WEBVTT - Fed Focus Is on September Updates to SEP 0:00:01.360 --> 0:00:05.680 This is Bloomberg Business Wait inside from the reporters and 0:00:05.880 --> 0:00:09.440 editors who bring you America's most trusted business magazine, plus 0:00:09.520 --> 0:00:13.680 global business, finance and tech news. The Bloomberg Business Week 0:00:13.720 --> 0:00:23.280 Podcast with Carol Messer and Tim Stenebeck from Bloomberg Radio. 0:00:23.840 --> 0:00:24.400 What is it? 0:00:36.880 --> 0:00:40.000 Well, when tomorrow comes, That's when we hear from fed 0:00:40.080 --> 0:00:42.840 share J. Powell two pm. We get the decision. Thirty 0:00:42.840 --> 0:00:46.040 minutes later, we're going to hear from the man himself. 0:00:46.080 --> 0:00:48.320 It's the sixth meeting of the Federal Reserves Policy Setting 0:00:48.320 --> 0:00:51.920 Commeting Policy Setting Committee. We're going to have all the 0:00:52.040 --> 0:00:55.080 US Central Bank's latest view on economic projections on the 0:00:55.200 --> 0:00:57.880 US economy. Is it going to be a snoozer? Or 0:00:57.960 --> 0:01:01.120 might there be some possible fireworks with his view? Back 0:01:01.120 --> 0:01:03.880 with us, we got doctor Stephen Skanky, chief economic advisor 0:01:03.920 --> 0:01:05.880 at keep Point, also a former US Treasury and White 0:01:05.880 --> 0:01:08.760 House National Security Council staff member, joining us on Zoom 0:01:08.800 --> 0:01:11.960 from Washington, DC. Also with us, Anna Wong, chief US 0:01:12.040 --> 0:01:16.920 economist for Bloomberg Economics, on Zoom from our Washington DC bureau. 0:01:17.000 --> 0:01:18.840 Doctor Skanky, good to have you with us. It's a 0:01:18.840 --> 0:01:21.040 good day to talk to both of you, especially ahead 0:01:21.040 --> 0:01:24.440 of hearing from FED Chair J Powell tomorrow, the committee 0:01:24.440 --> 0:01:27.640 meeting today. Of course, what's top of mind for them, 0:01:27.680 --> 0:01:30.400 do you think, doctor Skanky. 0:01:30.720 --> 0:01:34.520 Well, they're still trying to figure out whether inflation is 0:01:34.959 --> 0:01:38.880 had just taken a break and is not going to rebound. Certainly, 0:01:38.920 --> 0:01:43.600 they're concerned about the high oil and energy price numbers 0:01:43.640 --> 0:01:47.400 and what that's doing in gasoline on the headline, and 0:01:47.440 --> 0:01:52.200 how that translates through to core inflation. So that's that's 0:01:52.200 --> 0:01:56.200 certainly a concern. The other concern is that the economy 0:01:56.280 --> 0:01:59.520 still seemed to be growing pretty robustly for all the 0:01:59.560 --> 0:02:03.440 reason that we think consumer spending should be slowing. The 0:02:03.520 --> 0:02:06.840 latest numbers last week didn't show that at all, and 0:02:06.920 --> 0:02:08.960 that's got to be a concern for them. 0:02:09.440 --> 0:02:11.400 I want to bring in Anna Wong, but first, speaking 0:02:11.680 --> 0:02:15.280 of headlines, the Treasury tenure yield rising to four point 0:02:15.440 --> 0:02:19.040 three six five percent, the highest going all the way 0:02:19.040 --> 0:02:22.119 back to two thousand and seven. Anna Wong is chief 0:02:22.200 --> 0:02:25.080 US economists for Bloomberg Economics, and you've got a great 0:02:25.160 --> 0:02:29.960 piece out about why a soft landing call always precedes recessions. 0:02:30.639 --> 0:02:34.760 Take us into the history there, and also why you 0:02:34.800 --> 0:02:36.880 know you think it's a little too early for people 0:02:36.919 --> 0:02:39.120 to declare soft landing this time around. 0:02:39.919 --> 0:02:43.720 Yeah, so, you know, we have seen four recessions in 0:02:43.760 --> 0:02:48.320 the past, say since nineteen ninety, and preceding each of 0:02:48.360 --> 0:02:52.160 those four recessions there had been a chorus of soft 0:02:52.240 --> 0:02:56.800 lending optimism. So you could actually look up the word 0:02:56.919 --> 0:03:00.320 soft lending across news headline and it's very clear that 0:03:00.320 --> 0:03:02.960 that's the trend. And so in that piece we ask 0:03:03.200 --> 0:03:07.079 what is the reason for why soft landing hopes always 0:03:07.160 --> 0:03:09.600 peak right before recession? I think I think there are 0:03:09.639 --> 0:03:13.480 a couple of reasons. Number one is that economists forecasting 0:03:13.560 --> 0:03:19.520 tools tend to depend on linear relationships. Unfortunately, unemployment does 0:03:19.560 --> 0:03:26.400 not follow a linear distribution data generation process. In fact, 0:03:26.520 --> 0:03:31.400 during recessions, unemployment tends to jump on a non linear 0:03:31.680 --> 0:03:34.200 in a non linear way. So as a result, when 0:03:34.240 --> 0:03:38.680 people think linearly, the mean forecast would suggest that unemployment 0:03:39.040 --> 0:03:42.600 rate would only you know, slightly rise to three point 0:03:42.720 --> 0:03:44.680 nine percent by the end of this year. And that 0:03:44.800 --> 0:03:48.520 might be the number that the Fed officials, the median 0:03:48.640 --> 0:03:51.400 participant to write it, would write in in the updated 0:03:52.520 --> 0:03:55.520 SEP tomorrow, three point nine percent unemployment by the end 0:03:55.560 --> 0:03:58.520 of this year. That is entirely consistent with a linear 0:03:58.560 --> 0:04:00.960 way of thinking about the world. But if you think 0:04:01.000 --> 0:04:05.640 about the risk, and we calculated the risk around that 0:04:05.800 --> 0:04:09.000 mean forecast using historical data, in fact, it shows you 0:04:09.120 --> 0:04:13.000 that the upside risk for unemployment is actually much much 0:04:13.000 --> 0:04:16.279 bigger than the downside risk to unemployment. So this is 0:04:16.320 --> 0:04:20.400 why we think overall that there's still substantial risk of 0:04:20.440 --> 0:04:21.440 a recession before the. 0:04:21.480 --> 0:04:22.000 End of the year. 0:04:22.040 --> 0:04:23.680 Doctor Snaky way in on that, do you think do 0:04:23.720 --> 0:04:26.560 you agree with in along that there's substantial risk of 0:04:26.640 --> 0:04:28.479 a US recession by the end of the year. 0:04:29.279 --> 0:04:34.000 Well, I certainly agree with annas Research and Analytics on this, 0:04:34.560 --> 0:04:37.320 and yes, there is a risk of recession before the 0:04:37.440 --> 0:04:39.960 end of the year. I happen to think that it's 0:04:40.000 --> 0:04:44.880 more likely to bleed into twenty twenty four than necessarily 0:04:45.320 --> 0:04:47.000 show up here. But there are a lot I mean, 0:04:47.000 --> 0:04:48.560 we know that there's a lot of things that are 0:04:48.600 --> 0:04:52.440 going to be happening in October and November that could 0:04:53.200 --> 0:04:58.400 very quickly push consumers spending down. Other things on the 0:04:58.440 --> 0:05:02.800 trade front, business and certainly tim as you mentioned, the 0:05:02.880 --> 0:05:06.760 high the record high tenure treasury, how does that affect 0:05:07.040 --> 0:05:12.240 the psychology of business investing and so several things could 0:05:12.240 --> 0:05:17.440 all of a sudden start to spook decision makers and 0:05:17.520 --> 0:05:20.800 we end up with not only a weakening but even 0:05:20.880 --> 0:05:26.360 possibly a negative GDP growth by the end of the 0:05:26.920 --> 0:05:32.159 fourth quarter. The other thing is is money supply has 0:05:32.240 --> 0:05:35.720 been in a negative growth period for now over a year, 0:05:36.520 --> 0:05:42.719 and historically that correlates very highly with recession. That would 0:05:43.440 --> 0:05:45.680 if you sort of try to time it out, I'll 0:05:45.720 --> 0:05:50.080 look more into early twenty twenty four than at the 0:05:50.160 --> 0:05:55.640 end of twenty twenty three. But even that historically has 0:05:55.760 --> 0:06:01.360 not been a tightly timed at eighteen months. So that's 0:06:01.400 --> 0:06:04.080 another factor out there that we don't talk about very much, 0:06:04.279 --> 0:06:08.440 but still a very real factor in how this thing 0:06:08.480 --> 0:06:09.400 could turn quickly. 0:06:10.320 --> 0:06:14.560 So doctor Wong, tell us how you think the FED 0:06:14.640 --> 0:06:18.479 is going to handle I don't know, talking about the 0:06:18.560 --> 0:06:21.520 uncertainties that have come up over the last few months here, 0:06:22.560 --> 0:06:25.479 the fact that the tenure has risen so much, the 0:06:25.520 --> 0:06:30.200 concerns that you raised about unemployment. Talk to me about 0:06:30.200 --> 0:06:31.960 how you think the FED deals with this with regard 0:06:32.000 --> 0:06:34.279 to how it's thinking about its interest rate path and 0:06:34.320 --> 0:06:35.640 potentially cutting in twenty four. 0:06:36.480 --> 0:06:40.440 Yeah, so you know, Chairman Powell has already told us 0:06:40.560 --> 0:06:45.000 very clearly how he deals with uncertainty. At the Jackson 0:06:45.040 --> 0:06:49.360 Whole speech, he said that when there's uncertainty and when 0:06:49.560 --> 0:06:54.280 there are still some lack of monetary policy operating in 0:06:54.320 --> 0:06:59.120 the background, he would move slowly. And uncertainty is what 0:06:59.160 --> 0:07:01.559 we are going to have in the next couple of months. 0:07:01.600 --> 0:07:05.400 As Steve said, we have you know ua w strike 0:07:05.880 --> 0:07:08.680 ongoing right now, We still have that Hollywood strike. We 0:07:08.760 --> 0:07:11.920 have a potential government shut down looming that if it 0:07:12.080 --> 0:07:14.800 lasts for a month, we expect that it will raise 0:07:14.880 --> 0:07:18.880 unemployment rate by point two percentage point and at which 0:07:18.880 --> 0:07:23.760 point the psalm's rule for kickstarting a recession would be triggered. 0:07:24.520 --> 0:07:28.840 So I think that Powell would definitely perceive all these 0:07:28.960 --> 0:07:33.840 risks as telling him that they should wait for more information. 0:07:34.000 --> 0:07:37.080 So I think it's unlikely that the Fed will race 0:07:37.160 --> 0:07:40.520 rate in November. However, it might be that he would 0:07:40.520 --> 0:07:43.880 be holding out the door open for December hips or 0:07:43.920 --> 0:07:44.720 even January. 0:07:44.800 --> 0:07:48.080 January hike, a January hike. So much of our conversation 0:07:48.120 --> 0:07:50.560 over the last few weeks it's focused on November. Doctor 0:07:50.560 --> 0:07:53.360 Skankey is, what's your impression here do you think we'll 0:07:53.360 --> 0:07:54.160 see a Well? 0:07:54.200 --> 0:07:57.000 I agree with what Anna said. I don't think that 0:07:57.040 --> 0:08:00.680 the Fed is going to raise rates when they announced tomorrow, 0:08:01.280 --> 0:08:05.120 but I do think that Cherah Powell will qualify the 0:08:05.200 --> 0:08:08.480 decision not to raise rates indus remarks by saying something 0:08:08.680 --> 0:08:14.200 like rate hikes can resume if needed. I think the 0:08:14.280 --> 0:08:19.240 hold will will also have some other hawkish elements or 0:08:19.360 --> 0:08:25.160 hawkish connotations. In the dot plot, they might even show 0:08:26.160 --> 0:08:30.560 the possibility of another rate hike, if not in November 0:08:30.960 --> 0:08:36.400 in December, could happen early in January. So the dot 0:08:36.480 --> 0:08:41.520 plot and the updated Summary of Economic Projections will be 0:08:41.559 --> 0:08:46.800 important and very interesting, for example, to see if they 0:08:46.880 --> 0:08:51.920 ratify the notion that the GDP is still growing steadily, 0:08:52.440 --> 0:08:55.360 albeit maybe a little bit weaker than the two percent 0:08:55.440 --> 0:08:58.960 path that we're on right now. And how do they 0:08:59.280 --> 0:09:05.559 factor in higher oil prices when they look at PCE inflation. 0:09:07.040 --> 0:09:10.520 And what do they say about unemployment. Yes, again as 0:09:10.559 --> 0:09:17.280 Ada said, unemployment does not increase linearly, and they've they've 0:09:17.280 --> 0:09:21.439 been more hawkey shot that. So it'll be very interesting 0:09:21.840 --> 0:09:24.480 what we see in the doc lot and the SEP 0:09:25.080 --> 0:09:28.520 will probably be way more interesting than what they say 0:09:28.880 --> 0:09:30.160 about not raising rates. 0:09:30.240 --> 0:09:32.280 Oh interesting, I mean, I'm looking forward to the sep 0:09:32.400 --> 0:09:35.760 but also of course the press conference as well. Doctor Wong, 0:09:36.360 --> 0:09:38.679 tell us if you have one, if you could ask 0:09:39.120 --> 0:09:41.840 J Powell one question tomorrow, what would it be? 0:09:43.160 --> 0:09:46.439 I would ask him whether he thinks that the strikes 0:09:46.600 --> 0:09:51.080 is suggesting that maybe inflation expectations are not as anchored 0:09:51.240 --> 0:09:54.880 as it seemed. I mean, we've already seen central bank 0:09:54.960 --> 0:09:58.319 officials in other countries, such as Reserve Bank of Australia, 0:09:58.640 --> 0:10:02.240 suggesting that inflation the expectations may not be anchored, given 0:10:02.240 --> 0:10:05.160 that union workers are able to demand higher wages, and 0:10:05.200 --> 0:10:08.000 we're seeing exactly that happening in the US. 0:10:08.720 --> 0:10:12.600 How do oil prices and gas prices factor into inflation expectations? 0:10:12.600 --> 0:10:17.240 Anna, Well, that's it's like a chicken and egg problem 0:10:17.320 --> 0:10:21.040 from the FEDS perspective. If they believe that inflation expectations 0:10:21.040 --> 0:10:24.840 are anchored, they will look through the increase in oil prices. 0:10:24.880 --> 0:10:28.360 But if they don't believe that it's very anchored, they 0:10:28.440 --> 0:10:32.040 won't look through it. So I think the inflation expectations 0:10:32.720 --> 0:10:35.400 question is really the core of what they will do. 0:10:35.400 --> 0:10:37.800 Doctor Skanky ten seconds. One question that you would ask 0:10:37.880 --> 0:10:38.720 J Powell tomorrow? 0:10:39.720 --> 0:10:42.559 What's the corrector point for deciding that the rights need 0:10:42.600 --> 0:10:46.240 to be increased again either in November or December. 0:10:46.640 --> 0:10:48.920 All right, there, It is really appreciate both of you 0:10:49.040 --> 0:10:52.080 joining us this afternoon, the eve before we hear from 0:10:52.280 --> 0:10:55.360 FED Chair J Powell tomorrow. That's doctor Stephen Skanky, chief 0:10:55.400 --> 0:10:57.760 economic advisor at keep Point, former US Treasury and White 0:10:57.800 --> 0:11:01.760 House National Sercity Security Accounts staff member. Also doctor Anna Wong, 0:11:01.800 --> 0:11:03.840 chief you has economist for Bloomberg Economics. 0:11:05.120 --> 0:11:08.679 You're listening to the Bloomberg Business Week podcast. Catch us 0:11:08.720 --> 0:11:12.040 live weekday afternoons from three to six Eastern Listen on 0:11:12.120 --> 0:11:16.160 Bloomberg dot com, the iHeartRadio app, and the Bloomberg Business app, 0:11:16.440 --> 0:11:18.720 or watch us live on YouTube. 0:11:19.559 --> 0:11:21.480 His next voice is going to sound familiar because we 0:11:21.520 --> 0:11:23.600 caught up with him at the Milkin Institute Global Conference 0:11:23.600 --> 0:11:25.640 earlier this year. So great to have back with us 0:11:25.679 --> 0:11:28.560 in studio. Hans Kobler. He's found her managing partner of 0:11:28.679 --> 0:11:31.840 Energy Impact Partners. They have about three billion in assets 0:11:31.920 --> 0:11:34.719 under management. They invest in clean energy technologies and they 0:11:34.720 --> 0:11:39.040 help deploy them through partnerships with companies trying to decarbonize. 0:11:39.080 --> 0:11:41.080 He is in town for Climate Week, and as I said, 0:11:41.080 --> 0:11:43.280 he's here in our Bloomberg Interactive broker student. Nice to 0:11:43.360 --> 0:11:45.959 have you here with him and myself being here. Welcome back. 0:11:45.960 --> 0:11:47.240 Come on close to the mike because you want to 0:11:47.240 --> 0:11:51.200 make sure we can hear you. The energy transition. Let's 0:11:51.200 --> 0:11:52.400 start basic. How's it going. 0:11:53.880 --> 0:11:56.280 It's going well, it's picking up momentum. We had the 0:11:56.360 --> 0:11:59.920 first year in history that more money will spend on 0:12:00.160 --> 0:12:03.080 energy transitioning on traditional energy one point one trillion. So 0:12:03.200 --> 0:12:06.840 the momentum is building a tipping point. It's a tipping point, 0:12:07.000 --> 0:12:09.440 it's but it's the beginning. It's the first inning of 0:12:09.480 --> 0:12:12.600 a long, long race. You know, if you believe McKinsey 0:12:12.640 --> 0:12:15.120 and some forecasts, we will need eight nine trillion dollars 0:12:15.120 --> 0:12:18.120 a year one hundred and fifty trillion. That's fifteen internets 0:12:18.280 --> 0:12:20.440 or one and a half times the global economy spend 0:12:20.480 --> 0:12:23.880 therever the next few decades. That's a lot, and we 0:12:23.960 --> 0:12:26.080 may or we may not get there, but we are 0:12:26.559 --> 0:12:27.360 taking it serious. 0:12:27.440 --> 0:12:28.960 So it's picking up momentum. 0:12:29.360 --> 0:12:31.040 One thing that I think about when it comes to 0:12:31.080 --> 0:12:34.120 the energy transition is the role of nuclear power. And 0:12:34.520 --> 0:12:37.840 here in the US, it's a really checkered history, it's 0:12:37.840 --> 0:12:40.040 a really checkered past. It's very expensive for us to 0:12:40.080 --> 0:12:43.679 build nuclear power plants. They're always cost overruns, and then 0:12:43.760 --> 0:12:47.479 you have the legacy of Fukushima three Mile Island in Chernobyl. 0:12:47.520 --> 0:12:48.640 What are your thoughts on nuclear? 0:12:49.280 --> 0:12:52.880 I think so we have a lot of corporate partners 0:12:52.880 --> 0:12:55.960 in our investor group. The Southern Company was the last 0:12:55.960 --> 0:12:58.240 one here to try to build a nuclear panther. They 0:12:58.360 --> 0:13:01.520 finally got them all online, which is right. We have 0:13:02.240 --> 0:13:04.480 ed f as an investor that had fifty five in 0:13:04.520 --> 0:13:06.520 the country running and half of them didn't work when 0:13:06.559 --> 0:13:10.720 they when they shut down. The Russian gas and Tepco 0:13:10.840 --> 0:13:15.760 was an investor too, so nuclear. You know, the clean 0:13:15.920 --> 0:13:19.560 energy transition is amazing, and a lot will be wind 0:13:19.600 --> 0:13:22.000 and solar, but you need the baseload and nuclear is 0:13:22.000 --> 0:13:25.200 still the best way to get to the baseload. So 0:13:25.240 --> 0:13:28.160 I think it's critical to keep that in the Arsenal 0:13:28.160 --> 0:13:30.560 and from Germany originally, I mean you can tell tell 0:13:30.600 --> 0:13:33.480 the accent. You know, the probably the greenest country that 0:13:33.559 --> 0:13:36.200 has most ambitions to go clean. They spend the tonne 0:13:38.040 --> 0:13:40.160 and they shut down, which is a stupid thing to do. 0:13:40.600 --> 0:13:43.280 It's I mean, is this reversible. 0:13:43.880 --> 0:13:45.640 Yeah, but it's hard. It's hard. 0:13:45.640 --> 0:13:47.880 Once you shut down an industry, you have to build 0:13:47.960 --> 0:13:52.480 up the talent to build new to build new nuclear plants. 0:13:52.520 --> 0:13:55.560 You can, but I guess can we transition to net 0:13:55.640 --> 0:13:56.559 zero without nuclear? 0:13:57.080 --> 0:13:57.440 Crucial? 0:13:57.520 --> 0:13:58.400 Is it hard? 0:13:58.720 --> 0:14:03.120 The transition to net zero is not only converting what 0:14:03.200 --> 0:14:06.600 we have today, but to deal with the demand that 0:14:06.640 --> 0:14:09.960 we are facing. We have had a flat demand curve 0:14:10.000 --> 0:14:14.719 in this country for twenty years. We are now electrifying transportation. 0:14:15.200 --> 0:14:19.200 We're building data centers running on AI where one Google search, 0:14:20.400 --> 0:14:22.760 where one AI search is taking about fifty to two 0:14:22.800 --> 0:14:27.200 hundred times more power than a Google search. So you're 0:14:27.240 --> 0:14:30.840 talking about doubling the infrastructure that you've built over one 0:14:30.920 --> 0:14:33.720 hundred years. You know, Musk is out there saying no, no, no, 0:14:34.040 --> 0:14:36.120 whatever you are calculated, it's going to be tripled. So 0:14:36.320 --> 0:14:38.800 you need a lot of electrons and so there is 0:14:38.840 --> 0:14:40.960 not one solution for that. That means we have to 0:14:41.800 --> 0:14:44.880 use different tools in the toolkit to get there and 0:14:44.920 --> 0:14:46.400 get there a lot faster than we have been. 0:14:47.320 --> 0:14:52.360 But can we do it this energy transformation without nuclear? 0:14:54.320 --> 0:14:56.320 Yes, but I think it would be a lot cheaper 0:14:56.520 --> 0:14:58.520 if it did it with nuclear. And at the end 0:14:58.560 --> 0:15:00.720 of the day, we have to address something that we 0:15:00.840 --> 0:15:03.800 call in the industry trilemma. Everyone wants to go clean, 0:15:04.400 --> 0:15:09.120 but when you face not having power at all, security 0:15:09.160 --> 0:15:14.080 reliability gets on the horizon. And when the Germans pay 0:15:14.160 --> 0:15:17.280 twelve times more for natural gas than the Americans and 0:15:17.280 --> 0:15:19.880 four times more for electricity, then affordability comes in right. 0:15:19.920 --> 0:15:23.880 So that's an equation. This trilemma is an equation very difficult. 0:15:23.600 --> 0:15:26.560 But also motivation perhaps to invest in renewable sources that 0:15:26.680 --> 0:15:28.000 in the long run are less expensive. 0:15:28.080 --> 0:15:30.640 Absolutely, but in a way in our view, the only 0:15:30.680 --> 0:15:33.840 way to solve that equation of this trilemma is to 0:15:33.920 --> 0:15:37.880 really to apply innovation. That means you need new technologies, 0:15:37.920 --> 0:15:41.080 great technologies, and you need to collaborate. 0:15:41.160 --> 0:15:41.640 You need to. 0:15:41.840 --> 0:15:47.400 Involve the incumbents. The existing infrastructure sits on, sit on 0:15:47.480 --> 0:15:50.400 trillions of dollars of investments that we have to help 0:15:50.480 --> 0:15:52.440 them get there faster. That's by the way, it's a 0:15:52.440 --> 0:15:54.480 business model that we have where we team up with 0:15:54.600 --> 0:15:58.040 corporates and bring them together in a room with the 0:15:58.040 --> 0:16:00.840 innovators and the capital to forge the alliance is to 0:16:00.880 --> 0:16:06.080 accelerate that transition. It's look, everybody wants to see the 0:16:06.160 --> 0:16:08.480 rosy sky, but you've got to be pragmatic about it, 0:16:08.800 --> 0:16:11.040 and that means. That means we got to work together 0:16:11.480 --> 0:16:13.960 and work faster and harder than we have in the past. 0:16:14.040 --> 0:16:16.880 So when you have those conversations and those collaborations, what 0:16:17.080 --> 0:16:20.640 is it that you speak most about? Tim brought up nuclear, right, 0:16:20.680 --> 0:16:22.400 and we feel like it has become such a no, no, 0:16:22.960 --> 0:16:25.480 it is it nuclear? Is it hydro? Is it solar? 0:16:25.640 --> 0:16:27.800 Is it? Like? What is it that people that you 0:16:27.840 --> 0:16:29.920 guys spend a lot of time talking about with your oartners? 0:16:30.120 --> 0:16:30.520 Yeah? 0:16:30.600 --> 0:16:34.480 Yes, yeah, yeah, yes. So it is a complex undertaking. 0:16:34.520 --> 0:16:37.280 We need to decarbonize supply, We need to create a 0:16:37.360 --> 0:16:39.840 lot more supplies. So that's one folks there. The second 0:16:39.880 --> 0:16:43.280 one is we need to create sustainable demand. That means 0:16:43.280 --> 0:16:48.160 electrifying a lot of the industries, from transportation to home heating, 0:16:48.360 --> 0:16:51.600 to the data centers, indoor agriculture. And then you have 0:16:51.680 --> 0:16:54.400 to deal with the high intermittency you create. So I 0:16:54.400 --> 0:16:57.000 was just telling you it's two to three times more 0:16:57.160 --> 0:17:00.200 power that we need, but at its peak it could 0:17:00.200 --> 0:17:02.160 be five times as much. You know, it's like building 0:17:02.280 --> 0:17:05.320 a church for Easter Sunday, and we've got to somehow 0:17:05.320 --> 0:17:07.679 we have to balance that, and that means you have 0:17:07.720 --> 0:17:10.320 to invest in transmission distribution, which is very difficult. 0:17:10.440 --> 0:17:10.600 Right. 0:17:10.680 --> 0:17:13.400 It took fifteen years to get the clean electrons from 0:17:13.480 --> 0:17:16.000 Canada through two of the greenest states to New York. 0:17:16.040 --> 0:17:19.320 Because nobody wants to build anything in their backyard. You 0:17:19.400 --> 0:17:21.560 build storage, and great technologies are coming up. You an 0:17:21.560 --> 0:17:23.679 investor in form, you investor in power and so. But 0:17:23.760 --> 0:17:27.000 that's a lot of space that is needed. Takes some time. 0:17:27.640 --> 0:17:32.199 Or you digitize the communication between the customer and the 0:17:32.280 --> 0:17:34.399 supply and you tell them, look, don't charge your car 0:17:34.440 --> 0:17:35.760 at six o'clock to it at midnight. 0:17:36.240 --> 0:17:41.000 It turned down. It's nice years. Just don't cool right 0:17:41.040 --> 0:17:42.280 now because everybody's cooling. 0:17:42.359 --> 0:17:44.640 Can I ask you, with only about thirty seconds left here, 0:17:44.720 --> 0:17:48.760 would you invest in a fossil fuel energy company? No, 0:17:48.800 --> 0:17:52.240 oil and gas company? No, you wouldn't anymore. No, even 0:17:52.240 --> 0:17:52.840 though it's going to. 0:17:52.760 --> 0:17:54.439 Be doing for some people. 0:17:54.480 --> 0:17:57.280 You know, look, we need certainly natural gas form. 0:17:57.400 --> 0:17:58.840 I know you're kind of talking your book because that's. 0:17:58.720 --> 0:18:01.320 The way we need natural gas a long long time, okay, 0:18:01.560 --> 0:18:04.440 But we personally would not invest. We are fun focused 0:18:04.480 --> 0:18:07.919 on you know, we are Article nine fund. We invest 0:18:08.000 --> 0:18:09.840 in things that decarbonize the globally. 0:18:10.040 --> 0:18:10.960 But if you weren't would you. 0:18:11.760 --> 0:18:13.679 If I was a financial bssit would okay? 0:18:13.920 --> 0:18:17.159 All right? Love having you come here, always provocative. I 0:18:17.200 --> 0:18:20.320 always learned something. Come back soon, yeah, Hans Kobbler, he's founding. 0:18:20.320 --> 0:18:23.040 Do you took a founder managing partner Energy Impact Partners? 0:18:23.040 --> 0:18:27.920 Here in our studio, you're listening to the Bloomberg Business 0:18:27.920 --> 0:18:28.800 Week podcast. 0:18:29.040 --> 0:18:32.120 Catch us live weekday afternoons from three to six Easter 0:18:32.440 --> 0:18:36.199 on Bloomberg Radio, the Bloomberg Business App, and YouTube. You 0:18:36.240 --> 0:18:39.480 can also listen live on Amazon Alexa from our flagship 0:18:39.560 --> 0:18:43.440 New York station Just Say Alexa playing Bloomberg eleven. 0:18:43.160 --> 0:18:47.720 Thirty Climate Week in New York against the backdrop of 0:18:47.760 --> 0:18:50.000 the seventy eighth session of the You in General Assembly. 0:18:50.080 --> 0:18:52.120 You know that we've been talking about it. 0:18:52.440 --> 0:18:53.040 They have. 0:18:53.359 --> 0:18:57.840 The UN has identified seventeen specific SDG sustainable Development goals, 0:18:58.040 --> 0:19:01.400 including building out resilient technology infrastructure. And to get there 0:19:01.520 --> 0:19:04.520 and reach some of those seventeen SDGs, the UN has 0:19:04.560 --> 0:19:08.680 highlighted high impact initiatives, among them unlocking the data dividend, 0:19:08.880 --> 0:19:11.800 which our next guest participated in an event that happened 0:19:12.320 --> 0:19:15.040 here this week with us is Johannes uting Am. I 0:19:15.080 --> 0:19:19.359 saying it right, perfect Okay, he's being kind, but he's 0:19:19.400 --> 0:19:21.879 executive head of the Partnership in Statistics for Development in 0:19:21.920 --> 0:19:25.359 the twenty first Century. The acronym is Paris twenty one, 0:19:25.480 --> 0:19:28.239 which is hosted by the OCD in Paris. I have 0:19:28.280 --> 0:19:30.960 to say that Johanna's former member of the UN Secretary 0:19:31.359 --> 0:19:35.760 General's Expert Group on the Data Revolution. He's a development economist, 0:19:35.800 --> 0:19:39.040 expertise and employment, social protection, healthcare, financing and gender. He's 0:19:39.080 --> 0:19:40.880 looked at the world in a lot of different ways 0:19:40.920 --> 0:19:42.880 and we were delighted to have him here in our 0:19:43.000 --> 0:19:44.639 Bloomberg Interactive Brokers studio. 0:19:44.720 --> 0:19:47.159 Welcome, Welcome, Thank you very much for inviting me. 0:19:47.280 --> 0:19:49.360 Well, thank you. And I've learned about Paris twenty one 0:19:49.359 --> 0:19:52.080 because my daughter has done an internship with you all 0:19:52.119 --> 0:19:54.640 this summer. So full transparency, but I've learned a lot. 0:19:54.720 --> 0:19:56.920 Tell us though, in your words, your mission and your goals, 0:19:56.960 --> 0:19:57.959 what you guys are all about. 0:19:58.520 --> 0:20:02.280 Paris tonty one stands for Partnership in Statistics in Development 0:20:02.359 --> 0:20:06.040 for the twenty first Century. We basically do three things. 0:20:06.160 --> 0:20:11.240 We help countries with technical capacity development national statistical offices, 0:20:11.680 --> 0:20:15.960 so we help training of managers in statistical offices in 0:20:16.000 --> 0:20:20.360 poor countries like Wanda and others. So we organize trainings, 0:20:20.720 --> 0:20:24.080 We help with coordination in many parts of when you 0:20:24.200 --> 0:20:28.080 produce data, there are many ministries involved, there are development 0:20:28.119 --> 0:20:32.159 agencies involved, and we help them with to get coordinated. 0:20:32.680 --> 0:20:34.440 And last but not least, we do advocacy. 0:20:34.480 --> 0:20:38.240 And you just mentioned the UNGA week, the SDG summit, 0:20:38.800 --> 0:20:41.600 and we do advocacy for more and better funding for 0:20:41.720 --> 0:20:42.760 data and statistics. 0:20:42.880 --> 0:20:45.160 Well, what's interesting in a world that's overrun with data 0:20:45.160 --> 0:20:48.280 we just assume it's good. We don't say it's good. 0:20:48.320 --> 0:20:51.720 We talk about biased data and kind of dirty data, 0:20:51.800 --> 0:20:54.679 not great data. But not all data is good, not 0:20:54.760 --> 0:20:58.639 all data is productive or useful, right, And so you 0:20:58.680 --> 0:21:02.879 guys are involved in that helping countries develop infrastructure so 0:21:02.880 --> 0:21:05.680 that they can actually accumulate their own data sets. 0:21:05.680 --> 0:21:07.560 Correct, absolutely correct. 0:21:07.600 --> 0:21:10.480 I think what is a bit difficult sometimes to understand is, 0:21:10.520 --> 0:21:12.280 on the one hand, we have a data tsunami. We 0:21:12.320 --> 0:21:16.080 have all these data digital data, which is very good, 0:21:16.080 --> 0:21:20.600 which is feeding artificial intelligence and innovation. On the other hand, 0:21:20.720 --> 0:21:24.240 we have and on the other hand we have data gaps, 0:21:24.600 --> 0:21:27.240 terrible data gaps, and in some countries we don't even 0:21:27.280 --> 0:21:29.720 know of how many people in a country are living. 0:21:30.000 --> 0:21:34.360 We have difficulties to measure burst rates and to register 0:21:34.440 --> 0:21:35.000 those people. 0:21:35.440 --> 0:21:37.959 We have a lot of data gaps in the SDGs. 0:21:38.080 --> 0:21:42.080 We in particular on climate change or gender equality. We 0:21:42.119 --> 0:21:46.120 are literally flying blind. So we are supporting as Paras 0:21:46.119 --> 0:21:49.800 twenty one with our partners to close those data gaps, 0:21:49.960 --> 0:21:53.399 to be able to do better decisions, but also to 0:21:53.480 --> 0:21:56.280 hold our governments accountable. I think that's also a very 0:21:56.280 --> 0:21:59.480 important aspect of this. So that if you say you 0:21:59.520 --> 0:22:01.800 want to read use poverty in a given country by 0:22:01.840 --> 0:22:04.439 six percent, you want to have the start point and 0:22:04.480 --> 0:22:06.280 the endpoint, and you want to see if this is 0:22:06.320 --> 0:22:06.760 on track. 0:22:07.040 --> 0:22:09.920 We've talked a lot this year about AI and the 0:22:09.960 --> 0:22:12.840 impact that AI is having on companies whose stocks are 0:22:12.840 --> 0:22:15.640