Transcript: Nathan Sheets

The transcript from this week’s MIB: Nathan Sheets, PGIM’s Chief Economist, is below.

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VOICE-OVER: The Masters in Business podcast is brought to you by Invesco. Every day we bring together ideas with technology, data with inspiration, investors with solutions. Let’s invest in greater possibilities together. Find out more at Invesco Distributors, Inc.

VOICE-OVER: This is a Masters in Business with Barry Ritholtz on Bloomberg Radio.

RITHOLTZ: This week on the podcast I have an extra special guest. His name is Nathan Sheets and he comes to us by way of PGIM Fixed Income, a — a giant institutional shop. Their fixed income department alone, $743 billion in fixed income assets.

Nathan has a unique background. He served in the Treasury Department. He was with the Federal Reserve for 18 or so years. He worked at Citi and then Prudential, and now he’s been at PGIM for a while. He is uniquely situated to comment about and analyze and discuss monetary policy; state of the economy; how best to analyze employment, inflation; what it means for interest rates; what that means for fixed income investments. It really is a fascinating conversation filled with wonky goodness. So if you are all remotely interested in any of those things and you know I’m interested in all of those things, you will find this to be an utterly fascinating discussion.

So with no further ado, my conversation with PGIM Fixed Income’s Nathan Sheets.

VOICE-OVER: This is a Masters in Business with Barry Ritholtz on Bloomberg Radio.

RITHOLTZ: My special guest this week is Nathan Sheets. He is the Chief Economist and Head of Global Macro-Economic Research at PGIM Fixed Income, which manages $743 billion in assets. Previously, he was the Undersecretary of the Treasury for International Affairs. Prior to that, he worked at U.S. Treasury Department as well as the Federal Reserve where he served as Director of the Division of International Finance.

Previously, he was at Citigroup. Did I get that right or wrong? How far off was I?

SHEETS: I — I think you nailed it.

RITHOLTZ: All right.


RITHOLTZ: Nathan Sheets, welcome to Bloomberg.

SHEETS: Pleasure to be here. Thank you.

RITHOLTZ: So you have a fascinating background. You are — now you’re currently at PGIM Fixed Income. Previously, you were at Prudential, at Citigroup, the U.S. Treasury and the Federal Reserve. Was — was this the plan? Was this the career path you had mapped out for yourself?

SHEETS: I think it would have been impossible to foresee how things would evolve. But coming out of grad school, I did want a career in practical economics. I wanted to take the theory that I had learned and apply it in a way that it might actually make a difference in — in the lives of people.

RITHOLTZ: And hence, all this public service …


RITHOLTZ: … at the Treasury Department and the Federal Reserve.

SHEETS: I envisioned — I envisioned public service. My first job was — was at the Federal Reserve. But I’m also — you know, I think a practically-minded guy, at least as practical you can be and still be an economist. And I was interested in applying these kinds of principles in a — in a private sector context as well. So I could’ve have predicted the path or how things would evolve. I’ve been very fortunate in the opportunities that I’ve had, but I did very much want to do qualitatively these kinds of things.

RITHOLTZ: So — so you come out of your PhD program, you say, “I’m not going to go into academia,” but the next best — best thing is the Federal Reserve who typically hires PhDs as researchers. What — what was your first job at the Fed like?

SHEETS: The Federal Reserve for me, especially in those first years, was a vigorous post doc.


SHEETS: It allowed me to take the theory, as I said, apply it in practical ways to real world issues. So my first assignment was to follow Russia and some of the other transition economies — Poland, Hungary and so forth. I — in the — in the mid 1990’s, when they were transitioning from a centrally planned system into market-based economies. And it was — it was very exciting to see the interplay between politics and policy, and economics, and sociology through — through that period.

RITHOLTZ: So Russia continues to struggle with corruption on its path to capitalism. Some of the outer block former Soviet countries are doing much better. What’s that transition like? And are they still heading the right direction?

SHEETS: What we’re finding is that the countries that had some tradition of capitalism are doing quite well.

RITHOLTZ: Give us a few examples.

SHEETS: Most of those — most of those are the Central Europeans. The Czech Republic is doing very well. Slovakia is — is — is doing well.

Kind of the next wrong, you’ve got countries like — like Bulgaria, Romania, maybe not quite as well as — as the Czech Republic and — and the Slovak Republic, but they’re — they’re proceeding.

Russia, as you say, continues to struggle. And frankly, I think history will have a judgment as to whether we had opportunities there to help the Russians more effectively than we actually did. And then many of the former Soviet republics continue to struggle. They have very low levels of per capita income and have a significant distance you have to go before they’re really part of the global economy.

RITHOLTZ: Since your early days at the Fed, the global monetary system has really evolved, some of it certainly in response to great financial crisis. Where do you see the future of monetary policy from — from your perspective at PGIM today?

SHEETS: During the 25 years when I’ve been a professional economist, the global economic and monetary system has absorbed two very large shocks or changes. I’d say the first one has been the ongoing integration of China.

From a structural standpoint, the addition of 1.25 billion Chinese into the global economy has been significant. We’re still dealing with the implications of that.

RITHOLTZ: Deflationary or inflationary or at times both?

SHEETS: I think so far more deflationary or disinflationary that most of those folks had lower wages than western workers, and I think that’s put downward pressure on wages throughout the world over the last 20 or 25 years.

RITHOLTZ: And the second issue you mentioned?

SHEETS: The second major issue is the global financial crisis. So China, the big structural issue, the global financial crisis is the big cyclical issue. But the bottom line and as it pertains to the international monetary system, in particular, is that notwithstanding these two big shocks, the role of the dollar and the centrality of U.S. markets has remained largely intact. The dollar is still by far the world’s leading reserve currency. U.S. financial markets are essentially unrivaled in the world that that, in many ways, the world is more multipolar, but not so much in finance.

RITHOLTZ: Let’s talk a little bit about your role at the Federal Reserve. How did you start? What did that evolve into? And — and how closely did you end up working with the board and its chairman?

SHEETS: So I was at the Fed for 18 years. During the entirety of the time, I was in the Division of International Finance. During the first 14 of those years, I held a variety of roles. I mentioned Russia and I was following emerging markets in Japan and so forth.

During the last four, which started in 2007, I was the Director of the International Finance Division as the global financial crises emerged and had the opportunity and the responsibility to work closely with Ben Bernanke and the board and — and — and others and trying to respond to that — that terrible set of economic conditions.

RITHOLTZ: So there’s been a lot of revisionist history. If you remember early on in the — in the financial crisis, the Fed is going to be the ruin of all of us. They’re going to cause hyperinflation. They’re going to destroy the dollar. They should just stand down. What sort of grade do you give the Federal Reserve for the job they did both before during and after the financial crisis?

SHEETS: So I’m probably a little biased. I would give the Fed, I don’t know, a B for pre-crisis. And I think the criticism there is not about monetary policy, which I think was about right, but the Fed didn’t do what it could have done it in the regulatory space and allowed imbalances in the financial system to emerge.

RITHOLTZ: Ed Gramlich and — and his work for sure?

SHEETS: Exactly, exactly, and the Fed was not unique. The Fed was not alone, but I don’t see I can give the — the Fed more than a B.

During the heat of the crisis, a — a — a vigorous response was absolutely necessary. As we were sitting in the Fed’s building and those terrible facts were emerging, it reminded me a bit of the Jack Nicholson line, “You can’t handle the truth.”


The truth was terrible. And Bernanke and Geithner, and then Paulson at the Treasury, they just worked through this and he had a set of — a set of responses. I would give the Fed an A for that period.

Lehman, obviously, failed and no one saw the consequences of that. I think they were going to let somebody fail at some point. That’s why I don’t give them an A plus.

And then frankly, since the financial crisis, I think the Fed again has done a pretty good job, keeping — keeping inflation expectations well anchored and supporting growth in the U.S. economy. When you look around the world, you know, we can’t say things are going gangbusters in the United States, but we’re doing better than Europe and Japan and — and many others.

RITHOLTZ: So let me push back a little bit. I don’t think we’re all that far apart and, in fact, I think revisionist history helps the Fed’s decision with Lehman Brothers because subsequently learned that Lehman brothers had a negative net worth of minus $150 billion. Nobody could’ve taken Lehman Brothers on. P.S. Dick Fuld turned down Warren Buffett when they needed some capital six months before they collapsed.

At what point — I just picture these meetings at the Fed where someone says the Citi had said no to Buffett, how can we possibly bail him out? It’s a — but here’s where I disagree with you.

So in the period leading up to the crisis, we’re — we’re totally in synch about people like Ed Gramlich should have been listened to. He understood the regulatory lapses that were being taken advantage of by the private sector. But dear Lord, we had Federal Reserve rates under two percent for three years and at one percent for a year. That really kicked off a giant inflationary spiral. I think Greenspan was far too accommodative post 9/11. He was emotionally shaken up and did not normalize rates fast enough.

I’ve heard people make the same complaints post crisis the Fed has not normalize rates fast enough. In each case, both instances led to income inequality and political instability. How far off is — is that criticism?

SHEETS: So when I think about what a different path the policy rates might have looked like and suppose you compare it to a benchmark like the Taylor Rule, the Fed was a little bit softer than the Taylor Rule, but in my mind the misses are a couple of rate hikes and a little bit in timing. It doesn’t seem like even if we think there should have been a — a more vigorous monetary policy response that the difference between what they did and what one might envision was large enough to explain the imbalances and problems that erupted in the economy.

My feeling really is that the mistakes were on the regulatory side, on the governance side, in board rooms, amongst managers, amongst traders. I mean, there’s a lot of blame to go around for the global financial crisis.

RITHOLTZ: No doubt about it.

SHEETS: But I just don’t think that the misses for monetary policy were big enough to get really on the scoreboard relative to those other mistakes.

RITHOLTZ: So let’s — let’s play a counterfactual game. Some people wanted the Fed to do nothing during the crisis. Hey, it’s Congress’s responsibility. What would the world have looked like if the Fed said we’d like to create either Q.E. or SERP (ph)? But really it’s up to the Senate and the House. We’re going to do nothing and follow their lead. What would world have looked like then?

SHEETS: So as it was, we saw the unemployment rate rise to 10 percent. I honestly believe that if the Fed had done nothing and had just waited for Congress, we could have seen the unemployment rate twice that high.

RITHOLTZ: Yeah, 20 percent.

SHEETS: Twenty percent.

RITHOLTZ: Not unthinkable.

SHEETS: That would have been more like what happened during the Great Depression. And I think that if the Fed had been hands off that they had said that’s not our responsibility, that we could have had Great Depression 2.0.


SHEETS: And as it was, as we’ve said it was unimaginably terrible, but it could have been even worse.

RITHOLTZ: I don’t – I don’t disagree with that at all. Lots of folks got the implications of Q.E. wrong. Very famously a number of people had a letter in the Wall Street Journal to Ben Bernanke that said — I want to say this was 2010 or 2011 – “Hey, your quantitative easing is again. We’re going to see hyperinflation. We’re going to see the collapse of the dollar. You’re destroying the economy.” And, in fact, none of this sort happened.

Why did people get quantitative easing so long? Was it the fundamental understanding of economics? Was it bias or we just haven’t lived through anything like that? What excuses can these folks legitimately offer for being so wrong?

SHEETS: So as the Fed pursued quantitative easing. They were really pushing out the frontier of monetary policy. And the Fed, the markets and the rest of the world didn’t know the full implications of what they were doing. And I think that’s what kicked off some of these concerns and anxieties you described.

But I think that Ben Bernanke and Janet Yellen have been very effective at having their economic dashboard. And I would say at the center of that dashboard has been inflation expectations where if they have one objective, it’s to make sure that inflation expectations stay well-anchored around two percent. And these various policies that the Fed pursue quantitative easing and the like have pushed up inflation expectations some to keep them well-anchored. But there hasn’t been any overshooting.

RITHOLTZ: Let’s talk a little bit about your current role. It seems like your backgrounds in international finance at the Treasury and everything you’ve done at the Federal Reserve pretty perfect preparation for being head of research at a — at a big fixed income shop.

SHEETS: I — I feel like I learned global macro at the Fed and the Treasury. During my time at Citi, I learned how to talk to investors about markets, and I’m able to draw on that background on a daily basis in my work at — at PGIM Fixed Income.

The new dimension is being closer to the portfolio allocation process and closer to the portfolio managers and getting a better sense of the real considerations that go into that decision of should we buy or sell a given asset.

RITHOLTZ: So your clients are essentially all big institutions. How often do you get to interact with investors from these other institutions? And — and what are they concerned about today?

SHEETS: So the interaction with — with our clients is — is frequent and intensive. I travel extensively across the United States and also globally. We have lots of clients in Europe, Japan, Asia and elsewhere.

In terms of the issues I would say the short-term issue that clients are the most interested in is how much steam does this expansion have left? Are we looking at a recession around the corner? It’s been running for a while.

RITHOLTZ: We’ve been hearing warnings about that for two or three years.

SHEETS: Exactly. Is this late cycle or not? The longer-term issue that they are the most focused on is debt and demographics. What — what does this kind of adverse cocktail mean for a long-term performance?

RITHOLTZ: So — so let’s talk about the first one about the length of the cycle. I have long since complained that most economists are using the wrong dataset. It’s not recessions, it’s post credit crisis recoveries that they should be looking at. And — and they seem to be very different than the ordinary balance sheet recession. Explain that if you would.

SHEETS: Yes. So a — a decade or so ago Ken Rogoff and Carmen Reinhart did some very interesting work when they looked at decades and decades of recessions and compared those that are driven by banking crises to those recessions that arise for other reasons. And what they found was that the recoveries from those banking crises were systematically slower and that the slower pace of growth persisted for up to a decade.

And when you look at the U.S. experience, it seems to be matched Reinhart and Rogoff almost — almost — almost precisely. It really is — is quite extraordinary.

Now the one thing I would say that’s on the other side of the ledger is that this has been slower as they predicted, but this has also been a — an extraordinarily persistent expansion where, by July, it will be the longest expansion in — in U.S. history. So it’s been slower, but also longer lived.

RITHOLTZ: So some people have given Reinhart and Rogoff a little push back. “This Time is Different: Eight Centuries of Financial Folly” was the book they wrote post-crisis, but what a lot of folks do not recall is that, in December 2007, they put out a white paper that looked at crises. I want to say it was U.S., Mexico, Sweden, Japan, one other that escapes my — my recollection.

So before — like literally as the market peaked, they put out a — a paper that said — says here’s what how financial crises are different and why the recoveries are different also, very prescient, very few people really paid a lot of attention to that. But they were dead on, weren’t they?

SHEETS: They — they — they really were. You know, I’d say five years ago there was a debate as to what was going on, why was growth slower. And I think all the other explanations have kind of melted away. And we just have to accept the fact this was deep. It hit our financial sector. There are significant headwinds to — to bank credit and lending and probably also scars in terms of — of — of demand for credit in the corporate sector, which is translated not only into somewhat tighter credit conditions than what have prevailed, but also corporates have been hesitant to invest. And all of that has been a slower — slower recovery.

RITHOLTZ: You mentioned the longer-term concerns of your institutional clients are the combination of debt and demographics. I’m assuming they mean sovereign debt or is it also corporate debt. How do those two play together?

SHEETS: I would say primarily it’s sovereign debt with an asterisk that the private debt in China is — is — is — is very high.

RITHOLTZ: Is it really private debt isn’t kind of sort of like what we did with Fannie and Freddie? Isn’t there the full faith in credit of the Chinese government behind that private debt or am I overstating that?

SHEETS: In the first instance, it’s — it’s private debt, but your point, you know, doesn’t the Chinese government implicitly guarantee most of the debt in China is absolutely right. And so maybe you just think about that as a different form of — of — of public debt.

But then the question is as these debt levels rise and as we know in the future there are going to be fewer workers and fewer taxpayers, you know, how do these things interact with each other? What are those tax rates in 20 or 30 years going to look like in order to — in order to make payment to even service this debt? And will those tax rates have adverse implications or incentives to work?

Alternatively, will — will an older society be less prone to — to want to take risks and engage in entrepreneurship than a younger one? And if so, then that might mean you have a slower productivity growth. So there are a number of concerns where these issues of debt and — and demographics interact.

RITHOLTZ: I’m Barry Ritholtz. You’re listening to Masters in Business on Bloomberg Radio. My special guest today is Nathan Sheets. He is the Chief Economist and Head of Global Macroeconomic Research at PGIM Fixed Income, which manages $743 billion in fixed income assets.

Let’s talk a little bit about the economic cycle and where we are. It’s been a decade since the great financial crisis. We’re still a sub three percent economy, maybe even a sub two percent economy. Now that the highs of the 2017 tax cuts seem to have faded, what’s our growth outlook over the next couple of years? And — and why have we been so muddled over the past few years?

SHEETS: So my baseline would be that growth this year is a little bit over two percent and the growth next year, as fiscal stimulus rolls off, will be a little bit under two percent, but two percent is kind of trend.

RITHOLTZ: And that’s not terrible, right …

SHEETS: That’s not terrible.

RITHOLTZ: … for a mature economy.

SHEETS: Yeah, compared again to many of our international competitors.

RITHOLTZ: Japan, Europe, et cetera.

SHEETS: That looks — that looks pretty good. You know, underneath it, there’s a really a rather deep and important question, and that is that it feels like and the economic data suggest the productivity growth has slowed significantly over the last say 10 or 20 years. And — and the question is, on the one hand, we see these data pointing to a slower productivity. On the other hand, it feels like the world we’re living in is a wash in new technologies, miniaturization and — and machine learning, and artificial intelligence, and genomics and on and on and on. And the big question is when and — and if, but when do all of those — those developments find their way into the national income accounts and into productivity growth.

RITHOLTZ: So — so here’s my pushback on this, and — and people have told me that, well, you’re in a sector that is very dependent on technology so you’re seeing productivity. But we were once a heavy manufacturing economy. We’re now a service economy, which means every person in that value chain is using technologies, using computers and mobile and everything else. How much of that lack of — so therefore, there’s a ton of productivity growth at least I see it. So how much of that lack of productivity gains is really a measurement issue not a lack of productivity issue?

SHEETS: And so this is something that I have explored. I have rebalanced the U.S. sectors and said suppose that we had less services and more manufacturing more like what we had 10 or 20 years ago, what would productivity look like? And it would still be down, so it doesn’t seem like it’s the services rebalancing that’s driving it, but that — that — that can certainly — certainly be part of it.

I think another point that’s important is there is some evidence as what’s happened so far is that the — the leading firms in various industries have adopted a lot of these new technologies, but these new technologies have not yet defused themselves deeply into various sectors, largely reflecting that investment has remained kind of lackluster. A lot of this new technology, how are you going to get it as a firm? You’re going to get it by investing in firms that have been hesitant to — to put the resources on the table.

RITHOLTZ: Let’s talk a little bit about full employment and what it should look like. We’ve been hovering around four percent for a while. Shouldn’t we be seeing greater wage gains or is international competition tamping that down?

SHEETS: If you told me where the unemployment rate was I would have guessed that wage growth would be more rapid, so I think this is a — this is a puzzle. It’s a surprise.

When I look at the economy, what do I think is going on? Yeah, I think technology is probably holding down wage growth, certainly globalization is holding down wage growth. I think another key element, as I mentioned, is that inflation expectations are well-anchored. And so if you really think that inflation is only going to be two percent and your boss offers you one and a half percent raise, you know, is it worth it to get — to get agitated? And then that interacts with another key factor in the U.S. labor market as we have very little collective bargaining.

RITHOLTZ: I was going to ask you about that. The unions are a fraction of what they were before. What does that do to the bargaining power of — of individual employees even highly sought after STEM-type employees?

SHEETS: Yeah. So it means if you want a raise, you got to go slam your fist down on your boss’ desk and say, “Boss, I want a raise.” And that’s an uncomfortable conversation that if inflation was taking off, I think people would probably feel more comfortable having it.

Now I’d say the good news for American workers is we are seeing some acceleration. Wage gains are now over three percent, which is less than I would have expected, but it’s a little bit higher. And more importantly, we’re also starting to see increased churn in the labor market so people are leaving jobs and there are lots jobs posted. And the way you get a raise in the U.S. is to get an outside offer.


SHEETS: And then you go to your boss, you say, “Boss, I want more money, and the guy across the street is giving me a 10 percent raise.”

RITHOLTZ: Quite, quite interesting. So here we are, we’re running bigger deficits than we ever had. At this point, which is a bigger driver of the economy? Is it the fiscal policy or is it monetary policy?

SHEETS: So I’ll still give the nod to monetary policy as — as being more important, but fiscal is increasingly giving it a run for its money so to speak. In the short-term, we’ve seen the power of fiscal policy and providing stimulus and — and — and supporting growth. In the long run, we have these very difficult issues of debt and deficits, and office how to manage those, and what the implied tax rates are going to be. So fiscal policy is becoming increasingly important.

It really strikes me as we think of these two pillars of macro policy how different they are in the way they are formulated. You have technocrats doing monetary policy and you have a very messy political process with — with — with fiscal.

RITHOLTZ: You’re — you’re being too kind. So let’s talk about what’s been in the news a ton lately. Monetary theory has been making the rounds that essentially says, you know, you can run deficits, it’s not the worst thing in the world. Look at Japan, their demographics are terrible. They’re running giant deficits relative to GDP and their economy is moving along just fine. How do you respond to those claims?

SHEETS: So my feeling is that modern monetary theory is dangerous, but also — and this is why it’s particularly dangerous — is there is a grain of truth in it. We don’t know what the limits are as to how much debt the …


SHEETS: … United States as a reserve currency can have. As you say, Japan has very high levels of public debt.

RITHOLTZ: Two hundred percent relative to GDP, right, or more?

SHEETS: Over 200 percent of GDP. And is there a good economic case that some economists have recently made when rates are very low to borrow and — and do infrastructure …


SHEETS: … that might have very high rates of return. So all of those things are true, but at the same time to say there’s really no constraints on fiscal policy, I consider it just how prudent. It’s driving too close to the edge of the cliff. We don’t know exactly where that edge is, but I sure don’t want to find out.

RITHOLTZ: See what — what you’re supposed to do is lie and say these tax cuts will pay for themselves and then run giant deficits. And by the time people figured it out, you’ve already retired to the Bahamas and you’re — you’re out of office. That — that I think is the key — the key secret there.

But there is some truth to the fact that whether you’re looking at monetary theory from the left or the right and the same with physical theory, neither party, neither ideological wing has a monopoly on not running deficits. They both seem to run deficits, although I have to give the Clinton administration a little credit for actually running a surplus one year. But the Obama administration and the Bush administration, they — and now the Trump administration, they’ve all been running deficits.

SHEETS: Yes. And I think the — I think the point here is the — the right hates taxes. The left loves spending. And guess what? Both of those mean somewhat higher deficits. Where do we get fiscal restraint, we get fiscal restraint from the center. And the political center, especially at present, is very hollowed out.

RITHOLTZ: So — so let’s talk a little bit about the center in terms of the nexus between the markets and the economy because the old joke is economists have predicted none of the previous four recessions. But in reality, when the economy begins to slow when — when profits begins to get curtailed, you know, the market just happens to pick it up a little faster than the economic data because it’s reported so much sooner. What — what’s that relationship between economics and — and equity prices?

SHEETS: So there’s all sorts of theory about how equity prices are current expected value of future profits. And, you know, all of those things are important what we’re expecting for — for profitability, what we’re expecting for rates, what we’re expecting for growth. But the mapping is — is a very, very noisy one.

I’d love to be able to say if you give me the economy, I know the markets, but I’d also need to know sentiment and a lot of sociological and psychological elements. So I would say macro is part of the story, but the best market commentators, the best strategists deeply understand something in addition to the macro theory.

RITHOLTZ: So you — you touched on sentiment there. You teed up my next question perfectly. How does sentiment vary over the course of a market cycle? How important are things like small business sentiment, consumer sentiment which — does that drive the economy or does the economy drive sentiment?

SHEETS: I think that the answer is both, that if sentiment deteriorates, that drags down the economy but then as the economy gets worse, sentiment will respond to that. So it’s very much a — a symbiotic self-reinforcing kind of relationship. But, you know, if you’re press me, what’s the first mover? I think sentiment typically moves before the economic data.

RITHOLTZ: We have been speaking with Nathan Sheets. He is the Chief Economist at PGIM Fixed Income.

If you enjoy this conversation, well, be sure to come back for the podcast extras where we keep the tape rolling and continue discussing all things macro. You can find that wherever finer podcasts are sold — Apple iTunes, Stitcher, Overcast,

We love your comments, feedback and suggestions. Write to us at Check out my daily column on Follow me on Twitter @ritholtz.

I’m Barry Ritholtz. You’re listening to Masters in Business on Bloomberg Radio.


RITHOLTZ: Welcome to the podcast. Nathan, thank you so much for doing this. I’m really enjoying this conversation.

You are right in the wonky sweet spot of — of some of my favorite piece. I want to circle back to the financial crisis and — and some of the issues related to that. But you were discussing wages not going up as fast as anyone would have suspected relative to full employment, and I have a theory I want to run by you.

Employees have seen substantial wage gains, but they’re not seeing it in dollars, they’re seeing it in giant increases and health care costs, going up eight, nine, 10 percent a year. If you’re paying for health care as an employer and whatever it is, five or 10 percent, maybe even more for some employees of the healthcare is one of the biggest inflationary inputs we see, how much of that is dollars that otherwise might have gone to salary increases?

SHEETS: I think the answer to that is — is — is substantial amount could have gone into salary increases. And as you say, for many employees, health care is a very substantial part of their overall compensation. And we do have broader measures of compensation to include health care and other benefits, and they also have been going up somewhat more slowly than we would have expected.

So very much true that it’s an enormous cost, an enormous source of — of overhead for U.S. firms that makes it less attractive, the higher in the United States, but that alone doesn’t explain this puzzle as to why wage growth hasn’t …


RITHOLTZ: I’m — I’m looking at that from a competitive standpoint of …


RITHOLTZ: … U.S. manufacturers versus Germany, U.S. manufacturers versus Japan. Given we — whether they’re like 300 or 400 democratic people in the presidential race already and almost all of them are talking about some variation of universal health care, I would think the corporate sector would jump all over this and say, “Please take this off our backs. Why is it our responsibility?”

And I don’t necessarily agree with this, but how has corporate America evolved to be responsible for health care and not the government? It seems …


RITHOLTZ: … so bizarre.

SHEETS: It’s a — it’s an interesting historical feature the way our labor market has evolved. And as you said in many other major economies, in Europe, and in Canada and elsewhere, it’s dealt with very differently, and it is a — it is a drag on — on wages and a responsibility that the corporate sector bears. And I think you’re right, for someone to come and say don’t worry about that would be very welcome.

Now the flip side of that is it means the burden of paying for get — gets transferred, and so the German corporates don’t have to deal with it, but the overall level of taxation in Germany is much higher so the government is larger relative to GDP.

RITHOLTZ: No — no free lunches, right?

SHEETS: That’s right. There’s a piper to be paid someplace.

RITHOLTZ: It makes a lot of sense. One would wonder if salary were higher and corporate earnings were higher, but the tax burden would be higher as well.

SHEETS: Exactly.

RITHOLTZ: Could be kind of intriguing. So — so let’s bring it back to the pre financial crisis era, and I — I didn’t want to push that too much during the broadcast portion, but I have to push back on. And some of this is clearly with the benefit of hindsight, but I can go back and look at what I was writing in a 10203, and I could see gee, this rate seemed to be really low. Greenspan seems to be wildly overreacting to both the mild — to both the mild post dot com recession. All things considered, it wasn’t that bad. And towards the end of that recession, September 11th happened, and there — that also seemed to engender a pretty substantial overreaction in terms of monetary policy.

I look at everything that was priced in either credit or dollars as just spiraling up. Gold went from 400 to over 1,000. Home prices doubled in some parts of the country. All the commodities spiraled up. The dollar actually did really take a pretty healthy wack; it suffered. So — you and I completely agree that the Fed missed their opportunity in terms of acting as a regulator for the banking industry, but how much of that big spiral can trace its way back to one percent rates under Greenspan?

SHEETS: So I think that say the dot com recession compared to what we had at the time of the Great Recession later in that decade, the dot com recession did seem pretty mild, but we’re living through it. I don’t think any of us would have described it that way.

RITHOLTZ: Specially with Nasdaq falling 80 percent beneath the trough …

SHEETS: Exactly.

RITHOLTZ: … was a …

SHEETS: And the Fed did respond to that. And when 9/11 broke out, I remember being inside the building. People were very concerned about what that might mean for sentiment, which we’ve talked about.

RITHOLTZ: At the Fed.

SHEETS: And the economy, exactly, people inside the Fed. So there were reactions to that. And then I think Greenspan was also worried about trying to make sure that inflation expectations stayed anchored and didn’t start to fall.

But your comments evoke another kind of criticism of the Fed’s policies through that period, and that is how vigorous should monetary policy be in responding to perceived imbalances in financial markets. And the Greenspan Fed was loathed to do that. And at the time, the argument was we don’t know where the tops are, we don’t know what’s a bubble. And instead of trying to kill things preemptively, it’s better to clean them up after the fact.

We learned that central banks do need to think hard about financial stability and whether asset markets are overvalued. And I think that many central banks now have an implicit mandate — it’s not part of their explicit responsibilities, but an implicit mandate to ensure financial stability. And they spend a lot of resources doing that now.

RITHOLTZ: So it’s not just full employment and keeping inflation contained, it’s, oh, and now you guys are responsible for the markets. So I always push back to the Greenspan defense on we are loathe to intervene in the markets because — of all people — Greenspan probably intervened in the markets more than any Fed chair in memory.

So forget that the ’87 crash happened right after he began. It’s like every new Fed chief gets a baptism of fire. And he did what he always has — does as he cut rates. But hat I recall very specifically when doing some research for Bailout Nation, it was either in ’90 or ’91. I’m not positive. Early 90’s, in between meetings, Greenspan, without the Board of Governors, lowered rates on its own in response to something going on in the markets. And the board was so offended that they clipped its wings and prevented that from happening. They passed a rule that said the Fed chief can only raise or low rates with the approval of the board.

So I’ve heard that argument that, well, Greenspan was loathe to do it except when he did it and he did it quite frequently. Am I wildly off? Am I just a Greenspan basher or is that a fair criticism?

SHEETS: Well, I think that there were some instances like ’87 and after 9/11 where the Federal Reserve saw risks to market functioning and the capacity of markets to operate. And in response to that, the Fed did respond very, very vigorously.

Now that said, you know, the Fed was aware of what was happening in financial markets. And I think that what I should say precisely is that the Fed under Greenspan was — was hesitant to try to say a given market is in a bubble. Let’s go and prick that bubble.


SHEETS: That’s really the core of the Greenspan …


SHEETS: … doctrine. We don’t know a bubble. We’re not sure. We could be surprised. We don’t have good tools to do it, let’s do it on the other side. And I do think that’s been roundly — roundly rejected at this point by central banks.

RITHOLTZ: Quite fascinating. The other issue that has come up about the Federal Reserve — by the way, I think that last issue about rates being too low too long, here’s my hindsight bias, what I’m about to say and I will admit this is hindsight bias.

At the time, I flagged those ultra-low rates as inflationary. With the benefit of hindsight, I wish the Fed would have said either post 9/11 or some other one-off emergency, hey, this is an emergency, we are, for six months, going to take rates down. I think the cut rate is 50 basis points. We’re going to implement a 50 basis point rate cut and, in six months, half of it will go away and in — and in nine months, the other half it will go away so that there would have prevented that while we’re afraid there were no expectations of — of a raise, and it’s going to be problematic.

If it would have been built into this is an emergency action, but it’ll automatically unwind, I think they would have been better off. Again, pure hindsight bias with that.

SHEETS: Yeah. And — and I think that that is a very creative form of — of forward guidance, which the Fed has experimented, particularly under Bernanke, experimented with a lot of different forms of forward guidance. Typically, it’s been more of the form will keep rates where they are and not pre-committing to future rate hikes. But it wouldn’t surprise me at some point in the future to see some central bank around the world implement a — a policy that had the kind of forward guidance you just described. Look, we’re responding to what we believe is an extraordinary circumstance. We expect that it’s going to go away. And as our expectations are confirmed, then we very well may be hiking rates.

RITHOLTZ: The Ritholtz option, look …

SHEETS: I like — I like it.

RITHOLTZ: … referred as the emerging market central bank …

SHEETS: Good stuff.

RITHOLTZ: … in — in the future.

So you bring up Bernanke and what he did it during his tenure as chairman. I’m not in this camp, but some people have criticized him as to transparent. Back in the early days, you never knew what the Fed did. You would see the reaction in the bond market. Oh, bonds are ticking up, the Fed might have raised rates. They did have a meeting this week. Has the Federal Reserve become too transparent?

SHEETS: This is — this is a very important question and it’s — it’s corollary as does the Fed talk too much. And a concrete question is, you know, through every FOMC cycle we hear a variety of voices from Federal Reserve policymakers. All the reserve bank presidents are talking, various members of the board and so forth. And does that give markets more information? Does that allow investors to make better decisions and better understand what the Federal Reserve is going to do?

If you press me, I guess I’d say on balance, yes, the transparency and — and perspectives are hopeful, but it’s also important that the Fed not talk so much that it’s saying things it’s not really sure about.


SHEETS: What people want to hear from the Fed is what is its reaction function, meaning as various economic events evolve, how is it going to respond? What does it expect about the future?

I think this is one of the risks with having press conferences after every meeting that there may be times when Jay Powell is going to have to say something just because the question is asked, not because it’s part of his preferred proactive communications strategy.

RITHOLTZ: Quite, quite interesting. The — the whole idea of we’re data-driven and we’re going to wait and see what the economic data looks like, is that a fair approach or is that still too squishy and — and ambiguous?

SHEETS: So I think that that is a very fair approach. I think more or less, that’s what central banks have been saying for — for generations. The — the problem with that is markets yearn for something more concrete. And if the Fed says, you know, we’ll just see where the data takes us, then the next question is, well, where do you think the data are going to take us? And so markets — markets are going to want more, but ultimately the Fed does have to be date-dependent that even if they say, you know, we’re going to be flat if, ultimately, the economy surprise is on the upside, they’re going to have to hike. If the economy surprise is on the downside, they’re going to have to cut. And for them not to act in the future because of something they said in the past would, I think, not be — not — not be good policy.

RITHOLTZ: So — so let’s talk about the post-crisis era. I was surprised at — at lower for longer. I was surprised that at the length of time that we seem to have been on emergency footing, how fast should the Fed return to a more normalized rate regime? Are we there yet? Are we halfway there yet?

Some people have said they’re behind the curve. The President is saying they’re choking off economic expansion. Where are we, 2.5 percent? By — by any measure, that’s still fairly accommodative, isn’t it?

SHEETS: So I think the Fed has — has handled the rate hikes quite skillfully. This has been perhaps the slowest tightening cycle in the history of central banking. We’ve moved — we’ve moved a quarter percentage point every quarter, so one percentage point a year.

Back in the days of Greenspan, they were going 25 basis points every meeting and they thought they had — we’re going as slow as they could. That’s still twice as fast. So the Fed has gone — has gone very gradually, and they’re now at a place where, you know, they think neutral is two and a half, three, something like that where they’re on the lip of — of — of a neutral policy. And that gives them the luxury of being able to watch and wait and see how some of these various risks unfold — does China do better, does Europe pickup, what happens with the trade war, and so forth.

RITHOLTZ: So if we look at inflation today, also about two, 2.5 percent, is that the — there are million economic inputs, but is that, you know, the tutii da capo (ph)? Is that the one that really matters? And if inflation stays around two percent, the Fed doesn’t feel any urgency to move off of these low rates?

SHEETS: I think in this circumstance with rates — policy rates around 2.5 percent that they probably are going to need to see inflation at or probably a little bit above two percent before they seriously start thinking about more rate hikes. The flipside is, I think, the other variable that they’re going to continue to watch closely is the unemployment rate. And I think that as long as labor market looks — looks tight and the unemployment rate is — is — is falling, they’re not going to think that they need to — they need to cut rates either. I think it would require an increase, a marked increase in the unemployment rate before the Fed would throw it into reverse.

RITHOLTZ: Now — now, well, you’ve seen some modest increases in the unemployment rate, but for the good reason, meaning people who had left the labor force were coming back into it, and suddenly there’s more people in that pool. And it — it’s not that people are losing their jobs, it’s that more people are looking for their jobs. Obviously, the Fed understands that nuance. Are we going to continue to pull or — or let me rephrase that, what’s it going to take to continue pulling more and more of these discouraged workers back into the labor pool?

SHEETS: The increasing labor force participation that we’ve seen of late is an extremely constructive development. There’s been more slack on the edges of the labor market that I would’ve expected and then most economists would’ve expected. And I think what it’s going to take to — for this process to continue is for the U.S. economy to continue to grow at a solid pace and for us to see some further upside pressure on wages.

As we see that additional — those additional wage gains, that’s going to be very attractive to workers on the sidelines and getting them back in the labor force. And once these folks are back in the labor force, they’re developing skills and abilities. They’re going to help drive the economy through the years ahead.

RITHOLTZ: So — so let me wax wonky (ph) a little bit. You brought up the Taylor Rule earlier. Has the Taylor Rule lost its power or is it — is it expired? And — and explain it before — before we go too far into the weeds?

SHEETS: So the — the Taylor Rule basically says that, in setting monetary policy, the Federal Reserve should look at the unemployment rate relative to some equilibrium or some trend rate of unemployment, and it should also look at the inflation rate relative to its two percent target. And if — if — if inflation is low and unemployment is high, then the Taylor Rule would suggest you should have a very easy monetary policy.

And I do think it’s fair to say that many central banks around the world have pursued policies in recent years that are much softer than what the Taylor Rule would suggest. Even so, I think if you talk to those central bankers and say, yeah, we’re not really following the Taylor Rule right now, but we like having it as a — a point of departure.

It really gets into this powerful question of how far should you push theory. And it’s — it’s good as a theoretical construct, but then from there we realized that there are number of headwinds and other challenges our economies face that explain why we should be off that, but it’s a good benchmark still.

RITHOLTZ: Every cycle is different. If you try and apply the same rules to different cycles, you may not be happy with the results.

SHEETS: And that’s the problem in economics is in — in thinking about our recommendations, we are driven by what the data say, but the data only cover the past which then makes trying to figure out what the next one is going to look like really hard that says Yogi Bear has said forecasting is really hard especially when it’s about the future.


That summarizes my life as an economist.

RITHOLTZ: Perfect way to sum it up. So I know I only have you for a — a finite amount of time, and I want to get to my favorite questions that I ask every guest. Let’s — let’s start with the — the first one. Tell us the most important thing that people don’t know about your background.

SHEETS: So I would say it’s that I just kind of — of wandered my way into economics and international economics. When I was in college, I couldn’t decide whether I was going to be a lawyer or going to business or be an economist. I took all of the exams, all the entrance exams and finally said, “Well, I’ll do economics.” And then in grad school didn’t know what I wanted to do, kind of looked around. And international economics was an area where the faculty at MIT was great, but there weren’t very many students my year. So I went there because I said, oh, I have less competition getting a job. And everything — everything worked out well. I was very, very fortunate to fall into international, which I really have enjoyed.

RITHOLTZ: And — and MIT’s Economics Department is just a murderers row of rock stars. When you were there, who were some of the — the names that — that you got to work with either as mentors or just professors?

SHEETS: The — the three key folks that I interacted with were Stan Fischer, Rudi Dornbusch who passed away some years ago, but was really big in thinking about how do we apply economics in the real world and Olivier Blanchard who was extremely brilliant and fertile-minded. Every time I talk to him I learn something new.

RITHOLTZ: Any other mentors you want to mention who helped guide you either your academic or professional career?

SHEETS: Well, when I arrived at the Federal Reserve, I’d say two folks had a big impact on me. One was a Federal Reserve governor who your listeners are have probably heard of, named Larry Meyer.


SHEETS: Larry was — was interested in taking a very empirical view and using that to analyze where the global economy was headed. And another chap was my boss. His name was Ted Truman. And Ted was intense and focused on how do we get the right answer and best served policymakers. So I’d say those two individuals had a big impact on my early career.

RITHOLTZ: So you’re now working at PGIM Fixed Income, which is the giant bond shop. What investors influenced your way of looking at the world of interest rates, and inflation and everything else that goes into investing?

SHEETS: I would say that the investors that are having the — the most impact on my perspectives are frankly the ones that I’m working with now. And a — a — a number of these folks are what I would describe them as — as very balanced in their world views. They are getting all the information they can, and they’re responding to it in a way and said, Okay, we’ll move a little here, relative value is a little more attractive, we’re going to move there.

They’re never off balance. They’re responding to what the world is throwing at them and — and seeking the best returns, always — always comparing one asset to the other.

RITHOLTZ: So let’s talk about books. What are some of your favorite books, fiction, nonfiction, economics related or not? What — what do you like to read?

SHEETS: Well, I am a heavy reader of — of biographies. I really enjoy learning what others have gone through in their lives in their — in their — in their career paths and the like.

I’d say along those lines, my favor writer is — is probably Ron Chernow. He’s written some absolutely brilliant economic biographies. And I think his very, very bast was his biography on Alexander Hamilton, which as you read it, it really is quite extraordinary. The challenges that Hamilton was facing in helping Washington and others set-up the Republic and how we face, in various ways, very similar challenges. And I think that Chernow just brings all of that to life and makes it very rich and fertile in helping us think, well, how — how would — how would Hamilton respond to a global financial crisis? How would Hamilton have responded to European debt crisis?

RITHOLTZ: Plus writing the whole thing in hip-hop lyrics, that was really challenging.

SHEETS: That — that — that was the extra …


RITHOLTZ: But — but true story, that’s where Lin-Manuel Miranda discovered Hamilton was Chernow’s book. It’s an astonishing — that book has astonishing legs.

Give us some other books that you enjoy.

SHEETS: So I would say just continuing, I’ve read wonderful biographies of Woodrow Wilson, a progressive, and our — and notably a progressive who is arguing for free trade because it would bring down prices for the masses. It’s really extraordinary the way the — the free trade debate has evolved over the last 100 years.

RITHOLTZ: Or devolved as the case may be.

SHEETS: I’ve read — continuing in that kind of time in history, love to read about Teddy Roosevelt, brilliant, brilliant individual, but in addition by indigestion really focused on getting things done.

RITHOLTZ: Who — who wrote the Roosevelt bio, because there are a ton of them? Which one did you like?

SHEETS: You nailed me.


RITHOLTZ: I’m not looking, too.

SHEETS: I don’t remember.

RITHOLTZ: So email to me and I’ll — I’ll add it to …

SHEETS: Great.

RITHOLTZ: … the info on this …

SHEETS: Great, great.

RITHOLTZ: … because there are — the problem with a lot of these bios …


RITHOLTZ: … is that there are so many of them.


RITHOLTZ: A friend recommended a Genghis Khan bio. His book is great …


RITHOLTZ: … so I ordered on Amazon.


RITHOLTZ: And I say to him this is — was a great book, thanks for recommending it. He looks the book, he goes, “No, no, that’s the wrong one.” I’m like, “Dude, 1,000 pages of Genghis Khan,” I’m good.


RITHOLTZ: I don’t need to read the second one. Have you gotten around to reading McCullough’s “Wright Brothers” book?

SHEETS: No, I’ve thought about it though.

RITHOLTZ: I read it on vacation.


RITHOLTZ: It was just fascinating. I like it. You have no idea — well, let me rephrase that. I had no idea who they were and how they became effectively the inventors of flight. It was — if you like biographies …

SHEETS: Yeah, yeah, yeah.

RITHOLTZ: … especially, you know, early 20th century …


RITHOLTZ: … it’s fascinating. They …

SHEETS: I was at Kitty Hawk last summer.

RITHOLTZ: Get out of here.

SHEETS: And it’s — yeah, it’s really an interesting place.

RITHOLTZ: So they weren’t …

SHEETS: You can see where they flew the thing.

RITHOLTZ: … they weren’t from Kitty Hawk.

SHEETS: Right, right.

RITHOLTZ: Orville had tagged …

SHEETS: They’re from Ohio.

RITHOLTZ: Right, that’s right.


RITHOLTZ: And they had tagged somebody in the National Weather Service …


RITHOLTZ: … to say where are their steady winds of 10 to 15 miles an hour, preferably not too rocky? And they gave me a couple of things and — and Kitty Hawk …

SHEETS: There they go.

RITHOLTZ: … checked out as — so now you could get the Kitty Hawk really easily.


RITHOLTZ: Back then …

SHEETS: Right.

RITHOLTZ: … it was an ordeal. It was a train, and then a boat, and then a — a giant track to get there. If you like biographies, you’re going to love this book.

SHEETS: Okay, I’ll — I’ll pick that one.

RITHOLTZ: That’s my — my recommendation for you.

SHEETS: I can give you other books too now.

RITHOLTZ: Give me one more.

SHEETS: Okay. Let me — let me give you another one. I think one of the most readable and interesting books that I’ve been exposed to is “Outliers” by Malcolm Gladwell.


SHEETS: And that — that book has very interesting argument in it which resonates with me now because my son is going through the college admission process, and he shows where the Nobel prizes in chemistry got their undergrad degree. And they are all solid institutions …


SHEETS: … but they all didn’t go to MIT or Prince then. It is all over the map.

And Gladwell then makes the argument that — that have they all gone to MIT, then most of them would not be Nobel laureates in chemistry, that there would have been someone else or someone’s else in their — in their introductory and early training that would’ve been better in chemistry, and it would have discouraged them in their career, in their trajectory of ultimately great creativity. So that, you know, where you go to school matters. What really matters is how much you work once you’re there.

RITHOLTZ: Makes perfect sense to me. So let’s talk a little bit about a time you failed and what you learned from the experience?

SHEETS: So this is my time at the U.S. Treasury. I was part of the team on the administration that was managing U.S. policy regarding China’s proposed Asian Infrastructure and Investment Bank, the AIIB. We had concerns about this institution that it would not pursue good standards in its lending. And consistent with that, we expressed our concerns and lack of enthusiasm to countries across the world. But as you know, the Brits, the U.K. joined the AIIB and soon thereafter, dozens of other countries joined.

What do I learn from — from this? I think I learned two things. One important policy implication is China’s rise is going to happen.


SHEETS: There really is not a lot we can do about it. We can slow it down or we can support them and have it accelerated, but they’re going to rise. And I think the big question is once they’ve risen, are they going to look at us as being their friend or their foe?

Secondly, and this may be more on a personal basis, but I learned from that experience. We have a message. It’s got to be simple. And we had a — we had a very sophisticated position that I think had a lot of analytical rigor associated with it, but I needed 1,000 words to explain it.

RITHOLTZ: To nuance for — for that.

SHEETS: Most — most positions, when you go through life, you need to be able to put them on a bumper sticker.


SHEETS: If it — if it’s — if it’s more complicated than that, people size start to glaze over it.


SHEETS: You got to boil it down.

RITHOLTZ: … even in complex diplomatic trade negotiations, you still have to dumb it down to a bumper sticker.

SHEETS: I think you got to — I think you got to get it on a bumper sticker so this administration has, you know — but I think they probably — they have answered the question. What are we trying to achieve? We’re trying to break down barriers in China and make it fairer for U.S. firms to — to operate there.

RITHOLTZ: So if you could go back in time and rejigger your message back when you were at Treasury, what would that look like if it was reduced to a bumper sticker?

SHEETS: Well, I think we would have had to do further — further argumentation inside the administration and say, are we for it or are we against it, because we were — we were closer to being against it. It was perceived as being fully against it, but we really weren’t. But we have to decide are we for it or against it. And I think probably a clean position would be, look, for a number of reasons we’re not going to join, mainly political reasons, we’re not going to join.

We have these concerns, you make your own decision. That would’ve been a cleaner position.

RITHOLTZ: Quite interesting. So what do you do for fun, what do you do to stay mentally or physically active when you’re outside of the office?

SHEETS: So for fun, I have four kids that keep me — keep me fully engaged and — and energized. I’m also very active in my church congregation. And in terms of staying physically fit, about a year ago, I came to the conclusion that I needed to do more in that department and since have spent a lot of time on the treadmill, which actually I’ve come to enjoy and found to be a place where I can reflect and — and unwind.

RITHOLTZ: Quite interesting. So if a millennial or a recent college grad came to you and said they were interested in a career in economics or finance, what sort of advice would you give them?

SHEETS: My — my number one piece of advice is find something that you are passionate about. When I talk to — to graduates and people early in their careers, sometimes I feel like they’re trying to turn themselves into the perfect candidate, the candidate that everyone will want to hire. That’s not what I want to see. I want them to come in and tell me this is what I really care about. And if they really care about, if they’re passionate about it, then they’re going to be successful.

In these — in these — these — these careers, particularly in finance and — and policy, there are going to be a lot of weekends, there are going to be a lot of late nights. And if you don’t fundamentally love what you’re doing, it’s going to drive you to distraction, you’re not going to be as effective. Find what you love and what you care about.

RITHOLTZ: And our final question, what is it that you know today about macroeconomics, monetary policy, fixed income investing that you wish you knew 30 years or so ago when you were first getting started?

SHEETS: So I — I think that the — that the biggest thing I’ve learned is as one goes through these cycles, and this is true as an investor, it’s true as a policymaker, you have to have faith in your instincts. You know, at the end of the day, all the analytics are great, bring them to bear. But I think ultimately, at the end of the day, we have to — we have to trust our guts and trust our instincts.

RITHOLTZ: Quite, quite intriguing. We have been speaking with Nathan Sheets. He is the Chief Economist at PGIM Fixed Income. If you enjoyed this conversation, well, look up an inch or down an inch on Apple iTunes, and you could see any of the other 239 such prior conversations that we’ve had. You can find that Apple iTunes, Overcast, Stitcher, wherever your finer podcasts are located.

We love your comments, feedback and suggestions. Write to us at Please go to Apple iTunes and give us a delightful five-star review.

I would be remiss if I do not thank the crack staff that helps put this conversation together each week. Taylor Riggs is our Booker. Atika Valbrun is our Project Manager. Michael Batnick is our Head of Research.

I’m Barry Ritholtz. You’ve been listening to Masters in Business on Bloomberg Radio.



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