1 00:00:02,480 --> 00:00:07,400 Speaker 1: Bloomberg Audio Studios, Podcasts, Radio news. 2 00:00:07,640 --> 00:00:10,280 Speaker 2: Joe, are we going to spend this episode just arguing 3 00:00:10,280 --> 00:00:11,720 Speaker 2: about the term premium? 4 00:00:12,440 --> 00:00:15,200 Speaker 3: I do know, like, yeah, maybe you know, I've always like, 5 00:00:15,320 --> 00:00:18,079 Speaker 3: I've always been sort of I wouldn't say a term 6 00:00:18,079 --> 00:00:21,400 Speaker 3: premium denier, but I yes, you are, okay, but like, 7 00:00:21,720 --> 00:00:24,080 Speaker 3: and I was totally ready to capitulate. I was like, Oh, 8 00:00:24,120 --> 00:00:26,160 Speaker 3: it's all the term premium. And I was like, I'm 9 00:00:26,200 --> 00:00:29,640 Speaker 3: totally convinced the term premium is this really important concept 10 00:00:29,640 --> 00:00:32,880 Speaker 3: that can be measured analytically with precision. And then to 11 00:00:32,960 --> 00:00:35,080 Speaker 3: people like, ah, it's actually you don't really have to 12 00:00:35,120 --> 00:00:38,159 Speaker 3: go that far. It's sort of straightforward. I still, you know, there's. 13 00:00:37,960 --> 00:00:40,480 Speaker 2: A middle path where you can say that the term 14 00:00:40,560 --> 00:00:44,040 Speaker 2: premium is hard to measure because you have to estimate 15 00:00:44,120 --> 00:00:48,080 Speaker 2: like a risk neutral rate, but but it still exists. 16 00:00:48,400 --> 00:00:50,720 Speaker 2: It might mean different things to different people. 17 00:00:50,920 --> 00:00:53,280 Speaker 3: But I've never been good in life at taking the 18 00:00:53,320 --> 00:01:00,240 Speaker 3: middle path in anything. I oscillate between extremes. I did 19 00:01:00,240 --> 00:01:00,800 Speaker 3: a deadlist. 20 00:01:00,880 --> 00:01:04,400 Speaker 2: I'm both the most popular trader and most successful trader 21 00:01:04,600 --> 00:01:05,800 Speaker 2: at Citadel. 22 00:01:05,480 --> 00:01:06,520 Speaker 3: That is going viral. 23 00:01:06,800 --> 00:01:07,640 Speaker 2: Uh barges. 24 00:01:07,720 --> 00:01:09,840 Speaker 3: This is an after school special, except. 25 00:01:09,520 --> 00:01:12,040 Speaker 2: I've decided I'm going to base my entire personality going 26 00:01:12,080 --> 00:01:15,320 Speaker 2: forward on campaigning for a strategic pork reserve in the US. 27 00:01:15,520 --> 00:01:16,199 Speaker 3: Black goals. 28 00:01:16,360 --> 00:01:19,360 Speaker 2: These are the important questions that robots taking over the world. 29 00:01:19,440 --> 00:01:22,280 Speaker 3: No, I think that like in a couple of years, 30 00:01:22,480 --> 00:01:24,759 Speaker 3: the AI will do a really good job of making 31 00:01:24,760 --> 00:01:27,760 Speaker 3: the Odd Lots podcast. One day that person will have 32 00:01:27,800 --> 00:01:28,839 Speaker 3: the mandate of heaven. 33 00:01:29,000 --> 00:01:31,199 Speaker 2: How do I get more popular and successful? 34 00:01:31,520 --> 00:01:32,440 Speaker 3: We do have. 35 00:01:34,760 --> 00:01:37,080 Speaker 2: You're listening to lots More where we catch up with 36 00:01:37,120 --> 00:01:39,840 Speaker 2: friends about what's going on right now, because. 37 00:01:39,640 --> 00:01:42,520 Speaker 3: Even when The Odd Lots is over, there's always lots more. 38 00:01:42,920 --> 00:01:49,000 Speaker 2: And we really do have the perfect guest back with 39 00:01:49,240 --> 00:01:51,800 Speaker 2: Jay Berry. He is now the head of Global rate 40 00:01:51,880 --> 00:01:55,160 Speaker 2: Strategy at JP Morgan. The last time we had him 41 00:01:55,280 --> 00:01:58,600 Speaker 2: on was in October of twenty twenty three, and the 42 00:01:58,640 --> 00:02:01,280 Speaker 2: headline on the episode was like Jay Berry on the 43 00:02:01,320 --> 00:02:04,440 Speaker 2: big sell off in bonds and we can just recycle 44 00:02:04,520 --> 00:02:06,280 Speaker 2: all that again. 45 00:02:06,480 --> 00:02:08,080 Speaker 3: Was that the peak when we had him on then? 46 00:02:08,800 --> 00:02:09,480 Speaker 1: I don't know. 47 00:02:11,040 --> 00:02:13,679 Speaker 2: At that time, Yeah, Jay, do you believe in the 48 00:02:13,760 --> 00:02:14,600 Speaker 2: term premium? 49 00:02:14,800 --> 00:02:16,959 Speaker 1: Well, Tracy, I think it's funny you talk about the 50 00:02:17,040 --> 00:02:19,000 Speaker 1: last time I was on because ten year yields are 51 00:02:19,000 --> 00:02:21,520 Speaker 1: basically at the same level they were then, and at 52 00:02:21,520 --> 00:02:23,800 Speaker 1: the time, the funds rate was one hundred bases points 53 00:02:23,840 --> 00:02:26,760 Speaker 1: higher than it is right now. So term premium is 54 00:02:26,800 --> 00:02:28,960 Speaker 1: hard to measure. But I'm a simple man, and I 55 00:02:28,960 --> 00:02:30,640 Speaker 1: think of it as the slope of the yield curve, 56 00:02:30,960 --> 00:02:32,560 Speaker 1: and the slope of the yield curve is steeper for 57 00:02:32,560 --> 00:02:34,400 Speaker 1: a given level of policy rates. So I think it 58 00:02:34,440 --> 00:02:36,600 Speaker 1: tells you that there is more term premium in the 59 00:02:36,639 --> 00:02:37,840 Speaker 1: curve right now. Absolutely. 60 00:02:38,400 --> 00:02:41,320 Speaker 3: Ira Jersey, who does rates your Bloombering Intelles, had a 61 00:02:41,400 --> 00:02:45,399 Speaker 3: chart and you just said, look, yes, one term premium, 62 00:02:45,440 --> 00:02:48,560 Speaker 3: all that. But one part of the story is just 63 00:02:48,680 --> 00:02:51,200 Speaker 3: that the markets estimate of the terminal rate is now 64 00:02:51,320 --> 00:02:53,600 Speaker 3: higher than it would have been, say, six months ago, 65 00:02:53,639 --> 00:02:57,480 Speaker 3: et cetera, at the start of the cutting process, and 66 00:02:57,560 --> 00:02:59,320 Speaker 3: that a big part of the story with the rise 67 00:02:59,320 --> 00:03:02,000 Speaker 3: and the long ends in September is just that you know, 68 00:03:02,120 --> 00:03:03,840 Speaker 3: there's not as much cutting baked in. 69 00:03:04,120 --> 00:03:06,720 Speaker 1: I think that's exactly it as well. Joe. I think 70 00:03:06,720 --> 00:03:09,120 Speaker 1: that's a really important point because this is. 71 00:03:08,560 --> 00:03:10,800 Speaker 3: Just now the middle ground. It's like, part of it 72 00:03:10,880 --> 00:03:12,400 Speaker 3: is the term premium, and part of it. 73 00:03:12,400 --> 00:03:15,480 Speaker 2: If we get Joe to a middle path, is a success. 74 00:03:15,600 --> 00:03:17,320 Speaker 1: Yeah, I'm a middle of the road guy, and I 75 00:03:17,360 --> 00:03:20,120 Speaker 1: don't think a single explanation or a single factor can 76 00:03:20,160 --> 00:03:22,800 Speaker 1: explain the bond sell of but term premiums one tracy, 77 00:03:22,880 --> 00:03:27,240 Speaker 1: but Joe, FED policy expectations matter because it's fascinating. When 78 00:03:27,240 --> 00:03:29,800 Speaker 1: the FED cut fifty in September, we were pricing in 79 00:03:29,840 --> 00:03:32,440 Speaker 1: a terminal funds rate of like two and three quarters. Yeah, 80 00:03:32,480 --> 00:03:34,200 Speaker 1: and now we're pricing in a terminal fund rate of 81 00:03:34,200 --> 00:03:36,840 Speaker 1: four percent. It's a huge change and that's driven it 82 00:03:36,880 --> 00:03:39,680 Speaker 1: as well, and it's so unusual, and I think it's unusual. 83 00:03:40,080 --> 00:03:42,680 Speaker 1: But what the Fed did was unusual because basically, by 84 00:03:42,680 --> 00:03:46,160 Speaker 1: preemptively cutting fifty, they said, even though inflation hasn't come 85 00:03:46,200 --> 00:03:48,320 Speaker 1: back to target, we do not want to sacrifice this 86 00:03:48,400 --> 00:03:51,600 Speaker 1: expansion and this probably means better growth outturns in the future, 87 00:03:51,720 --> 00:03:55,320 Speaker 1: higher inflation in the future, thus justifying fewer cuts down 88 00:03:55,360 --> 00:03:57,680 Speaker 1: the road and actually higher rates. So that's a big 89 00:03:57,720 --> 00:03:59,600 Speaker 1: piece of the puzzle because that's been one hundred and 90 00:03:59,600 --> 00:04:01,080 Speaker 1: twenty five basis point move as well. 91 00:04:01,520 --> 00:04:04,000 Speaker 2: The one thing I would say, though, I mean, I 92 00:04:04,040 --> 00:04:12,360 Speaker 2: agree Jay, Obviously bond yields react to FED expectations and 93 00:04:12,400 --> 00:04:15,560 Speaker 2: the near term path of the economy and inflation. But 94 00:04:15,960 --> 00:04:19,160 Speaker 2: the one thing I would say is, like in October, 95 00:04:19,240 --> 00:04:21,920 Speaker 2: there were other things you could look at to measure 96 00:04:22,600 --> 00:04:26,240 Speaker 2: nervousness about a potential Trump woin, Like you know, puts 97 00:04:26,320 --> 00:04:29,520 Speaker 2: on the TLT that suggested that a bunch of investors 98 00:04:29,560 --> 00:04:33,960 Speaker 2: really wanted to shed long term bond exposure right after 99 00:04:34,040 --> 00:04:36,680 Speaker 2: the election, And this was happening, like you know, those 100 00:04:36,680 --> 00:04:40,040 Speaker 2: were going up as Trump's pulling odds were going up. 101 00:04:40,080 --> 00:04:42,560 Speaker 2: So I feel like there are other things that suggest 102 00:04:42,720 --> 00:04:46,120 Speaker 2: some of this nervousness is like secular in the long end. 103 00:04:46,600 --> 00:04:50,400 Speaker 2: But anyway, the thing I wanted to ask, Jobs Day 104 00:04:50,520 --> 00:04:54,440 Speaker 2: is coming up, So we're recording this on Thursday, January ninth. 105 00:04:54,640 --> 00:04:58,800 Speaker 2: The bond market is actually off early today for Carter's funeral. 106 00:04:59,360 --> 00:05:02,760 Speaker 2: But how big a deal is the bond market reaction 107 00:05:02,960 --> 00:05:05,479 Speaker 2: gonna be to the Job's Day, Like if we're debating 108 00:05:05,520 --> 00:05:09,680 Speaker 2: whether this is some secular, maybe politically related change versus 109 00:05:09,680 --> 00:05:12,880 Speaker 2: something about the FED and the path of the economy 110 00:05:12,880 --> 00:05:15,320 Speaker 2: and inflation, it feels like jobs are going to be 111 00:05:15,320 --> 00:05:16,159 Speaker 2: a big factor here. 112 00:05:16,640 --> 00:05:18,440 Speaker 1: I think they absolutely are, And I think it depends 113 00:05:18,440 --> 00:05:20,839 Speaker 1: on which part of the term structure you're talking about 114 00:05:21,279 --> 00:05:23,440 Speaker 1: because what's been interesting in this move is that the 115 00:05:23,480 --> 00:05:26,880 Speaker 1: front end has remained tracy, really well anchored. Right I 116 00:05:26,880 --> 00:05:29,520 Speaker 1: think it's because the FED has been asymmetrically dubvish in 117 00:05:29,560 --> 00:05:33,440 Speaker 1: its reaction function. Right now, even with what happened in December, 118 00:05:33,480 --> 00:05:35,800 Speaker 1: with the dots showing only two cuts for next year, 119 00:05:36,279 --> 00:05:39,080 Speaker 1: the FED and aggregate is talking about cutting further, albeit 120 00:05:39,120 --> 00:05:41,960 Speaker 1: at a slower pace, or just going on hold. Nowhere 121 00:05:41,960 --> 00:05:44,960 Speaker 1: in the discussion is hikes, and that's why the money 122 00:05:44,960 --> 00:05:46,920 Speaker 1: market curve, even though we're pricing in few er eases, 123 00:05:46,960 --> 00:05:50,839 Speaker 1: is still inverted. I think that could start to change 124 00:05:50,880 --> 00:05:52,880 Speaker 1: if you see the labor markets start to tighten again. 125 00:05:52,920 --> 00:05:55,039 Speaker 1: So if the unemployment rate starts to come back down, 126 00:05:55,120 --> 00:05:57,240 Speaker 1: that could be meaningful for repricing the front end in 127 00:05:57,279 --> 00:06:00,640 Speaker 1: the opposite direction. But at the same time, even though 128 00:06:00,640 --> 00:06:02,280 Speaker 1: the labor markets are not as weak as that we 129 00:06:02,360 --> 00:06:05,120 Speaker 1: perceive them to be. Back in August and September, there 130 00:06:05,160 --> 00:06:07,640 Speaker 1: has been a steady slowing in private payroll growth. There's 131 00:06:07,680 --> 00:06:11,279 Speaker 1: been a steady slight increase in the unemployment rate, which 132 00:06:11,320 --> 00:06:13,320 Speaker 1: tells you that the demand for labor is moderating. And 133 00:06:13,360 --> 00:06:15,039 Speaker 1: if you get another sense of that, tomorrow, and I 134 00:06:15,040 --> 00:06:17,360 Speaker 1: think consensus is one hundred and sixty k with the 135 00:06:17,440 --> 00:06:19,520 Speaker 1: unemployment rate at four to two. We're one fifty four 136 00:06:19,520 --> 00:06:22,200 Speaker 1: to two, so we're very close. I think that probably 137 00:06:22,200 --> 00:06:24,600 Speaker 1: anchors the front end and tells you that it's probably, 138 00:06:24,760 --> 00:06:27,240 Speaker 1: you know, relatively stable. Here. The long end is a 139 00:06:27,240 --> 00:06:29,880 Speaker 1: different story. I think if the pace of employment growth 140 00:06:30,320 --> 00:06:32,760 Speaker 1: is stable, but you see something like the rate come 141 00:06:32,800 --> 00:06:36,000 Speaker 1: down and average hourly earnings firm back up, you know, 142 00:06:36,040 --> 00:06:38,000 Speaker 1: then the markets can price out a bit more of 143 00:06:38,040 --> 00:06:39,599 Speaker 1: the FETE easing that we've got priced in, and it 144 00:06:39,600 --> 00:06:41,440 Speaker 1: becomes a bit more of a parallel shift because that 145 00:06:41,560 --> 00:06:44,400 Speaker 1: justifies higher long term rates as well. So I think 146 00:06:44,440 --> 00:06:47,160 Speaker 1: it's important with some asymmetry that the front end is 147 00:06:47,200 --> 00:06:48,919 Speaker 1: better supported than the rest of the curve. But this 148 00:06:48,920 --> 00:06:50,480 Speaker 1: has been kind of our whole thesis too, and the 149 00:06:50,520 --> 00:06:53,160 Speaker 1: employment data tomorrow is a key piece of that puzzle. 150 00:06:53,279 --> 00:06:56,760 Speaker 3: The ecomomy overall seems very noisy to me right now 151 00:06:56,839 --> 00:06:58,960 Speaker 3: and hard to parse because there do seem to be 152 00:06:59,000 --> 00:07:02,240 Speaker 3: signs like, look, growth continues, no real signs of slipping 153 00:07:02,240 --> 00:07:04,800 Speaker 3: into recession. But on the other hand, there are signs 154 00:07:04,800 --> 00:07:07,400 Speaker 3: that the labor market is softening. Maybe the labor market 155 00:07:07,400 --> 00:07:10,119 Speaker 3: is strengthening. I think it's actually really noisy. Let's zoom 156 00:07:10,120 --> 00:07:13,160 Speaker 3: out those sort of big picture to talk about. I 157 00:07:13,200 --> 00:07:17,520 Speaker 3: guess since September what's happened, So there's been a few developments. 158 00:07:17,520 --> 00:07:20,320 Speaker 3: First of all, just looking at the ten year you know, 159 00:07:20,760 --> 00:07:24,120 Speaker 3: that bottomed at about three point six on September sixteenth. 160 00:07:24,160 --> 00:07:27,000 Speaker 3: It's currently at four point six four six ' five 161 00:07:27,400 --> 00:07:29,480 Speaker 3: as of this second, when we're talking at eight oh 162 00:07:29,560 --> 00:07:33,040 Speaker 3: one a m. January ninth, twenty twenty five. Since then, 163 00:07:33,800 --> 00:07:36,400 Speaker 3: obviously we did have the Trump way in we did, 164 00:07:36,400 --> 00:07:39,040 Speaker 3: we're not going into there are still no signs of 165 00:07:39,080 --> 00:07:42,360 Speaker 3: imminent recession. How would you tell the story basically of 166 00:07:42,480 --> 00:07:46,960 Speaker 3: just what's happened, you know, and explain perhaps the upward 167 00:07:47,000 --> 00:07:50,560 Speaker 3: repricing of that terminal rate since that initial fifty basis point. 168 00:07:50,680 --> 00:07:53,200 Speaker 1: I'm glad you asked that, and I think it's fascinating 169 00:07:53,240 --> 00:07:55,520 Speaker 1: that that trough and yields was a day before the 170 00:07:55,520 --> 00:07:57,720 Speaker 1: FED thing, right, So that was when we were priced 171 00:07:57,760 --> 00:08:00,000 Speaker 1: for maximum dubbishness. 172 00:07:59,680 --> 00:08:02,320 Speaker 3: And so at that point we had seen the unemployment 173 00:08:02,400 --> 00:08:04,960 Speaker 3: rate had been solidly ticking higher in the months before, 174 00:08:05,320 --> 00:08:07,239 Speaker 3: and you could maybe it turned out to be wrong 175 00:08:07,600 --> 00:08:09,480 Speaker 3: but you could at least tell a story then Oh, 176 00:08:09,520 --> 00:08:11,400 Speaker 3: this looks like what happens before recession. 177 00:08:11,480 --> 00:08:13,360 Speaker 1: Yeah, And it wasn't just the unemployment rate, because I 178 00:08:13,360 --> 00:08:15,440 Speaker 1: think it's tough to disentangle what's happening with the rate 179 00:08:15,440 --> 00:08:18,760 Speaker 1: because there's obviously supply side factors going on there. But 180 00:08:18,880 --> 00:08:22,040 Speaker 1: the pace of private payroll growth had accelerated. 181 00:08:21,600 --> 00:08:22,520 Speaker 3: US sharp as well. 182 00:08:22,560 --> 00:08:24,280 Speaker 1: So that was a big one with what the July 183 00:08:24,360 --> 00:08:27,120 Speaker 1: and August data showed. So I think since then, first, 184 00:08:27,200 --> 00:08:30,240 Speaker 1: it's what the Fed did when they went fifty. I'm 185 00:08:30,280 --> 00:08:32,280 Speaker 1: not going to sort of toot our own horn, but 186 00:08:32,320 --> 00:08:34,760 Speaker 1: Mike Fole, my colleague in our chief US economis, I think, 187 00:08:34,800 --> 00:08:37,240 Speaker 1: was one of the few calling for a fifty. And 188 00:08:37,320 --> 00:08:39,120 Speaker 1: I think that was a surprise of the markets because 189 00:08:39,160 --> 00:08:42,120 Speaker 1: it showed the Fed's hand with respect to its reaction function. 190 00:08:42,280 --> 00:08:45,840 Speaker 1: It really valued the labor markets over inflation and did 191 00:08:45,840 --> 00:08:48,800 Speaker 1: not want to sacrifice this soft landing. And again that 192 00:08:48,840 --> 00:08:51,840 Speaker 1: generates better growth out turns and higher inflation in the future, 193 00:08:51,880 --> 00:08:55,080 Speaker 1: which was a turnaround in rates because perversely enough, it 194 00:08:55,240 --> 00:08:58,480 Speaker 1: requires fewer eases down the road. So that's a big 195 00:08:58,800 --> 00:09:01,160 Speaker 1: dominant driver, and I think we can see that in 196 00:09:01,200 --> 00:09:04,560 Speaker 1: the interim since then, to support this, growth expectations have 197 00:09:04,640 --> 00:09:06,800 Speaker 1: moved up. And just for example, we've got our series 198 00:09:06,840 --> 00:09:09,040 Speaker 1: of forecast revision and disease and our year ahead growth 199 00:09:09,080 --> 00:09:11,280 Speaker 1: forecasts over the last three months have gone up something 200 00:09:11,400 --> 00:09:14,360 Speaker 1: like a percentage point. And right we've come off consecutive 201 00:09:14,360 --> 00:09:16,079 Speaker 1: three percent quarters. It looks like we're running two and 202 00:09:16,080 --> 00:09:17,680 Speaker 1: a half percent right now. So that's a piece of 203 00:09:17,679 --> 00:09:20,320 Speaker 1: the puzzle. The second is, and this is where we'll 204 00:09:20,320 --> 00:09:22,840 Speaker 1: get back to Tracy in term premium, is the change 205 00:09:22,840 --> 00:09:27,400 Speaker 1: in the fiscal expectations because of the reelection of President 206 00:09:27,480 --> 00:09:31,240 Speaker 1: elect Trump. And that is meaningful because we expect the 207 00:09:31,280 --> 00:09:34,720 Speaker 1: TCGA to basically be extended in full and that's going 208 00:09:34,760 --> 00:09:37,079 Speaker 1: to add an additional four trillion to deficits over the 209 00:09:37,160 --> 00:09:39,360 Speaker 1: next decade on a baseline of what I believe was 210 00:09:39,400 --> 00:09:42,559 Speaker 1: about twenty two trillion to begin with. And that matters 211 00:09:43,040 --> 00:09:45,240 Speaker 1: because I think, as we spoke about the last time 212 00:09:45,280 --> 00:09:48,400 Speaker 1: we were here, the budget deficit running at six to 213 00:09:48,400 --> 00:09:50,720 Speaker 1: seven percent of GDP when we're close to full employment 214 00:09:50,760 --> 00:09:53,680 Speaker 1: is highly unusual, and the growth of the treasury market 215 00:09:53,720 --> 00:09:57,720 Speaker 1: is just outstripping demand from its sort of most price 216 00:09:57,760 --> 00:10:01,680 Speaker 1: in sensitive historical investors the FED and US banks and 217 00:10:01,760 --> 00:10:04,760 Speaker 1: foreign official investors. So we've got to find other price 218 00:10:05,000 --> 00:10:08,559 Speaker 1: sensitive investors to underwrite this supply. And when that happens, 219 00:10:08,559 --> 00:10:10,840 Speaker 1: it just requires a higher term premium and higher yields 220 00:10:10,840 --> 00:10:12,920 Speaker 1: and a steeper curve for a given level of policy rates. 221 00:10:12,960 --> 00:10:15,520 Speaker 1: So I think those are the few drivers there. And 222 00:10:15,600 --> 00:10:18,000 Speaker 1: it's a global story. Yes, the US is led the way, 223 00:10:18,480 --> 00:10:33,599 Speaker 1: but it's been happening everywhere as well. 224 00:10:33,679 --> 00:10:36,840 Speaker 2: So back in October, I think I think it was October, 225 00:10:36,920 --> 00:10:39,520 Speaker 2: you had a note where you sort of mentioned your 226 00:10:39,679 --> 00:10:44,760 Speaker 2: former colleague Josh Younger's famous Volfefe index. I think probably 227 00:10:44,800 --> 00:10:47,960 Speaker 2: the only piece of JP Morgan bond research to ever 228 00:10:48,000 --> 00:10:50,680 Speaker 2: make it into New York Magazine's like Hot or Not 229 00:10:51,200 --> 00:10:54,000 Speaker 2: graph at the end of the magazine. You remember that shoe? 230 00:10:54,440 --> 00:10:56,839 Speaker 3: Uh do they still have they still have that hot 231 00:10:56,880 --> 00:10:57,360 Speaker 3: I don't know. 232 00:10:57,320 --> 00:10:58,840 Speaker 2: If they do, but they did when. 233 00:10:58,720 --> 00:11:00,640 Speaker 3: It was first Do you remember that that was a. 234 00:11:00,640 --> 00:11:04,360 Speaker 1: Good hot idea approval matrix? 235 00:11:06,320 --> 00:11:08,920 Speaker 2: Yeah, that's right, and you sort of you mentioned it. 236 00:11:08,960 --> 00:11:11,080 Speaker 2: Are you guys going to be reviving it under the 237 00:11:11,080 --> 00:11:12,040 Speaker 2: Trump administration? 238 00:11:12,640 --> 00:11:16,120 Speaker 1: So I can't comment on things that we intend to research, Tracy, 239 00:11:16,200 --> 00:11:17,880 Speaker 1: But as you said, we talked about it a few 240 00:11:17,880 --> 00:11:19,439 Speaker 1: times in the last few months, and I think it's 241 00:11:19,480 --> 00:11:23,680 Speaker 1: important to understand that during the first Trump administration that 242 00:11:24,880 --> 00:11:29,400 Speaker 1: announcing policy via Twitter or via x right Now or 243 00:11:29,400 --> 00:11:31,880 Speaker 1: truth social as the case may be, was something that 244 00:11:31,920 --> 00:11:37,079 Speaker 1: did actually raise implied rate volatility, and higher rate volatility 245 00:11:37,200 --> 00:11:40,520 Speaker 1: necessitates higher term premium and thus more sticky higher rates. 246 00:11:40,960 --> 00:11:42,960 Speaker 1: So it's something I think in the background that we're 247 00:11:43,000 --> 00:11:45,000 Speaker 1: sort of focused on. And it's funny talk about Josh 248 00:11:45,040 --> 00:11:47,320 Speaker 1: actually was on the phone with him yesterday, and so 249 00:11:47,400 --> 00:11:49,200 Speaker 1: I think this is all kind of coming full circle. 250 00:11:49,240 --> 00:11:50,840 Speaker 1: But I think that's something in the background that we 251 00:11:50,880 --> 00:11:52,480 Speaker 1: need to focus on as well. No doubt. 252 00:11:53,000 --> 00:11:55,760 Speaker 3: Why is this a global story? I get the the 253 00:11:55,920 --> 00:11:58,920 Speaker 3: labor market looks stronger, perhaps than it did six months 254 00:11:58,920 --> 00:12:02,480 Speaker 3: ago or five months ago, but a lot of headlines 255 00:12:02,520 --> 00:12:07,120 Speaker 3: this week about the UK specifically and now the global seat. 256 00:12:07,200 --> 00:12:09,200 Speaker 3: I can ask you UK question, so why is this 257 00:12:09,280 --> 00:12:11,840 Speaker 3: a global story? And maybe tell us something about the UK? 258 00:12:12,200 --> 00:12:15,080 Speaker 1: Yeah, thanks for that, Joe. But I think there's a 259 00:12:15,080 --> 00:12:18,520 Speaker 1: policy story globally that's divergent. Right, So the FED and 260 00:12:18,600 --> 00:12:21,000 Speaker 1: the US isn't a very different spot from rest of world. 261 00:12:21,640 --> 00:12:25,560 Speaker 1: Euro Area ECB is cutting and cutting twenty five until 262 00:12:25,559 --> 00:12:28,040 Speaker 1: it goes into slightly accommodative territory, we think. So there's 263 00:12:28,040 --> 00:12:31,920 Speaker 1: a slightly divergent factor there. BOJ is in the midst 264 00:12:31,920 --> 00:12:32,760 Speaker 1: of normalizing rates. 265 00:12:32,800 --> 00:12:34,120 Speaker 3: The ES rates are going high. 266 00:12:34,160 --> 00:12:36,840 Speaker 1: In the rates are going higher exactly. And then you 267 00:12:36,960 --> 00:12:39,640 Speaker 1: ask about the UK. I think the UK is sort 268 00:12:39,640 --> 00:12:41,880 Speaker 1: of stuck somewhere in between the US and the Euro 269 00:12:41,960 --> 00:12:45,560 Speaker 1: Area because it's got the fiscal issues that we're talking 270 00:12:45,559 --> 00:12:48,080 Speaker 1: about in the US, it's got the sticky inflation that 271 00:12:48,080 --> 00:12:51,160 Speaker 1: we're talking about in the US, but it lacks the 272 00:12:51,240 --> 00:12:54,920 Speaker 1: labor supply and productivity benefits that we've had in the US. 273 00:12:54,960 --> 00:12:56,840 Speaker 1: So you've got a central bank that's kind of getting 274 00:12:56,840 --> 00:13:00,719 Speaker 1: stuck here and can only ease at a somewhat more 275 00:13:00,760 --> 00:13:03,040 Speaker 1: gentle pace. And there's nothing really we can point to 276 00:13:03,080 --> 00:13:06,080 Speaker 1: this week in the UK about the fiscal pressures, but 277 00:13:06,160 --> 00:13:07,840 Speaker 1: they're just there in the background. And it's the same 278 00:13:07,840 --> 00:13:09,480 Speaker 1: way the US has sort of seen that's moved a 279 00:13:09,520 --> 00:13:11,439 Speaker 1: higher rates since we've walked into the new year, that 280 00:13:11,480 --> 00:13:12,760 Speaker 1: they're coming back in full force. 281 00:13:13,200 --> 00:13:16,240 Speaker 3: So just to summarize the sort of core tension, it 282 00:13:16,320 --> 00:13:20,200 Speaker 3: has the same fiscal pressures as the US but it 283 00:13:20,280 --> 00:13:24,280 Speaker 3: doesn't have the same productivity growth as the US. Therefore, 284 00:13:24,320 --> 00:13:28,000 Speaker 3: all that spending is running into a less productive economy 285 00:13:28,640 --> 00:13:31,000 Speaker 3: and that sort of creates that upward moving rates and 286 00:13:31,000 --> 00:13:33,319 Speaker 3: the inflationary pressure. And so far is that the idea. 287 00:13:33,960 --> 00:13:35,880 Speaker 1: It is to an extent, and I think it's also 288 00:13:35,920 --> 00:13:38,600 Speaker 1: more idiosyncratic Joe as well, because look at what happened 289 00:13:38,600 --> 00:13:41,120 Speaker 1: with the UK market. What was it back in September 290 00:13:41,160 --> 00:13:43,840 Speaker 1: October of twenty two when the LDI sell off happened. 291 00:13:44,320 --> 00:13:47,280 Speaker 1: It's a market which, yes it's smaller than the treasury market, 292 00:13:47,720 --> 00:13:50,520 Speaker 1: but it's less liquid, it's more concentrated in its ownership. 293 00:13:50,600 --> 00:13:52,880 Speaker 1: So when you have a market where I think it's 294 00:13:52,920 --> 00:13:55,000 Speaker 1: a bit more concentrated in its ownership than a very 295 00:13:55,040 --> 00:13:57,480 Speaker 1: diffuse set of ownership in the treasury market, you can 296 00:13:57,520 --> 00:14:00,000 Speaker 1: go through these balances of idiosyncrasy where it's hard to 297 00:14:00,040 --> 00:14:03,200 Speaker 1: identify a single driving factor to see what happened with 298 00:14:03,240 --> 00:14:05,760 Speaker 1: this sell off, but it can get exaggerated by those 299 00:14:05,760 --> 00:14:06,520 Speaker 1: factors as well. 300 00:14:06,720 --> 00:14:10,839 Speaker 2: There is also a reflexivity at play here where if 301 00:14:10,920 --> 00:14:13,880 Speaker 2: bond yields are going up, particularly at the long end, 302 00:14:14,600 --> 00:14:17,240 Speaker 2: when the US is planning to do more long issuance 303 00:14:17,640 --> 00:14:20,920 Speaker 2: that means the cost of borrowing is going to go up, 304 00:14:21,040 --> 00:14:24,800 Speaker 2: which maybe increases the fiscal burden, and then yields go 305 00:14:24,960 --> 00:14:27,960 Speaker 2: up even further. Is that the kind of risk that 306 00:14:28,000 --> 00:14:30,360 Speaker 2: we should be thinking about in twenty twenty five. 307 00:14:31,360 --> 00:14:34,280 Speaker 1: I think it's a slow moving train there, Tracy, because 308 00:14:34,320 --> 00:14:37,520 Speaker 1: the average maturity of the US Treasury market debt's about 309 00:14:37,640 --> 00:14:41,120 Speaker 1: six years, So higher rates will definitely lead to higher 310 00:14:41,120 --> 00:14:44,520 Speaker 1: interest expense and will add to the burden. But I 311 00:14:44,560 --> 00:14:47,080 Speaker 1: think a large part of that burden and that increase 312 00:14:47,080 --> 00:14:49,320 Speaker 1: occurred as the FED was raising rates rapidly, and we 313 00:14:49,400 --> 00:14:52,040 Speaker 1: know that T bills are about a twenty percent share 314 00:14:52,080 --> 00:14:53,880 Speaker 1: of total debt outstanding, so there's a fair amount of 315 00:14:53,920 --> 00:14:55,920 Speaker 1: short term deat outstanding, and it's less expensive than it 316 00:14:56,000 --> 00:14:58,520 Speaker 1: was a year ago. So this will continue to feed through, 317 00:14:58,880 --> 00:15:01,320 Speaker 1: but it will be at a very slow rate. So 318 00:15:01,360 --> 00:15:03,440 Speaker 1: I think it's certainly there in the background as well, 319 00:15:03,480 --> 00:15:06,840 Speaker 1: but not as primary or secondary driver as these other 320 00:15:06,880 --> 00:15:08,200 Speaker 1: factors that we've been talking about. 321 00:15:08,480 --> 00:15:12,880 Speaker 3: You know, speaking of policy by Twitter, I don't think 322 00:15:12,920 --> 00:15:17,200 Speaker 3: that Cure Starmer or what's the chancellor's name reeves in 323 00:15:17,240 --> 00:15:21,080 Speaker 3: the UK they're not doing as much posting policy by Twitter, 324 00:15:21,480 --> 00:15:25,360 Speaker 3: but the owner of Twitter is posting a lot about 325 00:15:25,360 --> 00:15:28,440 Speaker 3: the UK these days, so to the extent that there 326 00:15:28,520 --> 00:15:31,920 Speaker 3: is just a lot of noise about the government going on. 327 00:15:32,440 --> 00:15:35,720 Speaker 3: Setting aside everything else, there is a lot of just 328 00:15:35,800 --> 00:15:39,240 Speaker 3: political noise in the UK on top of all the 329 00:15:39,440 --> 00:15:40,800 Speaker 3: sort of core economic stuff. 330 00:15:41,080 --> 00:15:43,560 Speaker 1: And it's not just the UK, Joe, I think this 331 00:15:43,640 --> 00:15:46,560 Speaker 1: fiscal noise is going on everywhere. Right, We're talking about 332 00:15:46,600 --> 00:15:49,080 Speaker 1: the TCGA and the fiscal bird in the US. You're 333 00:15:49,080 --> 00:15:51,960 Speaker 1: talking about fiscal in the UK. Look at what's happened 334 00:15:52,000 --> 00:15:55,000 Speaker 1: with France right with its government falling and they've got 335 00:15:55,000 --> 00:15:57,320 Speaker 1: deficit issues to try and get back out of the 336 00:15:57,680 --> 00:16:00,680 Speaker 1: EDP over the next few years, which seems unlikely. You're 337 00:16:00,720 --> 00:16:03,200 Speaker 1: talking about it in Japan as well. So fiscal and 338 00:16:03,280 --> 00:16:06,960 Speaker 1: supply is a belief, a global story to varying degrees 339 00:16:07,000 --> 00:16:08,600 Speaker 1: across developed markets. Right now. 340 00:16:08,880 --> 00:16:11,040 Speaker 2: You need to do a vall Elon index. 341 00:16:11,120 --> 00:16:15,280 Speaker 3: That's right, vall X Oh vall x is good. The 342 00:16:15,360 --> 00:16:18,040 Speaker 3: volt Yeah, a global VOLA you can have that one. 343 00:16:18,080 --> 00:16:22,120 Speaker 3: A global Blex index, just a measure of social media 344 00:16:22,240 --> 00:16:26,360 Speaker 3: talk around the world relating to fiscal policy. That's a 345 00:16:26,360 --> 00:16:29,280 Speaker 3: free one to break it down my country there on 346 00:16:29,320 --> 00:16:32,040 Speaker 3: that yeah, the volat I'm gonna trade vult, I'm gonna 347 00:16:32,040 --> 00:16:35,080 Speaker 3: trade vall X. I like that idea. What about central 348 00:16:35,120 --> 00:16:38,240 Speaker 3: bank like QT? People I don't know. People don't seem 349 00:16:38,240 --> 00:16:41,160 Speaker 3: to talk about as much about QT, But what about 350 00:16:41,200 --> 00:16:45,240 Speaker 3: the role of central bank asset purchases or sell offs 351 00:16:45,280 --> 00:16:47,120 Speaker 3: in this story or on wines. 352 00:16:47,200 --> 00:16:50,120 Speaker 1: I think I think it's something in the background, right. 353 00:16:50,200 --> 00:16:53,320 Speaker 1: I think back to twenty eighteen when share Pell talked 354 00:16:53,320 --> 00:16:56,240 Speaker 1: about QT and referred to it as watching paint dry, 355 00:16:56,440 --> 00:16:58,440 Speaker 1: and I think it is just sort of going on 356 00:16:58,520 --> 00:17:00,280 Speaker 1: in the background. And of course in the US it's 357 00:17:00,280 --> 00:17:01,880 Speaker 1: at a slower rate than it has been for most 358 00:17:01,880 --> 00:17:04,040 Speaker 1: of the last couple of years. But in our work, 359 00:17:04,840 --> 00:17:07,680 Speaker 1: the Fed's balance sheet as a share of GDP matters 360 00:17:07,680 --> 00:17:10,720 Speaker 1: for rate levels. It matters more for curve slope as well. 361 00:17:10,760 --> 00:17:13,720 Speaker 1: So that's something that's happening in the background, because the 362 00:17:13,720 --> 00:17:16,399 Speaker 1: Fed's balance sheet has been not only shrinking on a 363 00:17:16,440 --> 00:17:19,240 Speaker 1: nominal basis, but shrinking relative to the size of the economy. 364 00:17:19,480 --> 00:17:22,040 Speaker 1: And we found that every one percentage point move relative 365 00:17:22,040 --> 00:17:23,600 Speaker 1: to the size of the US economy has been worth 366 00:17:23,600 --> 00:17:25,560 Speaker 1: a handful of basis points on the yield curve. So 367 00:17:25,960 --> 00:17:28,280 Speaker 1: as it continues to normalize. That is something that's in 368 00:17:28,320 --> 00:17:31,840 Speaker 1: the background also placing steepening pressure on the yield curve. 369 00:17:32,320 --> 00:17:34,600 Speaker 1: And it's of course a global dynamic because you've got 370 00:17:34,640 --> 00:17:36,400 Speaker 1: the ECB, the Bank of England, and now the Bank 371 00:17:36,440 --> 00:17:38,720 Speaker 1: of Japan all doing this as well. And you can 372 00:17:38,720 --> 00:17:41,440 Speaker 1: see it not just in curve slopes globally, but visa 373 00:17:41,480 --> 00:17:43,400 Speaker 1: v swap spreads. I think there's been a story where 374 00:17:43,440 --> 00:17:46,600 Speaker 1: swap spreads until recently have been narrowing globally across the 375 00:17:46,640 --> 00:17:48,800 Speaker 1: DM as well, so you can see the imprints of 376 00:17:48,840 --> 00:17:51,200 Speaker 1: QT there. It's there, but I think it's probably again 377 00:17:51,359 --> 00:17:53,560 Speaker 1: kind of a third order factor when considering the term 378 00:17:53,560 --> 00:17:55,960 Speaker 1: structure of rates in the US and globally as well. 379 00:17:56,119 --> 00:17:58,760 Speaker 2: This might be a weird question, but since we brought 380 00:17:58,840 --> 00:18:01,480 Speaker 2: up QT and earlier you were talking about the need 381 00:18:01,520 --> 00:18:05,480 Speaker 2: to find new buyers for bonds, what exactly can the 382 00:18:05,600 --> 00:18:08,880 Speaker 2: US do if a bunch of traditional buyers like banks 383 00:18:09,080 --> 00:18:12,560 Speaker 2: the FED for the past more than a decade, are 384 00:18:12,600 --> 00:18:16,280 Speaker 2: stepping away from the market other than yields going up, 385 00:18:16,440 --> 00:18:18,720 Speaker 2: is there anything else they can do to market debt 386 00:18:18,760 --> 00:18:21,320 Speaker 2: to the outside world or I don't know even internally 387 00:18:21,600 --> 00:18:23,159 Speaker 2: how banks buy more bonds. 388 00:18:23,920 --> 00:18:26,720 Speaker 1: So it's funny because the Treasury Department can only deal 389 00:18:26,760 --> 00:18:28,720 Speaker 1: with the symptoms and not the root cause. But the 390 00:18:28,760 --> 00:18:31,640 Speaker 1: Treasury and it's sort of cadre of private sector advisors. 391 00:18:31,640 --> 00:18:33,400 Speaker 1: The Tea back have done a lot of strong work 392 00:18:33,440 --> 00:18:36,720 Speaker 1: on this, and there are charge questions that are asked 393 00:18:36,720 --> 00:18:40,240 Speaker 1: at every single we're funding process, and one that was 394 00:18:40,280 --> 00:18:42,040 Speaker 1: asked of the Tea BAC a couple of quarters ago 395 00:18:42,160 --> 00:18:44,800 Speaker 1: is what new products and processes can we open up 396 00:18:44,840 --> 00:18:46,800 Speaker 1: to sort of widen the spectrum of demand. I think 397 00:18:46,800 --> 00:18:49,800 Speaker 1: they're asking this question Tracy for that very reason. And 398 00:18:49,840 --> 00:18:52,240 Speaker 1: two products that were talked about were adding another floater 399 00:18:52,320 --> 00:18:53,719 Speaker 1: at the short end of the curve. There's a lot 400 00:18:53,720 --> 00:18:56,440 Speaker 1: of demand for short duration floating rate product that's latent. 401 00:18:57,080 --> 00:18:59,000 Speaker 1: The other is adding another point on the TIPS curve. 402 00:18:59,080 --> 00:19:01,359 Speaker 1: And the TIPS product has been around for close to 403 00:19:01,400 --> 00:19:03,520 Speaker 1: thirty years right now, but we've only had three points 404 00:19:03,520 --> 00:19:06,200 Speaker 1: on the yield curve. We've added three or four bill points. 405 00:19:06,200 --> 00:19:09,000 Speaker 1: We've added three nominal points. So in order to make 406 00:19:09,040 --> 00:19:12,480 Speaker 1: sure that you're maintaining the TIPS product as a share 407 00:19:12,520 --> 00:19:14,320 Speaker 1: of the treasury market and your commitment to it, you 408 00:19:14,320 --> 00:19:16,840 Speaker 1: can add tips as well. So they're certainly focused on it, 409 00:19:17,240 --> 00:19:19,320 Speaker 1: and that's one way to try and widen the spectrum. 410 00:19:19,320 --> 00:19:22,040 Speaker 1: The other less from the treasury, perhaps more from the 411 00:19:22,080 --> 00:19:25,359 Speaker 1: regulatory side, is thinking about how you make it easier 412 00:19:25,359 --> 00:19:27,879 Speaker 1: to intermediate in the treasury market for banks and dealers 413 00:19:27,880 --> 00:19:30,320 Speaker 1: and own treasury. So there's been a lot of focus 414 00:19:30,359 --> 00:19:33,920 Speaker 1: on potential regulatory developments in the context of Vice Chair 415 00:19:34,200 --> 00:19:37,320 Speaker 1: bars announcement earlier this week, and I think that's something 416 00:19:37,359 --> 00:19:39,119 Speaker 1: that we can think about in the background over the 417 00:19:39,160 --> 00:19:41,800 Speaker 1: medium term. But would just offer that the timeline for 418 00:19:41,840 --> 00:19:45,280 Speaker 1: regulatory reform is probably years to sort of unfold and 419 00:19:45,359 --> 00:19:48,600 Speaker 1: not months, and even when it occurs, I think some 420 00:19:48,640 --> 00:19:51,360 Speaker 1: important points that we've made. The banks aren't leverage constrained 421 00:19:51,440 --> 00:19:54,440 Speaker 1: right now, so bank demand for treasuries is not being 422 00:19:54,520 --> 00:19:58,320 Speaker 1: constrained by leverage ratios. So it's something that could happen 423 00:19:58,359 --> 00:19:59,920 Speaker 1: once again down the line, but it's not inn ishe 424 00:20:00,200 --> 00:20:00,600 Speaker 1: right now? 425 00:20:00,880 --> 00:20:02,680 Speaker 3: Do you have like a fair value here? So again 426 00:20:02,720 --> 00:20:05,600 Speaker 3: we're at like four point sixty four whatever. A lot 427 00:20:05,640 --> 00:20:09,560 Speaker 3: of it seems to be explained by, you know, just 428 00:20:09,600 --> 00:20:13,119 Speaker 3: the sort of overall change in the outlook since September. 429 00:20:13,400 --> 00:20:17,159 Speaker 3: Then there's various reasons for volatility. Maybe Tracy would call 430 00:20:17,200 --> 00:20:22,960 Speaker 3: it the term premium, but obviously more issue in uncertainty, 431 00:20:23,160 --> 00:20:25,479 Speaker 3: higher deficits, etc. Where does that put us? 432 00:20:25,520 --> 00:20:25,840 Speaker 1: Does it? 433 00:20:26,040 --> 00:20:28,800 Speaker 3: Are we around where it quote should be? Like what 434 00:20:28,960 --> 00:20:30,280 Speaker 3: makes sense to you? Or where could it go? 435 00:20:30,560 --> 00:20:32,680 Speaker 1: And it's funny to draw the parallels again, Joe, because 436 00:20:32,680 --> 00:20:34,359 Speaker 1: the last time I was on, we talked about and 437 00:20:34,440 --> 00:20:36,239 Speaker 1: we made the case at that time that ten year 438 00:20:36,320 --> 00:20:38,840 Speaker 1: yields looked about thirty five to forty basis points too 439 00:20:38,920 --> 00:20:41,320 Speaker 1: high relative to that fair value metric. Yeah, and that's 440 00:20:41,320 --> 00:20:45,080 Speaker 1: adjusting for how the market's pricing FED policy, inflation growth, 441 00:20:45,080 --> 00:20:47,320 Speaker 1: and the size of the Fed's balance sheet. We're at 442 00:20:47,359 --> 00:20:49,720 Speaker 1: a similarly high level right now, so the fair value 443 00:20:49,720 --> 00:20:52,600 Speaker 1: would be probably closer to four and a quarter. The 444 00:20:52,720 --> 00:20:56,560 Speaker 1: only thing I'm going to sort of caveat there and 445 00:20:56,600 --> 00:20:58,159 Speaker 1: not to say that we're losing the anchor. That's an 446 00:20:58,160 --> 00:21:01,480 Speaker 1: important valuation framework we have, atchiape Morgan, is that we've 447 00:21:01,480 --> 00:21:03,920 Speaker 1: been trading either at fair value or cheap to fair 448 00:21:04,000 --> 00:21:05,720 Speaker 1: value for the last two to three years. And I 449 00:21:05,720 --> 00:21:08,040 Speaker 1: think it's because in the background we don't have a 450 00:21:08,080 --> 00:21:10,359 Speaker 1: term premium factor in that model, and we have to 451 00:21:10,400 --> 00:21:12,919 Speaker 1: be sensitive to the fact that that is something that's changing. 452 00:21:12,960 --> 00:21:15,880 Speaker 1: So even though we're called it two standard deviations cheap 453 00:21:15,960 --> 00:21:19,360 Speaker 1: right now, my argument is that the propensity for mean 454 00:21:19,400 --> 00:21:21,480 Speaker 1: perversion is probably lower than it's been in the past. 455 00:21:22,600 --> 00:21:24,560 Speaker 2: Joe, are you a term premium convert yet? 456 00:21:25,560 --> 00:21:27,920 Speaker 3: Yeah? Sure, of course sure. 457 00:21:28,000 --> 00:21:30,560 Speaker 2: Hey, I mean say the sentence, say the sentence. 458 00:21:30,600 --> 00:21:34,280 Speaker 1: I believe in the term premium. Now you won't do it. 459 00:21:38,840 --> 00:21:41,960 Speaker 3: Lots More is produced by Carmen Rodriguez and dash El Bennett, 460 00:21:41,960 --> 00:21:44,120 Speaker 3: with help from Moses Onam and kel Brooks. 461 00:21:44,520 --> 00:21:47,679 Speaker 2: Our sound engineer is Blake Maples. Sage Bauman is the 462 00:21:47,720 --> 00:21:49,120 Speaker 2: head of Bloomberg Podcasts. 463 00:21:49,560 --> 00:21:52,919 Speaker 3: Please rate, review, and subscribe to Odd, Lots and Lots 464 00:21:52,920 --> 00:21:55,840 Speaker 3: More on your favorite podcast platforms. 465 00:21:55,560 --> 00:21:58,360 Speaker 2: And remember that Bloomberg subscribers can listen to all our 466 00:21:58,400 --> 00:22:02,480 Speaker 2: podcasts ad free by can connecting through Apple Podcasts. Thanks 467 00:22:02,480 --> 00:22:03,040 Speaker 2: for listening.