kailey: if you ask jan hatzius, going back down to 1.5% to 2% in the back have a 2022, but whether or not consumers are actually going to tolerate these higher prices come up that means for growth, but also for companies because we are seeing important in this earnings season is the ability to pass higher input costs onto those consumers. if consumers prove unwilling which is that going to mean for the margins of some of these big corporate? jonathan: stag light sounds like a drink you would have before a wedding. [laughter] futures look like this, down 34, down 35, -0.8%. in the bond market coming to slightly defensive. yields lower by two or three basis points to 1.24%. the dollar not doing a lot against the euro, euro-dollar $1.1885. lisa: real yields more negative if you look at the 10 year. inflation expert patients staying higher than where yields are, leading to this question of what is behind the move. i love that fed chair jay powell said i don't know, and every one is saying even he doesn't know. jonathan: they don't know either. and you know everybody savor it excuse, techn

the lovely panel i would like to see would be jan hatzius and ellen zentner. i think there are real nuances between those two houses, and many other houses as well. jonathan: investors are concerned about the impact on economic growth. i imagine most of the team agree with that, that it doesn't have to translate into a major market risk, just somewhat of a risk. lisa: how many years have we been talking about goldilocks? it is not necessarily a bad thing to see growth moderate. what will pressure stocks downward? tom: jon, do you want to make 43% of the market? krispy kreme and their original blaze, they say this is the new business plan. jonathan: thank you for the single business call. lisa: are you hungry? jonathan: he must be. [laughter] lisa: we are both speechless. how do you pick up from that one? jonathan: i don't know. tom: we bring quality research to you. i need to sit next to you. sitting away from you, i just need to know where you are going sometimes. tom: we all need to be in the same room together. jonathan: down six on the s&p. yields at 1.24

as you point out about jan hatzius, you're looking at not the growth this year but the deceleration intor. romaine: what has been the change when we went from talking about 2% yields on the 10 year to now talking about sub 1% on nominal yield. jonathan: the emphasis of the federal reserve. the emphasis of the federal reserve has shifted. we have gone away from focusing on the labor market. it is up to the federal reserve to say whether this is reality. the perceived reality of the federal reserve's we have had an emphasis shift away from a focus on the labor market and the slack that remains towards a risk management position. i think a lot of people over last month have conflated a change in the balance of risk at the federal reserve with a shift in the reaction function. most vet officials would tell you there has been no shift in the reaction function on this federal reserve whatsoever. tom: it is a new theory to say the least. joining us now is the for more -- is the former of the federal reserve system, frederic mishkin is at columbia university. everything he is ever written has pa

that was jan hatzius and the team at goldman sachs. the chief economist joins us now.downgraded your forecast. can you walk us through this a little bit more, the degree to think you will -- you think we will celebrate? jan: we are looking for -- we will decelerate. jan: we are looking for pretty significant celebration. pretty significant growth in q2, probably more in q3, but then out by the second half of 2022. that is partly because the return to full utilization in the service sector is a slow process. just one data point that i think is very important, the office occupancy rate in the united states is still only 30% of the pre-pandemic level. even in texas, which is most advanced, it is only 50%. i do think those numbers are going to be much higher eventually, but it is a very slow process. jonathan: 1.5% to 2% trend growth. that was amazing just to read that. 1.5% to 2% by the back end of 2022. that is the call. help me understand how you reconcile that with your call from the federal reserve. how does the policy call reconcile with the growth call you are makin

tom: jan hatzius coming out with gdp estimates within the report, i believe we had what is importantme is you go back to 2019 for a pre-pandemic compare. if you take two years of their estimated gdp growth, you end up with 11.5% growth, 24 months which is 5.75% per year. the run rate in america is in the vicinity of 2% to 3%. jonathan: gdp growth in 2021 expect it at 6.8% in the u.s.. in 2022, 4 .7%. you're looking at 6.8% this year. they are great gdp figures. if that something that some of these banks can actually leverage? because so far and hasn't translated to what investors were hoping for. do you start to see that happening cute or and beyond? -- happening q4 and beyond? stephen: loan growth has started to resume of this and. that will be the most likely beneficiary for banks is to get the loan balances to expand a little bit, where they have just sort of held back. we think there's a number of reasons for that. confidence previously had not been where it needed to be. you had tons of government stimulus in the form of enhanced and employment benefits or the outright checks to

were added but the economy remains 6.8 million jobs short of where it was before the pandemic jan hatziusake on the number. >> i thought it was obviously a strong payroll gain and therefore encouraging for a couple more disappointing numbers. i think we also learned that the explanations for the weaker numbers in april and may may be seasonal, it is probably weighing on job growth, and probably some impact from the unemployment benefits, and labor supply, that those probably are pretty good explanations so i think it is reassuring in that sense at the same time, slightly higher unemployment rate, underscores how far we still have to go to get back to more global monetary conditions >> what did we learn from the report, jan, about the so-called labor shortage and obviously on the other side of that, the significant increase in wages that we've seen? >> i think we learned that the labor shortage is to some degree probably driven by the still very unusual conditions we're in the unusually high benefits, which are putting a lot of upward pressure on wages at the bottom end of the income distr

i want to talk to jan hatzius, julia coronado, and on and on.onathan: i just love that i know you are talk about. 4353 on the s&p, down 15, -0.25%. of about 0.1% on the nasdaq 100. yields lower by a couple of basis points, 1.3290%, going into chair powell a little bit later. tom: i've got to cut in here. this is important. peter from chapel hill emails in and says put a cork in it. lisa: thank you for that. 7:30 am, we are expecting morgan stanley earnings. very interested to see how they come in with dealmaking, what guidance they give, and how they are dealing with acquisitions. going to the market share gains they have been getting from the likes of some swiss bank, maybe credit suisse, and a number of developments we have seen across the board with big u.s. banks. u.s. initial jobless claims coming out. the expectation is for it to be the lowest level going back to the start of the pandemic, still 350 thousand individuals filing for unemployment benefits. that is the expectation. the key i am looking at our signs of slack, signs of weakness