WEBVTT - Bloomberg Surveillance TV: October 1, 2024 0:00:00.120 --> 0:00:06.800 Bloomberg Audio Studios, Podcasts, radio news. 0:00:11.640 --> 0:00:15.440 This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along 0:00:15.480 --> 0:00:18.680 with Lisa Bromwitz and Amrie Hordern. Join us each day 0:00:18.720 --> 0:00:22.280 for insight from the best in markets, economics, and geopolitics 0:00:22.400 --> 0:00:24.920 from our global headquarters in New York City. We are 0:00:24.920 --> 0:00:27.680 live on Bloomberg Television weekday mornings from six to nine 0:00:27.720 --> 0:00:31.280 am Eastern. Subscribe to the podcast on Apple, Spotify or 0:00:31.320 --> 0:00:33.960 anywhere else you listen, and as always on the Bloomberg 0:00:34.040 --> 0:00:36.919 Terminal and the Bloomberg Business app. We begin this out 0:00:36.960 --> 0:00:39.720 with US stocks posting four consecutive quarters of games, the 0:00:39.800 --> 0:00:43.400 longest streak since twenty twenty one. Seema Sharp of Principal 0:00:43.400 --> 0:00:46.760 Aid Management, writing this, the attractiveness of cash has declined. 0:00:46.960 --> 0:00:49.720 There is some six point four trillion dollars currently in 0:00:49.720 --> 0:00:54.320 money market funds, potentially representing an important tailwind for risk assets. 0:00:54.320 --> 0:00:57.200 Seema joins us. Now for more, Seema, you sound bullish. 0:00:57.400 --> 0:00:59.400 Walk me through why and where that cash is going 0:00:59.480 --> 0:00:59.640 to go? 0:01:01.240 --> 0:01:02.680 Sure, so, yes, we are bullish. 0:01:03.000 --> 0:01:06.600 I don't want to say overly bullish. We're very cognizant 0:01:06.600 --> 0:01:08.160 of the number of risks out there, but I think 0:01:08.200 --> 0:01:10.360 what we're really basing it on is you have a 0:01:10.360 --> 0:01:13.679 global montri stimular cycle in play. You have a Federal 0:01:13.720 --> 0:01:16.600 Reserve which yes, very very cloud and very difficult to 0:01:16.680 --> 0:01:19.400 navigate its way with all the uncertainties that you've been 0:01:19.400 --> 0:01:22.440 talking about with regards to their data, but they are 0:01:22.640 --> 0:01:25.440 very much committed to soft landing. So that's the one 0:01:25.440 --> 0:01:27.520 thing that we are hang our hats on is you're 0:01:27.600 --> 0:01:31.920 very unlikely to see a recession materializing over the next 0:01:31.959 --> 0:01:34.600 eighteen months. So that is a good backdrop. It doesn't 0:01:34.640 --> 0:01:36.920 necessarily mean that you're going to see enormous security gains. 0:01:36.959 --> 0:01:38.440 I actually doubt that you're going to see the same 0:01:38.520 --> 0:01:40.520 kind of pace of gains that we've already seen in 0:01:40.560 --> 0:01:43.600 the first first three quarters of the year extending through 0:01:43.680 --> 0:01:47.280 to twenty twenty five. But you have a growth backdrop. 0:01:47.360 --> 0:01:50.480 You have a FED munthre easing program in play. That 0:01:50.520 --> 0:01:52.520 should be positive for stocks, it should be positive for 0:01:52.560 --> 0:01:55.640 credit as well. So from our perspective, why being cash 0:01:55.640 --> 0:01:57.960 when you know that rates are coming down and there's 0:01:58.000 --> 0:01:59.720 so many other games to be had on risk assets. 0:01:59.840 --> 0:02:01.920 The story you describe is precisely why we've had this 0:02:02.000 --> 0:02:04.960 massive US overweight and it's been building over the last 0:02:05.000 --> 0:02:06.680 few years relative to the rest of the world, because 0:02:06.680 --> 0:02:09.520 the relative story around the world has not been great. 0:02:09.760 --> 0:02:12.160 Seeming with that in mind, is it time to rejig 0:02:12.200 --> 0:02:15.119 some of that story, cut some of that overweight, redeploy 0:02:15.200 --> 0:02:18.120 some capital abroad, look internationally and a question I think 0:02:18.160 --> 0:02:20.280 a lot of people are asking themselves this morning is well, 0:02:20.320 --> 0:02:22.320 I've seen this movie a few times. This has been 0:02:22.400 --> 0:02:24.600 head fake after headfake. I know how this ends. Is 0:02:24.600 --> 0:02:25.519 it different this time? 0:02:27.160 --> 0:02:29.000 So I don't want to use those words. 0:02:29.280 --> 0:02:32.000 I'll get told off by or by colleagues for saying that, 0:02:32.040 --> 0:02:34.080 But I do think that this is a time to 0:02:34.080 --> 0:02:35.480 be thinking about global diversification. 0:02:35.520 --> 0:02:37.480 It's not necessarily pulling away from the US. 0:02:37.520 --> 0:02:40.640 So you know, with all those all that casually there, 0:02:40.639 --> 0:02:41.800 you need to deploy it somewhere. 0:02:42.440 --> 0:02:43.920 It's about whatever you're going to add. 0:02:43.960 --> 0:02:46.120 Try and think about where the global diversification is because 0:02:46.200 --> 0:02:49.480 valuations around the world in some pockets, not everywhere, but 0:02:49.520 --> 0:02:50.520 they are quite attractive. 0:02:50.760 --> 0:02:52.320 And as I said, it's not just a fur. 0:02:52.200 --> 0:02:54.360 That it's easying, but you're seeing other central banks around 0:02:54.360 --> 0:02:55.359 the world moving. 0:02:55.520 --> 0:02:57.400 I think China is an interesting story. 0:02:57.480 --> 0:03:00.120 We have a lot of I think skepticisn't about how 0:03:00.200 --> 0:03:03.720 much it's going to be sustained, how significant STEMAS. 0:03:03.480 --> 0:03:04.760 Is going to be, how it's going to be implemented. 0:03:05.080 --> 0:03:06.320 But we do think that there will. 0:03:06.200 --> 0:03:09.440 Be positive benefits from a risk sentiment perspective for other 0:03:09.480 --> 0:03:11.600 parts of ages. So I think that there are places 0:03:11.720 --> 0:03:14.280 outside of the US that we can think about, but 0:03:14.360 --> 0:03:16.040 also within the US, you know, we will become very 0:03:16.080 --> 0:03:18.519 accustomed to having that exposure to the MAC seven. We 0:03:18.600 --> 0:03:20.920 are maintaining that, but I think there is also some 0:03:20.960 --> 0:03:23.639 space for some tactical opportunities within the small gap space. 0:03:24.040 --> 0:03:26.320 I want to understand the bullish case and what's been 0:03:26.360 --> 0:03:29.480 priced in already, especially when it comes to the relationship 0:03:29.560 --> 0:03:32.639 of Starks and Bards, Stacks and the Federal Reserve. How 0:03:32.720 --> 0:03:35.440 much of the rally and your bullish sentiment really hinges 0:03:35.840 --> 0:03:39.080 on this recutting cycle that will pick up steam even 0:03:39.120 --> 0:03:42.840 if we don't necessarily get really negative employment data. 0:03:44.200 --> 0:03:46.200 So I think some of it is hinged on it. 0:03:46.440 --> 0:03:49.760 But as I said, we're not expecting the gains to 0:03:49.840 --> 0:03:52.240 continue at the same kind of pace we've had. I 0:03:52.240 --> 0:03:54.240 actually think that it's quite difficult in this market with 0:03:54.240 --> 0:03:56.240 these kind of valuations unless you're to have some kind 0:03:56.280 --> 0:03:59.080 of clean out at this point to have another twenty 0:03:59.120 --> 0:04:01.400 twenty five percent high. So we're thinking more about in 0:04:01.400 --> 0:04:04.600 the single digits for returns. There is a lot of 0:04:04.680 --> 0:04:06.880 uncertainty about how much the FED is going to come 0:04:06.960 --> 0:04:08.960 within the next few months. Are they going to front 0:04:08.960 --> 0:04:10.520 load or are we going to be looking at a 0:04:10.520 --> 0:04:11.520 more extended cycle. 0:04:11.800 --> 0:04:12.520 But as I said. 0:04:12.320 --> 0:04:14.440 Before, the thing that we're thinking about is, look, the 0:04:14.520 --> 0:04:16.680 FED we know is committed to that soft landing. They 0:04:16.760 --> 0:04:19.919 started to cut rates against the backdrop of still positive 0:04:19.920 --> 0:04:22.440 growth where there is no financial crisis Simmery. That is 0:04:22.440 --> 0:04:25.360 a very very pastive, positive backdrop which shoul assure soft landing, 0:04:25.680 --> 0:04:29.240 and against that perspective then you should have continued earnings 0:04:29.240 --> 0:04:32.520 growth and equities moving higher. But we do think that 0:04:32.600 --> 0:04:35.400 instead of just focusing on the MAC seven, it's really 0:04:35.520 --> 0:04:37.760 time to think about other parts of the US market 0:04:37.760 --> 0:04:38.800 and the global complex. 0:04:38.920 --> 0:04:41.159 I feel a bit whipside Seema because we've been talking 0:04:41.200 --> 0:04:45.280 about all of these catastrophic situations around the world and 0:04:45.520 --> 0:04:49.240 how it could potentially affect employment, how it could affect inflation, 0:04:49.440 --> 0:04:52.520 how it could affect growth over the short and potentially 0:04:52.640 --> 0:04:56.160 longer terms, how could disrupt supply chains, and yet Marcus 0:04:56.160 --> 0:04:58.280 have shrugged it off, don't seem to be pricing it 0:04:58.279 --> 0:05:00.760 in at all, which I guess makes because in the 0:05:00.800 --> 0:05:03.680 past it hasn't come to fruition as a tangible risk. 0:05:04.120 --> 0:05:06.679 Of the potential issues that we see on the four 0:05:06.960 --> 0:05:09.560 whether it's the storm, or whether it's the strike we're 0:05:09.600 --> 0:05:11.440 talking about the US, whether it's what's going on in 0:05:11.480 --> 0:05:13.640 the Middle East, what do you have your eye on 0:05:13.800 --> 0:05:15.760 potentially as the most disruptive event. 0:05:17.320 --> 0:05:20.960 I should think that the disruptive event is the Of course, 0:05:21.000 --> 0:05:24.560 this is from market perspective. The most disruptive event is 0:05:24.600 --> 0:05:26.839 really what it does to the data. We know that 0:05:26.880 --> 0:05:28.520 this is effect which is very date to depend. This 0:05:28.560 --> 0:05:31.000 is the market, which is also very data dependent. So 0:05:31.040 --> 0:05:33.280 as much as the data becomes more and more muddied, 0:05:34.200 --> 0:05:35.599 I think that you're going to see a lot of whips. 0:05:35.600 --> 0:05:39.080 And we've already seen abol atilty pick up that there's 0:05:39.120 --> 0:05:42.560 a risk that continues or even exacerbates over the coming months. 0:05:42.560 --> 0:05:44.200 And of course there's always the chance that you take 0:05:44.240 --> 0:05:47.600 the wrong turn because you're so clarded and blinded. 0:05:47.960 --> 0:05:50.920 When it comes to China. I know you mentioned that earlier, 0:05:50.960 --> 0:05:53.080 but you talked about that this week was a pivotal 0:05:53.080 --> 0:05:55.080 moment for it, and it all comes down to the details. 0:05:55.560 --> 0:05:57.880 So far, do you like the details that are coming 0:05:57.880 --> 0:05:58.560 out of Beijing. 0:05:59.680 --> 0:06:00.360 Yeah, we do. 0:06:00.440 --> 0:06:04.200 We are quite encouraged by what we're hearing. We really 0:06:04.240 --> 0:06:06.480 need to see clear numbers. We need to see a 0:06:06.480 --> 0:06:10.400 little more information about the consumption drive. Are we seeing 0:06:10.480 --> 0:06:12.960 kind of direct injections to consumers or is it done 0:06:13.040 --> 0:06:15.440 through subsidies? So there are different ways which is going 0:06:15.480 --> 0:06:18.039 to make it a little bit more impactful or less so. 0:06:19.000 --> 0:06:21.400 But overall, I think the positive thing that we're hearing 0:06:21.440 --> 0:06:24.360 from the government is that they recognize that something needs 0:06:24.360 --> 0:06:25.960 to be done, and it needs to be done in 0:06:26.000 --> 0:06:28.520 conjunction with Mounty Stimmus. It's not enough just for the 0:06:28.600 --> 0:06:32.040 Montreal Mountreal policy cuts. That has to be some kind 0:06:32.040 --> 0:06:34.600 of spending coming in play. I think that is positive. 0:06:34.640 --> 0:06:37.440 It should have a good impact and risk sentiment in 0:06:37.560 --> 0:06:40.440 terms of how much further we think about China GDP 0:06:40.560 --> 0:06:42.800 growth going, Does it hit the five percent level or not? 0:06:43.080 --> 0:06:45.040 That really comes down to those specific details. 0:06:45.040 --> 0:06:47.440 But at least from this point in time, we're hearing 0:06:47.520 --> 0:06:49.719 all the right things from the government and that should 0:06:49.720 --> 0:06:52.479 have some positive externalities across outside from China as well. 0:06:52.640 --> 0:06:55.039 Can we talk about the limits of that positive fallout. 0:06:55.160 --> 0:06:56.279 Let's talk about that right now. 0:06:56.400 --> 0:06:58.520 Pitter Cheer of Academy was on the program about an 0:06:58.560 --> 0:07:00.760 hour ago, and he made the point that Orienta China 0:07:00.839 --> 0:07:04.599 is a story for China, Chinese brands, Chinese companies, and 0:07:04.640 --> 0:07:07.920 the spillover, the positive spillover, is limited to the rest 0:07:07.920 --> 0:07:09.800 of the world, particularly to European companies. 0:07:09.800 --> 0:07:11.040 Sima, what do you make of that argument. 0:07:12.560 --> 0:07:13.760 I wouldn't necessarily agree. 0:07:13.800 --> 0:07:15.680 You know, when we've done the charting, that's actually a 0:07:15.720 --> 0:07:18.800 pretty clear correlation. You have China credit steamulus or whatever 0:07:18.840 --> 0:07:21.200 comes stembus measure that you want to use. There is 0:07:21.240 --> 0:07:25.000 a clear impact on the USICM Manufacturing. 0:07:24.400 --> 0:07:25.360 Survey, for example. 0:07:25.600 --> 0:07:27.600 So we do think that there is a positive impact, 0:07:27.720 --> 0:07:30.320 and in fact for European companies you could actually actually 0:07:30.320 --> 0:07:32.160 see some beluxury companies benefiting. 0:07:32.440 --> 0:07:33.800 So China's consumption has. 0:07:33.680 --> 0:07:36.200 Been limited within China up to now, we could see 0:07:36.200 --> 0:07:39.200 that's streaming outs other parts, particularly in Europe. Now I 0:07:39.240 --> 0:07:41.559 don't exaggerate this because we're actually quite negative on Europe 0:07:41.560 --> 0:07:43.960 as a whole, but in terms of what the impact 0:07:43.960 --> 0:07:46.920 could be outside of China. I don't think it's huge, 0:07:47.080 --> 0:07:49.680 but I think it certainly could be quite positive, particularly 0:07:49.720 --> 0:07:52.120 the time for the rest of the world when expectations 0:07:52.120 --> 0:07:54.120 have been quite low outside of the US. 0:07:54.040 --> 0:07:55.760 Rock bottom over the last few years. 0:07:55.800 --> 0:08:08.679 Samoth, thank you as always, Semushan There of principle, Plis 0:08:08.720 --> 0:08:11.520 and Golfer. The only vice presidential debate of the election. 0:08:11.760 --> 0:08:13.600 We're going to get nine pm Eastern Time without a 0:08:13.640 --> 0:08:16.480 studio audience. The candidates will have two minutes to answer 0:08:16.600 --> 0:08:19.600 questions and two minutes to react. Both Walts and Vans 0:08:19.840 --> 0:08:23.240 will have hot Mike's Republican Congresswoman Lisa McLain from the 0:08:23.240 --> 0:08:25.560 Swiss state of Michigan joined us now for more congresswomen. 0:08:25.600 --> 0:08:27.200 It's going to see you. It's good to be here. 0:08:27.200 --> 0:08:29.560 Thank yousome to New York. Yeah, thanks, welcome. What are 0:08:29.560 --> 0:08:32.200 you hoping to get from the save, Nick Well. 0:08:32.200 --> 0:08:34.520 I hope to get a contrast, right, And what I 0:08:34.559 --> 0:08:37.160 think I'm really hoping for is what exactly the American 0:08:37.160 --> 0:08:40.280 people are hoping for, and that's answers to the questions 0:08:40.760 --> 0:08:44.559 of the issues that everybody's worried about, the economic issues. 0:08:44.760 --> 0:08:46.880 What are we doing about the hurricane, what are we 0:08:46.920 --> 0:08:50.120 doing to bring inflation down? What are we doing about 0:08:50.120 --> 0:08:52.920 the ev mandates? What are we doing about crime? They 0:08:52.960 --> 0:08:56.400 want answers to the issues, and I can share with you. 0:08:56.440 --> 0:09:00.840 In Michigan, there are three issues that matter economy, economy, 0:09:00.880 --> 0:09:03.040 and economy. That's the bottom line. 0:09:03.200 --> 0:09:05.440 When's your economy right now in the set of Michigan. 0:09:05.440 --> 0:09:09.120 And what couldn't the federal government do to have these automakas. 0:09:09.800 --> 0:09:13.839 Our economy in Michigan. We're struggling. Families are struggling. We're 0:09:13.840 --> 0:09:17.920 struggling to put food on the table, put you know, uh, 0:09:18.200 --> 0:09:22.400 put put our gas in our cars and whatnot. What 0:09:22.440 --> 0:09:24.760 the government can do is stay out of the way. 0:09:25.320 --> 0:09:29.160 I mean, seriously, just have some faith in the people. 0:09:29.400 --> 0:09:32.240 We don't need more regulation. We don't need the government 0:09:32.320 --> 0:09:34.120 to tell us what to do, when to do it, 0:09:34.160 --> 0:09:36.640 how to do it, what cars to buy. Have a 0:09:36.640 --> 0:09:38.360 little faith in the American people. 0:09:39.240 --> 0:09:42.360 Even very critical of this administration when it comes to 0:09:42.640 --> 0:09:45.959 the transition to electric vehicles. At the same time, you're 0:09:45.960 --> 0:09:49.400 also very critical of China. But China is absolutely dominating 0:09:49.400 --> 0:09:52.280 the entire world when it comes to electric vehicles as 0:09:52.280 --> 0:09:54.319 well as the processing to make the batteries to get 0:09:54.320 --> 0:09:57.000 to that electric vehicle. So how do you suggest the 0:09:57.160 --> 0:10:00.400 US compete given this is so critical to your district. 0:10:00.920 --> 0:10:03.160 The biggest thing that we can do to compete is 0:10:03.200 --> 0:10:08.640 stop the mandates. Let the consumer buy the product they 0:10:08.800 --> 0:10:13.280 want to buy. Listen with the seventy percent EV mandates 0:10:13.280 --> 0:10:16.040 by twenty thirty, we don't have the infrastructure. I mean, 0:10:16.080 --> 0:10:18.480 I'm not telling you guys everything anything you don't already know. 0:10:18.720 --> 0:10:21.520 We don't have the infrastructure, and people don't want to 0:10:21.520 --> 0:10:24.800 buy the cars. Not to mention, where are we getting 0:10:24.800 --> 0:10:29.320 all the batteries from? Oh, our biggest adversary, China? And 0:10:29.360 --> 0:10:31.360 for those of us who really care about the Green 0:10:31.440 --> 0:10:35.040 New Deal, right, Okay, that was a little bit of 0:10:35.080 --> 0:10:38.440 sarcasm there. But for those of us who care, where 0:10:38.480 --> 0:10:41.600 are we getting the batteries from China? What does it 0:10:41.679 --> 0:10:46.440 take to produce those batteries coal and coal plants? It's 0:10:46.520 --> 0:10:52.040 counterproductive and counterintuitive on what we're doing with these EV mandates. 0:10:52.080 --> 0:10:54.320 When you say mandate, there's not an explicit mandate. It's 0:10:54.360 --> 0:10:58.240 just the pollution controls. So just the question I have 0:10:58.360 --> 0:11:01.320 is the Inflation Reduction Act, which I know you're critical of. 0:11:01.400 --> 0:11:02.480 You called the Three New Deals. 0:11:02.559 --> 0:11:04.720 You clearly are critical of it, but a lot of 0:11:04.720 --> 0:11:07.560 that money actually went to Michigan for clean tech. So, 0:11:07.880 --> 0:11:11.160 say there is a change in the composition of Congress 0:11:11.240 --> 0:11:13.320 or change in the White House, are you going to 0:11:13.320 --> 0:11:15.960 be one of those individuals that wants to repeal some 0:11:16.120 --> 0:11:19.200 of those provisions that are in the Inflation Reduction Act. 0:11:19.600 --> 0:11:19.840 Yes? 0:11:20.240 --> 0:11:23.600 And I say that because I have faith in people 0:11:24.040 --> 0:11:29.200 and in the Inflation Reduction Act. With these mandates, right, 0:11:29.640 --> 0:11:34.320 I think everyone wants a cleaner planet, right, But who's 0:11:34.400 --> 0:11:37.120 going to give us that cleaner planet. I'm going to 0:11:37.160 --> 0:11:39.400 share with you it's going to be business, and it's 0:11:39.400 --> 0:11:41.960 going to be industry, the people that do it for 0:11:42.040 --> 0:11:45.080 a living every day. The government's not going to be 0:11:45.120 --> 0:11:49.080 able to legislate that because of all the unintended consequences. 0:11:49.320 --> 0:11:52.360 Let's leave it to the business owners and industry that 0:11:52.559 --> 0:11:56.000 actually know what they're doing and how to do it. 0:11:56.320 --> 0:11:58.640 So let's talk about what's going on in Michigan. I'm 0:11:58.679 --> 0:12:01.000 sure you saw the report about slock In, who's going 0:12:01.000 --> 0:12:03.800 for the Senate seat. She's telling her donors, according to 0:12:03.880 --> 0:12:07.520 scoop from Axios, that she is underwater because Kamala Harris 0:12:07.600 --> 0:12:10.560 isn't polling well in Michigan. Are you expecting a red 0:12:10.600 --> 0:12:11.480 wave in your state. 0:12:13.040 --> 0:12:15.559 I don't want to predict a red wave. Last time 0:12:15.600 --> 0:12:17.760 we did that, it didn't turn out exactly like a 0:12:17.800 --> 0:12:21.360 red wave. I want to predict a win, right, And 0:12:21.679 --> 0:12:25.080 I think I'm cautiously optimistic that we are going to 0:12:25.120 --> 0:12:27.719 get a win in Michigan. And I think we're going 0:12:27.760 --> 0:12:30.000 to get a win for three reasons and I said 0:12:30.040 --> 0:12:33.200 them earlier. The economy. The economy, the economy. People in 0:12:33.240 --> 0:12:37.840 Michigan are hurting. We're a manufacturing state, right, We're an 0:12:37.920 --> 0:12:42.240 auto state. We need to be able to do business. 0:12:42.320 --> 0:12:45.640 And with the inflation and the layoffs and the mandates, 0:12:46.160 --> 0:12:49.520 people in Michigan are hurting in it's because of the 0:12:49.559 --> 0:12:53.520 policies that this administration and the Democrats are cramming down 0:12:53.559 --> 0:12:54.240 our throats. 0:12:54.640 --> 0:12:56.680 You said the best thing the government can do is 0:12:56.720 --> 0:12:59.120 to stay out of your way. You talk about how 0:12:59.120 --> 0:13:01.920 business really needs to just be left to their own devices, 0:13:02.240 --> 0:13:06.959 and yet Donald Trump is talking about tariffs, extensive tariffs 0:13:06.960 --> 0:13:10.959 that could potentially increase inflation and potentially put up gates 0:13:11.200 --> 0:13:14.199 to the concept of free trade and businesses making those decisions. 0:13:14.800 --> 0:13:16.560 Why is that a good option? 0:13:17.160 --> 0:13:19.280 Well, I think if you look at the tariffs that 0:13:19.320 --> 0:13:24.440 Donald Trump is proposing. He's proposing tariffs as a reaction 0:13:25.600 --> 0:13:30.240 to unfair trade practices. What Donald Trump wants and why 0:13:30.280 --> 0:13:33.360 he's using tariffs as a tool that he has in 0:13:33.400 --> 0:13:36.360 his tool belt, is to make sure that we are 0:13:36.400 --> 0:13:39.360 playing on a level playing field. Right now, we're not 0:13:39.520 --> 0:13:42.760 playing on a level playing field, and he wants to 0:13:42.800 --> 0:13:46.680 make sure that we have a level playing field for 0:13:46.840 --> 0:13:51.560 our businesses and for American companies. If our adversaries like 0:13:51.679 --> 0:13:54.240 China would like to plan a level playing field, I 0:13:54.240 --> 0:13:56.440 don't think there's a need for tariffs, but if they're 0:13:56.480 --> 0:13:59.160 not going to play fairly, your dog on right, He's 0:13:59.160 --> 0:14:01.040 going to put tariffs in place, and I agree with them. 0:14:01.160 --> 0:14:04.760 I'm curious just more in the immediate aftermath of the strike, 0:14:05.040 --> 0:14:07.000 just to sort of go to the next couple of weeks, 0:14:07.400 --> 0:14:10.559 not just the longer term. We are talking about the 0:14:10.600 --> 0:14:13.320 biggest strike of dock workers going back to nineteen seventy seven. 0:14:13.360 --> 0:14:15.840 There are a lot of auto parts it could potentially 0:14:15.880 --> 0:14:20.200 be coming through. How are you preparing your manufacturers in 0:14:20.320 --> 0:14:23.720 Michigan for the potential of production being stopped. 0:14:23.440 --> 0:14:25.000 Or delayed because of this. 0:14:25.080 --> 0:14:29.000 Listen, we're very concerned, and they've been preparing up to 0:14:29.080 --> 0:14:32.040 this point because they had an inkling that this would happen. Right, 0:14:32.120 --> 0:14:34.720 This isn't something that's just happened yesterday. Right, We've been 0:14:34.760 --> 0:14:36.680 able to prepare a little bit. 0:14:37.280 --> 0:14:37.880 But make no. 0:14:37.920 --> 0:14:44.000 Mistake, this will be devastating for Michigan manufacturing, for trucking industries, 0:14:44.040 --> 0:14:47.520 for grocery stores. But the biggest people who will be 0:14:47.560 --> 0:14:50.480 affected by this will be the consumer. Right on top 0:14:50.520 --> 0:14:55.720 of record inflations, the people of Michigan are going to 0:14:55.800 --> 0:14:57.520 be hurt drastically. 0:14:57.760 --> 0:14:59.200 Do you think that why has should get involved? 0:15:00.000 --> 0:15:02.120 You know, I think you should have never gotten to 0:15:02.160 --> 0:15:06.400 this point, right. The White House touts itself as you know, 0:15:07.080 --> 0:15:11.360 mister Joe Union, Right, why did it get to this point? 0:15:11.480 --> 0:15:13.880 There's no reason it would it should have gotten to 0:15:13.920 --> 0:15:17.120 this point. But again, like many other issues, here we 0:15:17.160 --> 0:15:20.920 are today and now we're in a crisis situation. We've 0:15:20.960 --> 0:15:23.640 got to do better and be more proactive so that 0:15:23.680 --> 0:15:25.920 we don't get to this position. 0:15:26.080 --> 0:15:28.120 This is why we are the congresswoman, So I'm wondering 0:15:28.160 --> 0:15:30.400 there is an act that he can activate that would 0:15:30.400 --> 0:15:32.040 initiate an eighty day code and off perage. 0:15:32.040 --> 0:15:32.760 You think you should do. 0:15:32.680 --> 0:15:34.840 So, Yeah, I think you should take a long hard 0:15:34.920 --> 0:15:38.239 look at it. Right, we have to bring both parties 0:15:38.360 --> 0:15:42.880 back to the table. It couldn't be a worse timing, right, 0:15:43.400 --> 0:15:46.080 you have inflation, record high inflation, but also let's not 0:15:46.080 --> 0:15:47.880 forget about the devastating hurricane we had. 0:15:47.920 --> 0:15:49.960 High inflation, it's come down a little bit, price, it 0:15:50.000 --> 0:15:50.800 still elevates it. 0:15:50.880 --> 0:15:53.880 Well, places are still elevated. But it's the bottom line 0:15:53.920 --> 0:15:55.840 that counts, provided you know how to count. Right, if 0:15:55.920 --> 0:15:58.600 inflation's at one point four percent, it goes up to 0:15:58.680 --> 0:16:01.240 nine and it comes down to four four, still higher 0:16:01.280 --> 0:16:01.720 than one point. 0:16:01.800 --> 0:16:02.720 People are still struggling. 0:16:02.920 --> 0:16:06.440 People are still struggling, but also on the backs of 0:16:06.480 --> 0:16:08.880 the hurricane that we're just we've got to be able 0:16:08.920 --> 0:16:13.800 to get supplies in the necessary aid. This dock strike 0:16:13.960 --> 0:16:16.200 is not going to help that at all. So I 0:16:16.200 --> 0:16:18.560 think we should take a long hard look at it. Well, 0:16:19.160 --> 0:16:21.520 you know, and to your point, here we are, Yes, 0:16:21.600 --> 0:16:23.840 we should have never gotten here, but here we are. 0:16:24.240 --> 0:16:25.600 So we have to take a look at all the 0:16:25.600 --> 0:16:27.200 options to protect the American people. 0:16:27.240 --> 0:16:28.960 Well, we appreciate your time, thanks for being able to 0:16:29.000 --> 0:16:30.760 star in New York City. Thank you, Thank you, come 0:16:30.760 --> 0:16:31.120 back again. 0:16:31.200 --> 0:16:31.320 Soon. 0:16:31.400 --> 0:16:33.880 Republican Congresswoman Lisa McLain of Michigan. 0:16:42.720 --> 0:16:45.440 Marcus digesting fed Shad Jay Poal's message that he's in 0:16:45.520 --> 0:16:47.560 no hurry to move ahead with more rate cuts, but 0:16:47.640 --> 0:16:50.840 Noil Duatta of renomass one hundred more basis points off 0:16:50.880 --> 0:16:54.120 Easy before year end, citing the fact that unemployment is 0:16:54.240 --> 0:16:57.880 likely to continue rising and inflation continues to slow. Neil 0:16:57.960 --> 0:16:59.680 joins us now for more, Neil, welcome to the program. 0:17:00.080 --> 0:17:02.840 As always, I've written a note yesterday, just one very 0:17:02.880 --> 0:17:06.280 short line. I think captured everything. Why take the chance 0:17:06.520 --> 0:17:10.320 with inflation resolved? Neil, can you ask your own question? 0:17:12.840 --> 0:17:17.080 Well, I think when I look ahead, I do think 0:17:17.160 --> 0:17:20.320 there's additional awkward pressure here on the unemployment rate. I mean, 0:17:20.359 --> 0:17:22.520 if you look at what consumers are telling you about 0:17:22.560 --> 0:17:25.320 the jobs market, it's not like they're telling you that 0:17:25.359 --> 0:17:27.720 things are getting better. It's not even like they're telling 0:17:27.720 --> 0:17:31.480 you that things are stabilizing. So the distribution of risks 0:17:31.520 --> 0:17:34.000 with respect to the labor market are clearly skewed to 0:17:34.000 --> 0:17:37.040 the downside. Still, even after this fifty basis point move. 0:17:37.640 --> 0:17:40.680 I mean, there is some inertia in the labor market data, 0:17:40.840 --> 0:17:43.879 and so the fact that things have been weak is 0:17:43.920 --> 0:17:47.000 probably a good reason why they'll stay that way. But 0:17:47.080 --> 0:17:49.720 if you look at the Conference Board labor differential example, 0:17:50.119 --> 0:17:54.639 for example, it's clearly telling you that there might be 0:17:54.920 --> 0:17:58.880 that the unemployment rate probably keeps going up. How much 0:17:58.920 --> 0:18:01.439 of I think remain to be seen, but I do 0:18:01.480 --> 0:18:04.359 think it's probably still higher. And at the same time, 0:18:05.160 --> 0:18:08.400 core inflation has been running below two percent since May, 0:18:08.640 --> 0:18:13.480 and that's happened despite very little help from housing rental inflation. Now, 0:18:13.520 --> 0:18:17.480 I think that there's probably still additional downside with respect 0:18:17.480 --> 0:18:20.080 to rents, you know, based on what we see with 0:18:20.119 --> 0:18:23.080 things like new leases and new tenant rents, for example. 0:18:24.320 --> 0:18:26.680 But if rents begin to cooperate, then you can see 0:18:26.720 --> 0:18:30.520 continued downward pressure on inflation. So you know, my sense 0:18:30.640 --> 0:18:34.000 is that, you know, the Fed's forecasts are conditional, and 0:18:34.080 --> 0:18:36.040 you know, it's interesting to see Powell kind of toe 0:18:36.040 --> 0:18:40.240 the party line after basically exerting his will in September, 0:18:41.280 --> 0:18:42.760 you know, But my sense is, if you get a 0:18:42.760 --> 0:18:46.560 clunker on the employment report between now and the November meeting, 0:18:47.520 --> 0:18:49.320 you know, I think he'll have the ammunition that he 0:18:49.400 --> 0:18:51.840 needs to push through another fifty basis point grade. 0:18:51.680 --> 0:18:55.240 Cut and nails you said, the Chairman yesterday sounded somewhat 0:18:55.240 --> 0:18:58.200 confident of the back of recent data, as you indicated 0:18:58.200 --> 0:19:01.800 in your note earlier on today reiterating the Fed's baseline, 0:19:01.840 --> 0:19:03.800 and as you've alluded to, where you think that baseline 0:19:03.840 --> 0:19:06.440 is vulnerable is when it comes to unemployment and the 0:19:06.520 --> 0:19:07.159 labor market. 0:19:07.200 --> 0:19:08.880 Can we just push your head to Friday? 0:19:09.200 --> 0:19:10.840 What kind of numbers do you think we need to 0:19:10.880 --> 0:19:13.960 see to enable chair and pal to really assert some 0:19:14.000 --> 0:19:15.840 authority again on the committee and get them to go 0:19:16.000 --> 0:19:17.040