1
00:00:05,120 --> 00:00:09,200
Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane. Along

2
00:00:09,200 --> 00:00:13,200
Speaker 1: with Jonathan Ferrell and Lisa Abramowitz Jaily. We bring you

3
00:00:13,280 --> 00:00:18,600
Speaker 1: insight from the best and economics, finance, investment, and international relations.

4
00:00:18,960 --> 00:00:23,799
Speaker 1: Find Bloomberg Surveillance on Apple podcast, sun Cloud, Bloomberg dot com,

5
00:00:23,920 --> 00:00:30,400
Speaker 1: and of course on the Bloomberg terminal. I'm placed to

6
00:00:30,440 --> 00:00:32,640
Speaker 1: say that joining us now is a Labor Secretary Marty

7
00:00:32,720 --> 00:00:36,440
Speaker 1: Welsh off the back of this Stella jobs report. Secondly, Walsh,

8
00:00:36,479 --> 00:00:39,360
Speaker 1: the floor is yours set your thoughts on this one. No,

9
00:00:39,520 --> 00:00:41,880
Speaker 1: thank you very much. This certainly is a great jobs report.

10
00:00:41,920 --> 00:00:44,159
Speaker 1: When you look at the different sectors. Uh, most of

11
00:00:44,200 --> 00:00:47,640
Speaker 1: the economy is recovered. The jobs that were that companies

12
00:00:47,680 --> 00:00:50,839
Speaker 1: had pre pandemic or all returned. So it shows good gains.

13
00:00:51,240 --> 00:00:54,360
Speaker 1: We've showed some good wage growth, We've shown good good areas.

14
00:00:54,360 --> 00:00:57,160
Speaker 1: Manufacturing is one of those areas that certainly we've seen

15
00:00:57,200 --> 00:00:59,400
Speaker 1: come back, not just come back to pre pandemic levels.

16
00:00:59,400 --> 00:01:01,840
Speaker 1: About going beyond that. I think with the Chips bill

17
00:01:02,040 --> 00:01:04,200
Speaker 1: that was passed and signed is gonna be signed until

18
00:01:04,280 --> 00:01:07,320
Speaker 1: next week, we can do more manufacturing United States of America,

19
00:01:07,360 --> 00:01:09,120
Speaker 1: which in the long term will help us with some

20
00:01:09,120 --> 00:01:13,560
Speaker 1: of the inflationary pressures such as semiconductors and and more microchips. Secondly, well,

21
00:01:13,800 --> 00:01:16,600
Speaker 1: what a turnaround this has been since the pandemic. Can

22
00:01:16,640 --> 00:01:18,160
Speaker 1: we just take a moment to think about that, how

23
00:01:18,200 --> 00:01:20,280
Speaker 1: much we've recovered over the last couple of years, and

24
00:01:20,440 --> 00:01:22,319
Speaker 1: can you talk to me about how sustainable you think

25
00:01:22,319 --> 00:01:25,800
Speaker 1: these jobs gains might be. I'll tell you, Uh, pandemic

26
00:01:25,880 --> 00:01:28,320
Speaker 1: March of I was the mirror Boston and we were

27
00:01:28,319 --> 00:01:32,840
Speaker 1: shutting businesses down. We're shutting h restaurants down. Uh, we

28
00:01:32,840 --> 00:01:35,280
Speaker 1: didn't really know what the economy held, and thinking about

29
00:01:35,319 --> 00:01:37,520
Speaker 1: where we are today was really incredible. And I think

30
00:01:37,520 --> 00:01:40,680
Speaker 1: that this will, in my opinion, will be sustainable moving forward.

31
00:01:40,720 --> 00:01:42,760
Speaker 1: I think companies are understanding. I think we're gonna have

32
00:01:42,760 --> 00:01:44,800
Speaker 1: a new type of economy. I think we're still obviously

33
00:01:45,080 --> 00:01:47,400
Speaker 1: dealing with the inflationary pressures. You talked about it right

34
00:01:47,400 --> 00:01:49,800
Speaker 1: before we got on the air here. I heard you talking,

35
00:01:49,840 --> 00:01:51,640
Speaker 1: and I think that you know, we're going to adapt

36
00:01:51,680 --> 00:01:53,560
Speaker 1: and adjust and we're gonna move forward. I think that

37
00:01:53,720 --> 00:01:56,040
Speaker 1: the infrastructure law that was was signed into law, we're

38
00:01:56,040 --> 00:01:58,800
Speaker 1: going to see more investments all across American roads, and bridges.

39
00:01:59,040 --> 00:02:01,200
Speaker 1: I think with the chips all that was passed and

40
00:02:01,200 --> 00:02:04,720
Speaker 1: move forward, we're going to see more investment in manufacturing. Hopefully,

41
00:02:05,160 --> 00:02:06,880
Speaker 1: the bill that's being worked on now in front of

42
00:02:06,880 --> 00:02:09,119
Speaker 1: the Senate is going to be working on prescription drug

43
00:02:09,200 --> 00:02:12,600
Speaker 1: costs and environmental climate change in some other areas is

44
00:02:12,639 --> 00:02:14,679
Speaker 1: going to help when you really think about a lot

45
00:02:14,720 --> 00:02:17,400
Speaker 1: of what's happened here under the Biden administration is something

46
00:02:17,400 --> 00:02:19,639
Speaker 1: that we've talked about for the last decade or so.

47
00:02:20,320 --> 00:02:22,120
Speaker 1: And these are all going to be good bills and

48
00:02:22,160 --> 00:02:24,920
Speaker 1: good investments to move our economy and quite honestly, move

49
00:02:24,960 --> 00:02:26,840
Speaker 1: America forward. And you've got a lot of people to

50
00:02:26,880 --> 00:02:28,200
Speaker 1: talk to this morning. I did want to talk to

51
00:02:28,240 --> 00:02:30,720
Speaker 1: you about the negotiations on the West Coast with the ports.

52
00:02:31,160 --> 00:02:33,120
Speaker 1: This was gonna bring out. I know you are because

53
00:02:33,120 --> 00:02:34,760
Speaker 1: this was your quote last time we spoke. You said,

54
00:02:34,800 --> 00:02:36,200
Speaker 1: next month, I'll come on the If I come on

55
00:02:36,240 --> 00:02:38,240
Speaker 1: this show. If we don't have a contract, and we're

56
00:02:38,280 --> 00:02:40,040
Speaker 1: not close to a contract, then you and I might

57
00:02:40,040 --> 00:02:42,280
Speaker 1: be having a very different conversation. So I guess that

58
00:02:42,360 --> 00:02:44,079
Speaker 1: we have one to be close to one, or we

59
00:02:44,160 --> 00:02:47,280
Speaker 1: have a very different conversations. No, we're not well, I

60
00:02:47,280 --> 00:02:49,080
Speaker 1: don't know how close we had to get into contract.

61
00:02:49,080 --> 00:02:51,079
Speaker 1: But one thing that that has happened and since we've

62
00:02:51,080 --> 00:02:53,920
Speaker 1: spoken and both sides have agreed is the healthcare And

63
00:02:53,919 --> 00:02:55,880
Speaker 1: that was a big sticking point. That's usually a big

64
00:02:55,880 --> 00:02:58,480
Speaker 1: sticking point, the costs around healthcare and who's gonna pay

65
00:02:58,520 --> 00:03:01,079
Speaker 1: for healthcare, and and that was an aociated and solved

66
00:03:01,120 --> 00:03:03,320
Speaker 1: about ten days ago. So I'm very pleased with that.

67
00:03:03,440 --> 00:03:06,400
Speaker 1: Now they're onto the next phase of negotiation. UH. And

68
00:03:06,480 --> 00:03:09,639
Speaker 1: usually when you think about contracts negotiations, the biggest sticking

69
00:03:09,639 --> 00:03:12,600
Speaker 1: point is around healthcare, pensions, things like that, and those

70
00:03:12,600 --> 00:03:15,080
Speaker 1: are in the rearview Marna. Now now they're moving forward

71
00:03:15,200 --> 00:03:16,760
Speaker 1: on some of the other issues they want to tackle.

72
00:03:16,840 --> 00:03:19,680
Speaker 1: So I feel good where we are. If I said that,

73
00:03:19,800 --> 00:03:21,520
Speaker 1: I probably should have used my words a little better

74
00:03:21,600 --> 00:03:23,200
Speaker 1: if you don't have a contract by next month, but

75
00:03:23,240 --> 00:03:26,000
Speaker 1: I certainly I am very confident where we are in

76
00:03:26,040 --> 00:03:29,040
Speaker 1: the negotiation right now. I am not concerned. Uh. And

77
00:03:29,120 --> 00:03:32,720
Speaker 1: I say in very close contact with both the longshoreman

78
00:03:32,880 --> 00:03:35,760
Speaker 1: union in the companies on the ports to offer any

79
00:03:35,760 --> 00:03:37,640
Speaker 1: type of support we need. But every time I talk

80
00:03:37,720 --> 00:03:39,720
Speaker 1: to them, they said, we're moving forward. A secondly, well,

81
00:03:40,000 --> 00:03:42,760
Speaker 1: for some people who might not be that confident as

82
00:03:42,760 --> 00:03:44,680
Speaker 1: you are, they might not be familiar with how this

83
00:03:44,760 --> 00:03:47,680
Speaker 1: works with this particular set of negotiations. Have you said before,

84
00:03:48,120 --> 00:03:49,840
Speaker 1: this particularly one is a little bit different because it

85
00:03:49,920 --> 00:03:52,840
Speaker 1: only starts six weeks before expliration. Can you help us

86
00:03:52,880 --> 00:03:54,840
Speaker 1: understand things a little bit better by comparing it to

87
00:03:55,800 --> 00:03:57,760
Speaker 1: where we were then at this stage and where we

88
00:03:57,800 --> 00:04:00,640
Speaker 1: are now. Well, I think we're further along than we

89
00:04:00,640 --> 00:04:03,280
Speaker 1: were if I remember that took an awful long time

90
00:04:03,320 --> 00:04:05,040
Speaker 1: to get done. But just for people that don't quit

91
00:04:05,120 --> 00:04:09,080
Speaker 1: quite understand collective boggating or negotiations, usually you can start

92
00:04:09,160 --> 00:04:11,280
Speaker 1: months ahead of time to lay down the foundation for

93
00:04:11,320 --> 00:04:14,080
Speaker 1: a contract. In this particular case, it's six weeks before

94
00:04:14,080 --> 00:04:16,760
Speaker 1: the termination of the contract, which means it always runs

95
00:04:16,800 --> 00:04:19,360
Speaker 1: over the expiration day. I don't think they've ever had

96
00:04:19,400 --> 00:04:22,359
Speaker 1: a contract done on the expiration date itself. Normally you

97
00:04:22,400 --> 00:04:24,599
Speaker 1: want to shoot to get a contract by expiration day.

98
00:04:24,760 --> 00:04:26,359
Speaker 1: But what both sides have agreed to do in this

99
00:04:26,440 --> 00:04:28,960
Speaker 1: case have continued to agree to keep the current collective

100
00:04:28,960 --> 00:04:32,320
Speaker 1: bargaining agreement in place while they negotiate moving forward. There's

101
00:04:32,320 --> 00:04:35,520
Speaker 1: been no no conversation of strikes lockout, slowdowns, none of

102
00:04:35,520 --> 00:04:37,919
Speaker 1: that stuff that hasn't even broached up, brought up and

103
00:04:37,960 --> 00:04:40,040
Speaker 1: talked about. And that's the thing that I don't think

104
00:04:40,080 --> 00:04:42,760
Speaker 1: will happen in this negotiation. And I'm going to continue

105
00:04:42,800 --> 00:04:44,719
Speaker 1: to talk to the sides and where I need to

106
00:04:44,720 --> 00:04:46,960
Speaker 1: pro pressure on them. Certainly, this is a big, big

107
00:04:46,960 --> 00:04:49,520
Speaker 1: issue for the ports and for products coming into the

108
00:04:49,560 --> 00:04:51,920
Speaker 1: United States America and quite honestly for exports out the

109
00:04:51,960 --> 00:04:54,280
Speaker 1: United States of America too, So we want to make

110
00:04:54,360 --> 00:04:57,240
Speaker 1: stay very closely now myself in general, Lions whose liaison

111
00:04:57,240 --> 00:04:59,560
Speaker 1: at the White House has been in constant communication. We

112
00:04:59,680 --> 00:05:01,600
Speaker 1: talked more than we talked a couple of times a week,

113
00:05:01,600 --> 00:05:03,520
Speaker 1: but we have a scheduled call just to go over

114
00:05:03,520 --> 00:05:05,000
Speaker 1: where we are just so we can stay on top

115
00:05:05,040 --> 00:05:07,720
Speaker 1: of these negotiations. Secondly, Welsh and Monster jobs report, it's

116
00:05:07,720 --> 00:05:10,600
Speaker 1: the final question for me for Boston. Do you need

117
00:05:10,640 --> 00:05:14,799
Speaker 1: to see some labor turn over at the Red Sox? Uh? God,

118
00:05:14,920 --> 00:05:16,680
Speaker 1: I get myself in trouble. They I'm not really sure

119
00:05:16,720 --> 00:05:19,360
Speaker 1: what's going on there, although that they seem like they

120
00:05:19,360 --> 00:05:22,239
Speaker 1: didn't make any many changes, so uh, they're going for something,

121
00:05:22,240 --> 00:05:24,080
Speaker 1: So they must be going for that wild card spot.

122
00:05:24,320 --> 00:05:26,360
Speaker 1: That was from Mike McKay and Tom Kane. They were

123
00:05:26,360 --> 00:05:28,600
Speaker 1: pushing me to our secondary wolves. They had to go there.

124
00:05:28,600 --> 00:05:30,839
Speaker 1: It's gonna catch up with you, sir. Thank you, Labor

125
00:05:30,880 --> 00:05:39,159
Speaker 1: Secretary Marty Wolves. There on just the Killer Jobs report again,

126
00:05:39,279 --> 00:05:43,240
Speaker 1: tape negative two, down on negative one, a little bit

127
00:05:43,279 --> 00:05:46,560
Speaker 1: of improvement. We'll see where that goes through This Friday,

128
00:05:46,560 --> 00:05:50,560
Speaker 1: we continue with Tiffany Welding of PIMCO, their chief US economists.

129
00:05:50,600 --> 00:05:54,680
Speaker 1: Tim Tiffany, I want to talk about something that's harder

130
00:05:54,720 --> 00:05:57,680
Speaker 1: than it sounds, which is the physics of inertial force

131
00:05:58,560 --> 00:06:03,480
Speaker 1: and momentum and the idea that a trend gets inertia,

132
00:06:04,000 --> 00:06:07,360
Speaker 1: the trend is going to be higher interest rates. Explain

133
00:06:07,480 --> 00:06:11,200
Speaker 1: how the next rate increase is different than the third

134
00:06:11,279 --> 00:06:16,760
Speaker 1: or fourth rate increase out UM. Well, so I think that, uh,

135
00:06:17,000 --> 00:06:19,919
Speaker 1: you know, it depends on the level of interest rates

136
00:06:19,960 --> 00:06:23,839
Speaker 1: that you start at. So UM. You know, before July,

137
00:06:24,080 --> 00:06:26,680
Speaker 1: the most recent fo MC meeting, for example, you know,

138
00:06:26,760 --> 00:06:29,279
Speaker 1: we would have argued that interest rates, the level of

139
00:06:29,360 --> 00:06:33,840
Speaker 1: interest rates was still providing accommodation to the US economy UM,

140
00:06:33,880 --> 00:06:38,320
Speaker 1: and that was increasingly inconsistent with economic fundamentals, you know,

141
00:06:38,320 --> 00:06:40,800
Speaker 1: which we would even argue before July and before this

142
00:06:40,839 --> 00:06:45,160
Speaker 1: payroll report, we're calling for more restrictive monetary policy. So

143
00:06:45,200 --> 00:06:48,279
Speaker 1: the July increase of seventy basis points from the Federal

144
00:06:48,320 --> 00:06:51,520
Speaker 1: Reserve basically just got them out of accommodative territory into

145
00:06:51,560 --> 00:06:54,360
Speaker 1: something closer to neutral, although I think you could even

146
00:06:54,440 --> 00:06:57,360
Speaker 1: argue that maybe they're not neutral yet. Um. But now

147
00:06:57,560 --> 00:07:00,440
Speaker 1: what the focus is on is really recaliber rating to

148
00:07:00,520 --> 00:07:03,480
Speaker 1: where we need to be, which is in restrictive territory,

149
00:07:03,560 --> 00:07:05,560
Speaker 1: you know. So that's why we think federers are officials

150
00:07:05,560 --> 00:07:07,880
Speaker 1: are probably also going to do another seventy five basis

151
00:07:07,880 --> 00:07:11,520
Speaker 1: point rate hike at the at the September meeting, you know.

152
00:07:11,560 --> 00:07:15,160
Speaker 1: But ultimately eventually they will slow the pace of those

153
00:07:15,680 --> 00:07:19,080
Speaker 1: adjustments down. Um, but as they get closer to kind

154
00:07:19,080 --> 00:07:21,040
Speaker 1: of where they think they need to be on on

155
00:07:21,120 --> 00:07:24,960
Speaker 1: the restrictive side. Tiffany, I'm looking at the two year

156
00:07:25,240 --> 00:07:27,720
Speaker 1: and the ten year treasury yields. I see a forty

157
00:07:27,760 --> 00:07:31,360
Speaker 1: basis point inversion. Do I need to pay attention to that?

158
00:07:31,400 --> 00:07:35,400
Speaker 1: I'm just an equity analyst wanted to pay attention to that. Yeah,

159
00:07:35,720 --> 00:07:37,960
Speaker 1: I mean so historically, you know, what we call the

160
00:07:38,040 --> 00:07:40,560
Speaker 1: yield curve you just mentioned has been one of the

161
00:07:40,600 --> 00:07:44,800
Speaker 1: best leading indicators of inflation UM and then obviously today

162
00:07:44,800 --> 00:07:47,760
Speaker 1: in reaction to the data that was released the employment

163
00:07:47,760 --> 00:07:50,080
Speaker 1: report you saw, I think even more inversion in the

164
00:07:50,160 --> 00:07:52,680
Speaker 1: yield curve. So maybe the markets pricing in more of

165
00:07:52,760 --> 00:07:56,200
Speaker 1: a recessionary outcome or higher probability of that event. I

166
00:07:56,240 --> 00:07:59,520
Speaker 1: think that's right in terms of market reaction. So although

167
00:07:59,560 --> 00:08:02,560
Speaker 1: this for a court confirmed that the economy was not

168
00:08:02,680 --> 00:08:05,880
Speaker 1: in recession in July UM, it also suggests that the

169
00:08:05,920 --> 00:08:08,280
Speaker 1: FED needs to do more to tame inflation, and that

170
00:08:08,320 --> 00:08:12,320
Speaker 1: means tighter financial conditions, putting more pressure on the economy,

171
00:08:12,560 --> 00:08:15,320
Speaker 1: which just raises the risk of you know, of a

172
00:08:15,360 --> 00:08:18,880
Speaker 1: recession call it twelve to eighteen months out. So um.

173
00:08:18,880 --> 00:08:21,520
Speaker 1: You know, I think that there's a growing concern, certainly

174
00:08:21,560 --> 00:08:23,480
Speaker 1: from US and probably from others, that the Fed will

175
00:08:23,520 --> 00:08:26,840
Speaker 1: have to do more than just um produce below trend

176
00:08:26,880 --> 00:08:29,480
Speaker 1: growth to get the economy to cool down. You know,

177
00:08:29,520 --> 00:08:32,600
Speaker 1: if you look at you know, historical precedents, you know,

178
00:08:32,600 --> 00:08:34,760
Speaker 1: in the seventies and eighties for this, the FED actually

179
00:08:34,760 --> 00:08:37,679
Speaker 1: had to engineer a recession, or at least recessions did

180
00:08:37,720 --> 00:08:40,520
Speaker 1: follow these kinds of high inflationary episodes. You know, so

181
00:08:40,559 --> 00:08:42,599
Speaker 1: it's certainly possible that you know, the FED was to

182
00:08:42,640 --> 00:08:44,920
Speaker 1: bring down inflation and quite quickly they might have to

183
00:08:45,080 --> 00:08:49,440
Speaker 1: do more. Uh. But back then, and I spent a

184
00:08:49,440 --> 00:08:52,640
Speaker 1: lot of time looking at log proportional change of the

185
00:08:52,840 --> 00:08:55,920
Speaker 1: curving versions, Tiffany, and we're not going to go there

186
00:08:55,920 --> 00:09:00,760
Speaker 1: on August Friday, but Tiffany welding when we we're doing that.

187
00:09:00,880 --> 00:09:07,400
Speaker 1: In the seventies, the ten year yield was what Paul whatever,

188
00:09:08,160 --> 00:09:11,720
Speaker 1: I I don't see the equivalency to the Voker period.

189
00:09:12,040 --> 00:09:14,880
Speaker 1: Do you see that? Well? I think what you have

190
00:09:15,000 --> 00:09:17,679
Speaker 1: to do is, you know, you have to adjust for

191
00:09:17,720 --> 00:09:20,440
Speaker 1: the fact that you know, what we call the real

192
00:09:20,480 --> 00:09:22,360
Speaker 1: neutral interest rate in the economy, so kind of the

193
00:09:22,360 --> 00:09:25,880
Speaker 1: interest rate, uh, that the economy can handle right where

194
00:09:25,880 --> 00:09:31,439
Speaker 1: where is uh monetary policy accommodative or restrictionary, and that

195
00:09:31,440 --> 00:09:34,760
Speaker 1: that level has declined over the years. Um. So it

196
00:09:34,800 --> 00:09:38,120
Speaker 1: was much higher in the seventies and eighties. Uh. You know,

197
00:09:38,160 --> 00:09:40,360
Speaker 1: the model suggests we kit observed this in the market,

198
00:09:40,440 --> 00:09:42,000
Speaker 1: so we have to try to estimate it. It was

199
00:09:42,080 --> 00:09:43,760
Speaker 1: much higher than that it is now. So you do

200
00:09:43,840 --> 00:09:45,480
Speaker 1: have to adjust for that, you know. So we don't

201
00:09:45,520 --> 00:09:47,480
Speaker 1: think interest rates are going back to where they were

202
00:09:47,880 --> 00:09:50,880
Speaker 1: back then. Um, but nevertheless, we think the FED will

203
00:09:50,920 --> 00:09:53,960
Speaker 1: have to be restrictive at this lower level of interest

204
00:09:54,040 --> 00:09:59,079
Speaker 1: rates now. So tiffany five wage increase that sounds pretty

205
00:09:59,120 --> 00:10:02,440
Speaker 1: good to me? Is that's something that you think is sustainable,

206
00:10:02,520 --> 00:10:05,640
Speaker 1: sticky healthy. How do you think about the wage environment

207
00:10:05,640 --> 00:10:08,240
Speaker 1: out there? Well, you know, the you know, I think

208
00:10:08,280 --> 00:10:11,559
Speaker 1: the bottom line from that is that although wages wage

209
00:10:11,559 --> 00:10:14,559
Speaker 1: inflation has started to accelerate, you know, of course, it's

210
00:10:14,600 --> 00:10:18,560
Speaker 1: still below uh price level inflation. So people are are

211
00:10:18,600 --> 00:10:21,280
Speaker 1: still getting squeezed. If you look at you know, the

212
00:10:21,320 --> 00:10:24,360
Speaker 1: kind of data and aggregate what we see or interpret

213
00:10:24,480 --> 00:10:26,840
Speaker 1: is that, um, you know, more people are getting jobs,

214
00:10:26,840 --> 00:10:30,280
Speaker 1: so overall, aggregate incomes are still growing, um, you know,

215
00:10:30,320 --> 00:10:32,400
Speaker 1: and they're growing much more in line with with h

216
00:10:32,520 --> 00:10:36,120
Speaker 1: inflation prices, price inflation, um, you know, so maybe people

217
00:10:36,160 --> 00:10:38,920
Speaker 1: are getting two jobs to deal with uh, you know,

218
00:10:39,000 --> 00:10:41,360
Speaker 1: to get some extra income to deal with these types

219
00:10:41,400 --> 00:10:44,200
Speaker 1: of price increases that they're seeing in the grocery store, etcetera.

220
00:10:44,520 --> 00:10:46,559
Speaker 1: You know, but I think overall you're asking if if

221
00:10:46,600 --> 00:10:49,120
Speaker 1: the wage the wage numbers, is that is that normal?

222
00:10:49,160 --> 00:10:50,880
Speaker 1: I mean, I think the concerns still that we have

223
00:10:51,040 --> 00:10:53,840
Speaker 1: is that as you get more price increases, people negotiate

224
00:10:53,920 --> 00:10:57,200
Speaker 1: higher wages. The wage inflation broadens out, you know, and

225
00:10:57,240 --> 00:10:59,840
Speaker 1: then you get even more you get higher prices as

226
00:11:00,200 --> 00:11:02,480
Speaker 1: companies pass on those additional costs, so you get in

227
00:11:02,480 --> 00:11:05,000
Speaker 1: this kind of trial situation. We don't think we're there yet,

228
00:11:05,040 --> 00:11:07,720
Speaker 1: but certainly that's something that we want to avoid. Tiffany,

229
00:11:07,760 --> 00:11:15,840
Speaker 1: thank you so much. PIMCO. Let us get a briefing

230
00:11:15,920 --> 00:11:18,600
Speaker 1: from someone who's sat at the desk in the Echoes building.

231
00:11:18,679 --> 00:11:22,320
Speaker 1: Randall Krosner continues, where there's a former FED governor at

232
00:11:22,320 --> 00:11:26,560
Speaker 1: Both School Chicago. Randy, how does this change the calculus

233
00:11:27,000 --> 00:11:31,360
Speaker 1: for the Federal Open Market Committee? I think it's really

234
00:11:31,400 --> 00:11:33,720
Speaker 1: clear that they are in a path to continue to

235
00:11:33,800 --> 00:11:37,440
Speaker 1: raise those rates UM. Certainly seventy five basis points will

236
00:11:37,440 --> 00:11:41,880
Speaker 1: be on the table for the UH for the next meeting. UH.

237
00:11:42,000 --> 00:11:44,680
Speaker 1: The thing, it's not only the strength of the labor market,

238
00:11:44,720 --> 00:11:49,680
Speaker 1: but it is also the UH the significant increase in wages,

239
00:11:50,320 --> 00:11:54,920
Speaker 1: higher than expected upward revisions. UM. The FED really worries

240
00:11:54,920 --> 00:11:58,760
Speaker 1: about inflation expectation becoming entrenched. They're really hoping that inflation

241
00:11:58,800 --> 00:12:02,280
Speaker 1: is gonna be coming down low five percent fairly soon.

242
00:12:02,480 --> 00:12:05,600
Speaker 1: But if people are still demanding five percent wage increases,

243
00:12:05,920 --> 00:12:08,160
Speaker 1: that gets them into a lot of difficulty, and so

244
00:12:08,200 --> 00:12:10,560
Speaker 1: that's why they're going to continue to move. I think

245
00:12:10,559 --> 00:12:13,280
Speaker 1: this means that they'll will certainly be in the fours

246
00:12:13,360 --> 00:12:15,960
Speaker 1: by early next year. And I said I said before,

247
00:12:16,080 --> 00:12:17,559
Speaker 1: I think it's going to be there for a while.

248
00:12:17,800 --> 00:12:20,720
Speaker 1: And exactly as Jonathan had said, when the Fed moves

249
00:12:20,760 --> 00:12:22,679
Speaker 1: the rates up, it's not that they just pivot and

250
00:12:22,720 --> 00:12:25,199
Speaker 1: pull them back down. They typically keep them up for

251
00:12:25,240 --> 00:12:27,440
Speaker 1: a while because they really want to stamp inflation, inflation

252
00:12:27,480 --> 00:12:29,760
Speaker 1: expectations out of the system. Randy, someone's going to ask

253
00:12:29,800 --> 00:12:32,640
Speaker 1: this question, does this pass the smell test for you?

254
00:12:32,800 --> 00:12:36,640
Speaker 1: A number this big? I mean, there can be always revisions.

255
00:12:36,679 --> 00:12:38,640
Speaker 1: You never want to put too much emphasis on any

256
00:12:38,679 --> 00:12:41,440
Speaker 1: one month. But you've got an upward revision last month,

257
00:12:41,720 --> 00:12:44,480
Speaker 1: you have a strong number this month. UM. The Fed

258
00:12:44,559 --> 00:12:47,000
Speaker 1: is not going to overreact to any one number, but

259
00:12:47,440 --> 00:12:51,040
Speaker 1: you know the upward revisions to UM that that came

260
00:12:51,120 --> 00:12:55,080
Speaker 1: last month with this will certainly embolden them to to

261
00:12:55,280 --> 00:12:59,240
Speaker 1: move expeditiously as they have said. And I think they're

262
00:12:59,240 --> 00:13:02,040
Speaker 1: gonna get least I think it's going to be very

263
00:13:02,080 --> 00:13:03,880
Speaker 1: close to four by the end of the year. By

264
00:13:03,920 --> 00:13:05,760
Speaker 1: the end of the year, Randy, can you talk a

265
00:13:05,760 --> 00:13:08,040
Speaker 1: little bit about the path you did mention earlier that

266
00:13:08,080 --> 00:13:09,880
Speaker 1: you expect them to go to four percent for the

267
00:13:09,880 --> 00:13:12,720
Speaker 1: Fed funds rate and stay there for a while. How

268
00:13:12,760 --> 00:13:15,480
Speaker 1: long is that while and what will determine that length?

269
00:13:16,640 --> 00:13:19,800
Speaker 1: So it's gonna depend a lot on these these statistics

270
00:13:19,840 --> 00:13:22,280
Speaker 1: that we're that we're getting. What's gonna be happening labor market,

271
00:13:22,280 --> 00:13:25,560
Speaker 1: what's gonna be happening to two wages? And Um, you know,

272
00:13:25,679 --> 00:13:28,560
Speaker 1: right now we're not seeing the economy going over cliff

273
00:13:28,920 --> 00:13:31,160
Speaker 1: and this is exactly the time that the Fed needs

274
00:13:31,200 --> 00:13:35,400
Speaker 1: to be moving quickly. Um, the the economy hasn't sputtered yet,

275
00:13:35,480 --> 00:13:38,400
Speaker 1: so they need to move. But also they haven't gotten

276
00:13:38,400 --> 00:13:41,480
Speaker 1: the political pressure on them yet because the unemployed rate

277
00:13:41,640 --> 00:13:44,480
Speaker 1: is at near record lows. So this is the time

278
00:13:44,640 --> 00:13:47,520
Speaker 1: to be raising races to try to stamp the inflation

279
00:13:47,559 --> 00:13:49,800
Speaker 1: expectations and inflation out of the system. Brandy, you're gonna

280
00:13:49,880 --> 00:13:51,600
Speaker 1: throw me out of the classroom, but I'm gonna ask

281
00:13:51,600 --> 00:13:54,400
Speaker 1: the question. I'm gonna raise my snarky arm and say,

282
00:13:54,440 --> 00:13:57,960
Speaker 1: Professor Krasner, where's the neutral rate? And I say that

283
00:13:58,040 --> 00:14:01,400
Speaker 1: with great respect because is within all the back and

284
00:14:01,480 --> 00:14:04,680
Speaker 1: forth of all our guests, and that it's when does

285
00:14:04,679 --> 00:14:08,920
Speaker 1: this become painful, which means through the neutral rate? Where's

286
00:14:08,960 --> 00:14:12,559
Speaker 1: the neutral rate? Professor? I always knew you were the

287
00:14:12,600 --> 00:14:15,559
Speaker 1: troublemaker in the back of the class. Um, and uh,

288
00:14:15,600 --> 00:14:18,920
Speaker 1: and you continue to be. That's exactly. That's a very

289
00:14:18,920 --> 00:14:23,800
Speaker 1: important question, and one where Um, the consensus of the Fed,

290
00:14:24,320 --> 00:14:26,360
Speaker 1: what they say is around two and a half, so

291
00:14:26,480 --> 00:14:29,040
Speaker 1: roughly where they are. But that's two and a half

292
00:14:29,640 --> 00:14:33,000
Speaker 1: when they think of inflation being down at two percent

293
00:14:33,240 --> 00:14:36,160
Speaker 1: in the long run. In the short run, when inflation

294
00:14:36,240 --> 00:14:39,720
Speaker 1: is still very very high, Um, you're still the very

295
00:14:39,880 --> 00:14:43,680
Speaker 1: dramatically negative inflation adjusted rate. So two and a half

296
00:14:43,760 --> 00:14:45,360
Speaker 1: is not neutral right now. In the long run it

297
00:14:45,440 --> 00:14:48,120
Speaker 1: might be neutral, but it's still quite expansionary when inflation

298
00:14:48,240 --> 00:14:51,280
Speaker 1: is depending on are you are? Are you giving up

299
00:14:51,320 --> 00:14:54,080
Speaker 1: the Chicago school and joining adam posing with a three

300
00:14:54,160 --> 00:14:57,640
Speaker 1: percent inflation level? Is that really what we're talking about here,

301
00:14:57,960 --> 00:15:01,960
Speaker 1: is we need to adjust a neutral rate higher? No, no, no,

302
00:15:02,000 --> 00:15:03,960
Speaker 1: I'm not saying that that the goal should change from

303
00:15:04,000 --> 00:15:07,160
Speaker 1: from two percent and I'm not saying that that in

304
00:15:07,240 --> 00:15:10,000
Speaker 1: the long run they're not. I think they're right about

305
00:15:10,080 --> 00:15:12,480
Speaker 1: the or it seems reasonable that they are in a

306
00:15:12,560 --> 00:15:14,960
Speaker 1: reasonable range for the for the long run. But in

307
00:15:14,960 --> 00:15:17,360
Speaker 1: the short run you can't say that two and a

308
00:15:17,400 --> 00:15:21,960
Speaker 1: half percent is neutral when inflation is eight percent and

309
00:15:22,240 --> 00:15:24,720
Speaker 1: so you have a you know, very significantly negative real rate.

310
00:15:25,120 --> 00:15:26,800
Speaker 1: So it's there's a bit of a long run versus

311
00:15:26,800 --> 00:15:29,840
Speaker 1: short run kind of thing. To catch up Randy Crossing

312
00:15:29,880 --> 00:15:38,960
Speaker 1: at that to make sense of this stunning report, Jeffrey

313
00:15:39,040 --> 00:15:44,400
Speaker 1: Rosenberg joins US portfolio manager of the Systematic Multi Strategy

314
00:15:44,480 --> 00:15:47,240
Speaker 1: Fund at black Rock. Jeff Rosenberg, let me cut to

315
00:15:47,280 --> 00:15:50,560
Speaker 1: the chase, how do you do? Multi strategy? Was such

316
00:15:50,560 --> 00:15:55,440
Speaker 1: a shock? It is a bit of a surprise. Clearly,

317
00:15:55,480 --> 00:15:58,320
Speaker 1: you guys have hit it on the head with you know,

318
00:15:58,400 --> 00:16:01,560
Speaker 1: good news being being bad is and and it's surprising.

319
00:16:02,040 --> 00:16:04,360
Speaker 1: We strong, and it's a reminder of just you know,

320
00:16:04,480 --> 00:16:08,320
Speaker 1: how strong the economy is. We're expecting an eventual slow down,

321
00:16:08,840 --> 00:16:11,400
Speaker 1: but it's not here yet. And Lisa and I we're

322
00:16:11,440 --> 00:16:14,000
Speaker 1: talking about this ahead of time. You know, what does

323
00:16:14,040 --> 00:16:17,920
Speaker 1: the market do on a on a big upside surprise?

324
00:16:18,000 --> 00:16:21,360
Speaker 1: And the narrative going in here from the fm C

325
00:16:21,680 --> 00:16:25,160
Speaker 1: was the Powell pivot, and this is the payroll pushback,

326
00:16:25,720 --> 00:16:28,280
Speaker 1: and the pushback is they're not going to be able

327
00:16:28,320 --> 00:16:32,920
Speaker 1: to pivot as aggressively as the market was expecting post

328
00:16:32,960 --> 00:16:35,560
Speaker 1: that FOMC. And that's what you're seeing with that yield

329
00:16:35,560 --> 00:16:37,720
Speaker 1: curve flattening and the big increase in the front end

330
00:16:37,760 --> 00:16:39,800
Speaker 1: of the race and then on risky assets and equities.

331
00:16:40,040 --> 00:16:41,960
Speaker 1: You know, they don't like that because they like, you know,

332
00:16:42,000 --> 00:16:44,160
Speaker 1: the end of the FED tightening, and as Randy Krassner

333
00:16:44,280 --> 00:16:46,880
Speaker 1: was was talking about, if inflation doesn't come down, we

334
00:16:46,920 --> 00:16:50,520
Speaker 1: are nowhere near neutral and so you've got a lot

335
00:16:50,600 --> 00:16:54,280
Speaker 1: more FED hikes if you don't have that inflation coming down. Jeff,

336
00:16:54,320 --> 00:16:57,200
Speaker 1: I've got a bunch of Doeby Bond questions for you,

337
00:16:57,240 --> 00:16:59,880
Speaker 1: but I think it's important. And a lot large pop

338
00:17:00,000 --> 00:17:04,800
Speaker 1: relation of our radio and TV audience worldwide don't have

339
00:17:04,920 --> 00:17:10,320
Speaker 1: fancy financial degrees, and they're asking what's wrong with generating

340
00:17:10,440 --> 00:17:16,560
Speaker 1: five fifties six thousand jobs with the revision? Why is

341
00:17:16,920 --> 00:17:21,159
Speaker 1: so much good jobs reformation a bad thing? I just

342
00:17:21,200 --> 00:17:25,919
Speaker 1: don't get that. Yeah, Well, it's it's about it's about

343
00:17:25,960 --> 00:17:29,840
Speaker 1: overheating and it's about inflation. And one of the challenges

344
00:17:29,920 --> 00:17:33,840
Speaker 1: that you have is in this report you see a

345
00:17:33,880 --> 00:17:37,560
Speaker 1: lot of signs of that wage inflation and the wage

346
00:17:37,560 --> 00:17:41,160
Speaker 1: price spiral. Uh. That is is really the bigger risk

347
00:17:41,240 --> 00:17:46,480
Speaker 1: here that you you transition from COVID supply side disruptions

348
00:17:46,520 --> 00:17:50,600
Speaker 1: transitory to something that's much more persistent. And the risk

349
00:17:50,760 --> 00:17:55,879
Speaker 1: is that inflation hurts everyone and if you don't snub

350
00:17:55,920 --> 00:17:59,359
Speaker 1: it out early, the pain that has to happen later

351
00:17:59,760 --> 00:18:02,480
Speaker 1: is much much greater. And so that's why good news

352
00:18:02,600 --> 00:18:05,199
Speaker 1: is bad news because for financial markets it means the

353
00:18:05,240 --> 00:18:07,640
Speaker 1: FED is going to have to do a lot more,

354
00:18:07,680 --> 00:18:09,880
Speaker 1: and it's going to have to do that sooner, tightening

355
00:18:09,880 --> 00:18:13,919
Speaker 1: financial conditions to rain in the demand side. It's the

356
00:18:13,960 --> 00:18:17,560
Speaker 1: only tool they have to address this inflation concern. So, Jeff,

357
00:18:17,600 --> 00:18:19,720
Speaker 1: we were talking before we got these numbers that the

358
00:18:19,720 --> 00:18:22,080
Speaker 1: Powell pivot would turn into the payroll push back, which

359
00:18:22,080 --> 00:18:24,240
Speaker 1: is exactly what we're seeing. And that was your expectation

360
00:18:24,720 --> 00:18:28,040
Speaker 1: just based on how lopside of the markets have gotten

361
00:18:28,119 --> 00:18:31,399
Speaker 1: in their belief of the pivot. How much have we

362
00:18:31,560 --> 00:18:34,159
Speaker 1: unwound of that? How much more do we have to go?

363
00:18:34,280 --> 00:18:36,439
Speaker 1: And I say this as we look, yes at NAZDAC

364
00:18:36,520 --> 00:18:39,720
Speaker 1: futures out about a percent and going lower but still

365
00:18:39,720 --> 00:18:45,240
Speaker 1: well off the lows after surging over the past few weeks. Well,

366
00:18:45,280 --> 00:18:48,399
Speaker 1: there's a there's a narrow reaction to today, and then

367
00:18:48,440 --> 00:18:51,600
Speaker 1: there's a longer run issue. The narrow reaction is, as

368
00:18:51,640 --> 00:18:54,119
Speaker 1: I looked at it last about seventeen basis points. You know,

369
00:18:54,200 --> 00:18:56,600
Speaker 1: you're you're taking back you know, a little bit less

370
00:18:56,640 --> 00:19:00,280
Speaker 1: than twenty five that you priced out follow going the

371
00:19:00,359 --> 00:19:03,240
Speaker 1: FO and C in the Powell pivot. But the bigger

372
00:19:03,280 --> 00:19:05,639
Speaker 1: issue is really what Randy is talking about and what

373
00:19:05,720 --> 00:19:08,560
Speaker 1: Somers is talking about that you know, to say that

374
00:19:08,560 --> 00:19:11,600
Speaker 1: that we're at neutral, we're at two and a half

375
00:19:11,760 --> 00:19:16,200
Speaker 1: percent is the conflation. It's the difference between the long

376
00:19:16,280 --> 00:19:18,359
Speaker 1: run neutral, which was really what he was talking about,

377
00:19:18,600 --> 00:19:21,040
Speaker 1: and the issue of the short run And and this

378
00:19:21,119 --> 00:19:23,359
Speaker 1: is the issue we're gonna be talking about for the

379
00:19:23,400 --> 00:19:27,360
Speaker 1: next six to nine months, which is we're past peak inflation.

380
00:19:27,920 --> 00:19:31,760
Speaker 1: We're going to see inflation decline. But to what level?

381
00:19:32,119 --> 00:19:34,840
Speaker 1: Because the forecast in the FED. To say that they're

382
00:19:34,880 --> 00:19:37,280
Speaker 1: at neutral is Randy was just saying, is that's a

383
00:19:37,320 --> 00:19:40,240
Speaker 1: two percent inflation rate. If you don't get to that

384
00:19:40,280 --> 00:19:42,879
Speaker 1: two percent inflation rates. Say you get to a higher

385
00:19:42,920 --> 00:19:46,359
Speaker 1: inflation rate of say three percent, well, what it means

386
00:19:46,480 --> 00:19:49,639
Speaker 1: is that you're nowhere near your long term neutral, and

387
00:19:49,680 --> 00:19:53,040
Speaker 1: the whole bond market expectations in terms of where rates

388
00:19:53,080 --> 00:19:56,440
Speaker 1: settle in have to reprice, because what we're pricing right

389
00:19:56,480 --> 00:19:59,359
Speaker 1: now is a two percent inflation two and a half

390
00:19:59,359 --> 00:20:03,359
Speaker 1: percent long term neutral, and that's all conditional on the

391
00:20:03,480 --> 00:20:06,800
Speaker 1: realization that two percent inflation. Right, Jeff, this is a

392
00:20:06,880 --> 00:20:09,399
Speaker 1: sea of uncertainty, and we're getting a little nodes that

393
00:20:09,480 --> 00:20:12,160
Speaker 1: might point to a direction of travel. Where is your

394
00:20:12,160 --> 00:20:15,359
Speaker 1: conviction right now as you tweak your portfolio, as you

395
00:20:15,400 --> 00:20:21,760
Speaker 1: try to understand where the risks are miss priced in markets? Yeah,

396
00:20:21,520 --> 00:20:25,159
Speaker 1: you know, we're a little bit uh skeptical of the

397
00:20:25,280 --> 00:20:28,760
Speaker 1: of the rally that we've seen in risky assets. We're

398
00:20:28,840 --> 00:20:33,040
Speaker 1: still concerned that you have uh, both a shock in

399
00:20:33,160 --> 00:20:35,879
Speaker 1: terms of inflation what we're talking about here today in

400
00:20:35,960 --> 00:20:38,080
Speaker 1: terms of what the Fed has to do in front

401
00:20:38,119 --> 00:20:43,040
Speaker 1: of that tightening financial conditions not being conducive for risky assets.

402
00:20:43,560 --> 00:20:46,560
Speaker 1: So we've been pulling back from our risky asset position.

403
00:20:46,640 --> 00:20:50,200
Speaker 1: We didn't add uh in the rally that we saw

404
00:20:50,359 --> 00:20:53,960
Speaker 1: in July. It's important to recognize that when you're in

405
00:20:54,040 --> 00:20:57,399
Speaker 1: bear markets, they don't go straight down. They have ratchets,

406
00:20:57,440 --> 00:21:01,920
Speaker 1: they have bear market rallies. That's what people are characterizing

407
00:21:01,920 --> 00:21:06,600
Speaker 1: the last up move here. That's barely consensus. We're a

408
00:21:06,600 --> 00:21:09,320
Speaker 1: little concerned that that we're in the consensus camp there,

409
00:21:09,359 --> 00:21:12,240
Speaker 1: but we think all the data is pointing to still

410
00:21:12,280 --> 00:21:17,560
Speaker 1: considerable challenges to the risky asset profile going forward here,

411
00:21:17,560 --> 00:21:20,240
Speaker 1: So it's a little bit more cautious. Vie, what about

412
00:21:20,280 --> 00:21:22,520
Speaker 1: your portfolio of cash? I know that black Rock has

413
00:21:22,560 --> 00:21:25,359
Speaker 1: been adjusting as cash and holding a higher than usual

414
00:21:25,680 --> 00:21:31,240
Speaker 1: level of it. How have you maneuvered in that space? Yeah,

415
00:21:31,280 --> 00:21:34,560
Speaker 1: you know, I mean every portfolio and portfolio management team runs,

416
00:21:34,720 --> 00:21:38,200
Speaker 1: you know, their own portfolios and are fun. As Tom

417
00:21:38,240 --> 00:21:40,520
Speaker 1: introduced at the beginning, you know, we have run higher

418
00:21:40,520 --> 00:21:44,480
Speaker 1: cash levels. Um, it's it's a way to reduce some

419
00:21:44,560 --> 00:21:47,880
Speaker 1: of the risky acid exposure. The other issue that all

420
00:21:48,400 --> 00:21:51,400
Speaker 1: investors are facing in this summer environment is it's been

421
00:21:51,600 --> 00:21:56,280
Speaker 1: an exceptionally a liquid environment, very expensive to trade, uh,

422
00:21:56,359 --> 00:21:59,240
Speaker 1: and so using cash as as opposed to other means

423
00:21:59,280 --> 00:22:01,959
Speaker 1: to bring your risk down is just a more efficient

424
00:22:02,240 --> 00:22:06,080
Speaker 1: way of reducing transactions, costs and and and retaining value

425
00:22:06,080 --> 00:22:08,440
Speaker 1: for our investors. What do you do on duration? Here

426
00:22:08,480 --> 00:22:10,359
Speaker 1: is a general statement of black Rock. What do you

427
00:22:10,359 --> 00:22:12,119
Speaker 1: do on duration? You guys are gonna have twenty of

428
00:22:12,119 --> 00:22:14,280
Speaker 1: you in a meeting yelling and scream is going to

429
00:22:14,400 --> 00:22:17,639
Speaker 1: assume you know, we just we just understand that probably

430
00:22:17,680 --> 00:22:19,320
Speaker 1: cost her. It shall be rude. I mean, that's just

431
00:22:19,440 --> 00:22:21,720
Speaker 1: use you the way it is. But then, Jeff Rosenberg,

432
00:22:21,800 --> 00:22:26,600
Speaker 1: what's a duration call? Well, I think the duration call,

433
00:22:26,760 --> 00:22:28,800
Speaker 1: you know, I'll speak for our our team. Obviously, as

434
00:22:28,800 --> 00:22:31,159
Speaker 1: you highlighted, there's a lot of different voices, and you're

435
00:22:31,200 --> 00:22:35,000
Speaker 1: gonna hear some more voices in Jonathan's program uh in

436
00:22:35,119 --> 00:22:38,080
Speaker 1: the next hour. But it's still a cautious view on

437
00:22:38,760 --> 00:22:42,600
Speaker 1: duration here. Again, that's the view of the uncertainty of inflation.

438
00:22:42,920 --> 00:22:46,240
Speaker 1: Markets are pricing certainty we're gonna have a clean path

439
00:22:46,359 --> 00:22:51,280
Speaker 1: to two percent. We are more skeptical about that being realized.

440
00:22:51,320 --> 00:22:53,480
Speaker 1: And if it is not realized and you end up

441
00:22:53,520 --> 00:22:57,920
Speaker 1: with higher inflation, the whole bond curve, inflation risk premium,

442
00:22:58,440 --> 00:23:00,560
Speaker 1: they need to reset higher. And so you've got to

443
00:23:00,600 --> 00:23:03,480
Speaker 1: be a bit more defensive on duration with that uncertainty

444
00:23:03,760 --> 00:23:09,280
Speaker 1: Jeff Rozenberg, Thank you so much, greatly greatly appreciated. This

445
00:23:09,440 --> 00:23:13,240
Speaker 1: is the Bloomberg Surveillance Podcast. Thanks for listening. Join us

446
00:23:13,280 --> 00:23:17,040
Speaker 1: live weekdays from seven to ten am Eastern on Bloomberg

447
00:23:17,119 --> 00:23:20,960
Speaker 1: Radio and on Bloomberg Television each day from six to

448
00:23:21,080 --> 00:23:25,720
Speaker 1: nine am for insight from the best in economics, finance, investment,

449
00:23:25,880 --> 00:23:30,919
Speaker 1: and international relations. And subscribe to the Surveillance podcast on

450
00:23:31,000 --> 00:23:34,800
Speaker 1: Apple podcast, SoundCloud, Bloomberg dot com, and of course on

451
00:23:34,920 --> 00:23:39,080
Speaker 1: the terminal. I'm Tom Keene and this is Bloomberg