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Speaker 1: Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg

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Speaker 1: Surveillance Podcast. Catch us live weekdays at seven am Eastern

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Speaker 1: Listen on demand wherever you get your podcasts, or watch

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Speaker 1: us live on YouTube.

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Speaker 2: And we begin strong with Sarah Wolf, thrilled that she

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Speaker 2: could join us this morning for briefing into this economic

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Speaker 2: data and PC. Sarah, I want to get back to

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Speaker 2: first principles CPI inflation course CPI, there's business inflation. What

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Speaker 2: is PC? Why do I need a PCE index if

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Speaker 2: I already have a CPI index.

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Speaker 3: I love that question. You're really getting down to the basics.

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Speaker 4: So CPI, if we remember from econ one oh one,

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Speaker 4: is everything that you pay out of your own pocket.

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Speaker 4: It's your basket of goods that comes out of your wallet.

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Speaker 4: PCE is a more encompassing measure, so it incorporates everything

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Speaker 4: you pay out of pocket, and.

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Speaker 3: Then things that get paid on behalf of you.

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Speaker 4: So think about healthcare insurance, so PC would capture a

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Speaker 4: larger weight for health care insurance.

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Speaker 3: Or think about it if you're in the military.

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Speaker 4: The clothing that's purchased for you, and so the FED

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Speaker 4: does like to look at PC as the preferred measure

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Speaker 4: because it is a broader measure of inflation.

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Speaker 2: Is the disinflationary vector broken? Has it snapped to where

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Speaker 2: we're leveling or can you dare say, give me an

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Speaker 2: inflationary vector before this report?

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Speaker 4: I mean, we're just at the early days of getting

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Speaker 4: the reacceleration and inflation.

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Speaker 3: I think that we could agree that.

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Speaker 4: You know, when we thought back to April, when we

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Speaker 4: thought inflation data would start to accelerate off terraffs, we

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Speaker 4: all thought, oh.

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Speaker 3: The summer and then and then it'll be over.

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Speaker 4: The reality is is that what we've heard from from

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Speaker 4: earnings from companies is that inventory building was actually a

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Speaker 4: lot stronger in the second quarter and that's helped keep

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Speaker 4: prices low or through the summer, and that the price

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Speaker 4: pressures are just starting to.

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Speaker 3: Trickle through right now.

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Speaker 4: We're really going to be getting more of that pressure

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Speaker 4: in the coming month. So we're looking for a point

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Speaker 4: three percent, which is an acceleration relative to the recent trend,

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Speaker 4: but it's fairly mild. Uh, We're going to see that

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Speaker 4: pick up and trend in that three month annualized pace, which.

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Speaker 3: Is going to start to accelerate higher.

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Speaker 5: Sarah, All morning, We've been talking to me or Chanda

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Speaker 5: and JP Morgan win Thin, We've been talking to Katie

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Speaker 5: Kati Kaminsky of Appa Simplex. We've all been talking about

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Speaker 5: the potential for inflation in the US to diverge between

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Speaker 5: Europe or let's just call it the rest of the world.

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Speaker 5: You know, I'd like to hear your thoughts on that.

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Speaker 5: I mean, should I be buying Oba glacio? Should I

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Speaker 5: be buying basically French show it's on, you know, some

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Speaker 5: of the things we're seeing between Germany and France here.

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Speaker 2: What do you say, Sarah, excuse me, he's out of control.

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Speaker 5: Well, I'm somebody's talking about you know, I'm trying to

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Speaker 5: pronounce them.

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Speaker 2: Sarah, I think you.

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Speaker 4: I think you bring up a good point that what's

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Speaker 4: happening with tears is twofold. First of all, businesses in

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Speaker 4: the US are having to pay for a lot of

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Speaker 4: these cares. So instead of businesses overseas that are exporting

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Speaker 4: to the US taking the burden of the cost, a

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Speaker 4: lot of that is hitting US businesses and in turn

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Speaker 4: getting passed through to consumers.

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Speaker 3: So more of that price effect showing up in the US.

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Speaker 4: Add on top of that that we've seen a devaluation

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Speaker 4: in the dollars appreciation and so that's.

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Speaker 3: Not helping with the inflation story in the US.

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Speaker 4: And actually that's appreciation and the dollar is keeping prices

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Speaker 4: lower among our trading partners relative to the US.

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Speaker 2: What's your twelve months forward inflation number, CPI, before we

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Speaker 2: do PCE, what's your statistic twelve months forward?

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Speaker 3: So twelve months forward, we're looking at inflation that's probably

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Speaker 3: still somewhere around two and a half to three percent.

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Speaker 4: So we're getting that reacceleration, but it's going to be sticky,

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Speaker 4: I think coming back down. It's really also going to

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Speaker 4: depend on how much weakening we see in the economy.

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Speaker 4: If we see persistent weakening through twenty twenty six, we

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Speaker 4: could get that downward drag coming through the services.

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Speaker 3: Channel, say more likely than now.

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Speaker 4: We're actually going to be getting some reacceleration and growth

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Speaker 4: going into twenty twenty six, just as these prices are

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Speaker 4: picking up because you're getting the one big beautiful bill stimulus,

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Speaker 4: you're getting the AI backstory.

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Speaker 2: But I don't think i've ever seen the survey that

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Speaker 2: matches the excuse a study that matches a survey like

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Speaker 2: we've just seen Sarah Wolf with us here. Sarah, I

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Speaker 2: don't know if you saw this. Thank you to Bloomberg

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Speaker 2: Television for alerting me on it. But folks, Canada GDP

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Speaker 2: came in with stunning, stunning statistics. There's no other way

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Speaker 2: to put it. Second quarter Canadian GDP, the forecast was

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Speaker 2: a negative zero point seven and they came in at

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Speaker 2: negative one point six. They came in with a lesser inflation.

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Speaker 2: Sarah Wolf, this is a global US inflation report. How

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Speaker 2: does Morgan Stanley see this mixing out in the next

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Speaker 2: tour or three quarters? Is going to be a global

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Speaker 2: slow down combined with in America that's resilient.

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Speaker 4: I mean, the reality is is that there's going to

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Speaker 4: be certain economies that are way more affected by US

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Speaker 4: terriffs and the spillover from the slowdown we're seen in

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Speaker 4: the US. Canada being one of the number one countries

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Speaker 4: that are going to be affected. As one of our

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Speaker 4: closest trading partners, you know, over twenty percent of our

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Speaker 4: exports go to Canada and way more of Canadian exports

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Speaker 4: go to the US, I think somewhere around eighty percent,

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Speaker 4: and so we're seeing that that spillover is going to

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Speaker 4: global growth, but I think largely a big hit of

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Speaker 4: it is going to be felt within the US that

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Speaker 4: we are going to bear the brunt of the terraffs

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Speaker 4: slow down because as I mentioned earlier, businesses in the

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Speaker 4: US are pushing that price through to US consumers.

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Speaker 3: And other consumers. So think about in Europe, they're actually

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Speaker 3: getting a deflationary impulse from the slow down.

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Speaker 4: And so I do think that that's worth noting that

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Speaker 4: the US is going to slow down and it's to

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Speaker 4: take Canada and Mexico probably with it in this in

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Speaker 4: this economic deceleration.

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Speaker 5: Well, Sarah, I think you hit the nail on the

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Speaker 5: head here. Listen to this one. Experts on annualized from

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Speaker 5: the US into Canada fell twenty seven percent on the quarter.

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Speaker 6: That is a huge, huge miss.

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Speaker 5: And you're seeing dollar CAD rise off the back of this,

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Speaker 5: although not so much a little bit of spike here.

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Speaker 5: But you know, talk to us about what this means

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Speaker 5: for the dollar narrative. If you start seeing GDP in

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Speaker 5: some of the US's largest trading partners coming off to

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Speaker 5: that extent, you know, do you expect the dollar to

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Speaker 5: rally or falling that news.

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Speaker 4: I mean, it's all about how we are relative to

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Speaker 4: cern economy. So the US pad might appreciate, but if we.

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Speaker 3: Think about the trade that investors are.

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Speaker 4: Going to be putting on the US euro for example,

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Speaker 4: that we're still seeing a relatively better situation in Europe

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Speaker 4: and so there's going to be a little bit more

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Speaker 4: of a diversified trade. There's still room for the dollar

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Speaker 4: to depreciate further as the tear story starts to materialize.

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Speaker 4: So I wouldn't discount the fact that just because we're

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Speaker 4: getting a bit of a rally and the dollar off

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Speaker 4: of this weeker using Canada, that that's going to be

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Speaker 4: the new up trend. I think as we start to

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Speaker 4: get the slower numbers, the weaker numbers coming in from.

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Speaker 3: The US paired with a better situation coming in from Europe,

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Speaker 3: so they're going to be able to cut interest rates more,

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Speaker 3: we could get further dollar depreciation.

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Speaker 2: So you guys do brilliant work. I mean, the legacy

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Speaker 2: here of Stephen Roach and Richard Berners has been identified,

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Speaker 2: and the Morgan Stanley excellence of Seth Carpenter and all great.

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Speaker 2: Do you guys care what the price of beef is

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Speaker 2: at the grocery store.

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Speaker 3: It matters to the extent that it's hitting consumer wallets.

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Speaker 4: Of course, we like to strip out food and energy,

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Speaker 4: and Corea.

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Speaker 2: Strives me nuts. Lisa, Can you set out food and

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Speaker 2: energy over the next month? Come on, Sarah, Nobody except

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Speaker 2: fancy people like you strip out food and energy.

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Speaker 3: As a consumer economist, I agree with you. The food and.

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Speaker 4: Energy are the most important components that go into the

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Speaker 4: basket when you think about the everyday consumer and how

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Speaker 4: they prices. Right, So, if you actually look at what

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Speaker 4: drives inflation expectations, which seems to be the only thing

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Speaker 4: that the FED really is focused on right now, the

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Speaker 4: number one driver of inflation expectations is retail gas prices

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Speaker 4: and the price of a carton of eggs and a

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Speaker 4: box of milk, because those are the most salient prices,

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Speaker 4: and so you could add on to that other things,

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Speaker 4: other stables people like to buy, like the price of beef.

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Speaker 4: And so if we see an acceleration in these other components,

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Speaker 4: that does start to feed through into inflation expectations and

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Speaker 4: become a real concern for the FED.

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Speaker 2: We're commercial free for you into the top of the arm.

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Speaker 2: Michael McKee will join us here in a bit, you

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Speaker 2: lend us show the table, will join us as well.

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Speaker 2: But right now we're looking it's not a cart and

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Speaker 2: the milk. It's like, give me some one percent. Come on,

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Speaker 2: Danian Larry Kudlow became famous.

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Speaker 5: Tom Sarah and I both strip out tomatoes, onions, and

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Speaker 5: potatoes when we're looking at inflation. In India, you have

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Speaker 5: to do it. They call them top. It's often referred

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Speaker 5: to as top tomatoes, onions, potatoes get stripped right out.

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Speaker 6: But Sarah, I have to ask you absolutely.

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Speaker 2: You're you're a font of with Oh we have seris,

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Speaker 2: we can. Why don't you bring in Elena.

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Speaker 5: Elena show you tel a former Bloomberg colleague of mine. Elena,

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Speaker 5: Welcome to Bloomberg Surveillance. Let's talk a little bit about

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Speaker 5: the inflationary pressures that are emanating from China to the

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Speaker 5: rest of the world.

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Speaker 6: What are your thoughts there?

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Speaker 7: Well, I think that we can just quickly cover it

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Speaker 7: and all go home, because that was largely as expected

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Speaker 7: write this report. But seriously speaking, I think that today's

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Speaker 7: report doesn't add much in terms of the new information.

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Speaker 7: We already knew that consumers are still holding up. They

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Speaker 7: are spending on goods, So goods spending increased by zero

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Speaker 7: point nine percent in July, and we spend lesson services.

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Speaker 8: So that is telling me that consumers are getting.

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Speaker 7: Becoming more choosy in what they need to spend one.

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Speaker 8: They are stocking up again.

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Speaker 7: Look at the advanced report that also came out along

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Speaker 7: with the data on inflation, we saw a huge increase

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Speaker 7: in imports. So I think we have some kind of

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Speaker 7: a dija here, because you know, we're talking up again

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Speaker 7: ahead of the set of times.

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Speaker 2: Elina show Tavy whether us with the conference board, the

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Speaker 2: senior economists there, Elena, let me ask you dumb. It's

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Speaker 2: sound like Damien Woods us. I'll ask a dumb question.

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Speaker 2: On a scale of zero to one hundred, where we

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Speaker 2: say the tariffs have been passed on to the consumer

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Speaker 2: in America. Where are we on that continuum from zero

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Speaker 2: to one hundred. Are we like a ten where it's

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Speaker 2: barely in effect or fifty midpoint or is there now

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Speaker 2: becoming a huge effect of tariffs on our listeners and viewers.

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Speaker 7: I think we're in the early stages of that, and

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Speaker 7: Sarah was referring to that as well earlier. I think

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Speaker 7: we're in kind of like a twenty to thirty percent

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Speaker 7: on that scale probably, you know, look at what is happening.

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Speaker 7: So today we get an expiration of the Deminimus text

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Speaker 7: tariff exemption. So that alone, according to the Conference Board

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Speaker 7: research we published earlier this year, will add a few

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Speaker 7: tenths of a percent to PC inflation later on this year.

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Speaker 7: I think that is an important thing as well. So

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Speaker 7: I think that, yeah, we stalked up inventory with cheaper

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Speaker 7: inventories earlier this year, and now it's just the time

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Speaker 7: when we're going to start seeing inflationary pressure. So I

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Speaker 7: think they will continue to build into the end of

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Speaker 7: the year and going into the next.

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Speaker 5: Lena, Sorry about that, Elena. You know, I know you

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Speaker 5: we could stick to the US here, but I'm going

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Speaker 5: to talk about Canada here because this GDP print was

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Speaker 5: pretty surprising to the downside that we just got at

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Speaker 5: eight thirty this morning, and you know, we're seeing growth

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Speaker 5: kind of you know, coming in a little bit across

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Speaker 5: the board, and I'm seeing central banks literally across the

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Speaker 5: board from Mexico to the UK, poland perhaps next week,

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Speaker 5: the Philippines this week they're cutting rates. Are we missing

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Speaker 5: something that other countries are seeing. Is growth slowing more

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Speaker 5: quickly in some of these other nations and is that

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Speaker 5: why the central banks are acting so aggressively.

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Speaker 7: Well, you have to like when you disrupt the system,

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Speaker 7: and that's what we see, right with all the new

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Speaker 7: policies and the policy actions, something will break somewhere, right,

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Speaker 7: so and you have to react to that. I just

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Speaker 7: don't think that in terms of the US, we are,

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Speaker 7: you know, heading into some kind of a downturn at

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Speaker 7: this point. I think growth in the US is still

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Speaker 7: solid despite all the disruptions, and it's a very tough

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Speaker 7: choice for the FED what to do the next meeting

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Speaker 7: and going forward.

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Speaker 2: We continue with you, Lena show TeV at the conference board,

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Speaker 2: bandmarkets showing higher yields ten yure up a solid three

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Speaker 2: basis points four point twenty three percent, thirty year one

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Speaker 2: nine at five percent four point ninety one percent. Equities

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Speaker 2: do better than before before the eight to thirty report,

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Speaker 2: moving from negative twenty five futures about now negative eighteen futures.

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Speaker 2: The Vics fourteen point five six with Julina Schilitzeva, Damian

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Speaker 2: Sasor Damien.

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Speaker 6: Yes, Elena.

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Speaker 5: I mean, look, we've been talking all morning about the

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Speaker 5: impact of inflation on growth, the impact of inflation on

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Speaker 5: pretty much, you know, some of these local economies, not

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Speaker 5: just in the US but abroad. But what I really

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Speaker 5: want to get a sense of what are you seeing

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Speaker 5: on the ground here, you know, I mean just real economy,

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Speaker 5: is the real purses in the pocketbooks that are being

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Speaker 5: you know, I mean, do you see consumer discretionary spend

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Speaker 5: coming down here in the US or is there potential

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Speaker 5: for surprise to the upside?

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Speaker 2: Still?

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Speaker 7: I think we are we see a slowdown, and based

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Speaker 7: on our conference board consumer confidence data, you do hear

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Speaker 7: a lot of concerns about inflation and how that will

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Speaker 7: impact consumers going forward.

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Speaker 8: So look at this report again this morning. So services were.

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Speaker 7: Pretty weak, even though goods spending rebounded from its tep

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Speaker 7: it pace based in the second quarter of this year.

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Speaker 7: So that tells me that, you know, consumers are really

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Speaker 7: facing tough choices. They have to spend more on food

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Speaker 7: and things like that that are necessities, and you know,

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Speaker 7: they have to forego what could be a discretionary spending

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Speaker 7: like going to Disney World or other things.

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Speaker 2: EULENUS, thank you so much. Let me show the tab

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Speaker 2: at the conference point with this office key economic data.

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Speaker 2: I do want a reviewer. We really focused on PCE

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Speaker 2: Lisa Matteyo with that great effort at eight thirty. Personal

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Speaker 2: income came out on plan. I don't have a revise

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Speaker 2: number of personal spending. I do have a revision. It

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Speaker 2: came in on plans zero point five percent, but a

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Speaker 2: more buoyant prior eating of zero point three moves to

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Speaker 2: zero point four. So again it's that tendency to that

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Speaker 2: word solid economy dealing. You know, I was on the

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Speaker 2: horse out with Joe and Tracy at Jackson Hole. They

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Speaker 2: got me one of the Clydesdale trigger was great. I

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Speaker 2: didn't fall off, which was half the battle. Somebody who

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Speaker 2: actually rides a horse at Jackson Hole and is like gifted.

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Speaker 2: Michael mckeey, Michael McKee head of all of our economics,

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Speaker 2: before we dance into what we're doing right now, your

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Speaker 2: single vision, your summary of your effort out west this summer.

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Speaker 9: It was quite interesting and also somewhat unnerving because there

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Speaker 9: was this palpable sense of worry about what's going on

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Speaker 9: with an independence and then of course Tom as you saw,

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Speaker 9: there was a massive security presence there, massive.

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Speaker 2: Security presence, but the unnerving part into September October November.

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Speaker 2: What are you watching in the data that leads to

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Speaker 2: a stuff body of that unnerving.

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Speaker 9: Well, if we're talking about it in that sense, we're

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Speaker 9: talking about what the FED is going to do a September, October, November, September, November,

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Speaker 9: December meetings. And in this case we're looking at the

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Speaker 9: inflation numbers and the jobs numbers.

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Speaker 10: And it was interesting to hear.

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Speaker 9: Chris Waller last night suggests a footnote that they're also

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Speaker 9: following the ADP numbers and they have shown deterioration. They

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Speaker 9: get the ADP numbers on a weekly basis and use

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Speaker 9: them to form their own okay index, and they have

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Speaker 9: been deteriorating since the last job's report.

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Speaker 2: And this is Waller's Reelhouse started Damien with this was

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Speaker 2: a question about mister Waller. Now he's popping fifty beeps.

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Speaker 2: Talk back down to twenty five basis point. With this

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Speaker 2: economic study this morning, it screams moderation by the Fed,

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Speaker 2: doesn't it?

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Speaker 10: Not? Necessarily?

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Speaker 2: I got that wrung, Damian. Please.

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Speaker 9: What we do see is is some spending increase on

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Speaker 9: automobiles drove much of the increase overall, and automobiles, spending

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Speaker 9: is expected to drop off some because the tariffs are

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Speaker 9: going to affect and the auto companies have said they're

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Speaker 9: going to be raising prices once we get to the

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Speaker 9: twenty twenty six model year. Now I don't know exactly

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Speaker 9: what that means, but you two are old enough like

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Speaker 9: me to know that it was always when the football

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Speaker 9: season started, they started the new car ads for the

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Speaker 9: new year. So somewhere around this time or.

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Speaker 5: Well, you know what, Mike, here's the thing. I'm looking

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Speaker 5: at the PC data. I'm looking at soondy A's GDP data,

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Speaker 5: and it's all on the screws. There's no news here.

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Speaker 5: There's nothing really here. When I want to ask you

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Speaker 5: is let's look forward one week from today when NFP

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Speaker 5: comes out, and I want to ask your humble opinion here,

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Speaker 5: your gut check here. You know, just a few months back,

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Speaker 5: we were looking at peril prints of the one fifty

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Speaker 5: one to seventy elk. Now we're looking at a consensus

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Speaker 5: estimate of what seventy four thousand added last scored last month.

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Speaker 5: Talk to us about that shift, that change, and are

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Speaker 5: the market suggesting that properly? Is that you know a

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Speaker 5: precursor to something more notorious here in these markets.

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Speaker 9: Well, there's two numbers that the FED has got to watch.

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Speaker 9: One is the number of jobs created, and that has

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Speaker 9: slowed tremendously, and the expectation is that it will continue

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Speaker 9: to do so. But they are also following the unemployment rate,

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Speaker 9: and that is the sign they have for what's happening

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Speaker 9: to the overall economy. If people start losing jobs, they're

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Speaker 9: much more worried. And at this point, to this point,

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Speaker 9: it hasn't moved very much or very quickly. The issue is,

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Speaker 9: and Waller brought this up last night, is where what

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Speaker 9: is causing this? Is it because we're seeing no entrance

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Speaker 9: into the labor force because immigration has been cut off,

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Speaker 9: or is it because companies are holding on to workers,

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Speaker 9: which is sort of the It's kind of a combination too,

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Speaker 9: is the general consensus.

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Speaker 10: But Waller thinks it's not so much immigration. You have

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Speaker 10: two questions.

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Speaker 2: First, one is important, Okay, the unemployment rate right now

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Speaker 2: geist on global Wall Street and particularly Manhattan and Wall Street.

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Speaker 2: Is anybody modeling out over five percent out there somewhere?

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Speaker 10: I have not seen over five percent.

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Speaker 9: I have seen four point five to four point six

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Speaker 9: and that would be considered.

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Speaker 2: And this is because it's all immigration influenced.

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Speaker 9: Well, yeah, your denominator would change, and that would make

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Speaker 9: the unemployment rate hold steady if there's nobody entering the

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Speaker 9: labor force. So that's the question is what's going to

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Speaker 9: happen with the labor force size there? But the Fed

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Speaker 9: is less concerned tom with an overall level than they

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Speaker 9: are with how fast it goes up, because it's when

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Speaker 9: unemployment starts to rise, it starts to rise much more

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Speaker 9: quickly because lots of companies are going to be laying

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Speaker 9: off people because they see a problem in the economy.

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Speaker 10: And that's what we have to keep an eye on.

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Speaker 2: Okay, nobody cares. All they care about is this is

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Speaker 2: like make a movie like we need like Kevin Costner

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Speaker 2: tonight at Fenway. We need James Earl Jones in the stands, right,

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Speaker 2: you know, with the with the if you build it,

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Speaker 2: They'll come or whatever feel the dreams. I mean, are

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Speaker 2: you kidding me? Mike? We got the number one pitcher

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Speaker 2: in baseball showing up in the Red Sox have joined

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Speaker 2: the Hollywood trade. I don't know how to pronounce his

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Speaker 2: last name. Peyton Coyle am I close to the picture.

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Speaker 10: Close.

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Speaker 2: Yeah, I'm somewhat close. He's the second round pick out

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Speaker 2: of TCUs. It's like he was playing rookie league earlier

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Speaker 2: in the season. A ball double, a ball triple A.

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Speaker 2: The kid comes in tonight. It's got to be sold out.

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Speaker 2: He's going up against the stud I mean, it's like

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Speaker 2: the movies, Mike.

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Speaker 10: I suppose it is.

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Speaker 9: But this is one of the most interesting times of

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Speaker 9: the year for stuff like this. What you're he's actually

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Speaker 9: coming up a little early because it's September one when

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Speaker 9: they can expand their rosters, so they're gonna.

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Speaker 2: See what they got here, Damien. Here's the quote from

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Speaker 2: Ken Rose. The last picture to see such almost as

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Speaker 2: quick a rise is the man he's facing Paul Theater.

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Speaker 6: Well, I look, I look.

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Speaker 5: I think what the Red Sox are two and a

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Speaker 5: half games up on the wildcard. I think the Youanks

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Speaker 5: are two games up on the wildcard?

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Speaker 6: Is that right?

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Speaker 2: The Blue Jays?

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Speaker 5: Yeah, but we're not going to catch them. We're looking

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Speaker 5: for one. We're just trying to get a wildcard bid here.

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Speaker 5: But I think that is it's just going to be

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Speaker 5: an interesting Uh, It's going to be an interesting postseason.

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Speaker 5: If you have the Blue Jays, the Red Sox and

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Speaker 5: the Yankees all you know, dueling it out with who,

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Speaker 5: the Astros, the Tigers.

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Speaker 2: You know, you.

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Speaker 9: Look at like stub Hub and you see what the

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Speaker 9: resale prices are. Yeah right, they're going up for all

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Speaker 9: of those teams. That's exactly right at Fedway. Interesting thing

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Speaker 9: about Peyton Tall is that he's six or six, so

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Speaker 9: he would look Tom right in the eye.

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Speaker 2: Wow.

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Speaker 6: You know, Tom is not a small person.

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Speaker 2: I went to a Dwight Yoakam concert and I said,

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Speaker 2: directly behind Roger Clemens and he could barely get in

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Speaker 2: the chair. He's so big. These guys are huge, huge bike.

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Speaker 11: Yeah.

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Speaker 2: Commit I did a thing with Derek Jeter and Alec

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Speaker 2: Riguez once at the Marriott. They're like, they're like, you

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Speaker 2: know my height, but they're twice the size.

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Speaker 6: Yeah, no, I know, enormous.

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Speaker 2: We get thirty seconds. Arnold'st Chapman best signing ever.

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Speaker 10: Oh no, not the best signing ever, but a good signing.

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Speaker 6: Uh, I mean, okay, we would say Baby Ruth was

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Speaker 6: the best signing ever.

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Speaker 10: Well you could argue thank you for that, Okay, And

437
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Speaker 10: the worst trade ever.

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Speaker 2: Lisa's this's been enough baseball talk, please okay Michael McKee

439
00:22:37,520 --> 00:22:45,119
Speaker 2: with the economics.

440
00:22:41,200 --> 00:22:42,639
Speaker 6: Passed out behind the water.

441
00:22:42,920 --> 00:22:46,199
Speaker 2: Supportant here is Damien asked the right question as it

442
00:22:46,240 --> 00:22:49,880
Speaker 2: moves us on to non firm payrolls and to inflation.

443
00:22:50,040 --> 00:22:53,720
Speaker 2: We'll be bringing you that data if we survived Labor Day.

444
00:22:54,400 --> 00:22:58,560
Speaker 2: Stay with us. More from Bloomberg Surveillance coming up after this.

445
00:23:05,840 --> 00:23:09,400
Speaker 1: You're listening to the Bloomberg Surveillance podcast. Catch us live

446
00:23:09,480 --> 00:23:12,639
Speaker 1: weekday afternoons from seven to ten am Eastern Listen on

447
00:23:12,720 --> 00:23:16,359
Speaker 1: Applecarplay and Android Auto with the Bloomberg Business app, or

448
00:23:16,520 --> 00:23:18,000
Speaker 1: watch US live on YouTube.

449
00:23:18,080 --> 00:23:21,000
Speaker 2: Good pull naudo ho, Damien says Sorr with this, this

450
00:23:21,040 --> 00:23:23,919
Speaker 2: is your wheelhouse as we go into Mirahandon dollar, Indian

451
00:23:24,600 --> 00:23:28,160
Speaker 2: Rupia out to an eighty level. Oh Indian okay, yeah,

452
00:23:28,160 --> 00:23:34,080
Speaker 2: in India, Okia Rupia whatever, it's gone from forty to ninety.

453
00:23:34,359 --> 00:23:37,399
Speaker 2: This is a This is a devaluation of a major

454
00:23:37,440 --> 00:23:38,840
Speaker 2: world's currency, isn't it Well?

455
00:23:38,880 --> 00:23:40,359
Speaker 5: I mean, I think you know when you're talking about

456
00:23:40,359 --> 00:23:43,320
Speaker 5: em currencies, and that's not Mira Chandon's wheelhouse. One binary

457
00:23:43,400 --> 00:23:47,320
Speaker 5: clear she controls euro US dollar, the number one cross

458
00:23:47,440 --> 00:23:49,879
Speaker 5: on the planet for JP Morgan that's her wheelhouse, and

459
00:23:49,880 --> 00:23:51,440
Speaker 5: we're gonna ask her about G ten effects.

460
00:23:51,440 --> 00:23:53,439
Speaker 6: Not em so much, but I understand, you know, as

461
00:23:53,440 --> 00:23:54,960
Speaker 6: an extension of what you're saying, this.

462
00:23:54,920 --> 00:23:58,040
Speaker 2: Is like Trump economics, Trump political theory having a reaction

463
00:23:58,119 --> 00:23:58,520
Speaker 2: to somewhere.

464
00:23:58,720 --> 00:23:59,399
Speaker 6: Absolutely right.

465
00:23:59,440 --> 00:24:02,920
Speaker 2: Mari Shannon joins us JP Morgin here is Damien lectures

466
00:24:02,960 --> 00:24:05,520
Speaker 2: me on the larger currencies. Me, let's just get to

467
00:24:05,560 --> 00:24:09,879
Speaker 2: the JP Morgan call. When you synthesize Kasmi economics and

468
00:24:09,920 --> 00:24:13,680
Speaker 2: look at all your work in Europe, strong euro or weak.

469
00:24:13,520 --> 00:24:18,159
Speaker 12: Euro, definitely stronger even from here we've been we've been

470
00:24:18,160 --> 00:24:21,560
Speaker 12: calling for the one twenty two yo dollar forecast on

471
00:24:21,600 --> 00:24:23,040
Speaker 12: the upside.

472
00:24:23,840 --> 00:24:26,760
Speaker 2: Yeah, I think that's that's as strong as we've seen

473
00:24:26,800 --> 00:24:31,200
Speaker 2: here is Well, where is the tariff dynamic? Now? Are

474
00:24:31,240 --> 00:24:35,600
Speaker 2: we nuances in tweaking or do you anticipate other major

475
00:24:35,640 --> 00:24:37,600
Speaker 2: announcements into September?

476
00:24:39,160 --> 00:24:43,119
Speaker 12: The tariff We've we've been in macromarkets, been dealing with

477
00:24:43,160 --> 00:24:46,879
Speaker 12: the tariff announcements and the potential for tariff announcements for

478
00:24:47,119 --> 00:24:48,760
Speaker 12: almost more than a year now.

479
00:24:48,840 --> 00:24:50,240
Speaker 3: So I think it's.

480
00:24:50,040 --> 00:24:51,760
Speaker 12: Fair to see a lot of the businesses were prepared,

481
00:24:51,800 --> 00:24:54,560
Speaker 12: a lot of the economists had already bigged this into

482
00:24:54,600 --> 00:24:58,000
Speaker 12: their forecast. What we've see now is because the tariff

483
00:24:58,080 --> 00:25:02,160
Speaker 12: implementation has taken longer than most people had expected, it's

484
00:25:02,400 --> 00:25:04,160
Speaker 12: been a longer drawn out of pair. What you're actually

485
00:25:04,200 --> 00:25:07,040
Speaker 12: seeing is that the growth forecast had gotten too pessimistic

486
00:25:07,040 --> 00:25:08,280
Speaker 12: and now you're actually seen.

487
00:25:08,160 --> 00:25:10,360
Speaker 3: Upside revisions to growth outlook.

488
00:25:10,600 --> 00:25:13,320
Speaker 12: Obviously, there's more stuff in the pipeline, there's sectoral talis

489
00:25:13,440 --> 00:25:15,960
Speaker 12: that can can take a bite out of growth, But

490
00:25:16,080 --> 00:25:18,480
Speaker 12: as far as we've seen it right now, things right now,

491
00:25:18,840 --> 00:25:22,040
Speaker 12: it does look like European growth is on a stronger footing,

492
00:25:22,880 --> 00:25:25,560
Speaker 12: and it's certainly an improvement relative to last year, which

493
00:25:25,600 --> 00:25:28,359
Speaker 12: is not the same for the US.

494
00:25:28,800 --> 00:25:31,560
Speaker 5: Mira. I would love nothing more than to ask you

495
00:25:31,600 --> 00:25:35,480
Speaker 5: about real yield differentials, growth differentials, fed credibility here with

496
00:25:35,560 --> 00:25:38,240
Speaker 5: cook eurofiscal spending. But the number one question in my

497
00:25:38,320 --> 00:25:40,000
Speaker 5: mind is why is it taking you so long to

498
00:25:40,040 --> 00:25:41,800
Speaker 5: come on the show here with me and Tom? Because

499
00:25:41,880 --> 00:25:44,000
Speaker 5: is it the at any rate podcast? Because I know

500
00:25:44,040 --> 00:25:45,879
Speaker 5: it's taking up a lot of your time. By the way, Tom,

501
00:25:46,280 --> 00:25:48,600
Speaker 5: it is the best. It is a Musclessen. I mean,

502
00:25:48,680 --> 00:25:51,240
Speaker 5: every new episode is better than any of this podcast

503
00:25:51,280 --> 00:25:54,800
Speaker 5: any rate. GP Morgan's podcast. It is an incredible property.

504
00:25:54,800 --> 00:25:55,840
Speaker 5: Congratulations on that.

505
00:25:55,920 --> 00:25:56,120
Speaker 2: Cool.

506
00:25:56,240 --> 00:25:58,520
Speaker 5: But now that I have you here, Mirah, because I

507
00:25:58,520 --> 00:26:00,600
Speaker 5: am such a huge fan, I want to ask you

508
00:26:00,600 --> 00:26:03,120
Speaker 5: about euro dollar because at the beginning of this year,

509
00:26:03,720 --> 00:26:05,879
Speaker 5: you know, it was tough to find anyone calling for

510
00:26:05,920 --> 00:26:07,399
Speaker 5: a stronger euro. I mean, we were at one o

511
00:26:07,480 --> 00:26:09,800
Speaker 5: two and many expected the cross to test parody. Today

512
00:26:09,800 --> 00:26:12,280
Speaker 5: we're at one seventeen. You're calling for one twenty two.

513
00:26:12,520 --> 00:26:14,840
Speaker 5: We're already up a full thirteen percent year to date

514
00:26:14,880 --> 00:26:17,120
Speaker 5: and it's only August or end.

515
00:26:17,000 --> 00:26:19,400
Speaker 6: Of AUGUSTA talk to us a little bit about the call.

516
00:26:19,440 --> 00:26:21,440
Speaker 5: You know what's going to drive you know, euro dollar

517
00:26:21,480 --> 00:26:23,959
Speaker 5: two and twenty two over the near term.

518
00:26:24,400 --> 00:26:26,679
Speaker 12: Yeah, I mean the big the big game changer to

519
00:26:26,720 --> 00:26:29,040
Speaker 12: be fair at this, you know, in March was the

520
00:26:29,119 --> 00:26:30,359
Speaker 12: German fiscal u turn.

521
00:26:30,480 --> 00:26:31,400
Speaker 3: Before that, if we.

522
00:26:31,359 --> 00:26:33,560
Speaker 12: Spoke about the euro dollar call, I would have said,

523
00:26:33,880 --> 00:26:36,160
Speaker 12: we'll get tarifs you Arizona count.

524
00:26:36,040 --> 00:26:37,240
Speaker 3: Leaf do anything about it.

525
00:26:37,280 --> 00:26:39,040
Speaker 12: All we're going to get is ecb raid cuts and

526
00:26:39,040 --> 00:26:41,119
Speaker 12: you're a dollar is going to plummet and it's not

527
00:26:41,160 --> 00:26:43,840
Speaker 12: really going to fix the growth problem. Now we've got

528
00:26:43,840 --> 00:26:47,159
Speaker 12: the German fiscal in play, it hasn't even arguably started

529
00:26:47,160 --> 00:26:50,320
Speaker 12: to hit the numbers yet, but it is some pointing sentiment.

530
00:26:51,359 --> 00:26:54,639
Speaker 12: And uh so you have a lot of underlying resilience.

531
00:26:54,560 --> 00:26:56,719
Speaker 3: To the trade war, so to speak.

532
00:26:57,720 --> 00:27:00,760
Speaker 12: Secondly, what we're seeing is that that has been a

533
00:27:00,840 --> 00:27:03,280
Speaker 12: US catchdown story. Now US grew are two twenty eight

534
00:27:03,320 --> 00:27:06,600
Speaker 12: percent last year this year projected to grow, you know,

535
00:27:06,720 --> 00:27:07,400
Speaker 12: just one and.

536
00:27:07,320 --> 00:27:08,000
Speaker 3: A half percent.

537
00:27:09,000 --> 00:27:10,879
Speaker 12: Is it is growth falling off a cliff, No, but

538
00:27:11,000 --> 00:27:13,720
Speaker 12: it is catching down. Meanwhile, you're U two at twenty

539
00:27:13,720 --> 00:27:15,600
Speaker 12: eight last year and we're thinking closer to one and

540
00:27:15,600 --> 00:27:18,600
Speaker 12: a half percent. So it's about this growth convergence story

541
00:27:18,640 --> 00:27:21,560
Speaker 12: in a way, and the real yeals you know, aspect.

542
00:27:21,640 --> 00:27:23,520
Speaker 12: I think it captures a lot of the things that

543
00:27:23,560 --> 00:27:27,240
Speaker 12: you mentioned. Look, we're looking at two year if you

544
00:27:27,240 --> 00:27:30,600
Speaker 12: look at you know, shorter tenors, real yields in the US,

545
00:27:31,000 --> 00:27:33,160
Speaker 12: we're at we're at almost two two and a half

546
00:27:33,240 --> 00:27:36,879
Speaker 12: year lows. And that has happened in part because the

547
00:27:36,920 --> 00:27:39,320
Speaker 12: market is pricing in and lower fed terminal, but also

548
00:27:39,359 --> 00:27:40,879
Speaker 12: inflation expectations have gone up.

549
00:27:40,880 --> 00:27:41,639
Speaker 6: At the end of the.

550
00:27:42,520 --> 00:27:46,879
Speaker 12: Adjusted for inflation, you are seeing a deterioration in the

551
00:27:46,920 --> 00:27:49,359
Speaker 12: dollars fundamentals, which is really the key driver here, and

552
00:27:49,400 --> 00:27:50,879
Speaker 12: it is suggesting you're.

553
00:27:50,760 --> 00:27:51,720
Speaker 3: A dollar going further.

554
00:27:51,800 --> 00:27:56,840
Speaker 12: Particularly fed independent is an issue that is constrained on

555
00:27:57,000 --> 00:27:57,560
Speaker 12: what they can do.

556
00:27:57,760 --> 00:28:00,760
Speaker 5: Well, Mira, you mentioned real yield differentials, and you really mentioned,

557
00:28:00,760 --> 00:28:02,920
Speaker 5: you know, have things changed in Germany earlier this year,

558
00:28:02,920 --> 00:28:04,760
Speaker 5: and how that sort of catalyzed your call. But I

559
00:28:05,400 --> 00:28:08,120
Speaker 5: got to point your direction and the post Liberation day

560
00:28:08,320 --> 00:28:11,600
Speaker 5: FX hedge flows, right, You've written about this extensively, how

561
00:28:11,680 --> 00:28:14,600
Speaker 5: dour hedging from foreign investors into the US queen market

562
00:28:14,600 --> 00:28:16,639
Speaker 5: has been driving at the margin a lot of what

563
00:28:16,680 --> 00:28:19,480
Speaker 5: you're seeing in your dollar. Is that going to continue?

564
00:28:19,560 --> 00:28:22,560
Speaker 5: Candid continue? And more importantly can it accelerate?

565
00:28:24,160 --> 00:28:27,760
Speaker 12: So me actually, the challenge with the hedge ratio data

566
00:28:27,840 --> 00:28:29,679
Speaker 12: is that you don't get it on a tandy manner.

567
00:28:29,720 --> 00:28:31,720
Speaker 12: There are some countries that do release it on a

568
00:28:31,720 --> 00:28:35,040
Speaker 12: timely manner, you know, like like Denmark for example. We

569
00:28:35,080 --> 00:28:37,760
Speaker 12: do get this data. It's publicly available, and what he's

570
00:28:37,800 --> 00:28:40,240
Speaker 12: seen is for the last three months after that initial

571
00:28:40,680 --> 00:28:43,320
Speaker 12: adjustment and the FX hedge ratio higher, for the last

572
00:28:43,320 --> 00:28:47,160
Speaker 12: three months they've been basically unchanged. So there is this

573
00:28:47,280 --> 00:28:51,240
Speaker 12: chatter of well, have the hedge ratios flows that you know,

574
00:28:51,360 --> 00:28:55,280
Speaker 12: dried up. I think this is really a result a

575
00:28:55,320 --> 00:28:57,480
Speaker 12: consequence of the fact that the dollar has been in

576
00:28:57,600 --> 00:28:59,959
Speaker 12: arrange in recent months as well.

577
00:29:00,000 --> 00:29:00,120
Speaker 3: Well.

578
00:29:00,560 --> 00:29:03,480
Speaker 12: We haven't really seen this breaklower a week er and

579
00:29:03,560 --> 00:29:04,440
Speaker 12: the dollar that people have.

580
00:29:04,480 --> 00:29:05,120
Speaker 8: Been calling for.

581
00:29:05,360 --> 00:29:07,800
Speaker 12: And what that means for the hedgers is that there's

582
00:29:07,800 --> 00:29:10,560
Speaker 12: no real urgency or catalysts to get them to chase

583
00:29:10,640 --> 00:29:12,720
Speaker 12: price action if you think that is going to.

584
00:29:12,640 --> 00:29:15,520
Speaker 2: Be Marri Chandon with us at JP Morgan this morning.

585
00:29:15,520 --> 00:29:17,920
Speaker 2: We welcome all of you across the nation. Yeah, we're

586
00:29:17,960 --> 00:29:21,240
Speaker 2: sliding into the Labor day weekend. Mirra Shandon's working, no

587
00:29:21,360 --> 00:29:26,000
Speaker 2: doubt the spanking new JP Morgan building. Damien Sansaradai are

588
00:29:26,040 --> 00:29:29,800
Speaker 2: here with Lisa Mateo and Michael Barr. Good morning on YouTube.

589
00:29:29,840 --> 00:29:33,800
Speaker 2: We're really pushing this into the autumnal season from your

590
00:29:33,840 --> 00:29:39,440
Speaker 2: office from home. Consider YouTube a new digital media mirror.

591
00:29:39,480 --> 00:29:41,840
Speaker 2: This is really important and Damien alerted me to it.

592
00:29:41,880 --> 00:29:44,880
Speaker 2: That's why he's here. William Harbin and Alexander Weber for

593
00:29:44,880 --> 00:29:49,280
Speaker 2: Bloomberg have a great chart at this moment, a French, Spanish,

594
00:29:49,560 --> 00:29:53,480
Speaker 2: an Italian inflation comes in below forecast, and all you

595
00:29:53,520 --> 00:29:55,920
Speaker 2: need to know is there's next to no inflation, and

596
00:29:56,000 --> 00:30:00,120
Speaker 2: you're mirror I wanting you to synthesize again the global J. B.

597
00:30:00,240 --> 00:30:06,240
Speaker 2: Morgan view of China imputing deflation or at least the

598
00:30:06,400 --> 00:30:12,840
Speaker 2: trend of disinflation worldwide. How large is that potential for

599
00:30:13,000 --> 00:30:17,080
Speaker 2: a Chinese deflation to affect our listeners and viewers.

600
00:30:18,440 --> 00:30:20,840
Speaker 3: I think it's going to be a dominant factor.

601
00:30:20,880 --> 00:30:24,760
Speaker 12: And in fact, post Liberation Day, the biggest you know,

602
00:30:24,800 --> 00:30:27,920
Speaker 12: for currencies, we care about differentiation, you know, we care

603
00:30:27,960 --> 00:30:30,600
Speaker 12: less about things when they're moving the same direction. So

604
00:30:30,760 --> 00:30:33,560
Speaker 12: with Liberation Day, the biggest source of differentiation that we

605
00:30:33,680 --> 00:30:38,440
Speaker 12: got among countries was tatiffs are universal that US is applying.

606
00:30:38,520 --> 00:30:41,600
Speaker 12: It's inflationary for the US, it's deflationary for.

607
00:30:41,600 --> 00:30:42,440
Speaker 3: The rest of the world.

608
00:30:42,960 --> 00:30:46,400
Speaker 12: And I think that's the part that really I think

609
00:30:46,400 --> 00:30:50,200
Speaker 12: became a thorne on dollar side. Essentially, you have a

610
00:30:50,240 --> 00:30:54,800
Speaker 12: situation where you've got inflation expectations going up, growth moderating

611
00:30:55,160 --> 00:30:58,320
Speaker 12: the FED, and a sticky situation can be should we eased,

612
00:30:58,320 --> 00:31:01,239
Speaker 12: should be produtized, growth, should be product inflation that as

613
00:31:01,280 --> 00:31:04,959
Speaker 12: a set southside are getting a deflationary impulse or inflation

614
00:31:05,120 --> 00:31:06,720
Speaker 12: is less of a big deal, and in fact they're

615
00:31:06,760 --> 00:31:08,960
Speaker 12: doing fiscal policy as well physcal spending.

616
00:31:09,040 --> 00:31:11,120
Speaker 3: So your monc.

617
00:31:10,680 --> 00:31:13,200
Speaker 12: Policy makes is ready grow supportive outside of the US.

618
00:31:13,280 --> 00:31:15,320
Speaker 2: Well, you just heard there from Maria Channon, Folks. Is

619
00:31:15,360 --> 00:31:21,040
Speaker 2: your conversation for September, October and into twenty twenty six. Damien,

620
00:31:21,080 --> 00:31:23,320
Speaker 2: I think there's nothing greater than this. This goes back

621
00:31:23,360 --> 00:31:28,320
Speaker 2: to Thatcher expect the unexpected. I'm looking at bananas. Have

622
00:31:28,360 --> 00:31:31,840
Speaker 2: you seen beef prices? I mean we're eating tofu. To Lisa,

623
00:31:31,800 --> 00:31:35,000
Speaker 2: are you having to food Labor day weekend mirror? Channon's

624
00:31:35,000 --> 00:31:38,680
Speaker 2: eating tofood? Yeah, okay, you can't afford beef. We're all

625
00:31:38,720 --> 00:31:42,720
Speaker 2: mental about inflation, and is Damien sansar or mirroa Channon

626
00:31:42,800 --> 00:31:46,719
Speaker 2: suggests disinflation globally is the real story.

627
00:31:46,800 --> 00:31:47,320
Speaker 6: Yeah, it is.

628
00:31:47,360 --> 00:31:49,680
Speaker 5: And for me, it's just look to emerging markets. And

629
00:31:49,720 --> 00:31:51,320
Speaker 5: I know it's not your remit mirror, but I look

630
00:31:51,360 --> 00:31:53,400
Speaker 5: at emerging markets and today's char pack that I just

631
00:31:53,440 --> 00:31:55,720
Speaker 5: put out. I looked at the nineteen major emerging markets,

632
00:31:55,720 --> 00:31:58,640
Speaker 5: and these central banks have injected one thousand, four hundred

633
00:31:58,680 --> 00:32:01,520
Speaker 5: and seventy five basis points of SMUs into their markets

634
00:32:01,520 --> 00:32:04,200
Speaker 5: over the past year or alone. Yet twelve of nineteen

635
00:32:04,280 --> 00:32:07,080
Speaker 5: I've seen two year real yields rise over the last year,

636
00:32:07,440 --> 00:32:10,280
Speaker 5: and eighteen of nineteen are well in positive territory. I'm

637
00:32:10,280 --> 00:32:12,239
Speaker 5: talking on two year basis, so you know, we are

638
00:32:12,280 --> 00:32:16,360
Speaker 5: seeing actually emerging market resilience, if anything picking up in

639
00:32:16,400 --> 00:32:16,959
Speaker 5: this environment.

640
00:32:17,000 --> 00:32:17,960
Speaker 6: Are you surprised about that?

641
00:32:19,560 --> 00:32:21,840
Speaker 3: Absolutely? I mean it makes a lot of sense.

642
00:32:21,880 --> 00:32:24,760
Speaker 12: And in fact, if you look at more of the

643
00:32:24,800 --> 00:32:28,880
Speaker 12: fundamental details as well, things like overall indebtedness of the government,

644
00:32:29,600 --> 00:32:32,200
Speaker 12: the external balances, you know, the kind of account deficits,

645
00:32:32,240 --> 00:32:34,200
Speaker 12: the physical deficits are in much better.

646
00:32:34,000 --> 00:32:34,800
Speaker 3: Shape in EM.

647
00:32:35,560 --> 00:32:38,640
Speaker 12: So yeah, I mean that the policy makes it more positive,

648
00:32:38,640 --> 00:32:40,880
Speaker 12: and some of the underlying fundamentals, one could argue, are

649
00:32:40,880 --> 00:32:46,000
Speaker 12: more positive as well. So nobodybody's overly excited about growth

650
00:32:46,040 --> 00:32:49,400
Speaker 12: in EM and in Europe. I think the key differentiator

651
00:32:49,480 --> 00:32:54,240
Speaker 12: here is that US is looking less attractive and the

652
00:32:54,280 --> 00:32:55,200
Speaker 12: rest of the world.

653
00:32:55,000 --> 00:32:56,280
Speaker 3: Is actually showing resilience.

654
00:32:56,320 --> 00:32:58,320
Speaker 12: In some silver linings.

655
00:32:58,160 --> 00:33:00,240
Speaker 2: Mirror are you into the new office, shows A P.

656
00:33:00,360 --> 00:33:04,280
Speaker 5: Morgan, He is in London, London, you're in London.

657
00:33:04,600 --> 00:33:07,640
Speaker 6: They're out of the US to US rates. But now

658
00:33:08,120 --> 00:33:08,760
Speaker 6: global effects.

659
00:33:10,440 --> 00:33:12,480
Speaker 2: Yeah, I can understand. Miraa, Thank you so much. Don't

660
00:33:12,520 --> 00:33:16,920
Speaker 2: be a stranger. This is usually wonderful to stay with us.

661
00:33:17,160 --> 00:33:27,800
Speaker 2: More from Bloomberg Surveillance coming up after this.

662
00:33:27,800 --> 00:33:31,720
Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday

663
00:33:31,760 --> 00:33:35,160
Speaker 1: starting at seven am Eastern on Applecarplay and Android Auto

664
00:33:35,200 --> 00:33:38,000
Speaker 1: with the Bloomberg Business app. You can also watch us

665
00:33:38,040 --> 00:33:41,880
Speaker 1: live every weekday on YouTube and always on the Bloomberg terminal.

666
00:33:42,040 --> 00:33:43,880
Speaker 2: Right now, to get the market open, we're going to

667
00:33:43,960 --> 00:33:46,600
Speaker 2: go back to economics and talk to someone who's just

668
00:33:46,880 --> 00:33:50,520
Speaker 2: absolutely exquisite at this Francis donald Is at the Royal

669
00:33:50,600 --> 00:33:54,000
Speaker 2: Bank of Canada RBC. Francis, I've got to migrate and

670
00:33:54,040 --> 00:33:57,600
Speaker 2: do an audible over to your Canada this morning. Were

671
00:33:57,600 --> 00:34:02,080
Speaker 2: you surprised by the Canadian economic data amid this trade war?

672
00:34:04,160 --> 00:34:08,080
Speaker 13: Well, you might have seen Canadian growth fell sharply in

673
00:34:08,120 --> 00:34:10,880
Speaker 13: the second quarter, but of course it did. Most economies

674
00:34:10,880 --> 00:34:14,359
Speaker 13: are still experiencing sizable distortions to the trade war.

675
00:34:14,760 --> 00:34:17,320
Speaker 8: Business sentiment was down. Is that a big surprise?

676
00:34:17,400 --> 00:34:21,439
Speaker 13: And trade data is continuing to produce some very big

677
00:34:21,480 --> 00:34:25,360
Speaker 13: dislocations globally, so not a big surprise. What's more of

678
00:34:25,400 --> 00:34:28,520
Speaker 13: a surprise with Canada is I think on getting into

679
00:34:28,600 --> 00:34:30,560
Speaker 13: year end, we're going to see some sizable improvements in

680
00:34:30,560 --> 00:34:31,320
Speaker 13: the Canada story.

681
00:34:31,600 --> 00:34:35,759
Speaker 2: Later Q three into Q four. What part of our

682
00:34:35,840 --> 00:34:39,960
Speaker 2: economy should our listeners and viewers study? Is it consumption?

683
00:34:40,239 --> 00:34:42,280
Speaker 2: Is it an investment? Something different?

684
00:34:44,360 --> 00:34:48,440
Speaker 13: I actually have been surprised how different my own economic

685
00:34:48,480 --> 00:34:52,640
Speaker 13: presentations have been for clients as we think about where

686
00:34:52,680 --> 00:34:55,799
Speaker 13: is the US economy? It's been so interesting to me

687
00:34:55,880 --> 00:34:58,439
Speaker 13: that almost all of the conversations I have are about

688
00:34:58,520 --> 00:35:02,239
Speaker 13: these big structural trends that are hitting the US and

689
00:35:02,280 --> 00:35:05,400
Speaker 13: appear to be hitting them in real time. For example,

690
00:35:05,600 --> 00:35:08,960
Speaker 13: I'm not often asked, what is your non farm payrolls

691
00:35:09,000 --> 00:35:10,520
Speaker 13: forecast for next Friday?

692
00:35:10,640 --> 00:35:12,200
Speaker 8: But what is really.

693
00:35:11,960 --> 00:35:15,319
Speaker 13: Happening with the supply side of labor? Are we going

694
00:35:15,360 --> 00:35:17,920
Speaker 13: to see a labor shortage? I no longer get asked,

695
00:35:17,960 --> 00:35:20,920
Speaker 13: you know what, specifically, when is the US debt story

696
00:35:20,920 --> 00:35:23,600
Speaker 13: going to blow up? But what are the implications of

697
00:35:23,719 --> 00:35:26,640
Speaker 13: high rates on alongside? What are the implications of fiscal

698
00:35:26,680 --> 00:35:31,000
Speaker 13: policy now maybe dominating monetary policy? And of course, a

699
00:35:31,080 --> 00:35:33,960
Speaker 13: topic we have talked about many times is have we

700
00:35:34,080 --> 00:35:37,480
Speaker 13: really internalized the idea of that K shaped economy and

701
00:35:37,520 --> 00:35:41,920
Speaker 13: the institutionalization of high income Americans just living on a

702
00:35:42,080 --> 00:35:45,680
Speaker 13: very different economic cycle than low income Americans. And all

703
00:35:45,719 --> 00:35:48,719
Speaker 13: these themes together, Tom have effectively meant that, yes, there's

704
00:35:48,719 --> 00:35:51,200
Speaker 13: a cyclical economy, and we have to pay attention to it.

705
00:35:51,520 --> 00:35:54,520
Speaker 13: But we're at this nexus between the cyclical economy and

706
00:35:54,560 --> 00:35:57,600
Speaker 13: the structural economy. And right now, in the second half

707
00:35:57,600 --> 00:35:58,680
Speaker 13: of the year, I think we're going to see a

708
00:35:58,719 --> 00:36:00,440
Speaker 13: lot of these themes come head.

709
00:36:00,600 --> 00:36:01,040
Speaker 6: Francis.

710
00:36:01,040 --> 00:36:03,360
Speaker 5: We've seen this weaker dollar narrative play out, yet you know,

711
00:36:03,600 --> 00:36:06,640
Speaker 5: we aren't seeing capital flows into foreign markets out of

712
00:36:06,680 --> 00:36:07,120
Speaker 5: the US.

713
00:36:07,160 --> 00:36:07,399
Speaker 10: Here.

714
00:36:07,520 --> 00:36:09,919
Speaker 5: I'm curious, you know, if the dollar continues to weaken

715
00:36:10,040 --> 00:36:11,960
Speaker 5: or even if it recovers from that matter, you know,

716
00:36:12,040 --> 00:36:14,280
Speaker 5: what's the story for capital flows? Is there any potential

717
00:36:14,280 --> 00:36:16,200
Speaker 5: for flows to you know, I'm talking when I say

718
00:36:16,200 --> 00:36:19,160
Speaker 5: capital flows, obviously i'm talking FDI and portfolio flows. What's

719
00:36:19,200 --> 00:36:21,160
Speaker 5: the extent to which you can see that sort of

720
00:36:21,320 --> 00:36:22,040
Speaker 5: you know, happen.

721
00:36:24,120 --> 00:36:24,759
Speaker 3: Yeah, I think you're.

722
00:36:24,680 --> 00:36:27,760
Speaker 13: Getting to the core of the is the US exceptionalism

723
00:36:27,880 --> 00:36:31,279
Speaker 13: story still in play? And as Tom noted earlier, we

724
00:36:31,360 --> 00:36:34,200
Speaker 13: still have some big hits to growth happening outside the

725
00:36:34,360 --> 00:36:35,120
Speaker 13: United States.

726
00:36:35,280 --> 00:36:37,799
Speaker 8: What I'm watching for in the US is are we

727
00:36:37,840 --> 00:36:38,200
Speaker 8: going to.

728
00:36:38,120 --> 00:36:40,560
Speaker 13: See the productivity start to pick up in a way

729
00:36:40,600 --> 00:36:45,000
Speaker 13: where American exceptionalism can be reflected in strong capex, strong

730
00:36:45,040 --> 00:36:49,240
Speaker 13: business development, and really seeing those productivity numbers start to rise.

731
00:36:49,600 --> 00:36:52,920
Speaker 13: I think underlying this whole story is this one big

732
00:36:53,040 --> 00:36:57,360
Speaker 13: US issue, which is the United States going to see

733
00:36:57,719 --> 00:37:01,719
Speaker 13: big impacts from tariffs, and that the outstanding elephant in

734
00:37:01,760 --> 00:37:05,719
Speaker 13: the room for the American economy and the global investors

735
00:37:05,760 --> 00:37:07,880
Speaker 13: have to get over that hump and have more clarity

736
00:37:07,920 --> 00:37:10,799
Speaker 13: on that before we can call one way or the other.

737
00:37:11,080 --> 00:37:13,880
Speaker 8: Is capital flow going to return meaningfully to the United States?

738
00:37:13,960 --> 00:37:17,920
Speaker 2: So what are some twelve months forward nominal and real GDP.

739
00:37:18,440 --> 00:37:21,239
Speaker 2: To me, it's a huge mystery.

740
00:37:21,920 --> 00:37:25,680
Speaker 13: So we have what we call a stagflation light type

741
00:37:25,680 --> 00:37:28,920
Speaker 13: of outlook, which is growth that is comfortably low but

742
00:37:29,120 --> 00:37:29,920
Speaker 13: not collaxing.

743
00:37:30,000 --> 00:37:32,880
Speaker 8: So that's one, you know, between one and two percent.

744
00:37:33,719 --> 00:37:36,399
Speaker 13: The problem is the inflation side of this secure, which

745
00:37:36,400 --> 00:37:39,480
Speaker 13: is that we continue to see above two percent inflation

746
00:37:39,920 --> 00:37:41,920
Speaker 13: and getting it as high in the next six months

747
00:37:42,000 --> 00:37:44,520
Speaker 13: is three point four on both the CPI and the

748
00:37:44,560 --> 00:37:48,000
Speaker 13: PCI number. So you're seeing this phenomenal tension in the

749
00:37:48,120 --> 00:37:50,759
Speaker 13: US economy, and what worries me about it is that

750
00:37:50,800 --> 00:37:55,120
Speaker 13: it's not particularly aggressive. It's not pandemic level inflation that

751
00:37:55,200 --> 00:37:59,920
Speaker 13: calls for clear policy response. It's a very nefarious, uncomfortable,

752
00:38:00,360 --> 00:38:03,279
Speaker 13: muddle through type of environment. And this, I think is

753
00:38:03,280 --> 00:38:05,680
Speaker 13: going to continue to dominate a lot of the conversations

754
00:38:05,680 --> 00:38:08,080
Speaker 13: and make it difficult to say we're early, mid or

755
00:38:08,160 --> 00:38:11,239
Speaker 13: late cycle. When you say it's difficult to see, what

756
00:38:11,320 --> 00:38:13,600
Speaker 13: I hear is that this way of thinking about the

757
00:38:13,640 --> 00:38:17,040
Speaker 13: economy as being in a business cycle is getting substantially

758
00:38:17,040 --> 00:38:22,120
Speaker 13: distorted by tariffs, by inequalities, by government spending, and so

759
00:38:22,200 --> 00:38:23,680
Speaker 13: reading that story is more difficult.

760
00:38:23,760 --> 00:38:29,000
Speaker 2: Fransis, I want you to describe how you study net exports,

761
00:38:29,080 --> 00:38:34,799
Speaker 2: the exports leaving America and the imports coming into America.

762
00:38:34,840 --> 00:38:38,680
Speaker 2: How do you study that back end of the GDP equation.

763
00:38:40,080 --> 00:38:41,720
Speaker 8: At this point by sector?

764
00:38:41,960 --> 00:38:44,920
Speaker 13: And that's effectively what we're doing for all elements of

765
00:38:44,960 --> 00:38:48,359
Speaker 13: that GDP equals C plus I plus. You know, the

766
00:38:48,360 --> 00:38:50,719
Speaker 13: standard way of looking at the economy is very very

767
00:38:50,760 --> 00:38:54,040
Speaker 13: top down, but there's two things happening that mean we

768
00:38:54,120 --> 00:38:56,480
Speaker 13: have to go much more bottom up than we would

769
00:38:56,520 --> 00:38:59,880
Speaker 13: have a is sector bisector because we're getting these substantial

770
00:39:00,080 --> 00:39:05,160
Speaker 13: distortions from everything from autos to consumer imports, from China.

771
00:39:05,200 --> 00:39:07,920
Speaker 13: But we also have to do this by consumer segment.

772
00:39:07,960 --> 00:39:10,200
Speaker 13: I know you said you don't like the K shape language,

773
00:39:10,360 --> 00:39:11,520
Speaker 13: so let's call it.

774
00:39:11,400 --> 00:39:15,040
Speaker 8: Instead to Americas. Maybe that's more poetic for you, Tom.

775
00:39:15,640 --> 00:39:19,840
Speaker 13: We are seeing different consumer behaviors between high income households

776
00:39:19,840 --> 00:39:23,880
Speaker 13: and low income households, and importantly, they're operating on different cycles.

777
00:39:24,120 --> 00:39:27,480
Speaker 13: So I no longer find it valuable with most headline

778
00:39:27,520 --> 00:39:30,560
Speaker 13: economic data to say GDP will be at one point

779
00:39:30,600 --> 00:39:31,280
Speaker 13: five percent.

780
00:39:31,360 --> 00:39:33,080
Speaker 8: That's not helping companies and it's.

781
00:39:32,960 --> 00:39:36,640
Speaker 13: Not helping markets understand the granularity that's happening. Because the

782
00:39:36,680 --> 00:39:38,879
Speaker 13: truth is that there are sectors that are suffering very

783
00:39:38,880 --> 00:39:41,600
Speaker 13: deeply in the United States right now. Housing is one

784
00:39:41,640 --> 00:39:44,080
Speaker 13: of them, trade exposed sectors or another, and there are

785
00:39:44,120 --> 00:39:46,560
Speaker 13: sectors that are doing phenomenally well and will continue to

786
00:39:46,600 --> 00:39:48,640
Speaker 13: do so. So sector bisector breakdown.

787
00:39:48,719 --> 00:39:50,960
Speaker 8: Unfortunately, Tom, it's a little more work. We have to

788
00:39:51,400 --> 00:39:52,520
Speaker 8: work through our lunch breaks.

789
00:39:52,880 --> 00:39:55,359
Speaker 2: It's just fascinating, to say the least. Let's leave it there,

790
00:39:55,400 --> 00:39:57,719
Speaker 2: Francis Donald, thank you so much, your trooper to join

791
00:39:57,840 --> 00:40:01,040
Speaker 2: us here. And Friday is it Labor Day in Canada? Francis,

792
00:40:02,080 --> 00:40:04,120
Speaker 2: that would be Monday, Monday.

793
00:40:04,280 --> 00:40:04,920
Speaker 6: Yeah, they get off.

794
00:40:04,960 --> 00:40:07,440
Speaker 2: They have Monday. Okay, They're like, I don't know.

795
00:40:07,600 --> 00:40:09,480
Speaker 11: I mean, come on, you've never been to Canada before.

796
00:40:09,880 --> 00:40:13,600
Speaker 11: I've been to Canada. I've never been to day Francis do.

797
00:40:13,920 --> 00:40:15,799
Speaker 11: Thank you so much just for we got to do

798
00:40:15,800 --> 00:40:19,200
Speaker 11: a panel her in the fall. Francis, thank you so much.

799
00:40:19,640 --> 00:40:20,359
Speaker 11: Stay with us.

800
00:40:20,600 --> 00:40:31,239
Speaker 2: More from Bloomberg Surveillance coming up after this.

801
00:40:31,239 --> 00:40:35,160
Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday

802
00:40:35,200 --> 00:40:38,200
Speaker 1: starting at seven am Eastern on Apple Corplay and Android

803
00:40:38,239 --> 00:40:41,200
Speaker 1: Auto with the Bloomberg Business app. You can also watch

804
00:40:41,320 --> 00:40:44,239
Speaker 1: us live every weekday on YouTube and always on the

805
00:40:44,280 --> 00:40:45,360
Speaker 1: Bloomberg terminal.

806
00:40:45,960 --> 00:40:49,440
Speaker 2: At the coffee tail bar at the US Open, it's

807
00:40:49,920 --> 00:40:52,520
Speaker 2: time you can order an espresso martini in the morning

808
00:40:52,640 --> 00:40:57,360
Speaker 2: or the new iced o Tiami Sue iced Tarami Sue.

809
00:40:57,440 --> 00:41:01,120
Speaker 2: It's made with cold brew chocolate syrup. How do you

810
00:41:01,120 --> 00:41:06,600
Speaker 2: pronounce whatever? Mars coupone?

811
00:41:06,640 --> 00:41:09,360
Speaker 6: My goodness, yes, Mars copone moose?

812
00:41:10,239 --> 00:41:13,480
Speaker 14: Okay at this time of the morning, sure, it's never

813
00:41:13,560 --> 00:41:14,840
Speaker 14: too late, okay.

814
00:41:14,880 --> 00:41:18,840
Speaker 2: The newspapers Lisa Matteo, okay, super coffee.

815
00:41:18,400 --> 00:41:20,040
Speaker 10: This one, okay, well you do that, okay.

816
00:41:20,080 --> 00:41:22,680
Speaker 14: So this article actually stood out to me it's from

817
00:41:22,680 --> 00:41:24,279
Speaker 14: the Wall Street Journal. But it was a really good

818
00:41:24,320 --> 00:41:27,480
Speaker 14: look into higher prices and how that's affecting because of

819
00:41:27,520 --> 00:41:29,600
Speaker 14: the cost of twists, how they're passing on to consumers.

820
00:41:29,600 --> 00:41:30,640
Speaker 10: So this was a big thing.

821
00:41:31,000 --> 00:41:32,399
Speaker 2: They pointed out a few things. Right.

822
00:41:32,440 --> 00:41:35,920
Speaker 14: We saw companies like Hormel Food, Jam, Smucker, Ace Hardware.

823
00:41:35,960 --> 00:41:38,480
Speaker 14: They all said they're going to raise their prices. You

824
00:41:38,560 --> 00:41:41,200
Speaker 14: had retailers like Walmart, Target, best Buy. They say some

825
00:41:41,239 --> 00:41:44,640
Speaker 14: of their terror related price increases already in place. My

826
00:41:44,719 --> 00:41:46,840
Speaker 14: daughter came home from a Target run gave me the receipt.

827
00:41:46,840 --> 00:41:49,680
Speaker 14: I was surprised there was. It was a lot larger.

828
00:41:51,520 --> 00:41:54,360
Speaker 14: It's a micro yeah, yeah, yeah, and it starts to

829
00:41:54,400 --> 00:41:56,960
Speaker 14: add up though. That's the problem. But here's the thing.

830
00:41:57,000 --> 00:42:00,200
Speaker 14: You have retailers like dick Sporting is Good, Victoria's Secret.

831
00:42:00,080 --> 00:42:00,720
Speaker 3: Dollar General.

832
00:42:00,760 --> 00:42:03,600
Speaker 14: They're saying that even though the prices are higher, consumers

833
00:42:03,600 --> 00:42:07,759
Speaker 14: are still buying and so far exactly is a big

834
00:42:07,800 --> 00:42:10,799
Speaker 14: sol but they're warning how soon you can you can

835
00:42:10,800 --> 00:42:11,040
Speaker 14: take that.

836
00:42:11,160 --> 00:42:13,000
Speaker 5: I'm looking at the article, you know as well, and

837
00:42:13,040 --> 00:42:15,239
Speaker 5: it's all food prices. I mean, are we releasing price

838
00:42:15,280 --> 00:42:18,120
Speaker 5: increases that Dick's Sporting Goods and Victoria's secret. I mean,

839
00:42:18,160 --> 00:42:20,440
Speaker 5: are we seeing it hit at retail like real retail

840
00:42:20,480 --> 00:42:22,520
Speaker 5: or is it more just you know I that's where

841
00:42:22,520 --> 00:42:25,280
Speaker 5: I think they're gonna have trouble coming on price increases.

842
00:42:25,320 --> 00:42:26,480
Speaker 2: And I know we've got to go on to the

843
00:42:26,480 --> 00:42:29,440
Speaker 2: next story. But Liam Denning, folks, I'll retweet it out

844
00:42:29,440 --> 00:42:33,560
Speaker 2: without question, the essay of the week on across America.

845
00:42:33,880 --> 00:42:39,240
Speaker 2: You're electric in gas utility bill Yep, unreal, absolutely unreal.

846
00:42:39,440 --> 00:42:40,839
Speaker 2: The next one that is great.

847
00:42:41,200 --> 00:42:43,520
Speaker 14: Okay, so this one my husband will like this because

848
00:42:43,560 --> 00:42:45,040
Speaker 14: I wake up right at the wee hours of the

849
00:42:45,080 --> 00:42:48,600
Speaker 14: morning and sometimes he gets up mad dash outside forgets

850
00:42:48,600 --> 00:42:50,680
Speaker 14: to put out the recycling and the garbage right, so

851
00:42:50,719 --> 00:42:53,600
Speaker 14: he rushes out. But now there is some new technology

852
00:42:53,880 --> 00:42:55,759
Speaker 14: that could help him and others who have to do

853
00:42:55,800 --> 00:42:59,600
Speaker 14: that mad dash self driving trash receptacles. It is in

854
00:42:59,680 --> 00:43:02,200
Speaker 14: the work. I'm just letting you know that you could

855
00:43:02,280 --> 00:43:04,359
Speaker 14: order it and demand like an uber. It just takes

856
00:43:04,360 --> 00:43:05,480
Speaker 14: it out to the curb for you.

857
00:43:05,560 --> 00:43:05,880
Speaker 10: Okay.

858
00:43:05,960 --> 00:43:08,080
Speaker 5: So this is at least I have to I have

859
00:43:08,080 --> 00:43:10,000
Speaker 5: to chime in area. This is not only real. This

860
00:43:10,120 --> 00:43:12,359
Speaker 5: is also something that at the golf course at time

861
00:43:12,400 --> 00:43:15,640
Speaker 5: our country club, they have the lawnmowers along the fairway.

862
00:43:15,680 --> 00:43:18,640
Speaker 5: So they basically have saved so much money by basically

863
00:43:18,719 --> 00:43:22,279
Speaker 5: getting these AI programmed lawnmowers to just go back and forth.

864
00:43:22,280 --> 00:43:23,920
Speaker 5: They know how to charge themselves up, come out of

865
00:43:23,920 --> 00:43:26,400
Speaker 5: the charger and just you know, kind of and.

866
00:43:26,800 --> 00:43:29,680
Speaker 6: Cut the lawn, cut the lawn. So it's the same

867
00:43:29,719 --> 00:43:31,440
Speaker 6: thing here. It's and this is even simpler to do.

868
00:43:31,520 --> 00:43:33,040
Speaker 5: I mean, all you're asking is to take a you know,

869
00:43:33,160 --> 00:43:35,480
Speaker 5: for a trash can to you know, leave your garage,

870
00:43:35,520 --> 00:43:37,239
Speaker 5: you know, go to the end of the curb.

871
00:43:37,440 --> 00:43:38,840
Speaker 14: It's a huge pot because we have you know, a

872
00:43:38,840 --> 00:43:39,719
Speaker 14: growing garbage time.

873
00:43:39,760 --> 00:43:41,359
Speaker 6: There's a thing or two about taking the garbage out.

874
00:43:41,320 --> 00:43:41,879
Speaker 4: Right to no.

875
00:43:43,880 --> 00:43:44,440
Speaker 3: Silence.

876
00:43:46,840 --> 00:43:48,759
Speaker 14: That's just one of the things that they're doing. And

877
00:43:48,840 --> 00:43:51,960
Speaker 14: also electric powered garbage trucks, you know, because they're so

878
00:43:52,120 --> 00:43:54,959
Speaker 14: loud sometimes to feel complain about the noise. So could

879
00:43:54,960 --> 00:43:57,560
Speaker 14: be on the way electric powered garbage trucks too. Okay,

880
00:43:58,040 --> 00:44:01,400
Speaker 14: all right, I want to go to the US Open. Okay, yes,

881
00:44:01,440 --> 00:44:04,960
Speaker 14: because Naomi Osaka she advanced, right, But what was actually

882
00:44:05,000 --> 00:44:07,560
Speaker 14: the star of the US Open are her laboo boos?

883
00:44:07,640 --> 00:44:10,960
Speaker 14: Okay she had two of them. They were blinged out. Okay,

884
00:44:11,000 --> 00:44:13,520
Speaker 14: they were very very and she named them after famous

885
00:44:13,560 --> 00:44:15,800
Speaker 14: tennis player tennis players, Okay. The first one is named

886
00:44:15,960 --> 00:44:20,400
Speaker 14: Billy Jean Bling, Okay after Billy Jean King, red rhinestones

887
00:44:20,400 --> 00:44:26,479
Speaker 14: all over it. Another Arthur Flash named after Arthur Ash. Yes, yes,

888
00:44:26,680 --> 00:44:30,120
Speaker 14: there you go, and crusted blue and white rhinestones.

889
00:44:30,200 --> 00:44:30,520
Speaker 6: Okay.

890
00:44:30,520 --> 00:44:32,759
Speaker 14: But she is just another one. You know, all the

891
00:44:32,800 --> 00:44:36,759
Speaker 14: celebrities are h She's they're attached to her bag and

892
00:44:36,800 --> 00:44:39,360
Speaker 14: they each little laboo buo has their own little tiny

893
00:44:39,360 --> 00:44:41,160
Speaker 14: tennis racket. It's the cutest thing ever.

894
00:44:42,880 --> 00:44:45,880
Speaker 2: And this she's like making these endorsing news. It's like her.

895
00:44:46,239 --> 00:44:49,399
Speaker 14: They're like customized for her. But what it's doing, it's

896
00:44:49,400 --> 00:44:52,480
Speaker 14: sparking again the whole la boo boo craze. I mean,

897
00:44:52,520 --> 00:44:53,279
Speaker 14: we've gone so.

898
00:44:53,239 --> 00:44:57,480
Speaker 2: Far from Stan Smith, Rosco Tanner.

899
00:44:58,120 --> 00:45:00,000
Speaker 6: I mean these, I mean all the ones you're wearing

900
00:45:00,160 --> 00:45:00,759
Speaker 6: around their bag.

901
00:45:00,920 --> 00:45:03,600
Speaker 2: Yes, the new Mini one sold out.

902
00:45:03,760 --> 00:45:05,799
Speaker 14: It just came out there, sold out, the Mini ones.

903
00:45:06,880 --> 00:45:07,440
Speaker 14: It's a craze.

904
00:45:07,640 --> 00:45:09,640
Speaker 2: Thank you, Lisa Matteo on the newspapers.

905
00:45:10,440 --> 00:45:15,239
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906
00:45:15,360 --> 00:45:19,640
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907
00:45:19,760 --> 00:45:23,239
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908
00:45:23,320 --> 00:45:27,319
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909
00:45:27,360 --> 00:45:30,719
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910
00:45:30,920 --> 00:45:32,680
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