1 00:00:00,800 --> 00:00:04,040 Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside 2 00:00:04,040 --> 00:00:06,920 Speaker 1: my co host Matt Miller. Every business day we bring 3 00:00:06,960 --> 00:00:11,520 Speaker 1: you interviews from CEOs, market pros, and Bloomberg experts, along 4 00:00:11,520 --> 00:00:15,600 Speaker 1: with essential market moving news. Find the Bloomberg Markets Podcast 5 00:00:15,600 --> 00:00:18,439 Speaker 1: on Apple Podcasts or wherever you listen to podcasts, and 6 00:00:18,480 --> 00:00:21,680 Speaker 1: at Bloomberg dot com slash podcast. I want to get 7 00:00:21,680 --> 00:00:23,960 Speaker 1: through our next guest right away, to Grant Ron Sanchez, 8 00:00:24,079 --> 00:00:28,200 Speaker 1: executive vice president, chief Information, chief investment officer for Fiduciary 9 00:00:28,240 --> 00:00:32,280 Speaker 1: Trust Company International. Ron, thanks so much for joining us here. Boy, 10 00:00:32,320 --> 00:00:34,760 Speaker 1: when you have a volatile week like this week, we've 11 00:00:34,760 --> 00:00:37,120 Speaker 1: got you know, two or three four percent moves every 12 00:00:37,240 --> 00:00:41,040 Speaker 1: day in equity indices, what's the conversation like with your 13 00:00:41,080 --> 00:00:43,480 Speaker 1: portfolio managers? Do you buy the dips? Do you sell 14 00:00:43,560 --> 00:00:46,280 Speaker 1: the rips? Do you add the names you like? What's 15 00:00:46,280 --> 00:00:51,080 Speaker 1: the conversation like? Uh, thank you and good morning. Thanks 16 00:00:51,120 --> 00:00:55,240 Speaker 1: for having me on. Obviously the zero challenging um conversations. 17 00:00:55,600 --> 00:00:59,160 Speaker 1: Markets are particularly complicated right now, and you mentioned a 18 00:00:59,200 --> 00:01:02,280 Speaker 1: week like we've had. Nonetheless, the sort of the profile 19 00:01:02,320 --> 00:01:04,520 Speaker 1: we've had on a year to day basis um to 20 00:01:04,760 --> 00:01:09,520 Speaker 1: this week would be described as UM almost violently unchanged UM, 21 00:01:09,600 --> 00:01:14,360 Speaker 1: and so we are UM positions close to neutral here 22 00:01:14,680 --> 00:01:19,520 Speaker 1: UM and UM. I'm not sure that we have actually 23 00:01:19,600 --> 00:01:22,800 Speaker 1: seen the lows here. I would say, though, that we're 24 00:01:22,800 --> 00:01:26,880 Speaker 1: preparing both portfolio matches and clients to continue to see 25 00:01:27,440 --> 00:01:31,280 Speaker 1: challenging environment unfold over the next couple of months. And 26 00:01:31,319 --> 00:01:34,360 Speaker 1: the reason I say that is, I think what some 27 00:01:34,480 --> 00:01:38,680 Speaker 1: of the major challenges for the economy and for policy 28 00:01:38,720 --> 00:01:42,480 Speaker 1: makers UM. You don't necessarily get a degree of clarity 29 00:01:42,880 --> 00:01:46,080 Speaker 1: in the next month or two UM, and it's really 30 00:01:46,080 --> 00:01:48,680 Speaker 1: a second half development. So I think we need to 31 00:01:48,680 --> 00:01:52,240 Speaker 1: sort of buckle up and continue to see UM volatile 32 00:01:52,280 --> 00:01:55,960 Speaker 1: markets and most likely unchanged markets here as we sort 33 00:01:56,000 --> 00:01:58,320 Speaker 1: of choppy for the next month or two RON. What 34 00:01:58,360 --> 00:02:00,000 Speaker 1: does it mean to you that we see the tenure 35 00:02:00,040 --> 00:02:05,640 Speaker 1: yield back above three for the first time in years. 36 00:02:05,640 --> 00:02:09,000 Speaker 1: It's it's actually extraordinary to think about just the magnitude. 37 00:02:09,160 --> 00:02:10,600 Speaker 1: I mean, if you go back to the beginning of 38 00:02:10,600 --> 00:02:13,480 Speaker 1: the year, we've essentially doubled. We were one seven at 39 00:02:14,080 --> 00:02:15,399 Speaker 1: or call it in one and a half an hour 40 00:02:15,520 --> 00:02:19,160 Speaker 1: at three. I think what we're experiencing UM is a 41 00:02:19,320 --> 00:02:24,720 Speaker 1: rapid um acceleration of monetary policy UM. And again, as 42 00:02:24,760 --> 00:02:28,560 Speaker 1: it's been talked about, the fetters is in fact behind 43 00:02:28,600 --> 00:02:32,240 Speaker 1: the curve and they are in major catch up mode UM. 44 00:02:32,320 --> 00:02:34,240 Speaker 1: And I think the tenure as well as the two 45 00:02:34,280 --> 00:02:38,720 Speaker 1: years for that matter, are UM. I wouldn't necessarily say ahead, 46 00:02:38,760 --> 00:02:42,120 Speaker 1: but more mature in the normalization of interest rates. And 47 00:02:42,160 --> 00:02:43,840 Speaker 1: so what I mean by that is the fellow reserve 48 00:02:43,880 --> 00:02:47,360 Speaker 1: again move this week for the second time, but the 49 00:02:47,400 --> 00:02:52,000 Speaker 1: interest rate complex is already reflecting UM a continuation of 50 00:02:52,040 --> 00:02:55,440 Speaker 1: that tightening throughout year end. And I think that markets 51 00:02:55,800 --> 00:03:01,000 Speaker 1: in terms of tightening financial conditions probably are I wouldn't 52 00:03:01,000 --> 00:03:05,200 Speaker 1: say all, but reflect about the tightening cycle that will 53 00:03:05,240 --> 00:03:09,320 Speaker 1: inevitably occur within the next six to twelve months. Al Right, 54 00:03:09,360 --> 00:03:13,560 Speaker 1: So as the fed UH focuses on battling inflation, let's 55 00:03:13,560 --> 00:03:15,480 Speaker 1: think about economic growth and the impact that can have 56 00:03:15,560 --> 00:03:18,560 Speaker 1: on economic growth. Do you have a recession in your model, 57 00:03:18,600 --> 00:03:21,000 Speaker 1: do you have stagflation coming into your model? How do 58 00:03:21,000 --> 00:03:26,120 Speaker 1: you think about economic growth? So currently economic growth is 59 00:03:26,440 --> 00:03:29,520 Speaker 1: UM is really solid and I think the underpinnings, if 60 00:03:29,560 --> 00:03:33,040 Speaker 1: you will UM from a both corporate and consumer fundamental 61 00:03:33,280 --> 00:03:37,560 Speaker 1: balance sheet, UM wage growth will remain solid. So we 62 00:03:37,640 --> 00:03:41,840 Speaker 1: do not expect over the next twelve months and economic recession. 63 00:03:42,240 --> 00:03:47,560 Speaker 1: We do expect giving tightening financial conditions, UM, high inflation 64 00:03:48,160 --> 00:03:51,760 Speaker 1: which will create a high energy costs, create some demand 65 00:03:51,800 --> 00:03:55,520 Speaker 1: destruction as we move further away from the fiscal stimulus 66 00:03:55,760 --> 00:04:00,680 Speaker 1: UM that was that we experienced UM last year. UM. 67 00:04:00,720 --> 00:04:02,960 Speaker 1: I do think that we are definitely going to experience 68 00:04:03,000 --> 00:04:07,560 Speaker 1: a moderating economic backdrop and a convergence over the balance 69 00:04:07,600 --> 00:04:11,440 Speaker 1: of the year as the economy moderates UM and supply 70 00:04:12,160 --> 00:04:14,720 Speaker 1: issues sort of a bait. Over the second half of 71 00:04:14,760 --> 00:04:18,279 Speaker 1: the year, I think we'll see a better realignment of 72 00:04:18,360 --> 00:04:22,599 Speaker 1: economic growth and the ability to produce, which should ease 73 00:04:22,720 --> 00:04:26,000 Speaker 1: inflationary pressures. But again that's the second half story. As 74 00:04:26,040 --> 00:04:33,279 Speaker 1: we get so many superlatives UM that that compare what's 75 00:04:33,279 --> 00:04:36,320 Speaker 1: happening now to two tho nine. I wonder what your 76 00:04:36,320 --> 00:04:38,640 Speaker 1: thoughts are on the housing market. I mean, everyone seems 77 00:04:38,680 --> 00:04:44,000 Speaker 1: so sanguine, UM, but prices, you know, people are paying 78 00:04:44,839 --> 00:04:47,880 Speaker 1: any price that sell or swat, as Paul can attest 79 00:04:47,920 --> 00:04:51,680 Speaker 1: to having recently sold his crib. And UM, now we're 80 00:04:51,680 --> 00:04:55,640 Speaker 1: seeing mortgage rates at five point three percent. At what point, UM, 81 00:04:55,680 --> 00:05:00,520 Speaker 1: does this housing market start to look problematic? UM? I 82 00:05:00,520 --> 00:05:03,240 Speaker 1: think today UM. I think the you know, we talked 83 00:05:03,240 --> 00:05:05,880 Speaker 1: about the tenure doubling. The same could be said for 84 00:05:05,960 --> 00:05:08,440 Speaker 1: mortgage rates. As you pointed out, we are north of 85 00:05:08,600 --> 00:05:11,719 Speaker 1: five percent UM, and we have been in a sort 86 00:05:11,760 --> 00:05:18,000 Speaker 1: of a pandemic induced UM housing market, and so UM 87 00:05:18,040 --> 00:05:23,000 Speaker 1: there's very little supply UM and affordability though has meaningfully 88 00:05:23,080 --> 00:05:25,600 Speaker 1: changed in the last six months. And I do think 89 00:05:25,640 --> 00:05:29,120 Speaker 1: that on its own UM, the demand wasn't sustainable UM. 90 00:05:29,200 --> 00:05:33,000 Speaker 1: It was clearly reflective of a shift and a preference 91 00:05:33,240 --> 00:05:36,400 Speaker 1: for for housing post pandemic and work from home. I 92 00:05:36,440 --> 00:05:39,320 Speaker 1: think that will moderate UM, but I don't think it's 93 00:05:39,360 --> 00:05:42,800 Speaker 1: necessarily You want to probably make a distinction between price 94 00:05:43,560 --> 00:05:46,880 Speaker 1: UM and UM and and sort of value UM. So 95 00:05:47,200 --> 00:05:49,400 Speaker 1: I think that UM, we're probably going to see a 96 00:05:49,480 --> 00:05:55,200 Speaker 1: peak in housing prices probably UM. It's really difficult to 97 00:05:55,320 --> 00:05:59,920 Speaker 1: envision prices continuing to surge UM during the second half 98 00:06:00,040 --> 00:06:02,919 Speaker 1: the year. But I think more importantly UM, given the 99 00:06:03,000 --> 00:06:05,840 Speaker 1: low supply, I do think it comes off the boil, 100 00:06:05,920 --> 00:06:08,760 Speaker 1: so to speak, UM, and maybe a modest pulled back, 101 00:06:08,960 --> 00:06:14,160 Speaker 1: but the leverage from a consumer standpoint relative to O 102 00:06:14,279 --> 00:06:19,040 Speaker 1: eight is not comparable. So again, headwinds from housing UH 103 00:06:19,040 --> 00:06:22,520 Speaker 1: and consumption again will moderate this economy, and I actually 104 00:06:22,520 --> 00:06:25,040 Speaker 1: think that's most most favorable. We do not want to 105 00:06:25,120 --> 00:06:29,000 Speaker 1: run hot, so the most interest rate sensitive sectors will 106 00:06:29,000 --> 00:06:31,520 Speaker 1: show it first, and I think housing is a prime example. 107 00:06:31,920 --> 00:06:34,360 Speaker 1: All Right, Ron, we're pretty much through the earning season 108 00:06:34,400 --> 00:06:37,040 Speaker 1: for the sp you know, more than eight percent the 109 00:06:37,040 --> 00:06:40,599 Speaker 1: companies have reported. Any key takeaways from you, anything that 110 00:06:40,680 --> 00:06:45,839 Speaker 1: changed your investment outlook, No, I think we had. Uh. 111 00:06:46,000 --> 00:06:49,479 Speaker 1: What we received here is validation from companies that the 112 00:06:49,520 --> 00:06:54,200 Speaker 1: current environment UM is robust. Um. We've seen mostly beats 113 00:06:54,200 --> 00:06:57,000 Speaker 1: both in the top line and bottom line. But what 114 00:06:57,200 --> 00:07:00,599 Speaker 1: is sort of irking markets and clean ourselves is the 115 00:07:00,720 --> 00:07:03,880 Speaker 1: lack of clarity for the second half of the year UM. 116 00:07:03,920 --> 00:07:06,360 Speaker 1: And I think that's a that's a challenge for businesses, 117 00:07:06,600 --> 00:07:09,880 Speaker 1: leads a challenge for consumers, and it's certainly a challenging 118 00:07:09,920 --> 00:07:15,000 Speaker 1: for environment for investors. There is necessarily no model here, UM. 119 00:07:15,040 --> 00:07:19,320 Speaker 1: As you move from seeing rates adjust so quickly, UM 120 00:07:19,360 --> 00:07:22,800 Speaker 1: a sort of reopening two point up in the economy 121 00:07:22,840 --> 00:07:25,880 Speaker 1: here as as we sort of move at least temporarily 122 00:07:25,920 --> 00:07:29,760 Speaker 1: past post COVID and sort of uh, you know, a 123 00:07:29,800 --> 00:07:33,320 Speaker 1: pick up in consumer demand but not but again it's 124 00:07:33,320 --> 00:07:36,680 Speaker 1: a lack of clarity, but the under underpinnings at the 125 00:07:36,680 --> 00:07:39,400 Speaker 1: corporate corporate level of pretty good all right, Ron, good 126 00:07:39,400 --> 00:07:41,440 Speaker 1: good stuff there, Ron Sanchez E V P and c 127 00:07:41,600 --> 00:07:50,800 Speaker 1: I O Fuduciary Trust Company International. Again, non farm perils 128 00:07:50,880 --> 00:07:53,000 Speaker 1: came in better than expected four or twenty eight thousand. 129 00:07:53,000 --> 00:07:58,320 Speaker 1: Consensus was thousand, So pretty good number there. Um. We 130 00:07:58,400 --> 00:08:00,880 Speaker 1: had wages also on the rise year of year about 131 00:08:00,880 --> 00:08:03,760 Speaker 1: five and a half percent. Pretty solid numbers there. Let's 132 00:08:03,760 --> 00:08:06,720 Speaker 1: dig under the hood on those numbers. Johnny Biley, chief 133 00:08:06,720 --> 00:08:10,200 Speaker 1: workforce analysts at employee Bridge, joins us. Johnny, what were 134 00:08:10,200 --> 00:08:12,840 Speaker 1: your key takeaways? What from seams on the surface like 135 00:08:13,080 --> 00:08:16,920 Speaker 1: some pretty good employment numbers. Well, it was it was 136 00:08:16,960 --> 00:08:21,080 Speaker 1: a strong report, better than expected, as you mentioned, and 137 00:08:21,600 --> 00:08:23,880 Speaker 1: you know, it's great to see that we're still having 138 00:08:24,520 --> 00:08:27,240 Speaker 1: job creation. I was a little nervous that we might 139 00:08:27,280 --> 00:08:29,840 Speaker 1: not see that big of a number, and it's not 140 00:08:29,920 --> 00:08:33,400 Speaker 1: because of demand. Uh, certainly, we see a very very 141 00:08:33,400 --> 00:08:38,680 Speaker 1: strong demand, but there's still a tremendous challenge with supply 142 00:08:39,160 --> 00:08:43,520 Speaker 1: of labor and getting people actually back to work. So 143 00:08:43,720 --> 00:08:46,439 Speaker 1: you know, when you dig into this report though, there 144 00:08:46,480 --> 00:08:49,480 Speaker 1: there is a lot of good news. My biggest concern 145 00:08:49,640 --> 00:08:54,080 Speaker 1: in this report remains to be with labor participation. We 146 00:08:54,400 --> 00:08:58,480 Speaker 1: just don't have enough part. You know, people participating in 147 00:08:58,559 --> 00:09:01,560 Speaker 1: the labor force in the United Did States to meet 148 00:09:01,640 --> 00:09:04,280 Speaker 1: the demand for today. And that's why is it to 149 00:09:04,360 --> 00:09:09,640 Speaker 1: be such a challenge. Is that because employers aren't paying enough, 150 00:09:09,679 --> 00:09:11,679 Speaker 1: people are still sitting on the sidelines because they want 151 00:09:11,760 --> 00:09:16,120 Speaker 1: more money. Well, I think it's a number of issues, 152 00:09:16,640 --> 00:09:20,760 Speaker 1: UM that are really impacting the labor force. UM. We 153 00:09:20,840 --> 00:09:25,560 Speaker 1: are seeing wages move up nicely, but they're not keeping 154 00:09:25,640 --> 00:09:30,040 Speaker 1: up with inflation. I do believe that due to inflation, 155 00:09:30,160 --> 00:09:33,200 Speaker 1: we are going to see people forced to have to 156 00:09:33,240 --> 00:09:36,640 Speaker 1: participate back in the workforce UM. But there's there's a 157 00:09:36,720 --> 00:09:39,319 Speaker 1: number of reasons why it's so low. You know, baby 158 00:09:39,320 --> 00:09:44,760 Speaker 1: boomers have been retiring, the younger generation still maybe staying 159 00:09:44,760 --> 00:09:48,800 Speaker 1: in school for additional education before you know, just getting 160 00:09:48,800 --> 00:09:52,360 Speaker 1: a four year degree and getting UM into the workforce, 161 00:09:52,760 --> 00:09:56,880 Speaker 1: maybe staying for a master's or continuing education. So the 162 00:09:56,960 --> 00:10:00,480 Speaker 1: numbers are low there. We see women have opted out 163 00:10:00,480 --> 00:10:04,360 Speaker 1: of the workforce UM, and it's that has declined since 164 00:10:04,440 --> 00:10:08,079 Speaker 1: the pandemic UM. So it's it really is a number 165 00:10:08,080 --> 00:10:11,640 Speaker 1: of factors. The other issue is we're hearing that people 166 00:10:11,679 --> 00:10:14,920 Speaker 1: don't want to come back to work UM. They don't 167 00:10:14,960 --> 00:10:18,359 Speaker 1: want to come back into the office. They want flexibility, 168 00:10:18,840 --> 00:10:23,200 Speaker 1: they want the ability to work you know, remotely UM. 169 00:10:23,320 --> 00:10:27,640 Speaker 1: And that is very appealing to UM workers today. So 170 00:10:27,760 --> 00:10:31,600 Speaker 1: companies that are trying to attract talent, you know, should 171 00:10:31,640 --> 00:10:34,760 Speaker 1: think about if they could offer that option. That is 172 00:10:34,880 --> 00:10:39,079 Speaker 1: very attractive to people. Right now, Johnny, we have the 173 00:10:39,120 --> 00:10:44,040 Speaker 1: participation rate, which you called out at sixty two. What's 174 00:10:44,040 --> 00:10:48,240 Speaker 1: a healthy number in your mind? Well, I think you know, 175 00:10:48,280 --> 00:10:53,240 Speaker 1: at all time highs were probably six seven percent UM 176 00:10:53,360 --> 00:10:55,760 Speaker 1: was the highest it ever was. So, you know, it 177 00:10:55,800 --> 00:10:58,760 Speaker 1: would be great to see us get back up even 178 00:10:58,760 --> 00:11:03,600 Speaker 1: to UM sixty four sixty five UM. But unfortunately that 179 00:11:03,720 --> 00:11:07,720 Speaker 1: number just you know, hasn't hasn't been moving. We've we've 180 00:11:07,800 --> 00:11:12,760 Speaker 1: been at this level UM really since the pandemic. It 181 00:11:12,800 --> 00:11:15,920 Speaker 1: was a little bit higher before the pandemic. We were 182 00:11:16,080 --> 00:11:19,000 Speaker 1: hovering around maybe sixty three, getting up closer to six. 183 00:11:20,400 --> 00:11:22,760 Speaker 1: It would be great to see that number closer to 184 00:11:22,960 --> 00:11:28,880 Speaker 1: sixty five. In terms of wage increases, we saw I 185 00:11:28,880 --> 00:11:32,079 Speaker 1: think zero point three percent month over month UM year 186 00:11:32,120 --> 00:11:35,480 Speaker 1: of a year five point five percent in normal times 187 00:11:35,800 --> 00:11:39,079 Speaker 1: that would be good to great right for labor, but 188 00:11:39,480 --> 00:11:43,319 Speaker 1: right now it's it's it's barely half of inflation. Are 189 00:11:43,400 --> 00:11:48,640 Speaker 1: workers having a really difficult time keeping up? Workers are, 190 00:11:48,840 --> 00:11:52,320 Speaker 1: especially the hourly workers. You know, when you look at 191 00:11:52,360 --> 00:11:56,920 Speaker 1: the jobs, more of the blue collar jobs or lower 192 00:11:57,000 --> 00:12:02,360 Speaker 1: level jobs, it's having a tremendous impact to those workers 193 00:12:02,440 --> 00:12:04,640 Speaker 1: and to their families. And we all see it, right 194 00:12:04,720 --> 00:12:07,920 Speaker 1: the price at the pump, the price at the grocery store, 195 00:12:08,320 --> 00:12:13,240 Speaker 1: just everything is costing more money and their dollar just 196 00:12:13,320 --> 00:12:16,680 Speaker 1: doesn't go as far. So that is a real challenge. 197 00:12:16,720 --> 00:12:19,640 Speaker 1: I think when you look at the lower to middle 198 00:12:20,280 --> 00:12:24,280 Speaker 1: you know range for workers, um when when it comes 199 00:12:24,280 --> 00:12:27,880 Speaker 1: to salaries, they're feeling it and they're getting hit the hardest. 200 00:12:28,480 --> 00:12:32,319 Speaker 1: Um Now, I will say employers are are realizing it. 201 00:12:32,679 --> 00:12:34,959 Speaker 1: We are seeing on the front lines that employers are 202 00:12:35,120 --> 00:12:38,200 Speaker 1: increasing pay and they're doing it for a number of reasons. 203 00:12:38,280 --> 00:12:40,839 Speaker 1: It's not only to attract new workers, but they're having 204 00:12:40,880 --> 00:12:44,480 Speaker 1: to do it to retain their current workers. We've all 205 00:12:44,480 --> 00:12:48,000 Speaker 1: heard about, you know, the great resignation. I mean that's 206 00:12:48,040 --> 00:12:51,840 Speaker 1: real and that's here and it's a big challenge for 207 00:12:51,880 --> 00:12:55,080 Speaker 1: employers today. So they are raising wages. I'm surprised we're 208 00:12:55,080 --> 00:12:58,800 Speaker 1: not seeing more of that reflective in this report. Joy, 209 00:12:58,880 --> 00:13:01,360 Speaker 1: thank you so much for us. Was appreciate getting your 210 00:13:01,360 --> 00:13:05,600 Speaker 1: perspective here on these jobs numbers. Uh, Joni Bailey, chief 211 00:13:05,720 --> 00:13:09,360 Speaker 1: workforce Analysts for Employee Bridge, And again a better than 212 00:13:09,400 --> 00:13:14,120 Speaker 1: expected number there, four twenty eight thousand jobs added last months. 213 00:13:14,120 --> 00:13:17,800 Speaker 1: That's a solid number. We've seen some good, good recovery 214 00:13:18,240 --> 00:13:20,000 Speaker 1: presumably of all those jobs that were lost on a 215 00:13:20,040 --> 00:13:25,559 Speaker 1: pandemic now recovered. Let's get to our next guest, right, 216 00:13:25,559 --> 00:13:29,319 Speaker 1: Alf Kurt Seaver's president and CEO of n XP Semiconductors. 217 00:13:29,360 --> 00:13:31,000 Speaker 1: All right, Kurt, you're in here in our Bloomberg getting 218 00:13:30,960 --> 00:13:34,000 Speaker 1: after Broker studio. We appreciate you making the trip in here. 219 00:13:34,920 --> 00:13:40,960 Speaker 1: Semiconductor shortage, I just don't get it because my feeling is, 220 00:13:41,160 --> 00:13:43,480 Speaker 1: you guys have got floor after floor after floor in 221 00:13:43,480 --> 00:13:46,880 Speaker 1: your headquarters of NBA students and graduates who do nothing 222 00:13:47,040 --> 00:13:51,400 Speaker 1: but forecast semiconductor chip demand. How did the industry fall 223 00:13:51,559 --> 00:13:53,560 Speaker 1: so short and why is it taking so long to 224 00:13:53,600 --> 00:13:57,840 Speaker 1: get back to normalcy? Yeah? So, thanks Matt and Paul. Indeed, 225 00:13:58,080 --> 00:14:01,880 Speaker 1: um demand is exploding in our particular case with a 226 00:14:02,040 --> 00:14:05,120 Speaker 1: very very strong exposure to automotive in industrial, so half 227 00:14:05,200 --> 00:14:08,840 Speaker 1: half of our company is automotive. The most striking trend, 228 00:14:08,920 --> 00:14:13,200 Speaker 1: which lets demand explode, is actually the trend to xtvs SO. 229 00:14:13,280 --> 00:14:17,840 Speaker 1: Electric vehicles hybrid electric vehicles um together with premium cars 230 00:14:17,920 --> 00:14:21,200 Speaker 1: make now thirty percent of the total car production this year. 231 00:14:21,280 --> 00:14:25,160 Speaker 1: SOT of all cars being produced this year are electric 232 00:14:25,600 --> 00:14:29,240 Speaker 1: or premium. I'm stressing that because electric and premium vehicles 233 00:14:29,240 --> 00:14:32,440 Speaker 1: have two to three times more semiconductor content than a 234 00:14:32,480 --> 00:14:36,520 Speaker 1: conventional vehicle. That wasn't really foreseen, especially not through the 235 00:14:36,560 --> 00:14:41,120 Speaker 1: COVID breakdowns in early twenty twenty. Now, just to put 236 00:14:41,160 --> 00:14:43,760 Speaker 1: it in perspective, because it feels like we are crippled 237 00:14:43,920 --> 00:14:47,520 Speaker 1: from a supply perspective, not quite true. We did grow 238 00:14:47,880 --> 00:14:51,800 Speaker 1: our automotive revenues last year by forty percent year on year, 239 00:14:52,680 --> 00:14:55,880 Speaker 1: and that is not including pricing. So I just want 240 00:14:55,880 --> 00:14:58,840 Speaker 1: to be sure this is raw volume up. In the 241 00:14:58,880 --> 00:15:01,680 Speaker 1: first quarter of this year, we had earnings. Just this 242 00:15:01,720 --> 00:15:04,920 Speaker 1: week we did grow another and I just guided another 243 00:15:04,960 --> 00:15:07,400 Speaker 1: twenty six percent year on year growth in the second 244 00:15:07,480 --> 00:15:09,960 Speaker 1: quarter and second half of this year. Again, it is 245 00:15:09,960 --> 00:15:14,280 Speaker 1: going to be larger. Long story short, the ship record 246 00:15:14,360 --> 00:15:18,880 Speaker 1: volumes quarter after quarter. However, the demand is even growing steeper. 247 00:15:19,280 --> 00:15:22,160 Speaker 1: Now you asked, what's the way to fix this, how 248 00:15:22,200 --> 00:15:25,000 Speaker 1: to how to get out of this situation? The most 249 00:15:25,000 --> 00:15:29,080 Speaker 1: structural way obviously is building new chip factories. And as 250 00:15:29,120 --> 00:15:32,200 Speaker 1: a matter of fact, it takes say four to five 251 00:15:32,320 --> 00:15:35,600 Speaker 1: years to build a chip factory, qualify all the twos 252 00:15:36,120 --> 00:15:40,280 Speaker 1: until product comes out. So you see record capex numbers 253 00:15:40,320 --> 00:15:43,120 Speaker 1: in the industry. The industry is building new factories. The 254 00:15:43,200 --> 00:15:45,000 Speaker 1: Chip s ACT here in the US, the Chips ACT 255 00:15:45,040 --> 00:15:48,040 Speaker 1: in Europe is helping that big time. Um, but it's 256 00:15:48,040 --> 00:15:52,480 Speaker 1: gonna take well into i'd say twenty four until that 257 00:15:52,640 --> 00:15:56,240 Speaker 1: is going to yield from that perspective supply demand balance. 258 00:15:56,800 --> 00:16:01,360 Speaker 1: So wow, not until two thowenty four do we see equilibrium. 259 00:16:01,400 --> 00:16:04,520 Speaker 1: And to be honest, I'm hearing that from automotive CEOs 260 00:16:04,680 --> 00:16:08,720 Speaker 1: as well, UM that we're still going to have shortages 261 00:16:09,000 --> 00:16:13,080 Speaker 1: throughout this year into next year. Um, what about n 262 00:16:13,240 --> 00:16:17,800 Speaker 1: XP in terms of capex, in terms of building new factories, 263 00:16:17,840 --> 00:16:20,840 Speaker 1: in terms of an equilibrium for for you and your customers. 264 00:16:21,760 --> 00:16:24,760 Speaker 1: Let me start in the short term, UM, for this year, 265 00:16:25,160 --> 00:16:28,080 Speaker 1: in all fairness, we are sold out. UM. So it's 266 00:16:28,120 --> 00:16:31,840 Speaker 1: just it's just not any any revenue growth this year 267 00:16:31,960 --> 00:16:35,920 Speaker 1: is only gated by supply UM. From a capex perspective, 268 00:16:36,320 --> 00:16:39,320 Speaker 1: m we hiked up our capex two ten percent of revenue, 269 00:16:40,040 --> 00:16:43,080 Speaker 1: and that in an environment where our revenue was massively 270 00:16:43,120 --> 00:16:46,440 Speaker 1: growing Historically we've had four to five capex spending, so 271 00:16:46,480 --> 00:16:49,640 Speaker 1: it doubled from a percentage perspective, but actually in dollar 272 00:16:49,800 --> 00:16:53,680 Speaker 1: terms much more since our revenue was growing so much UM. 273 00:16:53,920 --> 00:16:58,120 Speaker 1: And that is we have two sorts of factories. We 274 00:16:58,200 --> 00:17:01,240 Speaker 1: have back and test an assembly fact trees, and we 275 00:17:01,280 --> 00:17:03,840 Speaker 1: have chip factories. So you you first produced the chip, 276 00:17:03,880 --> 00:17:05,639 Speaker 1: then you have to assemble the chip in order to 277 00:17:05,640 --> 00:17:09,040 Speaker 1: ship it to customers. The back end testing assembly is 278 00:17:09,080 --> 00:17:13,240 Speaker 1: relatively quick, so we are in equilibrium. So we there 279 00:17:13,320 --> 00:17:17,439 Speaker 1: is enough capacity. The other half of our tempers and 280 00:17:17,480 --> 00:17:21,280 Speaker 1: CABECK spending goes indeed in in building out our chip facilities. 281 00:17:21,320 --> 00:17:23,760 Speaker 1: We have chip three chip factories here in the US, 282 00:17:23,840 --> 00:17:27,800 Speaker 1: one in Europe, another chair venture in in Singapore, and 283 00:17:27,880 --> 00:17:31,840 Speaker 1: that takes time. So the investments from last year will 284 00:17:31,880 --> 00:17:35,560 Speaker 1: start to yield product next year. What we invest this 285 00:17:35,680 --> 00:17:38,040 Speaker 1: year and I talked about big numbers, will start to 286 00:17:38,119 --> 00:17:42,120 Speaker 1: yield product in twenty four And that's the reason why 287 00:17:42,119 --> 00:17:44,480 Speaker 1: I said there is a phase shift between the capex 288 00:17:44,520 --> 00:17:48,520 Speaker 1: investment and the equilibrium. Now, I have to say all 289 00:17:48,560 --> 00:17:53,200 Speaker 1: of that, of course, considers a continued strong demand. Now, 290 00:17:53,320 --> 00:17:56,399 Speaker 1: the chip industry has always been cyclic um so it 291 00:17:56,480 --> 00:18:00,560 Speaker 1: cannot be excluded. At some point. There's also at least 292 00:18:00,560 --> 00:18:03,399 Speaker 1: the softening in demand, and in some markets we don't 293 00:18:03,440 --> 00:18:06,399 Speaker 1: serve them. But in the PC market, in the in 294 00:18:06,440 --> 00:18:09,399 Speaker 1: the mobile market, I'm hearing that there is already some 295 00:18:09,520 --> 00:18:13,040 Speaker 1: softening that could be a short to midterm relief because 296 00:18:13,080 --> 00:18:15,600 Speaker 1: some of the technology is being used for for mobile 297 00:18:15,680 --> 00:18:21,960 Speaker 1: and compute could be funcible. Let's focus on automotive because, frankly, 298 00:18:22,040 --> 00:18:26,600 Speaker 1: who cares about the other stuff? I just I finally 299 00:18:26,600 --> 00:18:28,439 Speaker 1: put in the order from my new truck. I got 300 00:18:28,520 --> 00:18:31,600 Speaker 1: a Chevy coming that has heated and cooled seats, It's 301 00:18:31,640 --> 00:18:34,760 Speaker 1: got heated steering wheel, it's got front and rear park assist, 302 00:18:35,680 --> 00:18:38,959 Speaker 1: automated cruise control. All of these things lane keep assist. 303 00:18:39,040 --> 00:18:41,800 Speaker 1: All of these things need chips. And that's why you 304 00:18:41,800 --> 00:18:46,080 Speaker 1: know many of the orders are coming without the luxurious 305 00:18:46,080 --> 00:18:48,920 Speaker 1: extras and they're saying the dealer will retrofit them later. 306 00:18:49,560 --> 00:18:52,280 Speaker 1: Which are the chips that you're selling? What? What are 307 00:18:52,320 --> 00:18:56,680 Speaker 1: you allowing car makers to offer customers actually everything you 308 00:18:56,800 --> 00:19:01,639 Speaker 1: just said it more so we are We are the 309 00:19:01,720 --> 00:19:05,360 Speaker 1: largest micro controller and microprocesses supplier to the automotive industry. 310 00:19:05,920 --> 00:19:09,000 Speaker 1: And there is no application in the car which would 311 00:19:09,040 --> 00:19:12,679 Speaker 1: not need micro controllers and microprocesses. And I have to 312 00:19:12,720 --> 00:19:16,600 Speaker 1: agree with you. There is unfortunately some d featuring going 313 00:19:16,640 --> 00:19:21,320 Speaker 1: on because the priorities, of course, on the essential drive functions. 314 00:19:21,440 --> 00:19:24,600 Speaker 1: I mean you cannot you cannot drawn the car without 315 00:19:25,680 --> 00:19:31,080 Speaker 1: engine management, hybrid hybrid management, without electronic brakes, etcetera, which 316 00:19:31,119 --> 00:19:34,360 Speaker 1: means there is some d featuring when it's about seat electronics, 317 00:19:34,880 --> 00:19:40,040 Speaker 1: wireless charging for your iPhone in the dashboard. And trust me, 318 00:19:40,119 --> 00:19:42,080 Speaker 1: this is as painful for me as it is for 319 00:19:42,200 --> 00:19:44,560 Speaker 1: you as a customer. I would love to make the business. 320 00:19:44,560 --> 00:19:47,119 Speaker 1: I just don't have the capacity. All right, Kurt Seivers, 321 00:19:47,160 --> 00:19:49,159 Speaker 1: thank you so much for joining us. Kurt Sievers, President 322 00:19:49,160 --> 00:19:52,879 Speaker 1: and CEO of an XP Semiconductors in the Boomberg Interactive 323 00:19:52,880 --> 00:19:59,560 Speaker 1: Progress Studio. We appreciate him coming in. You know, we 324 00:19:59,640 --> 00:20:02,240 Speaker 1: had a like good jobs number this morning, so the 325 00:20:02,280 --> 00:20:04,320 Speaker 1: labor market seems to be in shape. That's a good thing. 326 00:20:05,080 --> 00:20:07,320 Speaker 1: We've got an inflation that's a bad thing. And we've 327 00:20:07,359 --> 00:20:10,400 Speaker 1: got a federal reserve that is get increasingly the aggressive 328 00:20:10,400 --> 00:20:13,200 Speaker 1: and raising rates, and that presumably could be a challenge 329 00:20:13,240 --> 00:20:16,359 Speaker 1: as well. Does that all add up to a recession 330 00:20:16,440 --> 00:20:18,800 Speaker 1: or staflation? I don't know, but I know somebody who 331 00:20:18,840 --> 00:20:21,080 Speaker 1: might have some good opinions there, Jeffrey Cleveland, Director and 332 00:20:21,160 --> 00:20:24,040 Speaker 1: chief economists at paid In and Regal. Jeff, thanks so 333 00:20:24,080 --> 00:20:26,800 Speaker 1: much for joining us here in your twenty two maybe 334 00:20:26,800 --> 00:20:29,720 Speaker 1: even twenty three outlook. Do you have a recession baked in? 335 00:20:30,520 --> 00:20:34,800 Speaker 1: Not yet? For me, the best real time indicator for 336 00:20:34,880 --> 00:20:37,600 Speaker 1: growth is actually this payroll survey. So now we have 337 00:20:37,640 --> 00:20:41,080 Speaker 1: that data through April, and you know, the three month 338 00:20:41,200 --> 00:20:45,280 Speaker 1: average still above five thousand in terms of monthly job growth. 339 00:20:45,880 --> 00:20:49,640 Speaker 1: That is a really that is really solid momentum. So 340 00:20:49,720 --> 00:20:51,720 Speaker 1: in the in the near term, I think the US 341 00:20:51,720 --> 00:20:55,560 Speaker 1: economy is good new momentum. The main I think the 342 00:20:55,680 --> 00:20:58,720 Speaker 1: question is people say recession, clients ask about it, the 343 00:20:58,840 --> 00:21:01,679 Speaker 1: question become was, Okay, what's going to be the cause? 344 00:21:02,320 --> 00:21:05,280 Speaker 1: And by and large people point to the Fed. The 345 00:21:05,320 --> 00:21:09,439 Speaker 1: Fed is going to tighten too much, and that might happen, 346 00:21:09,480 --> 00:21:12,359 Speaker 1: but it's gonna I still think that's down the road. 347 00:21:12,400 --> 00:21:15,040 Speaker 1: I mean we are now with one percent on the 348 00:21:15,119 --> 00:21:18,720 Speaker 1: upper end of the Fed Funds range. I don't think neutral. 349 00:21:18,840 --> 00:21:20,800 Speaker 1: I think neutrals around three and a half, maybe a 350 00:21:20,840 --> 00:21:23,400 Speaker 1: little bit higher than that. So they need to get 351 00:21:23,680 --> 00:21:26,280 Speaker 1: to three and a half before I'm gonna get overly 352 00:21:26,480 --> 00:21:30,119 Speaker 1: concerned about tightening too much and causing a downturn. So 353 00:21:30,200 --> 00:21:33,960 Speaker 1: I think that turns are premature. At the same time, Jeffrey, 354 00:21:33,960 --> 00:21:36,399 Speaker 1: we're seeing mortgage rates now at five point three percent, 355 00:21:36,480 --> 00:21:39,000 Speaker 1: and I know there are a lot of homebuyers who 356 00:21:39,040 --> 00:21:43,560 Speaker 1: are itching to way overspend um if they were able 357 00:21:43,600 --> 00:21:46,960 Speaker 1: to find anything out there, who now are saying, you 358 00:21:46,960 --> 00:21:49,480 Speaker 1: know what, I I don't think I can I really 359 00:21:49,520 --> 00:21:53,159 Speaker 1: can't stretch enough to afford that. Yeah, I think you 360 00:21:53,400 --> 00:21:57,480 Speaker 1: are a healthy critic of my view. You would say, hey, 361 00:21:57,760 --> 00:21:59,960 Speaker 1: the Fed Funds rate is not the rate to fall 362 00:22:00,040 --> 00:22:03,480 Speaker 1: low the you need to look at financial conditions, how 363 00:22:03,480 --> 00:22:05,600 Speaker 1: it's hitting the consumer right now. And I think in 364 00:22:05,760 --> 00:22:09,399 Speaker 1: case you know, exhibit A is the mortgage rate. Uh, 365 00:22:09,440 --> 00:22:12,560 Speaker 1: we were at to fifty on thirty year fixed in 366 00:22:12,600 --> 00:22:16,800 Speaker 1: the summer of so we're up almost three hundred basis points. 367 00:22:17,320 --> 00:22:19,159 Speaker 1: This is going to hit the marginal buyer. I mean that. 368 00:22:19,280 --> 00:22:21,760 Speaker 1: I guess the tricky thing is it will slow housing. 369 00:22:22,000 --> 00:22:24,840 Speaker 1: The marginal buyer is going to step away. Demand will 370 00:22:24,880 --> 00:22:27,000 Speaker 1: pull back, so we'll take some of the excess out 371 00:22:27,000 --> 00:22:30,040 Speaker 1: of housing the existing owner though. I mean, if you 372 00:22:30,040 --> 00:22:32,000 Speaker 1: have locked in a thirty year fixed this is not 373 00:22:32,200 --> 00:22:34,639 Speaker 1: hitting you your pocketbook at all. Um, you're sort of 374 00:22:34,680 --> 00:22:37,359 Speaker 1: insulated from the recent rising prices, So it might not 375 00:22:37,520 --> 00:22:41,159 Speaker 1: have this, you know, broader impact on consumer spending that 376 00:22:41,240 --> 00:22:44,959 Speaker 1: people fear so. Jeffrey also today in the in the 377 00:22:45,040 --> 00:22:49,159 Speaker 1: data we got regarding employment, uh, five point five percent 378 00:22:49,240 --> 00:22:51,320 Speaker 1: average average hourly earnings on a year of a year 379 00:22:51,400 --> 00:22:54,200 Speaker 1: basis that five point five percent growth. Ordinarily I would 380 00:22:54,200 --> 00:22:57,399 Speaker 1: say that's pretty darn good. But we've got inflation, headline 381 00:22:57,440 --> 00:23:00,680 Speaker 1: inflation north of eight percent, so my real wages went down. 382 00:23:01,840 --> 00:23:03,080 Speaker 1: How do you think about that? How do you think 383 00:23:03,080 --> 00:23:06,200 Speaker 1: the Fed Reserve thinks about that? Especially for lower income people, 384 00:23:06,320 --> 00:23:09,119 Speaker 1: right the only thing they're buying is gas and food 385 00:23:09,160 --> 00:23:12,200 Speaker 1: and paying rent. So for them, inflation is much higher 386 00:23:12,240 --> 00:23:16,800 Speaker 1: than eight percent, and they're just not keeping up. That's right. 387 00:23:16,800 --> 00:23:19,880 Speaker 1: I mean, I think one counter argument to that would 388 00:23:19,880 --> 00:23:22,760 Speaker 1: be to look at core inflation, you know, so closer 389 00:23:22,800 --> 00:23:25,000 Speaker 1: to six percent year on year, the five and a 390 00:23:25,200 --> 00:23:27,920 Speaker 1: half percent average generally earnings, you're you're you're getting close 391 00:23:27,960 --> 00:23:31,480 Speaker 1: to keeping up, do have, Jeffrey? Those are the core 392 00:23:31,520 --> 00:23:35,560 Speaker 1: inflation excludes all of the things those people need to buy, right, yes, 393 00:23:37,080 --> 00:23:39,240 Speaker 1: who cares what core inflation? That you can't eat an 394 00:23:39,240 --> 00:23:42,840 Speaker 1: iPad is. Someone famously told Ben Burn nanky, right, you've 395 00:23:42,840 --> 00:23:44,639 Speaker 1: got to put gas in the car and food in 396 00:23:44,680 --> 00:23:48,920 Speaker 1: your mouth. This is my favorite UH topic of conversations. 397 00:23:48,960 --> 00:23:52,080 Speaker 1: The reason I think economists focus on food and energy 398 00:23:52,160 --> 00:23:54,679 Speaker 1: excluded that you know, the core measure is not to 399 00:23:54,720 --> 00:23:57,000 Speaker 1: ignore food and energy. It's just that they tend to 400 00:23:57,040 --> 00:23:59,200 Speaker 1: be volatile in the shorter run, and they could be 401 00:23:59,320 --> 00:24:01,680 Speaker 1: down as much as they're up, so gas prices could 402 00:24:01,680 --> 00:24:04,680 Speaker 1: be down in the months ahead, and then if you're 403 00:24:04,680 --> 00:24:07,440 Speaker 1: looking at the underlying trend, you have to focus on core. 404 00:24:07,960 --> 00:24:11,120 Speaker 1: I actually would prefer investors not to do the traditional 405 00:24:11,160 --> 00:24:14,440 Speaker 1: core measures, but to look at trimmed mean inflation. That's 406 00:24:14,480 --> 00:24:17,359 Speaker 1: a better measure of core because to your point, it 407 00:24:17,400 --> 00:24:21,080 Speaker 1: doesn't just exclude arbitrarily food and energy. It excludes whatever 408 00:24:21,520 --> 00:24:24,360 Speaker 1: are the outliers in that given month. So we look 409 00:24:24,400 --> 00:24:27,520 Speaker 1: at trimmed mean PC on a year on your basis 410 00:24:27,520 --> 00:24:31,240 Speaker 1: for example, it's three point seven, so it's much better shape. 411 00:24:31,720 --> 00:24:35,600 Speaker 1: That is ultimately where those headline measures will end up 412 00:24:35,920 --> 00:24:38,600 Speaker 1: over a twelve month rise in my view. So that's 413 00:24:39,040 --> 00:24:40,879 Speaker 1: I know, it's tough in the short run, but that's 414 00:24:40,960 --> 00:24:42,280 Speaker 1: kind of where we're gonna end up. And if we 415 00:24:42,320 --> 00:24:44,440 Speaker 1: can hear what you're saying, but you know, what we had. 416 00:24:44,680 --> 00:24:47,960 Speaker 1: We had Simon Kennedy on sorry Will Kennedy on yesterday 417 00:24:47,960 --> 00:24:51,159 Speaker 1: from Bloomberg News saying that if it weren't for the 418 00:24:51,240 --> 00:24:54,880 Speaker 1: lockdowns in China, Brent crude would be closer to one 419 00:24:54,920 --> 00:24:59,359 Speaker 1: thirty nine, you know, than where it is now. You 420 00:24:59,400 --> 00:25:01,800 Speaker 1: think gas prices, you think oil prices are really going 421 00:25:01,880 --> 00:25:05,600 Speaker 1: to come down in the next few months, Well, it's 422 00:25:05,760 --> 00:25:08,879 Speaker 1: I think just looking at the history of food and 423 00:25:09,000 --> 00:25:12,639 Speaker 1: energy prices, you do tend to have pretty volatile swings 424 00:25:12,680 --> 00:25:15,720 Speaker 1: in those in those categories. So on I think on 425 00:25:15,760 --> 00:25:18,760 Speaker 1: a long enough time horizon, it's possible. So long enough 426 00:25:18,800 --> 00:25:21,280 Speaker 1: time arizing for me is you're talking about your twelve 427 00:25:21,320 --> 00:25:25,000 Speaker 1: month um the next four six weeks, next month, I don't, 428 00:25:25,000 --> 00:25:27,879 Speaker 1: I don't know. That's that's more difficult to say, but 429 00:25:27,960 --> 00:25:31,000 Speaker 1: I think, you know, looking more at those trend mean 430 00:25:31,080 --> 00:25:33,840 Speaker 1: measures of core inflation is probably a fair estimate of 431 00:25:33,920 --> 00:25:36,920 Speaker 1: where inflation will get to in a In a year's time, 432 00:25:37,080 --> 00:25:40,600 Speaker 1: that would still be let's say, roughly a four um 433 00:25:40,760 --> 00:25:44,639 Speaker 1: inflation rate. But if average atily earnings is five and 434 00:25:44,640 --> 00:25:47,720 Speaker 1: a half six percent, then the the U. S. Consumer 435 00:25:47,800 --> 00:25:50,399 Speaker 1: is doing pretty well. I think it's it's also worth 436 00:25:50,480 --> 00:25:53,800 Speaker 1: contrasting that with what you're seeing overseas. U. S. Consumer 437 00:25:54,040 --> 00:25:56,399 Speaker 1: is in much better footing than what we're seeing in 438 00:25:56,880 --> 00:25:59,720 Speaker 1: either continental Europe or the UK, where real incomes are 439 00:25:59,720 --> 00:26:02,639 Speaker 1: actually declining, which I think you know is the the 440 00:26:02,680 --> 00:26:05,320 Speaker 1: point that you're keen in on. Hey, Jeff, thanks so 441 00:26:05,400 --> 00:26:09,720 Speaker 1: much for joining us. Really appreciated. Jeffrey Cleveland, director and 442 00:26:09,800 --> 00:26:13,040 Speaker 1: chief economists at Paydon and Regal. Appreciate getting his thoughts 443 00:26:13,119 --> 00:26:16,280 Speaker 1: here on his economic outlook. And again, you know, I'll 444 00:26:16,320 --> 00:26:17,760 Speaker 1: be interested to see matter if we get more and 445 00:26:17,760 --> 00:26:20,760 Speaker 1: more economists start to say yeah and kind of thinking 446 00:26:20,760 --> 00:26:23,200 Speaker 1: about a recession. You know, right now, I think it's 447 00:26:23,200 --> 00:26:25,520 Speaker 1: a little bit of a minority. But how that's gonna 448 00:26:25,560 --> 00:26:27,440 Speaker 1: evolve over the next several weeks and months. Yeah, No, 449 00:26:27,560 --> 00:26:32,080 Speaker 1: I see, um, I just see base case percentages rising 450 00:26:32,160 --> 00:26:35,719 Speaker 1: for a recession, you know, from thirty five percent up 451 00:26:35,720 --> 00:26:39,040 Speaker 1: to fifty percent. I see more and more pessimists. Great 452 00:26:39,080 --> 00:26:43,439 Speaker 1: to hear from Jeff because it's it's it's nice to 453 00:26:43,480 --> 00:26:45,919 Speaker 1: hear from somebody on the other side of that argument. 454 00:26:45,960 --> 00:26:48,920 Speaker 1: For for once, I feel like we talk to people 455 00:26:48,920 --> 00:26:51,560 Speaker 1: who are more concerned about a slowdown, If not a recession, 456 00:26:51,800 --> 00:26:56,560 Speaker 1: at least, you know, a slowdown in growth, a stagnation 457 00:26:56,920 --> 00:27:00,520 Speaker 1: and um that coupled with inflation is just at news, 458 00:27:00,640 --> 00:27:05,240 Speaker 1: especially for lower wage earners. Thanks for listening to the 459 00:27:05,280 --> 00:27:09,200 Speaker 1: Bloomberg Markets podcast. You can subscribe and listen to interviews 460 00:27:09,200 --> 00:27:13,520 Speaker 1: with Apple Podcasts or whatever podcast platform you prefer. I'm 461 00:27:13,560 --> 00:27:17,960 Speaker 1: Matt Miller. I'm on Twitter at Matt Miller three. On 462 00:27:18,119 --> 00:27:21,200 Speaker 1: Fall Sweeney, I'm on Twitter at pt Sweeney before the podcast. 463 00:27:21,240 --> 00:27:23,720 Speaker 1: You can always catch us worldwide at Bloomberg Radio.