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00:00What are your thoughts on where the neutral rate is right now? Well, I'd agree with Kelsey. We're all trying to figure out where the neutral rate is, but I'm not really sure where the treasury secretary got that estimate because there's nothing that I can see in the data that would suggest we need rates slashed back sharply. And in fact, I think that that would be fairly inflationary, both on the asset price side and on goods and goods and services. So it's really difficult to see to make a case for that big a cut in rates unless you're really looking for the economy to fall off a cliff. I do think that there's room for a 25 basis point record at the September meeting. That's kind of been our call all year because we think that the impact of tariffs and some of the federal spending cutbacks will work their way into the numbers, particularly the employment numbers by the fall. But at going much beyond that, maybe another 25 by the end of the year, we really have to see the data play out in such a way that consumer spending really continues to slow down, where hiring gets much weaker than it already has and or the unemployment rate moves up. And I'm not convinced any of that's going to happen. So 25, maybe another 25 by the end of the year, but 150 or so, I have no idea where that comes from.

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Difficult to See Bessent Size Rate Cut: Kathy Jones

US Treasury Secretary Scott Bessent made his most explicit call yet for the Federal Reserve to execute a cycle of interest-rate cuts, suggesting the central bank’s benchmark ought to be at least 1.5 percentage points lower than it is now. However, Schwab Center for Financial Research Chief Fixed Income Strategist Kathy Jones says it is difficult to make the case for a big cut unless they are looking for the economy to fall off a cliff. She speaks with Vonnie Quinn on “Bloomberg Markets.” (Source: Bloomberg)

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