Speaker 1: Bloomberg Audio Studios, Podcasts, radio News.
Speaker 2: This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along
Speaker 2: with Lisa Bromwitz and Amrie Hordern. Join us each day
Speaker 2: for insight from the best in markets, economics, and geopolitics
Speaker 2: from our global headquarters in New York City. We are
Speaker 2: live on Bloomberg Television weekday mornings from six to nine
Speaker 2: am Eastern. Subscribe to the podcast on Apple, Spotify, or
Speaker 2: anywhere else you listen, and as always on the Bloomberg
Speaker 2: Terminal and the Bloomberg Business App. George Concrvis of MUFG writing,
Speaker 2: It's one thing to climb the wall of worry, it's
Speaker 2: yet another to be in denial of the reality still
Speaker 2: to come. We think broader financial markets have overshot again
Speaker 2: and are at risk of serious disappointment. George joins us
Speaker 2: now from More. George, Good morning, Good morning. Good that's
Speaker 2: a bearish way to start this morning, sir.
Speaker 3: It's a bearis way to start you potentially Powell's last
Speaker 3: FED day, and we'll see if you can change that
Speaker 3: kind of bears us into some sort of optimism here.
Speaker 3: But I think it's the right call.
Speaker 2: What do you think we're going to be disappointed by.
Speaker 3: I think we're gonna be disappointed by a number of things. One,
Speaker 3: if you go back in the analogs of history and
Speaker 3: if you look at again, people don't like to go
Speaker 3: back to two distinct periods two thousand and eight and
Speaker 3: two thousand. People just don't like those two years. And
Speaker 3: you can have good news, and you can have markets
Speaker 3: and then a high note and then kind of top
Speaker 3: tick things, and so earnings really do have to deliver today,
Speaker 3: and you have a lot of optimism already priced in.
Speaker 3: We have valuations again back to streaming high levels. It's
Speaker 3: all about the equity market. It's all about the tech
Speaker 3: sector within the equity market, and one could argue that
Speaker 3: that makes the economy much more fragile each time we
Speaker 3: do this. We are so dependent on stocks never going down.
Speaker 2: A protiate A Giants legendary investor speaking Saint Patrick hashonas
Speaker 2: say in a podcast and saying this two thousand was
Speaker 2: the easiest band market I've ever seen in my whole life,
Speaker 2: went on to say, it's got so many similarities to
Speaker 2: right now. What are the similarities to right now?
Speaker 3: The similarities are a concentrated kind of view, the four
Speaker 3: year around a new new technology like AI. Again, the
Speaker 3: sort of kind of liquidity that created meme stock like investing.
Speaker 3: All of this is kind of very similar. We use
Speaker 3: different ways of expressing what was happening back then, but
Speaker 3: it was bubble like conditions and there's I think a
Speaker 3: repeat of that happening now.
Speaker 4: You said something that I find really interesting, which is
Speaker 4: this market going up is one of the big reasons
Speaker 4: why people keep being bullish. It's almost like a Ponzi
Speaker 4: scheme of bullishness, Right, the market goes up, so you
Speaker 4: feel bullish, so you put your money in the market
Speaker 4: and it goes up. How big of a pillar is
Speaker 4: that to the overall recovery, to the resilience in the
Speaker 4: US economic data, to really underpin the justification to keep
Speaker 4: going into stocks that they can keep going up, that
Speaker 4: then propping up the economic condition.
Speaker 3: Yeah, it is kind of a vicious kind of cycle
Speaker 3: up the question. We haven't really felt the vicious cycle
Speaker 3: on the way down, largely because there's really no net
Speaker 3: sellers or real sellers, and most large investors have to
Speaker 3: be fully invested to kind of participate with the upside,
Speaker 3: and when they do try to head they use they
Speaker 3: use the options market, which then creates these sort of
Speaker 3: squeezes on gamma on options like so it creates this
Speaker 3: weird dynamic that's kind perpetual until one day it's not.
Speaker 3: We haven't felt that yet.
Speaker 4: I guess the biggest counterpoint to that is potentially we've
Speaker 4: seen every single potential puncture point to that. I mean, well,
Speaker 4: you name it, high oil prices, high bond prices, uncertainty
Speaker 4: at the Federal Reserve, political uncertainty, hot wars, I mean,
Speaker 4: all sorts of concerns. Why hasn't any of that been enough?
Speaker 3: I mean, like they think the market structure has clearly changed.
Speaker 3: I mean, there's been well documented the passive flow. That's
Speaker 3: why I've always looked at the jobs market as the
Speaker 3: most critical component. People have jobs that contribute to the
Speaker 3: four to one case. It keeps them the system going right.
Speaker 3: I think that's why it's so critical that we're at
Speaker 3: this interesting inflection point potentially that if AI is really
Speaker 3: that good, it's going to hurt the jobs market over time,
Speaker 3: at least in the short term I think will meetium
Speaker 3: shortter meeting term, and as you retool the economy around that,
Speaker 3: you might lose like AI is not going to be
Speaker 3: contributing to four to one case. You know, they're going
Speaker 3: to be replacing, Like if you start like doing windfall
Speaker 3: taxes at corporations. This is a really interesting crossroads. And
Speaker 3: I mean, you're the totality of all these things will
Speaker 3: start to be like a burden on the economy at
Speaker 3: some point. It's that last straw that brings the camels.
Speaker 5: Bet aren't we already doing some of that when the
Speaker 5: President comes out and says tech companies need to basically
Speaker 5: subsidize consumer's energy bills.
Speaker 3: Look, I mean, I think there's a there's going to
Speaker 3: be a need for it's kind of cost sharing load
Speaker 3: sharing for sure in the future, And.
Speaker 5: You think it's going to be more of a burden
Speaker 5: on corporate America to check that out.
Speaker 3: Look, ultimately, you know how this all shapes out. I
Speaker 3: really don't know. No one knows the future on how
Speaker 3: this works out. It's going to depend on future administrations
Speaker 3: more so than anything else. But I feel pretty confident
Speaker 3: both in this election cycle and in twenty twenty eight,
Speaker 3: AI is going to be on the ballot box.
Speaker 2: What do you think it is this year before we
Speaker 2: get to twenty eight, the shape this market out of
Speaker 2: what you believe is denial.
Speaker 3: I mean, I think look, I mean the front and
Speaker 3: center is the oil price, and I think just the
Speaker 3: fact that we've been into denial. The biggest denial is
Speaker 3: that somehow we can turn on and get production back,
Speaker 3: that we can kind of replace all this inventory that's
Speaker 3: been depleted. And as we're going through that process, I
Speaker 3: think it's going to really be a kind of rude
Speaker 3: awakening for markets, that it's going to be a drag
Speaker 3: on growth in the second half.
Speaker 2: We speak to shoe A Kaiser said, Hey, this is
Speaker 2: something he's been talking about coming into this week, that
Speaker 2: the slow moving risk just keep on building, keep on building,
Speaker 2: keep on building, and then you break, you reach a
Speaker 2: hipping point. I have no idea if we're close to
Speaker 2: one of those, but some people think we are.
Speaker 4: And what people are watching is that long dated oil
Speaker 4: contract and the fact that it's reaching almost ninety dollars
Speaker 4: on Brent crude for December. People are watching that and saying,
Speaker 4: hold on, it's going to cross some bogie where suddenly
Speaker 4: the stock market's going to wake up and say we're broken.
Speaker 4: We don't think we like this very much. And right
Speaker 4: now you aren't seeing that. Part of it is because
Speaker 4: the earnings keep giving that forward look that is more positive.
Speaker 4: And at what point do you start to have to
Speaker 4: see some of this reflected in some of the rhetoric
Speaker 4: coming from the C suite.
Speaker 2: George Yale's high now for different reasons or the same
Speaker 2: reasons we made those highs just a month or so ago.
Speaker 3: I think yields are higher for a number of different reasons,
Speaker 3: and they've not participated in the broader risk rally because
Speaker 3: it is a pure macro kind of expression. So it
Speaker 3: is capture, you know, a longer kind of wait and
Speaker 3: see mode for central banks, not just in the US,
Speaker 3: because like the hawkish rhetoric that's been coming out from
Speaker 3: overseas is also kind of pushed up US rates. The
Speaker 3: global kind of rate connection is there, and it's clearly
Speaker 3: an issue for the US bot market, and you know,
Speaker 3: fiscal concerns because I mean, we all know at some
Speaker 3: point if something does break, the government's going to come
Speaker 3: to the rescue. So I think there's a lot of
Speaker 3: different factors that are kind of at play.
Speaker 4: But to John's point, earlier in the conflict, people were
Speaker 4: looking at higher yields as a result of rate hikes
Speaker 4: in direct response to oil prices, which was absolutely negative.
Speaker 4: Now suddenly it's because the economy is doing just fine.
Speaker 4: The consumer can keep spending. It's almost like yields are
Speaker 4: rising for the right reason. At what point, even if
Speaker 4: they're rising for the right reasons, does it become a
Speaker 4: breaking point for equity valuations.
Speaker 3: I think markets, you know, get enamored around clear lines
Speaker 3: in the sand, five percent on the thirty year. If
Speaker 3: that breaks, you got above four to fifty on the
Speaker 3: ten year, and if you were to ever go back
Speaker 3: to four percent on the two year treasury, then the
Speaker 3: market I think the broader markets, like stocks, actually well careful.
Speaker 2: What business does the two year have at four percent?
Speaker 2: So we asked that question repeatedly back in March. I
Speaker 2: think we have to ask it once again at three
Speaker 2: eighty five. What business does the two year have of
Speaker 2: four percent? When we, as far as we understand, the
Speaker 2: bar to hike at the federal reserve is incredibly high.
Speaker 2: What business does the two year year have treading above
Speaker 2: Fed funds?
Speaker 3: I really think has very little business. So we're actually
Speaker 3: relatively constructor of the front end. We think that's the
Speaker 3: best sweet spot, highest risk reward for the bomb market
Speaker 3: is being long positive carry treasuries in the front end.
Speaker 4: So right now, looking forward, what's the best hedge to
Speaker 4: something potentially breaking although it hasn't yet and could potentially
Speaker 4: keep going.
Speaker 3: So unfortunately, it's been the trade that's been the hardest
Speaker 3: to kind of keep in place, which is when the
Speaker 3: curve steepener, you know, And that's the best macro expression
Speaker 3: that has to get reset every so often because it
Speaker 3: doesn't deliver until it.
Speaker 2: Does stay with us. More Blindberg surveillance coming up after this.
Speaker 2: So here's the lakes. This this morning, the Defense Secretary
Speaker 2: PTE hagg Seth Handing's a Capitol Hill to defend President
Speaker 2: Trump's one point five trillion dollar defense budget as it
Speaker 2: faces bipartisan pushback down in Washington, d C. Joining us
Speaker 2: around a table. Good friend of this program, Libby control
Speaker 2: of Pimco. Libby, good morning, and Bernie, we've lost all
Speaker 2: appreciation for how big these numbers are. What's their record
Speaker 2: of understanding whether one trillion goes never mind at one
Speaker 2: point five.
Speaker 6: Yeah, I mean, I think, as Tyler said, I mean
Speaker 6: this is basically sort of reflective of the president's wish list.
Speaker 6: This is an opening bid, if you will. The budget
Speaker 6: is you know, kind of suggests what the president's priorities are.
Speaker 6: But we should also realize that it is going to
Speaker 6: the actual spend, the actual appropriation for defense come for
Speaker 6: FY twenty seven is going to be much smaller. Historically
Speaker 6: this has been as amrino sort of eight hundred billion
Speaker 6: dollar you know, up to a trillion dollars of defense spending.
Speaker 6: As of last year, one and a half trillion dollars spent. Again,
Speaker 6: this is like pie in the sky kind of things.
Speaker 6: It's really to frame the negotiation. I think it does
Speaker 6: emphasize that what underscores how important the defense component is
Speaker 6: maybe surprisingly to this administration. So again I think we
Speaker 6: should take this with a grain of salt. Our view
Speaker 6: is that we probably see maybe a small tick up
Speaker 6: in terms of defense spending that would land around a
Speaker 6: trillion dollars, obviously much short of the one and a
Speaker 6: half trillion.
Speaker 5: Do they have to get this done before the midterms.
Speaker 6: Yeah, it means look, as you know, the end of
Speaker 6: the fiscal year is as September thirtieth. Oftentimes they're operating
Speaker 6: in or something called a continuing resolution as we all know,
Speaker 6: which is basically just a stopgap funding bill. Does this
Speaker 6: get a lot harder and maybe they get to do
Speaker 6: it in the lame Duck, which is of course the
Speaker 6: period after the election, before the end of this Congress.
Speaker 6: But look, I think that just in general, after the
Speaker 6: midterm elections, things are just going to get much more
Speaker 6: difficult for the Republican So any of these things that
Speaker 6: feel pretty ambitious, they should be trying to get done.
Speaker 6: The real story I think on Capitol Hill right now
Speaker 6: is just the lack of real progress in anything. Even
Speaker 6: though Republicans control both chambers of Congress, there is just,
Speaker 6: as you, very little movement on things that are faza
Speaker 6: the Farm Bill. I mean, things are kind of like
Speaker 6: the blocking and tackling of Congress, but I think does
Speaker 6: represent the fact that it's really difficult to get things
Speaker 6: done with small majorities even when one party controls both chambers. Well.
Speaker 5: Also, what's interesting about today is not just the defense
Speaker 5: budget request, but also Pete Haigseth is going to be
Speaker 5: really in the hot seat, and I've heard rumors that
Speaker 5: he's been kind of on thin ice. There's been mixed
Speaker 5: feelings about how Republicans in Congress feel about him. Do
Speaker 5: you think this is potentially a huge moment for him
Speaker 5: on whether or not the President decides to keep him
Speaker 5: on as his Defense secretary.
Speaker 6: Well, look, I think you're absolutely right. He is going
Speaker 6: to get a lot of pressure. I think a lot
Speaker 6: of Republicans, while publicly they're supporting this Iranian conflict, privately
Speaker 6: there's some growing skepticism about how long we're in this,
Speaker 6: what the strategic objectives are, what the sort of framework
Speaker 6: for successes, And as you know, there's this War Powers
Speaker 6: Act that could require Congress to actually authorize this conflict
Speaker 6: in Iran. So I think you're going to get a
Speaker 6: lot of pushback on him more just trying to get
Speaker 6: details about what the strategy is in terms of, you know,
Speaker 6: his future in the cabinet. I mean, it's it's an
Speaker 6: open question for anybody and any administration. I will say, though,
Speaker 6: as you get closer to the midterms, and as we're
Speaker 6: looking at potentially either a narrow Republican margin in the
Speaker 6: Senate or even potentially the Senate flipping to Democratic control,
Speaker 6: there will be pressure for folks to go so the
Speaker 6: President can renominate people while the Republicans still you know,
Speaker 6: have the existing majority in the Senate still.
Speaker 4: Trying to wrap ahead around one and a half trillion dollars,
Speaker 4: so forty four percent increase in the defense spending P.
Speaker 4: I mean, this to me highlights just how high the
Speaker 4: bar is to get anyone get scerned about fiscal issues.
Speaker 4: I mean, given the fact that our debt to GDP
Speaker 4: is right there behind Maldives, Bahrain, Greece and Sudan, here
Speaker 4: we are. So it just raises this issue. At what
Speaker 4: point where people start actually pushing back and saying, wait
Speaker 4: a second, we're supposed to care about the deficit. When
Speaker 4: are we going to do that again.
Speaker 6: I love the fact that you care about the deficit
Speaker 6: as much as we do.
Speaker 5: It can go yeah.
Speaker 6: I mean we talk about the deficits a lot, and
Speaker 6: we're talking about to our clients, of course, a lot
Speaker 6: about it.
Speaker 3: You know.
Speaker 6: I think, as we have said many times before, the
Speaker 6: treasuries benefit, Treasury bonds benefit from this idea of like
Speaker 6: the cleanest dirty shirt that like all of the you know,
Speaker 6: all of your shirts are dirty, and the sort of
Speaker 6: sovereign bond closet. But the treasuries continue to be the
Speaker 6: cleanest dirty shirt. And that is still true, right. The
Speaker 6: US still has the most mobile most dynamic, most innovative economy.
Speaker 6: It's the most liquid and deep bond market. However, you know,
Speaker 6: we're hearing from clients both in the US and overseas
Speaker 6: of these sort of continued worries, not only in the US,
Speaker 6: of course, but in other developed countries. But in the US,
Speaker 6: you know, and as I've been saying, sort of Congress
Speaker 6: will keep on dancing as long as the music is playing.
Speaker 6: And if the bond market is not a constraint, then
Speaker 6: what is a constraint. Not to get too wonky here,
Speaker 6: but I think one thing just to have on your
Speaker 6: radar is I would assume this would be an issue
Speaker 6: in twenty twenty eight because Social Security Trust Fund is
Speaker 6: supposed to go bankrupt, meaning will pay out less, and
Speaker 6: it brings in in twenty thirty three. That may feel
Speaker 6: like far away, it's really not, and so policy makers
Speaker 6: are going to have to start talking about this. I
Speaker 6: would be surprised if this is not a presidential election.
Speaker 6: We still are heart that we actually start talking about deficits.
Speaker 6: But in between, then sixty seven percent deficits, you know,
Speaker 6: sixty seven six seven percent deficits is a percentage of GDP.
Speaker 6: I mean, this is very high, and we're not even
Speaker 6: in a recession and we're really not at war. So yes,
Speaker 6: I mean, we hear you, we share your concerns. I
Speaker 6: feel hard, but again, I just don't think that unless
Speaker 6: the bomb market is going to be the constraint, and
Speaker 6: like you know, there's some concerns at the long end,
Speaker 6: but it really has not been that kind of that constrain.
Speaker 4: How much is this a big point in the Kevin
Speaker 4: Worsh nomination and any kind of Fed Treasury accord, especially
Speaker 4: given the fact that the Treasury is shifting away from
Speaker 4: long term issuance issuing more on the front end and
Speaker 4: we're talking about ways to potentially lower rates on the
Speaker 4: front end.
Speaker 6: Yeah, look, I mean, you know, I think we will
Speaker 6: be I think we'll just we'll have to wait and see.
Speaker 6: In terms of this accord, there's only so much, of course,
Speaker 6: that Kevin Worsh can do as chair. The chair is important,
Speaker 6: but not omnipotent, meaning like the power persuasion is important
Speaker 6: in terms of the chair position. But he's only one vote,
Speaker 6: and as it relates to the balance sheet, he's only
Speaker 6: one vote of twelve, and he's obvious course only one
Speaker 6: vote of twelve on rates as well, so you know,
Speaker 6: we'll just sort of see what he can do in
Speaker 6: terms of the balance sheet. And then you know, the
Speaker 6: Treasury is increasing their buy back program. That is something
Speaker 6: that they have been doing. But there's also a limit there, right,
Speaker 6: they do not have a balance sheet. It has to
Speaker 6: be balance sheet neutral, So there's only so much they
Speaker 6: can do in terms of you know, buybacks and what
Speaker 6: have you without really affecting the weighted average maturity of
Speaker 6: Treasury buck. So we're getting really walky here, you bis kist, just.
Speaker 2: The basic question middle of May, does channel Pound step away?
Speaker 6: You know, again open question. I think the Key will
Speaker 6: need to have every confidence in the world that this investigation,
Speaker 6: I think both at the FED in terms of the
Speaker 6: ig investigation and then also the do jay is put
Speaker 6: to bed.
Speaker 3: You know.
Speaker 6: My view, my guess, my speculation is it would make
Speaker 6: sense if he were to stay beyond the midterms just
Speaker 6: to sort of see what that. Again, I'm not I'm
Speaker 6: not trying to make news here. This is just this
Speaker 6: is just a guess.
Speaker 2: Okay, but it.
Speaker 6: Would But but but you think if you're worried about
Speaker 6: FED independence, you're going to really want to see what
Speaker 6: that Senate majority looks like and of course then it
Speaker 6: also gives you some time with Kevin worsh as well.
Speaker 6: So I just think that that the big point here
Speaker 6: is does it really matter? And I just that the
Speaker 6: FED is boxed in here in terms of the macroeconomic
Speaker 6: conditions and Kevin Warsh Fed a Powell Fed, I guess
Speaker 6: in the next few months will look that different. I'm
Speaker 6: just not sure if the inflation numbers and the growth
Speaker 6: numbers will really allow them to do, you know, to
Speaker 6: just take too much of a different posture.
Speaker 2: Appreciate your time, Thanks, thank you for the deficit therapy
Speaker 2: as well. Stay with us mult Bloomberg surveillance coming up
Speaker 2: off to this. So here's the liceis this morning investors
Speaker 2: looking for signals on how long the Central Bank will
Speaker 2: stay on hold what is likely to be Japowe's final
Speaker 2: meeting as chair, joining us now to discuss as former
Speaker 2: Kansas City FED president as the George esther warm welcome
Speaker 2: back to the program. As always, at two pm Eastern time,
Speaker 2: we get a decision thirteen minutes later a news conference.
Speaker 2: What are you expecting to hear?
Speaker 1: Well, good morning, Jonathan. I think it's clear the table
Speaker 1: is set for today's meeting, And the real question is
Speaker 1: not will they move rates. It seems likely they will
Speaker 1: remain on hold. But I think the question is how
Speaker 1: will they describe the outlook in this time of high uncertainty.
Speaker 1: Will they lean into the inflation issues that we've heard
Speaker 1: a number of the FMC members talk about, will they
Speaker 1: think about two sided risks if you will, to their mandates?
Speaker 1: And of course the other part of the discussion, people
Speaker 1: are leaning in very heavily on trying to understand how
Speaker 1: the Chairman might be thinking about his future.
Speaker 2: Role as the None of that is normal. That particular,
Speaker 2: that last point in particular is not normal. You know
Speaker 2: how this works. Typically they move aside, someone else comes
Speaker 2: on board, we move on with life. Why is this
Speaker 2: moment so different, Well.
Speaker 1: Because it's been wrapped up in a bit of political fury,
Speaker 1: if you will. The chairman has.
Speaker 2: Had I think we've lost that night to as the
Speaker 2: George the former Kansas City Fed President, on an important
Speaker 2: moment for the future of the Chairman of the Federal Reserve.
Speaker 4: That's some way she doesn't want to talk about it.
Speaker 2: I mean, I think no one wants to talk about it.
Speaker 6: We should do that next time you ask me about it.
Speaker 2: Maybe you guys will too.
Speaker 6: Ultimately, it's a difficult moment.
Speaker 4: Because people are used to talking about a difficult economic
Speaker 4: moment that we're in, and instead we're having to sell
Speaker 4: us out exactly whether it is going to be important
Speaker 4: for him to stay on, whether it'll matter to markets.
Speaker 4: Right now, the market seems to be incredibly calm.
Speaker 5: She stopped and the shot was frozen. It was a
Speaker 5: technical issue, but when she was talking about political fury
Speaker 5: when it comes to j Powell and you know what
Speaker 5: this is going to do, right the conspiracy theorists out
Speaker 5: there in financial markets are going to be seeing that
Speaker 5: and they're going to say there was a reason why
Speaker 5: she was frozen.
Speaker 2: The fact that we're even talking about this is a problem.
Speaker 2: It's a big problem. And understand, it's not just the
Speaker 2: chairman's responsibility to handle this issue. The blame layser the
Speaker 2: feet of this administration as well for introducing this as
Speaker 2: even a conversation. We've talked about this all the way.
Speaker 2: This could have been very straightforward. You've appointed your guy.
Speaker 2: Move on with life. Kevin Walsh runs the Federal Reserve,
Speaker 2: a new outlook for the Central Bank. We're here because
Speaker 2: No one wanted to take the off ram. They just
Speaker 2: kept pursuing it, pursuing it, pursuing it. And I've mentioned
Speaker 2: this a few times. Twelve months ago, when we were
Speaker 2: looking at one year and we were thinking about what
Speaker 2: the future of this conversation would look like around the
Speaker 2: Federal Reserve, we were talking about a shadow fed chair
Speaker 2: the likes of a Kevin wash maybe getting firm daily.
Speaker 2: So we knew that he was going to be there
Speaker 2: in the wings, and that was the ultimate story. This
Speaker 2: wasn't even a consideration the idea that Sham and Power
Speaker 2: would stick around to twenty eight on the board.
Speaker 4: Part of the reason why we're talking about this so
Speaker 4: much is President Trump is a real estate guy. He's
Speaker 4: a real estate developer. He wants rates lower, and we're
Speaker 4: dealing with a significant amount of debt in this country
Speaker 4: and it is much more beneficial for the rates to
Speaker 4: be significantly lower. How do you accomplish that increasingly becomes
Speaker 4: the question in one supply chain shock after another that
Speaker 4: really does challenge the discussion, even though we are having
Speaker 4: disinflation on other measures. So it is a complicated economic
Speaker 4: discussion that has been brought into the mainstream by President
Speaker 4: Trump and produced in utterly dramatic fashion so that everybody
Speaker 4: can really play a part in this bachelor fed style.
Speaker 5: And he was fanning the flames throughout the entire year
Speaker 5: and into this year. I mean, I was in the
Speaker 5: Oval office that morning when there's reports that maybe he
Speaker 5: was going to fire j. Powell, and that was really
Speaker 5: mostly about the fact he didn't think he was doing
Speaker 5: a good job less so even about what was going
Speaker 5: on when it comes to the refurbishment than they went
Speaker 5: to the referb member. This was a president who went
Speaker 5: to the FED, sat behind alongside the chair looking at
Speaker 5: all the work that was being done at the Federal reserves.
Speaker 5: So there's been a lot to this story.
Speaker 2: I believe we've re established that connection and at risk
Speaker 2: of offering any fields conspiracy theories, I hope Pas that
Speaker 2: George is still with us, that we want you to
Speaker 2: complete your thoughts on the future of CHAM and pounem.
Speaker 2: Why this moment is so different, Well.
Speaker 1: It's different, Jonathan, because again we have not seen this
Speaker 1: kind of political angst around a transition of leadership in
Speaker 1: the way that we have now. And of course this
Speaker 1: follows on a long period of badgering of the fed
Speaker 1: about its interest rates stance, and so it creates an
Speaker 1: environment right now that is unusual. Having said that, though
Speaker 1: the institution I think is quite capable of carrying forward
Speaker 1: during this transition, and really, as I think about the
Speaker 1: Committee and what they're doing this morning, I suspect they
Speaker 1: are squarely focused on the economic challenges and deciding what
Speaker 1: their stance of policy needs to be.
Speaker 2: This is the Bloomberg Surveillance Podcast, bringing you the best
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