1 00:00:05,120 --> 00:00:09,200 Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keene along 2 00:00:09,240 --> 00:00:13,080 Speaker 1: with Jonathan Ferroll and Lisa Brownwitz jay Leie. We bring 3 00:00:13,119 --> 00:00:17,159 Speaker 1: you insight from the best and economics, finance, investment and 4 00:00:17,280 --> 00:00:23,280 Speaker 1: international relations. Find Bloomberg Surveillance and Apple Podcast SoundCloud, Bloomberg 5 00:00:23,360 --> 00:00:29,720 Speaker 1: dot com and of course on the Bloomberg Termament. And 6 00:00:29,760 --> 00:00:34,000 Speaker 1: now in Washington and with our John Farrell, the Secretary 7 00:00:34,080 --> 00:00:36,159 Speaker 1: of Labor, it's now I'm pleased to say on the 8 00:00:36,159 --> 00:00:39,839 Speaker 1: payrolls report on TV on radio. It's Marty Wolves, the 9 00:00:39,880 --> 00:00:42,839 Speaker 1: U S Secretary of Labor. Mr Secretary, it's great to 10 00:00:42,840 --> 00:00:44,400 Speaker 1: catch out with you, sir. I cannot think of the 11 00:00:44,479 --> 00:00:49,520 Speaker 1: last payrolls report that got this little attention pay rolls 12 00:00:49,560 --> 00:00:51,960 Speaker 1: at six and seventy eight, because we're focused on everything 13 00:00:52,000 --> 00:00:54,360 Speaker 1: now secretly Wolves, your take first of all, and then 14 00:00:54,400 --> 00:00:57,920 Speaker 1: we need to get to the much, much bigger issues worldwide. Yeah, 15 00:00:57,960 --> 00:01:00,600 Speaker 1: I know, you know, a good, solid report, good briade, 16 00:01:00,600 --> 00:01:04,440 Speaker 1: base gains and all sectors pretty happy with that report. 17 00:01:04,880 --> 00:01:07,959 Speaker 1: Clearly we have more work to do. You're absolutely right. Uh, 18 00:01:08,000 --> 00:01:09,959 Speaker 1: you know, my heart and prayers go out with the 19 00:01:09,959 --> 00:01:12,280 Speaker 1: people of Ukraine. That that's kind of front and center 20 00:01:12,319 --> 00:01:15,400 Speaker 1: for everybody, uh in the world. The world is certainly 21 00:01:15,600 --> 00:01:18,840 Speaker 1: united behind Ukraine, and uh, you know, hopefully we can 22 00:01:18,840 --> 00:01:21,800 Speaker 1: get back to Hopefully we can get through Ukrainian people 23 00:01:21,840 --> 00:01:24,120 Speaker 1: can get through the challenges they have, and we can 24 00:01:24,160 --> 00:01:27,080 Speaker 1: go back to talking about the economy again. I would 25 00:01:27,160 --> 00:01:30,360 Speaker 1: much prefer to be taking taking strong questions from you 26 00:01:30,440 --> 00:01:33,760 Speaker 1: today about the economy and Ukraine people having peace and 27 00:01:33,800 --> 00:01:36,759 Speaker 1: freedom today. Secondary Welsh, I agree with you. I think 28 00:01:36,760 --> 00:01:38,840 Speaker 1: we all do. Let's get back to those days as 29 00:01:38,840 --> 00:01:40,720 Speaker 1: soon as possible. Right now, as you know that we've 30 00:01:40,720 --> 00:01:43,560 Speaker 1: got to talk about Russia. Microsoft moments ago, in the 31 00:01:43,600 --> 00:01:46,039 Speaker 1: last thirty minutes made the decision to suspend new sounds 32 00:01:46,040 --> 00:01:48,920 Speaker 1: of products and services in Russia. Many companies are doing 33 00:01:48,920 --> 00:01:51,400 Speaker 1: the same thing, whether they need to because of sanctions 34 00:01:51,480 --> 00:01:53,160 Speaker 1: or they choose to because they feel like they have 35 00:01:53,160 --> 00:01:58,240 Speaker 1: an obligation. Do you think so? For you as Secretary 36 00:01:58,240 --> 00:02:01,160 Speaker 1: of Labor and for the administration as well, do American 37 00:02:01,160 --> 00:02:04,440 Speaker 1: employers have a moral obligation to pull back from doing 38 00:02:04,480 --> 00:02:07,760 Speaker 1: business with Russia. I think we have to do whatever 39 00:02:07,760 --> 00:02:09,880 Speaker 1: we can in as many places we can to support 40 00:02:09,880 --> 00:02:12,400 Speaker 1: the Ukrainian people. Uh. You know, the President said it 41 00:02:12,520 --> 00:02:14,200 Speaker 1: at the State of the Union the other night from 42 00:02:14,200 --> 00:02:16,079 Speaker 1: the stage. I think a lot of countries and a 43 00:02:16,160 --> 00:02:18,600 Speaker 1: lot of companies are doing what they need to do. 44 00:02:18,720 --> 00:02:20,560 Speaker 1: I think that as we continue to move as the 45 00:02:20,840 --> 00:02:23,919 Speaker 1: as the conflict continues to move forward, I think that 46 00:02:23,960 --> 00:02:27,000 Speaker 1: there will be a lot more companies in America, and 47 00:02:27,040 --> 00:02:29,160 Speaker 1: not just America, around the world will will be taking 48 00:02:29,200 --> 00:02:33,200 Speaker 1: steps like this against Russia. The refiners in America also 49 00:02:33,320 --> 00:02:36,040 Speaker 1: not touching Russian crew as well. That choosing to pull 50 00:02:36,080 --> 00:02:39,800 Speaker 1: back from that, Secretary Walch, is that a good thing? Yeah? Well, 51 00:02:39,800 --> 00:02:41,600 Speaker 1: I think I think you know, as far as the conversations, 52 00:02:41,600 --> 00:02:44,200 Speaker 1: what they're gonna be many conversations. I know that here 53 00:02:44,240 --> 00:02:47,080 Speaker 1: in the United States, Speaker Pelosi, UH, send a mansion. 54 00:02:47,280 --> 00:02:50,440 Speaker 1: Senator Makowski and some other folks you're asking for that, uh. 55 00:02:50,639 --> 00:02:53,560 Speaker 1: And and I'm sure that U the President in the 56 00:02:53,560 --> 00:02:56,080 Speaker 1: White House, we're evaluating the different situations. But again, I 57 00:02:56,080 --> 00:02:58,520 Speaker 1: think that the whole world is going to continue to 58 00:02:58,280 --> 00:03:00,880 Speaker 1: to put sanctions on Russia as we move forward here. 59 00:03:02,160 --> 00:03:04,960 Speaker 1: The pictures on the pictures that we're seeing broadcast from 60 00:03:05,080 --> 00:03:08,200 Speaker 1: Ukraine are horrible and bring you when you go after 61 00:03:08,600 --> 00:03:10,960 Speaker 1: buildings with all the people on the schools it's just 62 00:03:11,040 --> 00:03:13,480 Speaker 1: uncalled for. So when refinance pulled back, I guess what 63 00:03:13,480 --> 00:03:15,720 Speaker 1: I'm trying to work out secontarly, Welsh, is that you've 64 00:03:15,720 --> 00:03:18,280 Speaker 1: tried for an energy carve out. A lot of people 65 00:03:18,280 --> 00:03:19,880 Speaker 1: still don't want to touch crude even if there is 66 00:03:19,919 --> 00:03:22,400 Speaker 1: a carve out. I want to understand the message the 67 00:03:22,440 --> 00:03:24,959 Speaker 1: administration is sending right now. Do you want refiners to 68 00:03:25,000 --> 00:03:27,000 Speaker 1: buy that crude or do you want them to step 69 00:03:27,040 --> 00:03:28,880 Speaker 1: back from it? Is that welcome development even though the 70 00:03:28,880 --> 00:03:31,640 Speaker 1: sanctions aren't there. Well, again, I'm not in a position 71 00:03:31,680 --> 00:03:33,200 Speaker 1: to be able to speak on that right now. I 72 00:03:33,280 --> 00:03:36,160 Speaker 1: know that, as the President had laid out, the sanctions 73 00:03:36,240 --> 00:03:39,600 Speaker 1: last week are actually over the last ten days. Uh. 74 00:03:39,720 --> 00:03:42,160 Speaker 1: He's been very thoughtful in doing them, working across the 75 00:03:42,200 --> 00:03:44,280 Speaker 1: globe and doing them. And I think those I'm sure 76 00:03:44,280 --> 00:03:47,240 Speaker 1: those conversations are happening right now with world leaders. There's 77 00:03:47,240 --> 00:03:49,360 Speaker 1: a conversation that hasn't happened apparently, and I wonder if 78 00:03:49,360 --> 00:03:52,320 Speaker 1: it has happened subsequently, I couldn't get this information from 79 00:03:52,360 --> 00:03:54,640 Speaker 1: the Treasury Department in the last hour, so allow me 80 00:03:54,680 --> 00:03:56,760 Speaker 1: to put this question to you. This came from the 81 00:03:56,760 --> 00:04:01,200 Speaker 1: Devon Energy CEO, big employer here in America, Crude Explorer, 82 00:04:01,960 --> 00:04:04,280 Speaker 1: this is what they said to us this week. Secondary 83 00:04:04,280 --> 00:04:06,960 Speaker 1: Welsh quote. I'm a little mystified that there hasn't been 84 00:04:07,000 --> 00:04:10,120 Speaker 1: some dialogue. If they were to reach out you, the 85 00:04:10,160 --> 00:04:14,360 Speaker 1: administration to them and maybe be a little bit more collaborative, 86 00:04:14,520 --> 00:04:17,760 Speaker 1: it might provide some cover cover from investors who might 87 00:04:17,760 --> 00:04:21,440 Speaker 1: be disappointed their boosting output. Have you reached out to 88 00:04:21,520 --> 00:04:26,440 Speaker 1: any employers in the old patch to boost production to 89 00:04:26,520 --> 00:04:28,719 Speaker 1: this point, I'm not aware of any any conversation, but 90 00:04:28,760 --> 00:04:31,240 Speaker 1: I'm sure that their conversation is going on. Again. I 91 00:04:31,279 --> 00:04:33,279 Speaker 1: have not been part of those have not been party 92 00:04:33,279 --> 00:04:36,359 Speaker 1: to those conversations. Uh. If asked and when asked and 93 00:04:36,360 --> 00:04:38,360 Speaker 1: when told to you by by the President, I will 94 00:04:38,400 --> 00:04:40,640 Speaker 1: absolutely be having those conversations. You have to wait to 95 00:04:40,680 --> 00:04:44,160 Speaker 1: be told to to have that conversation. Well, certainly this 96 00:04:44,240 --> 00:04:46,800 Speaker 1: is a this is a very coordinated effort. When you 97 00:04:46,880 --> 00:04:49,000 Speaker 1: look at what what what what's been going on here 98 00:04:49,080 --> 00:04:51,600 Speaker 1: with the with the with the powers of the countries 99 00:04:51,640 --> 00:04:54,920 Speaker 1: across the globe working collectively together, we've never seen I 100 00:04:54,920 --> 00:04:57,560 Speaker 1: shouldn't say never, I mean having the strength of NATO 101 00:04:57,839 --> 00:05:02,279 Speaker 1: seems so close together, really amazing and working collectively together 102 00:05:02,480 --> 00:05:04,800 Speaker 1: so again, I think there's been there's been a process 103 00:05:04,800 --> 00:05:07,279 Speaker 1: here as we move forward. Crewed right now, w t 104 00:05:07,360 --> 00:05:10,240 Speaker 1: I at one TOURVE eighty seven. You know as well 105 00:05:10,279 --> 00:05:13,240 Speaker 1: as I know that wages haven't been keeping up with inflation. 106 00:05:13,880 --> 00:05:15,320 Speaker 1: Is there anything you can do in the short term. 107 00:05:15,320 --> 00:05:17,120 Speaker 1: When we had from the President earlier this week in 108 00:05:17,120 --> 00:05:18,800 Speaker 1: the State of the Union, there were some big long 109 00:05:18,920 --> 00:05:21,880 Speaker 1: term goals, long term investments that he wanted to make 110 00:05:21,880 --> 00:05:24,560 Speaker 1: to build out the productive capacity of the economy. Is 111 00:05:24,560 --> 00:05:25,920 Speaker 1: the only thing we can do in the short term 112 00:05:25,920 --> 00:05:28,760 Speaker 1: here secondary walls, I think, I think if if you're 113 00:05:28,760 --> 00:05:30,720 Speaker 1: trying around inflation, I think what's happening here is I mean, 114 00:05:30,760 --> 00:05:34,760 Speaker 1: we're in the midst of a worldwide pandemic. Certainly that's 115 00:05:34,800 --> 00:05:37,440 Speaker 1: one we had the midst of dealing with supply chain issues. 116 00:05:37,440 --> 00:05:40,400 Speaker 1: Now now we have a major conflict in the world 117 00:05:40,920 --> 00:05:43,000 Speaker 1: that that that we're all eyes of the world are 118 00:05:43,040 --> 00:05:45,560 Speaker 1: on the Ukrainian people in Ukraine. And I think that 119 00:05:45,640 --> 00:05:48,440 Speaker 1: as we move forward here in the question earlier, as 120 00:05:48,480 --> 00:05:51,640 Speaker 1: oil supply, as oil supply gets cut back from Russia, 121 00:05:51,680 --> 00:05:54,520 Speaker 1: if that's what ultimately happens, we're going to see increasing 122 00:05:54,560 --> 00:05:56,719 Speaker 1: gas prices. And I think that there's a point here 123 00:05:56,760 --> 00:05:58,479 Speaker 1: that we have to we have to just continue to 124 00:05:58,480 --> 00:06:01,080 Speaker 1: move forward. The President has been very clear on on 125 00:06:01,160 --> 00:06:03,440 Speaker 1: bringing down inflation. He talked about it at the State 126 00:06:03,440 --> 00:06:07,040 Speaker 1: of the Union. But we're living in very interesting dynamic, 127 00:06:07,200 --> 00:06:09,880 Speaker 1: dynamic in times that are happening here. So again, there's 128 00:06:09,920 --> 00:06:12,479 Speaker 1: lots of conversations and lots of actions that will be 129 00:06:12,520 --> 00:06:14,560 Speaker 1: taken over the next weeks and months. You're in a 130 00:06:14,560 --> 00:06:16,480 Speaker 1: difficult spot now, and understand that because you need to 131 00:06:16,480 --> 00:06:18,400 Speaker 1: try and stand your lane and not get ahead of 132 00:06:18,400 --> 00:06:20,800 Speaker 1: what other people haven't said yet. But have you spoken 133 00:06:20,800 --> 00:06:24,279 Speaker 1: to the administration this morning and your message following the 134 00:06:24,320 --> 00:06:27,120 Speaker 1: overnight events which were shocking for so many people. I 135 00:06:27,200 --> 00:06:30,159 Speaker 1: haven't heard anyone yet called that an escalation from the 136 00:06:30,240 --> 00:06:33,400 Speaker 1: US administration. Secondly, Wolves, do you believe the events of 137 00:06:33,480 --> 00:06:36,640 Speaker 1: last night were an escalation? Well, I'm sure the President's 138 00:06:36,640 --> 00:06:39,320 Speaker 1: going to address that when he speaks later today. When 139 00:06:39,360 --> 00:06:41,880 Speaker 1: can we hear from him? I don't. I think he 140 00:06:42,120 --> 00:06:44,320 Speaker 1: generally has a not too far from now, a couple 141 00:06:44,320 --> 00:06:47,080 Speaker 1: of hours from now, I think he'll addressed he addresses 142 00:06:47,120 --> 00:06:50,000 Speaker 1: that the country on the issue of of of the jobs, 143 00:06:50,040 --> 00:06:53,159 Speaker 1: but certainly the biggest issue of of the day is Ukraine. 144 00:06:53,200 --> 00:06:55,719 Speaker 1: The biggest issue of our moment is Ukraine. Well, I 145 00:06:55,760 --> 00:06:57,720 Speaker 1: look forward to him from him a little bit later 146 00:06:57,760 --> 00:07:00,160 Speaker 1: and understand. Secondly, Wolves, there's only so much you can say, sir, 147 00:07:00,839 --> 00:07:02,440 Speaker 1: and it's only so much you can say this morning 148 00:07:02,480 --> 00:07:03,720 Speaker 1: as well. Thank you for paying with us, and I 149 00:07:03,720 --> 00:07:05,240 Speaker 1: think we're both on the same page. When we can 150 00:07:05,240 --> 00:07:08,080 Speaker 1: just talk about payrolls for ten minutes. I can't wait 151 00:07:08,120 --> 00:07:17,960 Speaker 1: for that moment, sir. Secondly, well, Stan, thank you our 152 00:07:18,040 --> 00:07:22,240 Speaker 1: conversation of the day on this term sanctions. Right now 153 00:07:22,360 --> 00:07:25,480 Speaker 1: in Ukraine, there is a teacher and a nurse and 154 00:07:25,560 --> 00:07:28,320 Speaker 1: they are leaving Ukraine and maybe they've got an eighteen 155 00:07:28,360 --> 00:07:31,280 Speaker 1: month old with them. It was not war in Nigeria, 156 00:07:31,400 --> 00:07:35,360 Speaker 1: but Wally Adyamo came to California as an eighteen month 157 00:07:35,400 --> 00:07:38,000 Speaker 1: old with his parents. He's done better than good out 158 00:07:38,000 --> 00:07:41,480 Speaker 1: of Yale law, terrific in the Democratic Party with different 159 00:07:41,520 --> 00:07:46,800 Speaker 1: public service positions in the Deputy Treasury Secretary Jones this morning. 160 00:07:47,000 --> 00:07:51,480 Speaker 1: What will happen on sanctions sir this weekend? What I 161 00:07:51,520 --> 00:07:54,120 Speaker 1: can say, um, good morning, thanks for having me, is 162 00:07:54,160 --> 00:07:58,960 Speaker 1: that if President Putin continues to escalate his war in Ukraine, 163 00:07:59,240 --> 00:08:01,680 Speaker 1: we will continue you to increase the sanctions that we've 164 00:08:01,720 --> 00:08:04,000 Speaker 1: put on Russia. It's important to see what's happening in 165 00:08:04,000 --> 00:08:06,800 Speaker 1: the Russian economy today because the sanctions we've put on, 166 00:08:06,880 --> 00:08:10,800 Speaker 1: inflation is likely North Russian markets have been shut down 167 00:08:10,800 --> 00:08:13,240 Speaker 1: for days, and just earlier they announced they're going to 168 00:08:13,280 --> 00:08:16,200 Speaker 1: shut them down for more days, which is the longest 169 00:08:16,200 --> 00:08:19,480 Speaker 1: shutdown they've had since at least when they defaulted on 170 00:08:19,520 --> 00:08:22,440 Speaker 1: their debt. And in addition to that, any investor or 171 00:08:22,440 --> 00:08:24,440 Speaker 1: market princison that I've talked to over the last week, 172 00:08:24,680 --> 00:08:26,440 Speaker 1: what they're trying to do is take their money out 173 00:08:26,440 --> 00:08:29,320 Speaker 1: of Russia, which means that the Russian economy is collapsing. 174 00:08:29,640 --> 00:08:32,439 Speaker 1: You've had experience with that with Mr Finkett Black Rock, 175 00:08:32,559 --> 00:08:36,079 Speaker 1: so you've served both spheres of government and finance. From 176 00:08:36,120 --> 00:08:40,360 Speaker 1: where you sit. Can the Biden administration at unilaterally or 177 00:08:40,440 --> 00:08:43,959 Speaker 1: we must we wait for our allies. The thing that 178 00:08:44,000 --> 00:08:46,040 Speaker 1: the President has discovered is that we are far more 179 00:08:46,080 --> 00:08:48,800 Speaker 1: powerful working with our allies. And that's exactly what we've 180 00:08:48,800 --> 00:08:53,080 Speaker 1: seen here, building alliance that doesn't only include our European partners, 181 00:08:53,120 --> 00:08:56,320 Speaker 1: but also partners and allies in Asia, which has cut 182 00:08:56,320 --> 00:09:00,080 Speaker 1: off Russia from access to the international financial system, the 183 00:09:00,080 --> 00:09:03,360 Speaker 1: global economy. Mr Secretary, your words just moments ago. If 184 00:09:03,480 --> 00:09:06,200 Speaker 1: Russia increases the war in Ukraine, we increase the sanctions 185 00:09:06,200 --> 00:09:11,880 Speaker 1: in Russia. Mrs Secretary, was last night an escalation? So 186 00:09:11,920 --> 00:09:14,240 Speaker 1: I'll leave that to the judgment as we look at 187 00:09:14,280 --> 00:09:16,400 Speaker 1: what happened last night. But our goal is to make 188 00:09:16,400 --> 00:09:19,079 Speaker 1: sure that we continue to increase sanctions as they increase 189 00:09:19,120 --> 00:09:22,200 Speaker 1: their escalation. We took sanctions actions yesterday, were prepared to 190 00:09:22,200 --> 00:09:24,800 Speaker 1: take additional actions to not only cut off the Russian 191 00:09:24,800 --> 00:09:27,720 Speaker 1: economy but cut off Russian elites who are helping support 192 00:09:27,840 --> 00:09:29,880 Speaker 1: President Putin, and we're going to continue to do that 193 00:09:30,080 --> 00:09:32,680 Speaker 1: as long as President Putin chooses us to continue his 194 00:09:32,760 --> 00:09:35,640 Speaker 1: work choice in Ukraine. You'll leave it for another department 195 00:09:35,640 --> 00:09:37,880 Speaker 1: to decide whether that was an escalation. Then you have 196 00:09:37,960 --> 00:09:40,240 Speaker 1: to enforce the sanctions that the White House decides. So 197 00:09:40,480 --> 00:09:43,120 Speaker 1: Mr Secretary, just help us understand how the sausage is made. 198 00:09:43,640 --> 00:09:46,640 Speaker 1: Do you do the groundwork ahead of sanctions being announced 199 00:09:46,720 --> 00:09:49,040 Speaker 1: or do you have to do the groundwork after they've 200 00:09:49,080 --> 00:09:51,000 Speaker 1: been announced. Can you help me understand what order it 201 00:09:51,040 --> 00:09:52,240 Speaker 1: comes through? Do you have to do a load of 202 00:09:52,280 --> 00:09:54,839 Speaker 1: studies now to be prepared to execute on something that 203 00:09:54,920 --> 00:09:56,760 Speaker 1: might be announced down on the road, or do you 204 00:09:56,760 --> 00:10:00,839 Speaker 1: wait for it to be announced. So in November, when 205 00:10:00,880 --> 00:10:03,920 Speaker 1: we started to see Russian troops gathering outside of Ukraine, 206 00:10:04,080 --> 00:10:07,480 Speaker 1: the President ordered Secretary yell And to start planning for 207 00:10:07,640 --> 00:10:10,680 Speaker 1: the imposition of sanctions if Russia were to invade. He 208 00:10:10,760 --> 00:10:13,040 Speaker 1: gave one order, which was to make sure that anything 209 00:10:13,080 --> 00:10:16,240 Speaker 1: we did had a maximum impact on Russia and mitigated 210 00:10:16,280 --> 00:10:18,800 Speaker 1: the impact on the United States and on our allies. 211 00:10:18,840 --> 00:10:21,600 Speaker 1: And that's exactly what we've done, working closely with Europe 212 00:10:21,600 --> 00:10:23,560 Speaker 1: and our allies in Asia, to make sure we design 213 00:10:23,880 --> 00:10:26,720 Speaker 1: sanctions that we could use if Russia invaded. And we 214 00:10:26,760 --> 00:10:29,040 Speaker 1: have a number of things that we've already deployed, the 215 00:10:29,160 --> 00:10:30,920 Speaker 1: number of things that we've planned for over the course 216 00:10:30,960 --> 00:10:33,360 Speaker 1: the last few months to worry to deploy if Russia 217 00:10:33,400 --> 00:10:36,400 Speaker 1: continued invasion of Let's talk about the stuff you planned 218 00:10:36,440 --> 00:10:38,640 Speaker 1: for and haven't deployed. Have you got a plan for 219 00:10:38,760 --> 00:10:41,240 Speaker 1: energy sanctions if you needed to deploy it? Has that 220 00:10:41,280 --> 00:10:45,240 Speaker 1: plan been made at Treasury? So going back to what 221 00:10:45,280 --> 00:10:47,000 Speaker 1: the President gave us as an order, make sure that 222 00:10:47,040 --> 00:10:49,760 Speaker 1: we maximized the pan on Russia and limit the cost 223 00:10:49,840 --> 00:10:52,320 Speaker 1: to the American people are our allies. What we decided 224 00:10:52,320 --> 00:10:54,280 Speaker 1: to do with regard to energy is make sure that 225 00:10:54,320 --> 00:10:58,280 Speaker 1: we do nothing to increase the price of energy um immediately. 226 00:10:58,400 --> 00:11:02,040 Speaker 1: So we're we've created a general licensing that energy can 227 00:11:02,080 --> 00:11:05,880 Speaker 1: be sold through pipelines by boat immediately. But what we're 228 00:11:05,880 --> 00:11:08,640 Speaker 1: doing is that over the long term, we're degrading Russia's 229 00:11:08,800 --> 00:11:12,120 Speaker 1: energy production capabilities so they can pump less energy from 230 00:11:12,120 --> 00:11:14,000 Speaker 1: the ground in order to cut off their source of 231 00:11:14,000 --> 00:11:16,880 Speaker 1: revenue overtime. So I understand what's being announced. I'm trying 232 00:11:16,880 --> 00:11:19,679 Speaker 1: to understand whether you have a plan to deploy if 233 00:11:19,679 --> 00:11:22,680 Speaker 1: you need to announce energy sanctions speak of Alosi says 234 00:11:22,720 --> 00:11:25,240 Speaker 1: band the oil band, Russian oil. I want to understand 235 00:11:25,240 --> 00:11:28,320 Speaker 1: whether you've done the work at Treasury to execute that plan, 236 00:11:28,360 --> 00:11:30,559 Speaker 1: if it needs to be executed. Does that plan exist 237 00:11:31,040 --> 00:11:33,880 Speaker 1: at Treasury? So the plan that we have now is 238 00:11:33,880 --> 00:11:35,559 Speaker 1: to do everything we can to make sure the market 239 00:11:35,600 --> 00:11:38,559 Speaker 1: remains well supplied. Now, what we have plans to do 240 00:11:38,600 --> 00:11:41,320 Speaker 1: is to grade their ability to produce energy into the future, 241 00:11:41,559 --> 00:11:44,040 Speaker 1: because the thing that we know is that if we 242 00:11:44,120 --> 00:11:47,320 Speaker 1: do something immediately that increases the cost of energy, that 243 00:11:47,360 --> 00:11:49,280 Speaker 1: will be a cost on the American people, and it 244 00:11:49,320 --> 00:11:51,360 Speaker 1: will be money that goes into the pocket of President 245 00:11:51,360 --> 00:11:54,400 Speaker 1: Putin if the cost of energy increases around the world. 246 00:11:54,559 --> 00:11:57,040 Speaker 1: So instead of increasing costs now, our goal is to 247 00:11:57,080 --> 00:11:59,559 Speaker 1: make sure that we degrade their ability to produce oil 248 00:11:59,600 --> 00:12:02,680 Speaker 1: overtime time, which will further starve them of the resources 249 00:12:02,880 --> 00:12:05,600 Speaker 1: they need to to conduct the kind of wars they 250 00:12:05,600 --> 00:12:09,040 Speaker 1: are doing today in Ukraine. Mr Secretary, Does that mean 251 00:12:09,120 --> 00:12:11,320 Speaker 1: that the sanctions that we've put out there so far 252 00:12:11,920 --> 00:12:13,880 Speaker 1: are all of the sanctions that we can put out 253 00:12:13,920 --> 00:12:16,480 Speaker 1: there at this time, because what you're talking about will 254 00:12:16,480 --> 00:12:19,760 Speaker 1: take time, So even if there's an escalation, there cannot 255 00:12:19,760 --> 00:12:23,200 Speaker 1: be the sanctions on oil without the having a conflict 256 00:12:23,240 --> 00:12:26,640 Speaker 1: with this goal. No, that's not true. We have other 257 00:12:26,679 --> 00:12:30,960 Speaker 1: sanctions options outside of the immediate sanctions on the energy industry. 258 00:12:31,160 --> 00:12:33,360 Speaker 1: What we have sanctions on the financial industry that we 259 00:12:33,400 --> 00:12:37,080 Speaker 1: can continue to deploy, Sanctions on their defense industry we 260 00:12:37,080 --> 00:12:39,199 Speaker 1: can continue to deploy. We have a number of options 261 00:12:39,240 --> 00:12:41,200 Speaker 1: that we can do that will allow us to meet 262 00:12:41,240 --> 00:12:44,320 Speaker 1: the President's objective, which is maximizing the cost on Russia 263 00:12:44,440 --> 00:12:47,160 Speaker 1: and reducing the costs in the United States and on Europe. 264 00:12:47,240 --> 00:12:50,240 Speaker 1: Our goals and make sure the energy market remains well supplied, 265 00:12:50,320 --> 00:12:53,000 Speaker 1: because that's important to the American people. But by making 266 00:12:53,040 --> 00:12:56,079 Speaker 1: sure that energy prices stay low, it stars President Putin 267 00:12:56,120 --> 00:12:58,360 Speaker 1: of the resources he needs to continue to fight the 268 00:12:58,360 --> 00:13:00,920 Speaker 1: war in Ukraine and also to just ableize the region. 269 00:13:01,280 --> 00:13:04,160 Speaker 1: Mr Secretary, how important is it to then get more 270 00:13:04,240 --> 00:13:08,559 Speaker 1: production domestically, to encourage the domestic oil and shell producers 271 00:13:08,760 --> 00:13:11,839 Speaker 1: to actually increase output, to create a buffer, to give 272 00:13:11,880 --> 00:13:14,680 Speaker 1: you more tools. What I can say is that the 273 00:13:14,720 --> 00:13:16,800 Speaker 1: most important thing we canna do is make sure that 274 00:13:16,880 --> 00:13:19,640 Speaker 1: the market today is well supplied, and we're doing that 275 00:13:19,840 --> 00:13:21,680 Speaker 1: in the United States, but we're also doing that with 276 00:13:21,679 --> 00:13:24,240 Speaker 1: our allies and partners to sexually give me Let's go 277 00:13:24,280 --> 00:13:27,200 Speaker 1: back to the question, are you reaching down to domestic 278 00:13:27,240 --> 00:13:30,320 Speaker 1: supplies of crude in America? Have you spoken to them? 279 00:13:30,520 --> 00:13:33,400 Speaker 1: Deaf and Energy said to us this week. The CEO 280 00:13:33,559 --> 00:13:36,720 Speaker 1: was mystified that you haven't reached out to boost production 281 00:13:36,760 --> 00:13:38,839 Speaker 1: at home. Have you done that? Have you spoken to 282 00:13:38,920 --> 00:13:43,120 Speaker 1: domestic supplies? So as you know, well, um, the domestic 283 00:13:43,120 --> 00:13:45,720 Speaker 1: supplier crude right now is at a peak and that 284 00:13:45,800 --> 00:13:47,880 Speaker 1: it will take time for more supply to come online. 285 00:13:48,080 --> 00:13:50,160 Speaker 1: We're focused on making sure that the energy markets are 286 00:13:50,200 --> 00:13:52,640 Speaker 1: well supplied today because we want to make sure costs 287 00:13:52,720 --> 00:13:55,720 Speaker 1: or reduce for American people today, and we're depriving President 288 00:13:55,760 --> 00:13:58,040 Speaker 1: Putin of the resources he needs to fight the war today. 289 00:13:58,320 --> 00:14:00,160 Speaker 1: Over time, we need to do more to make or 290 00:14:00,280 --> 00:14:02,480 Speaker 1: that the energy market is well supplied, and we're also 291 00:14:02,520 --> 00:14:04,360 Speaker 1: focused on that as well. You said we're to peak 292 00:14:04,400 --> 00:14:06,800 Speaker 1: with eleven points six million pounds of all the day 293 00:14:06,960 --> 00:14:10,000 Speaker 1: back to the north of thirteen. Just looking at that 294 00:14:10,360 --> 00:14:12,560 Speaker 1: off the Blomberg terminal, What what do you mean we're 295 00:14:12,559 --> 00:14:16,480 Speaker 1: to peak? My point is that at the moment we 296 00:14:16,559 --> 00:14:19,120 Speaker 1: are producing a great deal of energy in this country. 297 00:14:19,320 --> 00:14:22,040 Speaker 1: It will take time for additional energy to come online, 298 00:14:22,280 --> 00:14:24,160 Speaker 1: but we want to make sure is that as it takes, 299 00:14:24,200 --> 00:14:27,360 Speaker 1: as that energy comes online, we're well supplied today because 300 00:14:27,400 --> 00:14:29,040 Speaker 1: we want to make sure that Americans who are going 301 00:14:29,080 --> 00:14:31,880 Speaker 1: to the pump today are paying the lowest possible cost. 302 00:14:32,240 --> 00:14:34,480 Speaker 1: That's going to require not just us to take action 303 00:14:34,520 --> 00:14:36,920 Speaker 1: here in the United States, but other producers also to 304 00:14:36,920 --> 00:14:38,920 Speaker 1: make sure that the energy markets well supplied. You're a 305 00:14:38,920 --> 00:14:42,880 Speaker 1: great student of history on this, Mr Secretary, And is 306 00:14:42,920 --> 00:14:46,880 Speaker 1: this a see change for the politics and the energy 307 00:14:46,960 --> 00:14:50,920 Speaker 1: politics of the Democratic Party, Does Joe Biden have to 308 00:14:51,040 --> 00:14:55,720 Speaker 1: leave the Democrats to a new energy theory, a new 309 00:14:55,880 --> 00:14:59,560 Speaker 1: energy philosophy. I don't think it is. I think that 310 00:14:59,640 --> 00:15:01,800 Speaker 1: ultimately only we've always been for a well suppli at 311 00:15:01,880 --> 00:15:04,640 Speaker 1: energy market. We know that in the immediate term that's 312 00:15:04,640 --> 00:15:07,880 Speaker 1: going to require us to rely on fossil fuels. But 313 00:15:07,960 --> 00:15:10,680 Speaker 1: what we should learn from this is that ultimately being 314 00:15:10,720 --> 00:15:14,400 Speaker 1: reliant on fossil fuels, fuels that often come from places 315 00:15:14,480 --> 00:15:17,200 Speaker 1: like Russia, is not in anyone's interests. That's why the 316 00:15:17,240 --> 00:15:19,200 Speaker 1: President is focused on making sure that we move to 317 00:15:19,280 --> 00:15:21,960 Speaker 1: a clean energy future that's not only good for our security, 318 00:15:22,080 --> 00:15:25,000 Speaker 1: but it's good for our planet over time. Mr Secretary, 319 00:15:25,520 --> 00:15:28,880 Speaker 1: I'm a little bit confused, as many people are right now. 320 00:15:29,360 --> 00:15:32,960 Speaker 1: Crudes at one eleven on the Bloomberg right now, once 321 00:15:32,960 --> 00:15:37,680 Speaker 1: in ninety we've got domestic oil suppliers, private companies essentially 322 00:15:37,680 --> 00:15:39,200 Speaker 1: saying we just want to hear from the White House. 323 00:15:39,280 --> 00:15:40,960 Speaker 1: We're surprised we haven't heard from the White House. They 324 00:15:40,960 --> 00:15:43,280 Speaker 1: haven't heard from you, They haven't heard from the White House. 325 00:15:43,520 --> 00:15:45,320 Speaker 1: It doesn't make sense, and you keep repeating the same 326 00:15:45,320 --> 00:15:47,560 Speaker 1: thing over and over again. We need to make sure 327 00:15:47,600 --> 00:15:50,520 Speaker 1: there's enough crude supply. You won't. We can't reach out 328 00:15:50,520 --> 00:15:53,760 Speaker 1: to domestic suppliers. We need to tighten the grip on Russia. 329 00:15:54,400 --> 00:15:55,960 Speaker 1: The fact of the matter is people are stepping back 330 00:15:55,960 --> 00:15:57,640 Speaker 1: from Russian crewed anyway. And as you know, and I'm 331 00:15:57,640 --> 00:15:59,480 Speaker 1: just gonna repeat this for our audience, not for you, sir, 332 00:16:00,360 --> 00:16:03,600 Speaker 1: three percent of crude imports last year for the United 333 00:16:03,640 --> 00:16:06,440 Speaker 1: States came from Russia, just three So people are already 334 00:16:06,440 --> 00:16:09,600 Speaker 1: stepping back from Russian crude. What is it you think 335 00:16:09,640 --> 00:16:12,760 Speaker 1: will happen if the United States comes out and announces 336 00:16:12,800 --> 00:16:15,640 Speaker 1: that they're no longer importing Russian crude? What is it 337 00:16:15,640 --> 00:16:17,560 Speaker 1: that you think will happen? And if you don't want 338 00:16:17,600 --> 00:16:19,640 Speaker 1: to do that, are you essentially suggesting that you want 339 00:16:19,680 --> 00:16:23,520 Speaker 1: domestic refiners to be buying Russian crude? Is that the 340 00:16:23,560 --> 00:16:27,280 Speaker 1: goal of these sanctions still? But you want domestic refiners 341 00:16:27,280 --> 00:16:30,040 Speaker 1: to be buying Russian crude? Still? Is that the message 342 00:16:30,040 --> 00:16:33,920 Speaker 1: you want to send to the American public today? So 343 00:16:33,960 --> 00:16:36,400 Speaker 1: I know that you've repeated twice now that we haven't 344 00:16:36,400 --> 00:16:38,600 Speaker 1: reached out to domestic producers. But as you know well, 345 00:16:39,120 --> 00:16:42,400 Speaker 1: domestic producers are making decisions based on what they see 346 00:16:42,440 --> 00:16:44,840 Speaker 1: in the market um their ability to make money in 347 00:16:44,880 --> 00:16:46,560 Speaker 1: the market, and our goal is to make sure that 348 00:16:46,560 --> 00:16:48,680 Speaker 1: we have a well supplied market. The President has been 349 00:16:48,760 --> 00:16:50,720 Speaker 1: very clear about what our goal is is to make 350 00:16:50,760 --> 00:16:53,520 Speaker 1: sure that with regard to sanctions, that we have a 351 00:16:53,560 --> 00:16:56,840 Speaker 1: maximum impact on Russia and we minimize them impact on 352 00:16:57,000 --> 00:17:00,000 Speaker 1: the United States and our allies. That's why he's taken 353 00:17:00,040 --> 00:17:03,400 Speaker 1: steps like reduced like working with our allies and partners 354 00:17:03,560 --> 00:17:06,399 Speaker 1: to reduce the energy supplies that we have in store, 355 00:17:06,600 --> 00:17:08,080 Speaker 1: and we're going to continue to take steps to try 356 00:17:08,080 --> 00:17:10,560 Speaker 1: and reduce costs for the American people. It's a Secretary, 357 00:17:10,960 --> 00:17:13,560 Speaker 1: thanks for a time today, said well, the U S 358 00:17:13,600 --> 00:17:22,720 Speaker 1: Deputy try to read Secretary. Jeff Rosenberg of black Rock 359 00:17:22,840 --> 00:17:25,399 Speaker 1: joins us right now. Jeff, have you ever seen a 360 00:17:25,480 --> 00:17:29,480 Speaker 1: number as big as six thousand met with a collective 361 00:17:29,480 --> 00:17:34,080 Speaker 1: shrug in the market. Well, it's it's a reminder, Jonathan 362 00:17:34,119 --> 00:17:37,640 Speaker 1: that that the market's focus is really not on on payrolls. 363 00:17:37,640 --> 00:17:40,040 Speaker 1: But if we do just look at some of the 364 00:17:40,119 --> 00:17:43,720 Speaker 1: implications of the payroll report, you know, clearly a very 365 00:17:43,760 --> 00:17:47,639 Speaker 1: strong report across the board. Mike McKee, if you're if 366 00:17:47,640 --> 00:17:49,639 Speaker 1: you're looking, i mean check out the work week that 367 00:17:49,760 --> 00:17:53,040 Speaker 1: may have been behind that kind of disappointing month over 368 00:17:53,160 --> 00:17:56,080 Speaker 1: month A G. I can't quite see it here, but 369 00:17:56,200 --> 00:18:00,679 Speaker 1: this is really a difficult period for markets because you know, 370 00:18:00,720 --> 00:18:02,760 Speaker 1: as we heard earlier this week, you know, the Fed 371 00:18:02,920 --> 00:18:07,080 Speaker 1: is is focused on inflation and its need to get 372 00:18:07,119 --> 00:18:11,399 Speaker 1: on with normalization and raise rates, while the market is 373 00:18:11,440 --> 00:18:15,920 Speaker 1: focused on the implications of of of the Russian invasion, 374 00:18:15,960 --> 00:18:21,199 Speaker 1: and that implication is a negative supply shock um you know, 375 00:18:21,320 --> 00:18:26,360 Speaker 1: negative to growth, positive to inflation. It puts the Fed 376 00:18:26,359 --> 00:18:28,760 Speaker 1: in a difficult position. More importantly, it puts us as 377 00:18:28,840 --> 00:18:33,000 Speaker 1: investors in a difficult position that we can't really look to. Uh, 378 00:18:33,040 --> 00:18:36,720 Speaker 1: you know, interest rates falling um from from from Fed 379 00:18:36,800 --> 00:18:39,160 Speaker 1: policy easing in the face of any kind of growth 380 00:18:39,240 --> 00:18:41,800 Speaker 1: slow down because of the inflationary aspect. So it's a 381 00:18:41,800 --> 00:18:44,919 Speaker 1: it's a very tricky environment. Obviously, market reaction is about 382 00:18:45,000 --> 00:18:47,560 Speaker 1: Russia Ukraine, not really about the pay we say good 383 00:18:47,560 --> 00:18:49,879 Speaker 1: morning to Larry Finco. I know is watching and hanging 384 00:18:49,880 --> 00:18:52,040 Speaker 1: on every word, Mr Rosenberg. I don't want you to 385 00:18:52,080 --> 00:18:55,119 Speaker 1: give away the palace secrets, but does black crack and 386 00:18:55,280 --> 00:18:58,439 Speaker 1: have any sense in full faith and credit and in 387 00:18:58,480 --> 00:19:00,960 Speaker 1: the credit markets of all on all this war that 388 00:19:01,040 --> 00:19:05,679 Speaker 1: you can mark to market. This Friday, Well, you know, 389 00:19:05,720 --> 00:19:08,320 Speaker 1: what we're seeing in the credit markets, and this is 390 00:19:08,359 --> 00:19:11,879 Speaker 1: this is kind of even you know, preceding some of uh, 391 00:19:12,160 --> 00:19:16,320 Speaker 1: you know, the acceleration around the geopolitical uncertainties is you know, 392 00:19:16,359 --> 00:19:19,240 Speaker 1: we're well off the tight levels and the tightest levels 393 00:19:19,240 --> 00:19:21,399 Speaker 1: of spreads. You know, partly a lot of that was 394 00:19:21,400 --> 00:19:24,080 Speaker 1: was just repricing to a higher interest rate environment. I 395 00:19:24,119 --> 00:19:28,240 Speaker 1: think now, you know, you have a difficult time disentangling 396 00:19:28,240 --> 00:19:32,840 Speaker 1: the price signals because there's a liquidity uh premium risk 397 00:19:32,920 --> 00:19:36,400 Speaker 1: premium being built into the market. Uh. And I think 398 00:19:36,440 --> 00:19:38,800 Speaker 1: most of the price response so far as that, but 399 00:19:38,880 --> 00:19:44,600 Speaker 1: we have to recognize that the negative supply shock and 400 00:19:44,840 --> 00:19:49,480 Speaker 1: the stagflationary impact of that is really a tricky environment 401 00:19:49,560 --> 00:19:53,359 Speaker 1: for for credit. But the growth side is ultimately a 402 00:19:53,440 --> 00:19:55,480 Speaker 1: bit more on the negative side. And you've seen some 403 00:19:55,600 --> 00:19:59,720 Speaker 1: wider spreads across UH credit markets, and I think that's 404 00:19:59,720 --> 00:20:02,640 Speaker 1: a a message that makes sense in terms of pricing 405 00:20:02,680 --> 00:20:07,320 Speaker 1: in you know, some higher probabilities around some more negative 406 00:20:07,320 --> 00:20:09,800 Speaker 1: scenarios for for how this all plays out, and so 407 00:20:09,840 --> 00:20:12,480 Speaker 1: that higher risk premium you know, not yet really talking 408 00:20:12,520 --> 00:20:16,480 Speaker 1: about default risk premium, but risk premium around the potential 409 00:20:16,600 --> 00:20:20,240 Speaker 1: to to change some of the probabilities around um economic 410 00:20:20,280 --> 00:20:22,840 Speaker 1: outcomes around this this event. A lot of people who 411 00:20:22,840 --> 00:20:25,080 Speaker 1: we spoke to this week so that they did rethink 412 00:20:25,160 --> 00:20:28,679 Speaker 1: or they are rethinking actively their allocations in response to 413 00:20:28,680 --> 00:20:32,600 Speaker 1: the developments between Ukraine with the Russian invasion. Have you 414 00:20:32,680 --> 00:20:36,360 Speaker 1: done the same? Yeah? You know, you know there there 415 00:20:36,480 --> 00:20:41,240 Speaker 1: is certainly kind of the initial playbook of you know, 416 00:20:41,320 --> 00:20:46,440 Speaker 1: geopolitical risk is very hard for markets to sustainably reflect 417 00:20:46,520 --> 00:20:50,240 Speaker 1: in prices. I think that initial kind of hopeful response 418 00:20:50,320 --> 00:20:53,280 Speaker 1: in terms of this could be a buying opportunity has 419 00:20:53,440 --> 00:20:58,840 Speaker 1: really been replaced, particularly after the weekend sanctions, with a 420 00:20:58,960 --> 00:21:01,840 Speaker 1: much harder reacitity that this could be going on for 421 00:21:01,920 --> 00:21:06,160 Speaker 1: a much longer period with a much more persistent impact 422 00:21:06,280 --> 00:21:10,040 Speaker 1: to energy prices and broader commodity prices. And that's the 423 00:21:10,080 --> 00:21:13,800 Speaker 1: negative supply shock that you're seeing now roll out in 424 00:21:13,920 --> 00:21:17,640 Speaker 1: terms of forecast revisions. Forecast revisions so far are modest, 425 00:21:17,680 --> 00:21:21,560 Speaker 1: but they're significant in terms of reduction and growth increase 426 00:21:21,600 --> 00:21:25,280 Speaker 1: in inflation, a longer period of inflation. And then again 427 00:21:25,359 --> 00:21:28,320 Speaker 1: to the challenge that puts to global central banks in 428 00:21:28,400 --> 00:21:30,680 Speaker 1: terms of how do they manage the cross currents between 429 00:21:30,720 --> 00:21:33,399 Speaker 1: growth and inflation a lot more focused in the U 430 00:21:33,560 --> 00:21:35,600 Speaker 1: S here on inflation. I think for the e c 431 00:21:35,760 --> 00:21:39,320 Speaker 1: B we're gonna see perhaps a different response given the 432 00:21:40,240 --> 00:21:42,919 Speaker 1: central impact this has in a much larger impact on 433 00:21:43,000 --> 00:21:45,920 Speaker 1: the European growth outlook. So we're really upending a lot 434 00:21:45,960 --> 00:21:49,640 Speaker 1: of assumptions. But I think clearly here the shock to commodities, 435 00:21:49,720 --> 00:21:53,879 Speaker 1: the negative supply shock, prolonging the inflationary environment is is 436 00:21:53,880 --> 00:21:56,080 Speaker 1: going to make this a little bit more durable in 437 00:21:56,200 --> 00:21:59,680 Speaker 1: terms of market impact and economic impact as a geopolitical shock. 438 00:22:00,000 --> 00:22:03,320 Speaker 1: Me you watch this move in your DNA just about 439 00:22:03,320 --> 00:22:06,520 Speaker 1: holding onto one oh nine. What a breakdown. I can't 440 00:22:06,560 --> 00:22:09,240 Speaker 1: convey enough. And of course this is something Mr Rosenberg 441 00:22:09,320 --> 00:22:12,239 Speaker 1: is so good at as the cross correlations. If this 442 00:22:12,320 --> 00:22:16,000 Speaker 1: is not John flight nous, it's sort of a rolling 443 00:22:16,560 --> 00:22:21,840 Speaker 1: wave tape to tape of stress euroswissy, not showing me 444 00:22:21,960 --> 00:22:27,719 Speaker 1: euro your euro US dollar, but nevertheless extraordinary ruble at 445 00:22:27,760 --> 00:22:30,280 Speaker 1: one sevent five days of waitness for this euro. Just 446 00:22:30,280 --> 00:22:32,160 Speaker 1: it goes through the banks in Europe, any credits still 447 00:22:32,160 --> 00:22:34,680 Speaker 1: down by more than ten percent, Commas Bank down by eight, 448 00:22:34,760 --> 00:22:37,159 Speaker 1: suck gent Damn by seven, Deutsche Bank Dawn by a 449 00:22:37,160 --> 00:22:40,040 Speaker 1: little more than seven, Jeff, can you frame just how 450 00:22:40,119 --> 00:22:42,919 Speaker 1: much of a problem we're facing in European markets and 451 00:22:42,960 --> 00:22:48,440 Speaker 1: whether you'd go near it? Well, and the problem is 452 00:22:48,480 --> 00:22:51,920 Speaker 1: certainly centered there. You have you know, significant commodity shocked, 453 00:22:51,960 --> 00:22:56,200 Speaker 1: significant growth shock UH and and and and the dependency 454 00:22:56,280 --> 00:22:59,640 Speaker 1: that we know in terms of the Russian energy supplies 455 00:22:59,760 --> 00:23:03,240 Speaker 1: is is centered obviously much more in Europe than in 456 00:23:03,280 --> 00:23:05,320 Speaker 1: the rest of the world. So you know this is 457 00:23:05,840 --> 00:23:08,240 Speaker 1: you know, not only the growth impact, but the stock 458 00:23:08,280 --> 00:23:10,920 Speaker 1: impact that you just described in terms of the financial 459 00:23:10,960 --> 00:23:15,960 Speaker 1: linkage is for the banking sector, um all being reflected 460 00:23:16,040 --> 00:23:20,040 Speaker 1: in this repricing here of Russian sovereign and and and 461 00:23:20,119 --> 00:23:23,760 Speaker 1: credit risk premium. So UH, your second part of the question, 462 00:23:23,880 --> 00:23:26,600 Speaker 1: I think it's a very difficult environment to assess the 463 00:23:27,160 --> 00:23:31,520 Speaker 1: primary and secondary UH spillover effects, and so a more 464 00:23:31,600 --> 00:23:35,560 Speaker 1: cautious stance is one that we're taking when we look 465 00:23:35,600 --> 00:23:39,120 Speaker 1: at some of the impacts UH in our portfolios. Jeff, 466 00:23:39,119 --> 00:23:40,800 Speaker 1: looking forward to catching up with Rick a little bit later. 467 00:23:40,840 --> 00:23:42,879 Speaker 1: I'll be catching up with Rick reader in the next 468 00:23:42,920 --> 00:23:45,040 Speaker 1: hour on a stage. Mr o So David Kelly, a 469 00:23:45,119 --> 00:23:49,400 Speaker 1: JPMUK and Asset Management. We're here from the White House. Well, 470 00:23:49,440 --> 00:23:51,919 Speaker 1: you speak to Jeff, you speak to Jeff, catch up 471 00:23:51,960 --> 00:23:54,400 Speaker 1: with do you want to swap them? Do you want Jeff? 472 00:23:54,440 --> 00:23:55,680 Speaker 1: Would you like to come to me in the next 473 00:23:55,680 --> 00:23:59,760 Speaker 1: hour and Rick can come. Okay, we can work it out. 474 00:23:59,800 --> 00:24:03,040 Speaker 1: We and he's very sensitive this morning, Jeff, I apologize 475 00:24:03,080 --> 00:24:05,520 Speaker 1: for that and something. There's a difference between being long 476 00:24:05,600 --> 00:24:07,600 Speaker 1: into the weekend, being short into the weekend, and just 477 00:24:07,640 --> 00:24:09,800 Speaker 1: hands off into the weekend. I think a lot of 478 00:24:09,800 --> 00:24:13,080 Speaker 1: people are very, very worried about just being wrong and 479 00:24:13,160 --> 00:24:16,480 Speaker 1: this market just going completely in the other direction. I mean, 480 00:24:16,480 --> 00:24:19,440 Speaker 1: on an ancient U S statistic, the vix is mid midway, 481 00:24:19,520 --> 00:24:22,000 Speaker 1: it's thirty up to thirty five, and we're thirty three 482 00:24:22,000 --> 00:24:25,000 Speaker 1: point three three. So that's a journey. You're leaving us right, 483 00:24:25,080 --> 00:24:26,879 Speaker 1: I'm going I was gonna wait for your dollar to 484 00:24:26,880 --> 00:24:29,000 Speaker 1: bring you in one a weight hand or tumper. I'll 485 00:24:29,000 --> 00:24:33,520 Speaker 1: give it a one oh nine or four serious clubs. 486 00:24:33,680 --> 00:24:37,160 Speaker 1: We're making jokes, are John? Seriously? This is not a joke. 487 00:24:37,800 --> 00:24:41,399 Speaker 1: Something on Thursday, just the final word between you and 488 00:24:41,440 --> 00:24:45,240 Speaker 1: I t K on Thursday, c p I and then 489 00:24:45,320 --> 00:24:48,000 Speaker 1: literally a CPI comes out present the guard is going 490 00:24:48,080 --> 00:24:51,560 Speaker 1: to walk into the room. In Frankfurt, Germany, and deliver 491 00:24:51,600 --> 00:24:55,640 Speaker 1: a news conference I one on nine oh three. Were 492 00:24:55,680 --> 00:24:58,359 Speaker 1: there any moment. Jeffrey Rosenberg, thank you so much for 493 00:24:58,440 --> 00:25:01,520 Speaker 1: joining us. As always, black Rock, John Farrell, thank you 494 00:25:01,600 --> 00:25:10,840 Speaker 1: so much for joining us. We get an important perspective 495 00:25:10,840 --> 00:25:13,359 Speaker 1: from Tiffany Wild and Tiffany, thank you so much for 496 00:25:13,440 --> 00:25:15,919 Speaker 1: waiting through the half hour. Really really all of us 497 00:25:15,960 --> 00:25:21,560 Speaker 1: appreciate that. Tiffany, how separate is the United States right 498 00:25:21,560 --> 00:25:25,639 Speaker 1: now with a boom economy? Yeah, well, first of all, 499 00:25:25,680 --> 00:25:27,600 Speaker 1: good morning coming Paul. I mean, I think I think 500 00:25:27,600 --> 00:25:30,000 Speaker 1: what the SERAL report told you was that the US 501 00:25:30,040 --> 00:25:32,960 Speaker 1: economy is coming into the new year with a lot 502 00:25:33,000 --> 00:25:36,040 Speaker 1: of momentum. Um, you know. And you know, so we 503 00:25:36,040 --> 00:25:38,680 Speaker 1: we got a booming jobs market, but not only that, 504 00:25:38,800 --> 00:25:43,040 Speaker 1: we're seeing labor supply improve. Um. You know, the participation 505 00:25:43,119 --> 00:25:45,040 Speaker 1: rate is improving, people are starting to come back, and 506 00:25:45,560 --> 00:25:49,679 Speaker 1: importantly that is starting to cool off wages, um, you 507 00:25:49,680 --> 00:25:51,520 Speaker 1: know a little bit. Of course, wages are still running 508 00:25:51,520 --> 00:25:53,520 Speaker 1: at you know, five point one percent according to this 509 00:25:53,560 --> 00:25:56,480 Speaker 1: morning's data, um, you know, but that was against expectations 510 00:25:56,480 --> 00:25:58,920 Speaker 1: of almost six percent, so you know, that's a big difference. 511 00:25:58,920 --> 00:26:02,080 Speaker 1: So that's going to be important for the FED. UM 512 00:26:02,119 --> 00:26:06,040 Speaker 1: and It's also going to be important because you do have, um, 513 00:26:06,080 --> 00:26:09,359 Speaker 1: you know, the conflict between Russia and Ukraine, you know, 514 00:26:09,640 --> 00:26:12,479 Speaker 1: is going to have economic implications you know, for not 515 00:26:12,560 --> 00:26:15,280 Speaker 1: only you know, Russia and Ukraine, but for Europe, and 516 00:26:15,320 --> 00:26:17,760 Speaker 1: that will spill over to some extent to the United States. 517 00:26:17,920 --> 00:26:20,080 Speaker 1: So it's just it's really good news that we're coming 518 00:26:20,160 --> 00:26:23,280 Speaker 1: into that conflict, you know, with a very strong position 519 00:26:23,280 --> 00:26:26,840 Speaker 1: in the US economy. So, Tiffany, the headline unemployment rate 520 00:26:26,880 --> 00:26:31,760 Speaker 1: is three point eight percent. Is that full employment? Um? 521 00:26:31,840 --> 00:26:33,880 Speaker 1: You know, so I think I think we're getting there 522 00:26:33,960 --> 00:26:35,560 Speaker 1: for sure. Um you know. So I think we were 523 00:26:35,560 --> 00:26:37,600 Speaker 1: at three five right before the pandemic, and so I 524 00:26:37,600 --> 00:26:40,160 Speaker 1: think that's an easy number that people look at. Um 525 00:26:40,200 --> 00:26:43,080 Speaker 1: you know. So, so we're certainly close, um you know, 526 00:26:43,160 --> 00:26:46,080 Speaker 1: if we're not there already. So the bottom line is 527 00:26:46,160 --> 00:26:48,840 Speaker 1: is certainly from the monetary policy perspective, you know, subtle 528 00:26:48,880 --> 00:26:52,199 Speaker 1: reserve should be hiking interest rates. Um you know. But 529 00:26:52,240 --> 00:26:55,120 Speaker 1: I think the question of you know, hiking interest rates 530 00:26:55,160 --> 00:26:58,040 Speaker 1: and still you know, case of you know, maybe a 531 00:26:58,119 --> 00:27:01,240 Speaker 1: quarter per meeting first is doing something like a fifty 532 00:27:01,240 --> 00:27:03,159 Speaker 1: basis point rate hike, which many in the market have 533 00:27:03,240 --> 00:27:06,480 Speaker 1: talked about you know, I think this payroll report definitely 534 00:27:06,520 --> 00:27:09,159 Speaker 1: suggests that, you know, something more extreme like that fifty 535 00:27:09,160 --> 00:27:11,920 Speaker 1: basis point rate hike is probably not needed at Pimco 536 00:27:11,960 --> 00:27:14,640 Speaker 1: and Newport Beach. I mean, it's nothing to go up 537 00:27:14,640 --> 00:27:18,359 Speaker 1: and brunch in Hollywood about. You know, you just do it. 538 00:27:18,400 --> 00:27:21,240 Speaker 1: I mean, Tiffany does it right, and she's probably gonna 539 00:27:21,280 --> 00:27:24,520 Speaker 1: get in the car. It's gonna hit Mammoth Lakes this weekend, 540 00:27:24,880 --> 00:27:27,479 Speaker 1: you know, little That's how they do it. That's how 541 00:27:27,640 --> 00:27:30,639 Speaker 1: that's how Tiffany rolls. And I noticed a gallon of 542 00:27:30,680 --> 00:27:35,400 Speaker 1: gas Tiffany and Mammoth Lakes, a regular gallon clocking in 543 00:27:35,680 --> 00:27:41,119 Speaker 1: at five dollars. I mean, it's a political football, but 544 00:27:41,200 --> 00:27:44,480 Speaker 1: it's also a reality for a huge part of America. 545 00:27:45,040 --> 00:27:49,000 Speaker 1: When does the price of gas really impinge on your 546 00:27:49,040 --> 00:27:53,919 Speaker 1: Excel spreadsheet? Yeah, I mean so it already is, to 547 00:27:54,000 --> 00:27:56,160 Speaker 1: be quite frank with you, So, you know, I think 548 00:27:56,240 --> 00:27:58,639 Speaker 1: the issue here is is that, you know, obviously it 549 00:27:59,000 --> 00:28:01,800 Speaker 1: when people have to pay war for gasoline, something that 550 00:28:01,840 --> 00:28:04,720 Speaker 1: they need they can't really substitute into other products. It 551 00:28:04,840 --> 00:28:07,439 Speaker 1: just means that they have less you know, real discretionary 552 00:28:07,480 --> 00:28:10,159 Speaker 1: spending for other things. So it is it is bad 553 00:28:10,240 --> 00:28:13,960 Speaker 1: for for broader growth. UM. In the past, Um, the 554 00:28:14,040 --> 00:28:18,080 Speaker 1: United States shale revolution has offset that somewhat, you know, 555 00:28:18,160 --> 00:28:21,240 Speaker 1: but recently, um, you know, and and Jonathan Farrell's comments 556 00:28:21,359 --> 00:28:23,439 Speaker 1: UM to Marty Walsh kind of got to this. But 557 00:28:23,560 --> 00:28:28,280 Speaker 1: recently because of you know, environmental and other concerns, that 558 00:28:28,400 --> 00:28:31,439 Speaker 1: production response in the United States in the oil patch 559 00:28:31,560 --> 00:28:35,600 Speaker 1: has been much more sluggish. So it hasn't offset you know, 560 00:28:35,640 --> 00:28:38,280 Speaker 1: offset as much. And so you know, ultimately it will 561 00:28:38,360 --> 00:28:41,280 Speaker 1: be bad for for United States growth to have um, 562 00:28:41,320 --> 00:28:45,080 Speaker 1: you know, energy prices this high. Hopefully this will be 563 00:28:45,520 --> 00:28:48,000 Speaker 1: you know, a temporary shock, um, you know, and things 564 00:28:48,040 --> 00:28:50,640 Speaker 1: will will normalize at least eventually. UM. But I think 565 00:28:50,680 --> 00:28:52,680 Speaker 1: that also, you know, that also puts the FED in 566 00:28:52,720 --> 00:28:55,320 Speaker 1: a little bit trickier of a position, UM, because this, 567 00:28:55,440 --> 00:29:00,280 Speaker 1: the Russia Ukraine situation is a supply side shock, which 568 00:29:00,320 --> 00:29:04,320 Speaker 1: means higher inflation but yet lower growth. UM. And that's 569 00:29:04,320 --> 00:29:06,640 Speaker 1: a tricky position for the FED again. UM. You know. 570 00:29:06,720 --> 00:29:09,800 Speaker 1: Ultimately we think they stay on course because the US 571 00:29:09,880 --> 00:29:12,720 Speaker 1: is in such a strong position coming into this, um 572 00:29:12,720 --> 00:29:15,320 Speaker 1: that they can still hike interest rates. Um. You know, 573 00:29:15,360 --> 00:29:17,440 Speaker 1: but at some point, you know, they have to be mindful, 574 00:29:17,520 --> 00:29:20,000 Speaker 1: you get a further escalation. UM, you get actual trade 575 00:29:20,040 --> 00:29:23,280 Speaker 1: flow disruptions that are more material coming from Europe. UM. 576 00:29:23,320 --> 00:29:26,080 Speaker 1: You know, that's going to drag on US growth much 577 00:29:26,120 --> 00:29:28,400 Speaker 1: more strongly. UM. And then that's going to kind of 578 00:29:28,480 --> 00:29:31,200 Speaker 1: raise questions around if they need to pause or things 579 00:29:31,280 --> 00:29:33,440 Speaker 1: like that. But for right now, we think Punto Reserve 580 00:29:33,480 --> 00:29:36,240 Speaker 1: officials probably will continue on the path to monetary policy 581 00:29:36,720 --> 00:29:38,960 Speaker 1: UM normalization that they've kind of laid out of the 582 00:29:39,040 --> 00:29:41,000 Speaker 1: last several months. All right, so let's just go right there. 583 00:29:41,320 --> 00:29:44,600 Speaker 1: W I r P go on the Bloomberg terminal shows 584 00:29:44,640 --> 00:29:47,760 Speaker 1: me the markets kind of discounting maybe six rate hikes 585 00:29:47,760 --> 00:29:51,480 Speaker 1: incounter your two. Is that seemed reasonable to you? Yeah, 586 00:29:51,520 --> 00:29:53,520 Speaker 1: I mean we we think it does. You know, obviously, 587 00:29:53,720 --> 00:29:56,080 Speaker 1: you know there will be some uncertainty. Um. You know, 588 00:29:56,120 --> 00:29:59,560 Speaker 1: as we've been saying, you know, stuff happens, and I 589 00:29:59,600 --> 00:30:02,040 Speaker 1: think the you know, obviously this Russia Ukraine conflict is 590 00:30:02,080 --> 00:30:04,520 Speaker 1: a is a prime example of that. But historically, you know, 591 00:30:04,600 --> 00:30:07,920 Speaker 1: stuff happens, and and you have to worry about the 592 00:30:07,960 --> 00:30:11,680 Speaker 1: contagion events, you know, the market contagion that the spirals 593 00:30:11,680 --> 00:30:15,760 Speaker 1: from US. It's very difficult to pinpoint market vulnerabilities before 594 00:30:15,840 --> 00:30:18,280 Speaker 1: you have these types of events happen. So I think 595 00:30:18,320 --> 00:30:21,000 Speaker 1: what we're watching right now at least to see if 596 00:30:21,080 --> 00:30:22,960 Speaker 1: you know, the FED maybe goes a little bit slower, 597 00:30:23,080 --> 00:30:25,520 Speaker 1: is if you do get some of that market contagion happening. 598 00:30:25,560 --> 00:30:27,800 Speaker 1: So do you start to see it in credit, um, 599 00:30:27,840 --> 00:30:31,000 Speaker 1: you know, or even bank funding markets? So far we haven't, 600 00:30:31,120 --> 00:30:33,040 Speaker 1: which is great news, um, you know, but I think 601 00:30:33,080 --> 00:30:35,240 Speaker 1: it's appropriate for the market, you know, where the markets 602 00:30:35,240 --> 00:30:36,840 Speaker 1: pricing about sixth rate high because we think more or 603 00:30:36,920 --> 00:30:39,840 Speaker 1: less that's about right this year, um, given the risks 604 00:30:40,040 --> 00:30:42,720 Speaker 1: you know that are out there. Tiffany, Thank you so much, Tiffany, 605 00:30:42,760 --> 00:30:46,840 Speaker 1: Well to this storm. This is the Bloomberg Surveillance Podcast. 606 00:30:47,120 --> 00:30:50,480 Speaker 1: Thanks for listening. Join us live weekdays from seven to 607 00:30:50,560 --> 00:30:55,280 Speaker 1: ten am Eastern on Bloomberg Radio and Bloomberg Television each 608 00:30:55,360 --> 00:30:59,080 Speaker 1: day from six to nine am for insight from the 609 00:30:59,120 --> 00:31:04,320 Speaker 1: best Tonikon on finance, investment, and international relations. And subscribe 610 00:31:04,360 --> 00:31:09,320 Speaker 1: to the Surveillance podcast on Apple podcast, SoundCloud, Bloomberg dot com, 611 00:31:09,360 --> 00:31:12,640 Speaker 1: and of course on the terminal. I'm Tom Keene and 612 00:31:12,760 --> 00:31:14,600 Speaker 1: this is Bloomberg