1 00:00:02,520 --> 00:00:13,760 Speaker 1: Bloomberg Audio Studios, Podcasts, radio news. This is the Bloomberg 2 00:00:13,840 --> 00:00:17,920 Speaker 1: Surveillance Podcast. Catch us live weekdays at seven am Eastern 3 00:00:18,200 --> 00:00:21,240 Speaker 1: on Apple car Play or Android Auto with the Bloomberg 4 00:00:21,320 --> 00:00:24,840 Speaker 1: Business app. Listen on demand wherever you get your podcasts, 5 00:00:25,280 --> 00:00:27,160 Speaker 1: or watch us live on YouTube. 6 00:00:27,480 --> 00:00:31,160 Speaker 2: Joining us now with PIMCO Pacific Investment Management Company. Let 7 00:00:31,240 --> 00:00:36,720 Speaker 2: me Cantrell expert on Washington, the dynamics of public policy. Oh, 8 00:00:36,760 --> 00:00:41,480 Speaker 2: she's having she's seven. No, she's having a glue street 9 00:00:41,520 --> 00:00:45,760 Speaker 2: breaks of breakfast like these, having a full English. Hi, 10 00:00:45,840 --> 00:00:47,800 Speaker 2: the woman I love to hate missus Key sees you 11 00:00:47,880 --> 00:00:51,199 Speaker 2: and goes how much Van Cleef can you wear? Let 12 00:00:51,200 --> 00:00:53,560 Speaker 2: me joins us this morning. Okay, I'm a Lisa Cook. 13 00:00:54,120 --> 00:00:57,480 Speaker 2: I've been a and I did not see doctor Cook. 14 00:00:57,640 --> 00:00:59,920 Speaker 2: I did not see her at checkson hole. She sort 15 00:00:59,920 --> 00:01:01,880 Speaker 2: of slipped in and slipped down and I had to 16 00:01:02,120 --> 00:01:05,199 Speaker 2: get back to feed the walk the dogs. But Libby, 17 00:01:05,319 --> 00:01:09,920 Speaker 2: let's cut to the Chase Michigan State Bulletproof applied economics. 18 00:01:10,240 --> 00:01:13,840 Speaker 2: She's studied under Berry icing Green at Berkeley. This is 19 00:01:13,920 --> 00:01:20,360 Speaker 2: a front rate national economist in international economics. Why let's 20 00:01:20,400 --> 00:01:23,039 Speaker 2: just start with the why. Why is this happening in 21 00:01:23,120 --> 00:01:23,920 Speaker 2: your Washington. 22 00:01:25,120 --> 00:01:28,400 Speaker 3: Well, well, good morning, Tom. I mean I think that 23 00:01:28,440 --> 00:01:31,600 Speaker 3: you know, broadly speaking, this president is really upset that 24 00:01:31,760 --> 00:01:35,399 Speaker 3: Jay Powell will not cut rates, obviously, and he is 25 00:01:35,440 --> 00:01:40,039 Speaker 3: trying to influence the Fed Board any way that he can. 26 00:01:40,440 --> 00:01:43,200 Speaker 3: I think he's he is frustrated with the structure of 27 00:01:43,240 --> 00:01:45,560 Speaker 3: the Fed Board, where there are stagger terms. As we 28 00:01:45,600 --> 00:01:49,400 Speaker 3: all know, these fourteen year terms which are some intended 29 00:01:49,440 --> 00:01:52,320 Speaker 3: to outlive any one administration. 30 00:01:51,960 --> 00:01:53,840 Speaker 2: On one president. But let me cut to the chase. 31 00:01:53,920 --> 00:01:57,120 Speaker 2: You're expert on this, and this is what everybody's asking, 32 00:01:57,120 --> 00:01:59,880 Speaker 2: whether they're for or against Ms. Cook. Where's a leg 33 00:02:00,080 --> 00:02:03,720 Speaker 2: slight branch on this, where's the House and particularly where's 34 00:02:03,720 --> 00:02:05,280 Speaker 2: a Phil Graham like Senate? 35 00:02:05,400 --> 00:02:07,600 Speaker 3: Well, so that is I think the big point is 36 00:02:07,600 --> 00:02:09,600 Speaker 3: that this is in many ways self defeating for the 37 00:02:09,639 --> 00:02:13,320 Speaker 3: president because of course, not only does this potentially not 38 00:02:13,480 --> 00:02:15,799 Speaker 3: have the impact on the ill curve that he wants 39 00:02:15,840 --> 00:02:18,960 Speaker 3: to see and mortgage rates and what have you, but 40 00:02:19,080 --> 00:02:24,040 Speaker 3: it also makes the confirmation of any future nominee that 41 00:02:24,240 --> 00:02:27,960 Speaker 3: much more difficult. Remember that in order to get confirmed, 42 00:02:28,240 --> 00:02:31,080 Speaker 3: a nominee needs fifty votes in the Senate. Republicans right 43 00:02:31,120 --> 00:02:34,000 Speaker 3: now have fifty three. However, this is something that you 44 00:02:34,080 --> 00:02:36,960 Speaker 3: all appreciate this nuance, but lots of financial press do not. 45 00:02:37,960 --> 00:02:40,800 Speaker 3: The Senate Banking Committee, which is the first step to 46 00:02:40,880 --> 00:02:45,600 Speaker 3: confirmation any nominee, cannot lose one Republican assuming Democrats vote 47 00:02:45,600 --> 00:02:50,079 Speaker 3: against that person. So that means that that by doing this, 48 00:02:50,200 --> 00:02:55,440 Speaker 3: the President has focused attention on that confirmation process and 49 00:02:55,480 --> 00:02:57,840 Speaker 3: in my view, makes it a lot more difficult for 50 00:02:57,960 --> 00:03:02,000 Speaker 3: him to get anybody who has any whiff of partisanship 51 00:03:02,440 --> 00:03:06,639 Speaker 3: or any whiff of you know, being able to be 52 00:03:06,800 --> 00:03:09,520 Speaker 3: influenced by the President in terms of minetary policy. So again, 53 00:03:09,560 --> 00:03:11,800 Speaker 3: sort of self defeating me from the market's perspective in 54 00:03:11,840 --> 00:03:13,520 Speaker 3: the short term, from a rate protecting the short ure. 55 00:03:14,280 --> 00:03:17,640 Speaker 4: Yeah, it's really it's really funny. We only get Libby 56 00:03:17,639 --> 00:03:19,920 Speaker 4: when summer recess is going on in the Senate and 57 00:03:19,960 --> 00:03:21,560 Speaker 4: the Congress are out, and she actually can make her 58 00:03:21,600 --> 00:03:23,000 Speaker 4: way up to New York. But Liby, I got to 59 00:03:23,040 --> 00:03:24,560 Speaker 4: ask you this, you know, forget about you know, fit 60 00:03:24,600 --> 00:03:27,040 Speaker 4: credibility for a minute. Let's talk about Intel. The US 61 00:03:27,080 --> 00:03:29,720 Speaker 4: government's making eight point nine billion dollar investment in Intel's 62 00:03:29,760 --> 00:03:32,720 Speaker 4: That's just the first of other investments that this government 63 00:03:32,800 --> 00:03:34,160 Speaker 4: is going to be making in the private sector. 64 00:03:34,320 --> 00:03:37,320 Speaker 3: Yeah, again, And to bring Congress into this. In order 65 00:03:37,480 --> 00:03:40,880 Speaker 3: for the president the executive branch to make an equity 66 00:03:41,000 --> 00:03:45,160 Speaker 3: investment in a company, you need congressional authorization. And the 67 00:03:45,200 --> 00:03:48,800 Speaker 3: President is using the Chips Act funding, the majority of 68 00:03:48,840 --> 00:03:52,560 Speaker 3: Chips Act funding for this investment in that bill. Sorry 69 00:03:52,600 --> 00:03:54,640 Speaker 3: to get all you know propeller head on you, but 70 00:03:55,000 --> 00:03:58,560 Speaker 3: in that bill there is no actual authorization for an 71 00:03:58,600 --> 00:04:01,040 Speaker 3: equity investment. So I think there's a question about the 72 00:04:01,160 --> 00:04:04,800 Speaker 3: legality of this particular veston. However, going forward, you would 73 00:04:04,840 --> 00:04:07,520 Speaker 3: absolutely need Congress to authorize. And so no, I do 74 00:04:07,560 --> 00:04:09,760 Speaker 3: not think it's a coming first. 75 00:04:09,560 --> 00:04:11,560 Speaker 2: Day and Friday. We want you to come in Thursday 76 00:04:11,560 --> 00:04:14,040 Speaker 2: and Friday as well. I got to get back to 77 00:04:14,160 --> 00:04:19,440 Speaker 2: doctor Cook. You know, frankly, everybody knows wonderfully closely into 78 00:04:19,640 --> 00:04:23,320 Speaker 2: King Green. This is one of his great students at Berkeley. 79 00:04:23,320 --> 00:04:26,719 Speaker 2: She's being run over the coals. Where is the senator 80 00:04:26,720 --> 00:04:30,600 Speaker 2: from Idaho? I'd been in his office. Creto has potatoes 81 00:04:30,880 --> 00:04:34,080 Speaker 2: lined up in his office. Where is Tim Scott of 82 00:04:34,120 --> 00:04:39,520 Speaker 2: the Carolinas? Where are these senators just to have due 83 00:04:39,560 --> 00:04:43,760 Speaker 2: process for against Trump? Due process? Where is it? 84 00:04:43,839 --> 00:04:46,719 Speaker 3: Libby and I would also add to that list where 85 00:04:46,720 --> 00:04:50,120 Speaker 3: a Senator rounds, where is Senator Tillis, Where is Senator McCormick. 86 00:04:50,120 --> 00:04:52,840 Speaker 3: I mean, these folks who you've just highlighted are all 87 00:04:52,880 --> 00:04:55,880 Speaker 3: on the Senate Banking Committee. Senator Tim Scott of course 88 00:04:55,920 --> 00:04:58,279 Speaker 3: being the chair of the Senate Banking Committee. And again 89 00:04:58,320 --> 00:05:00,719 Speaker 3: this may sort of seem like, you know, kind of 90 00:05:00,720 --> 00:05:04,000 Speaker 3: walky talk, but this is very important because this will 91 00:05:04,040 --> 00:05:07,839 Speaker 3: be the first step for any nominee for the FED. 92 00:05:08,279 --> 00:05:12,440 Speaker 3: And again, by focusing the attention, the public's attention on 93 00:05:12,480 --> 00:05:15,320 Speaker 3: the credibility of the FED, on the independence of the Fed, 94 00:05:15,680 --> 00:05:18,599 Speaker 3: he just raised the stakes and raised the bar in 95 00:05:18,680 --> 00:05:21,480 Speaker 3: terms of I think again getting his own nominee confirmed. 96 00:05:21,600 --> 00:05:23,919 Speaker 3: And I would say Stephen Myron as well, who he 97 00:05:24,040 --> 00:05:26,680 Speaker 3: wants to get in place by the September meeting. This 98 00:05:26,760 --> 00:05:28,839 Speaker 3: makes it a lot more difficult. That was always going 99 00:05:28,920 --> 00:05:31,440 Speaker 3: to be very difficult anyway, but this makes it even 100 00:05:31,480 --> 00:05:32,480 Speaker 3: harder to Okay, I got. 101 00:05:32,360 --> 00:05:34,200 Speaker 2: To go to the Supreme Court. Damian wants to jump 102 00:05:34,200 --> 00:05:36,520 Speaker 2: in here, folks, Lebby Cantrell. Where this with PIMPC you're 103 00:05:36,560 --> 00:05:40,280 Speaker 2: with real expertise on Washington. If it goes and I'm 104 00:05:40,279 --> 00:05:43,800 Speaker 2: speaking as a hack to the Supreme Court, do you 105 00:05:43,920 --> 00:05:48,560 Speaker 2: see evidence that the Trump appointed justices will look at 106 00:05:48,680 --> 00:05:52,160 Speaker 2: due process and tell their guy, no, you can't do 107 00:05:52,200 --> 00:05:52,680 Speaker 2: that him. 108 00:05:52,800 --> 00:05:56,120 Speaker 3: Well, they've already made a special case for the FED, right, 109 00:05:56,160 --> 00:06:00,560 Speaker 3: They've already in their footnotes in their recent judgment around 110 00:06:00,880 --> 00:06:05,080 Speaker 3: firing other chairmen of independent agencies, they've already basically carved 111 00:06:05,080 --> 00:06:07,719 Speaker 3: out and said that the FED is a special case 112 00:06:08,080 --> 00:06:11,719 Speaker 3: and that that the threshold for firing the chairman or 113 00:06:11,760 --> 00:06:14,240 Speaker 3: a governor for the FED is going to be different 114 00:06:14,520 --> 00:06:17,280 Speaker 3: from firing somebody at the FTC, for example, which is 115 00:06:17,320 --> 00:06:20,200 Speaker 3: also another which is another independent agency. So you know 116 00:06:20,400 --> 00:06:22,280 Speaker 3: who knows. I'm not. You know, I'm not. I'm not 117 00:06:22,320 --> 00:06:24,440 Speaker 3: a lawyer, although sometimes I do like to play one 118 00:06:24,440 --> 00:06:27,400 Speaker 3: on TV or radio, But I am not. But think 119 00:06:27,640 --> 00:06:29,560 Speaker 3: think your point is a good one that in that 120 00:06:29,600 --> 00:06:32,240 Speaker 3: this will this could very well be adjudicated by the 121 00:06:32,279 --> 00:06:34,120 Speaker 3: Supreme Court. And the last thing the time I'll say 122 00:06:34,160 --> 00:06:35,760 Speaker 3: this is I think this is by design. I think 123 00:06:35,800 --> 00:06:39,720 Speaker 3: the President is fine challenging all of these norms because 124 00:06:39,720 --> 00:06:41,640 Speaker 3: some of it will stick, and some of it has stick, 125 00:06:41,760 --> 00:06:45,760 Speaker 3: and thereby he expands executive power in the process. 126 00:06:45,800 --> 00:06:49,480 Speaker 2: Good morning, ninety nine in Washington. Libby Cantrell with this 127 00:06:49,640 --> 00:06:53,159 Speaker 2: is PIMCO on this is really important legal matter of 128 00:06:53,240 --> 00:06:57,000 Speaker 2: due process with Lisa Cook, the governor of the FED. 129 00:06:57,000 --> 00:07:01,800 Speaker 2: There are presidents pointed by the regional section. There are governors. 130 00:07:02,160 --> 00:07:04,800 Speaker 2: There are a set of vice chairman, and there is 131 00:07:04,839 --> 00:07:07,960 Speaker 2: a chairman chairman. Poull may come back to be a governor. 132 00:07:08,080 --> 00:07:10,560 Speaker 2: Just walk away. We'll see in the spring of next year. 133 00:07:10,680 --> 00:07:12,720 Speaker 2: Damien Sasaur with Libby Kentrell. 134 00:07:12,840 --> 00:07:14,240 Speaker 4: Well, I mean, I guess for me, is this a 135 00:07:14,320 --> 00:07:16,440 Speaker 4: kill shot at the Fed? Bibby? I mean, you know 136 00:07:16,520 --> 00:07:18,960 Speaker 4: he's been attacking the Fed. He's been attacking Powell. He's 137 00:07:19,000 --> 00:07:21,560 Speaker 4: been attacking, attacking, attacking for so long now that the 138 00:07:21,600 --> 00:07:24,000 Speaker 4: market just seems desensitized to it. I mean, do you 139 00:07:24,080 --> 00:07:25,840 Speaker 4: believe and I guess you know you don't look at 140 00:07:25,840 --> 00:07:28,320 Speaker 4: markets maybe as closely as others. Is any of this 141 00:07:28,440 --> 00:07:30,840 Speaker 4: price then? I mean, could this result in greater dominick? 142 00:07:32,080 --> 00:07:32,520 Speaker 4: Stop it? 143 00:07:33,280 --> 00:07:34,360 Speaker 2: I just want to I want to. 144 00:07:34,640 --> 00:07:40,160 Speaker 3: I want to, sir, Yes, I have expected doing d 145 00:07:43,480 --> 00:07:44,000 Speaker 3: thanks job. 146 00:07:44,680 --> 00:07:44,760 Speaker 5: No. 147 00:07:44,880 --> 00:07:46,880 Speaker 3: So, I mean, you know we have been talking about 148 00:07:46,880 --> 00:07:50,320 Speaker 3: a steeper yield curve really since the since the election, uh, 149 00:07:50,680 --> 00:07:55,240 Speaker 3: partly because of deficits, partly because of concervative the independence 150 00:07:55,360 --> 00:07:57,720 Speaker 3: of the Fed, and obviously that has been a way 151 00:07:57,960 --> 00:08:00,440 Speaker 3: for us to make money for for our clients. I 152 00:08:00,440 --> 00:08:02,920 Speaker 3: do think that the fact that we the equity market 153 00:08:02,920 --> 00:08:05,160 Speaker 3: didn't really move all that much last night. The FX 154 00:08:05,160 --> 00:08:08,440 Speaker 3: market kind of moved a little bit, but the you know, 155 00:08:08,480 --> 00:08:10,240 Speaker 3: the bomb market's moved, you know, moving a little bit, 156 00:08:10,280 --> 00:08:12,920 Speaker 3: obviously in a super yeal curve. But I do think 157 00:08:12,960 --> 00:08:16,240 Speaker 3: there is your to your question, There is sort of 158 00:08:16,280 --> 00:08:20,960 Speaker 3: this desensitization, this imperviousness, if you will, to these moves. 159 00:08:20,960 --> 00:08:23,840 Speaker 3: And I do think people are actually assuming that the 160 00:08:23,880 --> 00:08:25,720 Speaker 3: Senate will do its job. I do think that they 161 00:08:25,800 --> 00:08:28,280 Speaker 3: will assume the summer. 162 00:08:28,320 --> 00:08:30,720 Speaker 4: I mean, it's kind of the you know what I mean. 163 00:08:32,080 --> 00:08:34,440 Speaker 3: You're just thinking, Wow, I can get a break. 164 00:08:34,840 --> 00:08:36,480 Speaker 2: This is important. I want you to just said this 165 00:08:36,520 --> 00:08:39,560 Speaker 2: because I think it's really important. John Farrell did a 166 00:08:39,600 --> 00:08:43,680 Speaker 2: spectacular interview with the Secretary of the Treasury and the 167 00:08:43,760 --> 00:08:47,360 Speaker 2: other person. People are saying, look, can Besson just I mean, 168 00:08:47,400 --> 00:08:49,520 Speaker 2: I don't even know if best In plays golf. I mean, 169 00:08:49,600 --> 00:08:51,560 Speaker 2: you know, it could takes some lessons with Damien he does, 170 00:08:51,760 --> 00:08:54,040 Speaker 2: is beston going to come to the rescue here and 171 00:08:55,040 --> 00:08:59,199 Speaker 2: appeal to the president for some common sense of due process. 172 00:09:00,040 --> 00:09:01,840 Speaker 3: Yeah, I mean, I guess that's that's an open question. 173 00:09:01,880 --> 00:09:04,040 Speaker 3: I mean, what we know about this treasury is that 174 00:09:04,120 --> 00:09:08,160 Speaker 3: they have been, you know, very responsive to participants in 175 00:09:08,200 --> 00:09:10,839 Speaker 3: the treasury market that they had. You know that s 176 00:09:11,120 --> 00:09:14,240 Speaker 3: Secretary Busset in particular has leaned done the President when 177 00:09:14,240 --> 00:09:16,520 Speaker 3: he has seen really the long end kind of get 178 00:09:16,559 --> 00:09:18,959 Speaker 3: you know, you know, potentially get away from market back 179 00:09:19,240 --> 00:09:21,920 Speaker 3: back in April. So, you know, I think that we 180 00:09:21,960 --> 00:09:25,440 Speaker 3: can rely on this treasury to at least hear the input. 181 00:09:25,559 --> 00:09:27,960 Speaker 3: But again, the president here is I mean, you know, 182 00:09:28,040 --> 00:09:30,240 Speaker 3: he he has this sort of be in his bonnet. 183 00:09:30,720 --> 00:09:33,400 Speaker 3: This is something that he wants to see change. Again. 184 00:09:33,480 --> 00:09:36,240 Speaker 3: I just think that this is self defeated in many ways. 185 00:09:36,280 --> 00:09:39,640 Speaker 2: It's part unfair question. But Damian sort of alluded to 186 00:09:39,679 --> 00:09:43,720 Speaker 2: it earlier. Does Pimko feel the long end is drifting away, 187 00:09:43,960 --> 00:09:47,240 Speaker 2: price down, yield up, Japan and the rest. 188 00:09:47,360 --> 00:09:49,720 Speaker 3: Well, I mean, obviously we're seeing that with global gill curves, 189 00:09:49,720 --> 00:09:52,319 Speaker 3: and so yeah, I think there is there's there're just 190 00:09:52,360 --> 00:09:58,040 Speaker 3: a broader question about obviously about deficits about the political 191 00:09:58,080 --> 00:10:01,000 Speaker 3: will around you know, any fiscal consolidation. Of course, we 192 00:10:01,040 --> 00:10:04,760 Speaker 3: haven't seen any physical consolidation. We've seemed just just the opposite. 193 00:10:04,800 --> 00:10:07,960 Speaker 3: And then a concern around you know, obviously inflation, which 194 00:10:08,000 --> 00:10:10,720 Speaker 3: is you know, related to the independence of these central banks. 195 00:10:10,720 --> 00:10:12,520 Speaker 3: So yeah, I think that we have we have been 196 00:10:12,600 --> 00:10:16,240 Speaker 3: kind of calling for and position for seeper yeal curves 197 00:10:16,280 --> 00:10:18,559 Speaker 3: in many developed markets, you know, including in the US. 198 00:10:18,960 --> 00:10:21,280 Speaker 4: Libby when some summer recess ends, you know you're going 199 00:10:21,360 --> 00:10:22,600 Speaker 4: to be getting back to work. You know it's going 200 00:10:22,679 --> 00:10:26,720 Speaker 4: to be that sprint right to avoid the ever left work. Well, 201 00:10:29,640 --> 00:10:32,080 Speaker 4: about myself, I'm internalizing I have to do this. But 202 00:10:32,160 --> 00:10:33,960 Speaker 4: you know, for me, you know what are you going 203 00:10:34,000 --> 00:10:35,680 Speaker 4: to be most focused on? You know, I mean, like 204 00:10:35,920 --> 00:10:37,880 Speaker 4: I mean, we've just seen a lot of tax revenue. 205 00:10:37,880 --> 00:10:39,760 Speaker 4: I mean hasn't been spent yet, but I mean these 206 00:10:39,800 --> 00:10:42,280 Speaker 4: tarwerf the tariff revenue is there. Money is coming in. 207 00:10:42,320 --> 00:10:44,360 Speaker 4: I know there's the big concern about the fiscal But 208 00:10:44,480 --> 00:10:46,680 Speaker 4: you know, what do you expect in that run up 209 00:10:46,880 --> 00:10:48,520 Speaker 4: to the end of September when you know, when people 210 00:10:48,559 --> 00:10:48,840 Speaker 4: were turning. 211 00:10:48,920 --> 00:10:51,760 Speaker 3: Yeah, So Congress comes back right next next week, and 212 00:10:52,280 --> 00:10:55,320 Speaker 3: one big piece of unfinished business is to fund the 213 00:10:55,360 --> 00:10:58,480 Speaker 3: government and avoid a government shutdown. The deadline for that 214 00:10:58,559 --> 00:11:02,880 Speaker 3: is September thirtieth. I think again the market is desensitized 215 00:11:02,880 --> 00:11:06,640 Speaker 3: to these arguments for good reason because it really doesn't 216 00:11:06,640 --> 00:11:11,160 Speaker 3: necessarily affect the economy unless you see a prolonged government shutdown. 217 00:11:11,520 --> 00:11:11,720 Speaker 2: Yeah. 218 00:11:11,720 --> 00:11:15,280 Speaker 3: I do think that the chances of a government shutdown are. 219 00:11:15,160 --> 00:11:18,360 Speaker 4: Not non negligible, not negligible. 220 00:11:17,760 --> 00:11:22,040 Speaker 3: At all, and partly because you Democrats have very little 221 00:11:22,080 --> 00:11:25,000 Speaker 3: power right now, and this is one lever of power 222 00:11:25,040 --> 00:11:25,920 Speaker 3: that they can exert. 223 00:11:26,240 --> 00:11:29,440 Speaker 2: Olby Clinic, Thank you so much. Let me cantrell with 224 00:11:29,520 --> 00:11:32,160 Speaker 2: this is Pimco here, and of course on the back 225 00:11:32,200 --> 00:11:34,640 Speaker 2: and forth between the White House and the Federal Reserve 226 00:11:34,720 --> 00:11:41,200 Speaker 2: system involving the governor. Lisa. Stay with us. More from 227 00:11:41,240 --> 00:11:43,880 Speaker 2: Bloomberg Surveillance coming up after this. 228 00:11:51,120 --> 00:11:54,720 Speaker 1: You're listening to the Bloomberg Surveillance podcast. Catch us live 229 00:11:54,800 --> 00:11:58,319 Speaker 1: weekday afternoons from seven to ten am Eastern Listen on Alva, 230 00:11:58,360 --> 00:12:02,080 Speaker 1: Karplay and Android Otto the Bloomberg Business Up, or watch 231 00:12:02,160 --> 00:12:03,280 Speaker 1: us live on YouTube. 232 00:12:03,800 --> 00:12:06,599 Speaker 2: Its differently now with Kim Harvey at Duke University. We 233 00:12:06,640 --> 00:12:08,800 Speaker 2: can do all sorts of different topics, but we need 234 00:12:08,840 --> 00:12:12,640 Speaker 2: to get a briefing from Professor Harvey leading into the 235 00:12:12,720 --> 00:12:16,920 Speaker 2: vice chair Lyle brainer will do that scheduling eleven. Man, 236 00:12:16,960 --> 00:12:19,600 Speaker 2: it's doctor Harvey. Thank you so much for joining today. 237 00:12:20,000 --> 00:12:24,000 Speaker 2: You were years ago a visiting scholar the Board of 238 00:12:24,080 --> 00:12:28,560 Speaker 2: Governors of the Federal Reserve System. What is the Board 239 00:12:28,600 --> 00:12:31,200 Speaker 2: of Governors? This is a set of offices in the 240 00:12:31,240 --> 00:12:32,080 Speaker 2: Eccles building. 241 00:12:34,160 --> 00:12:37,160 Speaker 6: It is a setup offices, and when I was there, 242 00:12:37,360 --> 00:12:40,560 Speaker 6: the offices were really old and needed repair. So it's 243 00:12:40,640 --> 00:12:45,920 Speaker 6: kind of ironic that they're actually doing repair today so 244 00:12:46,000 --> 00:12:51,240 Speaker 6: many years later. But it is an important part of 245 00:12:51,280 --> 00:12:54,400 Speaker 6: the FED. A lot of the research is done there, 246 00:12:55,000 --> 00:12:57,280 Speaker 6: and I was visiting scholar many years ago. 247 00:12:57,520 --> 00:13:01,439 Speaker 2: What does a governor do different than a Federal Reserve president, 248 00:13:01,679 --> 00:13:05,920 Speaker 2: a vice chair like doctor Brainerd or the chair chairman Poul. 249 00:13:06,200 --> 00:13:09,320 Speaker 2: How is a governor different? Yeah? 250 00:13:09,520 --> 00:13:14,640 Speaker 6: So the FED is organized so there's a central part 251 00:13:14,640 --> 00:13:17,840 Speaker 6: of the FED, which is the Board of Governors, and 252 00:13:17,880 --> 00:13:23,680 Speaker 6: then there are regional feds and each of the regional 253 00:13:23,720 --> 00:13:27,880 Speaker 6: feds as a presidency. And then there's a rotation on 254 00:13:28,120 --> 00:13:33,439 Speaker 6: the fo MC, which is the most important component. So 255 00:13:34,240 --> 00:13:38,960 Speaker 6: the FOMC is the key committee that makes the decisions 256 00:13:39,080 --> 00:13:39,880 Speaker 6: on the rates. 257 00:13:40,040 --> 00:13:43,440 Speaker 2: Let me bring in my colleague Damien Sasauer before Lyle Brainerd. 258 00:13:43,600 --> 00:13:45,000 Speaker 2: We have Cam Harvey. 259 00:13:45,480 --> 00:13:48,440 Speaker 4: Cam, does the whole cook issue? Does this really change things? 260 00:13:48,480 --> 00:13:51,120 Speaker 4: Does really change someone's outlook on the FED, on their 261 00:13:51,240 --> 00:13:54,040 Speaker 4: ability to act? I mean, you know, what's the real 262 00:13:54,160 --> 00:13:57,920 Speaker 4: world impact on what Trump is, you know, basically proposing 263 00:13:57,960 --> 00:13:58,400 Speaker 4: to do here. 264 00:13:59,440 --> 00:14:06,120 Speaker 6: Yeah, it's pressure, So it's political pressure. And like, in 265 00:14:06,160 --> 00:14:11,080 Speaker 6: a way, what we really value is an independent FED. 266 00:14:12,160 --> 00:14:15,360 Speaker 6: So I've got some recent research that asks the question 267 00:14:16,559 --> 00:14:20,320 Speaker 6: how important is it to be a reserve currency? And 268 00:14:20,360 --> 00:14:24,600 Speaker 6: the US has got this privilege. So the people all 269 00:14:24,640 --> 00:14:28,120 Speaker 6: over the world central banks hold US dollars. They hold 270 00:14:28,400 --> 00:14:32,480 Speaker 6: not just the cash but treasury bonds, and that demand 271 00:14:32,680 --> 00:14:38,120 Speaker 6: for the bonds actually reduces the yield, so it allows 272 00:14:38,240 --> 00:14:42,840 Speaker 6: the US to have lower interest service cost on their debt. 273 00:14:43,120 --> 00:14:46,480 Speaker 6: It allows the US to have leverage. So it is 274 00:14:47,040 --> 00:14:51,200 Speaker 6: a privilege to actually have this. So one of the 275 00:14:51,280 --> 00:14:56,200 Speaker 6: key components of having a reserve currency is to have 276 00:14:56,400 --> 00:15:01,160 Speaker 6: an independent central bank, and that's been challenged right now. 277 00:15:01,240 --> 00:15:03,560 Speaker 4: So I just want to ask you on that, right, 278 00:15:03,600 --> 00:15:05,120 Speaker 4: I mean, because I agree with you, the dollars still 279 00:15:05,160 --> 00:15:08,440 Speaker 4: the world's reserve currency. It's transactual dominance is unquestioned. But 280 00:15:08,480 --> 00:15:10,880 Speaker 4: here's the deal. You know, will you know some of 281 00:15:10,920 --> 00:15:12,800 Speaker 4: these appointments, some of the things that Trump is doing here, 282 00:15:12,800 --> 00:15:15,280 Speaker 4: Will this give him greater access to what's going on 283 00:15:15,480 --> 00:15:18,120 Speaker 4: inside the FED, the ability to really impact at the 284 00:15:18,200 --> 00:15:21,080 Speaker 4: grassroots level, the way people are speaking to one another, 285 00:15:21,120 --> 00:15:23,600 Speaker 4: the way people are sharing data with one another. Is 286 00:15:23,600 --> 00:15:24,960 Speaker 4: that really what we're talking about here. 287 00:15:26,200 --> 00:15:30,880 Speaker 6: So this is a very difficult issue because it could 288 00:15:30,920 --> 00:15:35,440 Speaker 6: be that the FED is making a serious mistake. And 289 00:15:36,360 --> 00:15:39,200 Speaker 6: I for the last couple of years have criticized the 290 00:15:39,200 --> 00:15:43,600 Speaker 6: FED for keeping the FED punts rate too high, and 291 00:15:43,640 --> 00:15:46,440 Speaker 6: then now all of a sudden in DC, they've jumped 292 00:15:46,480 --> 00:15:47,720 Speaker 6: on that bandwagon. 293 00:15:48,720 --> 00:15:50,760 Speaker 4: So it is delicate. 294 00:15:51,240 --> 00:15:55,880 Speaker 6: The balance and the pressure here and there to get 295 00:15:55,880 --> 00:15:59,880 Speaker 6: them to think about this more carefully could be useful. 296 00:16:00,360 --> 00:16:04,280 Speaker 2: Kim Harvey with this Duke University, we continue with Professor Harvey. 297 00:16:04,360 --> 00:16:07,640 Speaker 2: We welcome all of you on an extraordinary Tuesday here 298 00:16:07,640 --> 00:16:11,200 Speaker 2: in August. Damien SASA are in for Pallsphenia. I'm Tim King. 299 00:16:11,240 --> 00:16:14,600 Speaker 2: Good morning across the nation, good morning in the Carolinas, 300 00:16:14,760 --> 00:16:18,160 Speaker 2: and of course on YouTube, subscribe to Bloomberg Podcast. Our 301 00:16:18,240 --> 00:16:22,240 Speaker 2: new digital experience. Really humbled by that excellence. Now, Damien 302 00:16:22,360 --> 00:16:24,560 Speaker 2: sassare with Professor Harvey. 303 00:16:24,280 --> 00:16:27,120 Speaker 4: So, Cam, we know about the lag from monetary policy 304 00:16:27,120 --> 00:16:29,040 Speaker 4: through to the real economy. You know, ray cuts just 305 00:16:29,040 --> 00:16:32,240 Speaker 4: don't you know, have an impact on the everyday person overnight. Right, 306 00:16:32,320 --> 00:16:35,280 Speaker 4: So talk to us about you know what if Trump 307 00:16:35,280 --> 00:16:37,160 Speaker 4: gets out of his wish and he gets one hundred 308 00:16:37,160 --> 00:16:39,840 Speaker 4: and fifty basis point cuts from the Fed before at 309 00:16:39,880 --> 00:16:41,600 Speaker 4: the end of the first quarter of next year. I mean, 310 00:16:41,920 --> 00:16:44,080 Speaker 4: if that were to happen, would that have any real 311 00:16:44,120 --> 00:16:45,720 Speaker 4: world impact immediately? 312 00:16:47,240 --> 00:16:49,880 Speaker 6: Oh, would have a dramatic impact. So you're talking one 313 00:16:49,960 --> 00:16:53,200 Speaker 6: hundred and fifty basis points, Yeah, sure, bring it off, 314 00:16:53,440 --> 00:16:58,120 Speaker 6: very dramatic. So more likely we'll have a few cuts. 315 00:16:58,560 --> 00:17:02,400 Speaker 6: But it's there is a lag, but the lag is 316 00:17:02,440 --> 00:17:05,440 Speaker 6: not as big as you might think. In any kind 317 00:17:05,840 --> 00:17:09,800 Speaker 6: you reduce rates, you reduce the cost of capital. And 318 00:17:09,960 --> 00:17:13,400 Speaker 6: when the cost of capital is decreased, that means there 319 00:17:13,440 --> 00:17:18,040 Speaker 6: should be increased business investment and consumers will do things 320 00:17:18,440 --> 00:17:21,960 Speaker 6: like buy a house that they were kind of waiting 321 00:17:22,400 --> 00:17:25,359 Speaker 6: to do for the rates to come down. So I 322 00:17:25,359 --> 00:17:29,080 Speaker 6: would say that if the rates did come down substantially, 323 00:17:29,560 --> 00:17:32,679 Speaker 6: that that could be a significant boost for economic growth 324 00:17:32,920 --> 00:17:36,520 Speaker 6: and potentially exactly at the right time where we're seeing 325 00:17:37,000 --> 00:17:39,520 Speaker 6: a significant softening in the labor market. 326 00:17:39,880 --> 00:17:42,720 Speaker 2: Kim Hervy, we're talking to the wonderful Stephen England or 327 00:17:43,000 --> 00:17:47,000 Speaker 2: a standard Charter about how everybody's looking at the mix 328 00:17:47,200 --> 00:17:50,639 Speaker 2: of our economics the summer of twenty twenty five, and 329 00:17:50,680 --> 00:17:54,760 Speaker 2: we're worried about substituting and substitution effect and what are 330 00:17:54,800 --> 00:17:57,600 Speaker 2: we going to do with tariffs and all that describe 331 00:17:57,680 --> 00:18:02,120 Speaker 2: for us the risk to our income effect of dampened income, 332 00:18:02,440 --> 00:18:07,080 Speaker 2: dampened investment, damp and real Dare I say damp phenomenal GDP? 333 00:18:07,400 --> 00:18:12,520 Speaker 6: Is that a legitimate risk? Oh, it's definitely legitimate. So 334 00:18:13,359 --> 00:18:16,720 Speaker 6: there's a lot of confusion over this teariff stuff. And 335 00:18:17,520 --> 00:18:21,080 Speaker 6: just to be very clear, tariffs lead to a one 336 00:18:21,160 --> 00:18:26,240 Speaker 6: time jump and price level. They're only inflationary if the 337 00:18:26,359 --> 00:18:31,159 Speaker 6: tear freight continues to go up. And this is widely misunderstood. 338 00:18:32,240 --> 00:18:34,960 Speaker 6: And it's also the case when you'd have tariffs, you 339 00:18:34,960 --> 00:18:38,760 Speaker 6: would have a substitution effect as you mentioned, so you 340 00:18:39,000 --> 00:18:44,480 Speaker 6: substitute alternative goods. But your point on the income effect 341 00:18:44,760 --> 00:18:48,359 Speaker 6: is very important that right now what we need is 342 00:18:48,480 --> 00:18:52,440 Speaker 6: increase growth. So growth has been in the first half 343 00:18:52,920 --> 00:18:56,919 Speaker 6: not very robust. And given this significant weakening in the 344 00:18:57,000 --> 00:19:00,000 Speaker 6: labor sector, we need some policies that are pro grows 345 00:19:00,680 --> 00:19:03,040 Speaker 6: and increasing tariffs is not pro. 346 00:19:02,880 --> 00:19:05,000 Speaker 4: Growth, Kim. You know, I was kidding a little bit 347 00:19:05,000 --> 00:19:06,720 Speaker 4: earlier on when I talked about one hundred and fifty BIPs. 348 00:19:06,720 --> 00:19:08,920 Speaker 4: But let's talk about the markets pricing, and right this minute, 349 00:19:08,960 --> 00:19:11,480 Speaker 4: they're only pricing in an eighty percent probability of a 350 00:19:11,480 --> 00:19:14,119 Speaker 4: step cut. They are only pricing in one hundred and 351 00:19:14,160 --> 00:19:16,000 Speaker 4: twenty five basis points of cuts through the end of 352 00:19:16,040 --> 00:19:18,879 Speaker 4: next year. That's equal to the fomc's dots medium of 353 00:19:18,880 --> 00:19:21,159 Speaker 4: long term projections. It's right on the screws with the 354 00:19:21,160 --> 00:19:24,200 Speaker 4: one year one year usois op rate. Talk to us 355 00:19:24,680 --> 00:19:27,800 Speaker 4: about the propensity for yields to go higher from here 356 00:19:27,960 --> 00:19:30,359 Speaker 4: if what you're saying is true and the tariff impact 357 00:19:30,400 --> 00:19:31,960 Speaker 4: has only been front loaded, and now we're going to 358 00:19:31,960 --> 00:19:33,000 Speaker 4: see the impact on inflation. 359 00:19:35,640 --> 00:19:39,080 Speaker 6: Yeah, So again, let's be careful with the tariffs. A 360 00:19:39,200 --> 00:19:42,160 Speaker 6: tariff could lead to a one time increase in prices, 361 00:19:42,520 --> 00:19:46,479 Speaker 6: but it's only inflationary if it's a continuous policy of 362 00:19:46,680 --> 00:19:54,000 Speaker 6: increasing tariffs. More seriously, tariffs could decrease economic growth. So 363 00:19:54,600 --> 00:19:59,360 Speaker 6: it is not a pro growth policy whatsoever. And that 364 00:19:59,520 --> 00:20:04,760 Speaker 6: decrease economic growth could cause issues in terms of uh, 365 00:20:05,119 --> 00:20:09,680 Speaker 6: you know, yeah, fewer firms going out to the debt market, 366 00:20:10,200 --> 00:20:13,399 Speaker 6: the government having some issues and raising funds, so there 367 00:20:13,440 --> 00:20:16,520 Speaker 6: could be a lot of like knock on issues with 368 00:20:16,720 --> 00:20:18,800 Speaker 6: the slower growth in financial markets. 369 00:20:18,800 --> 00:20:19,240 Speaker 3: Obviously. 370 00:20:19,320 --> 00:20:21,480 Speaker 4: Well, Cam, I think it's timely that we're talking about growth. 371 00:20:21,520 --> 00:20:23,679 Speaker 4: I mean, it's GDP week here in the US, you know, 372 00:20:23,760 --> 00:20:25,399 Speaker 4: and as we look into the second half, you know, 373 00:20:25,440 --> 00:20:27,640 Speaker 4: I'm just looking at you know, some IMF projections. I'm 374 00:20:27,680 --> 00:20:30,040 Speaker 4: looking at some of the bigger banks here, a lot 375 00:20:30,080 --> 00:20:32,200 Speaker 4: of them are projecting that China growth is gonna is 376 00:20:32,240 --> 00:20:34,600 Speaker 4: going to fall and fall quite significantly here. You know, 377 00:20:34,640 --> 00:20:36,240 Speaker 4: what are your thoughts there, What are your thoughts on 378 00:20:36,280 --> 00:20:37,800 Speaker 4: the impact that China is having on the rest of 379 00:20:37,800 --> 00:20:38,160 Speaker 4: the world. 380 00:20:40,359 --> 00:20:44,640 Speaker 6: So, China is obviously a very important engine of kind 381 00:20:44,640 --> 00:20:49,159 Speaker 6: of world economic growth now so uh, and they are 382 00:20:49,200 --> 00:20:53,719 Speaker 6: struggling in some respects, in particular in the property sector. 383 00:20:54,119 --> 00:20:59,560 Speaker 6: As we've seen, they really need to grow, uh, and 384 00:20:59,640 --> 00:21:02,320 Speaker 6: they need to grow more than the US needs to 385 00:21:02,359 --> 00:21:06,280 Speaker 6: grow because they've got a demographic problem that's way more 386 00:21:06,359 --> 00:21:09,720 Speaker 6: serious than the US Kim her So it's very important 387 00:21:09,720 --> 00:21:11,160 Speaker 6: for them to have growth. 388 00:21:11,400 --> 00:21:13,760 Speaker 2: Kim Harvey with US Duke University. Kim, I want to 389 00:21:13,960 --> 00:21:17,120 Speaker 2: make this personal as we go to a former vice 390 00:21:17,200 --> 00:21:20,760 Speaker 2: chair of Brainerd Low Brainerd came out of Wesleyan with 391 00:21:21,280 --> 00:21:25,000 Speaker 2: bulletproof academics, and I would say, Kim, somewhat like you. 392 00:21:25,440 --> 00:21:30,520 Speaker 2: It's not Richard Claired the dynamics stochastic general equilibrium theory. 393 00:21:30,640 --> 00:21:34,439 Speaker 2: It's much more of a holistic policy view. And I 394 00:21:34,440 --> 00:21:37,000 Speaker 2: would suggest we get that from Lisa Cook as well 395 00:21:37,040 --> 00:21:41,679 Speaker 2: out of ken Green and Berkeley. Explain the place of 396 00:21:42,080 --> 00:21:50,240 Speaker 2: policy centric economists at the FED, whether Harvey, Brainerd or Cook. Yeah. 397 00:21:50,359 --> 00:21:54,080 Speaker 6: So one thing that's really important at the FOMC is 398 00:21:54,119 --> 00:21:58,920 Speaker 6: to have diversity of viewpoints. So I'm always encouraged when 399 00:21:59,400 --> 00:22:05,680 Speaker 6: there's some agreement. If it's just unanimous on everything, I'm 400 00:22:05,720 --> 00:22:09,360 Speaker 6: worried about that. So we need to debate. And these 401 00:22:09,400 --> 00:22:14,680 Speaker 6: are difficult times and we need a FED that has 402 00:22:14,680 --> 00:22:18,160 Speaker 6: got a long term vision for the economy, that's willing 403 00:22:18,240 --> 00:22:22,439 Speaker 6: to take some risk and is willing to admit that 404 00:22:22,600 --> 00:22:26,080 Speaker 6: mistakes were made in the past, and most importantly to 405 00:22:26,200 --> 00:22:27,520 Speaker 6: learn from those mistakes. 406 00:22:27,880 --> 00:22:30,080 Speaker 2: This has been well timed Kim Harvey, Thank you so 407 00:22:30,160 --> 00:22:31,800 Speaker 2: much generous for you to be with us on this 408 00:22:31,880 --> 00:22:38,520 Speaker 2: August morning, Dictor Harvey at Duke University, stay with us. 409 00:22:38,800 --> 00:22:49,120 Speaker 2: More from Bloomberg Surveillance coming up after this. 410 00:22:49,119 --> 00:22:53,000 Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday 411 00:22:53,040 --> 00:22:56,040 Speaker 1: starting at seven am Eastern on Apple, Coarklay, and Android 412 00:22:56,080 --> 00:22:59,119 Speaker 1: Auto with the Bloomberg Business App. You can also listen 413 00:22:59,200 --> 00:23:02,480 Speaker 1: live on Amazon on Alexa from our flagship New York station, 414 00:23:03,000 --> 00:23:05,680 Speaker 1: Just say Alexa play Bloomberg eleven thirty. 415 00:23:06,040 --> 00:23:09,040 Speaker 2: Now another headline across the Bloomberg terminal, this one the 416 00:23:09,160 --> 00:23:12,720 Speaker 2: Washington Post. Who is Fed Governor Lisa Cook? And can 417 00:23:12,760 --> 00:23:17,760 Speaker 2: Trump really fire her? To provide market economic perspective, Stephanie 418 00:23:17,800 --> 00:23:21,000 Speaker 2: Roth joins us now as we've had some wonderful voices 419 00:23:21,480 --> 00:23:25,680 Speaker 2: this morning as well, this uproar. Does the market look 420 00:23:25,840 --> 00:23:30,320 Speaker 2: beyond it or can it actually adjust yield? The price 421 00:23:30,320 --> 00:23:32,680 Speaker 2: of fixed income and all we do. 422 00:23:34,119 --> 00:23:38,040 Speaker 7: If Trump actually succeeds in firing Cook, the result should 423 00:23:38,040 --> 00:23:40,199 Speaker 7: be ten year rates should be rising because this is 424 00:23:40,359 --> 00:23:42,879 Speaker 7: a real risk about the credibility of the FED and 425 00:23:42,920 --> 00:23:47,120 Speaker 7: inflation fighting, the fighting ability of that. So from that perspective, 426 00:23:47,119 --> 00:23:49,080 Speaker 7: it should actually be quite negative for markets. We should 427 00:23:49,080 --> 00:23:51,680 Speaker 7: see ten year yields rise as a result, the dollar 428 00:23:51,840 --> 00:23:54,639 Speaker 7: significantly weaker, in equities down. This is a really market 429 00:23:54,680 --> 00:23:57,360 Speaker 7: negative move to the extent that this actually can happen, 430 00:23:57,359 --> 00:23:58,440 Speaker 7: although are basically. 431 00:23:58,160 --> 00:24:00,600 Speaker 2: It could help even your base cases, it can. I 432 00:24:00,600 --> 00:24:02,800 Speaker 2: think that's what we see, Damien says are in the 433 00:24:02,840 --> 00:24:03,520 Speaker 2: tape this morning. 434 00:24:03,560 --> 00:24:05,600 Speaker 4: Well, Stephanie, earlier this morning we had a Peter chieron 435 00:24:05,720 --> 00:24:09,359 Speaker 4: and he proposed that the Fed should be enacting some 436 00:24:09,400 --> 00:24:11,520 Speaker 4: form of yield curve control. What are your thoughts on that? 437 00:24:13,160 --> 00:24:17,160 Speaker 7: Yeah, I mean, I think that that's certainly a potential 438 00:24:17,160 --> 00:24:19,760 Speaker 7: move because when we're thinking, when we see what the 439 00:24:19,760 --> 00:24:22,680 Speaker 7: path of policy at this point, you're seeing, even though 440 00:24:22,720 --> 00:24:25,560 Speaker 7: there's a pretty aggressive cutting path of the Fed, you 441 00:24:25,600 --> 00:24:28,200 Speaker 7: still see that tenure yields are fairly elevated. 442 00:24:28,200 --> 00:24:29,920 Speaker 4: I think, do you think there's a commitment for the 443 00:24:29,920 --> 00:24:31,800 Speaker 4: FED to expand its balance sheet going forward? 444 00:24:33,040 --> 00:24:33,400 Speaker 6: I don't. 445 00:24:33,480 --> 00:24:33,840 Speaker 3: I don't. 446 00:24:33,920 --> 00:24:36,440 Speaker 7: I don't think so. I think that would be sort 447 00:24:36,480 --> 00:24:40,159 Speaker 7: of a troubling move. I don't think that's necessarily a 448 00:24:40,200 --> 00:24:43,000 Speaker 7: good plan. So I think what we'll see is the 449 00:24:43,040 --> 00:24:46,520 Speaker 7: Fed will do a cut in September and then beyond that, 450 00:24:46,600 --> 00:24:48,160 Speaker 7: I think they're actually going to get a little bit 451 00:24:48,400 --> 00:24:51,040 Speaker 7: troubled because inflation is likely to pick up pretty substantially. 452 00:24:51,200 --> 00:24:53,159 Speaker 2: This is the heart of the matter. I mentioned this 453 00:24:53,320 --> 00:24:55,800 Speaker 2: eight times at Jackson Hole. I'm embarrassed to say I'm 454 00:24:55,800 --> 00:24:58,680 Speaker 2: going to do it again, but it's germane. Do you 455 00:24:58,720 --> 00:25:02,000 Speaker 2: perceive this as a one off twenty five beat move 456 00:25:02,600 --> 00:25:05,800 Speaker 2: or Ali? Greenspan is a vector in place, is a 457 00:25:05,840 --> 00:25:10,359 Speaker 2: process in place to have a set of fed RIG cuts. 458 00:25:10,560 --> 00:25:12,680 Speaker 7: The intention is never going to be to cut one 459 00:25:12,720 --> 00:25:15,480 Speaker 7: time and then get sort of troubled by inflation. 460 00:25:15,600 --> 00:25:17,520 Speaker 3: I think that will be the reality. 461 00:25:17,560 --> 00:25:21,200 Speaker 7: Because certainly they're very much set up for the September cut. 462 00:25:21,200 --> 00:25:23,800 Speaker 7: But what we'll probably see is employment look a bit 463 00:25:23,800 --> 00:25:26,040 Speaker 7: better than what we saw in May and June, and 464 00:25:26,080 --> 00:25:28,479 Speaker 7: then inflation look a little bit higher. 465 00:25:28,920 --> 00:25:30,320 Speaker 4: So what do you think about the end of twenty 466 00:25:30,400 --> 00:25:32,760 Speaker 4: twenty six three percent terminal rate? I mean, how do 467 00:25:32,800 --> 00:25:34,160 Speaker 4: we get there? Do you think we get there? 468 00:25:34,200 --> 00:25:36,399 Speaker 7: I don't think we get there. Interesting, I think we 469 00:25:36,520 --> 00:25:40,800 Speaker 7: end up getting two to three cuts. I don't think 470 00:25:40,800 --> 00:25:43,880 Speaker 7: we get to anything any close. Tennessily, where the markets priced? 471 00:25:43,920 --> 00:25:46,320 Speaker 2: You get some economic data this morning into a busy 472 00:25:46,400 --> 00:25:49,480 Speaker 2: economic week. This has been underplayed in the doldrums of August. 473 00:25:49,480 --> 00:25:54,160 Speaker 2: PCE Price Index on August twenty nine, I believe that's Friday. 474 00:25:54,200 --> 00:25:56,879 Speaker 2: We've got all sorts of second look at GDP on 475 00:25:57,040 --> 00:25:59,960 Speaker 2: August twenty eighth. Not much going on in the twenty seven, 476 00:26:00,240 --> 00:26:04,640 Speaker 2: but right now some economic data here and again durables 477 00:26:04,760 --> 00:26:10,399 Speaker 2: X transportation a better number, cap goods x Boeing a 478 00:26:10,440 --> 00:26:13,040 Speaker 2: better number, and so you know, again it's a tea 479 00:26:13,119 --> 00:26:15,480 Speaker 2: leaf and Joan Hassi has taught me to take this 480 00:26:15,520 --> 00:26:18,320 Speaker 2: three month moving average. But the bottom line is it's 481 00:26:18,960 --> 00:26:24,000 Speaker 2: not all that bad. Philadelphia fed non manufacturing. Thank you 482 00:26:24,080 --> 00:26:27,720 Speaker 2: Patrick Karker for the wonderful discussion in Jackson, OH is 483 00:26:27,720 --> 00:26:31,320 Speaker 2: a pretty grim number, negative seventeen point five. But there's 484 00:26:31,320 --> 00:26:33,680 Speaker 2: a set of economic data that I barely. 485 00:26:33,359 --> 00:26:33,720 Speaker 4: Thought the. 486 00:26:35,600 --> 00:26:39,120 Speaker 2: POK looks Yeah, it is. He did mention the eagles. 487 00:26:39,200 --> 00:26:43,200 Speaker 2: I mean, I'm sure, Stephanie, is our economy slowing. 488 00:26:43,960 --> 00:26:46,080 Speaker 7: We've slowed, but I don't think we're slowing from here. 489 00:26:46,200 --> 00:26:48,680 Speaker 7: So Q two is probably the weakest point of the year, 490 00:26:49,000 --> 00:26:51,000 Speaker 7: and then we'll see growth stabilize in Q three and 491 00:26:51,040 --> 00:26:53,399 Speaker 7: then pick up into Q four. So Q Q two 492 00:26:53,440 --> 00:26:54,919 Speaker 7: what happened in Q two If you think about it, 493 00:26:54,960 --> 00:26:56,879 Speaker 7: especially when it comes to the employment data, it was 494 00:26:56,920 --> 00:26:59,000 Speaker 7: a period of time where we had peak tariff uncertainty 495 00:27:00,119 --> 00:27:03,240 Speaker 7: of thousands of people lost the work authorization. So it 496 00:27:03,280 --> 00:27:05,920 Speaker 7: shouldn't be that surprising that payroll's growth was quite slow then. 497 00:27:06,000 --> 00:27:07,640 Speaker 7: But what we should say is it get a little 498 00:27:07,680 --> 00:27:09,560 Speaker 7: bit better and being at the break even pace of 499 00:27:09,560 --> 00:27:12,480 Speaker 7: payrolls growth is in the sixty to eighty thousand range. 500 00:27:12,480 --> 00:27:14,280 Speaker 7: If we see payrolls run at that type of trend, 501 00:27:14,359 --> 00:27:15,960 Speaker 7: then that's a solid economy. 502 00:27:16,040 --> 00:27:18,560 Speaker 4: So Stephanie, the reason you're I guess above consensus in 503 00:27:18,640 --> 00:27:21,000 Speaker 4: terms of how the FED gets there at towards the 504 00:27:21,080 --> 00:27:23,360 Speaker 4: end of twenty twenty six is it's going to be inflation, right, 505 00:27:23,400 --> 00:27:24,960 Speaker 4: It's going to be higher prices, and that's going to 506 00:27:24,960 --> 00:27:27,399 Speaker 4: stay the Fed's hand. I'm curious given what's going on 507 00:27:27,440 --> 00:27:30,080 Speaker 4: in the market today, given what's going on with cook, 508 00:27:30,440 --> 00:27:32,840 Speaker 4: you know what if the I mean, do you have 509 00:27:32,920 --> 00:27:34,680 Speaker 4: any doubt that the Fed's going to make a decision 510 00:27:34,680 --> 00:27:36,359 Speaker 4: as they have based on the data or based on 511 00:27:36,359 --> 00:27:37,560 Speaker 4: what they think the data is going to be, or 512 00:27:37,640 --> 00:27:39,160 Speaker 4: is there going to be another element that goes into 513 00:27:39,200 --> 00:27:42,760 Speaker 4: your calculus when you're trying to determine where policy rates 514 00:27:42,760 --> 00:27:44,240 Speaker 4: are going to be in a year and a half time. 515 00:27:44,760 --> 00:27:47,160 Speaker 7: Yeah, I mean so, I think the disconnect at least 516 00:27:47,200 --> 00:27:50,040 Speaker 7: between where I see the sort of the trajectory from 517 00:27:50,040 --> 00:27:53,159 Speaker 7: here versus what the FED is looking at is the 518 00:27:53,440 --> 00:27:55,040 Speaker 7: current trend in employment, which is. 519 00:27:55,520 --> 00:27:58,440 Speaker 4: Cannot be influenced by some of these moves that that 520 00:27:58,600 --> 00:28:00,920 Speaker 4: Trump is making in terms of the ability of the FED. 521 00:28:00,960 --> 00:28:03,200 Speaker 4: I mean, do you think that calculus? I mean, aren't 522 00:28:03,560 --> 00:28:05,919 Speaker 4: you know governor's going to be incentivized to cut rates 523 00:28:06,160 --> 00:28:07,800 Speaker 4: just to appease the president? Or is that not going 524 00:28:07,880 --> 00:28:09,359 Speaker 4: to add all factor into your thinking. 525 00:28:09,840 --> 00:28:12,199 Speaker 7: I think the bigger factor here is going to be 526 00:28:12,400 --> 00:28:15,520 Speaker 7: the next FED chair and how that shapes the leadership 527 00:28:15,560 --> 00:28:21,000 Speaker 7: as opposed to as opposed to the pressuring of individual members. 528 00:28:21,000 --> 00:28:23,040 Speaker 7: I think it's more about who's going to be in 529 00:28:23,040 --> 00:28:25,840 Speaker 7: that seat and how do they sort of shape the 530 00:28:25,920 --> 00:28:27,240 Speaker 7: narrative for the restaurant. 531 00:28:27,240 --> 00:28:29,879 Speaker 2: Smartest thing I've heard in twenty four hours, Stephanie Rawthip 532 00:28:29,920 --> 00:28:32,720 Speaker 2: will research. Okay, this goes back to green Span and 533 00:28:32,840 --> 00:28:36,399 Speaker 2: Lawrence Meyer's wonderful book, A term at the FED is 534 00:28:36,440 --> 00:28:39,280 Speaker 2: a risk. Here we get back to a green, spanning 535 00:28:39,360 --> 00:28:41,400 Speaker 2: and dominant chairman. 536 00:28:43,280 --> 00:28:46,080 Speaker 7: Is it's possible that will end up with a chairman that, 537 00:28:46,760 --> 00:28:50,120 Speaker 7: you know, kind of makes the decisions for the rest 538 00:28:50,120 --> 00:28:53,800 Speaker 7: of the board. That said, the people on the list, 539 00:28:53,920 --> 00:28:57,880 Speaker 7: for the most part, are largely credible, somewhat institutional type 540 00:28:57,880 --> 00:28:59,640 Speaker 7: of people, and if we get somebody like Waller, I 541 00:28:59,640 --> 00:29:03,240 Speaker 7: would I would expect that the credibility will be maintained. 542 00:29:03,320 --> 00:29:05,600 Speaker 2: I did my video with Joe and Tracy at the 543 00:29:05,600 --> 00:29:09,800 Speaker 2: horse farm and there was a horse like by the way, No, 544 00:29:09,840 --> 00:29:12,040 Speaker 2: we didn't play guitar. We were by the campfire, but 545 00:29:12,240 --> 00:29:14,840 Speaker 2: you know, we we we we didn't. We were trying 546 00:29:14,840 --> 00:29:17,640 Speaker 2: to use Chris Hillman. We're tried really to sing some 547 00:29:17,680 --> 00:29:21,400 Speaker 2: Desert Rose band but it didn't work out quickly. Here, uh, 548 00:29:21,600 --> 00:29:25,719 Speaker 2: Stephanie Wroth the inflation data on Friday? Is it in 549 00:29:25,760 --> 00:29:27,920 Speaker 2: the survey or could it be market moving? 550 00:29:28,480 --> 00:29:30,920 Speaker 7: I don't expect it to be market moving. We largely 551 00:29:30,920 --> 00:29:33,040 Speaker 7: get most of the information from bp I, c PI 552 00:29:33,120 --> 00:29:36,080 Speaker 7: and then import prices. Our expectation is cor PC comes 553 00:29:36,080 --> 00:29:36,920 Speaker 7: in a point three. 554 00:29:36,720 --> 00:29:37,120 Speaker 2: To one. 555 00:29:38,760 --> 00:29:42,560 Speaker 7: Decimal points I'm sorry, decimal point. 556 00:29:43,640 --> 00:29:46,640 Speaker 2: We get somebody in that just goes to the round 557 00:29:46,640 --> 00:29:47,360 Speaker 2: big figure. 558 00:29:47,880 --> 00:29:50,000 Speaker 7: You know in this environment you kind of can't do 559 00:29:50,040 --> 00:29:52,280 Speaker 7: it because point three one is very different than point two. 560 00:29:52,360 --> 00:29:54,080 Speaker 7: Seven point three one, of course, means that you are 561 00:29:54,080 --> 00:29:56,440 Speaker 7: at risk of closer to something like round a point four. 562 00:29:57,160 --> 00:29:59,040 Speaker 7: Our base cases that it shouldn't be market moving, it'll 563 00:29:59,080 --> 00:30:00,280 Speaker 7: be something that rounds the point three. 564 00:30:00,320 --> 00:30:03,080 Speaker 4: In the case she's talking, that's the smartest thing that 565 00:30:03,120 --> 00:30:05,120 Speaker 4: someone said in twenty four and more than twenty four hours. 566 00:30:05,120 --> 00:30:07,240 Speaker 4: Bruce Kasman would agree with you. We're talking you have 567 00:30:07,320 --> 00:30:09,160 Speaker 4: to go out a few decimal places here to really 568 00:30:09,200 --> 00:30:11,400 Speaker 4: get a sense of what's going on in inflation. 569 00:30:11,600 --> 00:30:14,120 Speaker 2: This conversation happened at the new bar at the Waldorf 570 00:30:14,320 --> 00:30:17,000 Speaker 2: Story by the Clock last night. Stephanie brought the bar 571 00:30:17,080 --> 00:30:21,320 Speaker 2: to a complete silent moment. People were just like decimal 572 00:30:21,360 --> 00:30:24,600 Speaker 2: points at the Waldorf Story of Bar. It's too much. 573 00:30:25,640 --> 00:30:28,720 Speaker 2: We'll see Stephanie Roth. Don't go away. Thank you so much. 574 00:30:28,840 --> 00:30:30,560 Speaker 2: We hope to see you the rest of this week 575 00:30:30,840 --> 00:30:36,440 Speaker 2: as well. Stephanie Roth will research stay with us. More 576 00:30:36,560 --> 00:30:46,880 Speaker 2: from Bloomberg Surveillance coming up after this. 577 00:30:46,880 --> 00:30:50,800 Speaker 1: This is the Bloomberg Surveillance podcast. Listen live each weekday 578 00:30:50,840 --> 00:30:53,840 Speaker 1: starting at seven am Eastern on Apple coarplay and Android 579 00:30:53,840 --> 00:30:56,840 Speaker 1: Atto with the Bloomberg Business app. You can also watch 580 00:30:56,960 --> 00:30:59,840 Speaker 1: US live every weekday on YouTube and always on the 581 00:31:00,000 --> 00:31:01,000 Speaker 1: Bloomberg terminal. 582 00:31:01,240 --> 00:31:06,760 Speaker 2: Joining US now, Jordan Rochester had a fixed strategy a missuo, Jordan, 583 00:31:06,800 --> 00:31:09,520 Speaker 2: the world's turned upside down. You're out on LinkedIn. The 584 00:31:09,640 --> 00:31:14,840 Speaker 2: value that you're doing is really good. Equities, bonds, currencies, commodities. 585 00:31:15,800 --> 00:31:19,720 Speaker 2: Jordan Rochester, what is your best tool now to assess 586 00:31:19,880 --> 00:31:20,680 Speaker 2: where we're heading? 587 00:31:22,480 --> 00:31:24,920 Speaker 5: Well, Tom, that's a very difficult question which tool. 588 00:31:25,160 --> 00:31:27,240 Speaker 8: I think if you look at the sort of growth 589 00:31:27,240 --> 00:31:30,920 Speaker 8: momentum in the surveys, we're kind of operating blind as 590 00:31:30,920 --> 00:31:33,440 Speaker 8: to whether surveys are good anymore about the hard data. 591 00:31:33,600 --> 00:31:34,760 Speaker 5: That's the tricky thing we have. 592 00:31:34,840 --> 00:31:37,520 Speaker 8: It's especially tricky in the UK, but it's also becoming 593 00:31:37,560 --> 00:31:40,479 Speaker 8: a problem with the US with this recent berless thing. 594 00:31:40,520 --> 00:31:42,720 Speaker 8: But I think if you take into account, the overall 595 00:31:42,720 --> 00:31:44,800 Speaker 8: message from an average of the surveys is that US 596 00:31:44,880 --> 00:31:47,960 Speaker 8: growth had a pretty a soft spot around tariffs, of course, 597 00:31:48,000 --> 00:31:49,600 Speaker 8: but maybe things aren't so bad. 598 00:31:49,720 --> 00:31:49,960 Speaker 5: Tom. 599 00:31:50,840 --> 00:31:53,320 Speaker 8: The equity market tells you that. I think profit margins 600 00:31:53,360 --> 00:31:56,440 Speaker 8: amongst firms tell you that. So a mixture of those 601 00:31:56,480 --> 00:31:57,560 Speaker 8: two factors. 602 00:31:58,760 --> 00:32:00,520 Speaker 4: Jordan. You know my friends Joe up In and Bruce 603 00:32:00,560 --> 00:32:02,959 Speaker 4: Kasman over at JP Morgan. They're looking for, you know, 604 00:32:03,000 --> 00:32:06,360 Speaker 4: a divergence, so to speak, between US inflation and that 605 00:32:06,480 --> 00:32:09,400 Speaker 4: in the Eurozone slash UK. Talk to us about that. 606 00:32:09,480 --> 00:32:12,160 Speaker 4: What are you seeing, you know, grassroots, you know, boots 607 00:32:12,160 --> 00:32:13,920 Speaker 4: on the ground in terms of price pressures. Is there 608 00:32:13,960 --> 00:32:14,480 Speaker 4: anything there? 609 00:32:15,760 --> 00:32:15,920 Speaker 2: Yeah. 610 00:32:15,960 --> 00:32:18,840 Speaker 8: What's really fascinating about this cycle is because the Bank 611 00:32:18,880 --> 00:32:21,080 Speaker 8: of England and the ECB have cut rates by more 612 00:32:21,760 --> 00:32:24,440 Speaker 8: and you've got a bit of a different sort of 613 00:32:24,520 --> 00:32:28,120 Speaker 8: narrative amongst their central bankers for the UK inflation sticky. 614 00:32:28,200 --> 00:32:29,280 Speaker 5: It's frustratingly so. 615 00:32:29,440 --> 00:32:32,640 Speaker 8: A mixture of exogious factors such as food price inflation 616 00:32:32,920 --> 00:32:35,880 Speaker 8: but also tax changes by the chance of herself, have 617 00:32:36,040 --> 00:32:39,960 Speaker 8: led to inflation being on a level towards three and 618 00:32:40,040 --> 00:32:42,360 Speaker 8: four percent that is very uncomfortable for the Bank of England. 619 00:32:42,640 --> 00:32:45,640 Speaker 8: The ECB a little bit different inflations hovering around too. 620 00:32:45,760 --> 00:32:49,120 Speaker 8: They're very happy about that. They're letting everybody know how 621 00:32:49,160 --> 00:32:51,280 Speaker 8: happy they are about that, and a sort of mission 622 00:32:51,400 --> 00:32:54,840 Speaker 8: success message has been given out over the past couple 623 00:32:54,880 --> 00:32:58,160 Speaker 8: of meetings. But their growth outlooks are very different to 624 00:32:58,200 --> 00:33:00,880 Speaker 8: the US. The US still has exceptional growth compared to 625 00:33:00,960 --> 00:33:03,520 Speaker 8: Europe and the UK in terms of their productivity, in 626 00:33:03,640 --> 00:33:06,880 Speaker 8: terms of their entrepreneurism. Yet in the US the debate 627 00:33:07,000 --> 00:33:09,920 Speaker 8: is more concerned about the impact of tariffs and inflation 628 00:33:10,120 --> 00:33:14,520 Speaker 8: raising inflation, raising inflation, so you go definitely a divergence 629 00:33:14,600 --> 00:33:17,480 Speaker 8: in central bank opinions, where in the UK it's sticky 630 00:33:17,520 --> 00:33:19,960 Speaker 8: inflation but they want to cut. In the US it's 631 00:33:19,960 --> 00:33:22,560 Speaker 8: potential inflation and they are concerned about cutting or not. 632 00:33:23,160 --> 00:33:25,760 Speaker 4: Jordan, I've survived thirty five years of covering emerging markets, 633 00:33:25,760 --> 00:33:28,560 Speaker 4: specifically because I've not had the you know what, to 634 00:33:28,600 --> 00:33:31,760 Speaker 4: get parish on the dollar. Curious to hear your thoughts there. 635 00:33:31,800 --> 00:33:34,600 Speaker 4: I mean, is there any length here to this, you know, 636 00:33:34,720 --> 00:33:36,720 Speaker 4: this dollar weakness story. 637 00:33:38,480 --> 00:33:39,280 Speaker 5: It's gotten harder. 638 00:33:39,720 --> 00:33:42,240 Speaker 8: I've got to say, I'm very surprised by the reaction 639 00:33:42,320 --> 00:33:45,200 Speaker 8: in markets to a chair Pals speech at Jackson Hole 640 00:33:45,280 --> 00:33:48,120 Speaker 8: last week. Of course, the initial knee jerk made complete 641 00:33:48,200 --> 00:33:50,600 Speaker 8: sense to me. But what's been surprising since and we 642 00:33:50,600 --> 00:33:53,720 Speaker 8: were out yesterday in London on the bank holiday, is 643 00:33:53,840 --> 00:33:55,720 Speaker 8: the lack of a follow through and in fact the 644 00:33:55,760 --> 00:33:59,160 Speaker 8: dollars come off in terms of it come back against 645 00:33:59,200 --> 00:34:01,080 Speaker 8: the euro at least. And that's a mixture of factors 646 00:34:01,120 --> 00:34:04,120 Speaker 8: such as the French politics heating backup, but it's also 647 00:34:04,240 --> 00:34:07,240 Speaker 8: market saying, look, we've got another CPI, we've got another 648 00:34:07,360 --> 00:34:11,440 Speaker 8: NFP print before the actual FED meeting. Maybe we shouldn't 649 00:34:11,480 --> 00:34:13,920 Speaker 8: go gun ho into this and fully priced in a 650 00:34:14,000 --> 00:34:15,799 Speaker 8: rate cut because the market's not pricing in a full 651 00:34:15,880 --> 00:34:19,040 Speaker 8: rate cut for the September meeting. Instead of twenty five, 652 00:34:19,080 --> 00:34:21,719 Speaker 8: we're around twenty two on the screen right now. 653 00:34:21,960 --> 00:34:23,560 Speaker 5: I thought we'd be closer to twenty five. 654 00:34:24,160 --> 00:34:25,799 Speaker 8: So the big surprise for me is that we've not 655 00:34:25,840 --> 00:34:29,120 Speaker 8: gone a bit more full blast into pricing in that 656 00:34:29,200 --> 00:34:32,360 Speaker 8: rate cut lean to a weeker dollar. But bigger picture, 657 00:34:32,680 --> 00:34:36,520 Speaker 8: I think the equity flow story into European equities we've 658 00:34:36,520 --> 00:34:39,840 Speaker 8: seen banks outperform and defense outperform this year will be 659 00:34:39,840 --> 00:34:41,680 Speaker 8: one of those factors that keeps the sort of long 660 00:34:41,719 --> 00:34:44,839 Speaker 8: euro short dollar view in play. And then for the yen, 661 00:34:45,080 --> 00:34:47,279 Speaker 8: I think the en out performs the dollar because of 662 00:34:47,280 --> 00:34:49,040 Speaker 8: the banks of hats hiking cycle. 663 00:34:49,520 --> 00:34:53,400 Speaker 2: I mean, it's sure, I look at all this and 664 00:34:53,440 --> 00:34:55,600 Speaker 2: I go okay, but where can I make money? Do 665 00:34:55,640 --> 00:34:59,680 Speaker 2: you have a currency pair that's a speculation out six 666 00:34:59,760 --> 00:35:02,920 Speaker 2: months a year now did you find really attractive? 667 00:35:04,680 --> 00:35:06,880 Speaker 8: Well, we're currently short dolly en and scratching our heads. 668 00:35:06,880 --> 00:35:09,520 Speaker 8: Why that's it should be? All rates point to a 669 00:35:09,600 --> 00:35:11,520 Speaker 8: much lower dolly en in terms of rate spread. 670 00:35:11,560 --> 00:35:15,080 Speaker 4: So strong cooperating Jordan? 671 00:35:15,200 --> 00:35:18,000 Speaker 8: Yeah, you know that right, it's not cooperating. The long 672 00:35:18,080 --> 00:35:20,320 Speaker 8: euro trade we haven't got on. It looks a bit tired, 673 00:35:20,360 --> 00:35:21,719 Speaker 8: but I do think it will be on a one 674 00:35:21,840 --> 00:35:24,879 Speaker 8: twenty handle going into next year. And if you want 675 00:35:24,920 --> 00:35:26,680 Speaker 8: to kind of avoid the dollar, you could be looking 676 00:35:26,680 --> 00:35:30,239 Speaker 8: at short euro sterling expressions as well, because whilst the 677 00:35:31,120 --> 00:35:33,640 Speaker 8: Bank of England view is very dubbish from myself compared 678 00:35:33,640 --> 00:35:35,880 Speaker 8: to the market pricing, I think the ECB pricing is 679 00:35:35,920 --> 00:35:37,680 Speaker 8: a bit out of whack and we should be pricing 680 00:35:37,719 --> 00:35:39,720 Speaker 8: in a bit more dubbishness from the ECB next. 681 00:35:39,640 --> 00:35:43,319 Speaker 2: Year, dovenish. Okay, So so what's your about using euro 682 00:35:43,480 --> 00:35:47,200 Speaker 2: yen as a is like the euro yena and stereo. 683 00:35:46,960 --> 00:35:49,839 Speaker 4: Jordan was going to talk about the Antipodeans, Oh, listen 684 00:35:49,920 --> 00:35:50,440 Speaker 4: to you now. 685 00:35:50,480 --> 00:35:52,720 Speaker 8: I think we're going to stick to just short Dolliyen 686 00:35:52,880 --> 00:35:54,920 Speaker 8: is our clear ethics expression, and there's a lot there's 687 00:35:55,000 --> 00:35:56,719 Speaker 8: lots of rage trades to be doing as well. 688 00:35:57,080 --> 00:35:59,160 Speaker 2: Okay, Jordan, Ryandchester, thank you so much. 689 00:35:59,320 --> 00:36:04,160 Speaker 1: This is the Bloomberg Surveillance Podcast, available on apples, Spotify, 690 00:36:04,280 --> 00:36:08,560 Speaker 1: and anywhere else you get your podcasts. Listen live each weekday, 691 00:36:08,680 --> 00:36:12,120 Speaker 1: seven to ten am Eastern on Bloomberg dot com, the 692 00:36:12,239 --> 00:36:16,239 Speaker 1: iHeartRadio app, tune In, and the Bloomberg Business app. You 693 00:36:16,280 --> 00:36:19,640 Speaker 1: can also watch us live every weekday on YouTube and 694 00:36:19,840 --> 00:36:21,600 Speaker 1: always on the Bloomberg terminal