1 00:00:02,520 --> 00:00:13,760 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg 2 00:00:13,840 --> 00:00:17,920 Speaker 1: Surveillance Podcast. Catch us live weekdays at seven am Eastern 3 00:00:18,200 --> 00:00:22,000 Speaker 1: on Apple CarPlay or Android Auto with the Bloomberg Business App. 4 00:00:22,360 --> 00:00:25,680 Speaker 1: Listen on demand wherever you get your podcasts, or watch 5 00:00:25,760 --> 00:00:27,480 Speaker 1: us live on YouTube right now. 6 00:00:27,480 --> 00:00:32,920 Speaker 2: Matt Hornback joins Global ahead of macro Strategy at Morgan Stanley. Matt, 7 00:00:32,960 --> 00:00:36,840 Speaker 2: good luck with the macro strategy. September twenty twenty five. 8 00:00:37,200 --> 00:00:40,800 Speaker 2: When you sit at the table in a wonderfully collegially 9 00:00:41,040 --> 00:00:46,080 Speaker 2: argumentative Morgan Stanley, how divisive is the debate? Hi? 10 00:00:46,159 --> 00:00:48,360 Speaker 3: Hi, Tom, Thanks for having me on. It's a pleasure 11 00:00:48,360 --> 00:00:52,760 Speaker 3: to be back. Well, we don't have divisive debates. We 12 00:00:52,840 --> 00:00:56,520 Speaker 3: have collegial debates, and you know, I think in the end, 13 00:00:56,640 --> 00:00:59,360 Speaker 3: we all try to come to an understanding of all 14 00:00:59,400 --> 00:01:04,360 Speaker 3: of the very perspectives that are informing investments taking place 15 00:01:04,360 --> 00:01:07,399 Speaker 3: in the markets every day. You know, it's it's obviously 16 00:01:07,520 --> 00:01:12,560 Speaker 3: not just one perspective that ends up dominating the investment landscape. 17 00:01:12,600 --> 00:01:15,560 Speaker 3: It's a collection of a multitude of perspectives, and so 18 00:01:15,600 --> 00:01:17,760 Speaker 3: we we like having those debates internally, but. 19 00:01:17,880 --> 00:01:22,839 Speaker 2: The debates here center around an absolutely original fed meeting. 20 00:01:23,520 --> 00:01:27,520 Speaker 2: I mean it's I remember years ago talking to Richard 21 00:01:27,560 --> 00:01:32,000 Speaker 2: Berner at a dinner former Morgan Stanley Giant about the dots. 22 00:01:32,640 --> 00:01:35,240 Speaker 2: I mean, this is not a normal meeting of dots, 23 00:01:35,360 --> 00:01:36,200 Speaker 2: is it, Matt. 24 00:01:35,920 --> 00:01:41,480 Speaker 3: Hornback, It certainly is not, and it's it's perhaps a 25 00:01:41,480 --> 00:01:44,000 Speaker 3: meeting of dots and dissents. 26 00:01:43,480 --> 00:01:46,160 Speaker 4: If I can, if I can play on words. 27 00:01:46,920 --> 00:01:50,760 Speaker 3: You know in the end that the dots are a 28 00:01:50,800 --> 00:01:55,040 Speaker 3: device that the FED doesn't like to use as a 29 00:01:55,120 --> 00:02:00,920 Speaker 3: guidance device, but unfortunately investors have become a customed to 30 00:02:01,080 --> 00:02:04,520 Speaker 3: using the dot plot as just that, as forward guidance, 31 00:02:04,560 --> 00:02:07,440 Speaker 3: and so this will be an important set of dots. 32 00:02:07,960 --> 00:02:10,160 Speaker 3: As you know, we add an additional year to the 33 00:02:10,200 --> 00:02:15,040 Speaker 3: dot plot in September, and we also focus very much 34 00:02:15,120 --> 00:02:19,120 Speaker 3: on what the dot for twenty twenty five implies for 35 00:02:19,200 --> 00:02:21,640 Speaker 3: the final two meetings of the year. You know, the 36 00:02:21,720 --> 00:02:26,440 Speaker 3: consensus is that we will have a median dot somewhere 37 00:02:26,480 --> 00:02:31,359 Speaker 3: between two or three cuts in total for twenty twenty five, 38 00:02:31,400 --> 00:02:35,359 Speaker 3: including of course the cut that everyone expects at this meeting. 39 00:02:36,240 --> 00:02:38,160 Speaker 4: But there's always surprises, and. 40 00:02:38,080 --> 00:02:41,000 Speaker 3: When the dots move, they tend to move a lot, 41 00:02:41,160 --> 00:02:44,200 Speaker 3: so that's will really be the main question I'll be 42 00:02:44,200 --> 00:02:46,160 Speaker 3: trying to answer going into the meeting. 43 00:02:47,320 --> 00:02:51,400 Speaker 5: Matt So as global head of macro Strategy, where's the 44 00:02:51,440 --> 00:02:54,280 Speaker 5: waiting for you guys these days, US versus rest of 45 00:02:54,320 --> 00:02:56,600 Speaker 5: the world, Because there was similarly a little bit of 46 00:02:56,600 --> 00:02:59,160 Speaker 5: a c change there in the beginning of this year 47 00:02:59,200 --> 00:03:02,200 Speaker 5: around the liberation today. Where are you guys right now? 48 00:03:03,320 --> 00:03:07,880 Speaker 3: Yeah, you know, the dominance of the US and macro 49 00:03:08,000 --> 00:03:12,080 Speaker 3: markets is something that has been around for quite some time. 50 00:03:12,200 --> 00:03:13,359 Speaker 4: Of course, I think one of. 51 00:03:13,320 --> 00:03:17,480 Speaker 3: The main reasons for that is because the central bank 52 00:03:17,960 --> 00:03:21,160 Speaker 3: that most people in the world pay attention to more 53 00:03:21,200 --> 00:03:23,680 Speaker 3: than any other is the FED, of course, and so 54 00:03:24,200 --> 00:03:26,400 Speaker 3: when you have all of these eyes around the world 55 00:03:26,560 --> 00:03:32,679 Speaker 3: focusing on the same event, it can dominate investment perspectives 56 00:03:32,680 --> 00:03:36,240 Speaker 3: and actions. So we are certainly focused on the US 57 00:03:36,280 --> 00:03:39,520 Speaker 3: at the moment. You know, the US economy is one 58 00:03:39,560 --> 00:03:43,760 Speaker 3: where the labor market appears to be showing the most 59 00:03:44,040 --> 00:03:48,000 Speaker 3: signs of strain. I don't want to use the word stress, 60 00:03:48,480 --> 00:03:52,200 Speaker 3: but I think strain is an appropriate description of what 61 00:03:52,760 --> 00:03:56,080 Speaker 3: we're seeing happen in the US labor market. And of course, 62 00:03:56,640 --> 00:04:01,720 Speaker 3: if the strain turns into stress, then we can expect 63 00:04:02,480 --> 00:04:07,240 Speaker 3: the central bank to act much more expeditiously, to use 64 00:04:07,240 --> 00:04:11,360 Speaker 3: a word that Pal has used in the past. So 65 00:04:11,400 --> 00:04:13,400 Speaker 3: I think right now we are focused on the US, 66 00:04:13,440 --> 00:04:16,560 Speaker 3: but we'll see, We'll see what happens in the economy 67 00:04:16,560 --> 00:04:18,000 Speaker 3: into the end of the year, and maybe it will 68 00:04:18,040 --> 00:04:21,600 Speaker 3: then be appropriate to focus on other parts of other 69 00:04:21,640 --> 00:04:22,799 Speaker 3: parts of the investment world. 70 00:04:23,800 --> 00:04:26,560 Speaker 5: Matt, we got you on YouTube video. I see outside 71 00:04:26,560 --> 00:04:28,760 Speaker 5: your office. I'm bet guessing some traders out there, and 72 00:04:28,800 --> 00:04:30,520 Speaker 5: they're probably thinking about what they should be doing, how 73 00:04:30,560 --> 00:04:33,320 Speaker 5: they should be positioned around two o'clock. How are you 74 00:04:33,360 --> 00:04:35,919 Speaker 5: guys thinking about two o'clock in the two thirty conference. 75 00:04:36,920 --> 00:04:41,160 Speaker 3: So our baseline view is that the FED will lower 76 00:04:41,240 --> 00:04:45,120 Speaker 3: rates by twenty five basis points. We are expecting one 77 00:04:45,440 --> 00:04:49,440 Speaker 3: dissent from a board governor, in this case the newly 78 00:04:49,480 --> 00:04:55,599 Speaker 3: appointed Steven Myron, and so that's what we're expecting for 79 00:04:55,839 --> 00:05:00,839 Speaker 3: kind of the main bits of the meeting. What, of course, 80 00:05:00,920 --> 00:05:03,880 Speaker 3: people will be focused on quite a bit is number 81 00:05:03,880 --> 00:05:07,279 Speaker 3: one the dot plot. As I mentioned earlier, does that 82 00:05:07,480 --> 00:05:12,240 Speaker 3: median dot settle in at two three? How many if 83 00:05:12,279 --> 00:05:17,719 Speaker 3: any dots are circling around four rate cuts for in 84 00:05:17,760 --> 00:05:19,920 Speaker 3: total for the year, that would be one hundred basis points. 85 00:05:20,160 --> 00:05:23,400 Speaker 3: I think very few people are expecting there to be 86 00:05:23,440 --> 00:05:26,120 Speaker 3: a collection of dots showing one hundred basis points of 87 00:05:26,200 --> 00:05:29,320 Speaker 3: rate cuts, but there certainly could be, and that will 88 00:05:29,360 --> 00:05:32,400 Speaker 3: be a point of focus. And then, naturally, the press 89 00:05:32,440 --> 00:05:35,800 Speaker 3: conference is an important part of the. 90 00:05:35,880 --> 00:05:38,960 Speaker 4: F MC meeting now every six to eight. 91 00:05:40,120 --> 00:05:44,600 Speaker 2: Matt, with all your heritage of decades in Japan, two 92 00:05:44,640 --> 00:05:48,520 Speaker 2: o'clock today in the press conference today, is your own 93 00:05:48,520 --> 00:05:50,200 Speaker 2: palse central banker to the world. 94 00:05:50,320 --> 00:05:52,360 Speaker 6: Is he, frankly central banker to Tokyo. 95 00:05:55,160 --> 00:05:59,279 Speaker 4: Well, he might be central banker to himself. 96 00:06:00,480 --> 00:06:03,039 Speaker 3: In the sense that you know, we are now in 97 00:06:03,120 --> 00:06:08,040 Speaker 3: the twilight period of his time as FED chair He has, 98 00:06:08,360 --> 00:06:12,279 Speaker 3: you know, just a handful of important meetings left in 99 00:06:12,320 --> 00:06:16,920 Speaker 3: his tenure. I imagine the closer that he gets to May, 100 00:06:17,880 --> 00:06:19,880 Speaker 3: the more he will start to reflect on his own 101 00:06:19,960 --> 00:06:25,080 Speaker 3: time as chairman of the Fed, and perhaps he will 102 00:06:25,240 --> 00:06:28,600 Speaker 3: start to think about the books that may or may 103 00:06:28,600 --> 00:06:33,560 Speaker 3: not be written about him after he bids farewell to 104 00:06:33,640 --> 00:06:37,120 Speaker 3: the Federal Reserve. In that case, you know, he could 105 00:06:37,120 --> 00:06:41,039 Speaker 3: be focused on doing what is certainly right for the economy, 106 00:06:41,520 --> 00:06:44,360 Speaker 3: but also in doing what is right for the economy, 107 00:06:45,400 --> 00:06:49,400 Speaker 3: he ultimately is going to be helping his own reputation 108 00:06:49,720 --> 00:06:50,320 Speaker 3: moving forward. 109 00:06:50,520 --> 00:06:53,600 Speaker 2: Matt thank you for your time. Matthew hornbackus with Morgan Stanley. 110 00:06:54,279 --> 00:06:58,400 Speaker 2: We thank him here on a FED day. Stay with us. 111 00:06:58,440 --> 00:07:01,640 Speaker 2: More from Bloomberg Survey on coming up after this. 112 00:07:08,880 --> 00:07:12,480 Speaker 1: You're listening to the Bloomberg Surveillance Podcast. Catch us live 113 00:07:12,560 --> 00:07:15,720 Speaker 1: weekday afternoons from seven to ten am Eastern. Listen on 114 00:07:15,800 --> 00:07:19,440 Speaker 1: Applecarplay and Android Otto with the Bloomberg Business app, or 115 00:07:19,600 --> 00:07:21,040 Speaker 1: watch us live on YouTube. 116 00:07:21,160 --> 00:07:25,440 Speaker 2: Kaylie Cox joined chief market strategists Riddultswell's management. Kaylee, get 117 00:07:25,520 --> 00:07:29,160 Speaker 2: us into earnings, but more importantly, get us beyond earnings 118 00:07:29,200 --> 00:07:30,720 Speaker 2: into November and December. 119 00:07:31,160 --> 00:07:33,320 Speaker 6: Is there going to be like a frenzy melt up? 120 00:07:35,360 --> 00:07:37,840 Speaker 7: Well, I think before earnings we need to talk the 121 00:07:37,880 --> 00:07:40,040 Speaker 7: FED and the government shutdown because those are the two 122 00:07:40,240 --> 00:07:43,840 Speaker 7: most prominent Yeah, risk kind of risk catalysts that are 123 00:07:43,840 --> 00:07:46,200 Speaker 7: coming over the next few weeks. But one quick thing 124 00:07:46,240 --> 00:07:48,960 Speaker 7: about earnings. Q three earnings obviously Q two was a 125 00:07:48,960 --> 00:07:52,880 Speaker 7: low bar. Companies hurdled that bar pretty easily, although I 126 00:07:52,880 --> 00:07:55,000 Speaker 7: guess there are a few caveats because I think you 127 00:07:55,040 --> 00:07:57,920 Speaker 7: need to be looking at earnings on a sector sector basis. 128 00:07:58,600 --> 00:08:01,360 Speaker 7: The bar will be higher. I think analysts are still 129 00:08:01,360 --> 00:08:04,680 Speaker 7: having trouble processing what tariffs could mean, especially with the 130 00:08:04,680 --> 00:08:07,440 Speaker 7: new change that came at the beginning of August. But 131 00:08:07,480 --> 00:08:09,800 Speaker 7: I'm really focusing on what the Fed will do as 132 00:08:09,840 --> 00:08:11,560 Speaker 7: a precursor to what we'll see through the end of 133 00:08:11,600 --> 00:08:14,720 Speaker 7: the year, and really the pushes and pulls and the 134 00:08:14,720 --> 00:08:17,160 Speaker 7: government shut down, especially as we head into October. 135 00:08:17,480 --> 00:08:21,280 Speaker 2: Yeah, but if we get past those, Paul, yep, I'm sorry, 136 00:08:22,320 --> 00:08:26,000 Speaker 2: I got solid GDP. I understand the tensions out there, 137 00:08:26,000 --> 00:08:29,440 Speaker 2: particularly in the labor market. But Paul, where are we 138 00:08:30,160 --> 00:08:32,160 Speaker 2: October twenty fifth or something? 139 00:08:32,200 --> 00:08:34,520 Speaker 5: I know it's time you talk about the resiliency, the 140 00:08:34,559 --> 00:08:36,520 Speaker 5: courage to be in the market's CALLI I know you 141 00:08:36,640 --> 00:08:39,880 Speaker 5: folks over Aberdhalt's Wealth Management are really long term. You 142 00:08:40,000 --> 00:08:43,400 Speaker 5: try not to get tripped up by by the noise here. 143 00:08:43,640 --> 00:08:47,199 Speaker 5: How is your kind of outlook kind of changed, if 144 00:08:47,200 --> 00:08:49,000 Speaker 5: at all, during the course of twenty twenty five. 145 00:08:50,600 --> 00:08:52,760 Speaker 7: Well, it's funny. Our clients are long term, but we 146 00:08:52,800 --> 00:08:55,000 Speaker 7: don't pretend that the noise isn't there. Our clients are 147 00:08:55,040 --> 00:08:57,440 Speaker 7: also hearing the noise. They have legitimate questions about the 148 00:08:57,440 --> 00:09:00,640 Speaker 7: headlines that they see come across the tape where we sit, 149 00:09:00,800 --> 00:09:04,720 Speaker 7: and you know, our outlook has been around leaning toward 150 00:09:04,760 --> 00:09:07,280 Speaker 7: value for most of the year, especially because toward the 151 00:09:07,280 --> 00:09:10,040 Speaker 7: beginning of the year, you know, we had Liberation Day, 152 00:09:10,080 --> 00:09:12,440 Speaker 7: we had these tariff pressures that we had to think about, 153 00:09:12,880 --> 00:09:16,160 Speaker 7: and labor markets weren't looking the strongest heading into the year. 154 00:09:16,240 --> 00:09:18,680 Speaker 7: And you know, we believe that the consumer drives the economy. 155 00:09:18,760 --> 00:09:23,800 Speaker 7: Consumers aren't making money then, you know, Americans aren't spending 156 00:09:23,840 --> 00:09:27,840 Speaker 7: like they usually are, So you know, we've been encouraging value. 157 00:09:27,880 --> 00:09:30,840 Speaker 7: We've been encouraging you know, rebalancing your book, understanding what 158 00:09:30,920 --> 00:09:33,120 Speaker 7: you own. We still think that this is prudent heading 159 00:09:33,120 --> 00:09:34,760 Speaker 7: into the end of the year, and honestly, we think 160 00:09:34,800 --> 00:09:37,640 Speaker 7: it's prudent for most of the time for our investors 161 00:09:37,679 --> 00:09:41,840 Speaker 7: who are prioritizing stability and consistency. But it is a 162 00:09:41,840 --> 00:09:46,360 Speaker 7: tricky moment, especially with you know, economic projections pulling in 163 00:09:46,440 --> 00:09:49,080 Speaker 7: one direction and then the labor market pulling in the other. 164 00:09:49,200 --> 00:09:50,880 Speaker 7: It's tough to know where to prioritize. 165 00:09:50,920 --> 00:09:52,440 Speaker 6: What are people actually doing. 166 00:09:52,640 --> 00:09:55,400 Speaker 2: Forget about the theory of ridd Holt's, the theory of Kelly, 167 00:09:55,760 --> 00:09:58,040 Speaker 2: the theory of Josh. Are they still scared stiff. 168 00:10:00,080 --> 00:10:02,920 Speaker 7: There's some healthy skepticism out there. It's funny. You know, 169 00:10:02,960 --> 00:10:06,200 Speaker 7: the fears were high heading into April, or excuse me, 170 00:10:06,559 --> 00:10:09,040 Speaker 7: you know fears were to start the beginning of the year. 171 00:10:09,080 --> 00:10:11,880 Speaker 7: I'll say confidence was high, and then it's slowly tailored 172 00:10:11,880 --> 00:10:13,960 Speaker 7: off in the first few months of the year. Now 173 00:10:14,080 --> 00:10:17,280 Speaker 7: investors have those scars. They're heading into the fourth quarter. 174 00:10:17,440 --> 00:10:20,839 Speaker 7: They know that the ground is shifting underneath them. We're 175 00:10:20,840 --> 00:10:23,040 Speaker 7: getting a lot of questions on how to capitalize on this. 176 00:10:23,080 --> 00:10:25,800 Speaker 7: I mean, mortgage refis, for example, are one of the 177 00:10:25,800 --> 00:10:28,520 Speaker 7: big questions that we're getting, you know, constantly, with the 178 00:10:28,520 --> 00:10:31,360 Speaker 7: thirty year mortgage down near a three year low. And 179 00:10:31,920 --> 00:10:34,840 Speaker 7: quite honestly, it's a hard question to answer because you know, 180 00:10:34,920 --> 00:10:37,160 Speaker 7: the long term end of the long end of the 181 00:10:37,200 --> 00:10:40,080 Speaker 7: curve is one of the hardest things to talk about 182 00:10:40,120 --> 00:10:40,560 Speaker 7: at the moment. 183 00:10:40,600 --> 00:10:42,920 Speaker 8: There are a lot of catalysts whipping Kelly. 184 00:10:42,640 --> 00:10:44,080 Speaker 6: Cox staying with us here, when do you get the 185 00:10:44,120 --> 00:10:47,640 Speaker 6: market open? Right now? The vics sixteen point one for it, 186 00:10:47,640 --> 00:10:49,000 Speaker 6: here's Lisa Mateo. 187 00:10:48,880 --> 00:10:50,680 Speaker 9: You got it, and we'll start with the S and 188 00:10:50,720 --> 00:10:53,440 Speaker 9: P five hundred right now. As we get the markets open, 189 00:10:53,480 --> 00:10:56,800 Speaker 9: it's little change, little movements still up about a point 190 00:10:56,880 --> 00:10:58,720 Speaker 9: at six thousand, six hundred and eight. You have to 191 00:10:58,720 --> 00:11:01,320 Speaker 9: point out the levels that now two ten percent, one 192 00:11:01,440 --> 00:11:04,200 Speaker 9: hundred and nine points at forty five thousand, eight hundred 193 00:11:04,240 --> 00:11:06,760 Speaker 9: and seventy seven. We get to the NASAC right now. 194 00:11:06,960 --> 00:11:09,560 Speaker 9: Not much movement there as well, up about two points 195 00:11:09,559 --> 00:11:12,320 Speaker 9: at twenty two thousand, three hundred and thirty seven. 196 00:11:12,720 --> 00:11:13,560 Speaker 8: We go to the yield space. 197 00:11:13,600 --> 00:11:15,959 Speaker 9: We have the two year at three point five one percent, 198 00:11:16,040 --> 00:11:18,760 Speaker 9: that's little changed. The yield on the tenure four point 199 00:11:18,840 --> 00:11:21,480 Speaker 9: zero two percent, and that is little changed as well. 200 00:11:21,520 --> 00:11:24,240 Speaker 9: We have the Bloomberg Dollar Spot Index, not much movement there. 201 00:11:24,280 --> 00:11:26,600 Speaker 9: We have bitcoined down about half percent at just above 202 00:11:26,840 --> 00:11:30,040 Speaker 9: one hundred and sixteen thousand. That is your Bloomberg opening 203 00:11:30,040 --> 00:11:31,160 Speaker 9: bell report all in time. 204 00:11:31,520 --> 00:11:34,040 Speaker 2: Thanks so much, Liza, greatly appreciate it. Kelly Cox with 205 00:11:34,120 --> 00:11:37,280 Speaker 2: us with Rufotes Wealth Management. I'm sure it's been a 206 00:11:37,280 --> 00:11:40,439 Speaker 2: point of discussion there in debate, and I'm certain with Barry, 207 00:11:40,440 --> 00:11:44,920 Speaker 2: and we've talked about it for years. Kelly Cox on 208 00:11:45,280 --> 00:11:49,079 Speaker 2: John Deere, which is the great CFA company to study 209 00:11:49,120 --> 00:11:54,120 Speaker 2: in the brutal level one accounting treatment of the CFA Institute, 210 00:11:54,400 --> 00:11:59,280 Speaker 2: Kelly Cox should John Dear Should John Dee report four 211 00:11:59,320 --> 00:12:03,160 Speaker 2: times a year or like sensible YEurope two times a year. 212 00:12:05,240 --> 00:12:08,920 Speaker 7: It's funny so Trump brought this up a few days ago. 213 00:12:08,960 --> 00:12:10,560 Speaker 7: I think this is the second time that he brought 214 00:12:10,640 --> 00:12:14,800 Speaker 7: up the possibility of cutting earnings reports down to semi annual, 215 00:12:14,920 --> 00:12:17,480 Speaker 7: or at least less frequent than quarterly. I'm a big 216 00:12:17,480 --> 00:12:20,160 Speaker 7: believer in transparency. I think markets are more efficient with 217 00:12:20,200 --> 00:12:21,319 Speaker 7: greater transparency. 218 00:12:21,600 --> 00:12:23,559 Speaker 8: But you have to look at this on both sides 219 00:12:23,559 --> 00:12:24,120 Speaker 8: of the equation. 220 00:12:24,200 --> 00:12:28,160 Speaker 7: It's lower compliance costs for companies, it's lower it's lower 221 00:12:28,200 --> 00:12:30,400 Speaker 7: operating costs in general, though I don't think it would 222 00:12:30,400 --> 00:12:32,920 Speaker 7: make much of a mark. Investors are on the losing 223 00:12:33,000 --> 00:12:36,280 Speaker 7: end though, and as we you know, for where we 224 00:12:36,360 --> 00:12:38,600 Speaker 7: sit in the business, we're always on the side of 225 00:12:38,640 --> 00:12:41,680 Speaker 7: the investor. The hardest person to ask is me because 226 00:12:41,679 --> 00:12:43,600 Speaker 7: I love rifling through data, so I have a natural 227 00:12:43,640 --> 00:12:44,240 Speaker 7: bias there. 228 00:12:45,440 --> 00:12:46,720 Speaker 6: She's on the conference call. 229 00:12:47,040 --> 00:12:50,760 Speaker 8: Great quarter, No, hey, Kelly, talk to us about it. 230 00:12:50,840 --> 00:12:50,920 Speaker 3: No. 231 00:12:51,000 --> 00:12:52,599 Speaker 8: I wish the courage. 232 00:12:52,240 --> 00:12:55,120 Speaker 5: To be in the market right now. What's it take 233 00:12:55,160 --> 00:12:57,880 Speaker 5: to get in the market today, That's the heart of 234 00:12:57,920 --> 00:12:58,319 Speaker 5: the matter. 235 00:12:59,640 --> 00:13:01,840 Speaker 7: I think it takes a strong stomach, but look, you 236 00:13:01,960 --> 00:13:05,120 Speaker 7: have to do it. You can't predict where the bullmarket is, 237 00:13:05,240 --> 00:13:07,440 Speaker 7: especially a bull market that's been driven by momentum and 238 00:13:07,480 --> 00:13:09,760 Speaker 7: sentiment for most of this year. You know, we keep 239 00:13:09,760 --> 00:13:12,800 Speaker 7: reminding people that things feel uncomfortable. Obviously, there are a 240 00:13:12,880 --> 00:13:15,840 Speaker 7: lot of catalysts to consider at this moment. But as 241 00:13:15,920 --> 00:13:18,120 Speaker 7: rake cuts come, you're going to be you're you will 242 00:13:18,120 --> 00:13:20,560 Speaker 7: be paid less and less on cash. So cash management 243 00:13:21,080 --> 00:13:23,280 Speaker 7: is key as we head into the end of the year. 244 00:13:23,440 --> 00:13:27,320 Speaker 7: And look, nobody ultimately knows where this bull market heads. 245 00:13:27,400 --> 00:13:30,360 Speaker 7: And you know, we could still be missing a lot 246 00:13:30,440 --> 00:13:33,360 Speaker 7: of You could still be missing a lot of upside here, 247 00:13:33,480 --> 00:13:35,880 Speaker 7: especially from those unloved sectors of the market that are 248 00:13:35,920 --> 00:13:39,320 Speaker 7: more value oriented that we've seen shine over the past 249 00:13:39,360 --> 00:13:41,200 Speaker 7: month or so with this rake cut rotation. 250 00:13:41,600 --> 00:13:43,679 Speaker 6: Kelly, Thank you so much, Kelly Cosh for the west 251 00:13:43,720 --> 00:13:45,200 Speaker 6: to management. Stay with us. 252 00:13:45,440 --> 00:13:55,720 Speaker 2: More from Bloomberg Surveillance coming up after this. 253 00:13:55,720 --> 00:13:59,560 Speaker 1: This is the Bloomberg Surveillance podcast. Listen live each weekday 254 00:13:59,600 --> 00:14:03,160 Speaker 1: starting seven am Eastern on Applecarplay and Android Auto with 255 00:14:03,240 --> 00:14:06,240 Speaker 1: the Bloomberg Business app. You can also listen live on 256 00:14:06,320 --> 00:14:10,000 Speaker 1: Amazon Alexa from our flagship New York station. Just Say 257 00:14:10,120 --> 00:14:12,320 Speaker 1: Alexa play Bloomberg eleven thirty. 258 00:14:12,720 --> 00:14:17,160 Speaker 2: This is well timed, to say the least. Randy Schummer's 259 00:14:17,200 --> 00:14:19,600 Speaker 2: with us, who's been doing this a while, Vice chairch 260 00:14:19,640 --> 00:14:24,520 Speaker 2: Churchill Asset Management and also chief investment strategists. Oh, chief 261 00:14:24,600 --> 00:14:30,120 Speaker 2: investment strategists. Should my grandmother have private credit in our 262 00:14:30,200 --> 00:14:31,000 Speaker 2: four oh one k? 263 00:14:31,640 --> 00:14:32,160 Speaker 8: Look? 264 00:14:32,560 --> 00:14:35,120 Speaker 10: Look at the rest of our investors. We have five 265 00:14:35,280 --> 00:14:40,640 Speaker 10: million teachers through the TIAA retirement program, including my brother 266 00:14:40,680 --> 00:14:44,280 Speaker 10: and sister in law, who every Thanksgiving ask about private credit, 267 00:14:44,400 --> 00:14:46,520 Speaker 10: how how their portfolio is doing? 268 00:14:46,600 --> 00:14:46,760 Speaker 3: Right? 269 00:14:46,800 --> 00:14:50,080 Speaker 10: So you're in good company. Look what's interesting now, particularly 270 00:14:50,080 --> 00:14:52,160 Speaker 10: my new role, is we're focused on one of the 271 00:14:52,160 --> 00:14:55,120 Speaker 10: fastest growing channels out there, which is private wealth. What 272 00:14:55,240 --> 00:14:56,000 Speaker 10: is private wealth? 273 00:14:56,080 --> 00:14:56,280 Speaker 6: Right? 274 00:14:56,440 --> 00:15:00,160 Speaker 10: Private wealth is pretty much everyone we all have of 275 00:15:00,560 --> 00:15:03,360 Speaker 10: private wealth. We all are looking for yield and we're 276 00:15:03,400 --> 00:15:06,440 Speaker 10: looking for income. You know, I'm at a softball game 277 00:15:06,560 --> 00:15:09,280 Speaker 10: with my daughter watching your play. Somebody comes up and 278 00:15:09,320 --> 00:15:11,160 Speaker 10: he says, Hey, I think I heard you on Bloomberg 279 00:15:11,240 --> 00:15:13,600 Speaker 10: last time. With those guys, you seem pretty smart. How 280 00:15:13,600 --> 00:15:16,520 Speaker 10: do I get into this assay class? That is what 281 00:15:16,720 --> 00:15:19,360 Speaker 10: a lot of people are thinking about, particularly when you 282 00:15:19,400 --> 00:15:22,400 Speaker 10: look at the sixty forty model, which you guys are 283 00:15:22,440 --> 00:15:26,320 Speaker 10: experts on, But what's happening is the alternative model, which 284 00:15:26,360 --> 00:15:31,240 Speaker 10: is including ten twenty thirty percent of non correlated assets 285 00:15:31,240 --> 00:15:34,600 Speaker 10: that have longer yield less correlation, is getting a lot 286 00:15:34,640 --> 00:15:36,880 Speaker 10: more action right now. And I haven't talked to you 287 00:15:36,960 --> 00:15:39,920 Speaker 10: about this during most of our programming, but half of 288 00:15:39,960 --> 00:15:42,920 Speaker 10: our committed capital is going to private equity and junior capital. 289 00:15:43,000 --> 00:15:47,160 Speaker 10: Think about that. So we have probably our fastest growing 290 00:15:47,200 --> 00:15:50,400 Speaker 10: products right now in private equity because the yields are better. 291 00:15:50,880 --> 00:15:54,640 Speaker 10: And in the current environment when gps are trying to 292 00:15:54,680 --> 00:15:58,080 Speaker 10: get more liquidity because the exits are slower, they're looking 293 00:15:58,120 --> 00:16:00,920 Speaker 10: for more products that can help them get liquided, not 294 00:16:01,040 --> 00:16:03,400 Speaker 10: just for them but for their LPs as well. So 295 00:16:03,520 --> 00:16:06,440 Speaker 10: exits are a little slow, but for the best private 296 00:16:06,440 --> 00:16:09,640 Speaker 10: equity firms, actually fundraising is pretty good. So you know, 297 00:16:09,680 --> 00:16:11,680 Speaker 10: I like to come every morning with you with a 298 00:16:11,880 --> 00:16:15,800 Speaker 10: fun fact. Fun fact for us, Our gps that have 299 00:16:15,840 --> 00:16:19,040 Speaker 10: been raising money this year in new funds have all 300 00:16:19,360 --> 00:16:22,360 Speaker 10: hit their hard caps. What does that mean? You have 301 00:16:22,400 --> 00:16:24,600 Speaker 10: a target cap of funds you want to raise five 302 00:16:24,640 --> 00:16:27,000 Speaker 10: hundred million billion, whatever it is, and then you have 303 00:16:27,040 --> 00:16:28,880 Speaker 10: a hard cap above which you're not going to go 304 00:16:28,920 --> 00:16:32,200 Speaker 10: because you don't want to dilute your existing investors. They've 305 00:16:32,240 --> 00:16:35,000 Speaker 10: all hit their hard caps. That's different than the news 306 00:16:35,040 --> 00:16:39,200 Speaker 10: you're hearing generally outside of Bloomberg about fundraising because people say, oh, 307 00:16:39,240 --> 00:16:40,920 Speaker 10: fundraising is slow, not for the best. 308 00:16:41,280 --> 00:16:44,760 Speaker 5: All right, So I'm on your distributional list. I get 309 00:16:44,880 --> 00:16:48,200 Speaker 5: notes from you guys. You're all over the world. What 310 00:16:48,240 --> 00:16:49,960 Speaker 5: are you doing when you go to Asia, when you 311 00:16:50,000 --> 00:16:51,640 Speaker 5: go to the Middle East, when you go to the Europe? 312 00:16:51,680 --> 00:16:55,000 Speaker 5: Are you looking for capital? Are you looking for deals? 313 00:16:55,360 --> 00:16:57,640 Speaker 10: So doing these days in my new role, but even 314 00:16:57,760 --> 00:16:59,320 Speaker 10: you know, when you can think of think of me as. 315 00:16:59,240 --> 00:17:03,240 Speaker 5: Likeocus on the private wealth site, private wealthments, and. 316 00:17:03,280 --> 00:17:06,640 Speaker 10: You know, we obviously have institutional clients. But the key 317 00:17:06,640 --> 00:17:08,800 Speaker 10: to my friend Jess larsenal give him a tip of 318 00:17:08,800 --> 00:17:11,520 Speaker 10: the hat, you know, over at Briarcliffe says that beta 319 00:17:11,640 --> 00:17:16,439 Speaker 10: for private capital is performance. Alpha is education, because you 320 00:17:16,520 --> 00:17:20,320 Speaker 10: need to explain to investors what this private credit, private 321 00:17:20,359 --> 00:17:23,359 Speaker 10: capital opportunity really is. You guys have been helping me. 322 00:17:23,400 --> 00:17:25,919 Speaker 10: Are so so grateful for that over the last several years, 323 00:17:26,080 --> 00:17:29,440 Speaker 10: getting the message out, getting the gospel of private capital out. 324 00:17:29,560 --> 00:17:31,440 Speaker 10: But what it means is that how do I get 325 00:17:31,560 --> 00:17:35,040 Speaker 10: value out of an ill liquid asset class? What is 326 00:17:35,080 --> 00:17:36,960 Speaker 10: the benefit to me if I can't sell? 327 00:17:37,160 --> 00:17:38,560 Speaker 6: What do you think benefits. 328 00:17:39,640 --> 00:17:43,280 Speaker 10: Correct? And the answer is less correlation when markets trade down, 329 00:17:43,680 --> 00:17:47,720 Speaker 10: and more consistency and premium income when when rates go down, 330 00:17:47,760 --> 00:17:50,200 Speaker 10: for example. So we're going to see some interesting turns 331 00:17:50,200 --> 00:17:52,960 Speaker 10: over the next few months and next year as rates 332 00:17:53,040 --> 00:17:53,800 Speaker 10: start to come down. 333 00:17:54,280 --> 00:17:56,280 Speaker 2: You know, I got to get this question, and we're 334 00:17:56,280 --> 00:17:58,040 Speaker 2: going to have to run here on an incredible FED day. 335 00:17:58,359 --> 00:18:00,600 Speaker 2: But Randy, to me, what's a pard of the matter 336 00:18:00,680 --> 00:18:02,320 Speaker 2: here is the big boys are going to come in. 337 00:18:02,520 --> 00:18:05,200 Speaker 2: Churchill can manage its story, fine, I get it, I 338 00:18:05,320 --> 00:18:07,440 Speaker 2: love it. But the big boys are going to show 339 00:18:07,520 --> 00:18:10,960 Speaker 2: up in private equity and particularly conservative private credit where 340 00:18:11,000 --> 00:18:13,760 Speaker 2: you can make a coupon blah blah blah. What's going 341 00:18:13,840 --> 00:18:17,840 Speaker 2: to happen when Blackrock and the others send a wall 342 00:18:18,160 --> 00:18:21,160 Speaker 2: of money right into this environment? 343 00:18:21,400 --> 00:18:24,720 Speaker 10: So you know that are the way we do deals 344 00:18:24,880 --> 00:18:27,080 Speaker 10: is that we're an investor in the GPS. We're an 345 00:18:27,240 --> 00:18:31,280 Speaker 10: LP actually in four hundred roughly GP funds. So we're 346 00:18:31,320 --> 00:18:35,320 Speaker 10: getting the best assets from those investors that we've already 347 00:18:35,400 --> 00:18:40,520 Speaker 10: pre credentialed. We've already pre qualified. Portfolio quality is destiny 348 00:18:40,600 --> 00:18:43,680 Speaker 10: in asset management. If your portfolio put if your portfolio 349 00:18:43,800 --> 00:18:46,359 Speaker 10: is hied to high quality, then you are going to 350 00:18:46,400 --> 00:18:48,920 Speaker 10: be able to satisfy the needs of your investors. In 351 00:18:49,160 --> 00:18:50,720 Speaker 10: order for it to be high quality, you have to 352 00:18:50,760 --> 00:18:51,480 Speaker 10: be super selected. 353 00:18:51,560 --> 00:18:54,520 Speaker 2: How is our listeners and viewers going to do a 354 00:18:54,680 --> 00:18:59,600 Speaker 2: credit analysis and quality analysis of the ginormous huge bank 355 00:19:00,160 --> 00:19:04,119 Speaker 2: either Park Avenue or Downtown West Street ETF fund in 356 00:19:04,200 --> 00:19:04,840 Speaker 2: their retirement. 357 00:19:04,960 --> 00:19:07,720 Speaker 10: The beauty of retail investing is, if you're investing in 358 00:19:08,600 --> 00:19:10,720 Speaker 10: our funds, you're investing in the same funds that the 359 00:19:11,200 --> 00:19:15,040 Speaker 10: ginormous sovereign wealth funds, including our parent company, Trillion Dollar, 360 00:19:15,119 --> 00:19:17,320 Speaker 10: TA and Euveen are investing in same deals. 361 00:19:19,920 --> 00:19:20,840 Speaker 2: Are you? 362 00:19:21,960 --> 00:19:23,199 Speaker 8: Are you in triple leverage? 363 00:19:23,200 --> 00:19:25,359 Speaker 5: I got to take a Chase Man, hadn't bank credit 364 00:19:25,440 --> 00:19:27,160 Speaker 5: training and going into private credit. 365 00:19:27,240 --> 00:19:28,240 Speaker 8: You do that again? 366 00:19:28,840 --> 00:19:31,840 Speaker 2: What was it like buying your first fancy white shirt 367 00:19:31,960 --> 00:19:34,520 Speaker 2: and blue suit to do the folks? This is what 368 00:19:34,680 --> 00:19:37,639 Speaker 2: Sweeney did. Was like gospel back then. It was like 369 00:19:37,720 --> 00:19:40,000 Speaker 2: going to State department. You did private. 370 00:19:40,040 --> 00:19:41,560 Speaker 5: We all came out of we all came out of 371 00:19:41,680 --> 00:19:43,760 Speaker 5: NBA programs and they said, get what you've learned. 372 00:19:43,920 --> 00:19:45,760 Speaker 8: Now we're going to tea. Now we're going to. 373 00:19:45,720 --> 00:19:46,440 Speaker 11: Teach you how to do it. 374 00:19:46,560 --> 00:19:48,160 Speaker 10: Was very good, by the way, he was very good. 375 00:19:48,440 --> 00:19:50,440 Speaker 6: Well, Sir Randy Schummer, thank you so much. 376 00:19:50,520 --> 00:19:53,399 Speaker 2: With Paul Sweeney looking down a whole new environment with 377 00:19:53,520 --> 00:19:55,399 Speaker 2: private credit and private equity. 378 00:19:55,640 --> 00:19:56,239 Speaker 8: Stay with us. 379 00:19:56,560 --> 00:19:59,639 Speaker 2: More from Bloomberg Surveillance coming up after this. 380 00:20:07,200 --> 00:20:11,040 Speaker 1: This is the Bloomberg Surveillance podcast. Listen live each weekdays. 381 00:20:11,040 --> 00:20:15,000 Speaker 2: Were sitting where this is, Andrew Lloyd allenhursts that was 382 00:20:15,040 --> 00:20:16,000 Speaker 2: City Bank, here. 383 00:20:17,800 --> 00:20:19,560 Speaker 6: Circumstances at the table. 384 00:20:21,600 --> 00:20:24,120 Speaker 2: I was trying to go back to the nineteen eighties 385 00:20:24,280 --> 00:20:28,440 Speaker 2: and Wayne Angel and some of the fiery debates of monetorism. 386 00:20:28,960 --> 00:20:30,840 Speaker 6: We've never seen this, have we end. 387 00:20:31,400 --> 00:20:32,680 Speaker 8: It's going to be a big debate today. 388 00:20:32,720 --> 00:20:36,040 Speaker 11: I think about not just what they should do at 389 00:20:36,080 --> 00:20:38,000 Speaker 11: this meeting, although at this meeting we could have a 390 00:20:38,040 --> 00:20:41,080 Speaker 11: couple of descents, but also where policies should be going, 391 00:20:41,119 --> 00:20:43,760 Speaker 11: where the neutral rate is, with the balance of risks is, 392 00:20:43,920 --> 00:20:45,800 Speaker 11: so every everything is on the table at this meeting. 393 00:20:45,880 --> 00:20:49,680 Speaker 2: Paul Donovan at UBS, a student of the British process, said, 394 00:20:49,720 --> 00:20:51,960 Speaker 2: we're becoming like the Bank of England, are we? 395 00:20:52,880 --> 00:20:54,760 Speaker 11: It feels a little bit that way, where you have 396 00:20:55,000 --> 00:20:57,760 Speaker 11: just this big divergence between some FED officials who didn't 397 00:20:57,760 --> 00:20:59,640 Speaker 11: want to cut rates at all this year, other FED 398 00:20:59,680 --> 00:21:02,400 Speaker 11: official those who wanted to cut more aggressively and dissented. 399 00:21:02,600 --> 00:21:05,600 Speaker 11: Back in July, we had Waller and Bowman with those 400 00:21:05,640 --> 00:21:07,760 Speaker 11: twenty five basis point cut VIEWA. 401 00:21:08,520 --> 00:21:13,400 Speaker 2: But should we notice Paul that Andrew Hollenhorz absolutely nailed 402 00:21:14,359 --> 00:21:17,600 Speaker 2: the higher rate environment we're talking two years ago. 403 00:21:17,840 --> 00:21:19,560 Speaker 6: Yep, I mean just absolutely nailed. 404 00:21:19,359 --> 00:21:19,920 Speaker 4: That, Andrew. 405 00:21:19,960 --> 00:21:23,200 Speaker 5: I mean, we had some strong retail sales yesterday. I 406 00:21:23,280 --> 00:21:26,439 Speaker 5: mean you could argue this FED could be as cautious 407 00:21:26,440 --> 00:21:29,000 Speaker 5: as it wants to be when you're thinking about twenty 408 00:21:29,040 --> 00:21:29,800 Speaker 5: five versus fifty. 409 00:21:29,920 --> 00:21:31,480 Speaker 11: Well, if you look at the retail sales report, I 410 00:21:31,520 --> 00:21:33,520 Speaker 11: think that's telling you this is an economy that's not 411 00:21:33,760 --> 00:21:37,280 Speaker 11: going into recession. We have had a slow down in growth, 412 00:21:37,359 --> 00:21:39,520 Speaker 11: We've had to slow down in consumer spending. Retail sales 413 00:21:39,520 --> 00:21:42,400 Speaker 11: doesn't change that. And what retail sales really doesn't change 414 00:21:42,600 --> 00:21:44,600 Speaker 11: is what's going on in the job market, and ultimately 415 00:21:44,680 --> 00:21:45,679 Speaker 11: that's the Fed's mandate. 416 00:21:45,880 --> 00:21:48,400 Speaker 8: You look at those payrolls numbers. We had negative job 417 00:21:48,440 --> 00:21:49,160 Speaker 8: growth in June. 418 00:21:49,200 --> 00:21:50,840 Speaker 11: I know, it was in a revision, so we don't 419 00:21:50,840 --> 00:21:52,800 Speaker 11: really feel that way. But this is a FED that 420 00:21:52,880 --> 00:21:54,960 Speaker 11: would have cut already if we had those jobs numbers 421 00:21:55,000 --> 00:21:55,480 Speaker 11: in real time. 422 00:21:55,760 --> 00:21:57,199 Speaker 5: So how do you think that cadence will go here 423 00:21:57,240 --> 00:21:58,720 Speaker 5: for this better reserve? Starting this sea? 424 00:21:59,240 --> 00:22:02,520 Speaker 11: So I think Powell, to Tom's point, has to bring 425 00:22:02,600 --> 00:22:04,760 Speaker 11: together this committee, and I think he can bring them 426 00:22:04,800 --> 00:22:07,120 Speaker 11: more or less together around a twenty five basis point 427 00:22:07,240 --> 00:22:11,359 Speaker 11: rate cut today. But you do have people like Waller 428 00:22:11,400 --> 00:22:16,000 Speaker 11: who are dissenting, wanting to cut back in July. How 429 00:22:16,080 --> 00:22:18,479 Speaker 11: do you keep Waller on board with just twenty five 430 00:22:18,520 --> 00:22:20,320 Speaker 11: basis points today? I think you have to be a 431 00:22:20,359 --> 00:22:22,280 Speaker 11: little bit dubvish in the press conference. I think we're 432 00:22:22,320 --> 00:22:24,120 Speaker 11: gonna hear Powell be a little bit dubish to kind 433 00:22:24,160 --> 00:22:27,440 Speaker 11: of indicate that this is a FED that could be 434 00:22:27,560 --> 00:22:30,440 Speaker 11: cutting at each meeting this year. I think we see 435 00:22:30,480 --> 00:22:32,639 Speaker 11: that in the dot plot, and then continuing to cut 436 00:22:32,720 --> 00:22:33,080 Speaker 11: next year. 437 00:22:33,080 --> 00:22:34,880 Speaker 2: Okay, but that's where I wanted to go to cut 438 00:22:34,960 --> 00:22:36,960 Speaker 2: this year. Some people are saying three this year. I 439 00:22:37,320 --> 00:22:39,119 Speaker 2: don't want to do the parlor game, Andrew, you know, 440 00:22:39,520 --> 00:22:42,360 Speaker 2: I hate it. But here's the reality. I've got nominal 441 00:22:42,480 --> 00:22:46,760 Speaker 2: GDPQ three off Atlanta fed of at least four and 442 00:22:46,800 --> 00:22:51,320 Speaker 2: a half five percent. Dare I say six percent? I 443 00:22:51,359 --> 00:22:53,880 Speaker 2: don't think I can say that. But with the consumption 444 00:22:54,000 --> 00:22:58,919 Speaker 2: and retail sales there there we are. Does that strengthen 445 00:22:59,040 --> 00:23:01,879 Speaker 2: the one and done feel of today's meeting or is 446 00:23:01,960 --> 00:23:05,720 Speaker 2: he really going to anticipate out a set of rate cuts. 447 00:23:05,840 --> 00:23:07,680 Speaker 11: I think it's a set of ray cuts, and I 448 00:23:08,000 --> 00:23:10,199 Speaker 11: think that's where cher Paul was starting to go at 449 00:23:10,280 --> 00:23:13,320 Speaker 11: Jackson Hall. Remember back in late August we had policing. 450 00:23:13,400 --> 00:23:15,800 Speaker 11: This balance of risks is starting to move more imbalance 451 00:23:15,880 --> 00:23:19,040 Speaker 11: between downside risk to employment, upside risk to inflation. Now 452 00:23:19,080 --> 00:23:22,440 Speaker 11: we have even more downside risk on the job side. 453 00:23:23,000 --> 00:23:23,520 Speaker 8: You're right down. 454 00:23:23,560 --> 00:23:26,680 Speaker 11: We've run very strong nominal growth through twenty twenty four. 455 00:23:26,800 --> 00:23:29,879 Speaker 11: The first half of this year was slower nominal growth. 456 00:23:30,000 --> 00:23:33,520 Speaker 11: What's your nominal growth twelve months forward? Twelve months forward 457 00:23:33,880 --> 00:23:37,280 Speaker 11: from here will probably be four to five percent nominal growth, 458 00:23:37,560 --> 00:23:39,080 Speaker 11: So not that six to seven percent. 459 00:23:39,680 --> 00:23:43,399 Speaker 6: That's terrible color graz to me. I'm sorry, I'm lost 460 00:23:43,480 --> 00:23:44,520 Speaker 6: on this, boss saying. 461 00:23:44,440 --> 00:23:47,280 Speaker 5: Exactly, so, talk to us about this labor market. Let's 462 00:23:47,280 --> 00:23:48,840 Speaker 5: dig a little little bit deeper in there. For the 463 00:23:48,920 --> 00:23:52,520 Speaker 5: first time I saw recently, number of job openings versus 464 00:23:52,560 --> 00:23:54,280 Speaker 5: the number of people kind of looking for jobs kind 465 00:23:54,280 --> 00:23:55,560 Speaker 5: of a little bit more in balance now and it 466 00:23:55,680 --> 00:23:57,720 Speaker 5: used to be poy. There's so many more job openings 467 00:23:57,800 --> 00:23:59,720 Speaker 5: out there, and that gave you a sense of olders. 468 00:24:00,400 --> 00:24:02,320 Speaker 5: This economy, the labor conmry is a lot stronger than 469 00:24:02,359 --> 00:24:04,439 Speaker 5: me we think. Is that not the case anymore? 470 00:24:04,840 --> 00:24:06,480 Speaker 8: It doesn't seem to be the case. 471 00:24:06,760 --> 00:24:10,600 Speaker 11: We obviously have big differences between which labor market series, 472 00:24:10,640 --> 00:24:14,399 Speaker 11: which job series you look at. But the payroll numbers 473 00:24:14,440 --> 00:24:17,880 Speaker 11: look very concerning now after those revisions, that probably looks 474 00:24:17,960 --> 00:24:19,919 Speaker 11: the most concerning of any series. But if you look 475 00:24:19,960 --> 00:24:21,479 Speaker 11: at some of the survey data, if you look at 476 00:24:21,800 --> 00:24:23,920 Speaker 11: in the consumer surveys, when you ask people are jobs 477 00:24:23,960 --> 00:24:26,359 Speaker 11: hard to get? That number is going up. People are 478 00:24:26,440 --> 00:24:29,160 Speaker 11: finding this to be a more difficult market to get 479 00:24:29,200 --> 00:24:32,480 Speaker 11: a job. We're also seeing if you switch your jobs, 480 00:24:32,520 --> 00:24:34,240 Speaker 11: how much is your pay going up when you switch 481 00:24:34,240 --> 00:24:36,639 Speaker 11: your jobs. That's really not normalized. You used to get 482 00:24:36,680 --> 00:24:38,920 Speaker 11: a big premium for switching your job. That would indicate 483 00:24:38,960 --> 00:24:41,159 Speaker 11: it's a labor market more imbalanced. No, that was my 484 00:24:41,320 --> 00:24:42,720 Speaker 11: game plan for twenty years of work. 485 00:24:42,760 --> 00:24:43,160 Speaker 3: Just fine. 486 00:24:44,080 --> 00:24:44,639 Speaker 8: So Andrew. 487 00:24:45,640 --> 00:24:47,520 Speaker 5: If I'm the FED here, I mean, I'm looking at 488 00:24:47,560 --> 00:24:50,720 Speaker 5: the labor market. Maybe why wouldn't I be a little 489 00:24:50,720 --> 00:24:53,760 Speaker 5: bit more aggressive here with that signal? Oh there's something 490 00:24:53,800 --> 00:24:55,480 Speaker 5: else under the hood the FED season. Maybe the market 491 00:24:55,520 --> 00:24:56,879 Speaker 5: doesn't seem I think. 492 00:24:56,760 --> 00:24:59,680 Speaker 11: There's nothing pushing them to be super aggressive at this meeting, 493 00:24:59,720 --> 00:25:01,880 Speaker 11: when when you really have a big push to be aggressible, 494 00:25:01,920 --> 00:25:04,120 Speaker 11: it's like what happened a year ago, where you had 495 00:25:04,840 --> 00:25:07,359 Speaker 11: data that was coming in softer than expected, and you 496 00:25:07,480 --> 00:25:10,360 Speaker 11: had the equity market selling off. You had risk assets 497 00:25:10,440 --> 00:25:13,680 Speaker 11: that were performing poorly, and that that's part of what 498 00:25:13,800 --> 00:25:16,120 Speaker 11: pushed the FED to deliver that fifty basis point rate 499 00:25:16,200 --> 00:25:19,320 Speaker 11: cut back in September of last year. This year, as 500 00:25:19,400 --> 00:25:22,480 Speaker 11: the FED is getting priced to cut, we're seeing equities rally. 501 00:25:22,520 --> 00:25:26,639 Speaker 11: We're seeing very high prices for risk assets and looser 502 00:25:26,760 --> 00:25:30,600 Speaker 11: financial conditions. So the FED isn't working against tightening financial 503 00:25:30,640 --> 00:25:33,160 Speaker 11: conditions here. We actually have loosening financial conditions. BET cuts 504 00:25:33,160 --> 00:25:35,119 Speaker 11: are going to feed into that. I think there's no 505 00:25:35,200 --> 00:25:36,879 Speaker 11: pressure for fifty basis points today. 506 00:25:37,240 --> 00:25:40,800 Speaker 12: The press conference today, what would be the question you 507 00:25:40,840 --> 00:25:44,800 Speaker 12: would ask, I think the key question that I would 508 00:25:44,880 --> 00:25:46,639 Speaker 12: want to know from share Powell is really what you 509 00:25:46,720 --> 00:25:49,440 Speaker 12: were asking, Tom, which is should we be thinking about 510 00:25:49,520 --> 00:25:52,760 Speaker 12: this as a adjustment. 511 00:25:52,960 --> 00:25:55,080 Speaker 8: Are we just calibrating rate slightly lower? 512 00:25:55,280 --> 00:25:57,159 Speaker 11: Or is this a real rate cut cycles at a 513 00:25:57,200 --> 00:26:00,000 Speaker 11: rate cut cycle that started a year ago pause because 514 00:26:00,119 --> 00:26:02,320 Speaker 11: we had care of uncertainty, inflation uncertainty, and now we're 515 00:26:02,359 --> 00:26:03,160 Speaker 11: picking it up again. 516 00:26:03,560 --> 00:26:06,560 Speaker 6: Lord Hollanders, thank you so much. 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