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Speaker 2: And we begin strong with Sarah Wolf, thrilled that she
Speaker 2: could join us this morning for briefing into this economic
Speaker 2: data and PC. Sarah, I want to get back to
Speaker 2: first principles CPI inflation course CPI, there's business inflation. What
Speaker 2: is PC? Why do I need a PCE index if
Speaker 2: I already have a CPI index.
Speaker 3: I love that question. You're really getting down to the basics.
Speaker 4: So CPI, if we remember from econ one oh one,
Speaker 4: is everything that you pay out of your own pocket.
Speaker 4: It's your basket of goods that comes out of your wallet.
Speaker 4: PCE is a more encompassing measure, so it incorporates everything
Speaker 4: you pay out of pocket, and.
Speaker 3: Then things that get paid on behalf of you.
Speaker 4: So think about healthcare insurance, so PC would capture a
Speaker 4: larger weight for health care insurance.
Speaker 3: Or think about it if you're in the military.
Speaker 4: The clothing that's purchased for you, and so the FED
Speaker 4: does like to look at PC as the preferred measure
Speaker 4: because it is a broader measure of inflation.
Speaker 2: Is the disinflationary vector broken? Has it snapped to where
Speaker 2: we're leveling or can you dare say, give me an
Speaker 2: inflationary vector before this report?
Speaker 4: I mean, we're just at the early days of getting
Speaker 4: the reacceleration and inflation.
Speaker 3: I think that we could agree that.
Speaker 4: You know, when we thought back to April, when we
Speaker 4: thought inflation data would start to accelerate off terraffs, we
Speaker 4: all thought, oh.
Speaker 3: The summer and then and then it'll be over.
Speaker 4: The reality is is that what we've heard from from
Speaker 4: earnings from companies is that inventory building was actually a
Speaker 4: lot stronger in the second quarter and that's helped keep
Speaker 4: prices low or through the summer, and that the price
Speaker 4: pressures are just starting to.
Speaker 3: Trickle through right now.
Speaker 4: We're really going to be getting more of that pressure
Speaker 4: in the coming month. So we're looking for a point
Speaker 4: three percent, which is an acceleration relative to the recent trend,
Speaker 4: but it's fairly mild. Uh, We're going to see that
Speaker 4: pick up and trend in that three month annualized pace, which.
Speaker 3: Is going to start to accelerate higher.
Speaker 5: Sarah, All morning, We've been talking to me or Chanda
Speaker 5: and JP Morgan win Thin, We've been talking to Katie
Speaker 5: Kati Kaminsky of Appa Simplex. We've all been talking about
Speaker 5: the potential for inflation in the US to diverge between
Speaker 5: Europe or let's just call it the rest of the world.
Speaker 5: You know, I'd like to hear your thoughts on that.
Speaker 5: I mean, should I be buying Oba glacio? Should I
Speaker 5: be buying basically French show it's on, you know, some
Speaker 5: of the things we're seeing between Germany and France here.
Speaker 2: What do you say, Sarah, excuse me, he's out of control.
Speaker 5: Well, I'm somebody's talking about you know, I'm trying to
Speaker 5: pronounce them.
Speaker 2: Sarah, I think you.
Speaker 4: I think you bring up a good point that what's
Speaker 4: happening with tears is twofold. First of all, businesses in
Speaker 4: the US are having to pay for a lot of
Speaker 4: these cares. So instead of businesses overseas that are exporting
Speaker 4: to the US taking the burden of the cost, a
Speaker 4: lot of that is hitting US businesses and in turn
Speaker 4: getting passed through to consumers.
Speaker 3: So more of that price effect showing up in the US.
Speaker 4: Add on top of that that we've seen a devaluation
Speaker 4: in the dollars appreciation and so that's.
Speaker 3: Not helping with the inflation story in the US.
Speaker 4: And actually that's appreciation and the dollar is keeping prices
Speaker 4: lower among our trading partners relative to the US.
Speaker 2: What's your twelve months forward inflation number, CPI, before we
Speaker 2: do PCE, what's your statistic twelve months forward?
Speaker 3: So twelve months forward, we're looking at inflation that's probably
Speaker 3: still somewhere around two and a half to three percent.
Speaker 4: So we're getting that reacceleration, but it's going to be sticky,
Speaker 4: I think coming back down. It's really also going to
Speaker 4: depend on how much weakening we see in the economy.
Speaker 4: If we see persistent weakening through twenty twenty six, we
Speaker 4: could get that downward drag coming through the services.
Speaker 3: Channel, say more likely than now.
Speaker 4: We're actually going to be getting some reacceleration and growth
Speaker 4: going into twenty twenty six, just as these prices are
Speaker 4: picking up because you're getting the one big beautiful bill stimulus,
Speaker 4: you're getting the AI backstory.
Speaker 2: But I don't think i've ever seen the survey that
Speaker 2: matches the excuse a study that matches a survey like
Speaker 2: we've just seen Sarah Wolf with us here. Sarah, I
Speaker 2: don't know if you saw this. Thank you to Bloomberg
Speaker 2: Television for alerting me on it. But folks, Canada GDP
Speaker 2: came in with stunning, stunning statistics. There's no other way
Speaker 2: to put it. Second quarter Canadian GDP, the forecast was
Speaker 2: a negative zero point seven and they came in at
Speaker 2: negative one point six. They came in with a lesser inflation.
Speaker 2: Sarah Wolf, this is a global US inflation report. How
Speaker 2: does Morgan Stanley see this mixing out in the next
Speaker 2: tour or three quarters? Is going to be a global
Speaker 2: slow down combined with in America that's resilient.
Speaker 4: I mean, the reality is is that there's going to
Speaker 4: be certain economies that are way more affected by US
Speaker 4: terriffs and the spillover from the slowdown we're seen in
Speaker 4: the US. Canada being one of the number one countries
Speaker 4: that are going to be affected. As one of our
Speaker 4: closest trading partners, you know, over twenty percent of our
Speaker 4: exports go to Canada and way more of Canadian exports
Speaker 4: go to the US, I think somewhere around eighty percent,
Speaker 4: and so we're seeing that that spillover is going to
Speaker 4: global growth, but I think largely a big hit of
Speaker 4: it is going to be felt within the US that
Speaker 4: we are going to bear the brunt of the terraffs
Speaker 4: slow down because as I mentioned earlier, businesses in the
Speaker 4: US are pushing that price through to US consumers.
Speaker 3: And other consumers. So think about in Europe, they're actually
Speaker 3: getting a deflationary impulse from the slow down.
Speaker 4: And so I do think that that's worth noting that
Speaker 4: the US is going to slow down and it's to
Speaker 4: take Canada and Mexico probably with it in this in
Speaker 4: this economic deceleration.
Speaker 5: Well, Sarah, I think you hit the nail on the
Speaker 5: head here. Listen to this one. Experts on annualized from
Speaker 5: the US into Canada fell twenty seven percent on the quarter.
Speaker 6: That is a huge, huge miss.
Speaker 5: And you're seeing dollar CAD rise off the back of this,
Speaker 5: although not so much a little bit of spike here.
Speaker 5: But you know, talk to us about what this means
Speaker 5: for the dollar narrative. If you start seeing GDP in
Speaker 5: some of the US's largest trading partners coming off to
Speaker 5: that extent, you know, do you expect the dollar to
Speaker 5: rally or falling that news.
Speaker 4: I mean, it's all about how we are relative to
Speaker 4: cern economy. So the US pad might appreciate, but if we.
Speaker 3: Think about the trade that investors are.
Speaker 4: Going to be putting on the US euro for example,
Speaker 4: that we're still seeing a relatively better situation in Europe
Speaker 4: and so there's going to be a little bit more
Speaker 4: of a diversified trade. There's still room for the dollar
Speaker 4: to depreciate further as the tear story starts to materialize.
Speaker 4: So I wouldn't discount the fact that just because we're
Speaker 4: getting a bit of a rally and the dollar off
Speaker 4: of this weeker using Canada, that that's going to be
Speaker 4: the new up trend. I think as we start to
Speaker 4: get the slower numbers, the weaker numbers coming in from.
Speaker 3: The US paired with a better situation coming in from Europe,
Speaker 3: so they're going to be able to cut interest rates more,
Speaker 3: we could get further dollar depreciation.
Speaker 2: So you guys do brilliant work. I mean, the legacy
Speaker 2: here of Stephen Roach and Richard Berners has been identified,
Speaker 2: and the Morgan Stanley excellence of Seth Carpenter and all great.
Speaker 2: Do you guys care what the price of beef is
Speaker 2: at the grocery store.
Speaker 3: It matters to the extent that it's hitting consumer wallets.
Speaker 4: Of course, we like to strip out food and energy,
Speaker 4: and Corea.
Speaker 2: Strives me nuts. Lisa, Can you set out food and
Speaker 2: energy over the next month? Come on, Sarah, Nobody except
Speaker 2: fancy people like you strip out food and energy.
Speaker 3: As a consumer economist, I agree with you. The food and.
Speaker 4: Energy are the most important components that go into the
Speaker 4: basket when you think about the everyday consumer and how
Speaker 4: they prices. Right, So, if you actually look at what
Speaker 4: drives inflation expectations, which seems to be the only thing
Speaker 4: that the FED really is focused on right now, the
Speaker 4: number one driver of inflation expectations is retail gas prices
Speaker 4: and the price of a carton of eggs and a
Speaker 4: box of milk, because those are the most salient prices,
Speaker 4: and so you could add on to that other things,
Speaker 4: other stables people like to buy, like the price of beef.
Speaker 4: And so if we see an acceleration in these other components,
Speaker 4: that does start to feed through into inflation expectations and
Speaker 4: become a real concern for the FED.
Speaker 2: We're commercial free for you into the top of the arm.
Speaker 2: Michael McKee will join us here in a bit, you
Speaker 2: lend us show the table, will join us as well.
Speaker 2: But right now we're looking it's not a cart and
Speaker 2: the milk. It's like, give me some one percent. Come on,
Speaker 2: Danian Larry Kudlow became famous.
Speaker 5: Tom Sarah and I both strip out tomatoes, onions, and
Speaker 5: potatoes when we're looking at inflation. In India, you have
Speaker 5: to do it. They call them top. It's often referred
Speaker 5: to as top tomatoes, onions, potatoes get stripped right out.
Speaker 6: But Sarah, I have to ask you absolutely.
Speaker 2: You're you're a font of with Oh we have seris,
Speaker 2: we can. Why don't you bring in Elena.
Speaker 5: Elena show you tel a former Bloomberg colleague of mine. Elena,
Speaker 5: Welcome to Bloomberg Surveillance. Let's talk a little bit about
Speaker 5: the inflationary pressures that are emanating from China to the
Speaker 5: rest of the world.
Speaker 6: What are your thoughts there?
Speaker 7: Well, I think that we can just quickly cover it
Speaker 7: and all go home, because that was largely as expected
Speaker 7: write this report. But seriously speaking, I think that today's
Speaker 7: report doesn't add much in terms of the new information.
Speaker 7: We already knew that consumers are still holding up. They
Speaker 7: are spending on goods, So goods spending increased by zero
Speaker 7: point nine percent in July, and we spend lesson services.
Speaker 8: So that is telling me that consumers are getting.
Speaker 7: Becoming more choosy in what they need to spend one.
Speaker 8: They are stocking up again.
Speaker 7: Look at the advanced report that also came out along
Speaker 7: with the data on inflation, we saw a huge increase
Speaker 7: in imports. So I think we have some kind of
Speaker 7: a dija here, because you know, we're talking up again
Speaker 7: ahead of the set of times.
Speaker 2: Elina show Tavy whether us with the conference board, the
Speaker 2: senior economists there, Elena, let me ask you dumb. It's
Speaker 2: sound like Damien Woods us. I'll ask a dumb question.
Speaker 2: On a scale of zero to one hundred, where we
Speaker 2: say the tariffs have been passed on to the consumer
Speaker 2: in America. Where are we on that continuum from zero
Speaker 2: to one hundred. Are we like a ten where it's
Speaker 2: barely in effect or fifty midpoint or is there now
Speaker 2: becoming a huge effect of tariffs on our listeners and viewers.
Speaker 7: I think we're in the early stages of that, and
Speaker 7: Sarah was referring to that as well earlier. I think
Speaker 7: we're in kind of like a twenty to thirty percent
Speaker 7: on that scale probably, you know, look at what is happening.
Speaker 7: So today we get an expiration of the Deminimus text
Speaker 7: tariff exemption. So that alone, according to the Conference Board
Speaker 7: research we published earlier this year, will add a few
Speaker 7: tenths of a percent to PC inflation later on this year.
Speaker 7: I think that is an important thing as well. So
Speaker 7: I think that, yeah, we stalked up inventory with cheaper
Speaker 7: inventories earlier this year, and now it's just the time
Speaker 7: when we're going to start seeing inflationary pressure. So I
Speaker 7: think they will continue to build into the end of
Speaker 7: the year and going into the next.
Speaker 5: Lena, Sorry about that, Elena. You know, I know you
Speaker 5: we could stick to the US here, but I'm going
Speaker 5: to talk about Canada here because this GDP print was
Speaker 5: pretty surprising to the downside that we just got at
Speaker 5: eight thirty this morning, and you know, we're seeing growth
Speaker 5: kind of you know, coming in a little bit across
Speaker 5: the board, and I'm seeing central banks literally across the
Speaker 5: board from Mexico to the UK, poland perhaps next week,
Speaker 5: the Philippines this week they're cutting rates. Are we missing
Speaker 5: something that other countries are seeing. Is growth slowing more
Speaker 5: quickly in some of these other nations and is that
Speaker 5: why the central banks are acting so aggressively.
Speaker 7: Well, you have to like when you disrupt the system,
Speaker 7: and that's what we see, right with all the new
Speaker 7: policies and the policy actions, something will break somewhere, right,
Speaker 7: so and you have to react to that. I just
Speaker 7: don't think that in terms of the US, we are,
Speaker 7: you know, heading into some kind of a downturn at
Speaker 7: this point. I think growth in the US is still
Speaker 7: solid despite all the disruptions, and it's a very tough
Speaker 7: choice for the FED what to do the next meeting
Speaker 7: and going forward.
Speaker 2: We continue with you, Lena show TeV at the conference board,
Speaker 2: bandmarkets showing higher yields ten yure up a solid three
Speaker 2: basis points four point twenty three percent, thirty year one
Speaker 2: nine at five percent four point ninety one percent. Equities
Speaker 2: do better than before before the eight to thirty report,
Speaker 2: moving from negative twenty five futures about now negative eighteen futures.
Speaker 2: The Vics fourteen point five six with Julina Schilitzeva, Damian
Speaker 2: Sasor Damien.
Speaker 6: Yes, Elena.
Speaker 5: I mean, look, we've been talking all morning about the
Speaker 5: impact of inflation on growth, the impact of inflation on
Speaker 5: pretty much, you know, some of these local economies, not
Speaker 5: just in the US but abroad. But what I really
Speaker 5: want to get a sense of what are you seeing
Speaker 5: on the ground here, you know, I mean just real economy,
Speaker 5: is the real purses in the pocketbooks that are being
Speaker 5: you know, I mean, do you see consumer discretionary spend
Speaker 5: coming down here in the US or is there potential
Speaker 5: for surprise to the upside?
Speaker 2: Still?
Speaker 7: I think we are we see a slowdown, and based
Speaker 7: on our conference board consumer confidence data, you do hear
Speaker 7: a lot of concerns about inflation and how that will
Speaker 7: impact consumers going forward.
Speaker 8: So look at this report again this morning. So services were.
Speaker 7: Pretty weak, even though goods spending rebounded from its tep
Speaker 7: it pace based in the second quarter of this year.
Speaker 7: So that tells me that, you know, consumers are really
Speaker 7: facing tough choices. They have to spend more on food
Speaker 7: and things like that that are necessities, and you know,
Speaker 7: they have to forego what could be a discretionary spending
Speaker 7: like going to Disney World or other things.
Speaker 2: EULENUS, thank you so much. Let me show the tab
Speaker 2: at the conference point with this office key economic data.
Speaker 2: I do want a reviewer. We really focused on PCE
Speaker 2: Lisa Matteyo with that great effort at eight thirty. Personal
Speaker 2: income came out on plan. I don't have a revise
Speaker 2: number of personal spending. I do have a revision. It
Speaker 2: came in on plans zero point five percent, but a
Speaker 2: more buoyant prior eating of zero point three moves to
Speaker 2: zero point four. So again it's that tendency to that
Speaker 2: word solid economy dealing. You know, I was on the
Speaker 2: horse out with Joe and Tracy at Jackson Hole. They
Speaker 2: got me one of the Clydesdale trigger was great. I
Speaker 2: didn't fall off, which was half the battle. Somebody who
Speaker 2: actually rides a horse at Jackson Hole and is like gifted.
Speaker 2: Michael mckeey, Michael McKee head of all of our economics,
Speaker 2: before we dance into what we're doing right now, your
Speaker 2: single vision, your summary of your effort out west this summer.
Speaker 9: It was quite interesting and also somewhat unnerving because there
Speaker 9: was this palpable sense of worry about what's going on
Speaker 9: with an independence and then of course Tom as you saw,
Speaker 9: there was a massive security presence there, massive.
Speaker 2: Security presence, but the unnerving part into September October November.
Speaker 2: What are you watching in the data that leads to
Speaker 2: a stuff body of that unnerving.
Speaker 9: Well, if we're talking about it in that sense, we're
Speaker 9: talking about what the FED is going to do a September, October, November, September, November,
Speaker 9: December meetings. And in this case we're looking at the
Speaker 9: inflation numbers and the jobs numbers.
Speaker 10: And it was interesting to hear.
Speaker 9: Chris Waller last night suggests a footnote that they're also
Speaker 9: following the ADP numbers and they have shown deterioration. They
Speaker 9: get the ADP numbers on a weekly basis and use
Speaker 9: them to form their own okay index, and they have
Speaker 9: been deteriorating since the last job's report.
Speaker 2: And this is Waller's Reelhouse started Damien with this was
Speaker 2: a question about mister Waller. Now he's popping fifty beeps.
Speaker 2: Talk back down to twenty five basis point. With this
Speaker 2: economic study this morning, it screams moderation by the Fed,
Speaker 2: doesn't it?
Speaker 10: Not? Necessarily?
Speaker 2: I got that wrung, Damian. Please.
Speaker 9: What we do see is is some spending increase on
Speaker 9: automobiles drove much of the increase overall, and automobiles, spending
Speaker 9: is expected to drop off some because the tariffs are
Speaker 9: going to affect and the auto companies have said they're
Speaker 9: going to be raising prices once we get to the
Speaker 9: twenty twenty six model year. Now I don't know exactly
Speaker 9: what that means, but you two are old enough like
Speaker 9: me to know that it was always when the football
Speaker 9: season started, they started the new car ads for the
Speaker 9: new year. So somewhere around this time or.
Speaker 5: Well, you know what, Mike, here's the thing. I'm looking
Speaker 5: at the PC data. I'm looking at soondy A's GDP data,
Speaker 5: and it's all on the screws. There's no news here.
Speaker 5: There's nothing really here. When I want to ask you
Speaker 5: is let's look forward one week from today when NFP
Speaker 5: comes out, and I want to ask your humble opinion here,
Speaker 5: your gut check here. You know, just a few months back,
Speaker 5: we were looking at peril prints of the one fifty
Speaker 5: one to seventy elk. Now we're looking at a consensus
Speaker 5: estimate of what seventy four thousand added last scored last month.
Speaker 5: Talk to us about that shift, that change, and are
Speaker 5: the market suggesting that properly? Is that you know a
Speaker 5: precursor to something more notorious here in these markets.
Speaker 9: Well, there's two numbers that the FED has got to watch.
Speaker 9: One is the number of jobs created, and that has
Speaker 9: slowed tremendously, and the expectation is that it will continue
Speaker 9: to do so. But they are also following the unemployment rate,
Speaker 9: and that is the sign they have for what's happening
Speaker 9: to the overall economy. If people start losing jobs, they're
Speaker 9: much more worried. And at this point, to this point,
Speaker 9: it hasn't moved very much or very quickly. The issue is,
Speaker 9: and Waller brought this up last night, is where what
Speaker 9: is causing this? Is it because we're seeing no entrance
Speaker 9: into the labor force because immigration has been cut off,
Speaker 9: or is it because companies are holding on to workers,
Speaker 9: which is sort of the It's kind of a combination too,
Speaker 9: is the general consensus.
Speaker 10: But Waller thinks it's not so much immigration. You have
Speaker 10: two questions.
Speaker 2: First, one is important, Okay, the unemployment rate right now
Speaker 2: geist on global Wall Street and particularly Manhattan and Wall Street.
Speaker 2: Is anybody modeling out over five percent out there somewhere?
Speaker 10: I have not seen over five percent.
Speaker 9: I have seen four point five to four point six
Speaker 9: and that would be considered.
Speaker 2: And this is because it's all immigration influenced.
Speaker 9: Well, yeah, your denominator would change, and that would make
Speaker 9: the unemployment rate hold steady if there's nobody entering the
Speaker 9: labor force. So that's the question is what's going to
Speaker 9: happen with the labor force size there? But the Fed
Speaker 9: is less concerned tom with an overall level than they
Speaker 9: are with how fast it goes up, because it's when
Speaker 9: unemployment starts to rise, it starts to rise much more
Speaker 9: quickly because lots of companies are going to be laying
Speaker 9: off people because they see a problem in the economy.
Speaker 10: And that's what we have to keep an eye on.
Speaker 2: Okay, nobody cares. All they care about is this is
Speaker 2: like make a movie like we need like Kevin Costner
Speaker 2: tonight at Fenway. We need James Earl Jones in the stands, right,
Speaker 2: you know, with the with the if you build it,
Speaker 2: They'll come or whatever feel the dreams. I mean, are
Speaker 2: you kidding me? Mike? We got the number one pitcher
Speaker 2: in baseball showing up in the Red Sox have joined
Speaker 2: the Hollywood trade. I don't know how to pronounce his
Speaker 2: last name. Peyton Coyle am I close to the picture.
Speaker 10: Close.
Speaker 2: Yeah, I'm somewhat close. He's the second round pick out
Speaker 2: of TCUs. It's like he was playing rookie league earlier
Speaker 2: in the season. A ball double, a ball triple A.
Speaker 2: The kid comes in tonight. It's got to be sold out.
Speaker 2: He's going up against the stud I mean, it's like
Speaker 2: the movies, Mike.
Speaker 10: I suppose it is.
Speaker 9: But this is one of the most interesting times of
Speaker 9: the year for stuff like this. What you're he's actually
Speaker 9: coming up a little early because it's September one when
Speaker 9: they can expand their rosters, so they're gonna.
Speaker 2: See what they got here, Damien. Here's the quote from
Speaker 2: Ken Rose. The last picture to see such almost as
Speaker 2: quick a rise is the man he's facing Paul Theater.
Speaker 6: Well, I look, I look.
Speaker 5: I think what the Red Sox are two and a
Speaker 5: half games up on the wildcard. I think the Youanks
Speaker 5: are two games up on the wildcard?
Speaker 6: Is that right?
Speaker 2: The Blue Jays?
Speaker 5: Yeah, but we're not going to catch them. We're looking
Speaker 5: for one. We're just trying to get a wildcard bid here.
Speaker 5: But I think that is it's just going to be
Speaker 5: an interesting Uh, It's going to be an interesting postseason.
Speaker 5: If you have the Blue Jays, the Red Sox and
Speaker 5: the Yankees all you know, dueling it out with who,
Speaker 5: the Astros, the Tigers.
Speaker 2: You know, you.
Speaker 9: Look at like stub Hub and you see what the
Speaker 9: resale prices are. Yeah right, they're going up for all
Speaker 9: of those teams. That's exactly right at Fedway. Interesting thing
Speaker 9: about Peyton Tall is that he's six or six, so
Speaker 9: he would look Tom right in the eye.
Speaker 2: Wow.
Speaker 6: You know, Tom is not a small person.
Speaker 2: I went to a Dwight Yoakam concert and I said,
Speaker 2: directly behind Roger Clemens and he could barely get in
Speaker 2: the chair. He's so big. These guys are huge, huge bike.
Speaker 11: Yeah.
Speaker 2: Commit I did a thing with Derek Jeter and Alec
Speaker 2: Riguez once at the Marriott. They're like, they're like, you
Speaker 2: know my height, but they're twice the size.
Speaker 6: Yeah, no, I know, enormous.
Speaker 2: We get thirty seconds. Arnold'st Chapman best signing ever.
Speaker 10: Oh no, not the best signing ever, but a good signing.
Speaker 6: Uh, I mean, okay, we would say Baby Ruth was
Speaker 6: the best signing ever.
Speaker 10: Well you could argue thank you for that, Okay, And
Speaker 10: the worst trade ever.
Speaker 2: Lisa's this's been enough baseball talk, please okay Michael McKee
Speaker 2: with the economics.
Speaker 6: Passed out behind the water.
Speaker 2: Supportant here is Damien asked the right question as it
Speaker 2: moves us on to non firm payrolls and to inflation.
Speaker 2: We'll be bringing you that data if we survived Labor Day.
Speaker 2: Stay with us. More from Bloomberg Surveillance coming up after this.
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Speaker 2: Good pull naudo ho, Damien says Sorr with this, this
Speaker 2: is your wheelhouse as we go into Mirahandon dollar, Indian
Speaker 2: Rupia out to an eighty level. Oh Indian okay, yeah,
Speaker 2: in India, Okia Rupia whatever, it's gone from forty to ninety.
Speaker 2: This is a This is a devaluation of a major
Speaker 2: world's currency, isn't it Well?
Speaker 5: I mean, I think you know when you're talking about
Speaker 5: em currencies, and that's not Mira Chandon's wheelhouse. One binary
Speaker 5: clear she controls euro US dollar, the number one cross
Speaker 5: on the planet for JP Morgan that's her wheelhouse, and
Speaker 5: we're gonna ask her about G ten effects.
Speaker 6: Not em so much, but I understand, you know, as
Speaker 6: an extension of what you're saying, this.
Speaker 2: Is like Trump economics, Trump political theory having a reaction
Speaker 2: to somewhere.
Speaker 6: Absolutely right.
Speaker 2: Mari Shannon joins us JP Morgin here is Damien lectures
Speaker 2: me on the larger currencies. Me, let's just get to
Speaker 2: the JP Morgan call. When you synthesize Kasmi economics and
Speaker 2: look at all your work in Europe, strong euro or weak.
Speaker 12: Euro, definitely stronger even from here we've been we've been
Speaker 12: calling for the one twenty two yo dollar forecast on
Speaker 12: the upside.
Speaker 2: Yeah, I think that's that's as strong as we've seen
Speaker 2: here is Well, where is the tariff dynamic? Now? Are
Speaker 2: we nuances in tweaking or do you anticipate other major
Speaker 2: announcements into September?
Speaker 12: The tariff We've we've been in macromarkets, been dealing with
Speaker 12: the tariff announcements and the potential for tariff announcements for
Speaker 12: almost more than a year now.
Speaker 3: So I think it's.
Speaker 12: Fair to see a lot of the businesses were prepared,
Speaker 12: a lot of the economists had already bigged this into
Speaker 12: their forecast. What we've see now is because the tariff
Speaker 12: implementation has taken longer than most people had expected, it's
Speaker 12: been a longer drawn out of pair. What you're actually
Speaker 12: seeing is that the growth forecast had gotten too pessimistic
Speaker 12: and now you're actually seen.
Speaker 3: Upside revisions to growth outlook.
Speaker 12: Obviously, there's more stuff in the pipeline, there's sectoral talis
Speaker 12: that can can take a bite out of growth, But
Speaker 12: as far as we've seen it right now, things right now,
Speaker 12: it does look like European growth is on a stronger footing,
Speaker 12: and it's certainly an improvement relative to last year, which
Speaker 12: is not the same for the US.
Speaker 5: Mira. I would love nothing more than to ask you
Speaker 5: about real yield differentials, growth differentials, fed credibility here with
Speaker 5: cook eurofiscal spending. But the number one question in my
Speaker 5: mind is why is it taking you so long to
Speaker 5: come on the show here with me and Tom? Because
Speaker 5: is it the at any rate podcast? Because I know
Speaker 5: it's taking up a lot of your time. By the way, Tom,
Speaker 5: it is the best. It is a Musclessen. I mean,
Speaker 5: every new episode is better than any of this podcast
Speaker 5: any rate. GP Morgan's podcast. It is an incredible property.
Speaker 5: Congratulations on that.
Speaker 2: Cool.
Speaker 5: But now that I have you here, Mirah, because I
Speaker 5: am such a huge fan, I want to ask you
Speaker 5: about euro dollar because at the beginning of this year,
Speaker 5: you know, it was tough to find anyone calling for
Speaker 5: a stronger euro. I mean, we were at one o
Speaker 5: two and many expected the cross to test parody. Today
Speaker 5: we're at one seventeen. You're calling for one twenty two.
Speaker 5: We're already up a full thirteen percent year to date
Speaker 5: and it's only August or end.
Speaker 6: Of AUGUSTA talk to us a little bit about the call.
Speaker 5: You know what's going to drive you know, euro dollar
Speaker 5: two and twenty two over the near term.
Speaker 12: Yeah, I mean the big the big game changer to
Speaker 12: be fair at this, you know, in March was the
Speaker 12: German fiscal u turn.
Speaker 3: Before that, if we.
Speaker 12: Spoke about the euro dollar call, I would have said,
Speaker 12: we'll get tarifs you Arizona count.
Speaker 3: Leaf do anything about it.
Speaker 12: All we're going to get is ecb raid cuts and
Speaker 12: you're a dollar is going to plummet and it's not
Speaker 12: really going to fix the growth problem. Now we've got
Speaker 12: the German fiscal in play, it hasn't even arguably started
Speaker 12: to hit the numbers yet, but it is some pointing sentiment.
Speaker 12: And uh so you have a lot of underlying resilience.
Speaker 3: To the trade war, so to speak.
Speaker 12: Secondly, what we're seeing is that that has been a
Speaker 12: US catchdown story. Now US grew are two twenty eight
Speaker 12: percent last year this year projected to grow, you know,
Speaker 12: just one and.
Speaker 3: A half percent.
Speaker 12: Is it is growth falling off a cliff, No, but
Speaker 12: it is catching down. Meanwhile, you're U two at twenty
Speaker 12: eight last year and we're thinking closer to one and
Speaker 12: a half percent. So it's about this growth convergence story
Speaker 12: in a way, and the real yeals you know, aspect.
Speaker 12: I think it captures a lot of the things that
Speaker 12: you mentioned. Look, we're looking at two year if you
Speaker 12: look at you know, shorter tenors, real yields in the US,
Speaker 12: we're at we're at almost two two and a half
Speaker 12: year lows. And that has happened in part because the
Speaker 12: market is pricing in and lower fed terminal, but also
Speaker 12: inflation expectations have gone up.
Speaker 6: At the end of the.
Speaker 12: Adjusted for inflation, you are seeing a deterioration in the
Speaker 12: dollars fundamentals, which is really the key driver here, and
Speaker 12: it is suggesting you're.
Speaker 3: A dollar going further.
Speaker 12: Particularly fed independent is an issue that is constrained on
Speaker 12: what they can do.
Speaker 5: Well, Mira, you mentioned real yield differentials, and you really mentioned,
Speaker 5: you know, have things changed in Germany earlier this year,
Speaker 5: and how that sort of catalyzed your call. But I
Speaker 5: got to point your direction and the post Liberation day
Speaker 5: FX hedge flows, right, You've written about this extensively, how
Speaker 5: dour hedging from foreign investors into the US queen market
Speaker 5: has been driving at the margin a lot of what
Speaker 5: you're seeing in your dollar. Is that going to continue?
Speaker 5: Candid continue? And more importantly can it accelerate?
Speaker 12: So me actually, the challenge with the hedge ratio data
Speaker 12: is that you don't get it on a tandy manner.
Speaker 12: There are some countries that do release it on a
Speaker 12: timely manner, you know, like like Denmark for example. We
Speaker 12: do get this data. It's publicly available, and what he's
Speaker 12: seen is for the last three months after that initial
Speaker 12: adjustment and the FX hedge ratio higher, for the last
Speaker 12: three months they've been basically unchanged. So there is this
Speaker 12: chatter of well, have the hedge ratios flows that you know,
Speaker 12: dried up. I think this is really a result a
Speaker 12: consequence of the fact that the dollar has been in
Speaker 12: arrange in recent months as well.
Speaker 3: Well.
Speaker 12: We haven't really seen this breaklower a week er and
Speaker 12: the dollar that people have.
Speaker 8: Been calling for.
Speaker 12: And what that means for the hedgers is that there's
Speaker 12: no real urgency or catalysts to get them to chase
Speaker 12: price action if you think that is going to.
Speaker 2: Be Marri Chandon with us at JP Morgan this morning.
Speaker 2: We welcome all of you across the nation. Yeah, we're
Speaker 2: sliding into the Labor day weekend. Mirra Shandon's working, no
Speaker 2: doubt the spanking new JP Morgan building. Damien Sansaradai are
Speaker 2: here with Lisa Mateo and Michael Barr. Good morning on YouTube.
Speaker 2: We're really pushing this into the autumnal season from your
Speaker 2: office from home. Consider YouTube a new digital media mirror.
Speaker 2: This is really important and Damien alerted me to it.
Speaker 2: That's why he's here. William Harbin and Alexander Weber for
Speaker 2: Bloomberg have a great chart at this moment, a French, Spanish,
Speaker 2: an Italian inflation comes in below forecast, and all you
Speaker 2: need to know is there's next to no inflation, and
Speaker 2: you're mirror I wanting you to synthesize again the global J. B.
Speaker 2: Morgan view of China imputing deflation or at least the
Speaker 2: trend of disinflation worldwide. How large is that potential for
Speaker 2: a Chinese deflation to affect our listeners and viewers.
Speaker 3: I think it's going to be a dominant factor.
Speaker 12: And in fact, post Liberation Day, the biggest you know,
Speaker 12: for currencies, we care about differentiation, you know, we care
Speaker 12: less about things when they're moving the same direction. So
Speaker 12: with Liberation Day, the biggest source of differentiation that we
Speaker 12: got among countries was tatiffs are universal that US is applying.
Speaker 12: It's inflationary for the US, it's deflationary for.
Speaker 3: The rest of the world.
Speaker 12: And I think that's the part that really I think
Speaker 12: became a thorne on dollar side. Essentially, you have a
Speaker 12: situation where you've got inflation expectations going up, growth moderating
Speaker 12: the FED, and a sticky situation can be should we eased,
Speaker 12: should be produtized, growth, should be product inflation that as
Speaker 12: a set southside are getting a deflationary impulse or inflation
Speaker 12: is less of a big deal, and in fact they're
Speaker 12: doing fiscal policy as well physcal spending.
Speaker 3: So your monc.
Speaker 12: Policy makes is ready grow supportive outside of the US.
Speaker 2: Well, you just heard there from Maria Channon, Folks. Is
Speaker 2: your conversation for September, October and into twenty twenty six. Damien,
Speaker 2: I think there's nothing greater than this. This goes back
Speaker 2: to Thatcher expect the unexpected. I'm looking at bananas. Have
Speaker 2: you seen beef prices? I mean we're eating tofu. To Lisa,
Speaker 2: are you having to food Labor day weekend mirror? Channon's
Speaker 2: eating tofood? Yeah, okay, you can't afford beef. We're all
Speaker 2: mental about inflation, and is Damien sansar or mirroa Channon
Speaker 2: suggests disinflation globally is the real story.
Speaker 6: Yeah, it is.
Speaker 5: And for me, it's just look to emerging markets. And
Speaker 5: I know it's not your remit mirror, but I look
Speaker 5: at emerging markets and today's char pack that I just
Speaker 5: put out. I looked at the nineteen major emerging markets,
Speaker 5: and these central banks have injected one thousand, four hundred
Speaker 5: and seventy five basis points of SMUs into their markets
Speaker 5: over the past year or alone. Yet twelve of nineteen
Speaker 5: I've seen two year real yields rise over the last year,
Speaker 5: and eighteen of nineteen are well in positive territory. I'm
Speaker 5: talking on two year basis, so you know, we are
Speaker 5: seeing actually emerging market resilience, if anything picking up in
Speaker 5: this environment.
Speaker 6: Are you surprised about that?
Speaker 3: Absolutely? I mean it makes a lot of sense.
Speaker 12: And in fact, if you look at more of the
Speaker 12: fundamental details as well, things like overall indebtedness of the government,
Speaker 12: the external balances, you know, the kind of account deficits,
Speaker 12: the physical deficits are in much better.
Speaker 3: Shape in EM.
Speaker 12: So yeah, I mean that the policy makes it more positive,
Speaker 12: and some of the underlying fundamentals, one could argue, are
Speaker 12: more positive as well. So nobodybody's overly excited about growth
Speaker 12: in EM and in Europe. I think the key differentiator
Speaker 12: here is that US is looking less attractive and the
Speaker 12: rest of the world.
Speaker 3: Is actually showing resilience.
Speaker 12: In some silver linings.
Speaker 2: Mirror are you into the new office, shows A P.
Speaker 5: Morgan, He is in London, London, you're in London.
Speaker 6: They're out of the US to US rates. But now
Speaker 6: global effects.
Speaker 2: Yeah, I can understand. Miraa, Thank you so much. Don't
Speaker 2: be a stranger. This is usually wonderful to stay with us.
Speaker 2: More from Bloomberg Surveillance coming up after this.
Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday
Speaker 1: starting at seven am Eastern on Applecarplay and Android Auto
Speaker 1: with the Bloomberg Business app. You can also watch us
Speaker 1: live every weekday on YouTube and always on the Bloomberg terminal.
Speaker 2: Right now, to get the market open, we're going to
Speaker 2: go back to economics and talk to someone who's just
Speaker 2: absolutely exquisite at this Francis donald Is at the Royal
Speaker 2: Bank of Canada RBC. Francis, I've got to migrate and
Speaker 2: do an audible over to your Canada this morning. Were
Speaker 2: you surprised by the Canadian economic data amid this trade war?
Speaker 13: Well, you might have seen Canadian growth fell sharply in
Speaker 13: the second quarter, but of course it did. Most economies
Speaker 13: are still experiencing sizable distortions to the trade war.
Speaker 8: Business sentiment was down. Is that a big surprise?
Speaker 13: And trade data is continuing to produce some very big
Speaker 13: dislocations globally, so not a big surprise. What's more of
Speaker 13: a surprise with Canada is I think on getting into
Speaker 13: year end, we're going to see some sizable improvements in
Speaker 13: the Canada story.
Speaker 2: Later Q three into Q four. What part of our
Speaker 2: economy should our listeners and viewers study? Is it consumption?
Speaker 2: Is it an investment? Something different?
Speaker 13: I actually have been surprised how different my own economic
Speaker 13: presentations have been for clients as we think about where
Speaker 13: is the US economy? It's been so interesting to me
Speaker 13: that almost all of the conversations I have are about
Speaker 13: these big structural trends that are hitting the US and
Speaker 13: appear to be hitting them in real time. For example,
Speaker 13: I'm not often asked, what is your non farm payrolls
Speaker 13: forecast for next Friday?
Speaker 8: But what is really.
Speaker 13: Happening with the supply side of labor? Are we going
Speaker 13: to see a labor shortage? I no longer get asked,
Speaker 13: you know what, specifically, when is the US debt story
Speaker 13: going to blow up? But what are the implications of
Speaker 13: high rates on alongside? What are the implications of fiscal
Speaker 13: policy now maybe dominating monetary policy? And of course, a
Speaker 13: topic we have talked about many times is have we
Speaker 13: really internalized the idea of that K shaped economy and
Speaker 13: the institutionalization of high income Americans just living on a
Speaker 13: very different economic cycle than low income Americans. And all
Speaker 13: these themes together, Tom have effectively meant that, yes, there's
Speaker 13: a cyclical economy, and we have to pay attention to it.
Speaker 13: But we're at this nexus between the cyclical economy and
Speaker 13: the structural economy. And right now, in the second half
Speaker 13: of the year, I think we're going to see a
Speaker 13: lot of these themes come head.
Speaker 6: Francis.
Speaker 5: We've seen this weaker dollar narrative play out, yet you know,
Speaker 5: we aren't seeing capital flows into foreign markets out of
Speaker 5: the US.
Speaker 10: Here.
Speaker 5: I'm curious, you know, if the dollar continues to weaken
Speaker 5: or even if it recovers from that matter, you know,
Speaker 5: what's the story for capital flows? Is there any potential
Speaker 5: for flows to you know, I'm talking when I say
Speaker 5: capital flows, obviously i'm talking FDI and portfolio flows. What's
Speaker 5: the extent to which you can see that sort of
Speaker 5: you know, happen.
Speaker 3: Yeah, I think you're.
Speaker 13: Getting to the core of the is the US exceptionalism
Speaker 13: story still in play? And as Tom noted earlier, we
Speaker 13: still have some big hits to growth happening outside the
Speaker 13: United States.
Speaker 8: What I'm watching for in the US is are we
Speaker 8: going to.
Speaker 13: See the productivity start to pick up in a way
Speaker 13: where American exceptionalism can be reflected in strong capex, strong
Speaker 13: business development, and really seeing those productivity numbers start to rise.
Speaker 13: I think underlying this whole story is this one big
Speaker 13: US issue, which is the United States going to see
Speaker 13: big impacts from tariffs, and that the outstanding elephant in
Speaker 13: the room for the American economy and the global investors
Speaker 13: have to get over that hump and have more clarity
Speaker 13: on that before we can call one way or the other.
Speaker 8: Is capital flow going to return meaningfully to the United States?
Speaker 2: So what are some twelve months forward nominal and real GDP.
Speaker 2: To me, it's a huge mystery.
Speaker 13: So we have what we call a stagflation light type
Speaker 13: of outlook, which is growth that is comfortably low but
Speaker 13: not collaxing.
Speaker 8: So that's one, you know, between one and two percent.
Speaker 13: The problem is the inflation side of this secure, which
Speaker 13: is that we continue to see above two percent inflation
Speaker 13: and getting it as high in the next six months
Speaker 13: is three point four on both the CPI and the
Speaker 13: PCI number. So you're seeing this phenomenal tension in the
Speaker 13: US economy, and what worries me about it is that
Speaker 13: it's not particularly aggressive. It's not pandemic level inflation that
Speaker 13: calls for clear policy response. It's a very nefarious, uncomfortable,
Speaker 13: muddle through type of environment. And this, I think is
Speaker 13: going to continue to dominate a lot of the conversations
Speaker 13: and make it difficult to say we're early, mid or
Speaker 13: late cycle. When you say it's difficult to see, what
Speaker 13: I hear is that this way of thinking about the
Speaker 13: economy as being in a business cycle is getting substantially
Speaker 13: distorted by tariffs, by inequalities, by government spending, and so
Speaker 13: reading that story is more difficult.
Speaker 2: Fransis, I want you to describe how you study net exports,
Speaker 2: the exports leaving America and the imports coming into America.
Speaker 2: How do you study that back end of the GDP equation.
Speaker 8: At this point by sector?
Speaker 13: And that's effectively what we're doing for all elements of
Speaker 13: that GDP equals C plus I plus. You know, the
Speaker 13: standard way of looking at the economy is very very
Speaker 13: top down, but there's two things happening that mean we
Speaker 13: have to go much more bottom up than we would
Speaker 13: have a is sector bisector because we're getting these substantial
Speaker 13: distortions from everything from autos to consumer imports, from China.
Speaker 13: But we also have to do this by consumer segment.
Speaker 13: I know you said you don't like the K shape language,
Speaker 13: so let's call it.
Speaker 8: Instead to Americas. Maybe that's more poetic for you, Tom.
Speaker 13: We are seeing different consumer behaviors between high income households
Speaker 13: and low income households, and importantly, they're operating on different cycles.
Speaker 13: So I no longer find it valuable with most headline
Speaker 13: economic data to say GDP will be at one point
Speaker 13: five percent.
Speaker 8: That's not helping companies and it's.
Speaker 13: Not helping markets understand the granularity that's happening. Because the
Speaker 13: truth is that there are sectors that are suffering very
Speaker 13: deeply in the United States right now. Housing is one
Speaker 13: of them, trade exposed sectors or another, and there are
Speaker 13: sectors that are doing phenomenally well and will continue to
Speaker 13: do so. So sector bisector breakdown.
Speaker 8: Unfortunately, Tom, it's a little more work. We have to
Speaker 8: work through our lunch breaks.
Speaker 2: It's just fascinating, to say the least. Let's leave it there,
Speaker 2: Francis Donald, thank you so much, your trooper to join
Speaker 2: us here. And Friday is it Labor Day in Canada? Francis,
Speaker 2: that would be Monday, Monday.
Speaker 6: Yeah, they get off.
Speaker 2: They have Monday. Okay, They're like, I don't know.
Speaker 11: I mean, come on, you've never been to Canada before.
Speaker 11: I've been to Canada. I've never been to day Francis do.
Speaker 11: Thank you so much just for we got to do
Speaker 11: a panel her in the fall. Francis, thank you so much.
Speaker 11: Stay with us.
Speaker 2: More from Bloomberg Surveillance coming up after this.
Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday
Speaker 1: starting at seven am Eastern on Apple Corplay and Android
Speaker 1: Auto with the Bloomberg Business app. You can also watch
Speaker 1: us live every weekday on YouTube and always on the
Speaker 1: Bloomberg terminal.
Speaker 2: At the coffee tail bar at the US Open, it's
Speaker 2: time you can order an espresso martini in the morning
Speaker 2: or the new iced o Tiami Sue iced Tarami Sue.
Speaker 2: It's made with cold brew chocolate syrup. How do you
Speaker 2: pronounce whatever? Mars coupone?
Speaker 6: My goodness, yes, Mars copone moose?
Speaker 14: Okay at this time of the morning, sure, it's never
Speaker 14: too late, okay.
Speaker 2: The newspapers Lisa Matteo, okay, super coffee.
Speaker 10: This one, okay, well you do that, okay.
Speaker 14: So this article actually stood out to me it's from
Speaker 14: the Wall Street Journal. But it was a really good
Speaker 14: look into higher prices and how that's affecting because of
Speaker 14: the cost of twists, how they're passing on to consumers.
Speaker 10: So this was a big thing.
Speaker 2: They pointed out a few things. Right.
Speaker 14: We saw companies like Hormel Food, Jam, Smucker, Ace Hardware.
Speaker 14: They all said they're going to raise their prices. You
Speaker 14: had retailers like Walmart, Target, best Buy. They say some
Speaker 14: of their terror related price increases already in place. My
Speaker 14: daughter came home from a Target run gave me the receipt.
Speaker 14: I was surprised there was. It was a lot larger.
Speaker 14: It's a micro yeah, yeah, yeah, and it starts to
Speaker 14: add up though. That's the problem. But here's the thing.
Speaker 14: You have retailers like dick Sporting is Good, Victoria's Secret.
Speaker 3: Dollar General.
Speaker 14: They're saying that even though the prices are higher, consumers
Speaker 14: are still buying and so far exactly is a big
Speaker 14: sol but they're warning how soon you can you can
Speaker 14: take that.
Speaker 5: I'm looking at the article, you know as well, and
Speaker 5: it's all food prices. I mean, are we releasing price
Speaker 5: increases that Dick's Sporting Goods and Victoria's secret. I mean,
Speaker 5: are we seeing it hit at retail like real retail
Speaker 5: or is it more just you know I that's where
Speaker 5: I think they're gonna have trouble coming on price increases.
Speaker 2: And I know we've got to go on to the
Speaker 2: next story. But Liam Denning, folks, I'll retweet it out
Speaker 2: without question, the essay of the week on across America.
Speaker 2: You're electric in gas utility bill Yep, unreal, absolutely unreal.
Speaker 2: The next one that is great.
Speaker 14: Okay, so this one my husband will like this because
Speaker 14: I wake up right at the wee hours of the
Speaker 14: morning and sometimes he gets up mad dash outside forgets
Speaker 14: to put out the recycling and the garbage right, so
Speaker 14: he rushes out. But now there is some new technology
Speaker 14: that could help him and others who have to do
Speaker 14: that mad dash self driving trash receptacles. It is in
Speaker 14: the work. I'm just letting you know that you could
Speaker 14: order it and demand like an uber. It just takes
Speaker 14: it out to the curb for you.
Speaker 10: Okay.
Speaker 5: So this is at least I have to I have
Speaker 5: to chime in area. This is not only real. This
Speaker 5: is also something that at the golf course at time
Speaker 5: our country club, they have the lawnmowers along the fairway.
Speaker 5: So they basically have saved so much money by basically
Speaker 5: getting these AI programmed lawnmowers to just go back and forth.
Speaker 5: They know how to charge themselves up, come out of
Speaker 5: the charger and just you know, kind of and.
Speaker 6: Cut the lawn, cut the lawn. So it's the same
Speaker 6: thing here. It's and this is even simpler to do.
Speaker 5: I mean, all you're asking is to take a you know,
Speaker 5: for a trash can to you know, leave your garage,
Speaker 5: you know, go to the end of the curb.
Speaker 14: It's a huge pot because we have you know, a
Speaker 14: growing garbage time.
Speaker 6: There's a thing or two about taking the garbage out.
Speaker 4: Right to no.
Speaker 3: Silence.
Speaker 14: That's just one of the things that they're doing. And
Speaker 14: also electric powered garbage trucks, you know, because they're so
Speaker 14: loud sometimes to feel complain about the noise. So could
Speaker 14: be on the way electric powered garbage trucks too. Okay,
Speaker 14: all right, I want to go to the US Open. Okay, yes,
Speaker 14: because Naomi Osaka she advanced, right, But what was actually
Speaker 14: the star of the US Open are her laboo boos?
Speaker 14: Okay she had two of them. They were blinged out. Okay,
Speaker 14: they were very very and she named them after famous
Speaker 14: tennis player tennis players, Okay. The first one is named
Speaker 14: Billy Jean Bling, Okay after Billy Jean King, red rhinestones
Speaker 14: all over it. Another Arthur Flash named after Arthur Ash. Yes, yes,
Speaker 14: there you go, and crusted blue and white rhinestones.
Speaker 6: Okay.
Speaker 14: But she is just another one. You know, all the
Speaker 14: celebrities are h She's they're attached to her bag and
Speaker 14: they each little laboo buo has their own little tiny
Speaker 14: tennis racket. It's the cutest thing ever.
Speaker 2: And this she's like making these endorsing news. It's like her.
Speaker 14: They're like customized for her. But what it's doing, it's
Speaker 14: sparking again the whole la boo boo craze. I mean,
Speaker 14: we've gone so.
Speaker 2: Far from Stan Smith, Rosco Tanner.
Speaker 6: I mean these, I mean all the ones you're wearing
Speaker 6: around their bag.
Speaker 2: Yes, the new Mini one sold out.
Speaker 14: It just came out there, sold out, the Mini ones.
Speaker 14: It's a craze.
Speaker 2: Thank you, Lisa Matteo on the newspapers.
Speaker 1: This is the Bloomberg Surveillance podcast, available on Apples, Spotify,
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