1 00:00:00,120 --> 00:00:06,800 Speaker 1: Bloomberg Audio Studios, Podcasts, radio news. 2 00:00:11,640 --> 00:00:15,440 Speaker 2: This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along 3 00:00:15,480 --> 00:00:18,680 Speaker 2: with Lisa Bromwitz and Amrie Hordern. Join us each day 4 00:00:18,720 --> 00:00:22,280 Speaker 2: for insight from the best in markets, economics, and geopolitics 5 00:00:22,400 --> 00:00:24,920 Speaker 2: from our global headquarters in New York City. We are 6 00:00:24,920 --> 00:00:27,680 Speaker 2: live on Bloomberg Television weekday mornings from six to nine 7 00:00:27,720 --> 00:00:31,280 Speaker 2: am Eastern. Subscribe to the podcast on Apple, Spotify or 8 00:00:31,320 --> 00:00:33,960 Speaker 2: anywhere else you listen, and as always on the Bloomberg 9 00:00:34,040 --> 00:00:36,919 Speaker 2: Terminal and the Bloomberg Business app. We begin this out 10 00:00:36,960 --> 00:00:39,720 Speaker 2: with US stocks posting four consecutive quarters of games, the 11 00:00:39,800 --> 00:00:43,400 Speaker 2: longest streak since twenty twenty one. Seema Sharp of Principal 12 00:00:43,400 --> 00:00:46,760 Speaker 2: Aid Management, writing this, the attractiveness of cash has declined. 13 00:00:46,960 --> 00:00:49,720 Speaker 2: There is some six point four trillion dollars currently in 14 00:00:49,720 --> 00:00:54,320 Speaker 2: money market funds, potentially representing an important tailwind for risk assets. 15 00:00:54,320 --> 00:00:57,200 Speaker 2: Seema joins us. Now for more, Seema, you sound bullish. 16 00:00:57,400 --> 00:00:59,400 Speaker 2: Walk me through why and where that cash is going 17 00:00:59,480 --> 00:00:59,640 Speaker 2: to go? 18 00:01:01,240 --> 00:01:02,680 Speaker 3: Sure, so, yes, we are bullish. 19 00:01:03,000 --> 00:01:06,600 Speaker 4: I don't want to say overly bullish. We're very cognizant 20 00:01:06,600 --> 00:01:08,160 Speaker 4: of the number of risks out there, but I think 21 00:01:08,200 --> 00:01:10,360 Speaker 4: what we're really basing it on is you have a 22 00:01:10,360 --> 00:01:13,679 Speaker 4: global montri stimular cycle in play. You have a Federal 23 00:01:13,720 --> 00:01:16,600 Speaker 4: Reserve which yes, very very cloud and very difficult to 24 00:01:16,680 --> 00:01:19,400 Speaker 4: navigate its way with all the uncertainties that you've been 25 00:01:19,400 --> 00:01:22,440 Speaker 4: talking about with regards to their data, but they are 26 00:01:22,640 --> 00:01:25,440 Speaker 4: very much committed to soft landing. So that's the one 27 00:01:25,440 --> 00:01:27,520 Speaker 4: thing that we are hang our hats on is you're 28 00:01:27,600 --> 00:01:31,920 Speaker 4: very unlikely to see a recession materializing over the next 29 00:01:31,959 --> 00:01:34,600 Speaker 4: eighteen months. So that is a good backdrop. It doesn't 30 00:01:34,640 --> 00:01:36,920 Speaker 4: necessarily mean that you're going to see enormous security gains. 31 00:01:36,959 --> 00:01:38,440 Speaker 4: I actually doubt that you're going to see the same 32 00:01:38,520 --> 00:01:40,520 Speaker 4: kind of pace of gains that we've already seen in 33 00:01:40,560 --> 00:01:43,600 Speaker 4: the first first three quarters of the year extending through 34 00:01:43,680 --> 00:01:47,280 Speaker 4: to twenty twenty five. But you have a growth backdrop. 35 00:01:47,360 --> 00:01:50,480 Speaker 4: You have a FED munthre easing program in play. That 36 00:01:50,520 --> 00:01:52,520 Speaker 4: should be positive for stocks, it should be positive for 37 00:01:52,560 --> 00:01:55,640 Speaker 4: credit as well. So from our perspective, why being cash 38 00:01:55,640 --> 00:01:57,960 Speaker 4: when you know that rates are coming down and there's 39 00:01:58,000 --> 00:01:59,720 Speaker 4: so many other games to be had on risk assets. 40 00:01:59,840 --> 00:02:01,920 Speaker 2: The story you describe is precisely why we've had this 41 00:02:02,000 --> 00:02:04,960 Speaker 2: massive US overweight and it's been building over the last 42 00:02:05,000 --> 00:02:06,680 Speaker 2: few years relative to the rest of the world, because 43 00:02:06,680 --> 00:02:09,520 Speaker 2: the relative story around the world has not been great. 44 00:02:09,760 --> 00:02:12,160 Speaker 2: Seeming with that in mind, is it time to rejig 45 00:02:12,200 --> 00:02:15,119 Speaker 2: some of that story, cut some of that overweight, redeploy 46 00:02:15,200 --> 00:02:18,120 Speaker 2: some capital abroad, look internationally and a question I think 47 00:02:18,160 --> 00:02:20,280 Speaker 2: a lot of people are asking themselves this morning is well, 48 00:02:20,320 --> 00:02:22,320 Speaker 2: I've seen this movie a few times. This has been 49 00:02:22,400 --> 00:02:24,600 Speaker 2: head fake after headfake. I know how this ends. Is 50 00:02:24,600 --> 00:02:25,519 Speaker 2: it different this time? 51 00:02:27,160 --> 00:02:29,000 Speaker 3: So I don't want to use those words. 52 00:02:29,280 --> 00:02:32,000 Speaker 4: I'll get told off by or by colleagues for saying that, 53 00:02:32,040 --> 00:02:34,080 Speaker 4: But I do think that this is a time to 54 00:02:34,080 --> 00:02:35,480 Speaker 4: be thinking about global diversification. 55 00:02:35,520 --> 00:02:37,480 Speaker 3: It's not necessarily pulling away from the US. 56 00:02:37,520 --> 00:02:40,640 Speaker 4: So you know, with all those all that casually there, 57 00:02:40,639 --> 00:02:41,800 Speaker 4: you need to deploy it somewhere. 58 00:02:42,440 --> 00:02:43,920 Speaker 3: It's about whatever you're going to add. 59 00:02:43,960 --> 00:02:46,120 Speaker 4: Try and think about where the global diversification is because 60 00:02:46,200 --> 00:02:49,480 Speaker 4: valuations around the world in some pockets, not everywhere, but 61 00:02:49,520 --> 00:02:50,520 Speaker 4: they are quite attractive. 62 00:02:50,760 --> 00:02:52,320 Speaker 3: And as I said, it's not just a fur. 63 00:02:52,200 --> 00:02:54,360 Speaker 4: That it's easying, but you're seeing other central banks around 64 00:02:54,360 --> 00:02:55,359 Speaker 4: the world moving. 65 00:02:55,520 --> 00:02:57,400 Speaker 3: I think China is an interesting story. 66 00:02:57,480 --> 00:03:00,120 Speaker 4: We have a lot of I think skepticisn't about how 67 00:03:00,200 --> 00:03:03,720 Speaker 4: much it's going to be sustained, how significant STEMAS. 68 00:03:03,480 --> 00:03:04,760 Speaker 3: Is going to be, how it's going to be implemented. 69 00:03:05,080 --> 00:03:06,320 Speaker 3: But we do think that there will. 70 00:03:06,200 --> 00:03:09,440 Speaker 4: Be positive benefits from a risk sentiment perspective for other 71 00:03:09,480 --> 00:03:11,600 Speaker 4: parts of ages. So I think that there are places 72 00:03:11,720 --> 00:03:14,280 Speaker 4: outside of the US that we can think about, but 73 00:03:14,360 --> 00:03:16,040 Speaker 4: also within the US, you know, we will become very 74 00:03:16,080 --> 00:03:18,519 Speaker 4: accustomed to having that exposure to the MAC seven. We 75 00:03:18,600 --> 00:03:20,920 Speaker 4: are maintaining that, but I think there is also some 76 00:03:20,960 --> 00:03:23,639 Speaker 4: space for some tactical opportunities within the small gap space. 77 00:03:24,040 --> 00:03:26,320 Speaker 1: I want to understand the bullish case and what's been 78 00:03:26,360 --> 00:03:29,480 Speaker 1: priced in already, especially when it comes to the relationship 79 00:03:29,560 --> 00:03:32,639 Speaker 1: of Starks and Bards, Stacks and the Federal Reserve. How 80 00:03:32,720 --> 00:03:35,440 Speaker 1: much of the rally and your bullish sentiment really hinges 81 00:03:35,840 --> 00:03:39,080 Speaker 1: on this recutting cycle that will pick up steam even 82 00:03:39,120 --> 00:03:42,840 Speaker 1: if we don't necessarily get really negative employment data. 83 00:03:44,200 --> 00:03:46,200 Speaker 3: So I think some of it is hinged on it. 84 00:03:46,440 --> 00:03:49,760 Speaker 4: But as I said, we're not expecting the gains to 85 00:03:49,840 --> 00:03:52,240 Speaker 4: continue at the same kind of pace we've had. I 86 00:03:52,240 --> 00:03:54,240 Speaker 4: actually think that it's quite difficult in this market with 87 00:03:54,240 --> 00:03:56,240 Speaker 4: these kind of valuations unless you're to have some kind 88 00:03:56,280 --> 00:03:59,080 Speaker 4: of clean out at this point to have another twenty 89 00:03:59,120 --> 00:04:01,400 Speaker 4: twenty five percent high. So we're thinking more about in 90 00:04:01,400 --> 00:04:04,600 Speaker 4: the single digits for returns. There is a lot of 91 00:04:04,680 --> 00:04:06,880 Speaker 4: uncertainty about how much the FED is going to come 92 00:04:06,960 --> 00:04:08,960 Speaker 4: within the next few months. Are they going to front 93 00:04:08,960 --> 00:04:10,520 Speaker 4: load or are we going to be looking at a 94 00:04:10,520 --> 00:04:11,520 Speaker 4: more extended cycle. 95 00:04:11,800 --> 00:04:12,520 Speaker 3: But as I said. 96 00:04:12,320 --> 00:04:14,440 Speaker 4: Before, the thing that we're thinking about is, look, the 97 00:04:14,520 --> 00:04:16,680 Speaker 4: FED we know is committed to that soft landing. They 98 00:04:16,760 --> 00:04:19,919 Speaker 4: started to cut rates against the backdrop of still positive 99 00:04:19,920 --> 00:04:22,440 Speaker 4: growth where there is no financial crisis Simmery. That is 100 00:04:22,440 --> 00:04:25,360 Speaker 4: a very very pastive, positive backdrop which shoul assure soft landing, 101 00:04:25,680 --> 00:04:29,240 Speaker 4: and against that perspective then you should have continued earnings 102 00:04:29,240 --> 00:04:32,520 Speaker 4: growth and equities moving higher. But we do think that 103 00:04:32,600 --> 00:04:35,400 Speaker 4: instead of just focusing on the MAC seven, it's really 104 00:04:35,520 --> 00:04:37,760 Speaker 4: time to think about other parts of the US market 105 00:04:37,760 --> 00:04:38,800 Speaker 4: and the global complex. 106 00:04:38,920 --> 00:04:41,159 Speaker 1: I feel a bit whipside Seema because we've been talking 107 00:04:41,200 --> 00:04:45,280 Speaker 1: about all of these catastrophic situations around the world and 108 00:04:45,520 --> 00:04:49,240 Speaker 1: how it could potentially affect employment, how it could affect inflation, 109 00:04:49,440 --> 00:04:52,520 Speaker 1: how it could affect growth over the short and potentially 110 00:04:52,640 --> 00:04:56,160 Speaker 1: longer terms, how could disrupt supply chains, and yet Marcus 111 00:04:56,160 --> 00:04:58,280 Speaker 1: have shrugged it off, don't seem to be pricing it 112 00:04:58,279 --> 00:05:00,760 Speaker 1: in at all, which I guess makes because in the 113 00:05:00,800 --> 00:05:03,680 Speaker 1: past it hasn't come to fruition as a tangible risk. 114 00:05:04,120 --> 00:05:06,679 Speaker 1: Of the potential issues that we see on the four 115 00:05:06,960 --> 00:05:09,560 Speaker 1: whether it's the storm, or whether it's the strike we're 116 00:05:09,600 --> 00:05:11,440 Speaker 1: talking about the US, whether it's what's going on in 117 00:05:11,480 --> 00:05:13,640 Speaker 1: the Middle East, what do you have your eye on 118 00:05:13,800 --> 00:05:15,760 Speaker 1: potentially as the most disruptive event. 119 00:05:17,320 --> 00:05:20,960 Speaker 4: I should think that the disruptive event is the Of course, 120 00:05:21,000 --> 00:05:24,560 Speaker 4: this is from market perspective. The most disruptive event is 121 00:05:24,600 --> 00:05:26,839 Speaker 4: really what it does to the data. We know that 122 00:05:26,880 --> 00:05:28,520 Speaker 4: this is effect which is very date to depend. This 123 00:05:28,560 --> 00:05:31,000 Speaker 4: is the market, which is also very data dependent. So 124 00:05:31,040 --> 00:05:33,280 Speaker 4: as much as the data becomes more and more muddied, 125 00:05:34,200 --> 00:05:35,599 Speaker 4: I think that you're going to see a lot of whips. 126 00:05:35,600 --> 00:05:39,080 Speaker 4: And we've already seen abol atilty pick up that there's 127 00:05:39,120 --> 00:05:42,560 Speaker 4: a risk that continues or even exacerbates over the coming months. 128 00:05:42,560 --> 00:05:44,200 Speaker 4: And of course there's always the chance that you take 129 00:05:44,240 --> 00:05:47,600 Speaker 4: the wrong turn because you're so clarded and blinded. 130 00:05:47,960 --> 00:05:50,920 Speaker 5: When it comes to China. I know you mentioned that earlier, 131 00:05:50,960 --> 00:05:53,080 Speaker 5: but you talked about that this week was a pivotal 132 00:05:53,080 --> 00:05:55,080 Speaker 5: moment for it, and it all comes down to the details. 133 00:05:55,560 --> 00:05:57,880 Speaker 5: So far, do you like the details that are coming 134 00:05:57,880 --> 00:05:58,560 Speaker 5: out of Beijing. 135 00:05:59,680 --> 00:06:00,360 Speaker 3: Yeah, we do. 136 00:06:00,440 --> 00:06:04,200 Speaker 4: We are quite encouraged by what we're hearing. We really 137 00:06:04,240 --> 00:06:06,480 Speaker 4: need to see clear numbers. We need to see a 138 00:06:06,480 --> 00:06:10,400 Speaker 4: little more information about the consumption drive. Are we seeing 139 00:06:10,480 --> 00:06:12,960 Speaker 4: kind of direct injections to consumers or is it done 140 00:06:13,040 --> 00:06:15,440 Speaker 4: through subsidies? So there are different ways which is going 141 00:06:15,480 --> 00:06:18,039 Speaker 4: to make it a little bit more impactful or less so. 142 00:06:19,000 --> 00:06:21,400 Speaker 4: But overall, I think the positive thing that we're hearing 143 00:06:21,440 --> 00:06:24,360 Speaker 4: from the government is that they recognize that something needs 144 00:06:24,360 --> 00:06:25,960 Speaker 4: to be done, and it needs to be done in 145 00:06:26,000 --> 00:06:28,520 Speaker 4: conjunction with Mounty Stimmus. It's not enough just for the 146 00:06:28,600 --> 00:06:32,040 Speaker 4: Montreal Mountreal policy cuts. That has to be some kind 147 00:06:32,040 --> 00:06:34,600 Speaker 4: of spending coming in play. I think that is positive. 148 00:06:34,640 --> 00:06:37,440 Speaker 4: It should have a good impact and risk sentiment in 149 00:06:37,560 --> 00:06:40,440 Speaker 4: terms of how much further we think about China GDP 150 00:06:40,560 --> 00:06:42,800 Speaker 4: growth going, Does it hit the five percent level or not? 151 00:06:43,080 --> 00:06:45,040 Speaker 3: That really comes down to those specific details. 152 00:06:45,040 --> 00:06:47,440 Speaker 4: But at least from this point in time, we're hearing 153 00:06:47,520 --> 00:06:49,719 Speaker 4: all the right things from the government and that should 154 00:06:49,720 --> 00:06:52,479 Speaker 4: have some positive externalities across outside from China as well. 155 00:06:52,640 --> 00:06:55,039 Speaker 6: Can we talk about the limits of that positive fallout. 156 00:06:55,160 --> 00:06:56,279 Speaker 6: Let's talk about that right now. 157 00:06:56,400 --> 00:06:58,520 Speaker 2: Pitter Cheer of Academy was on the program about an 158 00:06:58,560 --> 00:07:00,760 Speaker 2: hour ago, and he made the point that Orienta China 159 00:07:00,839 --> 00:07:04,599 Speaker 2: is a story for China, Chinese brands, Chinese companies, and 160 00:07:04,640 --> 00:07:07,920 Speaker 2: the spillover, the positive spillover, is limited to the rest 161 00:07:07,920 --> 00:07:09,800 Speaker 2: of the world, particularly to European companies. 162 00:07:09,800 --> 00:07:11,040 Speaker 6: Sima, what do you make of that argument. 163 00:07:12,560 --> 00:07:13,760 Speaker 3: I wouldn't necessarily agree. 164 00:07:13,800 --> 00:07:15,680 Speaker 4: You know, when we've done the charting, that's actually a 165 00:07:15,720 --> 00:07:18,800 Speaker 4: pretty clear correlation. You have China credit steamulus or whatever 166 00:07:18,840 --> 00:07:21,200 Speaker 4: comes stembus measure that you want to use. There is 167 00:07:21,240 --> 00:07:25,000 Speaker 4: a clear impact on the USICM Manufacturing. 168 00:07:24,400 --> 00:07:25,360 Speaker 3: Survey, for example. 169 00:07:25,600 --> 00:07:27,600 Speaker 4: So we do think that there is a positive impact, 170 00:07:27,720 --> 00:07:30,320 Speaker 4: and in fact for European companies you could actually actually 171 00:07:30,320 --> 00:07:32,160 Speaker 4: see some beluxury companies benefiting. 172 00:07:32,440 --> 00:07:33,800 Speaker 3: So China's consumption has. 173 00:07:33,680 --> 00:07:36,200 Speaker 4: Been limited within China up to now, we could see 174 00:07:36,200 --> 00:07:39,200 Speaker 4: that's streaming outs other parts, particularly in Europe. Now I 175 00:07:39,240 --> 00:07:41,559 Speaker 4: don't exaggerate this because we're actually quite negative on Europe 176 00:07:41,560 --> 00:07:43,960 Speaker 4: as a whole, but in terms of what the impact 177 00:07:43,960 --> 00:07:46,920 Speaker 4: could be outside of China. I don't think it's huge, 178 00:07:47,080 --> 00:07:49,680 Speaker 4: but I think it certainly could be quite positive, particularly 179 00:07:49,720 --> 00:07:52,120 Speaker 4: the time for the rest of the world when expectations 180 00:07:52,120 --> 00:07:54,120 Speaker 4: have been quite low outside of the US. 181 00:07:54,040 --> 00:07:55,760 Speaker 6: Rock bottom over the last few years. 182 00:07:55,800 --> 00:08:08,679 Speaker 2: Samoth, thank you as always, Semushan There of principle, Plis 183 00:08:08,720 --> 00:08:11,520 Speaker 2: and Golfer. The only vice presidential debate of the election. 184 00:08:11,760 --> 00:08:13,600 Speaker 2: We're going to get nine pm Eastern Time without a 185 00:08:13,640 --> 00:08:16,480 Speaker 2: studio audience. The candidates will have two minutes to answer 186 00:08:16,600 --> 00:08:19,600 Speaker 2: questions and two minutes to react. Both Walts and Vans 187 00:08:19,840 --> 00:08:23,240 Speaker 2: will have hot Mike's Republican Congresswoman Lisa McLain from the 188 00:08:23,240 --> 00:08:25,560 Speaker 2: Swiss state of Michigan joined us now for more congresswomen. 189 00:08:25,600 --> 00:08:27,200 Speaker 6: It's going to see you. It's good to be here. 190 00:08:27,200 --> 00:08:29,560 Speaker 6: Thank yousome to New York. Yeah, thanks, welcome. What are 191 00:08:29,560 --> 00:08:32,200 Speaker 6: you hoping to get from the save, Nick Well. 192 00:08:32,200 --> 00:08:34,520 Speaker 7: I hope to get a contrast, right, And what I 193 00:08:34,559 --> 00:08:37,160 Speaker 7: think I'm really hoping for is what exactly the American 194 00:08:37,160 --> 00:08:40,280 Speaker 7: people are hoping for, and that's answers to the questions 195 00:08:40,760 --> 00:08:44,559 Speaker 7: of the issues that everybody's worried about, the economic issues. 196 00:08:44,760 --> 00:08:46,880 Speaker 7: What are we doing about the hurricane, what are we 197 00:08:46,920 --> 00:08:50,120 Speaker 7: doing to bring inflation down? What are we doing about 198 00:08:50,120 --> 00:08:52,920 Speaker 7: the ev mandates? What are we doing about crime? They 199 00:08:52,960 --> 00:08:56,400 Speaker 7: want answers to the issues, and I can share with you. 200 00:08:56,440 --> 00:09:00,840 Speaker 7: In Michigan, there are three issues that matter economy, economy, 201 00:09:00,880 --> 00:09:03,040 Speaker 7: and economy. That's the bottom line. 202 00:09:03,200 --> 00:09:05,440 Speaker 2: When's your economy right now in the set of Michigan. 203 00:09:05,440 --> 00:09:09,120 Speaker 2: And what couldn't the federal government do to have these automakas. 204 00:09:09,800 --> 00:09:13,839 Speaker 7: Our economy in Michigan. We're struggling. Families are struggling. We're 205 00:09:13,840 --> 00:09:17,920 Speaker 7: struggling to put food on the table, put you know, uh, 206 00:09:18,200 --> 00:09:22,400 Speaker 7: put put our gas in our cars and whatnot. What 207 00:09:22,440 --> 00:09:24,760 Speaker 7: the government can do is stay out of the way. 208 00:09:25,320 --> 00:09:29,160 Speaker 7: I mean, seriously, just have some faith in the people. 209 00:09:29,400 --> 00:09:32,240 Speaker 7: We don't need more regulation. We don't need the government 210 00:09:32,320 --> 00:09:34,120 Speaker 7: to tell us what to do, when to do it, 211 00:09:34,160 --> 00:09:36,640 Speaker 7: how to do it, what cars to buy. Have a 212 00:09:36,640 --> 00:09:38,360 Speaker 7: little faith in the American people. 213 00:09:39,240 --> 00:09:42,360 Speaker 5: Even very critical of this administration when it comes to 214 00:09:42,640 --> 00:09:45,959 Speaker 5: the transition to electric vehicles. At the same time, you're 215 00:09:45,960 --> 00:09:49,400 Speaker 5: also very critical of China. But China is absolutely dominating 216 00:09:49,400 --> 00:09:52,280 Speaker 5: the entire world when it comes to electric vehicles as 217 00:09:52,280 --> 00:09:54,319 Speaker 5: well as the processing to make the batteries to get 218 00:09:54,320 --> 00:09:57,000 Speaker 5: to that electric vehicle. So how do you suggest the 219 00:09:57,160 --> 00:10:00,400 Speaker 5: US compete given this is so critical to your district. 220 00:10:00,920 --> 00:10:03,160 Speaker 7: The biggest thing that we can do to compete is 221 00:10:03,200 --> 00:10:08,640 Speaker 7: stop the mandates. Let the consumer buy the product they 222 00:10:08,800 --> 00:10:13,280 Speaker 7: want to buy. Listen with the seventy percent EV mandates 223 00:10:13,280 --> 00:10:16,040 Speaker 7: by twenty thirty, we don't have the infrastructure. I mean, 224 00:10:16,080 --> 00:10:18,480 Speaker 7: I'm not telling you guys everything anything you don't already know. 225 00:10:18,720 --> 00:10:21,520 Speaker 7: We don't have the infrastructure, and people don't want to 226 00:10:21,520 --> 00:10:24,800 Speaker 7: buy the cars. Not to mention, where are we getting 227 00:10:24,800 --> 00:10:29,320 Speaker 7: all the batteries from? Oh, our biggest adversary, China? And 228 00:10:29,360 --> 00:10:31,360 Speaker 7: for those of us who really care about the Green 229 00:10:31,440 --> 00:10:35,040 Speaker 7: New Deal, right, Okay, that was a little bit of 230 00:10:35,080 --> 00:10:38,440 Speaker 7: sarcasm there. But for those of us who care, where 231 00:10:38,480 --> 00:10:41,600 Speaker 7: are we getting the batteries from China? What does it 232 00:10:41,679 --> 00:10:46,440 Speaker 7: take to produce those batteries coal and coal plants? It's 233 00:10:46,520 --> 00:10:52,040 Speaker 7: counterproductive and counterintuitive on what we're doing with these EV mandates. 234 00:10:52,080 --> 00:10:54,320 Speaker 5: When you say mandate, there's not an explicit mandate. It's 235 00:10:54,360 --> 00:10:58,240 Speaker 5: just the pollution controls. So just the question I have 236 00:10:58,360 --> 00:11:01,320 Speaker 5: is the Inflation Reduction Act, which I know you're critical of. 237 00:11:01,400 --> 00:11:02,480 Speaker 6: You called the Three New Deals. 238 00:11:02,559 --> 00:11:04,720 Speaker 5: You clearly are critical of it, but a lot of 239 00:11:04,720 --> 00:11:07,560 Speaker 5: that money actually went to Michigan for clean tech. So, 240 00:11:07,880 --> 00:11:11,160 Speaker 5: say there is a change in the composition of Congress 241 00:11:11,240 --> 00:11:13,320 Speaker 5: or change in the White House, are you going to 242 00:11:13,320 --> 00:11:15,960 Speaker 5: be one of those individuals that wants to repeal some 243 00:11:16,120 --> 00:11:19,200 Speaker 5: of those provisions that are in the Inflation Reduction Act. 244 00:11:19,600 --> 00:11:19,840 Speaker 6: Yes? 245 00:11:20,240 --> 00:11:23,600 Speaker 7: And I say that because I have faith in people 246 00:11:24,040 --> 00:11:29,200 Speaker 7: and in the Inflation Reduction Act. With these mandates, right, 247 00:11:29,640 --> 00:11:34,320 Speaker 7: I think everyone wants a cleaner planet, right, But who's 248 00:11:34,400 --> 00:11:37,120 Speaker 7: going to give us that cleaner planet. I'm going to 249 00:11:37,160 --> 00:11:39,400 Speaker 7: share with you it's going to be business, and it's 250 00:11:39,400 --> 00:11:41,960 Speaker 7: going to be industry, the people that do it for 251 00:11:42,040 --> 00:11:45,080 Speaker 7: a living every day. The government's not going to be 252 00:11:45,120 --> 00:11:49,080 Speaker 7: able to legislate that because of all the unintended consequences. 253 00:11:49,320 --> 00:11:52,360 Speaker 7: Let's leave it to the business owners and industry that 254 00:11:52,559 --> 00:11:56,000 Speaker 7: actually know what they're doing and how to do it. 255 00:11:56,320 --> 00:11:58,640 Speaker 5: So let's talk about what's going on in Michigan. I'm 256 00:11:58,679 --> 00:12:01,000 Speaker 5: sure you saw the report about slock In, who's going 257 00:12:01,000 --> 00:12:03,800 Speaker 5: for the Senate seat. She's telling her donors, according to 258 00:12:03,880 --> 00:12:07,520 Speaker 5: scoop from Axios, that she is underwater because Kamala Harris 259 00:12:07,600 --> 00:12:10,560 Speaker 5: isn't polling well in Michigan. Are you expecting a red 260 00:12:10,600 --> 00:12:11,480 Speaker 5: wave in your state. 261 00:12:13,040 --> 00:12:15,559 Speaker 7: I don't want to predict a red wave. Last time 262 00:12:15,600 --> 00:12:17,760 Speaker 7: we did that, it didn't turn out exactly like a 263 00:12:17,800 --> 00:12:21,360 Speaker 7: red wave. I want to predict a win, right, And 264 00:12:21,679 --> 00:12:25,080 Speaker 7: I think I'm cautiously optimistic that we are going to 265 00:12:25,120 --> 00:12:27,719 Speaker 7: get a win in Michigan. And I think we're going 266 00:12:27,760 --> 00:12:30,000 Speaker 7: to get a win for three reasons and I said 267 00:12:30,040 --> 00:12:33,200 Speaker 7: them earlier. The economy. The economy, the economy. People in 268 00:12:33,240 --> 00:12:37,840 Speaker 7: Michigan are hurting. We're a manufacturing state, right, We're an 269 00:12:37,920 --> 00:12:42,240 Speaker 7: auto state. We need to be able to do business. 270 00:12:42,320 --> 00:12:45,640 Speaker 7: And with the inflation and the layoffs and the mandates, 271 00:12:46,160 --> 00:12:49,520 Speaker 7: people in Michigan are hurting in it's because of the 272 00:12:49,559 --> 00:12:53,520 Speaker 7: policies that this administration and the Democrats are cramming down 273 00:12:53,559 --> 00:12:54,240 Speaker 7: our throats. 274 00:12:54,640 --> 00:12:56,680 Speaker 1: You said the best thing the government can do is 275 00:12:56,720 --> 00:12:59,120 Speaker 1: to stay out of your way. You talk about how 276 00:12:59,120 --> 00:13:01,920 Speaker 1: business really needs to just be left to their own devices, 277 00:13:02,240 --> 00:13:06,959 Speaker 1: and yet Donald Trump is talking about tariffs, extensive tariffs 278 00:13:06,960 --> 00:13:10,959 Speaker 1: that could potentially increase inflation and potentially put up gates 279 00:13:11,200 --> 00:13:14,199 Speaker 1: to the concept of free trade and businesses making those decisions. 280 00:13:14,800 --> 00:13:16,560 Speaker 6: Why is that a good option? 281 00:13:17,160 --> 00:13:19,280 Speaker 7: Well, I think if you look at the tariffs that 282 00:13:19,320 --> 00:13:24,440 Speaker 7: Donald Trump is proposing. He's proposing tariffs as a reaction 283 00:13:25,600 --> 00:13:30,240 Speaker 7: to unfair trade practices. What Donald Trump wants and why 284 00:13:30,280 --> 00:13:33,360 Speaker 7: he's using tariffs as a tool that he has in 285 00:13:33,400 --> 00:13:36,360 Speaker 7: his tool belt, is to make sure that we are 286 00:13:36,400 --> 00:13:39,360 Speaker 7: playing on a level playing field. Right now, we're not 287 00:13:39,520 --> 00:13:42,760 Speaker 7: playing on a level playing field, and he wants to 288 00:13:42,800 --> 00:13:46,680 Speaker 7: make sure that we have a level playing field for 289 00:13:46,840 --> 00:13:51,560 Speaker 7: our businesses and for American companies. If our adversaries like 290 00:13:51,679 --> 00:13:54,240 Speaker 7: China would like to plan a level playing field, I 291 00:13:54,240 --> 00:13:56,440 Speaker 7: don't think there's a need for tariffs, but if they're 292 00:13:56,480 --> 00:13:59,160 Speaker 7: not going to play fairly, your dog on right, He's 293 00:13:59,160 --> 00:14:01,040 Speaker 7: going to put tariffs in place, and I agree with them. 294 00:14:01,160 --> 00:14:04,760 Speaker 1: I'm curious just more in the immediate aftermath of the strike, 295 00:14:05,040 --> 00:14:07,000 Speaker 1: just to sort of go to the next couple of weeks, 296 00:14:07,400 --> 00:14:10,559 Speaker 1: not just the longer term. We are talking about the 297 00:14:10,600 --> 00:14:13,320 Speaker 1: biggest strike of dock workers going back to nineteen seventy seven. 298 00:14:13,360 --> 00:14:15,840 Speaker 1: There are a lot of auto parts it could potentially 299 00:14:15,880 --> 00:14:20,200 Speaker 1: be coming through. How are you preparing your manufacturers in 300 00:14:20,320 --> 00:14:23,720 Speaker 1: Michigan for the potential of production being stopped. 301 00:14:23,440 --> 00:14:25,000 Speaker 6: Or delayed because of this. 302 00:14:25,080 --> 00:14:29,000 Speaker 7: Listen, we're very concerned, and they've been preparing up to 303 00:14:29,080 --> 00:14:32,040 Speaker 7: this point because they had an inkling that this would happen. Right, 304 00:14:32,120 --> 00:14:34,720 Speaker 7: This isn't something that's just happened yesterday. Right, We've been 305 00:14:34,760 --> 00:14:36,680 Speaker 7: able to prepare a little bit. 306 00:14:37,280 --> 00:14:37,880 Speaker 6: But make no. 307 00:14:37,920 --> 00:14:44,000 Speaker 7: Mistake, this will be devastating for Michigan manufacturing, for trucking industries, 308 00:14:44,040 --> 00:14:47,520 Speaker 7: for grocery stores. But the biggest people who will be 309 00:14:47,560 --> 00:14:50,480 Speaker 7: affected by this will be the consumer. Right on top 310 00:14:50,520 --> 00:14:55,720 Speaker 7: of record inflations, the people of Michigan are going to 311 00:14:55,800 --> 00:14:57,520 Speaker 7: be hurt drastically. 312 00:14:57,760 --> 00:14:59,200 Speaker 6: Do you think that why has should get involved? 313 00:15:00,000 --> 00:15:02,120 Speaker 7: You know, I think you should have never gotten to 314 00:15:02,160 --> 00:15:06,400 Speaker 7: this point, right. The White House touts itself as you know, 315 00:15:07,080 --> 00:15:11,360 Speaker 7: mister Joe Union, Right, why did it get to this point? 316 00:15:11,480 --> 00:15:13,880 Speaker 7: There's no reason it would it should have gotten to 317 00:15:13,920 --> 00:15:17,120 Speaker 7: this point. But again, like many other issues, here we 318 00:15:17,160 --> 00:15:20,920 Speaker 7: are today and now we're in a crisis situation. We've 319 00:15:20,960 --> 00:15:23,640 Speaker 7: got to do better and be more proactive so that 320 00:15:23,680 --> 00:15:25,920 Speaker 7: we don't get to this position. 321 00:15:26,080 --> 00:15:28,120 Speaker 2: This is why we are the congresswoman, So I'm wondering 322 00:15:28,160 --> 00:15:30,400 Speaker 2: there is an act that he can activate that would 323 00:15:30,400 --> 00:15:32,040 Speaker 2: initiate an eighty day code and off perage. 324 00:15:32,040 --> 00:15:32,760 Speaker 6: You think you should do. 325 00:15:32,680 --> 00:15:34,840 Speaker 7: So, Yeah, I think you should take a long hard 326 00:15:34,920 --> 00:15:38,239 Speaker 7: look at it. Right, we have to bring both parties 327 00:15:38,360 --> 00:15:42,880 Speaker 7: back to the table. It couldn't be a worse timing, right, 328 00:15:43,400 --> 00:15:46,080 Speaker 7: you have inflation, record high inflation, but also let's not 329 00:15:46,080 --> 00:15:47,880 Speaker 7: forget about the devastating hurricane we had. 330 00:15:47,920 --> 00:15:49,960 Speaker 2: High inflation, it's come down a little bit, price, it 331 00:15:50,000 --> 00:15:50,800 Speaker 2: still elevates it. 332 00:15:50,880 --> 00:15:53,880 Speaker 7: Well, places are still elevated. But it's the bottom line 333 00:15:53,920 --> 00:15:55,840 Speaker 7: that counts, provided you know how to count. Right, if 334 00:15:55,920 --> 00:15:58,600 Speaker 7: inflation's at one point four percent, it goes up to 335 00:15:58,680 --> 00:16:01,240 Speaker 7: nine and it comes down to four four, still higher 336 00:16:01,280 --> 00:16:01,720 Speaker 7: than one point. 337 00:16:01,800 --> 00:16:02,720 Speaker 6: People are still struggling. 338 00:16:02,920 --> 00:16:06,440 Speaker 7: People are still struggling, but also on the backs of 339 00:16:06,480 --> 00:16:08,880 Speaker 7: the hurricane that we're just we've got to be able 340 00:16:08,920 --> 00:16:13,800 Speaker 7: to get supplies in the necessary aid. This dock strike 341 00:16:13,960 --> 00:16:16,200 Speaker 7: is not going to help that at all. So I 342 00:16:16,200 --> 00:16:18,560 Speaker 7: think we should take a long hard look at it. Well, 343 00:16:19,160 --> 00:16:21,520 Speaker 7: you know, and to your point, here we are, Yes, 344 00:16:21,600 --> 00:16:23,840 Speaker 7: we should have never gotten here, but here we are. 345 00:16:24,240 --> 00:16:25,600 Speaker 7: So we have to take a look at all the 346 00:16:25,600 --> 00:16:27,200 Speaker 7: options to protect the American people. 347 00:16:27,240 --> 00:16:28,960 Speaker 2: Well, we appreciate your time, thanks for being able to 348 00:16:29,000 --> 00:16:30,760 Speaker 2: star in New York City. Thank you, Thank you, come 349 00:16:30,760 --> 00:16:31,120 Speaker 2: back again. 350 00:16:31,200 --> 00:16:31,320 Speaker 8: Soon. 351 00:16:31,400 --> 00:16:33,880 Speaker 6: Republican Congresswoman Lisa McLain of Michigan. 352 00:16:42,720 --> 00:16:45,440 Speaker 2: Marcus digesting fed Shad Jay Poal's message that he's in 353 00:16:45,520 --> 00:16:47,560 Speaker 2: no hurry to move ahead with more rate cuts, but 354 00:16:47,640 --> 00:16:50,840 Speaker 2: Noil Duatta of renomass one hundred more basis points off 355 00:16:50,880 --> 00:16:54,120 Speaker 2: Easy before year end, citing the fact that unemployment is 356 00:16:54,240 --> 00:16:57,880 Speaker 2: likely to continue rising and inflation continues to slow. Neil 357 00:16:57,960 --> 00:16:59,680 Speaker 2: joins us now for more, Neil, welcome to the program. 358 00:17:00,080 --> 00:17:02,840 Speaker 2: As always, I've written a note yesterday, just one very 359 00:17:02,880 --> 00:17:06,280 Speaker 2: short line. I think captured everything. Why take the chance 360 00:17:06,520 --> 00:17:10,320 Speaker 2: with inflation resolved? Neil, can you ask your own question? 361 00:17:12,840 --> 00:17:17,080 Speaker 8: Well, I think when I look ahead, I do think 362 00:17:17,160 --> 00:17:20,320 Speaker 8: there's additional awkward pressure here on the unemployment rate. I mean, 363 00:17:20,359 --> 00:17:22,520 Speaker 8: if you look at what consumers are telling you about 364 00:17:22,560 --> 00:17:25,320 Speaker 8: the jobs market, it's not like they're telling you that 365 00:17:25,359 --> 00:17:27,720 Speaker 8: things are getting better. It's not even like they're telling 366 00:17:27,720 --> 00:17:31,480 Speaker 8: you that things are stabilizing. So the distribution of risks 367 00:17:31,520 --> 00:17:34,000 Speaker 8: with respect to the labor market are clearly skewed to 368 00:17:34,000 --> 00:17:37,040 Speaker 8: the downside. Still, even after this fifty basis point move. 369 00:17:37,640 --> 00:17:40,680 Speaker 8: I mean, there is some inertia in the labor market data, 370 00:17:40,840 --> 00:17:43,879 Speaker 8: and so the fact that things have been weak is 371 00:17:43,920 --> 00:17:47,000 Speaker 8: probably a good reason why they'll stay that way. But 372 00:17:47,080 --> 00:17:49,720 Speaker 8: if you look at the Conference Board labor differential example, 373 00:17:50,119 --> 00:17:54,639 Speaker 8: for example, it's clearly telling you that there might be 374 00:17:54,920 --> 00:17:58,880 Speaker 8: that the unemployment rate probably keeps going up. How much 375 00:17:58,920 --> 00:18:01,439 Speaker 8: of I think remain to be seen, but I do 376 00:18:01,480 --> 00:18:04,359 Speaker 8: think it's probably still higher. And at the same time, 377 00:18:05,160 --> 00:18:08,400 Speaker 8: core inflation has been running below two percent since May, 378 00:18:08,640 --> 00:18:13,480 Speaker 8: and that's happened despite very little help from housing rental inflation. Now, 379 00:18:13,520 --> 00:18:17,480 Speaker 8: I think that there's probably still additional downside with respect 380 00:18:17,480 --> 00:18:20,080 Speaker 8: to rents, you know, based on what we see with 381 00:18:20,119 --> 00:18:23,080 Speaker 8: things like new leases and new tenant rents, for example. 382 00:18:24,320 --> 00:18:26,680 Speaker 8: But if rents begin to cooperate, then you can see 383 00:18:26,720 --> 00:18:30,520 Speaker 8: continued downward pressure on inflation. So you know, my sense 384 00:18:30,640 --> 00:18:34,000 Speaker 8: is that, you know, the Fed's forecasts are conditional, and 385 00:18:34,080 --> 00:18:36,040 Speaker 8: you know, it's interesting to see Powell kind of toe 386 00:18:36,040 --> 00:18:40,240 Speaker 8: the party line after basically exerting his will in September, 387 00:18:41,280 --> 00:18:42,760 Speaker 8: you know, But my sense is, if you get a 388 00:18:42,760 --> 00:18:46,560 Speaker 8: clunker on the employment report between now and the November meeting, 389 00:18:47,520 --> 00:18:49,320 Speaker 8: you know, I think he'll have the ammunition that he 390 00:18:49,400 --> 00:18:51,840 Speaker 8: needs to push through another fifty basis point grade. 391 00:18:51,680 --> 00:18:55,240 Speaker 2: Cut and nails you said, the Chairman yesterday sounded somewhat 392 00:18:55,240 --> 00:18:58,200 Speaker 2: confident of the back of recent data, as you indicated 393 00:18:58,200 --> 00:19:01,800 Speaker 2: in your note earlier on today reiterating the Fed's baseline, 394 00:19:01,840 --> 00:19:03,800 Speaker 2: and as you've alluded to, where you think that baseline 395 00:19:03,840 --> 00:19:06,440 Speaker 2: is vulnerable is when it comes to unemployment and the 396 00:19:06,520 --> 00:19:07,159 Speaker 2: labor market. 397 00:19:07,200 --> 00:19:08,880 Speaker 6: Can we just push your head to Friday? 398 00:19:09,200 --> 00:19:10,840 Speaker 2: What kind of numbers do you think we need to 399 00:19:10,880 --> 00:19:13,960 Speaker 2: see to enable chair and pal to really assert some 400 00:19:14,000 --> 00:19:15,840 Speaker 2: authority again on the committee and get them to go 401 00:19:16,000 --> 00:19:17,040 Speaker 2: another fifty. 402 00:19:17,800 --> 00:19:19,719 Speaker 8: Well, let's be clear. I mean, if you look at 403 00:19:19,720 --> 00:19:22,879 Speaker 8: the three month trend in private peril employment, it's already 404 00:19:22,960 --> 00:19:27,640 Speaker 8: running below one hundred thousand. So you know, I think 405 00:19:27,640 --> 00:19:30,639 Speaker 8: it's possible with those kinds of numbers, particularly with you know, 406 00:19:30,720 --> 00:19:33,440 Speaker 8: we've seen state local governments kind of slow down a 407 00:19:33,440 --> 00:19:36,560 Speaker 8: little bit. I do think it's possible you get additional 408 00:19:36,600 --> 00:19:41,760 Speaker 8: upward pressure on the unemployment rate, and then when you 409 00:19:41,800 --> 00:19:45,800 Speaker 8: look forward to the October jobs number, I mean there's 410 00:19:46,040 --> 00:19:52,600 Speaker 8: just a lot of just potential kits that that report's 411 00:19:52,640 --> 00:19:55,080 Speaker 8: going to take. I mean, you have the Boeing strike, 412 00:19:56,280 --> 00:19:59,879 Speaker 8: you have obviously the port strike, and then you have 413 00:20:00,080 --> 00:20:04,399 Speaker 8: this natural disaster Hurricane Heleen, that's you know, displacing a 414 00:20:04,400 --> 00:20:07,919 Speaker 8: lot of workers at a very sensitive time for that area. 415 00:20:08,040 --> 00:20:10,920 Speaker 8: I mean, if you know Ashville, I mean their tourism 416 00:20:11,000 --> 00:20:16,399 Speaker 8: industry revolves around the fall season, right, so you know, 417 00:20:16,600 --> 00:20:19,240 Speaker 8: I think it's you can't rule out a really really 418 00:20:19,280 --> 00:20:23,040 Speaker 8: bad number going into that. And again, yeah, does Powell 419 00:20:23,040 --> 00:20:25,680 Speaker 8: want to get up there after a really weak number 420 00:20:26,640 --> 00:20:30,480 Speaker 8: at the November press conference and look at the cameras 421 00:20:30,480 --> 00:20:34,440 Speaker 8: and explain away the job's number based on special factors 422 00:20:34,480 --> 00:20:37,760 Speaker 8: at a time when they may well be revising down 423 00:20:37,800 --> 00:20:39,280 Speaker 8: their expectations of inflation. 424 00:20:39,600 --> 00:20:42,320 Speaker 1: Neil Key question here, a lot of people pushing back 425 00:20:42,480 --> 00:20:45,560 Speaker 1: pretty aggressively against the fact that the economy is slowing 426 00:20:45,600 --> 00:20:49,000 Speaker 1: down really substantially. Torchon slock. Where is the slowdown? A 427 00:20:49,040 --> 00:20:52,760 Speaker 1: lot of people pointing to Atlanta Fed's GDP now, which 428 00:20:52,800 --> 00:20:57,280 Speaker 1: points to three point one percent growth in the third quarter. 429 00:20:57,680 --> 00:21:00,560 Speaker 1: How does that cohere with what you're seeing, especially at 430 00:21:00,560 --> 00:21:02,920 Speaker 1: a time where we're not seeing an increase in jobless 431 00:21:02,920 --> 00:21:05,960 Speaker 1: claims and a lot of the other potential ancillary kinds 432 00:21:05,960 --> 00:21:10,359 Speaker 1: of information are not pointing to that real negative downdraft. 433 00:21:12,040 --> 00:21:13,840 Speaker 8: I mean, if things are so strong, why is the 434 00:21:13,920 --> 00:21:18,040 Speaker 8: unemployment rate. Of it's a pretty simple I mean, I 435 00:21:18,080 --> 00:21:21,399 Speaker 8: thought it was very interesting that Powell talked about, you know, 436 00:21:21,480 --> 00:21:25,560 Speaker 8: GDP and GDI revisions, and admittedly they've been they've been positive, 437 00:21:26,160 --> 00:21:29,000 Speaker 8: but one thing that's not really revised is the unemployment rate, 438 00:21:30,000 --> 00:21:33,639 Speaker 8: and the unemployment rate's been climbing. And I would just 439 00:21:33,680 --> 00:21:37,080 Speaker 8: point out that the unemployment rate has been rising despite 440 00:21:38,600 --> 00:21:43,159 Speaker 8: this seemingly strong economy, and consumer attitudes about the labor 441 00:21:43,200 --> 00:21:48,280 Speaker 8: market have been getting worse despite strong headlines on GDP. 442 00:21:49,240 --> 00:21:52,320 Speaker 8: So you know, if you take that all at face value, 443 00:21:53,280 --> 00:21:56,280 Speaker 8: it basically means that the economy is not growing below potential, 444 00:21:57,119 --> 00:22:00,720 Speaker 8: is growing below potential, and Powell admitted that you know, look, 445 00:22:00,720 --> 00:22:02,439 Speaker 8: I mean growth may not be strong enough to keep 446 00:22:02,480 --> 00:22:05,800 Speaker 8: the unemployment rate from rising. If that's the case, that 447 00:22:05,960 --> 00:22:10,080 Speaker 8: means that the labor markets are exerting downward pressure on 448 00:22:10,119 --> 00:22:14,480 Speaker 8: the wages of those that are already working, which is disinflationary. 449 00:22:14,720 --> 00:22:17,840 Speaker 8: So that's another reason for the FED to be easy. 450 00:22:18,160 --> 00:22:22,320 Speaker 1: You know, Neil, I'm not disagreeing or agreeing, because ultimately 451 00:22:22,720 --> 00:22:23,600 Speaker 1: we cannot know. 452 00:22:23,840 --> 00:22:24,920 Speaker 6: What I find really. 453 00:22:24,680 --> 00:22:28,240 Speaker 1: Interesting, and I mean this sincerely is the conviction and 454 00:22:28,280 --> 00:22:30,240 Speaker 1: the idea to have the conviction to say to cut 455 00:22:30,240 --> 00:22:32,640 Speaker 1: by one hundred bass points at a time where there 456 00:22:32,680 --> 00:22:34,879 Speaker 1: is a huge debate over whether we could see a 457 00:22:34,880 --> 00:22:39,040 Speaker 1: reacceleration of the impact of say, some of these strikes 458 00:22:39,080 --> 00:22:41,560 Speaker 1: on data, making it really messy at the same time 459 00:22:41,600 --> 00:22:44,120 Speaker 1: that it's potentially inflationary, at the same time that we're 460 00:22:44,160 --> 00:22:47,560 Speaker 1: on the cost of potentially inflationary policies that could get 461 00:22:47,560 --> 00:22:52,000 Speaker 1: implemented in the United States early next year. How easy 462 00:22:52,040 --> 00:22:54,560 Speaker 1: for it is? How easy is it for you to 463 00:22:54,600 --> 00:22:58,159 Speaker 1: have conviction at a time where there seems to be 464 00:22:58,280 --> 00:22:59,960 Speaker 1: really bifurcated tail risks. 465 00:23:02,640 --> 00:23:05,200 Speaker 8: Well, I mean, I think that every outlook is fraught 466 00:23:05,240 --> 00:23:07,760 Speaker 8: with uncertainty, but I certainly don't believe the FED should 467 00:23:07,760 --> 00:23:10,679 Speaker 8: be front running potential fiscal outcomes based on you know, 468 00:23:11,080 --> 00:23:14,359 Speaker 8: and applying that to today's reaction function. I mean, this 469 00:23:14,480 --> 00:23:18,359 Speaker 8: is about the data as it's been coming in, so 470 00:23:18,680 --> 00:23:22,760 Speaker 8: you know, look, I mean conviction. I mean, I guess 471 00:23:23,200 --> 00:23:24,800 Speaker 8: this is sort of tongue in cheek, but I'm I'm 472 00:23:24,840 --> 00:23:27,240 Speaker 8: paid to have an opinion, and i'm and i'm you know, 473 00:23:27,240 --> 00:23:30,800 Speaker 8: I'm paid to kind of give people a coherent view 474 00:23:30,800 --> 00:23:35,680 Speaker 8: of the world that I think ultimately will pay dividends 475 00:23:35,720 --> 00:23:39,160 Speaker 8: for them, and so you know, I think that that's 476 00:23:39,200 --> 00:23:41,320 Speaker 8: that's part of where the conviction comes from. But you know, 477 00:23:41,480 --> 00:23:46,200 Speaker 8: for me, it's really about what are the markets pricing 478 00:23:46,240 --> 00:23:49,040 Speaker 8: in and what do I think where do I think 479 00:23:49,080 --> 00:23:52,080 Speaker 8: the distribution of risks are. And to me right now, 480 00:23:52,359 --> 00:23:55,359 Speaker 8: I think the idea that the Fed's just going to 481 00:23:55,400 --> 00:23:58,880 Speaker 8: deliver two twenty five basis point grade cuts I think 482 00:23:58,960 --> 00:24:02,879 Speaker 8: is a problem because that is conditional on a forecast 483 00:24:03,160 --> 00:24:06,400 Speaker 8: that assumes you know, the unemployment rates what at four 484 00:24:06,400 --> 00:24:08,480 Speaker 8: point four percent by year end, and that you see 485 00:24:08,840 --> 00:24:12,240 Speaker 8: two point six percent core inflation your every year. If 486 00:24:12,240 --> 00:24:15,240 Speaker 8: you get inflation prints like you did over the last 487 00:24:15,240 --> 00:24:19,399 Speaker 8: few months, they'll be revising down those estimates for core PCE. 488 00:24:20,440 --> 00:24:24,080 Speaker 8: And we're at four point two percent unemployment, and the 489 00:24:24,119 --> 00:24:27,120 Speaker 8: things that I see, whether that be job openings coming down, 490 00:24:27,240 --> 00:24:30,600 Speaker 8: whether that be hiring rates remaining weak, whether that be 491 00:24:30,640 --> 00:24:33,440 Speaker 8: the conference board labor differential, all of those things kind 492 00:24:33,440 --> 00:24:36,000 Speaker 8: of nudge me in the direction to say that we 493 00:24:36,080 --> 00:24:39,439 Speaker 8: may be at four point four percent before you're in 494 00:24:40,480 --> 00:24:44,240 Speaker 8: And like the Fed's forecasts are conditional, so to me, 495 00:24:44,280 --> 00:24:49,359 Speaker 8: it's not an especially big lead. So if I'm looking 496 00:24:49,359 --> 00:24:53,159 Speaker 8: at the way the markets are priced, I think it 497 00:24:53,240 --> 00:24:57,920 Speaker 8: makes sense to bet that they'll end up doing a 498 00:24:57,960 --> 00:24:59,920 Speaker 8: little bit more than what's priced into the full. 499 00:25:00,600 --> 00:25:04,160 Speaker 2: One thing we can all agree on November seventh, Box Office, 500 00:25:04,359 --> 00:25:05,159 Speaker 2: No datta. 501 00:25:05,000 --> 00:25:06,119 Speaker 6: Of run mac neil, Thank you. 502 00:25:06,720 --> 00:25:10,280 Speaker 2: This is the Bloomberg Surveillance Podcast, bringing you the best 503 00:25:10,320 --> 00:25:13,640 Speaker 2: in markets, economics, angio politics. You can watch the show 504 00:25:13,680 --> 00:25:16,639 Speaker 2: live on Bloomberg TV weekday mornings from six am to 505 00:25:16,760 --> 00:25:20,520 Speaker 2: nine am Eastern. 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