voelker in any way, but we are strongly committed.nd it is the thing we need so we can get back to the lake market that we all want. >> reaching the standard that voelker left at the fed would be a high reach, but one that in tibet there should try to get there, wouldn't it >> yes >> thank you. >> minus gas, food and rent, 4.9%, even slightly in decline from the previous report so that levels the real culprit, gas, food and rent first, the issue of gas price inflation is a global phenomenon is that correct? >> yes gas prices are a function of oil prices to a significant extent then the refining spread as well. >> right that had been exacerbated by the ukraine invasion we deliberately cut off access in russians supplies and the other problem, also with hike roe carbon, it's a cartel that sets the price -- >> i'm sorry, what's -- >> the cartel sets the pride , yes, globally that cartel has a major impact on the price of oil. >> they have decided that further production is not as lucrative as just sitting back and making money that's wha

that's what investors have missed which this is a voelker-esque type of fed where they are clearly focusedgetting inflation down and they are not going to throw away 40 years of credibility which we know matters a lot over the medium to long term. they are not going to throw that away just because the markets are telling them. >> to take that a step further does that mean the fed won't tolerate easing financial conditions anytime soon and what does that mean for how you put money to work? >> i think the financial conditions picture has been much stronger than i think the fed anticipated. i think financial conditions have to worsen. i think that the natural path here. yes you had really big moves thus far. i understand that where there's more value in the market today than there was six months ago, absolutely. but for example we had this internal poll we conducted with almost 300 of our investment specials and 76% of those folks believe we will have a hard landing and in europe at the most 90% believe there's a hard landing. so the point being there still a lot of risk out there on this har

. >> this is a of voelker-esque type of fat where they are focused on getting inflation down and they are not going to throw away 40 years of credibility. they will not throw that away just because the markets are telling them. jonathan: he is not constructed on this equity market. we will hear from jay powell in about 40 minutes time. futures up a third of a percent on the s&p. downside surprise on german cpi relative to what we expected yesterday. once we got the regional breakdown, it was longer than expected. 3.14 the 10-year. i was reading through those remarks from loretta mester, really interesting stuff. this is a massive change at the fed and they are working through it in real time. the current challenging situation have contributed to inflation being at 40 year highs calls into question the conventional view that monetary policy should always work through shocks. in some cases, it would require policy action. the world we have been in in the past 18 months. tom: she is the mathematician of the fed. john williams joints her in that ability, as well. but it speaks to these un

voelker at the time came in and jacked up rates until we had recession. so that is kind of the risk i think if the fed goes really hard to hear, but that is certainly not the intention they have. jonathan: how achievable are these forecasts over at the federal reserve, unemployment at 3.5% this year? how achievable is that? kathy: i would say that is aspirational. [laughter] it would be surprising to me if you could have the kind of monetary policy we are getting with higher rates and qt along with a global tightening cycle and still keep unemployment near 3.5%. jonathan: do you think they should rename the summary of economic projections federal reserve aspirations? kathy: i think so. they are never going to forecast failure, right? jonathan: so true. tom: shocked. kathy: they have to forecast what they hope happens. jonathan: thank you, kathy jones of the schwab center for financial research. the aspirations of the federal reserve. tom: there's not much to talk about here. their aspiration is to wait and wait. every central bank does this. it is allan m

call in for reenforcements, that means taking a page out of the page book of alan greenspan and al voelkerto try to tame mortgages, credit cards, car loans. the fed was late, first they thought it was transitory. they decided to retire that term and raise interest rates and now the expectation is an even bicker interest rate hike, three-quarters of a percentage point for the first time since 1994. the goal here is straight forward. they want to cool off demand by raising borrowing costs. that should slow things down. it's not necessarily easy here. because if they don't do enough, which is arguably what will happen then inflation can go hotter and heart and go out of control f. they too too much they can end up slowing the economy into a recession. >> larry somers, the former secretary talk about this last night, months ago when joe biden was saying inflation is transitory. larry somers made that point last night, saying this is a tough call for the fed. he hopes they find the sweet spot because if they don't -- >> i'd be very surprised if we still didn't have inflation at a meaningful rat

. >> is powell basically voelker dealing in the aftermath of miller and ferns and as opposed to you knowwell dealing in the aftermath of for nike and yelling? is the dynamic similar which is the psychological overcoming of inflation and what might be different is the structural labor market changes and where it is going to be really difficult to reverse the move in the labor market. how much of this is psychological from the fed at this point and how much of this is really what they have to continue to do? >> well, i think that they were embarrassed by what they have presided over, and i think for the sake of powell's reputation, he does not want to be burns. you make a point that is important about the structural change in the labor force and that that keeps inflation elevated and then that gets to okay, what happens next. let's just say that the economy is in a recession and inflation is only slowed to 3% to 4%. does that all of a sudden become tolerant by the fed rather than trying to push that down to 2? i actually think the answer will be yes, because they will lean toward helping t

i served in open market operations and was a secretary to paul voelker, who is president at the new york fed. so i have had three government assignments. it seems to me if you do nothing else in government, you should promote policies that would generate growth, prosperity, jobs. that is our job. i am a free-market capitalist. i believe in free enterprise capitalism. i think it is the surest path to growth. when i was in the cnbc days and had my show there for many years, i use to open up the show every night by saying free-market capitalism is the best path to prosperity. i set it for many years. i believe that. i still believe that. coming back to your questions, essentially, you need the lowest possible tax rates, the least possible government intervention -- think of it as minimal regulations, and you need a sound currency, which i call king dollar. that was my phrase years ago. if you break that, if you move to a policy regime of high tax rates, excessive government intervention and regulation and a cheap dollar, a debased dollar, depreciated dollar, you will find yourself with high