WEBVTT - Bloomberg Surveillance TV: May 15, 2025 0:00:02.400 --> 0:00:06.760 Bloomberg Audio Studios, Podcasts, radio News. 0:00:11.600 --> 0:00:15.440 This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along 0:00:15.440 --> 0:00:18.680 with Lisa Bromwitz and Amrie Hortenn. Join us each day 0:00:18.720 --> 0:00:22.239 for insight from the best in markets, economics, and geopolitics 0:00:22.400 --> 0:00:24.880 from our global headquarters in New York City. We are 0:00:24.920 --> 0:00:27.680 live on Bloomberg Television weekday mornings from six to nine 0:00:27.680 --> 0:00:31.280 am Eastern. Subscribe to the podcast on Apple, Spotify or 0:00:31.280 --> 0:00:33.919 anywhere else you listen, and as always on the Bloomberg 0:00:34.000 --> 0:00:35.840 Terminal and the Bloomberg Business App. 0:00:36.479 --> 0:00:39.200 Special guest john He's called Jamie Diamond. He runs JP 0:00:39.320 --> 0:00:42.120 Morgan and I'm delighted to speak to him. Jamie Diamond, 0:00:42.120 --> 0:00:43.000 thank you for joining us. 0:00:43.240 --> 0:00:44.240 It's happy to be here. 0:00:44.360 --> 0:00:46.920 Hey, there's a lot going on. It's trade wars, markets 0:00:47.000 --> 0:00:49.560 up and down. What did you learn in the last month? 0:00:49.840 --> 0:00:53.680 Not much other than we have all this uncertainty, you know, 0:00:53.760 --> 0:00:58.000 some preceded the new administration, like we had large deficits, 0:00:58.720 --> 0:01:00.800 intro rates going up and place going up, and some 0:01:00.920 --> 0:01:03.440 are you know, tariffs and things, and of course the 0:01:03.440 --> 0:01:08.080 geopolitical situation is very tense, very difficult and hard to resolve. 0:01:08.240 --> 0:01:11.360 Okay, so if you forget projections numbers, what's your hunch. 0:01:11.440 --> 0:01:13.039 Is the UYS going to go into a recession or not. 0:01:13.560 --> 0:01:15.920 Look, I'm going to defer to economists who give it 0:01:15.920 --> 0:01:18.839 about a fifty percent chance. I think all these things 0:01:18.880 --> 0:01:22.560 are probably inflationary a little bit more and slowing down 0:01:22.640 --> 0:01:25.080 the economy. If there's a recession, I don't know how 0:01:25.120 --> 0:01:27.160 big it'll be or how long it will last. Hopefully 0:01:27.200 --> 0:01:29.080 we'll avoid it, but I wouldn't take it off to 0:01:29.080 --> 0:01:29.880 the table at this point. 0:01:30.360 --> 0:01:32.520 If you look at you know, the trade war and 0:01:32.560 --> 0:01:36.160 then the somewhat reconciliation between the US and China, does 0:01:36.160 --> 0:01:36.560 it hold. 0:01:38.360 --> 0:01:40.480 I think it's the right thing to do is to 0:01:40.480 --> 0:01:42.760 back off of some of that stuff, you know, to 0:01:42.840 --> 0:01:46.480 have an engage in conversation. I'm grateful they did the 0:01:46.600 --> 0:01:49.720 US UK deal. You know, it's an agreement in principle. 0:01:49.800 --> 0:01:51.559 So you know, there's a lot of one sertaty still 0:01:51.960 --> 0:01:53.920 and there's all of one sturdy still in the China thing. 0:01:53.920 --> 0:01:56.960 But at least we started and obviously calms down the markets. 0:01:57.160 --> 0:01:59.360 That's not the reason to do it, but the markets, 0:01:59.360 --> 0:02:02.640 you know, or something like that. And so you'll tell 0:02:02.760 --> 0:02:05.680 uncertainty to resolve the ninety day triggers a lot of 0:02:05.720 --> 0:02:08.120 these things and hopefully they will be resolved. 0:02:08.400 --> 0:02:09.680 What are your with your complex? 0:02:09.760 --> 0:02:12.919 I don't expect immediate resolution, you know, it's the satisfaction 0:02:13.040 --> 0:02:14.720 of everybody in ninety days. 0:02:14.919 --> 0:02:17.320 But you expect markets to settle from here because we 0:02:17.360 --> 0:02:19.760 have a little bit more of a blueprint or could 0:02:19.840 --> 0:02:22.120 volatility pick back up in any second? 0:02:22.520 --> 0:02:25.519 No, markets are quite unpredictable. I think there's a lot 0:02:25.560 --> 0:02:28.840 of uncertainty out there that you can't discount, you know 0:02:28.880 --> 0:02:30.799 when I you know, war in Ukraine, territor in the 0:02:30.800 --> 0:02:34.200 Middle East, you know, I ran. You know, huge deficits 0:02:34.360 --> 0:02:35.960 are tax bill, which I would like to see a 0:02:36.000 --> 0:02:38.560 good tax bill pass, you know, the terrorists, the reaction 0:02:38.600 --> 0:02:41.760 of country to tariffs. The EU and the UK are 0:02:41.760 --> 0:02:43.519 about to negotiate. I think they have a chance to 0:02:43.560 --> 0:02:47.200 actually develop a great relationship, you know, partially making up 0:02:47.240 --> 0:02:51.119 for you know, the disaster the Brexit became, and so, yeah, 0:02:51.160 --> 0:02:53.560 those those are unsurtgerties. You can't eliminate them because you 0:02:53.600 --> 0:02:53.920 want to. 0:02:54.400 --> 0:02:58.120 But what are your biggest clients saying about this market volatility? 0:02:58.160 --> 0:02:59.680 Have they made money on the back of it? 0:03:01.120 --> 0:03:02.880 Yeah? Some, you know, some doing some don't. 0:03:02.960 --> 0:03:05.880 And you know, volatility volatier would be good or bad 0:03:05.919 --> 0:03:09.840 depending on you know, who's who's facing it. So but 0:03:09.840 --> 0:03:11.960 but I would expect continued volatility. I think it's a 0:03:11.960 --> 0:03:14.000 mistake to think we can go through all the things 0:03:14.000 --> 0:03:16.200 we're going through and the volatility itself will come down. 0:03:16.440 --> 0:03:17.960 Has it been good for JP margin? 0:03:18.160 --> 0:03:18.360 Was there? 0:03:18.639 --> 0:03:19.160 You know trading? 0:03:20.280 --> 0:03:23.720 Yes, because when there's volatility is a very simplistic way 0:03:23.760 --> 0:03:26.680 to look at, spreads gap out and traders make more 0:03:26.680 --> 0:03:29.639 money if there's more volume. So we had both this time, 0:03:29.680 --> 0:03:32.239 more volatilely more volume, because very often you have a 0:03:32.240 --> 0:03:35.400 lot of volatility and spreads gap out there's much less volume. 0:03:35.600 --> 0:03:38.839 So you've seen examples where there's good volatility and there's 0:03:38.840 --> 0:03:40.680 bad Volatilely, this just one happened to be good. The 0:03:40.720 --> 0:03:43.160 next go around may not be so good, Jamie. 0:03:43.200 --> 0:03:45.240 When it comes to financials, I mean, you know a 0:03:45.280 --> 0:03:48.720 lot of I guess non bank entrants are making quite 0:03:48.720 --> 0:03:53.000 a lot of way Citadel Jane Street, is that, you know, 0:03:53.040 --> 0:03:55.000 a concern for the banks shouldn't be a problem for 0:03:55.040 --> 0:03:55.480 the banks. 0:03:55.760 --> 0:03:57.920 I would call it a problem. You know that both clients. 0:03:58.600 --> 0:04:00.920 I'm very capable, you know, but I've always had the 0:04:01.000 --> 0:04:03.240 view there are a lot of competitors out there, and 0:04:03.320 --> 0:04:05.320 you know, all the major banks are back. I think 0:04:05.320 --> 0:04:06.720 that's a good thing for the world. You know, maybe 0:04:06.760 --> 0:04:09.600 not so much for Jamie Morgan. There's you mentioned those two, 0:04:09.600 --> 0:04:12.839 There's Apollo, There's a lot of fintech, some very good ones. 0:04:12.880 --> 0:04:16.000 There's Stripe, there's PayPal. Yeah, my view has always been 0:04:16.000 --> 0:04:19.960 the same. I tell them magic, Assume competition, Assume they're 0:04:19.960 --> 0:04:23.080 coming at you in every angle. Assume they often have 0:04:23.120 --> 0:04:25.800 their own strength, sometimes their own weaknesses. They won't all 0:04:25.839 --> 0:04:27.760 do great, but yeah, I think they're you know, some 0:04:27.760 --> 0:04:29.520 of these people gaining quite a bit of shared parts 0:04:29.520 --> 0:04:31.360 of their business. We still are too, by the way, 0:04:31.560 --> 0:04:33.599 So you know we're in the fight. We're not losing 0:04:33.640 --> 0:04:35.760 out very much. But that doesn't mean you won't lose 0:04:35.800 --> 0:04:37.520 out tomorrow because you're winning today. 0:04:37.839 --> 0:04:38.919 So what do you have to do today? 0:04:38.960 --> 0:04:41.400 How do you see the people that are doing, you know, 0:04:41.520 --> 0:04:43.240 well today doing even better tomorrow. 0:04:43.680 --> 0:04:47.119 It's about us are other people both? It's quality of people. 0:04:47.200 --> 0:04:51.200 You interviewed Pranav. I mean we have exceptional people in investment, 0:04:51.279 --> 0:04:53.640 banking and sales and training, And I say I put 0:04:53.720 --> 0:04:56.560 right next to that technology, but it's related because those 0:04:56.600 --> 0:05:00.000 people deploying technology. So there are thousands of technology project, 0:05:00.640 --> 0:05:03.280 then there are hundreds of AI projects, all of which 0:05:03.320 --> 0:05:06.479 are meant to do a better job for customers, consumer research, 0:05:06.760 --> 0:05:09.360 how we deliver things to people. And if you don't move, 0:05:09.400 --> 0:05:11.640 you know you're going to be left behind. I mean, 0:05:11.680 --> 0:05:13.839 I remind you could be a country or a company. 0:05:13.880 --> 0:05:16.440 You do not have a divine right to success. You know, 0:05:17.120 --> 0:05:19.000 we mentioned as management learnings as I did. You can 0:05:19.040 --> 0:05:21.240 see it on YouTube and all that. But I put 0:05:21.240 --> 0:05:27.280 out to people, look at the bank, look at no Keia, BlackBerry, Sears, Kmart, 0:05:28.040 --> 0:05:31.880 Bearster Lehman, I can chapter of diverse a failed companies 0:05:32.200 --> 0:05:35.440 usually because they're complacent, arrogant. They think they're on the 0:05:35.480 --> 0:05:37.960 top of the top of the world and they're not. 0:05:38.279 --> 0:05:40.640 There are competitors coming everywhere, and you should assume that's 0:05:40.640 --> 0:05:41.160 gonna be true. 0:05:41.560 --> 0:05:43.280 Do you see competitors coming for the US? 0:05:44.000 --> 0:05:47.520 Yeah? Where are Europe? Are about the countries? 0:05:47.560 --> 0:05:48.080 The countries? 0:05:48.160 --> 0:05:49.680 Yeah? 0:05:49.760 --> 0:05:51.599 Yeah, I think Europe. 0:05:52.760 --> 0:05:57.680 Let me just ask. I think Keirstormer, Mers and Macrone. 0:05:57.680 --> 0:06:00.680 I think Macron is one the best political leaders in 0:06:00.720 --> 0:06:04.560 the planet today. Okay, I think here Stormer is smart, devoted. 0:06:05.240 --> 0:06:08.159 They're saying the right things public and privately, all of 0:06:08.160 --> 0:06:12.240 them talking about growing the economies, thank god, pro business, 0:06:12.279 --> 0:06:15.440 pro capital, and they're doing all of that to improve 0:06:15.480 --> 0:06:16.480 the lot of their citizens. 0:06:16.480 --> 0:06:18.040 It's not about what they're doing for JP. 0:06:18.200 --> 0:06:18.560 Morgan. 0:06:19.000 --> 0:06:22.239 And if I was Europe, absolutely i'd want to regret 0:06:22.320 --> 0:06:26.360 live in the UK military, economic, and I would reform 0:06:26.720 --> 0:06:28.840 as best I can all of European things. What they're 0:06:28.839 --> 0:06:32.200 all talking about now, deregulation, simplification, and yeah, they try 0:06:32.240 --> 0:06:34.200 to compe America, and that would be good for America. 0:06:34.440 --> 0:06:36.240 That doesn't make me said, it makes me happy that 0:06:36.240 --> 0:06:38.960 they're strong. And then you know their allies. I want 0:06:39.000 --> 0:06:41.919 our allies to be strong and powerful military and economically. 0:06:42.440 --> 0:06:47.440 Do you worry about US supremacy actually exceptionalism, Yeah, I. 0:06:47.480 --> 0:06:50.320 Look, I never believe here quite that exceptional. I mean, remember, 0:06:51.400 --> 0:06:54.400 America is an unbelievable country with freedoms and the gifts 0:06:54.400 --> 0:06:57.680 of God and you know, water, food, energy, and then 0:06:57.720 --> 0:06:59.880 the gifts of founding fall is called freedom of religion. 0:07:00.200 --> 0:07:03.839 A speech from an enterprise that those dwarf everything, and 0:07:03.880 --> 0:07:05.440 so we still have the most prosperous economy of the 0:07:05.440 --> 0:07:07.800 world's ever seen. But the American shouldn't take it as 0:07:07.800 --> 0:07:10.320 a divine rights to succes either. We slowed ourselves down 0:07:10.360 --> 0:07:14.240 with regulations, stupid bureaucracy. You know, we're not getting We 0:07:14.240 --> 0:07:16.600 haven't done budgets in years, you know, So now we 0:07:16.640 --> 0:07:19.800 shouldn't assume it's forever. I don't think our will still 0:07:19.800 --> 0:07:23.600 be pre eminent, you know, militarily and economically for a 0:07:23.640 --> 0:07:24.680 long time, you know. 0:07:24.720 --> 0:07:26.320 But if we don't do everything right, we can lose 0:07:26.360 --> 0:07:26.640 that too. 0:07:26.760 --> 0:07:29.200 We have twenty thirty forty years from now, and I 0:07:29.200 --> 0:07:33.000 think very important that is America. The goal of America 0:07:33.040 --> 0:07:35.840 should be to help the military alliances of the Western 0:07:35.840 --> 0:07:38.239 world and to help the economic alliance of the Western 0:07:38.280 --> 0:07:40.720 world to walk side by side, like you did in 0:07:41.480 --> 0:07:44.240 victory in Europe day the other day here, to strengthen 0:07:44.280 --> 0:07:46.640 the Western world and hold it together, you know, not 0:07:46.720 --> 0:07:48.720 the cause of the fragments, And so I think we 0:07:48.800 --> 0:07:50.559 have to work hard to make sure that's the case. 0:07:51.200 --> 0:07:53.480 Do you worry about deficits and do you worry actually 0:07:53.480 --> 0:07:55.720 in the US, And do you worry also about the 0:07:55.840 --> 0:07:59.440 US dollar remaining as a reserve currency. Do you think 0:07:59.440 --> 0:08:01.440 Europe has what it takes to try and put the 0:08:01.440 --> 0:08:02.120 euro in there. 0:08:02.240 --> 0:08:04.200 Yeah, so I think I should have mentioned deficits up 0:08:04.200 --> 0:08:05.880 front as being one of the issues you have to deal. 0:08:06.000 --> 0:08:08.120 And I think acid prices are quite high too, and 0:08:08.160 --> 0:08:12.240 those create various risks For America. Our deficit is almost 0:08:12.240 --> 0:08:15.000 two trillion dollars, six or seven percent of GDP, the 0:08:15.080 --> 0:08:17.880 largest peacetime deficit ever, and we have one hundred percent 0:08:17.920 --> 0:08:20.320 debt to GDP. That one hundred percent debt to GDP 0:08:20.440 --> 0:08:25.560 is kind of universal almost around Europe on average. But 0:08:25.600 --> 0:08:28.640 your deficits are much smaller. Does that create a risk. Absolutely, 0:08:28.800 --> 0:08:30.640 it creates a risk of inflation. To me, it creates 0:08:30.640 --> 0:08:34.679 a risk of higher long term rates. Well, you know, 0:08:34.960 --> 0:08:36.520 but America, will the dollar get week? 0:08:36.559 --> 0:08:38.520 I don't know. That's a slightly different thing. 0:08:38.480 --> 0:08:40.160 I think you could see rates go up, the long 0:08:40.200 --> 0:08:42.520 bond rates go up, and you know that might slow 0:08:42.559 --> 0:08:45.280 down to growth, and that's how we you know, kind 0:08:45.320 --> 0:08:46.800 of a stackflation kind of scenario. 0:08:47.160 --> 0:08:49.800 Would you, I mean, you must see President Trump regularly. 0:08:50.080 --> 0:08:52.240 What do you tell what would you tell me? 0:08:52.280 --> 0:08:54.240 I talked to all of us, I talked to all 0:08:54.240 --> 0:08:56.600 of the folks there. I wrote about my Chairman's letter. 0:08:56.840 --> 0:08:57.400 I mean we have. 0:08:57.800 --> 0:08:59.600 First of all, America should worry about things we can 0:08:59.679 --> 0:09:02.320 do batter you know, I call it blue tape. I 0:09:02.320 --> 0:09:04.680 mean our regular we are out of control. We're doing 0:09:04.679 --> 0:09:08.400 the same stuff that they did here that you know virtually, 0:09:08.600 --> 0:09:10.040 you know, the American public and I don't know. The 0:09:10.080 --> 0:09:12.439 GDP per person of Europe has gone from some like 0:09:12.520 --> 0:09:15.560 ninety percent of America's to sixty five percent. And they 0:09:15.640 --> 0:09:20.760 did it to themselves. Rules, regulations, over complication. They started 0:09:20.760 --> 0:09:23.040 the European Union, which I think is a huge accomplishment 0:09:23.040 --> 0:09:23.600 of mankind. 0:09:23.720 --> 0:09:24.560 They got to finish it. 0:09:24.800 --> 0:09:26.559 And here they told you they called the Capital Markets 0:09:26.640 --> 0:09:28.640 Union the Banking Union. You know, they have to create 0:09:28.679 --> 0:09:30.960 a big common market of four and fifty million people. 0:09:32.600 --> 0:09:35.600 And so in America it's the same thing. It's regulations, 0:09:35.640 --> 0:09:38.280 it's permitting. You know, we've overdone. We've wasted a lot 0:09:38.280 --> 0:09:41.400 of money in the green economy. It's getting jobs back, 0:09:41.440 --> 0:09:45.560 it's training in schools, it's fixing immigration. So we've stopped 0:09:45.559 --> 0:09:47.280 at the border. But now we have to have a 0:09:47.320 --> 0:09:50.560 more merit based immigration, more seasonal immigration, you know, things 0:09:50.559 --> 0:09:53.040 that can help the country grow. And then we have 0:09:53.080 --> 0:09:56.120 to work in our military alliances and economic alliances, and 0:09:56.160 --> 0:09:58.439 that's for the sake of the future free and democratic role. 0:09:58.920 --> 0:09:59.559 So on the. 0:09:59.520 --> 0:10:02.960 Economic lines, is there a concern that actually certain countries 0:10:03.080 --> 0:10:07.040 in Europe or elsewhere will choose non US bank for bondifferences, 0:10:07.160 --> 0:10:11.040 will choose non US asset managers to manage their pensions. 0:10:11.360 --> 0:10:12.880 Yeah, there'll be a little of that, you know. I mean, 0:10:12.920 --> 0:10:15.480 you know, we irritate a lot of people, so I 0:10:15.520 --> 0:10:17.440 wrote into them. They say, you know, like they're not 0:10:17.480 --> 0:10:20.400 buying our you know, Kentucky bourbon or stuff like that. 0:10:20.559 --> 0:10:22.240 There'll be some of that, And I. 0:10:22.160 --> 0:10:24.520 Think it's perfectly reasonable for you know, I spoke to 0:10:24.559 --> 0:10:27.400 a lot of investors here. They're thinking about the ass 0:10:27.480 --> 0:10:30.439 allocation of the Ied States, Well, they diminished it. Possibly, 0:10:31.679 --> 0:10:34.520 is America a bad investment destination. No, if you're going 0:10:34.559 --> 0:10:36.679 to take all of your money and put it in 0:10:36.720 --> 0:10:39.320 one country, it would still be America. I mean, it's 0:10:39.360 --> 0:10:41.280 still the most prosperous nation of the planet. It's got 0:10:41.320 --> 0:10:43.720 the best military in the planet, It's got huge amounts 0:10:43.720 --> 0:10:48.480 of immigrant innovation. People are catching up. That's a good thing. 0:10:48.559 --> 0:10:51.880 You know, China's doing some very good innovation and medical 0:10:51.920 --> 0:10:54.080 and AI and we should assume they're continue to do that. 0:10:54.200 --> 0:10:57.160 But America still got the best our gdpeople versus eighty 0:10:57.160 --> 0:11:00.400 five thousand dollars, you know, China's fifteen thousand dollars. We 0:11:00.520 --> 0:11:03.439 have the ashamed about we should fix our problems because 0:11:03.440 --> 0:11:05.120 we could grow a lot faster, which help all of 0:11:05.120 --> 0:11:05.800 our citizens. 0:11:06.000 --> 0:11:08.440 But if you put too many tariffs and actually too 0:11:08.520 --> 0:11:11.440 much uncertainty, does that not squander actually a lot of 0:11:11.440 --> 0:11:12.080 the assets that that. 0:11:12.080 --> 0:11:14.200 You answer me, I think they're doing the right thing now, 0:11:14.200 --> 0:11:16.200 which is the back off of it. Let you know, 0:11:16.320 --> 0:11:19.440 the Secretary of Treasury do the hard work of figuring 0:11:19.440 --> 0:11:21.840 out what's the right thing to do. If they're unfair 0:11:21.880 --> 0:11:23.840 trade things, do something about it, you know. 0:11:23.880 --> 0:11:25.040 But they have backed off. 0:11:24.920 --> 0:11:28.640 Of specific things and specific industries, and I think that's 0:11:28.640 --> 0:11:30.040 the right thing to do. I think the first thing 0:11:30.160 --> 0:11:33.560 is very large, that everything in everywhere all at once, 0:11:33.920 --> 0:11:36.480 and now they're kind of backing to where I think 0:11:36.480 --> 0:11:39.200 they should be in termally. But even at this level, 0:11:39.240 --> 0:11:41.480 it caused that kind of uncertainty. Even this level, you 0:11:41.520 --> 0:11:44.240 see people holding back on investment and thinking through what 0:11:44.240 --> 0:11:46.520 they want to do, you know, thinking about, you know, 0:11:46.520 --> 0:11:48.480 how much you're gonna put in the United States, And 0:11:48.600 --> 0:11:50.640 I mean, we're gonna be okay, but it is causing 0:11:50.679 --> 0:11:51.479 that uncertainty. 0:11:51.559 --> 0:11:53.360 But we're looking at the president, of course in the 0:11:53.400 --> 0:11:56.480 Middle East, where there were seals that you know, deals 0:11:56.480 --> 0:11:58.040 that were signed and a lot of wall streets. Some 0:11:58.120 --> 0:12:00.160 of your competitors, they are, what's your strategy for the 0:12:00.200 --> 0:12:01.680 Middle East? How much do you want to grow there? 0:12:01.920 --> 0:12:02.920 Well, we grow everywhere. 0:12:02.960 --> 0:12:05.199 I mean, you know, we go country by country and 0:12:05.280 --> 0:12:08.480 we look at you know, we bank country, cities, schools, states, hospitals, 0:12:08.880 --> 0:12:11.800 big companies everywhere. We have a network effect. So when 0:12:11.840 --> 0:12:14.600 we bank Bloomberg, we're banking the United States. We're banking 0:12:14.640 --> 0:12:16.760 you in London, in Paris, we're banking you in Europe, 0:12:16.760 --> 0:12:18.840 We're banking you in the Middle East. That's what we do. 0:12:18.920 --> 0:12:21.680 So almost every one of those countries we're growing. As 0:12:21.720 --> 0:12:25.359 they grow, we grow, we cover more of their institutions. Overseas, 0:12:25.360 --> 0:12:27.600 we're institutional in the United States. We also have a 0:12:27.600 --> 0:12:30.200 consumer and so you know, as you know, we're testing 0:12:30.280 --> 0:12:32.160 consumer and chase UK to them. 0:12:32.400 --> 0:12:35.000 Yeah, and you're growing actually that retail business a lot 0:12:35.000 --> 0:12:35.480 in the UK. 0:12:35.520 --> 0:12:36.240 What's next for that? 0:12:36.640 --> 0:12:38.840 I hope too, We hope to grow more in the UK. 0:12:39.480 --> 0:12:41.760 Add some products, and eventually we already annouced we're going 0:12:41.800 --> 0:12:43.480 to go to Germany. But I think we have a 0:12:43.559 --> 0:12:46.280 chance to build a great digital bank, and we have 0:12:46.360 --> 0:12:49.160 competitive advantages. We have a brand, we have research, we 0:12:49.200 --> 0:12:51.840 have a balance sheet, We've got capabilities we're going to add. 0:12:52.160 --> 0:12:53.800 You know, we're not gonna announce it today. We'd add 0:12:53.800 --> 0:12:56.920 more capabilities over time. So that and then someone like you, 0:12:56.960 --> 0:12:59.200 if you travel the United States and to the UK, 0:12:59.520 --> 0:13:02.040 you're gonna be a move your money between Chase US 0:13:02.120 --> 0:13:05.440 and Chase UK on your phone. So we're add things 0:13:05.440 --> 0:13:07.800 that make your life better as a consumer of our 0:13:07.840 --> 0:13:08.600 banking product. 0:13:09.000 --> 0:13:12.560 You certainly caught some waves in, you know, talking about 0:13:12.559 --> 0:13:14.320 return to the office. I think there might have been 0:13:14.320 --> 0:13:17.200 a little bit swearing at bit there or not. 0:13:17.520 --> 0:13:21.920 People listened, Yeah, full time listen. 0:13:22.280 --> 0:13:24.040 At first of all, I tried, I did emote there. 0:13:24.080 --> 0:13:26.240 I emot you know, people know me, and I don't 0:13:26.240 --> 0:13:26.920 really care about that. 0:13:26.960 --> 0:13:27.679 I don't worry about it. 0:13:28.200 --> 0:13:30.440 But I answered, I want to answer the guy asked 0:13:30.480 --> 0:13:33.840 a legitimate question, and I gave it a very detailed 0:13:33.840 --> 0:13:36.000 answer about why it doesn't work for young people, why 0:13:36.040 --> 0:13:38.280 it doesn't work for management, why it doesn't work for innovation. 0:13:38.840 --> 0:13:41.320 I completely applaud your right to not to want to 0:13:41.520 --> 0:13:43.280 go to the office every day, but you're not going 0:13:43.320 --> 0:13:44.640 to tell JP Moore what to do. 0:13:44.880 --> 0:13:45.839 And I think we. 0:13:45.800 --> 0:13:47.440 Already have ten percent of jobs at home. I'm not 0:13:47.480 --> 0:13:50.160 against work from home. I'm against work from it doesn't work. 0:13:50.360 --> 0:13:51.160 And then of course the. 0:13:51.080 --> 0:13:53.439 Press made a big deal about the petition and all that. 0:13:53.960 --> 0:13:57.360 It was like not even Mosquito. Most of it back 0:13:57.520 --> 0:14:00.600 some people. We've had no additional attrition, you know, we 0:14:00.640 --> 0:14:02.079 had to make some modification, you know, we didn't have 0:14:02.160 --> 0:14:05.000 enough seats in certain areas and will be a better 0:14:05.040 --> 0:14:07.640 company and I think our employees will be happier over time, and. 0:14:07.600 --> 0:14:09.559 The younger people learned the right way. 0:14:09.880 --> 0:14:13.040 It's an apprenticeship system and you can't learn working from 0:14:13.120 --> 0:14:13.640 your basement. 0:14:14.600 --> 0:14:16.959 Jamie Diamond, thank you so much for joining us today. 0:14:16.960 --> 0:14:19.320 That was, of course, the chief executive officer of JP. 0:14:19.160 --> 0:14:32.640 Morgan jim's Ouzer, the president of Apollo Global Management, wenting 0:14:32.680 --> 0:14:34.800 in on the administration's trade regime the last time he 0:14:34.880 --> 0:14:37.640 joined us, saying this globalization is not going to be 0:14:37.720 --> 0:14:39.560 like we have seen it in the past. It is 0:14:39.600 --> 0:14:42.640 a new global world order and place is say for 0:14:42.680 --> 0:14:45.480 the next thirty minutes. Jim's outzer joins us this morning, Jim, 0:14:45.520 --> 0:14:47.760 good morning, Good morning. It's a phrase you used last 0:14:47.760 --> 0:14:49.600 time around that's stuck with both of us. We've been 0:14:49.640 --> 0:14:53.840 repeating it over the last several weeks. Macro paralysis. Can 0:14:53.880 --> 0:14:54.840 you adjust that term? 0:14:54.880 --> 0:14:55.040 Now? 0:14:55.080 --> 0:14:57.400 What phrase would you use to describe this moment? 0:14:58.880 --> 0:15:00.000 First of all, I was going to be here. 0:15:00.320 --> 0:15:03.040 I think I would frame it right now, is a 0:15:03.280 --> 0:15:08.440 macro political pivot the administration, clearly, I agree. I think 0:15:08.480 --> 0:15:13.120 that Monday meeting with the retail executives was a I 0:15:13.160 --> 0:15:14.600 don't want to call it watershed, but it was a 0:15:14.600 --> 0:15:19.640 critical moment for the administration to hear about the challenges 0:15:19.680 --> 0:15:24.480 on the ground of their plan. And the administration certainly 0:15:24.560 --> 0:15:27.160 is not admitted they made a mistake, but they've clearly pivoted. 0:15:28.080 --> 0:15:30.520 And that's not a surprise. And it's not a surprise 0:15:30.640 --> 0:15:34.960 that they're out going around the globe right now trying 0:15:35.000 --> 0:15:38.000 to and successfully inking a lot of deals, a lot 0:15:38.080 --> 0:15:41.040 of MOUs that are non binding. But certainly it's great 0:15:41.080 --> 0:15:45.080 headlines and it's hundreds of billions, if not trillions. But 0:15:45.200 --> 0:15:46.840 so that's where I think, and I think the big 0:15:46.960 --> 0:15:51.200 question now is I'll pull back in the COVID library, 0:15:52.040 --> 0:15:56.360 there's a big gap between confidence sentiment and the results 0:15:57.200 --> 0:16:02.480 and confidence and sentiment is still pretty negative or concerned, 0:16:03.600 --> 0:16:07.080 but the results have been pretty strong, and so there's 0:16:07.120 --> 0:16:10.320 a very if you think about you know, we're all, 0:16:11.600 --> 0:16:15.960 you know, history of the past, and we see signs 0:16:16.000 --> 0:16:18.840 of what we've seen in the past, and pattern recognition 0:16:18.920 --> 0:16:21.760 if you will, and you know, if you input all 0:16:21.800 --> 0:16:24.200 the things that you see right now, you would have 0:16:24.240 --> 0:16:27.480 been saying recession went from thirty percent to seventy eighty percent. 0:16:27.880 --> 0:16:29.800 Now it's probably below fifty percent. 0:16:30.160 --> 0:16:36.040 But the three questions are does the consumer do corporates. 0:16:35.520 --> 0:16:38.000 And countries are they going to be on the V 0:16:38.040 --> 0:16:41.520 shape recovery, the U shape recovery or the L shape recovery. 0:16:42.120 --> 0:16:45.080 Our view it, Apollo is right now that the consumer 0:16:45.160 --> 0:16:48.000 is still pretty strong, a bit of a V shape recovery, 0:16:48.600 --> 0:16:50.880 corporate's a bit of a U shape recovery because a 0:16:50.880 --> 0:16:53.720 lot of CAPEX and I've been traveling around quite a bit, 0:16:53.760 --> 0:16:57.320 and I think the global response is a bit more 0:16:57.440 --> 0:16:59.840 like the L And what you pointed out earlier with 0:17:00.040 --> 0:17:03.400 Amory did with Tim Cook. I am not surprised none 0:17:03.440 --> 0:17:06.119 of US should be surprised that this administration is going 0:17:06.160 --> 0:17:08.840 to put their arm around all these tech titans and 0:17:08.880 --> 0:17:12.840 other leaders and saying come to America. China was not 0:17:12.920 --> 0:17:15.439 the plan. We didn't love the idea of going India, 0:17:15.640 --> 0:17:16.879 come back to the US. 0:17:17.080 --> 0:17:18.480 This is going to be a theme that they're going 0:17:18.520 --> 0:17:19.840 to keep hitting hitting. 0:17:20.119 --> 0:17:22.760 Is there enough of a framework that you're gleaning from 0:17:22.800 --> 0:17:25.960 this administration that's solid to bring deal making back. We've 0:17:25.960 --> 0:17:29.160 seen on the margins some deals being made, some IPOs, 0:17:29.240 --> 0:17:31.360 there are just a few. Is this the beginning? 0:17:31.760 --> 0:17:34.800 Well, I think let's separate the headlines from activity. It's 0:17:34.800 --> 0:17:37.920 been an incredibly active time for folks that have involved 0:17:37.920 --> 0:17:40.440 in the markets. You know, we at Apollo, we opened 0:17:40.480 --> 0:17:43.280 up the IPO market. We brought out Aspen, one of 0:17:43.280 --> 0:17:46.200 our reinsurance for an IPO. We did a multi billion 0:17:46.240 --> 0:17:49.320 dollar deal for a lot of America igt every We 0:17:49.359 --> 0:17:52.800 announced a big merger between New Home and a Land 0:17:52.840 --> 0:17:55.959 and Sea. So there's been a lot of transactions since April. 0:17:55.960 --> 0:17:56.240 Second. 0:17:56.840 --> 0:17:59.960 I know the headlines may show contrary, but there's been 0:18:00.080 --> 0:18:02.240 a tremendous amount of financing and I think it shows 0:18:02.240 --> 0:18:05.119 the depth and breadth of the markets right now because 0:18:05.119 --> 0:18:08.040 of private capital in the equity and the credit world. 0:18:08.080 --> 0:18:11.760 So this idea that the markets shut down, that's actually 0:18:11.800 --> 0:18:15.040 what happened two decades ago. Two decades ago, the high 0:18:15.080 --> 0:18:18.480 yield market would go into periods six, eight, ten weeks 0:18:18.600 --> 0:18:21.800 where there would be no issuance based on the flows 0:18:21.800 --> 0:18:25.320 from retail the old AMG number. So this economy, this 0:18:25.480 --> 0:18:29.680 capital markets is very robust. Obviously a lot of volatility. 0:18:30.119 --> 0:18:32.920 One of the benchmarks in our market would be HyG, 0:18:33.080 --> 0:18:36.640 the high Yield Index, the listed HyG ETF that went 0:18:36.680 --> 0:18:40.080 from basically seventy nine to eighty down to seventy three, 0:18:40.240 --> 0:18:43.560 seventy four, back to seventy nine. It's been a round trip, 0:18:43.840 --> 0:18:47.120 but there's been a tremendous amount of activity underneath the headlines. 0:18:47.240 --> 0:18:49.120 How much do you think this is because people see 0:18:49.119 --> 0:18:53.560 the environment as being brighter than some may worry, And 0:18:53.600 --> 0:18:55.480 how much do you see this as just simply pent 0:18:55.600 --> 0:18:58.320 up demand that's been backed up for a long time. 0:18:58.600 --> 0:19:02.040 There is a sort of sickle move toward industrialization, and 0:19:02.080 --> 0:19:04.320 you have that kind of fundraising that is kind of 0:19:04.320 --> 0:19:06.359 independent of any economic cycle. 0:19:06.720 --> 0:19:10.200 I think the bigger long term trends of massive, massive 0:19:10.240 --> 0:19:13.520 capex the year or two of Cappex Global Industrial Renaissance. 0:19:14.000 --> 0:19:17.199 The demographics every asset class is higher today as we 0:19:17.240 --> 0:19:20.760 sit here this morning than it was on Liberation Day, 0:19:20.840 --> 0:19:24.960 except for treasuries, which have ten years basically thirty basis 0:19:25.000 --> 0:19:28.160 points higher and the thirty year about forty basis points higher, 0:19:28.160 --> 0:19:31.399 about five, fifteen and six percent, respectively. That's telling you 0:19:31.480 --> 0:19:35.000 that folks think that the economic backdrop is not going 0:19:35.040 --> 0:19:37.040 to be a recession. It's going to be slow to 0:19:37.080 --> 0:19:40.159 moderate growth. And that's what you're seeing right now in 0:19:40.200 --> 0:19:43.600 the market. So that's what we're seeing from our companies. 0:19:43.600 --> 0:19:46.520 We're seeing a lot of concern, a lot of handeringing 0:19:46.600 --> 0:19:50.080 about big strategic M and A transactions. I don't think 0:19:50.080 --> 0:19:52.920 you're going to see a massive equity calendar except for 0:19:53.119 --> 0:19:55.880 a few large deals here and there. But the reality 0:19:55.960 --> 0:19:59.080 is companies need to operate, finance, and grow, and they're 0:19:59.119 --> 0:20:02.920 positioning for an environment that the administration's putting forth. 0:20:03.160 --> 0:20:05.400 This is what companies need. Let's spend some time talking 0:20:05.400 --> 0:20:08.239 about what investors need. Never mind the rebound. What did 0:20:08.240 --> 0:20:10.840 you learn from the draw down public versus private? 0:20:11.600 --> 0:20:14.760 Well, what you saw is that the talk I come 0:20:14.800 --> 0:20:16.840 up here a lot and talk about market structure, and 0:20:17.600 --> 0:20:21.320 what you're finding right now is that longer dated capital 0:20:21.480 --> 0:20:24.840 is US and many of our peers have long dated 0:20:24.880 --> 0:20:27.920 insurance assets. Those were the folks that were the most 0:20:27.960 --> 0:20:30.639 active during the marketplace and they were a bit of 0:20:30.680 --> 0:20:32.600 the buffer if you would. You know, we put about 0:20:32.600 --> 0:20:34.960 twenty seven billion to work in the IG market from 0:20:35.000 --> 0:20:37.840 April second to last week. That's on a growth basis 0:20:37.880 --> 0:20:40.760 about net about seventeen eighteen billion. I think in the 0:20:40.880 --> 0:20:45.359 past that participant was not in the market as much, 0:20:45.840 --> 0:20:48.880 and the buffer from the Wall Street Bank trading desk 0:20:48.960 --> 0:20:52.199 taking that balance, I think that we collectively as an 0:20:52.200 --> 0:20:54.159 industry helped out so that was you didn't see as 0:20:54.200 --> 0:20:56.840 much folatileity. There's a lot of cash on the sidelines. 0:20:56.880 --> 0:20:59.640 There's a tremendous amount. And again as you see what's 0:20:59.680 --> 0:21:02.600 going on on right now around the globe with you know, 0:21:02.720 --> 0:21:05.920 the pension assets, DC assets, other assets really trying to 0:21:05.960 --> 0:21:11.120 get long duration, long duration assets against their liabilities, it's 0:21:11.200 --> 0:21:14.040 really really critical. I mean, the one big overhang it's 0:21:14.040 --> 0:21:16.199 still on the market is what's going on in the 0:21:16.200 --> 0:21:19.720 treasury market. You know, certainly if you pivot right now 0:21:19.760 --> 0:21:22.440 to what's going on with the budget issues, in DC. 0:21:23.040 --> 0:21:25.600 It doesn't look like they have a clear path to 0:21:25.680 --> 0:21:28.560 a deal that would be really de leveraging to the 0:21:28.680 --> 0:21:31.240 US over time. Now Best and is saying a lot 0:21:31.240 --> 0:21:34.800 of great things, but treasury rates are higher. And you know, 0:21:35.400 --> 0:21:39.520 as we've been saying, the one real left tail risk 0:21:39.560 --> 0:21:41.680 for this administration is the Liz Trust moment. 0:21:42.480 --> 0:21:43.560 Is that still out there. 0:21:43.880 --> 0:21:46.879 It's not a zero, it's not a big number, but 0:21:47.000 --> 0:21:49.080 it's a left tail risk for this administration. 0:21:49.320 --> 0:21:51.119 Can we ask you what you think that looks like? 0:21:51.400 --> 0:21:53.520 What does a List trust moment look like? In the 0:21:53.520 --> 0:21:54.200 treasury market? 0:21:54.280 --> 0:21:57.000 You know, it's the deepest, most liquid, broadest market in 0:21:57.040 --> 0:21:59.239 the world's and I don't really participate day to day, 0:21:59.280 --> 0:22:02.000 so I'm not it really is. It's a confidence issue, 0:22:02.080 --> 0:22:06.840 and it's when that stream of confidence goes from not 0:22:07.040 --> 0:22:09.800 being substantial to being a little bit more material. And 0:22:10.200 --> 0:22:12.720 I don't know what that number is, but certainly it's 0:22:12.720 --> 0:22:14.119 got to be in the back of the head of 0:22:14.119 --> 0:22:17.720 the administration. And again the prior administration did not really 0:22:17.800 --> 0:22:21.560 extend duration in their liabilities, So there's I think, I 0:22:21.600 --> 0:22:23.399 don't know if it's seven or nine trillion and be 0:22:23.440 --> 0:22:26.000 financing over the next twenty four months. It's a big number, 0:22:26.760 --> 0:22:30.120 but these rates are real. Rates are real in terms 0:22:30.160 --> 0:22:32.399 of where they are right now, So you are finding 0:22:32.440 --> 0:22:35.840 buyers of that paper, but it is a challenge. 0:22:35.840 --> 0:22:38.879 In the backdrop, there is this belief that private credit 0:22:38.920 --> 0:22:42.000 markets offer this ballast, the sort of haven from some 0:22:42.040 --> 0:22:44.199 of the volatility that we're seeing in public markets and 0:22:44.200 --> 0:22:45.359 in particular. 0:22:45.160 --> 0:22:46.360 From the treasury market. 0:22:46.520 --> 0:22:49.199 At the same time, how can you say that private 0:22:49.280 --> 0:22:52.399 debt in particular is really immune to the fluctuations and 0:22:52.440 --> 0:22:55.960 the sucking sound of capital into the treasury market. 0:22:56.320 --> 0:22:57.720 Given all of that issuing, Well. 0:22:57.600 --> 0:22:59.520 I'd say two things, and this is a longer conversation 0:22:59.520 --> 0:23:00.639 that I do want to get into. 0:23:01.040 --> 0:23:03.240 The real rates are higher, and if you can. 0:23:03.160 --> 0:23:06.639 In private credit, private credit, you know, high single digits, 0:23:06.640 --> 0:23:10.000 low double digits on a compounding basis, it's a tremendous 0:23:10.040 --> 0:23:13.200 asset class over a decade or two. I really want 0:23:13.200 --> 0:23:15.320 to spend some time with you both this morning talking 0:23:15.320 --> 0:23:18.760 about you know, these comments about private credit being a bubble. 0:23:19.200 --> 0:23:21.160 You know, that's just a mistaken comment. 0:23:21.320 --> 0:23:24.000 And when you really break it down, as I said before, 0:23:24.600 --> 0:23:28.239 private credit in the traditional manner, the narrow manner, is 0:23:28.280 --> 0:23:31.320 the high ole market. The leverage loan market and now 0:23:31.359 --> 0:23:34.600 the emerging direct lending market. When people talk about a 0:23:35.240 --> 0:23:38.160 credit bubble, it's just not the case. What they are 0:23:38.280 --> 0:23:40.760 talking about is there could be a credit cycle. 0:23:41.480 --> 0:23:44.240 That's that's normal. We haven't had one in a long time. 0:23:44.760 --> 0:23:48.920 But that credit cycle will impact debt and leverage balance sheets, 0:23:49.280 --> 0:23:52.760 high yield leverage loans, and direct lending. It will also 0:23:52.800 --> 0:23:57.600 affect private equity. It'll affect equity multiples. But it's not 0:23:57.680 --> 0:24:00.600 a bubble per se. It's a good old recess and 0:24:00.640 --> 0:24:02.840 a credit cycle. We're going to have one of those. 0:24:03.359 --> 0:24:05.320 It may be pushed out again a year or two, 0:24:05.800 --> 0:24:07.800 but let's not go out there. I think folks that 0:24:07.880 --> 0:24:11.040 are not in private credit or private capital say, oh, 0:24:11.080 --> 0:24:14.400 it's a bubble because they're not involved. But the reality 0:24:14.560 --> 0:24:17.960 is there's lots of opportunities. There's a massive amount of opportunities. 0:24:18.200 --> 0:24:21.400 We were very active last month Boeing decided to spin 0:24:21.440 --> 0:24:24.399 off its aircraft one of its businesses. 0:24:24.760 --> 0:24:27.120 We worked in conjunction with City on. 0:24:27.119 --> 0:24:31.119 It, multi billion dollar deal, a tremendous asset heated auction. 0:24:31.840 --> 0:24:35.280 There's opportunities for real companies, but there will be a 0:24:35.320 --> 0:24:36.040 credit cycle. 0:24:36.359 --> 0:24:38.480 It's always a bubble when you're not invested in it, right. 0:24:38.560 --> 0:24:39.800 I love that our cycle. 0:24:40.200 --> 0:24:42.240 Yeah, basically if you don't like it, it's because you're 0:24:42.280 --> 0:24:43.560 not it in, so too bad for you. 0:24:43.680 --> 0:24:45.719 Jim, we talked about the prospect of a credit cycle. 0:24:45.920 --> 0:24:47.760 How can we have a credit cycle when we're running 0:24:47.760 --> 0:24:51.560 deficits this launch in Washington, Well, I mean. 0:24:51.440 --> 0:24:54.000 As I said before, we've been waiting for those who 0:24:54.040 --> 0:24:58.199 have been professionals in this sector for decades would have 0:24:58.280 --> 0:25:00.720 expected a few things right now, And I've talked about 0:25:00.720 --> 0:25:05.359 pattern recognition. I was here several years ago talking about 0:25:05.800 --> 0:25:08.000 the rate hike and how that would create a tighter 0:25:08.080 --> 0:25:10.840 a period of tighter financial conditions, and many of us 0:25:10.880 --> 0:25:13.720 that were expecting a serious credit cycle, you know, predicted 0:25:13.760 --> 0:25:17.679 something that didn't occur because of the macro backdrop. You know, 0:25:17.960 --> 0:25:21.280 certainly right now is we have a higher rate environment, 0:25:21.359 --> 0:25:23.879 which means a bit of economic strength in. 0:25:23.880 --> 0:25:24.879 The overall economy. 0:25:25.400 --> 0:25:29.760 There always are a number of companies that just have 0:25:29.920 --> 0:25:31.520 too much leverage and are not going to grow out 0:25:31.520 --> 0:25:32.399 of their balance sheets. 0:25:32.520 --> 0:25:33.399 And you're going to see that. 0:25:33.480 --> 0:25:35.879 Last year, the last couple of years, you had actually 0:25:35.920 --> 0:25:39.320 fairly high numbers of restructurings and non investment grade credit. 0:25:39.600 --> 0:25:42.199 It just didn't overwhelm the headlines because of the overall 0:25:42.280 --> 0:25:45.399 returns and the strength of the equity market. But I 0:25:45.440 --> 0:25:48.760 do think there are you know, as I said before here, 0:25:48.680 --> 0:25:50.840 there's a when you look at back in the last 0:25:50.840 --> 0:25:55.560 four or five years in private credit direct lending, a 0:25:55.640 --> 0:26:01.280 lot of the largest sector of financing was technology, enterprise software. 0:26:01.880 --> 0:26:04.760 And I do think that there's a possibility with what's 0:26:04.800 --> 0:26:08.160 going on with AI that many of these companies could 0:26:08.200 --> 0:26:11.880 really have massive impact on their operating business. The renewal 0:26:11.960 --> 0:26:14.960 rates there are seven or eighty ninety ninety five percent 0:26:15.400 --> 0:26:19.119 could plummet dramatically, and I could see a variety of 0:26:19.200 --> 0:26:23.320 challenges in the enterprise software tech space that have been 0:26:23.359 --> 0:26:27.120 a big, big area of private credit. And I think 0:26:27.160 --> 0:26:29.600 there will be those who are not involved will say, aha, 0:26:30.040 --> 0:26:31.760 there was a problem, it's a hoax. 0:26:32.320 --> 0:26:33.119 That's not the case. 0:26:33.280 --> 0:26:36.600 It was just bad companies overlevered that didn't grow out 0:26:36.640 --> 0:26:38.800 of their balance sheet, and that happens every day in 0:26:38.840 --> 0:26:42.119 the equity market in other markets. But you know, again, 0:26:42.520 --> 0:26:46.760 as much as we are a player in the insurance 0:26:46.800 --> 0:26:49.680 balance sheets on safe yield, we also do play in 0:26:49.800 --> 0:26:53.879 that riskier end. And I don't see a massive credit 0:26:53.920 --> 0:26:58.320 cycle happening in twenty five. Certainly we've taken care of 0:26:58.359 --> 0:27:01.399 a lot of the refinancing risk, that refinancing clip that 0:27:01.480 --> 0:27:03.480 was pretty large in twenty six and twenty seven. 0:27:03.800 --> 0:27:04.760 It's been pushed out. 0:27:05.640 --> 0:27:08.719 But we're not seeing although the risk premiums have raised 0:27:09.000 --> 0:27:09.679 have been raised. 0:27:10.720 --> 0:27:12.160 And I will tell you there's a. 0:27:12.240 --> 0:27:15.840 Very large US based retailer based here in New York 0:27:16.080 --> 0:27:21.400 that has undergone a transformational merger. They had a private 0:27:21.440 --> 0:27:23.880 credit solution in front of them, which we were quite 0:27:23.920 --> 0:27:27.000 involved with. They decided to go to the public markets 0:27:27.040 --> 0:27:30.360 and issue a public bond in this safe public markets, 0:27:30.760 --> 0:27:34.080 and that bond today within six months is trading below fifty. 0:27:34.560 --> 0:27:37.480 So again, I think there's a lot of noise about 0:27:38.200 --> 0:27:41.719 risk and reward and various asset classes, but that's our 0:27:41.760 --> 0:27:42.639 view of private credit. 0:27:42.880 --> 0:27:43.399 Just quickly. 0:27:43.800 --> 0:27:47.760 How much could hire long term US yields spur that 0:27:47.840 --> 0:27:50.600 credit cycle. I won't call it a bubble because we 0:27:50.600 --> 0:27:53.080 could talk about what a bubble is or what we 0:27:53.119 --> 0:27:55.800 could see with some sort of just negative price action, 0:27:56.680 --> 0:27:58.879 But do you see that as being a catalyst. 0:27:59.320 --> 0:28:03.679 Well, I think that the overall listen, we having higher 0:28:03.800 --> 0:28:07.000 real rates are good for long term investors to a 0:28:07.040 --> 0:28:10.399 certain degree. They're good for a certain degree until we 0:28:10.480 --> 0:28:14.080 lose confidence in the actual underlying market. Again, the US 0:28:14.160 --> 0:28:17.320 treasure market deepest, most liquid in the world, rates of 0:28:17.400 --> 0:28:19.480 four and a half and five percent with real rates 0:28:19.560 --> 0:28:22.080 right now, pretty strong on a relative basis over the 0:28:22.119 --> 0:28:25.080 last twenty five years, but I'm not seeing that in 0:28:25.080 --> 0:28:26.040 the current zip code. 0:28:26.440 --> 0:28:28.520 Just to wrap it up, biggest opportunity right now for 0:28:28.520 --> 0:28:30.239 you in the team, what do you think it is? 0:28:30.720 --> 0:28:32.040 Well, I think it's a few places. 0:28:32.280 --> 0:28:36.119 I do think the volatility that has taken most people 0:28:36.160 --> 0:28:38.960 on the sidelines and a bit of a paralysis just 0:28:39.120 --> 0:28:41.600 operating day in and day out on the business that 0:28:41.640 --> 0:28:43.560 we do. Right now, we have eight hundred and fifty 0:28:43.560 --> 0:28:47.360 billion of capital doing a lot of refinancing with PE firms. 0:28:47.400 --> 0:28:50.800 There's over two thousand PE situations where they've owned companies 0:28:50.800 --> 0:28:54.360 more than five years. A lot of refinancing there. This 0:28:54.440 --> 0:28:57.080 and the global industrial renaissance is alive and well in 0:28:57.120 --> 0:28:59.920 the US with the delay in deploying the chips at 0:29:00.040 --> 0:29:03.160 a lot of financing on shore of chip manufacturing and 0:29:03.200 --> 0:29:06.680 other assets. I've been traveling around the globe quite a bit, 0:29:07.520 --> 0:29:12.000 you know, Japan is still quite interesting from a insurance perspective, 0:29:12.080 --> 0:29:15.720 from a global wealth perspective, and a Pe perspective. And 0:29:16.280 --> 0:29:18.960 we cannot forget about Europe. I mean, Europe really is 0:29:19.000 --> 0:29:21.640 what's going on there. It's a once in a generation. 0:29:22.160 --> 0:29:24.680 I do believe that there's a variety. When you look 0:29:24.720 --> 0:29:27.760 at a thirty trillion economy in the US twenty four 0:29:27.800 --> 0:29:30.800 trillion in Europe, there's a massive amount of financing to occur. 0:29:30.920 --> 0:29:32.720 You've been traveling too much. It's going to have you back. 0:29:32.760 --> 0:29:33.320 Good to be back. 0:29:33.360 --> 0:29:36.480 Welcome back to New York. Jym's out of Apollo Global Management, Jim, 0:29:36.480 --> 0:29:48.840 Thank you, sir, Thank you. Port of Los Angeles executive 0:29:48.920 --> 0:29:52.120 director Gene Soroka with a word of caution, telling the 0:29:52.160 --> 0:29:54.840 Wall Street Journal quote, even at a thirty percent tariff 0:29:54.880 --> 0:29:57.680 with a ninety day reprieve, it's not going to dramatically 0:29:57.760 --> 0:30:01.680 change what we're seeing now, joins Napama. Jane, welcome back. 0:30:01.920 --> 0:30:02.680 Good to see you. John. 0:30:02.760 --> 0:30:04.920 Tremendous feedback the last time you run, so thank you 0:30:04.920 --> 0:30:06.880 for your time once again, sir, Let's talk about what 0:30:06.960 --> 0:30:09.400 you are seeing now. What do you see now compared 0:30:09.440 --> 0:30:11.440 to what this looked like, say twelve months ago, a 0:30:11.520 --> 0:30:11.920 month ago. 0:30:13.000 --> 0:30:15.880 Last time we visited, I talked about a quick drop 0:30:16.000 --> 0:30:18.120 in cargo, and we saw that last week down by 0:30:18.200 --> 0:30:21.000 more than thirty percent. The balance of the month seems 0:30:21.040 --> 0:30:25.320 to be holding, unfortunately, to be down maybe twenty five 0:30:25.560 --> 0:30:31.080 percent compared to year on year stats. Canceled sailings seventeen 0:30:31.320 --> 0:30:34.440 out of a scheduled eighty still off the books. 0:30:34.760 --> 0:30:37.320 So you've got a twenty to forty day forward look 0:30:37.400 --> 0:30:40.360 just based on shipping times. What leaves China now arrives 0:30:40.400 --> 0:30:43.080 in twenty to forty days. How has that changed in 0:30:43.120 --> 0:30:45.200 the last few days Off the back of let's just 0:30:45.200 --> 0:30:47.920 say the easing tensions over the weekend just last night. 0:30:47.960 --> 0:30:50.520 Talking to some of my friends in Hong Kong and Singapore, 0:30:50.840 --> 0:30:54.480 bookings or reservations have ticked up. But it's going to 0:30:54.520 --> 0:30:58.480 take the liner shipping companies a few weeks to reposition 0:30:58.720 --> 0:31:03.800 vessels in places like and Shanghai, Jahmin Yantien, pick up 0:31:03.880 --> 0:31:06.360 some of the products that have been manufactured and sitting, 0:31:06.720 --> 0:31:09.000 and then another two weeks to get to Los Angeles 0:31:09.080 --> 0:31:12.520 before we try to distribute throughout the country. So while 0:31:12.600 --> 0:31:15.240 we're starting to see some momentum, a lot of what's 0:31:15.280 --> 0:31:18.760 taking place here in the States. Is the finance game. 0:31:19.160 --> 0:31:23.840 Does it make sense at an average of averages thirty 0:31:23.920 --> 0:31:26.640 percent tariff to start bringing in products and what will 0:31:26.680 --> 0:31:29.400 the American consumer's willingness be to buy? 0:31:29.920 --> 0:31:33.000 So Ryan Peterson, a Flexport came out and said, there's 0:31:33.000 --> 0:31:34.880 going to be a shipping boom with all these ships 0:31:34.920 --> 0:31:37.640 coming to the four that have been waiting to come 0:31:38.000 --> 0:31:40.360 to get some clarity on tariffs. It sounds like you disagree. 0:31:40.840 --> 0:31:42.480 Why do you think that it's not going to result 0:31:42.520 --> 0:31:44.600 in a shipping boom to make up for that month 0:31:45.320 --> 0:31:47.120 with the fact that it's going to be more expensive 0:31:47.160 --> 0:31:48.960 to make it, say in the US, rather than just 0:31:49.000 --> 0:31:51.280 pay the thirty percent tariff from China. 0:31:51.560 --> 0:31:53.920 Now there's a lot there, Lisa, As we've talked about before. 0:31:54.240 --> 0:31:56.200 Number one, let's pick up some of the product that's 0:31:56.200 --> 0:32:00.840 already been manufactured sitting on factory floors, warehouses and in containers. 0:32:01.120 --> 0:32:02.280 Get that flow going again. 0:32:02.680 --> 0:32:05.160 The manufacturers in China have got to get their folks 0:32:05.440 --> 0:32:08.920 back to work, and there'll be a considerable look at 0:32:09.000 --> 0:32:12.280 Southeast Asia, albeit at ten percent tariffs, is where we 0:32:12.320 --> 0:32:14.920 can go. But this ninety day reprieve, as you know, 0:32:15.600 --> 0:32:18.320 is not a long runway. That's typically the amount of 0:32:18.360 --> 0:32:21.600 time it takes for a procurement person here in the 0:32:21.760 --> 0:32:24.400 US to put an order in, get the goods made, 0:32:25.000 --> 0:32:27.120 and get them on a ship in Asia. 0:32:27.040 --> 0:32:30.480 Which raises the question, does that ninety day pause do 0:32:30.760 --> 0:32:33.160 enough to make sure that shelves are not empty? Say 0:32:33.680 --> 0:32:35.800 back to school sales period comes around. 0:32:35.840 --> 0:32:37.240 We're cutting it so close. 0:32:37.760 --> 0:32:40.200 Spring fashion has already passed a spy. Now you're talking 0:32:40.240 --> 0:32:44.040 summer fashion. Back to school. May is typically the month 0:32:44.560 --> 0:32:48.080 where purchase orders go in to Asia for the year 0:32:48.200 --> 0:32:51.520 end holidays. So now folks are kind of rolling the 0:32:51.560 --> 0:32:54.440 dice a little bit. Do I buy now at these 0:32:54.520 --> 0:32:56.880 kind of prices? And remember when I say an average 0:32:56.920 --> 0:33:00.440 of averages, not every commodity is a thirty percent tariff. 0:33:00.480 --> 0:33:03.520 There are some that are extremely high compared to that. 0:33:04.040 --> 0:33:07.400 And this is cumulative on top of tariffs that have 0:33:07.520 --> 0:33:10.760 already been put in place. So once again, what's consumer sentiment? 0:33:11.000 --> 0:33:12.800 How much do I buy? And how much stock do 0:33:12.920 --> 0:33:13.520 I get out there? 0:33:13.680 --> 0:33:15.640 This is a huge problem. Buy's down there, what's to buy? 0:33:16.080 --> 0:33:18.680 And producers don't know how much to produce. Even though 0:33:18.720 --> 0:33:20.040 we've moved the tower side of the weekend. 0:33:20.080 --> 0:33:22.880 Once again, so do you avoid the paralysis that many 0:33:22.920 --> 0:33:25.640 people were complaining about when businesses had no idea or 0:33:25.680 --> 0:33:28.560 does this just really ease things on the margins but 0:33:28.680 --> 0:33:30.800 still create some big lapses And that really is going 0:33:30.840 --> 0:33:32.120 to be something that we're not going to see for 0:33:32.160 --> 0:33:32.680 a couple of months. 0:33:32.840 --> 0:33:34.680 Jane, as you look at tritflows, can you describe how 0:33:34.720 --> 0:33:37.320 things have changed where the shipping routes have begun to 0:33:37.480 --> 0:33:39.600 go somewhere else, whether people are starting to think more 0:33:39.640 --> 0:33:42.920 about fright than they aren't just using traditional shipping. Have 0:33:43.040 --> 0:33:45.200 things changed from your vantage point in the last few 0:33:45.240 --> 0:33:46.360 weeks a lot? 0:33:46.920 --> 0:33:49.280 And it's about what do we need just to get 0:33:49.360 --> 0:33:52.360 buy over these weeks and months ahead, And going back 0:33:52.400 --> 0:33:56.000 to twenty eighteen, China was sixty percent of our business 0:33:56.040 --> 0:33:58.520 at the Port of Los Angeles. Then today it's forty 0:33:58.600 --> 0:34:01.880 five percent and drop the folks on the ground in 0:34:01.960 --> 0:34:04.800 Asia are telling me you'll start seeing even more migration 0:34:04.960 --> 0:34:08.839 of manufacturing and sourcing to Southeast Asia beyond. 0:34:08.719 --> 0:34:10.920 Said the likes of Malanchia, the likes of Vietnam. Is 0:34:10.960 --> 0:34:12.960 that why why they didn't finished the Schetz highlights. 0:34:13.280 --> 0:34:15.520 Yes, and of course a lot has been talked about 0:34:15.600 --> 0:34:19.680 India but remember that just last year, China exported about 0:34:19.680 --> 0:34:24.360 two hundred and fifty million container units, India about twenty million. 0:34:24.680 --> 0:34:27.880 There's a question not only about manufacturing the goods that 0:34:27.960 --> 0:34:30.880 will come over here, but also manufacturing the ships, and 0:34:30.960 --> 0:34:32.600 we know that that's been a huge focus of this 0:34:32.680 --> 0:34:35.560 administration and potential fees on ships that have been built 0:34:35.880 --> 0:34:39.719 in places like China. How have some of the proposals 0:34:39.840 --> 0:34:41.720 like that affected your business. 0:34:42.280 --> 0:34:46.000 My first thing is it's another fee. It's another charge 0:34:46.200 --> 0:34:49.520 that the liner shipping companies say will be passed on 0:34:49.680 --> 0:34:53.000 and ultimately get to the factory level or consumer. But 0:34:53.280 --> 0:34:56.319 I'm really pleased with the way the US Trade Representative 0:34:56.440 --> 0:34:59.480 and that office responded. There were more than five hundred 0:34:59.520 --> 0:35:03.160 public come letters two days of hearings in Washington back 0:35:03.200 --> 0:35:05.600 in March to talk about what this fee would mean 0:35:05.800 --> 0:35:08.560 if implemented based on the draft form, which was a 0:35:08.640 --> 0:35:11.640 million and a half bucks for every port call in 0:35:11.719 --> 0:35:14.720 the United States for a ship that was built in China. 0:35:15.160 --> 0:35:18.680 Now it's on a tonnage basis vessel voyage. Albeit additive 0:35:18.760 --> 0:35:20.920 to cost, it's a lot better than it was. So 0:35:21.040 --> 0:35:24.279 the feedback was really heard by the administration. 0:35:24.520 --> 0:35:26.680 I'm listening to everything that you're saying, and it sounds 0:35:26.760 --> 0:35:28.680 like a lot's going to hinge on how much companies 0:35:28.719 --> 0:35:30.200 believe they can pass along higher. 0:35:30.040 --> 0:35:31.040 Prices to consumers. 0:35:31.520 --> 0:35:34.480 What from their perspective, given your conversations with them, do 0:35:34.480 --> 0:35:36.400 you think they'll be looking for in retail sales in 0:35:36.480 --> 0:35:40.000 Walmart earnings to understand just how much power they have 0:35:40.400 --> 0:35:42.520 to increase prices on consumers that yes or tired but 0:35:42.560 --> 0:35:43.160 are still spending. 0:35:43.400 --> 0:35:44.880 I don't know if I can answer all that, but 0:35:44.960 --> 0:35:48.360 what I'm hearing on the ground is Okay, prices go up, tariffs, 0:35:48.480 --> 0:35:50.920 other fees, etc. I'm first going to talk with my 0:35:51.080 --> 0:35:55.040 manufacturer about the cost of those goods, the landed price, 0:35:55.200 --> 0:35:58.239 and we'll see what we can negotiate. Second, how much 0:35:58.320 --> 0:36:00.960 do I gain from efficiencies my company? Can I get 0:36:01.120 --> 0:36:04.319 smarter and sharper a little bit of margin compression maybe, 0:36:04.440 --> 0:36:06.799 but I've got to deliver on that cost saving side. 0:36:07.200 --> 0:36:09.480 And then thirdly, what can I pass on. If I'm 0:36:09.520 --> 0:36:12.360 a part supplier, that cost goes straight to the factory. 0:36:12.640 --> 0:36:15.200 If I'm a retail finished goods person, it goes to 0:36:15.320 --> 0:36:18.279 the consumer. So there's still a lot to be worked out. 0:36:18.719 --> 0:36:22.960 Chances are with what we know, lower inventories, fewer selections, 0:36:23.239 --> 0:36:24.080 and higher prices. 0:36:24.120 --> 0:36:25.800 And this is why Wilmot could be some interest in 0:36:26.120 --> 0:36:27.040 a few minutes time. 0:36:27.160 --> 0:36:29.520 Because they've already said they want to compete on price 0:36:29.640 --> 0:36:32.120 and they're going to take it probably somewhere else. And 0:36:32.200 --> 0:36:34.200 it also points to how much they're going to make 0:36:34.239 --> 0:36:36.879 their suppliers eat as well, so margins all around get 0:36:36.960 --> 0:36:39.600 compressed in order to offset some of what gets passed 0:36:39.600 --> 0:36:42.000 along to consumers. The fact that it comes an hour 0:36:42.040 --> 0:36:44.200 and a half before retail sales gives you a sense 0:36:44.520 --> 0:36:46.800 of the one two punch what companies are doing, and 0:36:46.840 --> 0:36:49.280 then how much appetite consumers have to keep on spending. 0:36:49.400 --> 0:36:51.799 We know how consumers fail. What if they've been doing. 0:36:52.040 --> 0:36:54.640 We'll get resound sales at eight thirty Eastern time numbers 0:36:54.719 --> 0:36:56.799 from Wolma that stuck is not by zero point seven 0:36:56.800 --> 0:36:59.600 percent numbers from Wolma in about five minutes time. I'm 0:36:59.600 --> 0:37:02.600 just shocked, I said route and not route. Been it 0:37:02.680 --> 0:37:03.000 too long? 0:37:03.120 --> 0:37:03.400 Welcome? 0:37:03.480 --> 0:37:05.240 Been it too long? I think that's for you. Jane's 0:37:05.239 --> 0:37:08.040 going to see thanks Joe. Jane Siakaba of the Port 0:37:08.080 --> 0:37:20.279 of Los Angeles and NATA Richardson can take a look 0:37:20.280 --> 0:37:22.160 at things. She joined us from IDP Nada. Welcome to 0:37:22.239 --> 0:37:24.520 the program. Do your best. What's going on here? Give 0:37:24.600 --> 0:37:26.319 us a clear picture of what's happening in the US 0:37:26.400 --> 0:37:28.320 economy in morning. 0:37:28.960 --> 0:37:31.200 It's mixed, and I think that's what you're seeing in 0:37:31.239 --> 0:37:33.759 the data now. If you're looking really for some good 0:37:33.800 --> 0:37:37.200 news on inflation, you found it today and that that 0:37:37.480 --> 0:37:39.440 is the three line. And also if you're looking for 0:37:39.520 --> 0:37:42.239 good news on the labor market, you see it continue. 0:37:42.320 --> 0:37:45.320 So those initial job was claimed still at historical lows. 0:37:45.800 --> 0:37:50.279 That is helpful for an economy built on consumption. But 0:37:50.400 --> 0:37:53.440 when you turn to the consumer and you bring in 0:37:53.560 --> 0:37:57.000 that soft data of consumer being down beat, and we 0:37:57.239 --> 0:38:00.600 know that consumers went out and they stop piled on durables, 0:38:00.960 --> 0:38:05.600 on cars and vehicles. What we're seeing in April as 0:38:06.480 --> 0:38:11.160 a moderation from that stockpilot and maybe starting to really 0:38:11.480 --> 0:38:19.240 reflect new economics vulnerabilities. We left the last FED meeting 0:38:19.400 --> 0:38:22.520 with two risks at our disposal. We left the risk 0:38:22.640 --> 0:38:26.239 of slower growth and higher inflation. And I think that's 0:38:26.320 --> 0:38:29.280 what the markets are really focused on. That higher inflation 0:38:29.480 --> 0:38:32.719 risk looks a little less risky today, but you know, 0:38:33.160 --> 0:38:35.040 every day is a different day. When it comes to 0:38:35.160 --> 0:38:36.279 this economy right now. 0:38:36.360 --> 0:38:38.239 Later and Plase, you brought up that topic because I 0:38:38.239 --> 0:38:40.719 think it's so important. It's been really difficult to try 0:38:40.800 --> 0:38:44.040 and unpack what is just the front loading of purchases 0:38:44.080 --> 0:38:48.760 by consumers versus what is genuine, authentic, durable, sustainable demand. 0:38:48.840 --> 0:38:50.799 And as we work our way through the summer, we've 0:38:50.800 --> 0:38:52.640 been trying to work this out all morning on this program. 0:38:52.760 --> 0:38:55.320 Are we going to see the price increases? Is Walmart 0:38:55.360 --> 0:38:57.640 the one to listen to as they warn this morning 0:38:57.719 --> 0:39:00.319 they can't hold off much longer from here, new how 0:39:00.360 --> 0:39:01.880 do you gauge that at the moment? What do you 0:39:01.960 --> 0:39:02.279 look at? 0:39:03.680 --> 0:39:06.200 I think the large retailer should be listened to. They 0:39:06.280 --> 0:39:09.320 are active in this market, they are seeing the prices 0:39:09.360 --> 0:39:13.839 in real time. So also consumers are important to listen 0:39:13.920 --> 0:39:16.919 to in this moment. When they say they're down beat, 0:39:18.360 --> 0:39:21.880 they mean it. We don't talk a lot about consumer surplus, 0:39:22.040 --> 0:39:26.000 and just really quickly from your econ one oh one class, 0:39:26.040 --> 0:39:28.759 it's the price consumers are willing to pay versus the 0:39:28.880 --> 0:39:32.920 price they're actually paid. But if consumer surplus is being 0:39:33.080 --> 0:39:37.520 eroded because they're seeing higher prices, that means consumers will 0:39:37.560 --> 0:39:41.480 continue to feel down beat, and those feelings are translating 0:39:42.160 --> 0:39:45.560 right now into what a data point we'll see on Friday, 0:39:45.640 --> 0:39:50.279 which is consumer sentiment, and if that continues, it really 0:39:50.360 --> 0:39:53.920 does reflect that higher risk of continued inflation that the 0:39:54.000 --> 0:39:56.560 Federal Reserve warned about a week ago. 0:39:56.800 --> 0:39:58.600 And this is the reason why, NILA, a lot of 0:39:58.680 --> 0:40:01.040 people say, we don't know how relevant any of this 0:40:01.200 --> 0:40:03.040 data is because we don't know whether this is just 0:40:03.120 --> 0:40:05.960 April data and people feeling bad in April. But in May, 0:40:06.040 --> 0:40:07.560 things are going to look a lot better because we 0:40:07.680 --> 0:40:10.000 have a reprieve from some of the tariffs and things 0:40:10.040 --> 0:40:12.919 are looking a little bit easier. The market is rebounding, Mila, 0:40:13.320 --> 0:40:16.239 How do you look at the quickly moving policy and 0:40:16.320 --> 0:40:19.480 then judge the relevance of any of this data that 0:40:19.680 --> 0:40:22.439 is just a snapshot and a very quickly moving movie. 0:40:23.480 --> 0:40:27.040 I look for the stead fast stronghold in the economy, 0:40:27.080 --> 0:40:29.879 and right now that's the labor market. The labor market 0:40:30.000 --> 0:40:33.200 is solid if you look at initial jobless claims, if 0:40:33.239 --> 0:40:35.520 you look at the pace of hiring. Though we see 0:40:35.560 --> 0:40:38.399 it at ADP to be more modest than it has 0:40:38.520 --> 0:40:42.440 been in the past, it's still solid. We're still seeing 0:40:42.600 --> 0:40:45.200 strength and that is the underpinning of the bulk of 0:40:45.280 --> 0:40:50.000 the consumers. So as long as the labor market stays strong, 0:40:51.080 --> 0:40:55.280 stays solid, we still see growth in jobs, we still 0:40:55.360 --> 0:40:59.600 see wages above inflation, then you have an economy that 0:40:59.680 --> 0:41:02.200 could weather some of these higher level risks. 0:41:02.560 --> 0:41:05.440 How much Neila do you see because of that, Because 0:41:05.440 --> 0:41:07.880 of that stability in the labor market. In addition to 0:41:07.960 --> 0:41:10.360 what we are hearing from some of the biggest retailers 0:41:10.400 --> 0:41:12.440 in the world that prices are going to go up, 0:41:12.840 --> 0:41:16.600 how much is a saguflationary like environment becoming increasingly your 0:41:16.640 --> 0:41:18.680 base case for the remainder of this year. 0:41:20.239 --> 0:41:20.879 It's a risk. 0:41:21.600 --> 0:41:22.200 It is a risk. 0:41:22.719 --> 0:41:25.759 I think what we're seeing, you know, collectively in all 0:41:25.840 --> 0:41:29.600 this data is an economy that looks to be slowing 0:41:29.640 --> 0:41:32.600 a bit. I mean, the first quarter contraction is also 0:41:32.640 --> 0:41:35.680 a messy given the high degree of import. So it's 0:41:36.000 --> 0:41:39.360 again a backward looking data point that was based on 0:41:39.400 --> 0:41:43.600 a lot of stockpiling. But looking forward, if growth slows, 0:41:43.880 --> 0:41:47.279 not just because of US consumption and US production, but 0:41:47.400 --> 0:41:50.960 also around the world, if growth is at risk, then 0:41:51.239 --> 0:41:54.160 you might see slower growth and higher prices. So, yes, 0:41:54.880 --> 0:41:59.680 statulation is an increasingly bigger concern. In my mind, it 0:41:59.800 --> 0:42:03.239 was always a concern. I think the dynamics set kept 0:42:03.280 --> 0:42:07.840 inflation down for for a decades going into the pandemic 0:42:07.960 --> 0:42:11.560 have changed dramatically. We don't talk about these longer trends 0:42:11.600 --> 0:42:15.480 that are affecting inflation. So even without trade policy, that 0:42:15.719 --> 0:42:19.240 was always a risk. Now that risk is amplified because 0:42:19.280 --> 0:42:21.440 of some of the uncertainty that we're still seeing on 0:42:21.560 --> 0:42:22.200 the trade side. 0:42:22.360 --> 0:42:24.839 Naba, thanks for jumping on. Thank you very much, Nida 0:42:24.920 --> 0:42:29.320 Richardson there of ADP. This is the Bloomberg Sevenance podcast, 0:42:29.520 --> 0:42:33.560 bringing you the best in markets, economics, angiopolitics. You can 0:42:33.600 --> 0:42:36.359 watch the show live on Bloomberg TV weekday mornings from 0:42:36.400 --> 0:42:39.640 six am to nine am Eastern. Subscribe to the podcast 0:42:39.719 --> 0:42:42.920 on Apple, Spotify or anywhere else you listen, and as 0:42:42.920 --> 0:42:45.839 always on the Bloomberg Terminal and the Bloomberg Business app.