOT OF FEELINGS AND EXPECTATIONS FOR WHAT WILL HAPPEN WHEN INCOMING PRESIDENT TRUMP STARTS TO IMPLEMENT HIS MANY CAMPAIGN PROMISES. ONE OF THE REASONS WE MIGHT HAVE SEEN WHAT I THINK WAS A DRASTICALLY HIGH EXPECTATION CONSUMERS HAVE FOR INFLATION PICKING BACK UP COMPARED TO WHAT WE THOUGHT CONSUMERS WOULD SAY IS BECAUSE THEY ‘ VE BEEN WATCHING THE NEWS WHERE PEOPLE TELL THEM TRUMP ‘ S GONNA PUT TARIFFS ON EVERYTHING, WHICH IS WHAT HE ‘ S PROMISED AND IT WILL CAUSE PRICES TO GO UP. BUT THIS IS A MAN WHO DOESN ‘ T ALWAYS DO WHAT HE SAYS HE ‘ S GONNA DO. EVEN STUFF HE ‘ S SAID HE ‘ S DONE HE MAY OR MAY NOT HAVE ACTUALLY DONE. WHAT WILL HAPPEN WITH HIM WITH IMMIGRATION, DEPORTING PEOPLE HE DEEMS TO BE NOT IN THE COUNTRY. WE CAN ‘ T KNOW BECAUSE WE DON ‘ T OF THE MAGNITUDE OF WHAT HE WILL DO. HIS CLAIMS FOR MASS DEPORTATIONS TO ME SEEM ALMOST LOGISTICALLY IMPOSSIBLE. WE WILL SEE WHAT HE ACTUALLY ACCOMPLISHES. OBVIOUSLY GETTING RID OF A LOT OF PEOPLE WILL CREATE A LOT MORE CHAOS THAN ECONOMIC CHAOS. KAILEY: YOU ARE RIGHT IN THAT WE DON ‘ T NECESSARILY KNOW WHAT DONALD TRUMP WILL DO ON A NUMBER OF THINGS, DEPORTATIONS AND ALSO IF HE ‘ S SERIOUS ABOUT ENACTING THE KIND OF TARIFFS HE ‘ S DISCUSSED, PERHAPS UNIVERSAL ONES APPLIED TO SOME COUNTRIES AT LEAST ON SOME GOODS AND THAT GETS US TO THE INFLATION QUESTION. WE GOT DATA FROM THE UNIVERSITY OF MICHIGAN TODAY NOT JUST ON CONFIDENCE BUT ALSO INFLATION EXPECTATIONS, WHICH HAVE GONE UP PRETTY DRAMATICALLY. DO YOU THINK THAT COULD BE IN PART TO THE ANTICIPATION OF POLICIES IN THIS ADMINISTRATION OR IS THAT JUST THE FACT THAT PEOPLE AREN ‘ T SEEING PRICES AT THE GROCERY STORE GOING DOWN? BETSEY: THAT ‘ S WHAT I WAS REFERRING TO. I THINK GIVEN THE NUMBER THAT CAME OUT OF THAT REPORT, I THINK IT HAS TO BE THAT PEOPLE, AND ENOUGH PEOPLE ARE THINKING TARIFFS WILL RAISE PRICES THAT IT CHANGED EXPECTATIONS. THAT CREATES A PROBLEM FOR THE FED BECAUSE THE FED ‘ S JOB IS TO KEEP THE RATE OF INFLATION AT 2% REGARDLESS OF WHERE IT ‘ S COMING FROM. IF IT ‘ S COMING FROM TARIFFS, THE FED IS STILL SUPPOSED TO GET THE INFLATION RATE DOWN. WHEN PEOPLE EXPECT HIGHER INFLATION, THINK THE NUMBER IN THE REPORT WAS 3.3 PERCENT EXPECTATION FOR INFLATION IN THE COMING YEAR, WHEN THEY EXPECT THAT, THEY START TO BEHAVE LIKE THAT. THAT MEANS THEY ASK FOR BIGGER RAISES TO MAKE UP FOR AN EXPECTATION THAT PRICES WILL BE RISING 3.3% AND THAT BECOMES A SELF-FULFILLING PROPHECY. THAT IS WHAT THE FED HAS TO WORK REALLY HARD WHEN PEOPLE ARE ACTIVELY MAKING DECISIONS TO TRY TO CREATE 3.3% INFLATION. I THINK THAT MIGHT BE A LITTLE BIT OF A WARNING SIGN TO THE INCOMING PRESIDENT. IF I WAS ONE OF HIS ADVISORS I WOULD BE SAYING EVEN BEFORE YOU ENACTED A SINGLE TARIFF, HE STARTED TO CAUSE INFLATION TO PICK UP IN THE UNITED STATES AND YOU MIGHT WANT TO SLOW YOUR ROLL A LITTLE. JOE: THIS IS THE LAST JOBS REPORT OF THE BIDEN ADMINISTRATION COME A HE ‘ S IN THE WHITE HOUSE. WE UNDERSTAND HE WILL BE SPEAKING AT SOME POINT TODAY ABOUT THE JOBS REPORT. HE KICKED OUT A STATEMENT EARLIER, 2.2 MILLION JOBS IN THE LAST YEAR. WHAT IS THE MESSAGE? WHEN WE HEAR MONTHLY FROM THE WHITE HOUSE, THE WHITE HOUSE SAYS THERE ‘ S MORE WORK TO BE DONE. CAN YOU SAY MISSION ACCOMPLISHED TO THE AMERICAN PEOPLE? BETSEY: I WAS THINKING ABOUT THIS EARLIER TODAY, SUCH AN AWKWARD REPORT IN FEBRUARY BECAUSE YOU ARE RIGHT, THE REPORT WILL COME OUT WHILE TRUMP IS PRESIDENT, BUT THE SURVEY WILL BE DONE WHILE BIDEN IS PRESIDENT SO IT DOES REFLECT BIDEN ‘ S TIME IN OFFICE. THERE ‘ S BEEN A REMARKABLE JOB GROWTH AND REMARKABLE GDP GROWTH UNDER PRESIDENT BIDEN. I DON ‘ T THINK I WOULD RECOMMEND ANYBODY STAND UP AND SAY MISSION ACCOMPLISHED BUT I HAVE NO DOUBT HISTORY WILL LOOK BACK AT WHAT HAPPENED OVER THE LAST FOUR YEARS WITH ASTONISHMENT AT WHAT THE U.S. HAS ACCOMPLISHED. I WAS RECENTLY IN AUSTRALIA TALKING WITH SOME AUSTRALIAN POLICYMAKERS WHO ARE WORRIED ABOUT SLOW GDP GROWTH, SLOW PRODUCTIVITY AND COMPARING IT TO THE UNITED STATES AND THEY SAID THAT ‘ S AN UNFAIR COMPARISON, THE UNITED STATES IS BLOWING EVERY COUNTRY AWAY, NOBODY CAN BE THE UNITED STATES WITH ITS FAST ECONOMIC GROWTH AND FAST EMPLOYMENT GROWTH AND PRODUCTIVITY GROWTH. IT IS THE OUTLIER. YOU KNOW WHAT, IT ‘ S A GREAT OUTLIER TO BE AND I THINK IT ‘ S SUPER UNFORTUNATE THAT THE AMERICAN PEOPLE DO NOT UNDERSTAND WE HAVE GROWN FASTER THAN BASICALLY ANY OTHER COUNTRY, DEVELOPED COUNTRY IN THE WORLD AND WE ‘ VE DONE IT NOT JUST WITH HIGH EMPLOYMENT BUT VERY INCLUSIVE GROWTH, SO SHRINKING OF INEQUALITY, RISING WAGES, WHICH IS COMING FROM HIGHER PRODUCTIVITY. OTHER COUNTRIES DON ‘ T HAVE THAT. EVERYBODY IS LOOKING AT HAS BEEN HAPPENING IN THE UNITED STATES TO FIGURE OUT HOW THEY CAN EMULATE IT. KAILEY: AND THIS U.S. ECONOMY IS WHAT THE INCOMING TRUMP ADMINISTRATION WILL BE INHERITING AND PRESUMABLY SCOTT BESSENT WILL BE PART OF IT, HIS CONFIRMATION HEARING ON THURSDAY. IF YOU COULD ASK THEM A QUESTION IN THE HEARING WHAT WOULD IT BE? BETSEY: WELL, I THINK WHAT I WOULD ASK IS WHAT DOES HE SEE OVER THE LAST FOUR YEARS, WHAT DOES HE SEE AS THE POLICIES THAT HAVE HELPED TO CREATE THE RAPID NEW BUSINESS FORMATION WE ‘ VE SEEN OVER THE LAST TWO OR THREE YEARS. IT ‘ S MUCH MORE RAPID THAN ANY ADMINISTRATION THIS CENTURY, AND HOW WOULD PRESENT — PRESIDENT TRUMP CONTINUE THAT?