Fed Playing Close Attention to Labor Market: NYU's Henry

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Aug. 25 (Bloomberg) -- Peter Henry, dean of NYU's Stern School of Business, discusses Federal Reserve monetary policy and the growing popularity of food trucks on "Bloomberg Surveillance." (Source: Bloomberg)

Yellen's speech.

It reminded me about the speech that malcom gladwell gave.

That is the first shameless plug there.

Malcolm gladwell.

I'm just amazed that the yellen and gladwell comparison.

Puzzles and mysteries.

Janet yellen said that what is going on in the u.s. market is a mystery.

We don't know how much slack is left in the economy.

Wages have been rising at about 2% per year.

Real wages are basically steady.

We don't know whether wages have a lot of room to rise or whether they are going to remain flat.

May i suggest after the mario draghi speech on the follow-up saturday and sunday that all of the eco-talk is being overwhelmed by markets and by europe right now.

Well, central bankers have a key mandate, to focus on price stability and full employment.

They have a job to make sure they focus on the long-term instability.

The speeches may not have been great theater.

What is not great theater is often best for the economy . . i went back of her janet yellen's speech and there were five mentions of the dual mandate.

We know the fed has a fed -- dual mandate.

Is she reminding everybody that she is still focused on unemployment?

Absolutely.

It is not so simple to understand the economy and full employment.

We don't know.

It is a mystery right now.

She said one piece of information is not going to solve the mystery.

I will go with the idea that we need more.

I would just suggest obe.

That we are becoming overcome by events.

None of this matters if we have negative two-year yields.

The german two-year yield, it is like this down.

Are they talking about this on the sideline?

Mario draghi's speech was much more interesting in a way.

Thank you.

I agree.

He said forcefully that we need more reform in europe.

Monetary policy alone is not going to fix the problems in europe and we know that is the case.

If you look at the overall market reaction to the speeches, what the markets are saying is that things are actually weaker in the long-term than expected.

He said that europe needs reform in two ways.

One is structural reform.

France and italy need to change the way they approach employment.

He also said explicitly that countries in europe need to spend more money.

That felt new and like a germanic departure for the ecb.

-- dramatic departure for the ecb.

It was a soft punch at the austerity of the past.

He said it does not make sense to continue to have easy monetary policy if businesses are not going to invest.

They are not going to invest unless we address the business side.

Making it easier for small and medium-sized enterprises to take it vantage of looser monetary policy.

-- advantage of looser monetary policy.

The euro as a scapegoat for the blunders of politicians.

We talk about this uneven pace of growth.

Do you get the sense from being in jackson hole that these are crosscurrents that may play a role in how the fed makes its next move?

I think the fed will be playing -- paying close attention to the u.s. labor market.

The key issues have been working at cross purposes for the past few years.

You have easing monetary policy and tight fiscal policy and the lack of structural reform.

In the united states, we have gotten back on track.

For a number of years, we had easing and sequestration.

We had things working at cross or business.

-- cross purposes.

There is no one thing to tell us which way things will go.

I want to rip up the script.

This goes to our news of this morning a burger king.

-- of burger king.

There are no burger king's with insight of new york university.

What do mba students eat at nyu?

Food trucks.

What is the trend in food trucks?

Waffles, korean ribs.

I think this says a lot about what burger king is doing.

The elite are walking away.

You mentioned the "wall street journal" this morning.

Maybe it is not fixable.

Burger king and mcdonald's are trying to pull on the same food lover -- same lever as they always have been.

The food trucks are a different thing.

It is a great example of innovation.

It is innovation, but do you think the restaurant business -- to nyu students sit in the food truck line?

If you come down sometime, you will see everything from waffles.

Is this "surveillance" breakfast innovation?

Any stern business school students go on to open food trucks and do well?

We have had food trucks.

We have had at least one student in the last year.

Twitter gets a lot of flack for not providing anything valuable to the economy, but it i think -- but i think it is important to note that twitter allowed food trucks to be possible.

This text has been automatically generated. It may not be 100% accurate.

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