Speaker 1: Bloomberg Audio Studios, Podcasts, radio News.
Speaker 2: This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along
Speaker 2: with Lisa Bromwitz and Amrie Hortenn. Join us each day
Speaker 2: for insight from the best in markets, economics, and geopolitics
Speaker 2: from our global headquarters in New York City. We are
Speaker 2: live on Bloomberg Television weekday mornings from six to nine
Speaker 2: am Eastern. Subscribe to the podcast on Apple, Spotify or
Speaker 2: anywhere else you listen, and as always on the Bloomberg
Speaker 2: Terminal and the Bloomberg Business App.
Speaker 3: Special guest john He's called Jamie Diamond. He runs JP
Speaker 3: Morgan and I'm delighted to speak to him. Jamie Diamond,
Speaker 3: thank you for joining us.
Speaker 4: It's happy to be here.
Speaker 3: Hey, there's a lot going on. It's trade wars, markets
Speaker 3: up and down. What did you learn in the last month?
Speaker 5: Not much other than we have all this uncertainty, you know,
Speaker 5: some preceded the new administration, like we had large deficits,
Speaker 5: intro rates going up and place going up, and some
Speaker 5: are you know, tariffs and things, and of course the
Speaker 5: geopolitical situation is very tense, very difficult and hard to resolve.
Speaker 3: Okay, so if you forget projections numbers, what's your hunch.
Speaker 3: Is the UYS going to go into a recession or not.
Speaker 5: Look, I'm going to defer to economists who give it
Speaker 5: about a fifty percent chance. I think all these things
Speaker 5: are probably inflationary a little bit more and slowing down
Speaker 5: the economy. If there's a recession, I don't know how
Speaker 5: big it'll be or how long it will last. Hopefully
Speaker 5: we'll avoid it, but I wouldn't take it off to
Speaker 5: the table at this point.
Speaker 3: If you look at you know, the trade war and
Speaker 3: then the somewhat reconciliation between the US and China, does
Speaker 3: it hold.
Speaker 5: I think it's the right thing to do is to
Speaker 5: back off of some of that stuff, you know, to
Speaker 5: have an engage in conversation. I'm grateful they did the
Speaker 5: US UK deal. You know, it's an agreement in principle.
Speaker 5: So you know, there's a lot of one sertaty still
Speaker 5: and there's all of one sturdy still in the China thing.
Speaker 5: But at least we started and obviously calms down the markets.
Speaker 5: That's not the reason to do it, but the markets,
Speaker 5: you know, or something like that. And so you'll tell
Speaker 5: uncertainty to resolve the ninety day triggers a lot of
Speaker 5: these things and hopefully they will be resolved.
Speaker 4: What are your with your complex?
Speaker 5: I don't expect immediate resolution, you know, it's the satisfaction
Speaker 5: of everybody in ninety days.
Speaker 3: But you expect markets to settle from here because we
Speaker 3: have a little bit more of a blueprint or could
Speaker 3: volatility pick back up in any second?
Speaker 5: No, markets are quite unpredictable. I think there's a lot
Speaker 5: of uncertainty out there that you can't discount, you know
Speaker 5: when I you know, war in Ukraine, territor in the
Speaker 5: Middle East, you know, I ran. You know, huge deficits
Speaker 5: are tax bill, which I would like to see a
Speaker 5: good tax bill pass, you know, the terrorists, the reaction
Speaker 5: of country to tariffs. The EU and the UK are
Speaker 5: about to negotiate. I think they have a chance to
Speaker 5: actually develop a great relationship, you know, partially making up
Speaker 5: for you know, the disaster the Brexit became, and so, yeah,
Speaker 5: those those are unsurtgerties. You can't eliminate them because you
Speaker 5: want to.
Speaker 3: But what are your biggest clients saying about this market volatility?
Speaker 3: Have they made money on the back of it?
Speaker 4: Yeah? Some, you know, some doing some don't.
Speaker 5: And you know, volatility volatier would be good or bad
Speaker 5: depending on you know, who's who's facing it. So but
Speaker 5: but I would expect continued volatility. I think it's a
Speaker 5: mistake to think we can go through all the things
Speaker 5: we're going through and the volatility itself will come down.
Speaker 3: Has it been good for JP margin?
Speaker 4: Was there?
Speaker 6: You know trading?
Speaker 5: Yes, because when there's volatility is a very simplistic way
Speaker 5: to look at, spreads gap out and traders make more
Speaker 5: money if there's more volume. So we had both this time,
Speaker 5: more volatilely more volume, because very often you have a
Speaker 5: lot of volatility and spreads gap out there's much less volume.
Speaker 5: So you've seen examples where there's good volatility and there's
Speaker 5: bad Volatilely, this just one happened to be good. The
Speaker 5: next go around may not be so good, Jamie.
Speaker 3: When it comes to financials, I mean, you know a
Speaker 3: lot of I guess non bank entrants are making quite
Speaker 3: a lot of way Citadel Jane Street, is that, you know,
Speaker 3: a concern for the banks shouldn't be a problem for
Speaker 3: the banks.
Speaker 5: I would call it a problem. You know that both clients.
Speaker 5: I'm very capable, you know, but I've always had the
Speaker 5: view there are a lot of competitors out there, and
Speaker 5: you know, all the major banks are back. I think
Speaker 5: that's a good thing for the world. You know, maybe
Speaker 5: not so much for Jamie Morgan. There's you mentioned those two,
Speaker 5: There's Apollo, There's a lot of fintech, some very good ones.
Speaker 5: There's Stripe, there's PayPal. Yeah, my view has always been
Speaker 5: the same. I tell them magic, Assume competition, Assume they're
Speaker 5: coming at you in every angle. Assume they often have
Speaker 5: their own strength, sometimes their own weaknesses. They won't all
Speaker 5: do great, but yeah, I think they're you know, some
Speaker 5: of these people gaining quite a bit of shared parts
Speaker 5: of their business. We still are too, by the way,
Speaker 5: So you know we're in the fight. We're not losing
Speaker 5: out very much. But that doesn't mean you won't lose
Speaker 5: out tomorrow because you're winning today.
Speaker 2: So what do you have to do today?
Speaker 3: How do you see the people that are doing, you know,
Speaker 3: well today doing even better tomorrow.
Speaker 5: It's about us are other people both? It's quality of people.
Speaker 5: You interviewed Pranav. I mean we have exceptional people in investment,
Speaker 5: banking and sales and training, And I say I put
Speaker 5: right next to that technology, but it's related because those
Speaker 5: people deploying technology. So there are thousands of technology project,
Speaker 5: then there are hundreds of AI projects, all of which
Speaker 5: are meant to do a better job for customers, consumer research,
Speaker 5: how we deliver things to people. And if you don't move,
Speaker 5: you know you're going to be left behind. I mean,
Speaker 5: I remind you could be a country or a company.
Speaker 5: You do not have a divine right to success. You know,
Speaker 5: we mentioned as management learnings as I did. You can
Speaker 5: see it on YouTube and all that. But I put
Speaker 5: out to people, look at the bank, look at no Keia, BlackBerry, Sears, Kmart,
Speaker 5: Bearster Lehman, I can chapter of diverse a failed companies
Speaker 5: usually because they're complacent, arrogant. They think they're on the
Speaker 5: top of the top of the world and they're not.
Speaker 5: There are competitors coming everywhere, and you should assume that's
Speaker 5: gonna be true.
Speaker 3: Do you see competitors coming for the US?
Speaker 4: Yeah? Where are Europe? Are about the countries?
Speaker 3: The countries?
Speaker 7: Yeah?
Speaker 4: Yeah, I think Europe.
Speaker 5: Let me just ask. I think Keirstormer, Mers and Macrone.
Speaker 5: I think Macron is one the best political leaders in
Speaker 5: the planet today. Okay, I think here Stormer is smart, devoted.
Speaker 5: They're saying the right things public and privately, all of
Speaker 5: them talking about growing the economies, thank god, pro business,
Speaker 5: pro capital, and they're doing all of that to improve
Speaker 5: the lot of their citizens.
Speaker 4: It's not about what they're doing for JP.
Speaker 6: Morgan.
Speaker 5: And if I was Europe, absolutely i'd want to regret
Speaker 5: live in the UK military, economic, and I would reform
Speaker 5: as best I can all of European things. What they're
Speaker 5: all talking about now, deregulation, simplification, and yeah, they try
Speaker 5: to compe America, and that would be good for America.
Speaker 5: That doesn't make me said, it makes me happy that
Speaker 5: they're strong. And then you know their allies. I want
Speaker 5: our allies to be strong and powerful military and economically.
Speaker 3: Do you worry about US supremacy actually exceptionalism, Yeah, I.
Speaker 5: Look, I never believe here quite that exceptional. I mean, remember,
Speaker 5: America is an unbelievable country with freedoms and the gifts
Speaker 5: of God and you know, water, food, energy, and then
Speaker 5: the gifts of founding fall is called freedom of religion.
Speaker 5: A speech from an enterprise that those dwarf everything, and
Speaker 5: so we still have the most prosperous economy of the
Speaker 5: world's ever seen. But the American shouldn't take it as
Speaker 5: a divine rights to succes either. We slowed ourselves down
Speaker 5: with regulations, stupid bureaucracy. You know, we're not getting We
Speaker 5: haven't done budgets in years, you know, So now we
Speaker 5: shouldn't assume it's forever. I don't think our will still
Speaker 5: be pre eminent, you know, militarily and economically for a
Speaker 5: long time, you know.
Speaker 4: But if we don't do everything right, we can lose
Speaker 4: that too.
Speaker 5: We have twenty thirty forty years from now, and I
Speaker 5: think very important that is America. The goal of America
Speaker 5: should be to help the military alliances of the Western
Speaker 5: world and to help the economic alliance of the Western
Speaker 5: world to walk side by side, like you did in
Speaker 5: victory in Europe day the other day here, to strengthen
Speaker 5: the Western world and hold it together, you know, not
Speaker 5: the cause of the fragments, And so I think we
Speaker 5: have to work hard to make sure that's the case.
Speaker 3: Do you worry about deficits and do you worry actually
Speaker 3: in the US, And do you worry also about the
Speaker 3: US dollar remaining as a reserve currency. Do you think
Speaker 3: Europe has what it takes to try and put the
Speaker 3: euro in there.
Speaker 5: Yeah, so I think I should have mentioned deficits up
Speaker 5: front as being one of the issues you have to deal.
Speaker 5: And I think acid prices are quite high too, and
Speaker 5: those create various risks For America. Our deficit is almost
Speaker 5: two trillion dollars, six or seven percent of GDP, the
Speaker 5: largest peacetime deficit ever, and we have one hundred percent
Speaker 5: debt to GDP. That one hundred percent debt to GDP
Speaker 5: is kind of universal almost around Europe on average. But
Speaker 5: your deficits are much smaller. Does that create a risk. Absolutely,
Speaker 5: it creates a risk of inflation. To me, it creates
Speaker 5: a risk of higher long term rates. Well, you know,
Speaker 5: but America, will the dollar get week?
Speaker 4: I don't know. That's a slightly different thing.
Speaker 5: I think you could see rates go up, the long
Speaker 5: bond rates go up, and you know that might slow
Speaker 5: down to growth, and that's how we you know, kind
Speaker 5: of a stackflation kind of scenario.
Speaker 3: Would you, I mean, you must see President Trump regularly.
Speaker 3: What do you tell what would you tell me?
Speaker 5: I talked to all of us, I talked to all
Speaker 5: of the folks there. I wrote about my Chairman's letter.
Speaker 4: I mean we have.
Speaker 5: First of all, America should worry about things we can
Speaker 5: do batter you know, I call it blue tape. I
Speaker 5: mean our regular we are out of control. We're doing
Speaker 5: the same stuff that they did here that you know virtually,
Speaker 5: you know, the American public and I don't know. The
Speaker 5: GDP per person of Europe has gone from some like
Speaker 5: ninety percent of America's to sixty five percent. And they
Speaker 5: did it to themselves. Rules, regulations, over complication. They started
Speaker 5: the European Union, which I think is a huge accomplishment
Speaker 5: of mankind.
Speaker 4: They got to finish it.
Speaker 5: And here they told you they called the Capital Markets
Speaker 5: Union the Banking Union. You know, they have to create
Speaker 5: a big common market of four and fifty million people.
Speaker 5: And so in America it's the same thing. It's regulations,
Speaker 5: it's permitting. You know, we've overdone. We've wasted a lot
Speaker 5: of money in the green economy. It's getting jobs back,
Speaker 5: it's training in schools, it's fixing immigration. So we've stopped
Speaker 5: at the border. But now we have to have a
Speaker 5: more merit based immigration, more seasonal immigration, you know, things
Speaker 5: that can help the country grow. And then we have
Speaker 5: to work in our military alliances and economic alliances, and
Speaker 5: that's for the sake of the future free and democratic role.
Speaker 2: So on the.
Speaker 3: Economic lines, is there a concern that actually certain countries
Speaker 3: in Europe or elsewhere will choose non US bank for bondifferences,
Speaker 3: will choose non US asset managers to manage their pensions.
Speaker 5: Yeah, there'll be a little of that, you know. I mean,
Speaker 5: you know, we irritate a lot of people, so I
Speaker 5: wrote into them. They say, you know, like they're not
Speaker 5: buying our you know, Kentucky bourbon or stuff like that.
Speaker 4: There'll be some of that, And I.
Speaker 5: Think it's perfectly reasonable for you know, I spoke to
Speaker 5: a lot of investors here. They're thinking about the ass
Speaker 5: allocation of the Ied States, Well, they diminished it. Possibly,
Speaker 5: is America a bad investment destination. No, if you're going
Speaker 5: to take all of your money and put it in
Speaker 5: one country, it would still be America. I mean, it's
Speaker 5: still the most prosperous nation of the planet. It's got
Speaker 5: the best military in the planet, It's got huge amounts
Speaker 5: of immigrant innovation. People are catching up. That's a good thing.
Speaker 5: You know, China's doing some very good innovation and medical
Speaker 5: and AI and we should assume they're continue to do that.
Speaker 5: But America still got the best our gdpeople versus eighty
Speaker 5: five thousand dollars, you know, China's fifteen thousand dollars. We
Speaker 5: have the ashamed about we should fix our problems because
Speaker 5: we could grow a lot faster, which help all of
Speaker 5: our citizens.
Speaker 3: But if you put too many tariffs and actually too
Speaker 3: much uncertainty, does that not squander actually a lot of
Speaker 3: the assets that that.
Speaker 5: You answer me, I think they're doing the right thing now,
Speaker 5: which is the back off of it. Let you know,
Speaker 5: the Secretary of Treasury do the hard work of figuring
Speaker 5: out what's the right thing to do. If they're unfair
Speaker 5: trade things, do something about it, you know.
Speaker 4: But they have backed off.
Speaker 5: Of specific things and specific industries, and I think that's
Speaker 5: the right thing to do. I think the first thing
Speaker 5: is very large, that everything in everywhere all at once,
Speaker 5: and now they're kind of backing to where I think
Speaker 5: they should be in termally. But even at this level,
Speaker 5: it caused that kind of uncertainty. Even this level, you
Speaker 5: see people holding back on investment and thinking through what
Speaker 5: they want to do, you know, thinking about, you know,
Speaker 5: how much you're gonna put in the United States, And
Speaker 5: I mean, we're gonna be okay, but it is causing
Speaker 5: that uncertainty.
Speaker 3: But we're looking at the president, of course in the
Speaker 3: Middle East, where there were seals that you know, deals
Speaker 3: that were signed and a lot of wall streets. Some
Speaker 3: of your competitors, they are, what's your strategy for the
Speaker 3: Middle East? How much do you want to grow there?
Speaker 4: Well, we grow everywhere.
Speaker 5: I mean, you know, we go country by country and
Speaker 5: we look at you know, we bank country, cities, schools, states, hospitals,
Speaker 5: big companies everywhere. We have a network effect. So when
Speaker 5: we bank Bloomberg, we're banking the United States. We're banking
Speaker 5: you in London, in Paris, we're banking you in Europe,
Speaker 5: We're banking you in the Middle East. That's what we do.
Speaker 5: So almost every one of those countries we're growing. As
Speaker 5: they grow, we grow, we cover more of their institutions. Overseas,
Speaker 5: we're institutional in the United States. We also have a
Speaker 5: consumer and so you know, as you know, we're testing
Speaker 5: consumer and chase UK to them.
Speaker 3: Yeah, and you're growing actually that retail business a lot
Speaker 3: in the UK.
Speaker 2: What's next for that?
Speaker 4: I hope too, We hope to grow more in the UK.
Speaker 5: Add some products, and eventually we already annouced we're going
Speaker 5: to go to Germany. But I think we have a
Speaker 5: chance to build a great digital bank, and we have
Speaker 5: competitive advantages. We have a brand, we have research, we
Speaker 5: have a balance sheet, We've got capabilities we're going to add.
Speaker 5: You know, we're not gonna announce it today. We'd add
Speaker 5: more capabilities over time. So that and then someone like you,
Speaker 5: if you travel the United States and to the UK,
Speaker 5: you're gonna be a move your money between Chase US
Speaker 5: and Chase UK on your phone. So we're add things
Speaker 5: that make your life better as a consumer of our
Speaker 5: banking product.
Speaker 3: You certainly caught some waves in, you know, talking about
Speaker 3: return to the office. I think there might have been
Speaker 3: a little bit swearing at bit there or not.
Speaker 2: People listened, Yeah, full time listen.
Speaker 5: At first of all, I tried, I did emote there.
Speaker 5: I emot you know, people know me, and I don't
Speaker 5: really care about that.
Speaker 4: I don't worry about it.
Speaker 5: But I answered, I want to answer the guy asked
Speaker 5: a legitimate question, and I gave it a very detailed
Speaker 5: answer about why it doesn't work for young people, why
Speaker 5: it doesn't work for management, why it doesn't work for innovation.
Speaker 5: I completely applaud your right to not to want to
Speaker 5: go to the office every day, but you're not going
Speaker 5: to tell JP Moore what to do.
Speaker 4: And I think we.
Speaker 5: Already have ten percent of jobs at home. I'm not
Speaker 5: against work from home. I'm against work from it doesn't work.
Speaker 4: And then of course the.
Speaker 5: Press made a big deal about the petition and all that.
Speaker 5: It was like not even Mosquito. Most of it back
Speaker 5: some people. We've had no additional attrition, you know, we
Speaker 5: had to make some modification, you know, we didn't have
Speaker 5: enough seats in certain areas and will be a better
Speaker 5: company and I think our employees will be happier over time, and.
Speaker 4: The younger people learned the right way.
Speaker 5: It's an apprenticeship system and you can't learn working from
Speaker 5: your basement.
Speaker 3: Jamie Diamond, thank you so much for joining us today.
Speaker 3: That was, of course, the chief executive officer of JP.
Speaker 2: Morgan jim's Ouzer, the president of Apollo Global Management, wenting
Speaker 2: in on the administration's trade regime the last time he
Speaker 2: joined us, saying this globalization is not going to be
Speaker 2: like we have seen it in the past. It is
Speaker 2: a new global world order and place is say for
Speaker 2: the next thirty minutes. Jim's outzer joins us this morning, Jim,
Speaker 2: good morning, Good morning. It's a phrase you used last
Speaker 2: time around that's stuck with both of us. We've been
Speaker 2: repeating it over the last several weeks. Macro paralysis. Can
Speaker 2: you adjust that term?
Speaker 6: Now?
Speaker 2: What phrase would you use to describe this moment?
Speaker 6: First of all, I was going to be here.
Speaker 8: I think I would frame it right now, is a
Speaker 8: macro political pivot the administration, clearly, I agree. I think
Speaker 8: that Monday meeting with the retail executives was a I
Speaker 8: don't want to call it watershed, but it was a
Speaker 8: critical moment for the administration to hear about the challenges
Speaker 8: on the ground of their plan. And the administration certainly
Speaker 8: is not admitted they made a mistake, but they've clearly pivoted.
Speaker 8: And that's not a surprise. And it's not a surprise
Speaker 8: that they're out going around the globe right now trying
Speaker 8: to and successfully inking a lot of deals, a lot
Speaker 8: of MOUs that are non binding. But certainly it's great
Speaker 8: headlines and it's hundreds of billions, if not trillions. But
Speaker 8: so that's where I think, and I think the big
Speaker 8: question now is I'll pull back in the COVID library,
Speaker 8: there's a big gap between confidence sentiment and the results
Speaker 8: and confidence and sentiment is still pretty negative or concerned,
Speaker 8: but the results have been pretty strong, and so there's
Speaker 8: a very if you think about you know, we're all,
Speaker 8: you know, history of the past, and we see signs
Speaker 8: of what we've seen in the past, and pattern recognition
Speaker 8: if you will, and you know, if you input all
Speaker 8: the things that you see right now, you would have
Speaker 8: been saying recession went from thirty percent to seventy eighty percent.
Speaker 8: Now it's probably below fifty percent.
Speaker 6: But the three questions are does the consumer do corporates.
Speaker 8: And countries are they going to be on the V
Speaker 8: shape recovery, the U shape recovery or the L shape recovery.
Speaker 8: Our view it, Apollo is right now that the consumer
Speaker 8: is still pretty strong, a bit of a V shape recovery,
Speaker 8: corporate's a bit of a U shape recovery because a
Speaker 8: lot of CAPEX and I've been traveling around quite a bit,
Speaker 8: and I think the global response is a bit more
Speaker 8: like the L And what you pointed out earlier with
Speaker 8: Amory did with Tim Cook. I am not surprised none
Speaker 8: of US should be surprised that this administration is going
Speaker 8: to put their arm around all these tech titans and
Speaker 8: other leaders and saying come to America. China was not
Speaker 8: the plan. We didn't love the idea of going India,
Speaker 8: come back to the US.
Speaker 6: This is going to be a theme that they're going
Speaker 6: to keep hitting hitting.
Speaker 1: Is there enough of a framework that you're gleaning from
Speaker 1: this administration that's solid to bring deal making back. We've
Speaker 1: seen on the margins some deals being made, some IPOs,
Speaker 1: there are just a few. Is this the beginning?
Speaker 8: Well, I think let's separate the headlines from activity. It's
Speaker 8: been an incredibly active time for folks that have involved
Speaker 8: in the markets. You know, we at Apollo, we opened
Speaker 8: up the IPO market. We brought out Aspen, one of
Speaker 8: our reinsurance for an IPO. We did a multi billion
Speaker 8: dollar deal for a lot of America igt every We
Speaker 8: announced a big merger between New Home and a Land
Speaker 8: and Sea. So there's been a lot of transactions since April.
Speaker 6: Second.
Speaker 8: I know the headlines may show contrary, but there's been
Speaker 8: a tremendous amount of financing and I think it shows
Speaker 8: the depth and breadth of the markets right now because
Speaker 8: of private capital in the equity and the credit world.
Speaker 8: So this idea that the markets shut down, that's actually
Speaker 8: what happened two decades ago. Two decades ago, the high
Speaker 8: yield market would go into periods six, eight, ten weeks
Speaker 8: where there would be no issuance based on the flows
Speaker 8: from retail the old AMG number. So this economy, this
Speaker 8: capital markets is very robust. Obviously a lot of volatility.
Speaker 8: One of the benchmarks in our market would be HyG,
Speaker 8: the high Yield Index, the listed HyG ETF that went
Speaker 8: from basically seventy nine to eighty down to seventy three,
Speaker 8: seventy four, back to seventy nine. It's been a round trip,
Speaker 8: but there's been a tremendous amount of activity underneath the headlines.
Speaker 1: How much do you think this is because people see
Speaker 1: the environment as being brighter than some may worry, And
Speaker 1: how much do you see this as just simply pent
Speaker 1: up demand that's been backed up for a long time.
Speaker 1: There is a sort of sickle move toward industrialization, and
Speaker 1: you have that kind of fundraising that is kind of
Speaker 1: independent of any economic cycle.
Speaker 8: I think the bigger long term trends of massive, massive
Speaker 8: capex the year or two of Cappex Global Industrial Renaissance.
Speaker 8: The demographics every asset class is higher today as we
Speaker 8: sit here this morning than it was on Liberation Day,
Speaker 8: except for treasuries, which have ten years basically thirty basis
Speaker 8: points higher and the thirty year about forty basis points higher,
Speaker 8: about five, fifteen and six percent, respectively. That's telling you
Speaker 8: that folks think that the economic backdrop is not going
Speaker 8: to be a recession. It's going to be slow to
Speaker 8: moderate growth. And that's what you're seeing right now in
Speaker 8: the market. So that's what we're seeing from our companies.
Speaker 8: We're seeing a lot of concern, a lot of handeringing
Speaker 8: about big strategic M and A transactions. I don't think
Speaker 8: you're going to see a massive equity calendar except for
Speaker 8: a few large deals here and there. But the reality
Speaker 8: is companies need to operate, finance, and grow, and they're
Speaker 8: positioning for an environment that the administration's putting forth.
Speaker 2: This is what companies need. Let's spend some time talking
Speaker 2: about what investors need. Never mind the rebound. What did
Speaker 2: you learn from the draw down public versus private?
Speaker 8: Well, what you saw is that the talk I come
Speaker 8: up here a lot and talk about market structure, and
Speaker 8: what you're finding right now is that longer dated capital
Speaker 8: is US and many of our peers have long dated
Speaker 8: insurance assets. Those were the folks that were the most
Speaker 8: active during the marketplace and they were a bit of
Speaker 8: the buffer if you would. You know, we put about
Speaker 8: twenty seven billion to work in the IG market from
Speaker 8: April second to last week. That's on a growth basis
Speaker 8: about net about seventeen eighteen billion. I think in the
Speaker 8: past that participant was not in the market as much,
Speaker 8: and the buffer from the Wall Street Bank trading desk
Speaker 8: taking that balance, I think that we collectively as an
Speaker 8: industry helped out so that was you didn't see as
Speaker 8: much folatileity. There's a lot of cash on the sidelines.
Speaker 8: There's a tremendous amount. And again as you see what's
Speaker 8: going on on right now around the globe with you know,
Speaker 8: the pension assets, DC assets, other assets really trying to
Speaker 8: get long duration, long duration assets against their liabilities, it's
Speaker 8: really really critical. I mean, the one big overhang it's
Speaker 8: still on the market is what's going on in the
Speaker 8: treasury market. You know, certainly if you pivot right now
Speaker 8: to what's going on with the budget issues, in DC.
Speaker 8: It doesn't look like they have a clear path to
Speaker 8: a deal that would be really de leveraging to the
Speaker 8: US over time. Now Best and is saying a lot
Speaker 8: of great things, but treasury rates are higher. And you know,
Speaker 8: as we've been saying, the one real left tail risk
Speaker 8: for this administration is the Liz Trust moment.
Speaker 6: Is that still out there.
Speaker 8: It's not a zero, it's not a big number, but
Speaker 8: it's a left tail risk for this administration.
Speaker 2: Can we ask you what you think that looks like?
Speaker 2: What does a List trust moment look like? In the
Speaker 2: treasury market?
Speaker 8: You know, it's the deepest, most liquid, broadest market in
Speaker 8: the world's and I don't really participate day to day,
Speaker 8: so I'm not it really is. It's a confidence issue,
Speaker 8: and it's when that stream of confidence goes from not
Speaker 8: being substantial to being a little bit more material. And
Speaker 8: I don't know what that number is, but certainly it's
Speaker 8: got to be in the back of the head of
Speaker 8: the administration. And again the prior administration did not really
Speaker 8: extend duration in their liabilities, So there's I think, I
Speaker 8: don't know if it's seven or nine trillion and be
Speaker 8: financing over the next twenty four months. It's a big number,
Speaker 8: but these rates are real. Rates are real in terms
Speaker 8: of where they are right now, So you are finding
Speaker 8: buyers of that paper, but it is a challenge.
Speaker 1: In the backdrop, there is this belief that private credit
Speaker 1: markets offer this ballast, the sort of haven from some
Speaker 1: of the volatility that we're seeing in public markets and
Speaker 1: in particular.
Speaker 6: From the treasury market.
Speaker 1: At the same time, how can you say that private
Speaker 1: debt in particular is really immune to the fluctuations and
Speaker 1: the sucking sound of capital into the treasury market.
Speaker 2: Given all of that issuing, Well.
Speaker 8: I'd say two things, and this is a longer conversation
Speaker 8: that I do want to get into.
Speaker 6: The real rates are higher, and if you can.
Speaker 8: In private credit, private credit, you know, high single digits,
Speaker 8: low double digits on a compounding basis, it's a tremendous
Speaker 8: asset class over a decade or two. I really want
Speaker 8: to spend some time with you both this morning talking
Speaker 8: about you know, these comments about private credit being a bubble.
Speaker 6: You know, that's just a mistaken comment.
Speaker 8: And when you really break it down, as I said before,
Speaker 8: private credit in the traditional manner, the narrow manner, is
Speaker 8: the high ole market. The leverage loan market and now
Speaker 8: the emerging direct lending market. When people talk about a
Speaker 8: credit bubble, it's just not the case. What they are
Speaker 8: talking about is there could be a credit cycle.
Speaker 6: That's that's normal. We haven't had one in a long time.
Speaker 8: But that credit cycle will impact debt and leverage balance sheets,
Speaker 8: high yield leverage loans, and direct lending. It will also
Speaker 8: affect private equity. It'll affect equity multiples. But it's not
Speaker 8: a bubble per se. It's a good old recess and
Speaker 8: a credit cycle. We're going to have one of those.
Speaker 8: It may be pushed out again a year or two,
Speaker 8: but let's not go out there. I think folks that
Speaker 8: are not in private credit or private capital say, oh,
Speaker 8: it's a bubble because they're not involved. But the reality
Speaker 8: is there's lots of opportunities. There's a massive amount of opportunities.
Speaker 8: We were very active last month Boeing decided to spin
Speaker 8: off its aircraft one of its businesses.
Speaker 6: We worked in conjunction with City on.
Speaker 8: It, multi billion dollar deal, a tremendous asset heated auction.
Speaker 8: There's opportunities for real companies, but there will be a
Speaker 8: credit cycle.
Speaker 2: It's always a bubble when you're not invested in it, right.
Speaker 2: I love that our cycle.
Speaker 1: Yeah, basically if you don't like it, it's because you're
Speaker 1: not it in, so too bad for you.
Speaker 2: Jim, we talked about the prospect of a credit cycle.
Speaker 2: How can we have a credit cycle when we're running
Speaker 2: deficits this launch in Washington, Well, I mean.
Speaker 8: As I said before, we've been waiting for those who
Speaker 8: have been professionals in this sector for decades would have
Speaker 8: expected a few things right now, And I've talked about
Speaker 8: pattern recognition. I was here several years ago talking about
Speaker 8: the rate hike and how that would create a tighter
Speaker 8: a period of tighter financial conditions, and many of us
Speaker 8: that were expecting a serious credit cycle, you know, predicted
Speaker 8: something that didn't occur because of the macro backdrop. You know,
Speaker 8: certainly right now is we have a higher rate environment,
Speaker 8: which means a bit of economic strength in.
Speaker 6: The overall economy.
Speaker 8: There always are a number of companies that just have
Speaker 8: too much leverage and are not going to grow out
Speaker 8: of their balance sheets.
Speaker 6: And you're going to see that.
Speaker 8: Last year, the last couple of years, you had actually
Speaker 8: fairly high numbers of restructurings and non investment grade credit.
Speaker 8: It just didn't overwhelm the headlines because of the overall
Speaker 8: returns and the strength of the equity market. But I
Speaker 8: do think there are you know, as I said before here,
Speaker 8: there's a when you look at back in the last
Speaker 8: four or five years in private credit direct lending, a
Speaker 8: lot of the largest sector of financing was technology, enterprise software.
Speaker 8: And I do think that there's a possibility with what's
Speaker 8: going on with AI that many of these companies could
Speaker 8: really have massive impact on their operating business. The renewal
Speaker 8: rates there are seven or eighty ninety ninety five percent
Speaker 8: could plummet dramatically, and I could see a variety of
Speaker 8: challenges in the enterprise software tech space that have been
Speaker 8: a big, big area of private credit. And I think
Speaker 8: there will be those who are not involved will say, aha,
Speaker 8: there was a problem, it's a hoax.
Speaker 6: That's not the case.
Speaker 8: It was just bad companies overlevered that didn't grow out
Speaker 8: of their balance sheet, and that happens every day in
Speaker 8: the equity market in other markets. But you know, again,
Speaker 8: as much as we are a player in the insurance
Speaker 8: balance sheets on safe yield, we also do play in
Speaker 8: that riskier end. And I don't see a massive credit
Speaker 8: cycle happening in twenty five. Certainly we've taken care of
Speaker 8: a lot of the refinancing risk, that refinancing clip that
Speaker 8: was pretty large in twenty six and twenty seven.
Speaker 6: It's been pushed out.
Speaker 8: But we're not seeing although the risk premiums have raised
Speaker 8: have been raised.
Speaker 6: And I will tell you there's a.
Speaker 8: Very large US based retailer based here in New York
Speaker 8: that has undergone a transformational merger. They had a private
Speaker 8: credit solution in front of them, which we were quite
Speaker 8: involved with. They decided to go to the public markets
Speaker 8: and issue a public bond in this safe public markets,
Speaker 8: and that bond today within six months is trading below fifty.
Speaker 8: So again, I think there's a lot of noise about
Speaker 8: risk and reward and various asset classes, but that's our
Speaker 8: view of private credit.
Speaker 6: Just quickly.
Speaker 1: How much could hire long term US yields spur that
Speaker 1: credit cycle. I won't call it a bubble because we
Speaker 1: could talk about what a bubble is or what we
Speaker 1: could see with some sort of just negative price action,
Speaker 1: But do you see that as being a catalyst.
Speaker 8: Well, I think that the overall listen, we having higher
Speaker 8: real rates are good for long term investors to a
Speaker 8: certain degree. They're good for a certain degree until we
Speaker 8: lose confidence in the actual underlying market. Again, the US
Speaker 8: treasure market deepest, most liquid in the world, rates of
Speaker 8: four and a half and five percent with real rates
Speaker 8: right now, pretty strong on a relative basis over the
Speaker 8: last twenty five years, but I'm not seeing that in
Speaker 8: the current zip code.
Speaker 2: Just to wrap it up, biggest opportunity right now for
Speaker 2: you in the team, what do you think it is?
Speaker 6: Well, I think it's a few places.
Speaker 8: I do think the volatility that has taken most people
Speaker 8: on the sidelines and a bit of a paralysis just
Speaker 8: operating day in and day out on the business that
Speaker 8: we do. Right now, we have eight hundred and fifty
Speaker 8: billion of capital doing a lot of refinancing with PE firms.
Speaker 8: There's over two thousand PE situations where they've owned companies
Speaker 8: more than five years. A lot of refinancing there. This
Speaker 8: and the global industrial renaissance is alive and well in
Speaker 8: the US with the delay in deploying the chips at
Speaker 8: a lot of financing on shore of chip manufacturing and
Speaker 8: other assets. I've been traveling around the globe quite a bit,
Speaker 8: you know, Japan is still quite interesting from a insurance perspective,
Speaker 8: from a global wealth perspective, and a Pe perspective. And
Speaker 8: we cannot forget about Europe. I mean, Europe really is
Speaker 8: what's going on there. It's a once in a generation.
Speaker 8: I do believe that there's a variety. When you look
Speaker 8: at a thirty trillion economy in the US twenty four
Speaker 8: trillion in Europe, there's a massive amount of financing to occur.
Speaker 2: You've been traveling too much. It's going to have you back.
Speaker 6: Good to be back.
Speaker 2: Welcome back to New York. Jym's out of Apollo Global Management, Jim,
Speaker 2: Thank you, sir, Thank you. Port of Los Angeles executive
Speaker 2: director Gene Soroka with a word of caution, telling the
Speaker 2: Wall Street Journal quote, even at a thirty percent tariff
Speaker 2: with a ninety day reprieve, it's not going to dramatically
Speaker 2: change what we're seeing now, joins Napama. Jane, welcome back.
Speaker 6: Good to see you. John.
Speaker 2: Tremendous feedback the last time you run, so thank you
Speaker 2: for your time once again, sir, Let's talk about what
Speaker 2: you are seeing now. What do you see now compared
Speaker 2: to what this looked like, say twelve months ago, a
Speaker 2: month ago.
Speaker 9: Last time we visited, I talked about a quick drop
Speaker 9: in cargo, and we saw that last week down by
Speaker 9: more than thirty percent. The balance of the month seems
Speaker 9: to be holding, unfortunately, to be down maybe twenty five
Speaker 9: percent compared to year on year stats. Canceled sailings seventeen
Speaker 9: out of a scheduled eighty still off the books.
Speaker 2: So you've got a twenty to forty day forward look
Speaker 2: just based on shipping times. What leaves China now arrives
Speaker 2: in twenty to forty days. How has that changed in
Speaker 2: the last few days Off the back of let's just
Speaker 2: say the easing tensions over the weekend just last night.
Speaker 9: Talking to some of my friends in Hong Kong and Singapore,
Speaker 9: bookings or reservations have ticked up. But it's going to
Speaker 9: take the liner shipping companies a few weeks to reposition
Speaker 9: vessels in places like and Shanghai, Jahmin Yantien, pick up
Speaker 9: some of the products that have been manufactured and sitting,
Speaker 9: and then another two weeks to get to Los Angeles
Speaker 9: before we try to distribute throughout the country. So while
Speaker 9: we're starting to see some momentum, a lot of what's
Speaker 9: taking place here in the States. Is the finance game.
Speaker 9: Does it make sense at an average of averages thirty
Speaker 9: percent tariff to start bringing in products and what will
Speaker 9: the American consumer's willingness be to buy?
Speaker 1: So Ryan Peterson, a Flexport came out and said, there's
Speaker 1: going to be a shipping boom with all these ships
Speaker 1: coming to the four that have been waiting to come
Speaker 1: to get some clarity on tariffs. It sounds like you disagree.
Speaker 1: Why do you think that it's not going to result
Speaker 1: in a shipping boom to make up for that month
Speaker 1: with the fact that it's going to be more expensive
Speaker 1: to make it, say in the US, rather than just
Speaker 1: pay the thirty percent tariff from China.
Speaker 9: Now there's a lot there, Lisa, As we've talked about before.
Speaker 9: Number one, let's pick up some of the product that's
Speaker 9: already been manufactured sitting on factory floors, warehouses and in containers.
Speaker 6: Get that flow going again.
Speaker 9: The manufacturers in China have got to get their folks
Speaker 9: back to work, and there'll be a considerable look at
Speaker 9: Southeast Asia, albeit at ten percent tariffs, is where we
Speaker 9: can go. But this ninety day reprieve, as you know,
Speaker 9: is not a long runway. That's typically the amount of
Speaker 9: time it takes for a procurement person here in the
Speaker 9: US to put an order in, get the goods made,
Speaker 9: and get them on a ship in Asia.
Speaker 1: Which raises the question, does that ninety day pause do
Speaker 1: enough to make sure that shelves are not empty? Say
Speaker 1: back to school sales period comes around.
Speaker 6: We're cutting it so close.
Speaker 9: Spring fashion has already passed a spy. Now you're talking
Speaker 9: summer fashion. Back to school. May is typically the month
Speaker 9: where purchase orders go in to Asia for the year
Speaker 9: end holidays. So now folks are kind of rolling the
Speaker 9: dice a little bit. Do I buy now at these
Speaker 9: kind of prices? And remember when I say an average
Speaker 9: of averages, not every commodity is a thirty percent tariff.
Speaker 6: There are some that are extremely high compared to that.
Speaker 9: And this is cumulative on top of tariffs that have
Speaker 9: already been put in place. So once again, what's consumer sentiment?
Speaker 9: How much do I buy? And how much stock do
Speaker 9: I get out there?
Speaker 2: This is a huge problem. Buy's down there, what's to buy?
Speaker 2: And producers don't know how much to produce. Even though
Speaker 2: we've moved the tower side of the weekend.
Speaker 1: Once again, so do you avoid the paralysis that many
Speaker 1: people were complaining about when businesses had no idea or
Speaker 1: does this just really ease things on the margins but
Speaker 1: still create some big lapses And that really is going
Speaker 1: to be something that we're not going to see for
Speaker 1: a couple of months.
Speaker 2: Jane, as you look at tritflows, can you describe how
Speaker 2: things have changed where the shipping routes have begun to
Speaker 2: go somewhere else, whether people are starting to think more
Speaker 2: about fright than they aren't just using traditional shipping. Have
Speaker 2: things changed from your vantage point in the last few
Speaker 2: weeks a lot?
Speaker 9: And it's about what do we need just to get
Speaker 9: buy over these weeks and months ahead, And going back
Speaker 9: to twenty eighteen, China was sixty percent of our business
Speaker 9: at the Port of Los Angeles. Then today it's forty
Speaker 9: five percent and drop the folks on the ground in
Speaker 9: Asia are telling me you'll start seeing even more migration
Speaker 9: of manufacturing and sourcing to Southeast Asia beyond.
Speaker 2: Said the likes of Malanchia, the likes of Vietnam. Is
Speaker 2: that why why they didn't finished the Schetz highlights.
Speaker 9: Yes, and of course a lot has been talked about
Speaker 9: India but remember that just last year, China exported about
Speaker 9: two hundred and fifty million container units, India about twenty million.
Speaker 1: There's a question not only about manufacturing the goods that
Speaker 1: will come over here, but also manufacturing the ships, and
Speaker 1: we know that that's been a huge focus of this
Speaker 1: administration and potential fees on ships that have been built
Speaker 1: in places like China. How have some of the proposals
Speaker 1: like that affected your business.
Speaker 9: My first thing is it's another fee. It's another charge
Speaker 9: that the liner shipping companies say will be passed on
Speaker 9: and ultimately get to the factory level or consumer. But
Speaker 9: I'm really pleased with the way the US Trade Representative
Speaker 9: and that office responded. There were more than five hundred
Speaker 9: public come letters two days of hearings in Washington back
Speaker 9: in March to talk about what this fee would mean
Speaker 9: if implemented based on the draft form, which was a
Speaker 9: million and a half bucks for every port call in
Speaker 9: the United States for a ship that was built in China.
Speaker 9: Now it's on a tonnage basis vessel voyage. Albeit additive
Speaker 9: to cost, it's a lot better than it was. So
Speaker 9: the feedback was really heard by the administration.
Speaker 1: I'm listening to everything that you're saying, and it sounds
Speaker 1: like a lot's going to hinge on how much companies
Speaker 1: believe they can pass along higher.
Speaker 2: Prices to consumers.
Speaker 1: What from their perspective, given your conversations with them, do
Speaker 1: you think they'll be looking for in retail sales in
Speaker 1: Walmart earnings to understand just how much power they have
Speaker 1: to increase prices on consumers that yes or tired but
Speaker 1: are still spending.
Speaker 9: I don't know if I can answer all that, but
Speaker 9: what I'm hearing on the ground is Okay, prices go up, tariffs,
Speaker 9: other fees, etc. I'm first going to talk with my
Speaker 9: manufacturer about the cost of those goods, the landed price,
Speaker 9: and we'll see what we can negotiate. Second, how much
Speaker 9: do I gain from efficiencies my company? Can I get
Speaker 9: smarter and sharper a little bit of margin compression maybe,
Speaker 9: but I've got to deliver on that cost saving side.
Speaker 9: And then thirdly, what can I pass on. If I'm
Speaker 9: a part supplier, that cost goes straight to the factory.
Speaker 9: If I'm a retail finished goods person, it goes to
Speaker 9: the consumer. So there's still a lot to be worked out.
Speaker 9: Chances are with what we know, lower inventories, fewer selections,
Speaker 9: and higher prices.
Speaker 2: And this is why Wilmot could be some interest in
Speaker 2: a few minutes time.
Speaker 1: Because they've already said they want to compete on price
Speaker 1: and they're going to take it probably somewhere else. And
Speaker 1: it also points to how much they're going to make
Speaker 1: their suppliers eat as well, so margins all around get
Speaker 1: compressed in order to offset some of what gets passed
Speaker 1: along to consumers. The fact that it comes an hour
Speaker 1: and a half before retail sales gives you a sense
Speaker 1: of the one two punch what companies are doing, and
Speaker 1: then how much appetite consumers have to keep on spending.
Speaker 2: We know how consumers fail. What if they've been doing.
Speaker 2: We'll get resound sales at eight thirty Eastern time numbers
Speaker 2: from Wolma that stuck is not by zero point seven
Speaker 2: percent numbers from Wolma in about five minutes time. I'm
Speaker 2: just shocked, I said route and not route. Been it
Speaker 2: too long?
Speaker 6: Welcome?
Speaker 2: Been it too long? I think that's for you. Jane's
Speaker 2: going to see thanks Joe. Jane Siakaba of the Port
Speaker 2: of Los Angeles and NATA Richardson can take a look
Speaker 2: at things. She joined us from IDP Nada. Welcome to
Speaker 2: the program. Do your best. What's going on here? Give
Speaker 2: us a clear picture of what's happening in the US
Speaker 2: economy in morning.
Speaker 7: It's mixed, and I think that's what you're seeing in
Speaker 7: the data now. If you're looking really for some good
Speaker 7: news on inflation, you found it today and that that
Speaker 7: is the three line. And also if you're looking for
Speaker 7: good news on the labor market, you see it continue.
Speaker 7: So those initial job was claimed still at historical lows.
Speaker 7: That is helpful for an economy built on consumption. But
Speaker 7: when you turn to the consumer and you bring in
Speaker 7: that soft data of consumer being down beat, and we
Speaker 7: know that consumers went out and they stop piled on durables,
Speaker 7: on cars and vehicles. What we're seeing in April as
Speaker 7: a moderation from that stockpilot and maybe starting to really
Speaker 7: reflect new economics vulnerabilities. We left the last FED meeting
Speaker 7: with two risks at our disposal. We left the risk
Speaker 7: of slower growth and higher inflation. And I think that's
Speaker 7: what the markets are really focused on. That higher inflation
Speaker 7: risk looks a little less risky today, but you know,
Speaker 7: every day is a different day. When it comes to
Speaker 7: this economy right now.
Speaker 2: Later and Plase, you brought up that topic because I
Speaker 2: think it's so important. It's been really difficult to try
Speaker 2: and unpack what is just the front loading of purchases
Speaker 2: by consumers versus what is genuine, authentic, durable, sustainable demand.
Speaker 2: And as we work our way through the summer, we've
Speaker 2: been trying to work this out all morning on this program.
Speaker 2: Are we going to see the price increases? Is Walmart
Speaker 2: the one to listen to as they warn this morning
Speaker 2: they can't hold off much longer from here, new how
Speaker 2: do you gauge that at the moment? What do you
Speaker 2: look at?
Speaker 7: I think the large retailer should be listened to. They
Speaker 7: are active in this market, they are seeing the prices
Speaker 7: in real time. So also consumers are important to listen
Speaker 7: to in this moment. When they say they're down beat,
Speaker 7: they mean it. We don't talk a lot about consumer surplus,
Speaker 7: and just really quickly from your econ one oh one class,
Speaker 7: it's the price consumers are willing to pay versus the
Speaker 7: price they're actually paid. But if consumer surplus is being
Speaker 7: eroded because they're seeing higher prices, that means consumers will
Speaker 7: continue to feel down beat, and those feelings are translating
Speaker 7: right now into what a data point we'll see on Friday,
Speaker 7: which is consumer sentiment, and if that continues, it really
Speaker 7: does reflect that higher risk of continued inflation that the
Speaker 7: Federal Reserve warned about a week ago.
Speaker 1: And this is the reason why, NILA, a lot of
Speaker 1: people say, we don't know how relevant any of this
Speaker 1: data is because we don't know whether this is just
Speaker 1: April data and people feeling bad in April. But in May,
Speaker 1: things are going to look a lot better because we
Speaker 1: have a reprieve from some of the tariffs and things
Speaker 1: are looking a little bit easier. The market is rebounding, Mila,
Speaker 1: How do you look at the quickly moving policy and
Speaker 1: then judge the relevance of any of this data that
Speaker 1: is just a snapshot and a very quickly moving movie.
Speaker 7: I look for the stead fast stronghold in the economy,
Speaker 7: and right now that's the labor market. The labor market
Speaker 7: is solid if you look at initial jobless claims, if
Speaker 7: you look at the pace of hiring. Though we see
Speaker 7: it at ADP to be more modest than it has
Speaker 7: been in the past, it's still solid. We're still seeing
Speaker 7: strength and that is the underpinning of the bulk of
Speaker 7: the consumers. So as long as the labor market stays strong,
Speaker 7: stays solid, we still see growth in jobs, we still
Speaker 7: see wages above inflation, then you have an economy that
Speaker 7: could weather some of these higher level risks.
Speaker 1: How much Neila do you see because of that, Because
Speaker 1: of that stability in the labor market. In addition to
Speaker 1: what we are hearing from some of the biggest retailers
Speaker 1: in the world that prices are going to go up,
Speaker 1: how much is a saguflationary like environment becoming increasingly your
Speaker 1: base case for the remainder of this year.
Speaker 6: It's a risk.
Speaker 2: It is a risk.
Speaker 7: I think what we're seeing, you know, collectively in all
Speaker 7: this data is an economy that looks to be slowing
Speaker 7: a bit. I mean, the first quarter contraction is also
Speaker 7: a messy given the high degree of import. So it's
Speaker 7: again a backward looking data point that was based on
Speaker 7: a lot of stockpiling. But looking forward, if growth slows,
Speaker 7: not just because of US consumption and US production, but
Speaker 7: also around the world, if growth is at risk, then
Speaker 7: you might see slower growth and higher prices. So, yes,
Speaker 7: statulation is an increasingly bigger concern. In my mind, it
Speaker 7: was always a concern. I think the dynamics set kept
Speaker 7: inflation down for for a decades going into the pandemic
Speaker 7: have changed dramatically. We don't talk about these longer trends
Speaker 7: that are affecting inflation. So even without trade policy, that
Speaker 7: was always a risk. Now that risk is amplified because
Speaker 7: of some of the uncertainty that we're still seeing on
Speaker 7: the trade side.
Speaker 2: Naba, thanks for jumping on. Thank you very much, Nida
Speaker 2: Richardson there of ADP. This is the Bloomberg Sevenance podcast,
Speaker 2: bringing you the best in markets, economics, angiopolitics. You can
Speaker 2: watch the show live on Bloomberg TV weekday mornings from
Speaker 2: six am to nine am Eastern. Subscribe to the podcast
Speaker 2: on Apple, Spotify or anywhere else you listen, and as
Speaker 2: always on the Bloomberg Terminal and the Bloomberg Business app.