Speaker 1: This is the Bloomberg Surveillance Podcast. I'm Tom Keene, along
Speaker 1: with Jonathan Farrell and Lisa Abramowitz. Join us each day
Speaker 1: for insight from the best an economics, geopolitics, finance and investment.
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Speaker 1: the Bloomberg Terminal, and the Bloomberg Business app.
Speaker 2: Joining us now from Washington is Jully Sue, the Acting
Speaker 2: US Labor Secretary, Acting Labor Secretary wander for to catch
Speaker 2: up with you, it always is. I want to go
Speaker 2: back to eight thirty, just briefly, if we can. I
Speaker 2: got a lot of feedback at eight thirty Eastern time
Speaker 2: about not being able to access the BLS website to
Speaker 2: get this information, to get this data. I'm told that
Speaker 2: the message they got on the screen was you were
Speaker 2: blocked from the BLS website. What was going on at
Speaker 2: eight thirty? What was the difficulty?
Speaker 3: I don't know what happened with the website.
Speaker 4: I will say that our jobs numbers today show that
Speaker 4: one hundred and ninety nine thousand jobs were added last month.
Speaker 4: That we have the lowest unemployment rate for the longest
Speaker 4: period of time since Diana Ross was at the top
Speaker 4: of the charts, and it reflects continued steady growth in
Speaker 4: our economy. I'm sorry to hear that you weren't able
Speaker 4: to get that, but I'm happy to talk about any
Speaker 4: of the data.
Speaker 3: That's come out.
Speaker 2: Well, let's talk about it coming out next month, and
Speaker 2: the month after that and a month after that. Can
Speaker 2: we revisit the lockup, Julie and have a lockup and
Speaker 2: make sure this data gets out efficiently and effectively, given
Speaker 2: it's probably the most important data point on the planet.
Speaker 4: I completely agree on the importance of the data. You know,
Speaker 4: we come out to talk about it every time because
Speaker 4: it demonstrates the health of the economy.
Speaker 3: It demonstrates, you.
Speaker 4: Know, whether our economic policies are working. And what we've
Speaker 4: seen is steadily since President Biden came into office, fourteen
Speaker 4: point one million jobs created, again broad based across numerous sectors,
Speaker 4: low unemployment rates, and real wages rising. So we're very
Speaker 4: happy to make sure that you were getting the information
Speaker 4: that you need to help us tell the story about
Speaker 4: the impact of Bidenomics across the country.
Speaker 2: You really don't want to talk about this to you.
Speaker 3: No, no, I'm not trying to avoid it.
Speaker 4: I obviously believe that the data has to be available,
Speaker 4: but it's not.
Speaker 2: To all of you, and it wasn't, So how can
Speaker 2: we fix that for next month?
Speaker 3: I hear you on that.
Speaker 2: Okay, maybe you should can respond to me in the
Speaker 2: future at some point in the next week or so,
Speaker 2: and I can share that answer to our listeners and
Speaker 2: our viewers. Let's talk about the data. On the surface,
Speaker 2: it looks great. This is from Catholic Economics this morning.
Speaker 2: The response from them this morning, just going beneath the surface,
Speaker 2: respectable organization saying this. The one ninety nine increase in
Speaker 2: November payroll employment included forty seven workers forty seven thousand
Speaker 2: workers returning from strikes, stripping out that one off boost.
Speaker 2: The one fifty two game was roughly the same as
Speaker 2: the mutant increase in October. Moreover, of that one fifty two,
Speaker 2: forty nine thousand, with government jobs a further seventy seven
Speaker 2: k in healthcare. Excluding those non cyclical sectors, the economy
Speaker 2: added only twenty six thousand jobs, which adds to the
Speaker 2: evidence that after a very strong third quarter, growth is
Speaker 2: slowing to a crawl. In the fourth quarter, Ginny, what
Speaker 2: would you make of that?
Speaker 4: I think what we're seeing is, again we look at
Speaker 4: overall trends in the economy. We've seen job growth at
Speaker 4: record rates, certainly faster than anybody predicted coming out of
Speaker 4: the pandemic. But it wasn't just like you know, one
Speaker 4: time boost in the immediate post pandemic months. It's been
Speaker 4: year over year growth. We're also seeing it across numerous industries,
Speaker 4: and we're seeing it in you know, overall, right, over
Speaker 4: eight hundred thousand jobs created in construction, over six hundred
Speaker 4: thousand in manufacturing since President Biden came into office. And yes,
Speaker 4: we also saw workers come back on the payroll after
Speaker 4: strikes that resulted in record wage increases and other kinds
Speaker 4: of benefits, retirement benefits, health benefits that we really associate
Speaker 4: with what we want for working people.
Speaker 1: Right.
Speaker 4: It's what gives families a sense of security. It's what
Speaker 4: gives individuals what the President always talks about, which.
Speaker 3: Is some breathing room.
Speaker 4: And that's the kind of economy that we want to
Speaker 4: build that we are seeing. We have more work to do,
Speaker 4: and we'll continue to build on the progress that we've made.
Speaker 4: Many of the investments that the President has helped to
Speaker 4: make possible are showing up in communities. Forty thousand some
Speaker 4: infrastructure projects across four thy five hundred communities all across
Speaker 4: the country. But we're just beginning with that, and so
Speaker 4: we'll continue to see more of that, and the jobs
Speaker 4: numbers are just another indicator of that growth and what
Speaker 4: its impact means.
Speaker 2: What do you think this is not resonating with the
Speaker 2: elector our share and pos CNN more than four and
Speaker 2: ten saying that seriously concerned rising costs could push them
Speaker 2: at their own community Splimberg together with Morning Conso only
Speaker 2: thirty five percent of voters in seven swing states trust
Speaker 2: Binden on the economy. Where's that disconnect coming from?
Speaker 5: Right?
Speaker 4: So one thing President Biden does talk a lot about
Speaker 4: to your point, is we want to make sure that
Speaker 4: there are jobs in communities so people can get jobs
Speaker 4: and build, you know, build a family, and join the
Speaker 4: middle class without leaving the place that.
Speaker 3: They work they live. I was with.
Speaker 4: Him when we went to Velvedere, Illinois, where a plant
Speaker 4: that had been shuttered is now being reopened because of
Speaker 4: the agreement between the UAW and the Big Three.
Speaker 3: I do think some of this is still you know,
Speaker 3: we had global uh you.
Speaker 4: Know, pandemic, and you know, and the economic wreckage that
Speaker 4: resulted immediately in the aftermath of that.
Speaker 3: Again, we've grown back.
Speaker 4: From it, but the sense of insecurity I think remains,
Speaker 4: and that's that's legitimate.
Speaker 3: The other thing.
Speaker 4: I you know, just from traveling on the country and
Speaker 4: talking to folks, is I think that part of this
Speaker 4: is that people really do see there's jobs being created,
Speaker 4: there's training programs that are connecting them to those jobs.
Speaker 4: But there remains deep inequities in our society. And part
Speaker 4: of that is the huge gap between CEO pay and
Speaker 4: frontline worker pay. So I talked about Diana Ross, I
Speaker 4: talked about the good news that we are having unemployment
Speaker 4: levels at record lows for the longest stretches since nineteen seventy.
Speaker 4: In nineteen seventy, the disparity between CEO pay and frontline
Speaker 4: pay was something like twenty percent.
Speaker 3: Today it's over.
Speaker 4: It was seventeen times hire the ceopay from worker pay.
Speaker 4: Today it's something like three hundred and forty four times.
Speaker 4: That doesn't feel fair to people, it doesn't feel good,
Speaker 4: and that's why President Biden talks about building an economy
Speaker 4: from the middle out and the bottom up, where working
Speaker 4: people and working families do well, not just the wealthy.
Speaker 2: Yeah, he's had a lot to say about corporate America
Speaker 2: as well. I'm going to share a tweet from the
Speaker 2: President with you, and I want your thoughts on it.
Speaker 2: A way to translate it if you can, because I
Speaker 2: don't understand it. It says, let me be clear, to
Speaker 2: any corporation that hasn't brought their prices back down even
Speaker 2: as inflation has come down, it's time to stop the
Speaker 2: price gouging. Give American consumers a break. What is the
Speaker 2: president talking about.
Speaker 4: The President is saying that we have a job to
Speaker 4: do this country, and we want working people and middle
Speaker 4: class families and every community across the country to have
Speaker 4: for things that they need to live a decent life.
Speaker 3: We want safe roads and new bridges.
Speaker 4: We want clean drinking water to flow out of every
Speaker 4: Fara's great.
Speaker 2: I want that too, But just this tweet specifically, inflation
Speaker 2: is slowly but it's still positive, so prices are going up.
Speaker 2: But the President's saying inflation has come down, why corporation
Speaker 2: is still price gouging. That's just economically speaking, just absolutely flawed.
Speaker 2: So Acting Labor Secretary who writes these tweets, what's he
Speaker 2: talking about.
Speaker 4: I mean, he's saying that we're all in this together,
Speaker 4: and we will pursue economic policies that help to bring
Speaker 4: down prices and control inflation.
Speaker 3: But everyone's got a job to do on that.
Speaker 4: And you know, when there are record profits by companies
Speaker 4: who are continuing to keep prices high, we'd like them
Speaker 4: to play their role in making sure that people can
Speaker 4: afford the basics they need in life.
Speaker 2: Appreciate it. JNS. Thank you, the Acting us LEBIS Sancitary.
Speaker 1: We continue our conversation with Michael Darta, chief economist macro
Speaker 1: strategist at Roth mkm Michael, once again, it is a
Speaker 1: confounding report of somewhat towards a fully employed America. Is
Speaker 1: this the productivity overlay? Is this the technology overlay in
Speaker 1: the non technological sectors where things are just simply better
Speaker 1: mother than we perceive.
Speaker 6: Well, it's hard to say, Tom. I mean, the productivity
Speaker 6: statistics have been really strong over the last two quarters,
Speaker 6: but they were insanely weak before that. So on productivity,
Speaker 6: we just vaulted back to the to the pre pandemic
Speaker 6: trend so far, which was one point six percent per annum,
Speaker 6: so to be determined on that question, this is a
Speaker 6: good report, you know, almost two hundred k with the
Speaker 6: downward revisions you know, were added just below the consensus expectation.
Speaker 6: But we were talking about the unemployment rate moving up
Speaker 6: to the cusp of a recession signal. Now we've pulled
Speaker 6: back to three seven on the unemployment rate. So this
Speaker 6: is a report the Fed is going to look at
Speaker 6: and not really feel compelled that they need to embrace
Speaker 6: these early rate cuts next year that the market has
Speaker 6: priced in. Now, this could change again, and you know
Speaker 6: with the December data obviously, but at face value, strong report,
Speaker 6: almost two hundred k on payrolls, unemployment ticks by two
Speaker 6: tents to three seven. That's going to be viewed as
Speaker 6: still a very tight fully employed labor market. And so
Speaker 6: you know, it makes sense that we're seeing a bit
Speaker 6: of risk off here and a bit of a bounce.
Speaker 3: In bond yields.
Speaker 7: Michael, does this make you rethink any of your thesis
Speaker 7: about the business cycle rolling over?
Speaker 6: Not so far. I mean, certainly it's not a you know,
Speaker 6: it's not an additive decisive signal. It Okay, this is
Speaker 6: you know, if we're up at you know, up above
Speaker 6: four in the you know for this report, then you know,
Speaker 6: to me, that would suggest that perhaps we've fallen into recession.
Speaker 6: So this says we're not in recession right now, but
Speaker 6: it's not necessarily an all clear signal for for next
Speaker 6: year either.
Speaker 1: Michael, you've followed with Bloomberg data your economics into your
Speaker 1: equity coverage. What's the data SPX call for when you're
Speaker 1: fifty one years old?
Speaker 8: Yeah?
Speaker 6: Tom, You know, we were talking before about the market
Speaker 6: really being dominated by two sectors and seven stocks, so
Speaker 6: you know, I think for the overall it's five hundred.
Speaker 6: We're going to have a challenging period. The valuations in
Speaker 6: these leading sectors are simply too high, So I think
Speaker 6: investors are going to have to look to some other
Speaker 6: areas that have been underperforming where the valuations are low
Speaker 6: will have opportunities with rising volatility next year.
Speaker 1: Michael Darter, thank you so much. With Roth MKM. This
Speaker 1: job's Dave Jeffrey Rosenberg's portfolio manager for the Systematic Multi
Speaker 1: Strategy Fund at black Rock. Jeff with great respect, what's
Speaker 1: the strategy that works forward given the treacherous economic water
Speaker 1: as we weighed.
Speaker 5: Yeah, this is a this is a good report, and
Speaker 5: as you know we've been discussing, you know, across the board,
Speaker 5: it's a bit stronger than expected.
Speaker 4: You know, maybe not on the.
Speaker 5: Headline payrolls, but certainly underneath. And I think that he
Speaker 5: really is going to push back, and I think that's
Speaker 5: why you've seen the market reaction. The initial market reaction
Speaker 5: that you just just just describe is markets, bond markets
Speaker 5: in particular, really starting to price in a lot of
Speaker 5: cuts into next year and pricing.
Speaker 1: Them earlier and earlier.
Speaker 5: Three point seven percent on employment rate. Hard to see
Speaker 5: where the restriction, the restrictiveness is coming for this FED policy.
Speaker 5: So I think you're going to have a little bit
Speaker 5: of pushback in that narrative and that you're not really
Speaker 5: seeing the slow down, particularly again with the wage picture.
Speaker 5: You know, most of the support here is coming from
Speaker 5: the inflation side, and we'll have that conversation next week,
Speaker 5: but on the growth side, you know, you're really not
Speaker 5: seeing the level of restrictiveness show up yet in the
Speaker 5: labor markets, and I think that's going to push back
Speaker 5: on how quickly the FED is going to be able
Speaker 5: to to cut rates to keep up with the fall
Speaker 5: and inflation and avoid you know, the unintended increase in real.
Speaker 1: Real rate and the Jeff's observation, Lisa, I miss this
Speaker 1: stunning the Bloomberg financial conditions index. I'm going to use
Speaker 1: this word carefully. It's explodes to an accommodate of point
Speaker 1: six y two. It's Greek, right. All you got to
Speaker 1: know is explodes the right word. This is what Powell
Speaker 1: does not want to see.
Speaker 7: Although he didn't push back as much as some people thought,
Speaker 7: at least last week in his speech. But you're right
Speaker 7: to that point, Jeff, when you say the inflation is
Speaker 7: really the front in the front minds of people who
Speaker 7: are betting on this Goldilock's narrative and even rate cuts
Speaker 7: without the pain. I wonder how much their view is
Speaker 7: damaged by average hourly earnings rising more than expected and
Speaker 7: rising from the prior month. How much does that suggest
Speaker 7: a stickiness to the labor market strength and wage growth
Speaker 7: that really flies against this narrative of FED rate cuts
Speaker 7: next year.
Speaker 5: A little bit, and there certainly goes in the opposite direction.
Speaker 5: But what you've had on the inflation side is really
Speaker 5: this psychotomy between goods and services, and it's the goods
Speaker 5: part that has really been the disinflation that's fueling the
Speaker 5: overall enthusiasm for the cuts into next year. The services
Speaker 5: side is held up, and services inflation is really the
Speaker 5: mapping of today's labor report and the wage picture into
Speaker 5: the broader inflation and so that you know, remains very supportive.
Speaker 5: So again it's kind of the easy disinflation is behind us.
Speaker 5: This report kind of supports continued support for the broad
Speaker 5: inflation picture from the services side, and that debate I
Speaker 5: think will will continue. And obviously what you've seen in
Speaker 5: the market is a little bit of pullback in terms
Speaker 5: of the enthusiasm. You know, as Jonathan says, the first
Speaker 5: reaction isn't necessarily the end reaction. But I do think
Speaker 5: the overall take from this report and the wage picture
Speaker 5: is again very strong. Labor market supportive of services inflation. Yes,
Speaker 5: it's still coming down, but most of that is being
Speaker 5: driven by the good side. You're not seeing that supported
Speaker 5: as much from the services side.
Speaker 8: You know.
Speaker 7: Priam Israe of JP Morgan earlier this morning said does
Speaker 7: it matter? She raised this question, does it matter how
Speaker 7: much the Fed cuts rates next year? Considering the fact
Speaker 7: that it didn't seem to matter how much they raised rates.
Speaker 7: It didn't tighten policy that much. The long lags are
Speaker 7: long in both directions. Do you think that people are
Speaker 7: overestimating whether it matters if they cut rates in March
Speaker 7: or if they cut rates in June, or if they
Speaker 7: cut rates in September, if they have stopped raising rates,
Speaker 7: and if right now what you're seeing as an economy
Speaker 7: that still is chugging along a business is still hiring, well.
Speaker 5: I think the question is does it matter for the
Speaker 5: real economy or does it matter for the financial economy.
Speaker 5: I think the points well taken in terms of the
Speaker 5: sensitivity of the economy to interest rates is a different
Speaker 5: question than the sensitivity to financial markets. And I think
Speaker 5: on the ladder the financial market it matters. It matters
Speaker 5: a lot. And I think that easing in financial conditions
Speaker 5: that you're just talking about has everything to do with
Speaker 5: the expectations of soft landing, the collapse in inflation, the
Speaker 5: immaculate disinflation proving out to be correct, and allowing the
Speaker 5: FED to cut interest rates. That's highly supportive of financial markets.
Speaker 5: The real economy point, yes, I would can side that
Speaker 5: may be less significant, but for investors it's gonna be
Speaker 5: the latter. It's gonna be the financial market.
Speaker 1: Jeff. Let's pretend you're in carnegiemail and you've got to
Speaker 1: sum this over from your financial chat over into the
Speaker 1: GDP chat. Does this good labor economy support a more
Speaker 1: buoyant assessment of our real GDP?
Speaker 5: Well, I think so, Tom, And I think that's, you know,
Speaker 5: kind of the issue here for the monetary policy outlook
Speaker 5: is that there is this question of just what is neutral,
Speaker 5: what is real interest rates? What is restrictive? And we
Speaker 5: think we're there, but you don't know until it shows up.
Speaker 5: And we've had the benefit from the inflation side, but
Speaker 5: the growth side less so. And I think that's been
Speaker 5: the message from labor markets. It's been a steady normalization,
Speaker 5: but we're still seeing very strong labor market prints here,
Speaker 5: very strong wages, strong unemployment rates that are not really
Speaker 5: consistent with restrictiveness. And that's good from the growth side,
Speaker 5: but it may not be good to get that last
Speaker 5: mile of that three percent three and a half percent
Speaker 5: inflation down to the two percent target.
Speaker 1: Jeff, Thank you. Jeffrey Rosenberg most often with us here
Speaker 1: on Jobs Day with Blackrock and his good work in
Speaker 1: shorter term paper as well. What we're going to do
Speaker 1: now is wrap around that important Washington interview with the
Speaker 1: interview that matters for Global Wall Street Jerome Schneider, legendary
Speaker 1: at PIMCO in the short term paper space, and we're
Speaker 1: thrilled he could join us this morning. Jerome, not so
Speaker 1: much what this job report does. How hard is it
Speaker 1: to manage the risks of short term paper right now?
Speaker 8: Good morning, Good morning Tom, and good morning Manus. The
Speaker 8: reality is is that a lot of clients are in
Speaker 8: positioned to be pretty defensive in twenty twenty three. And
Speaker 8: I guess when you see this latest data, we find
Speaker 8: ourselves in a confluence of events which the outlook will
Speaker 8: continue to recalibrate. The issue with short term paper really
Speaker 8: is it's quite attractive, and that issue is one where
Speaker 8: investors may define balance between harvesting the attractive yields at
Speaker 8: the front of the R curve with the opportunity set
Speaker 8: to own a little bit of interest rate exposure and
Speaker 8: income further out the curve, and that challenge will continue
Speaker 8: to be reconciled as we get into twenty twenty four.
Speaker 8: So that's the prospect where you know the challenge from
Speaker 8: understanding the data and more importantly, the investment the investment landscape. Really,
Speaker 8: it will tend to reconcile any one data point as
Speaker 8: a witness this morning isn't necessarily as important. And the
Speaker 8: Federal Reserve will continue to sort of put the emphasis
Speaker 8: on the longer term views when they meet next week.
Speaker 8: So for investors, they should do the same thing. Take
Speaker 8: a longer term view, Understand the industrates have greatly recalibrated
Speaker 8: from where we've come from in twenty twenty two, and
Speaker 8: more importantly, look at the broader landscape of opportunity sets
Speaker 8: that yes, you might have a software economy, but the
Speaker 8: likelihood of a soft landing, while a possibility, isn't a
Speaker 8: high probability, and that pretends to be a fairly attractive
Speaker 8: investment outlook for at least for fixed income over the
Speaker 8: next twelve months.
Speaker 9: Good days here, Jern, good to be on.
Speaker 3: Are with you?
Speaker 9: I mean, we're a wonderful line from Mike McKee a
Speaker 9: moment ago where he said, look, you know, the bond
Speaker 9: market traders and salespeople have the attention span of a
Speaker 9: two year old. Having been slaughtered by the bond market
Speaker 9: in nineteen ninety four. You get moments like this of
Speaker 9: where tens and twos and tens have bolded higher this morning.
Speaker 9: Is it just a bit of a wake up call
Speaker 9: that the trajectory on rates is not one way, It's
Speaker 9: not a collapsing falling knife all the way. There will
Speaker 9: be moments of interruptions which present opportunity.
Speaker 8: Well, yeah, you're trying to get insight to the practitioners
Speaker 8: frame of mind, and then right, honestly, manness, it's one
Speaker 8: of those things that from a data dependent point of view, yes,
Speaker 8: the attention span might be one of a two year
Speaker 8: old if that's the view you take, and that's why
Speaker 8: we suggest a PIMCO to take a longer term view.
Speaker 8: The practicality of it is is that the bond market
Speaker 8: has effectively challenged in many ways. The Feds resolve many
Speaker 8: times this year, probably five or six times by my account,
Speaker 8: and they're going to continue to do so. One of
Speaker 8: the largest challenges will be actually over the next week
Speaker 8: as we take a look at the dot plots that
Speaker 8: will be revealed, and that will ultimately suggest that perhaps
Speaker 8: the Fed only suggests a handful of rate cuts versus
Speaker 8: the Feds remaining five plus versus the markets rather five
Speaker 8: plus rate cuts that they're expecting, and that is a
Speaker 8: fairly big reconcilation that can have fairly large impacts across
Speaker 8: the curve. But where I might have main is, which
Speaker 8: is in the front end of the eal curve.
Speaker 1: How do you respond to risk of reinvestment the idea
Speaker 1: as somebody is picking out a duration and financial advisor site. Oh,
Speaker 1: but the risk of reinvestment, how do you respond to
Speaker 1: that your own?
Speaker 8: Yeah, that's where you have to have a diversified portfolio.
Speaker 8: And while there is attraction to be at the front
Speaker 8: of the YEO curve, and you know Tom that I'm
Speaker 8: a big proponent of being being in just outside that
Speaker 8: cash landscape of the money markets, the reality is is
Speaker 8: that there are attractive yields both in real terms and
Speaker 8: nominal terms at this point in time, and the risk
Speaker 8: of reinvestment is one where you actually want to balance
Speaker 8: the income which is a heck of a lot more
Speaker 8: attractive right now with the opportunity of capital preservation and
Speaker 8: more importantly, total return, which is going to be emphasized
Speaker 8: by capital appreciation over the course of the next few
Speaker 8: years as spread as spreads normalize and more importantly, as
Speaker 8: you perhaps get to an economy which is more supported
Speaker 8: by the SAD, which might be in later twenty twenty
Speaker 8: four or twenty five, which means those rate cuts means
Speaker 8: bond prices go higher. So that's where you want to
Speaker 8: think about that reinvestment risk and sort of takes them
Speaker 8: off the table by moving ever so slightly out of
Speaker 8: the YEO curve and adding a little bit of interest
Speaker 8: rate exposure.
Speaker 9: Jerom, I'm just trying to work out what kind of
Speaker 9: flow comes into the shoulder end of the curve across
Speaker 9: twenty two twenty four money market funds and you peak
Speaker 9: five point nine trillion dollars much a former bond trader, Well,
Speaker 9: it was a very bad sale. I was a terrible
Speaker 9: crackspread and oil commodity trader, but I didn't do too
Speaker 9: bad for all.
Speaker 1: So authentic, I sound like a fool.
Speaker 3: You start to floating.
Speaker 9: No, I think you know you get I think we've
Speaker 9: got Pinko on the line here. They're the pros.
Speaker 8: Please please, Well, man, if you sound sound, you sound
Speaker 8: a bit of an expert, So maybe we'll take you
Speaker 8: for a Maybe you got a.
Speaker 9: Job of PIPCO. Listen that that's a long time ago,
Speaker 9: first Chicago, many many many years ago, money market funds
Speaker 9: five point nine trillion. How much of that flows out
Speaker 9: of cash and into the short end of the curve.
Speaker 9: Is that a bump that you.
Speaker 8: Get We begin to see it happen that you know,
Speaker 8: the effect is going to be the trade off between
Speaker 8: the Fed's outlook, which will be cautious but yet perhaps
Speaker 8: pivoting to that dubbish aspect later on in twenty four
Speaker 8: and at the same time, investors still want to harvest
Speaker 8: those high yields, so the resolve of the money market
Speaker 8: fund investors will be actually quite high. We expect that
Speaker 8: the investors will continue to be in that six proroximately
Speaker 8: six trillion money market fund for quite some time. But
Speaker 8: we're actually quite quite excited by the fact that investors
Speaker 8: are beginning to see that balance, to begin to rationalize
Speaker 8: the risks in a more quantitative way, if you will,
Speaker 8: because they're thinking about the volatility in the market, the
Speaker 8: outlook of the market, and realizing that the story of
Speaker 8: capital appreciation, which has been so relevant and prevalent in
Speaker 8: the landscape of risk assets, equities, et cetera for the
Speaker 8: past decade, might be changing, and that might require a
Speaker 8: slightly different allocation.
Speaker 1: Jerome Schneider with us with Pimco had a short term
Speaker 1: portfolio management. We're thrilled you can find time to stay
Speaker 1: with us on the early West Coast. Subscribe to the
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Speaker 1: for listening. I'm Tom Kane, and this is Bloomber