00:00 Speaker A
It seems as though the committee is growing more concerned about making some sort of policy mistake. And indeed, we don’t have a lot of public data right now because the government’s shut down and a lot of economists I’m speaking with are, you know, it’s the path is not very clear. So, do you think that the risk is high of a policy mistake?
00:18 Speaker B
Well, it’s I think this is um, yes, this is very close to a policy mistake. Only time will tell, but I would say that
00:26 Speaker B
um, the reason there is a split is that there is a lot of information suggesting the economy is is in a stable growth path. Also, as you look forward, uh, the recent tax legislation from this past year takes effect. There’s a lot of stimulus in the investment side uh uh uh from that uh tax bill, uh that is the expensing of investments that makes it more attractive to invest, that will stimulate the economy.
00:46 Speaker B
And so you have this momentum for growth going forward. And then, um the other side of it is, well, that the employment numbers haven’t been as strong as we would like. Uh and of course that’s mixed by immigration as well as uh demand overall, but still the unemployment rate is fairly low, so you have that factor coming into it. so you have these these divisions. And one final thing,
01:04 Speaker B
that I think uh is a bit of a surprise to me was the size of the announcement in terms of their uh re-engaging in uh asset purchases of government securities to the uh level of 40 billion per month. That’s a big switch from quantitative tightening and very stimulative in and of itself, depending on how they how they manage that. And because if you think about 40 million 40 billion a month is 480 billion a year, that’s half a trillion. That’s a lot of uh, that’s a lot of money coming, base money coming into the system. So, yeah, with all this going on, there’s going to be a lot of disagreement within that committee.