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Speaker 1: Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg

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Speaker 2: I think the narrative in this market is, you know,

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Speaker 2: we've got a new administration, We've got some new trade

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Speaker 2: policy focusing on tariffs that's creating a certain amount of

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Speaker 2: uncertainty in the market. Maybe immigration policy changes pending also

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Speaker 2: in bringing in some uncertainty into this market. And we've

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Speaker 2: been told since day one the market's stole on uncertainty.

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Speaker 2: So net net, you've got the SMP kind of pulling

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Speaker 2: back about seven eight percent from its recent peak. You've

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Speaker 2: got the dollar a little bit weaker. But it's the

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Speaker 2: end of the day. What does this really mean for

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Speaker 2: the economy? I guess we have to wait and see.

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Speaker 2: But Tiffany Wilding, we're gonna ask her that question. She's

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Speaker 2: an economist in covering the North America for PIMPCO. I

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Speaker 2: was with her colleague mister Clarida last evening up in Stanford, Connecticut,

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Speaker 2: talking about these markets. So got the pimp COO view

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Speaker 2: for mister Clarida Tiffany at the end of the day,

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Speaker 2: when you plugged these things into your model, whether it's

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Speaker 2: tariffs and we'll find out more, I guess April second,

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Speaker 2: on tariffs, whether it's maybe some tweaks to the labor

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Speaker 2: market in terms of less migrant additions to the labor market.

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Speaker 2: How's it changed your economic outlook for twenty five.

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Speaker 3: Yeah, I mean, I think the bottom line for US

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Speaker 3: is is that, you know, although you could have you know,

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Speaker 3: medium term better outcomes with more investment in the United States,

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Speaker 3: as a result of these various policies, there's going to

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Speaker 3: be some near term disruption. And that's simply because you know,

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Speaker 3: tariffs raise costs, so they raise costs on investment as

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Speaker 3: well as consumption. So if you're you know, trying to

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Speaker 3: get more investment in the United States at the same

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Speaker 3: time you're making it more costly, you know, that is

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Speaker 3: potentially problematic. You know, But I think the bottom line

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Speaker 3: for US is is that there is some adjustment period

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Speaker 3: that that will happen.

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Speaker 4: You know.

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Speaker 3: The teariff policies that we've seen have been I think

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Speaker 3: much more aggressive, you know than anybody has expected there

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Speaker 3: will be some near term price level adjustments, some near

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Speaker 3: term inflationary pressures from that, and we'll also see you know,

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Speaker 3: growth and labor market outcomes, you know, really accelerate as

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Speaker 3: a result.

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Speaker 5: Tiffany, what did you make of the numbers we just got.

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Speaker 3: Yeah, so so we'll have to obviously dig into the

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Speaker 3: details on the income data, but I didn't want to.

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Speaker 3: You know, I do think the spending data, you know,

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Speaker 3: was a little bit weaker here. You know, we we

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Speaker 3: got some of this from the retail sales report, which

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Speaker 3: was incredibly strong. As I mentioned, consumers and so the

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Speaker 3: fact that today's data, which includes everything not only good

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Speaker 3: spending but services, today's data suggests that consumers are shifting

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Speaker 3: away from services at this point and spending focused much

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Speaker 3: more on on goods types of spending. And you know,

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Speaker 3: we've we definitely think that is the result of their

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Speaker 3: expectations that you will get higher tariffs, and so they're

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Speaker 3: trying to front load ahead of that. And I think,

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Speaker 3: you know, that kind of belies, you know, this kind

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Speaker 3: of underlying weakness in the economy. You're getting a front

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Speaker 3: loading behavior that's sort of propping up spending for now.

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Speaker 3: But that's not going to last forever, you know, so

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Speaker 3: the question is it win does.

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Speaker 5: That wane and how much?

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Speaker 3: You know, when we do think that the higher uncertainty

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Speaker 3: you know, plus higher prices, you know, will result in consumers,

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Speaker 3: you know, really taking a step down in terms of

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Speaker 3: growth and the it's been the high income consumer that

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Speaker 3: has really been driving consumption growth over the last couple

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Speaker 3: of years, and we think they are poised to you know,

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Speaker 3: just kind of take a step down here as as

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Speaker 3: we have this higher uncertainty, lower equity prices, and we

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Speaker 3: will see that moving forward.

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Speaker 2: How long do you think, Tiffany, that the lag effect

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Speaker 2: is when I don't know, tariffs go into effect and

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Speaker 2: then the other countries slap tariffs on our goods, And

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Speaker 2: how does this kind of play at in econyes? Is

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Speaker 2: something that's a three, four, five, six month time type

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Speaker 2: of process.

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Speaker 3: Yeah, well, I think it's different for different variables. So

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Speaker 3: I think for inflation. You know, what, what we've learned

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Speaker 3: over you know, the pandemic, and I would say the

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Speaker 3: last several years, you know, is that with the increased

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Speaker 3: digitization of retail and commerce, you don't have these quote

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Speaker 3: unquote menu costs anymore. So that was you know, kind

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Speaker 3: of economist jargon for when you want to change a price,

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Speaker 3: you literally have to print a new menu, and there's

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Speaker 3: some cost to that, so you might not change as quickly.

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Speaker 3: But now you don't have to do that. You can

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Speaker 3: literally change in real time, you know, if you have

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Speaker 3: a digital platform, and so that results in you getting

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Speaker 3: much quicker passed through, potentially to higher prices. Now the

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Speaker 3: you know, one of the things with us that the

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Speaker 3: businesses will have to be optimizing for is that when

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Speaker 3: you raise prices, you usually reduce volumes, and so they'll

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Speaker 3: have to be you know, again optimizing for that. I

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Speaker 3: think there's some question around the extent to which these

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Speaker 3: tariffs can actually be passed through to consumers. You know,

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Speaker 3: consumers are not as strong as they were several years

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Speaker 3: ago when they had big fiscal you know, paychecks in

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Speaker 3: their accounts that you know that helped fuel spending despite

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Speaker 3: higher prices. So, you know, I think those are the

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Speaker 3: kinds of things that we'll be looking for in terms

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Speaker 3: of the labor market effects. You know, I think it's

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Speaker 3: really a question of how businesses and how this impacts

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Speaker 3: their bottom line, how much of that price passed through

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Speaker 3: how much of the price increase can they pass through?

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Speaker 3: You know, if there's you know, much more margin compression,

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Speaker 3: then they might be looking towards you know, optimizing, you know,

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Speaker 3: reducing you know, some of their labor inputs and so

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Speaker 3: that you know, I think will take a little bit

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Speaker 3: more time to play out as we see how this goes.

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Speaker 3: But you know, we we think in the manufacturing sector

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Speaker 3: in particular, you could see some you know, some furloughs

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Speaker 3: and things like that, you know, as these things are

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Speaker 3: sort of passed through, you know, through through the you know,

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Speaker 3: through the hopper.

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Speaker 5: All right, Tiffany, thanks a lot.

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Speaker 6: We really appreciated Tiffany Wilding economists over at So let's

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Speaker 6: just get a recap on these numbers. Right, you had

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Speaker 6: personal income for February jumping eight tents of one percent,

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Speaker 6: but the spending slowing a bit to four tenths of

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Speaker 6: one percent versus expectations. Then you had the PCE index.

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Speaker 6: So that is what the FED winds up looking at

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Speaker 6: on a year on year basis, coming into two point

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Speaker 6: five percent and the core so you're backing out the

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Speaker 6: more volatile numbers that's coming up on a month on

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Speaker 6: month basis to four tenths of one percent. So as

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Speaker 6: we digest, want to get more on this with Stephanie Roth,

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Speaker 6: chief economist at Wolf Research. All Right, Stephane, first, blush,

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Speaker 6: what's your takeaway from these numbers? What stands out?

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Speaker 7: Yeah, I'm going to give two things. One is on

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Speaker 7: the price perspective. We're starting off at a fairly elevated

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Speaker 7: place and this is before teriffs have a big impact.

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Speaker 7: So we're in a tough situation. Just given the extent

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Speaker 7: of the tariffs that are likely to put in place,

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Speaker 7: they could have an impact of nearly a percentage point

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Speaker 7: on price inflation.

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Speaker 5: For the next year.

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Speaker 7: Of course, Powell last week made it sound like they

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Speaker 7: wanted to look through it, but at some point this

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Speaker 7: could become a real challenge for the Fed. And then

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Speaker 7: you are seeing a more sluggish consumer on the spending

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Speaker 7: side as well. The income numbers are a little bit overstated.

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Speaker 7: Some of that came from rental income and some other

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Speaker 7: sort of one off stuff from government, So I would

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Speaker 7: look at the income as slightly less than the numbers

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Speaker 7: would suggest. But all in all, you're looking at a

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Speaker 7: consumer that is pulling back a little bit and that's

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Speaker 7: likely to continue even more so as the consumer becomes

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Speaker 7: a little bit more concerned about the backdrop.

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Speaker 2: Stephanie, how do you think the Federal Reserve will look

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Speaker 2: at this data? Will that give them maybe a little

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Speaker 2: bit more confidence to maybe just kind of sit on

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Speaker 2: their hands for a while.

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Speaker 7: Yeah, I think they're going to want to sit on

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Speaker 7: their hands kind of either way. The policy backdrop is

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Speaker 7: so complicated. There's two main things that they're likely to

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Speaker 7: be looking at when we're thinking about what's going to

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Speaker 7: happen in the next couple months. On the tariff side,

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Speaker 7: of course, what gets implemented, and then how do inflation

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Speaker 7: expectations react as a result. This is the primary transmission

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Speaker 7: mechanism to which the Fed would initially become concerned. If

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Speaker 7: you start to see consumers really become worried about the

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Speaker 7: inflation outlook, which you miss, inflation expectations started to show

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Speaker 7: a little bit of a flavor of that, that's going

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Speaker 7: to make them want to become more hawkish than would

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Speaker 7: otherwise be the case. And then they're also going to

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Speaker 7: want to look on the immigration side, which people aren't

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Speaker 7: talking about enough. But Trump this week ended the visa

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Speaker 7: status for five hundred thousand people from Cuba, Haiti, Nicaragua,

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Speaker 7: and Venezuela effectively overnight on April twenty fourth, and that's

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Speaker 7: going to be felt both from a real labor market

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Speaker 7: perspective but also in the non from perials data.

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Speaker 6: So okay, to that point, though, what's the transmission mechanism

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Speaker 6: in that we get the sentiment kind of rolls over?

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Speaker 6: When does that actually feed into the hard data? Because

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Speaker 6: if you take a look, like a lot of President

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Speaker 6: Trump's polling is still really strong, So there is this

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Speaker 6: like divergence in terms of maybe where individuals feel the

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Speaker 6: country is headed and then.

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Speaker 5: How they feel about their pocketbooks.

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Speaker 7: Yeah, and there's been a big discrepancy between consumer confidence

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Speaker 7: and spending for a number of years at this point,

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Speaker 7: so it's not as if confidence is going to be

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Speaker 7: predictive of but in this instance, I do think at

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Speaker 7: least directionally, it's telling you that people are getting more concerned.

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Speaker 7: When does it feed into the real data. That's probably

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Speaker 7: when the price is actually take effect. So when things

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Speaker 7: become legitimately more expensive. Based on our analysis, it looks

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Speaker 7: like it takes about three to six months for prices

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Speaker 7: from TERFF implementation in implementation to prices actually showing off

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Speaker 7: at the stores. So I would imagine over the summer

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Speaker 7: is when consumers may really start to feel the pain,

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Speaker 7: and that's when you really could see people pulling back

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Speaker 7: even more materially.

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Speaker 2: Stephanie, is it I hate to go to labels, but

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Speaker 2: is it fair to label this teriff price increase that

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Speaker 2: may occur in this US economy as transitory or is

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Speaker 2: it something more than that?

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Speaker 7: I wouldn't use the word transitory, and to be fair,

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Speaker 7: I'm surprised that POW will use it as well, just

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Speaker 7: given the whole background with that word. I think it's

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Speaker 7: right that it's a price level shock. The problem is

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Speaker 7: similar to the last supply shock. Transitory was expected to

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Speaker 7: be of a short term thing, called it less than

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Speaker 7: a year, and we're likely to see the effects of

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Speaker 7: this for for way more than a year, because if

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Speaker 7: you start to see the supply chain and autos get

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Speaker 7: get sort of snarled to some extent, then that feeds

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Speaker 7: through into motor vehicle insurance. And we saw how long

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Speaker 7: that took to feed its way into the inflation data.

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Speaker 7: So I agree that it's a price level shock. It's

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Speaker 7: not a sort of an ongoing inflationary spiral type of thing.

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Speaker 7: But transitory kind of implies at this point that it's

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Speaker 7: going to be very short lived, and that's that's perhaps

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Speaker 7: a little bit too optimistic.

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Speaker 6: But I feel like the distinction though, is like it's

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Speaker 6: a one time price hike and then it stops versus

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Speaker 6: keeps going up. And if it keeps going up, then

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Speaker 6: that's obviously going to be more harbinger for the FED.

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Speaker 6: If it's just a one time price increase, the economy

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Speaker 6: is still growing, We're still in a good spot even

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Speaker 6: if we go one point six one point seven percent.

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Speaker 6: Can we handle it?

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Speaker 7: Yeah, I think we can, and I think the ultimate ultimately,

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Speaker 7: the Fed's gonna have to cut as a result, because

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Speaker 7: we're going to see the economy weekend on the back

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Speaker 7: of caraffs uncertainty. We're hearing, you know, capex is stalling

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Speaker 7: starting to stall out pretty materially, So realistically this is

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Speaker 7: likely to be a growth shock, in which case the

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Speaker 7: FED can react uvishly, but they can't react until the

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Speaker 7: data start to show that real weakness and we're several

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Speaker 7: months away from that, which is just a challenge for

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Speaker 7: markets at this point because the FED kind of has

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Speaker 7: to sit on its hands for a little while until

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Speaker 7: they can actually react and come out a bit more rubbishly.

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Speaker 7: What it's proved that this is more like a price

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Speaker 7: level shock and the impact on growth is notably softer.

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Speaker 2: So, Stephanie, have you in the good folks over at

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Speaker 2: Wolf have you materially changed maybe your GDP forecast, your

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Speaker 2: inflation forecast to account for what appears to be pretty

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Speaker 2: steady tariff policy here.

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Speaker 4: Yeah, we have.

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Speaker 7: So coming into the year we were a little bit

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Speaker 7: above two percent. We were more optimistic on the growth

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Speaker 7: once we realized that Trump was much more serious on

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Speaker 7: doing tariff, certainly earlier in the year we were expecting

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Speaker 7: it to be later once the DOS layoffs started to well,

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Speaker 7: they didn't actually play out, but the headlines weren't great.

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Speaker 7: Once the negative stuff started to happen, more so than

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Speaker 7: anything positive that could potentially play out. We changed our

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Speaker 7: outlook from two point two to one point six on GDP,

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Speaker 7: it's inflation from two three to two seven. And realistically,

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Speaker 7: the risks are that we might have to do a

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Speaker 7: similar type of you know, move again if you start

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Speaker 7: to just see more of an impact from it from

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Speaker 7: a tariff perspective.

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Speaker 5: I mean, yeah, it's not negative.

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Speaker 2: I'm just saying, Oh, it's not negative.

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Speaker 6: Okay, I'm trying I vacillate between like glass half full

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Speaker 6: of glass half empty.

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Speaker 5: So it's like has a good.

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Speaker 2: Point, which is companies adjust, consumers adjust, market suggest you

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Speaker 2: have to give everybody smart credit.

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Speaker 5: Yeah, well, but I think that's right.

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Speaker 7: I think the economy will adjust and we're not. I

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Speaker 7: think we'll still grow, it's just a slower pace we were.

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Speaker 7: We've been growing in an environment where growth has been

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Speaker 7: three percent or above for the.

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Speaker 5: Past couple of years. Yeah, and it just has to

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Speaker 5: have a level shift down.

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Speaker 6: It also just depends on what that transition period looks like,

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Speaker 6: like is it a couple months, is it a year, like?

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Speaker 5: Is it six months? Like that?

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Speaker 6: Really then depends on how maybe you ask it allocate

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Speaker 6: or like what that grow trajectory winds up looking like, Yeah, I.

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Speaker 7: Think that's fair for through much of this year, I

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Speaker 7: would be sort of concerned. From an equity perspective, I

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Speaker 7: think we might see a lot more volatility. At some

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Speaker 7: point it might be abundantly more clear that there's a

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Speaker 7: lot of sort of risk price into the markets, and

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Speaker 7: then it would make more sense to take a sort

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Speaker 7: of a stab at it, right now it just doesn't

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Speaker 7: feel like enough is in the price, just given the

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Speaker 7: tariff news that's likely coming.

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Speaker 2: Stephanie, thanks so much for joining us. Always appreciate getting

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Speaker 2: your thoughts there. Stephanie Roth, chief economist at Wolf Research.

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Speaker 2: She got a master's in statistics. You couldn't get pay me, literally,

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Speaker 2: you could not pay me nil money to get a

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Speaker 2: master's in statistics.

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Speaker 1: Wow.

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Speaker 2: I had one course at business school and statistics first quiz,

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Speaker 2: I got a seven out of twenty. Why because I

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Speaker 2: don't like statistics? And b I slept out the entire

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Speaker 2: weekend of Cameron into Or Stadium to get season tickets

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Speaker 2: to Duke basketball.

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Speaker 6: Well, I mean, like this priority totally totally worth it.

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Speaker 6: I think I took a statistics yep. And I say

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Speaker 6: think because like I actually don't remember. I think it

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Speaker 6: was my best friend and her boyfriend, and I think.

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Speaker 5: That maybe he helped us. Yeah, but that's in the testing.

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Speaker 2: You can't do that for a little bit, all right,

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Speaker 2: joining us now in our studio, which is a treat

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Speaker 2: a larn Goodwin, chief market strategist that New York Life

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Speaker 2: Investment Management. So we got some inflation data today kind

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Speaker 2: of came in line with expectations. Anything on the economic

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Speaker 2: data recently that's jumping out of you and maybe changing

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Speaker 2: the way you're thinking about these markets.

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Speaker 8: It's really difficult to take the today economic data and

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Speaker 8: tell us much about the markets moving forward because we're

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Speaker 8: in a really interesting and awkward in between spot. We

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Speaker 8: know that policy uncertainty is changing the way that businesses

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Speaker 8: can and consumers think, we don't know the extent to

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Speaker 8: which that will impact the hard data, and so as

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Speaker 8: we think about asset allocation, we're thinking about a couple

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Speaker 8: of different themes in relation to data like this. One

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Speaker 8: is how do you build resilience in the near term

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Speaker 8: to what we expect to be a RelA relatively meager

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Speaker 8: equity market backdrop? And the second is what do we

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Speaker 8: see happening that we can really anchor on long term?

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Speaker 8: And as we approach Liberation Day as it's being called,

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Speaker 8: I think investors could be forgiven for not feeling particularly liberated.

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Speaker 5: But as we approach liberation.

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Speaker 8: Day, even if tariffs disappeared from the policy framework, there

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Speaker 8: are mega trends in place related to supply chains and

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Speaker 8: AI that are on their way. These are things that

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Speaker 8: we believe we can allocate around regardless of the near

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Speaker 8: term volatility.

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Speaker 6: See, I feel like Lauren was someone who definitely had

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Speaker 6: did well in statistics.

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Speaker 9: I did, I did, I did really well in statistical Yeah,

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Speaker 9: this in no way surprises me. When when when you

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Speaker 9: got into like the seventh eighth order, like apply to conumetrics,

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Speaker 9: that's when I was calling.

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Speaker 6: Yeah totally, I mean that's like for me that, I mean,

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Speaker 6: I actually sailed past that part. It was the next

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Speaker 6: part that no, I'm kidding, know what you're talking about. Okay,

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Speaker 6: So then the question that I've kind of been wondering,

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Speaker 6: and I should point out that futures are around the

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Speaker 6: lost of the session right now. Will Wednesday be a

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Speaker 6: clearing event, like will we have will be clearing event

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Speaker 6: for the market, or it's just going to be more

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Speaker 6: volatility and adaptation after that.

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Speaker 8: I think many of the answers that I've heard from

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Speaker 8: the program already today suggests that it can't possibly be

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Speaker 8: a clearing event. It could be a clearing event for

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Speaker 8: Wednesday and Thursday, and then on Friday we get a

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Speaker 8: labor market report that's going to start to show the

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Speaker 8: impact of government layoffs, and so it's again, I honestly

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Speaker 8: think that if you gave me a spreadsheet that said

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Speaker 8: these are the tariffs that are going to be implemented

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Speaker 8: on these countries on this timeline. I've heard investors say

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Speaker 8: that's all we need, then we can do the math.

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Speaker 5: I don't agree.

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Speaker 8: We don't know how countries are going to react. And frankly,

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Speaker 8: there are places in the world that have a lot

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Speaker 8: of leverage on the US economy. And so even though

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Speaker 8: some clarity over the path of tariffs, if we receive

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Speaker 8: that can be helpful for those next steps to start

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Speaker 8: locking into place. Just the mere fact that we are

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Speaker 8: on this path towards more regionalized supply chains, more energy

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Speaker 8: and tech independence. That's a capital intensive trend that's on

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Speaker 8: its way. It's going to happen regardless, and so I'm

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Speaker 8: not really angering on feeling better on Wednesday.

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Speaker 2: Have you been rebalancing your portfolio, reallocating your portfolio, de

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Speaker 2: risking it, what have you done anything that kind of

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Speaker 2: your recommendations.

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Speaker 8: We're in the camp of recommending actually pretty significant changes

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Speaker 8: to a multi asset portfolio. And just to give a

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Speaker 8: little bit of backdrop, if you look back in the

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Speaker 8: last fifteen years, knowing what we know now, your ideal

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Speaker 8: asset allocation would be ninety percent US large cap growth equity,

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Speaker 8: and frankly, even in twenty twenty one twenty two, we

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Speaker 8: the investing public were starting to say, oh that lower

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Speaker 8: for longer interest rate environment is changing. The world might

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Speaker 8: look a little different. The AI boom bought us a

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Speaker 8: little time of by the think about US large cap

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Speaker 8: growth equity before all that's changing. We're looking forward at

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Speaker 8: a market environment that is more volatile, more inflation aware,

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Speaker 8: more capital intensive, and that's an environment where I believe

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Speaker 8: we need to be building more resilient equity portfolios, closing

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Speaker 8: international underweights, looking to generate income within the equity portfolio,

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Speaker 8: because we probably can only expect five to seven percent

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Speaker 8: on US equity this year, So what does that mean?

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Speaker 8: Well for starters. Many of the investors, despite some of

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Speaker 8: the news we've seen out of Europe, and frankly, despite

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Speaker 8: a much more a much quicker interest rate cutting cycle,

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Speaker 8: have ignored the cyclical uplift in international equity, and so

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Speaker 8: we're calling on investors to close those underweights. We're staying

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Speaker 8: focused on quality in large caps, dividend payers, those that

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Speaker 8: are lined up for stock buybacks, but we're also taking

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Speaker 8: more equity like risk in credit, and the reason for

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Speaker 8: that is as you see economic risks rise, or if

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Speaker 8: we see that, certainly spreads will widen. We're already seeing

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Speaker 8: it a bit. But on a two to three year

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Speaker 8: forward looking basis, I have very little concern that the

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Speaker 8: US high yield market, especially in the higher quality issuers,

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Speaker 8: won't be able to pay back their debt. And so

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Speaker 8: as a buy and hold strategy, getting six to eight

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Speaker 8: percent on a high yield bond portfolio, from my perspective,

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Speaker 8: that's a real source of resilience in a multi asset portfolio.

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Speaker 2: And how much duration would you typically like to take

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Speaker 2: in this environment? Most people, I guess a lot of

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Speaker 2: people have said kind of the belly of the curve,

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Speaker 2: which is a term I learned from Lisa Bromwitz years ago,

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Speaker 2: kind of five six, seven years, that kind of thing.

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Speaker 8: Lisa Abramowitz was also probably very good at statistics. I

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Speaker 8: think we can agree.

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Speaker 5: I can see that.

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Speaker 8: We are neutral on duration. So I just mentioned that

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Speaker 8: from a credit perspective, we like shorter duration exposure, and

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Speaker 8: that's because of the payback timeline. But in a portfolio

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Speaker 8: as a whole, we have very low conviction of which

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Speaker 8: part of the three and a half to five percent

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Speaker 8: treasury yield range will stay in for any amount of time.

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Speaker 8: I just think we're going to see more market volatility,

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Speaker 8: market interest rate volatility as these policy changes come into effect.

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Speaker 8: And so we're balancing short duration credit exposure with some

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Speaker 8: structured product and also with a little bit of exposure

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Speaker 8: in long duration municipal bonds, which is where infrastructure is funded.

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Speaker 6: So you're not worried about the tax break going away

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Speaker 6: for munies.

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Speaker 8: Not particularly, No, And that's it.

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Speaker 2: I am paying attention to that.

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Speaker 3: I know.

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Speaker 5: Well, okay, let me just so.

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Speaker 6: Usually we have a show from ten to twelve, which

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Speaker 6: I won't be on today, but we have a Muni

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Speaker 6: segment every Friday. And when we started doing the show together,

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Speaker 6: that was like Muni's man, I can't this is too hard,

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Speaker 6: And then finally Paul got me into it. So now

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Speaker 6: when I see a Muni headline, I'm like, oh my gosh,

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Speaker 6: maybe the tract is going to go away.

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Speaker 5: This is going to be terrible. Anyway, that doesn't worry.

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Speaker 8: You, No, Our teams feel high conviction that it's just

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Speaker 8: highly unlikely to take place. But this is a part

439
00:21:08,280 --> 00:21:14,440
Speaker 8: of the credit environment issuers in state and local governments

440
00:21:14,440 --> 00:21:17,000
Speaker 8: that need funding for things that they are doing. That

441
00:21:18,040 --> 00:21:22,680
Speaker 8: when though you may see how yields gap out, for example,

442
00:21:22,680 --> 00:21:26,159
Speaker 8: in the event of a major tax policy change, you

443
00:21:26,240 --> 00:21:29,560
Speaker 8: still have a quality of issuance and an opportunity that

444
00:21:29,800 --> 00:21:34,080
Speaker 8: we feel as meaningful and interestingly and perhaps more to

445
00:21:34,119 --> 00:21:37,439
Speaker 8: the point, long duration municipal bonds that twenty to thirty

446
00:21:37,480 --> 00:21:40,960
Speaker 8: sort of infrastructure twenty to thirty year infrastructure focus. Those

447
00:21:40,960 --> 00:21:43,760
Speaker 8: are taxable bonds, and so that's something that we're seeing

448
00:21:43,960 --> 00:21:48,040
Speaker 8: not only for a retail investor base sort of thematically,

449
00:21:48,080 --> 00:21:51,000
Speaker 8: but also for institutional investors who don't benefit from the

450
00:21:51,400 --> 00:21:53,040
Speaker 8: tax breaks anyway.

451
00:21:53,240 --> 00:21:56,879
Speaker 2: Interesting. I'm looking at the wrp GO function on the

452
00:21:56,920 --> 00:21:59,320
Speaker 2: Bloomberg terminal the World intst rate probability. It looks like

453
00:21:59,320 --> 00:22:03,560
Speaker 2: the market's counting a couple of rate cuts this year.

454
00:22:04,080 --> 00:22:06,080
Speaker 2: I don't know, maybe the data today influences kind of

455
00:22:06,119 --> 00:22:08,119
Speaker 2: your viewing. How do you think the FED will behave

456
00:22:08,160 --> 00:22:08,520
Speaker 2: this year.

457
00:22:09,840 --> 00:22:14,480
Speaker 8: I think that the FED is incredibly constrained by inflation

458
00:22:14,600 --> 00:22:17,320
Speaker 8: numbers like this. There's nothing wrong with them, it's just

459
00:22:17,400 --> 00:22:20,119
Speaker 8: very difficult to cut rates until we see a further

460
00:22:20,200 --> 00:22:23,600
Speaker 8: deterioration in the other side of their mandate, the employment

461
00:22:23,640 --> 00:22:26,080
Speaker 8: side of their mandate, And so I expect we'd either

462
00:22:26,119 --> 00:22:29,280
Speaker 8: need to see significant disinflation, which I don't believe is likely,

463
00:22:30,119 --> 00:22:34,240
Speaker 8: or meaningful deterioration and employment, or at least a twenty

464
00:22:34,280 --> 00:22:38,160
Speaker 8: percent drawback in the US equity market for the FED

465
00:22:38,160 --> 00:22:40,240
Speaker 8: to cut more than one time this year. And so

466
00:22:40,359 --> 00:22:42,040
Speaker 8: I do think that they will cut that one time.

467
00:22:42,080 --> 00:22:44,520
Speaker 8: I think that staying on a path towards neutral is

468
00:22:44,560 --> 00:22:48,080
Speaker 8: really important to them, but I think it will be

469
00:22:48,200 --> 00:22:51,640
Speaker 8: challenging in this inflation backdrop to do much more Before.

470
00:22:51,400 --> 00:22:53,240
Speaker 5: I let you go, Where do you.

471
00:22:53,200 --> 00:22:55,959
Speaker 6: Guys think of like Gold, for example? I mean, I

472
00:22:56,000 --> 00:22:59,000
Speaker 6: just I can't get over this. I don't record move

473
00:22:59,200 --> 00:23:01,080
Speaker 6: and I look back and what gold was doing back

474
00:23:01,119 --> 00:23:03,359
Speaker 6: in twenty sixteen when we had another bat of uncertainty

475
00:23:03,359 --> 00:23:05,320
Speaker 6: with President fromp and it's like half of what it

476
00:23:05,359 --> 00:23:07,520
Speaker 6: is now. I wonder how you guys talk about it.

477
00:23:08,520 --> 00:23:12,640
Speaker 8: So on a personal basis, we of course are very

478
00:23:12,720 --> 00:23:16,440
Speaker 8: very careful with our personal accounts as sort of institutional investors.

479
00:23:16,640 --> 00:23:18,320
Speaker 8: But this was one of my buy and holes that

480
00:23:18,359 --> 00:23:20,160
Speaker 8: I placed in September, and I'm feeling really.

481
00:23:20,000 --> 00:23:21,520
Speaker 5: Good about it night.

482
00:23:21,960 --> 00:23:25,359
Speaker 8: But for institutional portfolios. For the average retail investor, we

483
00:23:25,480 --> 00:23:29,359
Speaker 8: are advocating a satellite exposure to gold actually as a

484
00:23:29,400 --> 00:23:34,399
Speaker 8: function of inflation and volatility awareness. Effectively that in an

485
00:23:34,480 --> 00:23:40,119
Speaker 8: environment where you just you can expect more geopolitical dynamics

486
00:23:40,960 --> 00:23:44,520
Speaker 8: a little bit of concern about inflation, that that satellite

487
00:23:44,520 --> 00:23:47,560
Speaker 8: exposure makes sense. However, it really should be treated like

488
00:23:47,600 --> 00:23:51,960
Speaker 8: a satellite exposure. This is a volatile and multifaceted asset

489
00:23:52,000 --> 00:23:54,199
Speaker 8: class that most investors frankly don't have a ton of

490
00:23:54,280 --> 00:23:58,000
Speaker 8: understanding on, and it's very impacted by central bank policy,

491
00:23:58,000 --> 00:24:01,159
Speaker 8: which is also on the move. So we if you

492
00:24:01,320 --> 00:24:04,800
Speaker 8: put it in the bucket of making an equity portfolio

493
00:24:04,880 --> 00:24:07,359
Speaker 8: more resilient to the changes that we see going on,

494
00:24:07,400 --> 00:24:08,640
Speaker 8: that's how we classify gold.

495
00:24:09,040 --> 00:24:12,399
Speaker 6: Lauren so great, She's the best. Yeah, thank you so much.

496
00:24:12,400 --> 00:24:14,320
Speaker 6: It's so good to see you. Lauren Goodwin, chief market

497
00:24:14,359 --> 00:24:17,040
Speaker 6: strategist at New York Life Investment Management.

498
00:24:22,560 --> 00:24:26,160
Speaker 1: You're listening to the Bloomberg Surveillance Podcast. Catch us live

499
00:24:26,200 --> 00:24:29,399
Speaker 1: weekday afternoons from seven to ten am Eastern Listen on

500
00:24:29,440 --> 00:24:33,119
Speaker 1: Applecarplay and Android Auto with the Bloomberg Business app, or

501
00:24:33,240 --> 00:24:34,879
Speaker 1: watch us live on YouTube.

502
00:24:35,280 --> 00:24:39,080
Speaker 2: Seventy Balafas, CEO of goal List, a goal Vest Advisory

503
00:24:39,359 --> 00:24:41,000
Speaker 2: based here in New York City. She joints is here

504
00:24:41,000 --> 00:24:44,280
Speaker 2: in our Bloomberg Interactive Broker studio. So coming in studio

505
00:24:44,680 --> 00:24:47,080
Speaker 2: on a Friday to gold stars for you. So I'm

506
00:24:47,080 --> 00:24:49,800
Speaker 2: just letting you know that's big. So how do you

507
00:24:49,800 --> 00:24:53,679
Speaker 2: think about that app performance? Sebasty of European markets, international

508
00:24:53,680 --> 00:24:57,080
Speaker 2: markets or many international markets visa be the US this year.

509
00:24:57,280 --> 00:24:59,480
Speaker 2: Is this something that's sustainable from your perspective?

510
00:25:00,600 --> 00:25:03,680
Speaker 10: First of all, it's been very welcome for a long time.

511
00:25:03,720 --> 00:25:07,280
Speaker 10: As you know, the US markets have outperformed European markets,

512
00:25:07,320 --> 00:25:10,520
Speaker 10: and will it last over the long term. I still

513
00:25:10,560 --> 00:25:13,879
Speaker 10: am a believer in US large tech long term, but

514
00:25:14,040 --> 00:25:16,600
Speaker 10: over the next twelve twenty four months, I do think

515
00:25:16,640 --> 00:25:20,879
Speaker 10: that spread between the USO performance and the international or

516
00:25:20,960 --> 00:25:26,879
Speaker 10: European performance, that spread narrows. Of course, the big investment

517
00:25:27,119 --> 00:25:32,040
Speaker 10: in trillion dollar investment in defense is certainly going to

518
00:25:32,080 --> 00:25:36,160
Speaker 10: help those economies in those markets. But the same reasons

519
00:25:36,160 --> 00:25:42,880
Speaker 10: why we didn't love or weren't out overweight Europe six

520
00:25:42,920 --> 00:25:45,600
Speaker 10: months ago, some of those reasons still persist. So we

521
00:25:45,640 --> 00:25:49,960
Speaker 10: do see that spread narrowing. I am a believer in

522
00:25:50,280 --> 00:25:53,160
Speaker 10: long term US but over the next twelve twenty four

523
00:25:53,200 --> 00:25:55,840
Speaker 10: months do see some more room for growth in Europe.

524
00:25:56,000 --> 00:25:58,639
Speaker 6: Is the belief in US stocks really tied to the

525
00:25:58,680 --> 00:25:59,520
Speaker 6: AI trade?

526
00:26:00,000 --> 00:26:00,760
Speaker 5: Think it broadens?

527
00:26:00,880 --> 00:26:03,560
Speaker 10: It absolutely has broadened. I mean even if you look

528
00:26:03,680 --> 00:26:05,920
Speaker 10: year to date, of course, the S and P five

529
00:26:06,000 --> 00:26:09,000
Speaker 10: hundred is down, the large cap tech is down, the

530
00:26:09,080 --> 00:26:13,159
Speaker 10: MAG seven is down, but you're seeing strong healthcare performance,

531
00:26:13,400 --> 00:26:15,879
Speaker 10: the dividend stocks, those are up year to date, and

532
00:26:15,920 --> 00:26:18,320
Speaker 10: I do think that continues. So I do see a

533
00:26:18,359 --> 00:26:19,360
Speaker 10: broadening happening.

534
00:26:20,200 --> 00:26:23,600
Speaker 2: So peak to trough. We had earlier this year about

535
00:26:23,600 --> 00:26:25,399
Speaker 2: a ten percent corrections pull back in the S and

536
00:26:25,440 --> 00:26:28,040
Speaker 2: P five hundred. How did you view that? Was that

537
00:26:28,080 --> 00:26:31,399
Speaker 2: something that's just kind of a welcome, healthy part of

538
00:26:31,400 --> 00:26:33,760
Speaker 2: a longer term bull market or does it signal something

539
00:26:33,760 --> 00:26:34,159
Speaker 2: more for you?

540
00:26:35,280 --> 00:26:39,840
Speaker 10: Ten percent is normal? Actually more like fourteen fifteen percent

541
00:26:40,040 --> 00:26:43,080
Speaker 10: is average intra year decline on any given year. Right,

542
00:26:43,119 --> 00:26:45,800
Speaker 10: So the ten percent pullback, we can't forget. We had

543
00:26:45,880 --> 00:26:48,480
Speaker 10: the twenty plus percent in twenty twenty three, the twenty

544
00:26:48,480 --> 00:26:51,320
Speaker 10: plus percent in twenty twenty four, so it was almost

545
00:26:51,600 --> 00:26:53,639
Speaker 10: par for the course. It wasn't unexpected.

546
00:26:53,720 --> 00:26:55,480
Speaker 2: I thought it was just me being a great investor.

547
00:26:55,840 --> 00:26:58,040
Speaker 2: Oh well, I looked at my four one k I said,

548
00:26:58,119 --> 00:26:58,960
Speaker 2: how boy, you're good.

549
00:26:59,040 --> 00:26:59,240
Speaker 4: I know.

550
00:26:59,400 --> 00:27:01,080
Speaker 11: I mean that's just the market lifting all both.

551
00:27:01,200 --> 00:27:03,720
Speaker 6: Yeah, No, that's kind of happened to me. And then

552
00:27:03,800 --> 00:27:06,439
Speaker 6: my husband who's now freaking out a little bit. I'm overstating.

553
00:27:06,480 --> 00:27:10,600
Speaker 6: But so when you take a look at the benefits, though,

554
00:27:11,119 --> 00:27:13,480
Speaker 6: where do you hedge you the risk at the moment,

555
00:27:13,640 --> 00:27:15,600
Speaker 6: Like we to give it to him about gold gold

556
00:27:15,640 --> 00:27:18,560
Speaker 6: stocks doing really well, Like even if you have your

557
00:27:18,600 --> 00:27:21,200
Speaker 6: long term theme, even if you think European defense stocks

558
00:27:21,200 --> 00:27:23,359
Speaker 6: will do well, where's that safe haven bid?

559
00:27:23,520 --> 00:27:24,879
Speaker 10: Yeah, that's a great question.

560
00:27:25,640 --> 00:27:26,440
Speaker 5: A couple of things.

561
00:27:26,680 --> 00:27:29,480
Speaker 10: I in terms of having conversations with clients who ask

562
00:27:29,600 --> 00:27:32,640
Speaker 10: me exactly that, it's a couple of things. So those

563
00:27:32,720 --> 00:27:36,959
Speaker 10: conversations with clients that have cash needs coming up cash

564
00:27:37,040 --> 00:27:39,520
Speaker 10: has been great for us. We've put money aside that's

565
00:27:39,520 --> 00:27:42,440
Speaker 10: already been done. So anyone that has distributions coming up

566
00:27:42,720 --> 00:27:43,840
Speaker 10: cash aside.

567
00:27:43,520 --> 00:27:44,119
Speaker 5: We have that.

568
00:27:44,480 --> 00:27:47,800
Speaker 10: And in terms of longer term growth investors, so we

569
00:27:48,040 --> 00:27:52,800
Speaker 10: still have our neutral weight equity allocation, but we have

570
00:27:52,840 --> 00:27:56,920
Speaker 10: become more defensive by using those dividend stocks as an example,

571
00:27:57,000 --> 00:28:00,600
Speaker 10: the other areas in private markets, so private credit, for example,

572
00:28:00,600 --> 00:28:02,840
Speaker 10: you're not going to see the volatility that you have

573
00:28:02,960 --> 00:28:06,480
Speaker 10: been seeing in the public equities markets. Private credit and

574
00:28:06,520 --> 00:28:10,960
Speaker 10: then other securities, other alternative investments like structured notes for example,

575
00:28:11,200 --> 00:28:12,760
Speaker 10: that do well with volatility.

576
00:28:12,920 --> 00:28:15,880
Speaker 2: All in the structured notes. Unfortunately, there's some taxis issues there,

577
00:28:16,480 --> 00:28:18,239
Speaker 2: SEVESSI stay right there, You're gonna hang with us. We're

578
00:28:18,240 --> 00:28:21,760
Speaker 2: gonna get the market open right now, Lise Miteo, and.

579
00:28:21,560 --> 00:28:25,000
Speaker 12: It's opening Bellerport brought to you by Oppenheimer. Oppenheimer focuses

580
00:28:25,040 --> 00:28:27,960
Speaker 12: the powered they're thinking on you, creating customized plans to.

581
00:28:27,880 --> 00:28:28,800
Speaker 11: Help achieve your goals.

582
00:28:28,840 --> 00:28:32,480
Speaker 12: Put the power of Oppenheimer thinking into your investing, wealth management,

583
00:28:32,520 --> 00:28:36,520
Speaker 12: capital markets, investment banking. All right, and these markets are open,

584
00:28:36,560 --> 00:28:38,160
Speaker 12: and we've got read on the screen. S and P

585
00:28:38,280 --> 00:28:41,120
Speaker 12: five hundred down two tens percent sixteen points five thousand,

586
00:28:41,160 --> 00:28:44,040
Speaker 12: six hundred and seventy seven, the Downtown to ten percent

587
00:28:44,080 --> 00:28:47,080
Speaker 12: seventy six points forty two thousand, two hundred twenty one,

588
00:28:47,360 --> 00:28:49,920
Speaker 12: and then NAZAC down four tens a percent seventy eight

589
00:28:49,920 --> 00:28:53,640
Speaker 12: points at seventeen thousand, seven hundred and twenty two. The

590
00:28:53,760 --> 00:28:55,640
Speaker 12: two year yield. Let's head over there. The three to

591
00:28:55,640 --> 00:28:58,360
Speaker 12: two point nine six percent, that's down two basis points,

592
00:28:58,360 --> 00:29:00,400
Speaker 12: and the yield on the tenure four point three zero

593
00:29:00,440 --> 00:29:03,800
Speaker 12: percent down five basis points. We have the Bloomberg Dollar

594
00:29:03,880 --> 00:29:06,760
Speaker 12: Spot Index. That is a little change after point comex

595
00:29:06,800 --> 00:29:10,440
Speaker 12: goal three one hundred and twelve dollars an ounce. Now,

596
00:29:10,480 --> 00:29:12,760
Speaker 12: as far as Bitcoin, it's down about two and a

597
00:29:12,800 --> 00:29:15,600
Speaker 12: half percent, just above eighty five thousand. That is your

598
00:29:15,600 --> 00:29:17,720
Speaker 12: Bloomberg opening bell report, all of Alex.

599
00:29:17,920 --> 00:29:19,800
Speaker 6: All right, thanks so much, Lisa, Sorry I jugged you

600
00:29:19,840 --> 00:29:21,600
Speaker 6: on that, No problem. I was going to talk about

601
00:29:21,600 --> 00:29:24,800
Speaker 6: that sectors too. You got utilities and real estate doing well.

602
00:29:24,800 --> 00:29:26,800
Speaker 6: When those two are doing well, you know there's a

603
00:29:26,800 --> 00:29:29,280
Speaker 6: little bit of a save haven bid in the market. Tech,

604
00:29:29,720 --> 00:29:34,280
Speaker 6: consumer discretionary industrials, communication services, so tech and the cyclic goals.

605
00:29:34,320 --> 00:29:36,560
Speaker 5: Under performing just a touch.

606
00:29:37,280 --> 00:29:39,560
Speaker 6: What are your clients asking you right now in terms

607
00:29:39,560 --> 00:29:42,000
Speaker 6: of the tariff uncertainty and how to navigate that, And

608
00:29:42,080 --> 00:29:45,520
Speaker 6: if it's a huge structural portfolio shift or just trimming

609
00:29:45,520 --> 00:29:46,240
Speaker 6: around the edges.

610
00:29:46,960 --> 00:29:49,680
Speaker 10: It's trimming around the edges for us, it's not a

611
00:29:49,720 --> 00:29:52,720
Speaker 10: big structural shift because frankly, we don't have all the

612
00:29:52,760 --> 00:29:56,560
Speaker 10: information yet. The announcement on auto tariffs the other day

613
00:29:56,640 --> 00:29:59,040
Speaker 10: was a bit of a surprise. By the next day

614
00:29:59,080 --> 00:30:02,240
Speaker 10: we had additional information on that. So there's more and

615
00:30:02,320 --> 00:30:05,280
Speaker 10: more information coming out, and the questions are around is

616
00:30:05,320 --> 00:30:08,000
Speaker 10: this going to last? How long will it last? Is

617
00:30:08,040 --> 00:30:11,200
Speaker 10: this a negotiating tactic? What will we really see? But

618
00:30:11,280 --> 00:30:14,840
Speaker 10: in terms of restructuring portfolios, it's tweak on the margin

619
00:30:15,000 --> 00:30:18,400
Speaker 10: because we've had diverse fried portfolios. We're adding a little

620
00:30:18,400 --> 00:30:20,920
Speaker 10: bit more, as I said, to defensive, but not making

621
00:30:21,160 --> 00:30:23,880
Speaker 10: large changes. We just don't have information yet.

622
00:30:24,400 --> 00:30:27,880
Speaker 2: Yeah, let's talk a couple of names here. Progressive Insurance. Now,

623
00:30:27,960 --> 00:30:32,560
Speaker 2: when I got into VESPA, yeah, the guy said, the salesman,

624
00:30:32,600 --> 00:30:35,280
Speaker 2: who is also a Progressive agent, said go get your

625
00:30:35,320 --> 00:30:38,000
Speaker 2: quote from your insurance company. I got it over the phone. Huh,

626
00:30:38,520 --> 00:30:40,600
Speaker 2: he says, I guarantee I can beat that by like

627
00:30:40,600 --> 00:30:43,280
Speaker 2: thirty forty percent. Sure enough, Progressor came through and it

628
00:30:43,360 --> 00:30:46,320
Speaker 2: is so easy. The app is awesome. So I've become

629
00:30:46,320 --> 00:30:49,680
Speaker 2: a fan of Progressive Insurance because they insure the VESPA.

630
00:30:50,080 --> 00:30:50,520
Speaker 5: It's huge.

631
00:30:50,600 --> 00:30:51,120
Speaker 2: It's huge.

632
00:30:51,160 --> 00:30:51,320
Speaker 4: You know.

633
00:30:51,360 --> 00:30:54,120
Speaker 6: It's funny talking about insurance companies. We'll get to the

634
00:30:54,120 --> 00:30:57,880
Speaker 6: actual stock pick in a second. But this on streaming,

635
00:30:58,080 --> 00:31:01,080
Speaker 6: A lot of the insurance companies actually advertise, So my

636
00:31:01,200 --> 00:31:04,680
Speaker 6: daughter now can sing and it's into all the insurance jingles,

637
00:31:04,680 --> 00:31:08,160
Speaker 6: so Progressive, Geico, all State, like she knows them by name,

638
00:31:08,320 --> 00:31:09,520
Speaker 6: and I was like, what, it's.

639
00:31:09,400 --> 00:31:12,960
Speaker 2: Such a competitive business that they advertised, like crazy talk

640
00:31:13,000 --> 00:31:15,040
Speaker 2: to us about reasons to own Progressive.

641
00:31:15,160 --> 00:31:16,560
Speaker 5: Well, exactly what you said.

642
00:31:16,600 --> 00:31:19,680
Speaker 10: You sold it for me, exactly what you said. So

643
00:31:20,560 --> 00:31:24,920
Speaker 10: they are great with digital technology, that's certainly true. Number one.

644
00:31:25,320 --> 00:31:28,120
Speaker 10: They're growing, so it's not only auto insurance, but they're

645
00:31:28,160 --> 00:31:30,720
Speaker 10: really good with bundling the cross selling, so you mentioned

646
00:31:30,720 --> 00:31:33,600
Speaker 10: some of that as well. And right now when we

647
00:31:33,640 --> 00:31:37,600
Speaker 10: talk about staying allocated to equities but being more defensive Progressive.

648
00:31:37,960 --> 00:31:41,560
Speaker 10: Progressive is a wonderful name. Expected double digit earnings for

649
00:31:41,640 --> 00:31:44,640
Speaker 10: this year. We've seen solid earnings from them in the past,

650
00:31:44,720 --> 00:31:47,440
Speaker 10: even in down markets like twenty twenty two, actually they

651
00:31:47,440 --> 00:31:50,400
Speaker 10: were positive. So it's a name that even if we're

652
00:31:50,400 --> 00:31:53,160
Speaker 10: into a recession, you're still paying your insurance. It's a

653
00:31:53,240 --> 00:31:54,840
Speaker 10: name that we like to have in the portfolio.

654
00:31:55,280 --> 00:31:57,479
Speaker 5: That's a good point. All right, thanks pot, We really

655
00:31:57,560 --> 00:31:58,200
Speaker 5: appreciate it.

656
00:31:58,200 --> 00:32:00,880
Speaker 6: It's really great to get your perspective on how you're

657
00:32:00,960 --> 00:32:02,800
Speaker 6: navigating this environment.

658
00:32:02,840 --> 00:32:04,920
Speaker 5: Thank you so much for coming into the studio too.

659
00:32:04,920 --> 00:32:07,960
Speaker 6: We always love that when people come in a SEVESTBA

660
00:32:08,000 --> 00:32:11,400
Speaker 6: office joining a CEO of Goldfest Advisory.

661
00:32:11,600 --> 00:32:15,480
Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday

662
00:32:15,520 --> 00:32:18,800
Speaker 1: starting at seven am Eastern on Applecarplay and Android Auto

663
00:32:18,920 --> 00:32:21,880
Speaker 1: with the Bloomberg Business App. You can also listen live

664
00:32:21,960 --> 00:32:25,560
Speaker 1: on Amazon Alexa from our flagship New York station, Just

665
00:32:25,600 --> 00:32:28,120
Speaker 1: say Alexa Play Bloomberg eleven thirty.

666
00:32:28,440 --> 00:32:31,560
Speaker 2: Market's really been whipsawed by the news coming out of Washington, DC.

667
00:32:32,240 --> 00:32:34,200
Speaker 2: The folks there seem to be having the narrative here

668
00:32:34,200 --> 00:32:36,320
Speaker 2: as it relates to financial markets. So we figured, let's

669
00:32:36,320 --> 00:32:38,680
Speaker 2: get one of these folks on. Michael harrodappolisk play and

670
00:32:38,680 --> 00:32:42,240
Speaker 2: screw it up too badly. Republican representative from Florida in

671
00:32:42,320 --> 00:32:46,040
Speaker 2: the US Congress Joints is here in our Bloomberg Interactive Studio. Michael,

672
00:32:46,080 --> 00:32:49,360
Speaker 2: how do you guys think about Are you guys aware

673
00:32:49,440 --> 00:32:51,880
Speaker 2: in Congress that when you guys and when the White

674
00:32:51,920 --> 00:32:55,160
Speaker 2: House talks about tariffs and economic policy, boy, that has

675
00:32:55,200 --> 00:32:57,920
Speaker 2: a big impact on global financial markets. How do you

676
00:32:57,920 --> 00:33:00,560
Speaker 2: guys think about that well, like it absolutely, and now

677
00:33:00,800 --> 00:33:02,920
Speaker 2: one of my long term goals is offer a certainty

678
00:33:02,960 --> 00:33:05,480
Speaker 2: instability to the markets. What I led the Florida Senate

679
00:33:05,520 --> 00:33:08,200
Speaker 2: twelve years ago, we had a very challenging economy. We

680
00:33:08,240 --> 00:33:10,920
Speaker 2: wanted to offer certainty stability. We said, no new taxes,

681
00:33:10,920 --> 00:33:13,280
Speaker 2: no new fees, We're not going to make it easier

682
00:33:13,280 --> 00:33:16,280
Speaker 2: for people to sue people. It really consolidated the Florida market.

683
00:33:16,320 --> 00:33:19,040
Speaker 2: People flocked to Florida. We need to offer the same

684
00:33:19,080 --> 00:33:20,880
Speaker 2: thing in Washington. But as you see with these.

685
00:33:20,760 --> 00:33:23,000
Speaker 11: Tariffs, there's a lot of whipsaws you put it.

686
00:33:23,800 --> 00:33:26,560
Speaker 6: So the idea behind this right, and I think that

687
00:33:26,560 --> 00:33:28,880
Speaker 6: the Trump administration has been really clear, is to move

688
00:33:28,920 --> 00:33:31,959
Speaker 6: from an economy that's reliant on fiscal spend to an

689
00:33:32,000 --> 00:33:35,160
Speaker 6: economy that's reliant on private spend. And that is going

690
00:33:35,200 --> 00:33:38,120
Speaker 6: to be a really difficult transition from anyone that you

691
00:33:38,200 --> 00:33:40,560
Speaker 6: talk to, And I guess how much pain are you

692
00:33:40,600 --> 00:33:43,520
Speaker 6: guys willing to take as that happens.

693
00:33:43,840 --> 00:33:45,959
Speaker 13: I think the words turbulence there's going through. The turbulence

694
00:33:46,000 --> 00:33:47,480
Speaker 13: you've already seen in the market. Has been a little

695
00:33:47,480 --> 00:33:49,400
Speaker 13: bit of a slip from this high mark earlier this year,

696
00:33:49,720 --> 00:33:52,200
Speaker 13: and I think what the President's attempted to do is say,

697
00:33:52,200 --> 00:33:54,480
Speaker 13: we all learned during the COVID crisis that we're too

698
00:33:54,520 --> 00:33:55,720
Speaker 13: reliant on foreign markets.

699
00:33:55,760 --> 00:33:58,680
Speaker 11: We want to bring some of those jobs back. We also, of.

700
00:33:58,560 --> 00:34:01,120
Speaker 13: Course, want to offer the great the middle class once

701
00:34:01,160 --> 00:34:02,920
Speaker 13: again those manufacturing jobs can do.

702
00:34:02,960 --> 00:34:04,400
Speaker 11: But I think that challenge is there.

703
00:34:04,680 --> 00:34:07,560
Speaker 13: Our Secretary of the Treasury has talked about making that transition.

704
00:34:07,600 --> 00:34:09,480
Speaker 13: As you put it perfectly, I think you're going to

705
00:34:09,560 --> 00:34:11,400
Speaker 13: see some challenges over the next few months. But one

706
00:34:11,440 --> 00:34:13,760
Speaker 13: of the ways we do that is to reduce government

707
00:34:13,800 --> 00:34:15,960
Speaker 13: spending so that people have more money in their own

708
00:34:16,000 --> 00:34:18,840
Speaker 13: pockets to make those capital decisions, as opposed to the

709
00:34:19,040 --> 00:34:21,480
Speaker 13: let's just say the government making some of those big decisions.

710
00:34:21,880 --> 00:34:25,320
Speaker 2: So what do you think is is is Congress sits

711
00:34:25,680 --> 00:34:27,239
Speaker 2: comes back here? What do you think it's the to

712
00:34:27,239 --> 00:34:29,040
Speaker 2: do list for Congress these days?

713
00:34:29,080 --> 00:34:31,080
Speaker 11: From your perspective, Well, I think the great news.

714
00:34:31,080 --> 00:34:32,400
Speaker 13: First of all, I'll talking about the good news and

715
00:34:32,440 --> 00:34:35,480
Speaker 13: the challenges first and foremost, we realize that the border

716
00:34:35,520 --> 00:34:38,880
Speaker 13: crisis was simply enforcing the laws. We've reduced the border

717
00:34:38,920 --> 00:34:41,479
Speaker 13: crisis by ninety eight percent, and I like the idea

718
00:34:41,520 --> 00:34:43,160
Speaker 13: that means we could actually maybe make some changes in

719
00:34:43,160 --> 00:34:45,040
Speaker 13: the immigration law. There's some folks we need to bring

720
00:34:45,080 --> 00:34:47,400
Speaker 13: in for what to be seasonal workers and agriculture, like

721
00:34:47,400 --> 00:34:50,080
Speaker 13: mind state of Florida, let alone people working at hotels

722
00:34:50,120 --> 00:34:52,239
Speaker 13: and restaurants that are needed to some Americans just don't

723
00:34:52,239 --> 00:34:54,319
Speaker 13: want to do those jobs. That said, I think the

724
00:34:54,360 --> 00:34:56,759
Speaker 13: bad news is there's going to be challenges because the

725
00:34:56,800 --> 00:34:59,719
Speaker 13: President is saying we want reciprocal tariffs. Why are we

726
00:34:59,760 --> 00:35:02,400
Speaker 13: still treating other nations like is nineteen forty five and

727
00:35:02,440 --> 00:35:04,680
Speaker 13: stead at twenty twenty five. These nations are up on

728
00:35:04,719 --> 00:35:06,720
Speaker 13: their own feet right now. The EU economy is almost

729
00:35:06,760 --> 00:35:08,719
Speaker 13: the size of the United States. We want to be

730
00:35:08,800 --> 00:35:11,279
Speaker 13: treated fairly, whether it be on autos or food, and

731
00:35:11,360 --> 00:35:13,399
Speaker 13: I think that's a common sense approach that we get

732
00:35:13,440 --> 00:35:16,560
Speaker 13: treated fairly, especially how generous we are around the world,

733
00:35:16,680 --> 00:35:19,120
Speaker 13: whether it be are support in the Ukraine or of

734
00:35:19,160 --> 00:35:21,879
Speaker 13: course whenever there's a crisis overseas, we always step up.

735
00:35:22,239 --> 00:35:25,200
Speaker 13: That said, I think that the challenges is can we

736
00:35:25,320 --> 00:35:28,719
Speaker 13: actually reduce spending or at least focus on things that

737
00:35:28,800 --> 00:35:30,560
Speaker 13: really matter. And I think one of the things that

738
00:35:30,560 --> 00:35:33,279
Speaker 13: we're most focused on is how do we protect something

739
00:35:33,280 --> 00:35:36,239
Speaker 13: that people have earned Social Security and Medicare, and how

740
00:35:36,239 --> 00:35:38,719
Speaker 13: do we also agree form a program like Medicaid. I

741
00:35:38,760 --> 00:35:41,600
Speaker 13: know it sounds great, but remember medicaid is welfare healthcare

742
00:35:41,880 --> 00:35:44,279
Speaker 13: and these folks pay nothing into the system. But we

743
00:35:44,360 --> 00:35:46,920
Speaker 13: want to protect those folks on Medicaid or disabled or

744
00:35:46,960 --> 00:35:49,080
Speaker 13: in a nursing home. But folks who are able bodied,

745
00:35:49,560 --> 00:35:51,719
Speaker 13: they need to get into this economy and contribute because

746
00:35:51,920 --> 00:35:55,520
Speaker 13: we're all paying a little bit artificially higher in let's

747
00:35:55,560 --> 00:35:58,440
Speaker 13: just say insurance rates for healthcare. Because one third of

748
00:35:58,440 --> 00:36:00,719
Speaker 13: the population is getting free healthcare. There's going to be

749
00:36:00,760 --> 00:36:02,120
Speaker 13: a cost shift when that takes place.

750
00:36:02,160 --> 00:36:03,719
Speaker 6: Yeah, with any of the jobs, I mean, some of

751
00:36:03,719 --> 00:36:05,680
Speaker 6: them have jobs, they just don't pay a lot, so

752
00:36:05,719 --> 00:36:07,319
Speaker 6: it's not like they're just hanging out at home and

753
00:36:07,360 --> 00:36:08,680
Speaker 6: like collecting medicaid at this point.

754
00:36:08,719 --> 00:36:10,200
Speaker 11: No, I don't think that's the case. I think you're right.

755
00:36:10,239 --> 00:36:11,879
Speaker 13: I think that we do have things like the CHIP

756
00:36:11,920 --> 00:36:14,200
Speaker 13: program that's where you if you're working, you don't qualify

757
00:36:14,239 --> 00:36:16,479
Speaker 13: for Medicaid, and did the chip programs you can provide

758
00:36:16,520 --> 00:36:19,480
Speaker 13: at least low cost health insurance for your kids. I

759
00:36:19,480 --> 00:36:21,680
Speaker 13: think those are the transitions we're looking at, and I

760
00:36:21,680 --> 00:36:24,200
Speaker 13: think with Obamacare that does exist today. At least you're

761
00:36:24,200 --> 00:36:26,480
Speaker 13: paying Most people are paying something into the system.

762
00:36:26,960 --> 00:36:30,920
Speaker 2: How do people in Congress like yourself look at Doze

763
00:36:30,960 --> 00:36:33,000
Speaker 2: and Elon Musk. I mean, you guys have spent your

764
00:36:33,000 --> 00:36:36,840
Speaker 2: whole getting to Congress. You guys are are the bomb.

765
00:36:37,040 --> 00:36:40,240
Speaker 2: They got this dude coming in who elected him to anything?

766
00:36:40,280 --> 00:36:41,880
Speaker 2: How do you guys think about that in Congress?

767
00:36:41,920 --> 00:36:45,160
Speaker 11: About you? Based on your question, I might be the anomaly.

768
00:36:45,280 --> 00:36:46,439
Speaker 11: I love what they're doing. Here's why.

769
00:36:46,440 --> 00:36:47,920
Speaker 13: When I was the leader of the Senate, we literally

770
00:36:47,920 --> 00:36:50,600
Speaker 13: put everything online, from what we took in to what

771
00:36:50,640 --> 00:36:52,840
Speaker 13: we spent to the people who got the contracts.

772
00:36:53,040 --> 00:36:55,480
Speaker 11: I wanted to have that transparency. We are the Sunshine

773
00:36:55,480 --> 00:36:58,040
Speaker 11: State on legislation. I think the same should hold true

774
00:36:58,040 --> 00:36:58,600
Speaker 11: for spending.

775
00:36:58,840 --> 00:37:00,799
Speaker 13: It shouldn't just be Elon must get to be all

776
00:37:00,800 --> 00:37:02,960
Speaker 13: of us looking at where this money is spent. Every

777
00:37:03,000 --> 00:37:04,799
Speaker 13: one of us works hard at this table to earn

778
00:37:04,840 --> 00:37:07,799
Speaker 13: those dollars. The government should think as strongly about that

779
00:37:07,840 --> 00:37:10,399
Speaker 13: same position. When you see them spending some money, let's

780
00:37:10,400 --> 00:37:13,200
Speaker 13: just say some dubious programs. To be generous. You're wondering,

781
00:37:13,400 --> 00:37:15,440
Speaker 13: is that really the best use of our dollars? You

782
00:37:15,600 --> 00:37:17,239
Speaker 13: brought the question of medic it, I think it's a

783
00:37:17,320 --> 00:37:19,960
Speaker 13: legitimate issue. Those people who are on it, a lot

784
00:37:19,960 --> 00:37:22,200
Speaker 13: of them desperately need it because there's no other way.

785
00:37:22,400 --> 00:37:24,879
Speaker 13: When you take money and that this is not such

786
00:37:24,920 --> 00:37:27,799
Speaker 13: great programs, and you take away from needed programs, and

787
00:37:27,840 --> 00:37:30,960
Speaker 13: you undercut the confidence in the government. So I think

788
00:37:31,040 --> 00:37:33,879
Speaker 13: dose is a smart way to make people think. When

789
00:37:34,239 --> 00:37:36,279
Speaker 13: my wife says, hey, let's look at our credit card bill,

790
00:37:36,360 --> 00:37:38,640
Speaker 13: I know I'm only spend on my credit card bill. Really,

791
00:37:38,760 --> 00:37:41,600
Speaker 13: I just be spending on notts of extra items. I

792
00:37:41,600 --> 00:37:44,600
Speaker 13: think that that transparency is essential to gain trust in

793
00:37:44,640 --> 00:37:47,200
Speaker 13: the government, which is so lacking today. And as far

794
00:37:47,239 --> 00:37:50,000
Speaker 13: as your question the political question, Look, I'm a former

795
00:37:50,040 --> 00:37:50,840
Speaker 13: state legislator.

796
00:37:50,840 --> 00:37:52,120
Speaker 11: I hated it when this.

797
00:37:52,280 --> 00:37:55,359
Speaker 13: Federal government tell me the little brother to the big brother, Hey,

798
00:37:55,400 --> 00:37:57,480
Speaker 13: you got to do it this way. I think that

799
00:37:57,719 --> 00:37:59,319
Speaker 13: all of us who came to the state leg league

800
00:37:59,320 --> 00:38:01,719
Speaker 13: to remember, we didn't like it when Big Washington told

801
00:38:01,800 --> 00:38:03,799
Speaker 13: us what to do. We should not be hypocrites when

802
00:38:03,840 --> 00:38:06,439
Speaker 13: we have that opportunity in Washington. Let's have those block

803
00:38:06,480 --> 00:38:07,520
Speaker 13: grants back to the states.

804
00:38:07,520 --> 00:38:08,400
Speaker 11: They're smart folks.

805
00:38:08,480 --> 00:38:12,200
Speaker 13: They can make good decisions on healthcare, education, transportation, the environment.

806
00:38:12,440 --> 00:38:14,719
Speaker 13: They don't have to cycle it through Washington to get

807
00:38:14,760 --> 00:38:15,200
Speaker 13: the AOK.

808
00:38:16,000 --> 00:38:18,960
Speaker 6: Are your constituents freaked out at all by the uncertainty?

809
00:38:19,000 --> 00:38:22,160
Speaker 6: I mean, look at any sentiment data. Republicans, Independents, and

810
00:38:22,280 --> 00:38:23,640
Speaker 6: Democrats are all worried.

811
00:38:24,040 --> 00:38:24,239
Speaker 11: Well.

812
00:38:24,280 --> 00:38:26,120
Speaker 13: I think part of that in not just ubick, is

813
00:38:26,160 --> 00:38:28,240
Speaker 13: a lot of a media build up. Remember, there hasn't

814
00:38:28,239 --> 00:38:30,880
Speaker 13: been no, no, no no. There has not been a

815
00:38:30,920 --> 00:38:34,080
Speaker 13: single cut to Social Security or Medicare at this point.

816
00:38:34,120 --> 00:38:36,520
Speaker 13: We have not changed the Medicaid program at all.

817
00:38:36,800 --> 00:38:38,000
Speaker 11: And so when you.

818
00:38:37,880 --> 00:38:41,040
Speaker 6: Hear us talking about like a trillion dollars worth of cuts, like,

819
00:38:41,080 --> 00:38:42,799
Speaker 6: we know where that's going to come from. It's going

820
00:38:42,840 --> 00:38:45,160
Speaker 6: to be coming at had some point from entitlements.

821
00:38:45,880 --> 00:38:47,920
Speaker 13: It is going to come from. First of all, the entitlements,

822
00:38:47,920 --> 00:38:49,720
Speaker 13: the ones you've earned, are not going to be touched.

823
00:38:49,840 --> 00:38:52,000
Speaker 13: Social Security and Medicare. Every one of us on this

824
00:38:52,160 --> 00:38:54,960
Speaker 13: portal today have paid into that our entire working life.

825
00:38:55,000 --> 00:38:56,280
Speaker 11: That's a pledge you made. The folks.

826
00:38:56,400 --> 00:38:59,320
Speaker 13: Medicaid's a little different program, and there's almost one hundred

827
00:38:59,560 --> 00:39:02,719
Speaker 13: million people on Medicaid. All we've said were we really

828
00:39:02,760 --> 00:39:05,279
Speaker 13: focus At least I have is saying people who are

829
00:39:05,320 --> 00:39:08,359
Speaker 13: able bodied and are choosing not to work, should not.

830
00:39:08,280 --> 00:39:08,920
Speaker 11: Be on medicaid.

831
00:39:08,920 --> 00:39:10,759
Speaker 6: But it's not just that it's tariffs, right, it's the

832
00:39:10,800 --> 00:39:13,719
Speaker 6: worry of higher prices, even in the short term, and

833
00:39:13,760 --> 00:39:16,200
Speaker 6: it's across the board. So are people coming to you

834
00:39:16,200 --> 00:39:18,000
Speaker 6: and being like, look, I'm freaked out what's going on?

835
00:39:18,239 --> 00:39:19,759
Speaker 11: I think people are freaked out a little bit.

836
00:39:19,760 --> 00:39:21,920
Speaker 13: Sure, there's a big change coming government, but come on,

837
00:39:22,000 --> 00:39:24,520
Speaker 13: when we run a trillion dollar deficit, what kind of

838
00:39:24,520 --> 00:39:27,480
Speaker 13: responsibility is that we Again, what I love is we're

839
00:39:27,520 --> 00:39:30,240
Speaker 13: having this discussion finally of what is the role of government.

840
00:39:30,400 --> 00:39:32,600
Speaker 13: Should we be spending in this program or that program?

841
00:39:32,719 --> 00:39:34,480
Speaker 13: And let's all take a look at it, because some

842
00:39:34,520 --> 00:39:37,120
Speaker 13: of these programs that have been identified by DOGE would

843
00:39:37,120 --> 00:39:39,160
Speaker 13: have never passed the smell test if you actually brought

844
00:39:39,200 --> 00:39:42,120
Speaker 13: some of those expenditures before a government committee.

845
00:39:43,160 --> 00:39:46,920
Speaker 2: Florida. Everybody in this greater listenership here, Greater New York

846
00:39:46,920 --> 00:39:48,520
Speaker 2: City is seemingly gone to Florida.

847
00:39:48,719 --> 00:39:49,560
Speaker 5: Paul's just jealous.

848
00:39:49,600 --> 00:39:52,359
Speaker 2: I mean, what's the attraction? I mean, it's this summer's hot.

849
00:39:52,480 --> 00:39:55,920
Speaker 2: I mean, so talk to us about what's the Is

850
00:39:55,960 --> 00:39:57,200
Speaker 2: it still growing down there?

851
00:39:57,280 --> 00:40:00,439
Speaker 11: Is it appeals? I live in fantasyland. I love where live.

852
00:40:00,760 --> 00:40:02,800
Speaker 11: My wife says, I say, what, what are you crazy?

853
00:40:02,840 --> 00:40:05,200
Speaker 11: You're going to Congress. We lived in Florida's the first

854
00:40:05,239 --> 00:40:05,759
Speaker 11: place in the world.

855
00:40:05,840 --> 00:40:08,560
Speaker 13: Remember, we have budget surpluses, we have one of the

856
00:40:08,560 --> 00:40:11,600
Speaker 13: best education systems in America, we handle hurricanes when they

857
00:40:11,640 --> 00:40:12,400
Speaker 13: do come.

858
00:40:12,440 --> 00:40:14,880
Speaker 11: And it's just a fabulous place to live. And so

859
00:40:15,360 --> 00:40:17,040
Speaker 11: we love it there. And I'm a former New York

860
00:40:17,080 --> 00:40:18,800
Speaker 11: myself grew up in Garden City along Island.

861
00:40:19,120 --> 00:40:21,839
Speaker 13: And so when I experienced a winter in Florida after

862
00:40:21,920 --> 00:40:23,640
Speaker 13: going to college with Blase called stats and I said,

863
00:40:24,120 --> 00:40:26,960
Speaker 13: I found home, and it's hot ed where folks in August.

864
00:40:27,200 --> 00:40:30,160
Speaker 13: Let's be honest, and I'm willing to take one and

865
00:40:30,160 --> 00:40:32,120
Speaker 13: a half really bad months for ten and a half

866
00:40:32,200 --> 00:40:33,280
Speaker 13: great months in Florida.

867
00:40:33,600 --> 00:40:35,279
Speaker 11: Come on down. Eventually. You're all going to come.

868
00:40:35,480 --> 00:40:37,680
Speaker 2: Yeah, yeah, exactly. That seems work.

869
00:40:37,800 --> 00:40:39,160
Speaker 5: No, I'm too pale. I can't do Florida.

870
00:40:39,200 --> 00:40:39,960
Speaker 11: You can't to Florida.

871
00:40:40,000 --> 00:40:42,040
Speaker 2: No, well, no, I'm sick in state Jersey Shore. But no,

872
00:40:42,160 --> 00:40:44,520
Speaker 2: there's a lot of folks heading down there. Michael Hiradoupolis,

873
00:40:44,600 --> 00:40:46,879
Speaker 2: thank you so much for joining US Republican and representative

874
00:40:47,120 --> 00:40:49,600
Speaker 2: from the Great State of Florida in US Congress. Thank

875
00:40:49,600 --> 00:40:51,120
Speaker 2: you for coming to our studio. Appreciate it.

876
00:40:57,000 --> 00:41:00,880
Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday

877
00:41:00,920 --> 00:41:03,960
Speaker 1: starting at seven am Eastern on Apple, Coarclay, and Android

878
00:41:03,960 --> 00:41:07,000
Speaker 1: Auto with the Bloomberg Business app. You can also watch

879
00:41:07,040 --> 00:41:10,000
Speaker 1: us live every weekday on YouTube and always on the

880
00:41:10,000 --> 00:41:11,080
Speaker 1: Bloomberg terminal.

881
00:41:11,480 --> 00:41:15,040
Speaker 2: I'm looking at the thirty year fixed mortgage as per

882
00:41:15,040 --> 00:41:19,480
Speaker 2: the Mortgage Bankers Association, six point seventy one percent. It's

883
00:41:19,520 --> 00:41:21,879
Speaker 2: down from over seven, you know, kind of back where

884
00:41:21,880 --> 00:41:23,879
Speaker 2: we started the year. So it's come down a little bit,

885
00:41:23,920 --> 00:41:26,560
Speaker 2: but it's still not at a level that a lot

886
00:41:26,600 --> 00:41:28,799
Speaker 2: of folks say will free up this market. I don't know.

887
00:41:29,120 --> 00:41:32,839
Speaker 2: Some have chief economists core Logic. She does this stuff here.

888
00:41:33,160 --> 00:41:36,440
Speaker 2: She worries about the mortgage markets. So you see some

889
00:41:36,520 --> 00:41:39,760
Speaker 2: of the economic data here over the last couple of weeks.

890
00:41:40,160 --> 00:41:42,319
Speaker 2: How does that inform kind of where you think the

891
00:41:42,400 --> 00:41:45,160
Speaker 2: Fed is going to go with their interest rate policy

892
00:41:45,200 --> 00:41:45,600
Speaker 2: this year?

893
00:41:48,040 --> 00:41:51,440
Speaker 4: First of all, slight correction. Core Logic is now cautality.

894
00:41:51,719 --> 00:41:53,640
Speaker 4: So we have our brand name change here.

895
00:41:53,680 --> 00:41:57,480
Speaker 5: Oh nice, Yes, I will go ahead and blame Eric

896
00:41:57,520 --> 00:41:57,759
Speaker 5: for that.

897
00:41:57,880 --> 00:42:01,120
Speaker 2: Some consultants somewhere along the way came up with that.

898
00:42:01,200 --> 00:42:03,040
Speaker 2: You know, that was their job. They got paid to

899
00:42:03,080 --> 00:42:03,279
Speaker 2: do that.

900
00:42:03,320 --> 00:42:05,879
Speaker 11: Okay, okay, And what's the new firm name?

901
00:42:06,920 --> 00:42:08,800
Speaker 5: Brutality of Fatality?

902
00:42:08,920 --> 00:42:10,799
Speaker 2: All right, ol In. So what do you think about

903
00:42:10,800 --> 00:42:13,560
Speaker 2: our fed reserve here? Semma?

904
00:42:14,080 --> 00:42:17,760
Speaker 4: Yes, well, thanks for having me on. Well, Federal Reserve

905
00:42:18,120 --> 00:42:21,280
Speaker 4: is a really it's in a pickle in a sense

906
00:42:21,440 --> 00:42:27,120
Speaker 4: because you know, it's trying to maximize employment while stabilizing prices,

907
00:42:27,160 --> 00:42:29,279
Speaker 4: and either one is moving in the direction reel in

908
00:42:29,280 --> 00:42:32,960
Speaker 4: which they would want to. At their last meeting last week,

909
00:42:33,000 --> 00:42:37,120
Speaker 4: they were talking about higher inflation going forward, so they

910
00:42:37,120 --> 00:42:40,680
Speaker 4: don't expect reaching that two percent target until twenty twenty seven.

911
00:42:41,000 --> 00:42:44,680
Speaker 4: At the same time, concerns are building around the job market,

912
00:42:44,960 --> 00:42:48,520
Speaker 4: meaning that we can have a higher unemployment going forward,

913
00:42:48,560 --> 00:42:52,399
Speaker 4: and you know, when you're talking about large layoffs, that

914
00:42:52,600 --> 00:42:56,280
Speaker 4: never bodes well for consumer sentiment. And so consumer sentiment

915
00:42:56,360 --> 00:42:58,719
Speaker 4: has weakened at the moment, and that is not good

916
00:42:58,760 --> 00:43:02,239
Speaker 4: for the housing market. We did see mortgage rates come

917
00:43:02,280 --> 00:43:05,160
Speaker 4: down lower over the course you mentioned from that seven

918
00:43:05,239 --> 00:43:08,240
Speaker 4: percent in January. That is very helpful. And what's also

919
00:43:08,280 --> 00:43:11,520
Speaker 4: helpful is that mortgage rates have been stable over the

920
00:43:11,560 --> 00:43:14,640
Speaker 4: course of last month, because there's nothing worse than mortgage

921
00:43:14,680 --> 00:43:17,680
Speaker 4: rates going up in the middle of spring home buying season,

922
00:43:17,719 --> 00:43:21,040
Speaker 4: and that is what we saw last year. So mortgage

923
00:43:21,120 --> 00:43:23,399
Speaker 4: rates at least are a little bit helpful in terms

924
00:43:23,440 --> 00:43:24,800
Speaker 4: of the housing market at the moment.

925
00:43:25,320 --> 00:43:27,880
Speaker 6: Putting I mean, you really can't put mortgage rates aside,

926
00:43:27,880 --> 00:43:31,600
Speaker 6: but how's affordability aside from mortgage rates, Like our price

927
00:43:31,640 --> 00:43:35,040
Speaker 6: is coming down to reflect this uncertainty that consumers feel.

928
00:43:36,520 --> 00:43:40,000
Speaker 4: No, home prices are still stable. They've been pretty flat

929
00:43:40,080 --> 00:43:42,399
Speaker 4: for the course of last seven months, and we did

930
00:43:42,480 --> 00:43:47,440
Speaker 4: see this little bump in February reflecting entry into spring

931
00:43:47,440 --> 00:43:49,839
Speaker 4: home buying season. It was a little bit weaker than

932
00:43:49,880 --> 00:43:53,359
Speaker 4: we traditionally see in February, but it's still going up.

933
00:43:53,480 --> 00:43:55,600
Speaker 4: And there are still markets where you guys are up

934
00:43:55,600 --> 00:43:59,080
Speaker 4: in the northeast region of the country, where home prices

935
00:43:59,120 --> 00:44:01,239
Speaker 4: are up some nine to ten percent on a year

936
00:44:01,280 --> 00:44:04,920
Speaker 4: over year basis, so where incomes are strong, we do

937
00:44:05,040 --> 00:44:09,000
Speaker 4: continue to see relatively strong home price appreciation. The weakness

938
00:44:09,040 --> 00:44:12,160
Speaker 4: is really in the southern markets in Texas and Florida,

939
00:44:12,239 --> 00:44:15,000
Speaker 4: where we've talked about this over the course of last year.

940
00:44:15,239 --> 00:44:19,200
Speaker 4: Markets and the demand for homes have really weakened, and

941
00:44:19,239 --> 00:44:22,160
Speaker 4: that's reflected in lower and declining home prices.

942
00:44:23,600 --> 00:44:26,239
Speaker 2: Home affordability, I mean, and that's a term that I've

943
00:44:26,280 --> 00:44:28,520
Speaker 2: really come to understand a little bit more fully over

944
00:44:28,520 --> 00:44:30,520
Speaker 2: the last several years. It kind of goes to the

945
00:44:30,560 --> 00:44:35,080
Speaker 2: issue of, Hey, the houses are expenses out there, and

946
00:44:35,120 --> 00:44:38,720
Speaker 2: now we've got mortgage rates high. That makes home affordability

947
00:44:39,280 --> 00:44:42,600
Speaker 2: really really difficult. How long do you think that's going

948
00:44:42,680 --> 00:44:45,720
Speaker 2: to persist, Soma, Well.

949
00:44:45,640 --> 00:44:48,960
Speaker 4: I think we're already seeing pressures building up, and that's

950
00:44:48,960 --> 00:44:51,440
Speaker 4: why the rate of home press appreciation has slow don

951
00:44:51,560 --> 00:44:54,800
Speaker 4: and home prices have been flat, because it's really difficult

952
00:44:54,800 --> 00:44:58,560
Speaker 4: for people to make that new mortgage payment. Our estimate

953
00:44:58,760 --> 00:45:02,400
Speaker 4: is that mortgage just principle and interest over the course

954
00:45:02,840 --> 00:45:05,520
Speaker 4: since the onset of the pandemic has gone up some

955
00:45:05,560 --> 00:45:08,960
Speaker 4: sixty two percent on the same home, exactly the same home.

956
00:45:09,480 --> 00:45:12,720
Speaker 4: Your typical mortgage payment is now up sixty two percent.

957
00:45:13,000 --> 00:45:16,040
Speaker 4: But the other issue, and that's really causing concerns for

958
00:45:16,120 --> 00:45:19,840
Speaker 4: some markets that are more prone to natural disasters, is

959
00:45:19,880 --> 00:45:23,799
Speaker 4: that you have cost of insurance increasing so much, and

960
00:45:23,880 --> 00:45:26,400
Speaker 4: also in some markets that have seen a lot of appreciation,

961
00:45:26,800 --> 00:45:30,040
Speaker 4: you now have much higher property taxes. So that's the

962
00:45:30,120 --> 00:45:33,600
Speaker 4: component that's variable, it's not fixed, and that's really starting

963
00:45:33,640 --> 00:45:36,760
Speaker 4: to weigh on some more on affordability in some markets.

964
00:45:36,800 --> 00:45:38,520
Speaker 6: Some before I let you go, this is not taking

965
00:45:38,560 --> 00:45:42,000
Speaker 6: into account lumber, steel and copper and aluminum tariffs. How

966
00:45:42,040 --> 00:45:44,240
Speaker 6: much will that increase new homes.

967
00:45:45,440 --> 00:45:49,040
Speaker 4: Yeah, so we did an estimate and we think about

968
00:45:49,080 --> 00:45:52,520
Speaker 4: ten percent increasing material costs over the course of next

969
00:45:52,560 --> 00:45:56,480
Speaker 4: twelve months. Now, it's interesting, you know, there are different

970
00:45:56,480 --> 00:46:01,319
Speaker 4: components for residential. The biggest concern is applying is for commercial,

971
00:46:01,440 --> 00:46:06,160
Speaker 4: the biggest concern is steel and cement. But commercial sector

972
00:46:06,200 --> 00:46:09,239
Speaker 4: has been slowing, particularly when you think about multifamily, that

973
00:46:09,360 --> 00:46:13,400
Speaker 4: has been slowing. So the pressure on those prices is

974
00:46:13,440 --> 00:46:15,239
Speaker 4: going to be a little bit less simply because the

975
00:46:15,280 --> 00:46:18,000
Speaker 4: demand for those type of products is not as high

976
00:46:18,040 --> 00:46:20,200
Speaker 4: as it was over the course of the last few years.

977
00:46:20,680 --> 00:46:23,520
Speaker 2: All right, Sama, heep, thank you so much. We appreciate that. Sma.

978
00:46:23,680 --> 00:46:29,120
Speaker 2: She is the chief economist and the new firm is Cutality.

979
00:46:28,520 --> 00:46:29,160
Speaker 3: In you go for.

980
00:46:29,800 --> 00:46:33,720
Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday

981
00:46:33,760 --> 00:46:37,160
Speaker 1: starting at seven am Eastern on Applecarplay and Android Auto

982
00:46:37,200 --> 00:46:40,160
Speaker 1: with the Bloomberg Business app. You can also listen live

983
00:46:40,239 --> 00:46:43,799
Speaker 1: on Amazon Alexa from our flagship New York station. Just

984
00:46:43,840 --> 00:46:46,360
Speaker 1: say Alexa play Bloomberg eleven thirty.

985
00:46:46,560 --> 00:46:51,080
Speaker 2: Right now, let's hit the newspaper segment, the always popular

986
00:46:51,200 --> 00:46:54,000
Speaker 2: newspaper segment with Lisa Matailisha, what do you have for today?

987
00:46:54,280 --> 00:46:56,360
Speaker 12: Okay, Paul, I know you're not going to know this,

988
00:46:56,480 --> 00:46:58,960
Speaker 12: but Alex, did you notice what Oprah was wearing to

989
00:46:59,040 --> 00:46:59,839
Speaker 12: the Oscars?

990
00:47:00,400 --> 00:47:02,560
Speaker 5: No, but I want to know talk. Wait was it

991
00:47:02,560 --> 00:47:02,919
Speaker 5: a suit?

992
00:47:03,560 --> 00:47:05,799
Speaker 12: Yes, you're onto it, You're onto it, You're onto it. Okay,

993
00:47:05,880 --> 00:47:07,560
Speaker 12: wasn't an evening gown? So she was wearing this long

994
00:47:07,600 --> 00:47:10,600
Speaker 12: black skirt to thetotype laser white shirt with a tie.

995
00:47:10,640 --> 00:47:14,480
Speaker 12: And the tie was like the staple because women wearing ties.

996
00:47:15,040 --> 00:47:17,279
Speaker 12: It's it's not something new. I remember Diane Keaton like

997
00:47:17,320 --> 00:47:19,720
Speaker 12: she wore the all time. Yes, yes, but it's seeing

998
00:47:19,719 --> 00:47:23,080
Speaker 12: this resurgence. So you have like Zendaiya, Zoe Saldanya like

999
00:47:23,080 --> 00:47:24,279
Speaker 12: they're starting to do this. So I was on the

1000
00:47:24,280 --> 00:47:27,000
Speaker 12: twenty twenty five runway. So the Wall Street Journal really

1001
00:47:27,000 --> 00:47:29,520
Speaker 12: gets into it. They have like a bunch of listings.

1002
00:47:29,560 --> 00:47:31,000
Speaker 12: How they can be as high as two hundred and

1003
00:47:31,000 --> 00:47:33,120
Speaker 12: fifty five dollars. Some as cheap, you know, maybe twenty

1004
00:47:33,160 --> 00:47:35,840
Speaker 12: eight dollars, but they get into the history behind it,

1005
00:47:35,880 --> 00:47:38,600
Speaker 12: like in the eighteen thirties in Paris, women needed permission

1006
00:47:38,640 --> 00:47:40,200
Speaker 12: from the police to wear a tie.

1007
00:47:40,320 --> 00:47:42,960
Speaker 6: Oh my god, that's amazingly wrong.

1008
00:47:44,880 --> 00:47:46,480
Speaker 12: But I don't know. I think I would kind I

1009
00:47:46,560 --> 00:47:49,279
Speaker 12: like the thin like, yes, I think you would do that.

1010
00:47:49,360 --> 00:47:50,680
Speaker 12: Like I've seen people here wear it.

1011
00:47:50,600 --> 00:47:54,200
Speaker 2: Too, John far and he wears it very well, but

1012
00:47:54,320 --> 00:47:55,319
Speaker 2: you just wear it very well.

1013
00:47:55,560 --> 00:47:57,680
Speaker 5: I would totally. I would totally do that.

1014
00:47:57,719 --> 00:47:59,480
Speaker 2: No, I don't like it. Sorry, you don't like the

1015
00:47:59,520 --> 00:48:00,239
Speaker 2: women tie thing?

1016
00:48:00,320 --> 00:48:00,800
Speaker 11: No?

1017
00:48:00,800 --> 00:48:04,720
Speaker 2: No, can I ask it an adjacent by the way.

1018
00:48:04,600 --> 00:48:05,040
Speaker 5: But that's fine.

1019
00:48:05,040 --> 00:48:06,760
Speaker 11: You can have your opinion, but that's my opinion.

1020
00:48:06,840 --> 00:48:08,680
Speaker 2: Yeah, can I ask it an adjacent oprah question?

1021
00:48:08,800 --> 00:48:08,960
Speaker 3: Yes?

1022
00:48:09,440 --> 00:48:12,160
Speaker 2: Do we know is she has been reported whether she's

1023
00:48:12,160 --> 00:48:14,759
Speaker 2: doing like theozepic kind of we govy things.

1024
00:48:15,080 --> 00:48:17,160
Speaker 12: She talked about it because you had the whole special right.

1025
00:48:17,080 --> 00:48:20,080
Speaker 2: Yes, Okay, so she's okay, okay, just wonder phenomenal. Yeah

1026
00:48:20,080 --> 00:48:22,600
Speaker 2: she does. Okay, great tie.

1027
00:48:22,680 --> 00:48:26,440
Speaker 5: Oh yeah, what else are you looking at?

1028
00:48:26,640 --> 00:48:27,040
Speaker 11: Okay?

1029
00:48:27,800 --> 00:48:30,520
Speaker 12: President Trump's childhood home. I didn't know this, but he

1030
00:48:30,560 --> 00:48:32,320
Speaker 12: had this. You know, he lived in a tall jewelry

1031
00:48:32,360 --> 00:48:34,880
Speaker 12: twenty one undred square foot it's like a tutor style

1032
00:48:34,960 --> 00:48:38,400
Speaker 12: residence in Jamaica States in Queens until he was like

1033
00:48:38,400 --> 00:48:40,440
Speaker 12: four years old. His father actually built.

1034
00:48:40,200 --> 00:48:41,920
Speaker 2: It in nineteen forty area.

1035
00:48:42,160 --> 00:48:46,120
Speaker 12: Yeah, but it was sold at a steep discount.

1036
00:48:46,120 --> 00:48:46,359
Speaker 2: Okay.

1037
00:48:46,400 --> 00:48:48,000
Speaker 12: The reason why, Well, it was sold for eight hundred

1038
00:48:48,000 --> 00:48:50,799
Speaker 12: and thirty five thousand dollars. Right, it was less than

1039
00:48:50,880 --> 00:48:53,600
Speaker 12: half of the two point one four million that it

1040
00:48:53,719 --> 00:48:57,120
Speaker 12: was sold for back in twenty seventeen. But it's been unoccupied, right,

1041
00:48:57,120 --> 00:48:59,360
Speaker 12: it's run dad, And you said the area is nice,

1042
00:48:59,440 --> 00:49:02,000
Speaker 12: So the neighbor are like, this is a nysore. This

1043
00:49:02,080 --> 00:49:04,400
Speaker 12: is horrible. So they started trying to keep up with

1044
00:49:04,480 --> 00:49:06,800
Speaker 12: like a lawn and then you have like thirty straight

1045
00:49:06,920 --> 00:49:09,960
Speaker 12: cats that are like wandering around this house and they

1046
00:49:09,960 --> 00:49:13,040
Speaker 12: are feeding the cats because they and it's become this

1047
00:49:13,120 --> 00:49:16,279
Speaker 12: whole thing. But the person who owned it before, they

1048
00:49:16,320 --> 00:49:18,200
Speaker 12: actually used to rent it out as like an Airbnb

1049
00:49:18,400 --> 00:49:20,359
Speaker 12: for like eight hundred and something dollars a night.

1050
00:49:20,440 --> 00:49:23,440
Speaker 5: I love they owned that. The neighborhoods started. I love

1051
00:49:23,560 --> 00:49:24,560
Speaker 5: that is.

1052
00:49:24,640 --> 00:49:27,040
Speaker 12: So the neighbors were like pitching in. So now it

1053
00:49:27,080 --> 00:49:29,440
Speaker 12: was finally sold after being abandoned for a while.

1054
00:49:30,200 --> 00:49:30,960
Speaker 11: But it was just gonna be.

1055
00:49:31,120 --> 00:49:33,000
Speaker 2: You put a million dollars into that thing, which somebody

1056
00:49:33,040 --> 00:49:33,719
Speaker 2: will and it can be.

1057
00:49:33,800 --> 00:49:36,040
Speaker 12: And they're totally They have the dumpsters out there tearing

1058
00:49:36,120 --> 00:49:39,200
Speaker 12: everything down. So yeah, so that's interesting. I didn't even

1059
00:49:39,239 --> 00:49:40,560
Speaker 12: know that that that he lived there.

1060
00:49:40,800 --> 00:49:42,720
Speaker 2: He was like years old exactly.

1061
00:49:43,280 --> 00:49:44,960
Speaker 12: For those of you, are you guys on Facebook, I

1062
00:49:44,960 --> 00:49:46,319
Speaker 12: don't know you're not, okay.

1063
00:49:46,360 --> 00:49:48,160
Speaker 6: I mean I think I have an account, okay, but

1064
00:49:48,160 --> 00:49:49,720
Speaker 6: I think I haven't been on it for five years.

1065
00:49:49,800 --> 00:49:51,919
Speaker 12: I know I haven't either. My daughter says, only old

1066
00:49:51,920 --> 00:49:56,840
Speaker 12: people do it. So so Mark Zuckerberg athlete, wants to

1067
00:49:56,840 --> 00:50:00,040
Speaker 12: bring down back like the og Facebook, like when you

1068
00:50:00,000 --> 00:50:02,160
Speaker 12: you would talk and we'd see content from your friends

1069
00:50:02,200 --> 00:50:05,080
Speaker 12: instead of all these recommendations that you get. So they're

1070
00:50:05,120 --> 00:50:09,680
Speaker 12: introducing this friends tab. It shows your friend's stories, reels, birthdays,

1071
00:50:09,719 --> 00:50:11,879
Speaker 12: you know, all that kind of stuff what it kind

1072
00:50:11,880 --> 00:50:14,400
Speaker 12: of used to do. So it shows how they're going

1073
00:50:14,480 --> 00:50:16,560
Speaker 12: back to their roots a little bit. I mean, they've

1074
00:50:16,560 --> 00:50:18,800
Speaker 12: been trying to get popular, they've been falling to like

1075
00:50:18,840 --> 00:50:20,520
Speaker 12: all the other social media platforms.

1076
00:50:20,680 --> 00:50:25,239
Speaker 5: So what is it now? Feed basically versus a friend.

1077
00:50:24,960 --> 00:50:27,600
Speaker 12: Few, it's like the recommend date, like you gets recommended

1078
00:50:27,600 --> 00:50:30,360
Speaker 12: on the algorithm, like what you they think you would like,

1079
00:50:30,440 --> 00:50:32,880
Speaker 12: and they put that on your feed. So if you

1080
00:50:32,920 --> 00:50:36,120
Speaker 12: click on this friend's tab, it'll go directly to only

1081
00:50:36,160 --> 00:50:38,759
Speaker 12: what your friends are posting, so you can see that.

1082
00:50:38,800 --> 00:50:40,600
Speaker 5: And there's something very weird about this, isn't it.

1083
00:50:40,640 --> 00:50:42,680
Speaker 2: I don't know. I'm looking at you're going back to

1084
00:50:42,719 --> 00:50:44,760
Speaker 2: the OG way. I'm looking at the stock one point

1085
00:50:44,800 --> 00:50:47,960
Speaker 2: five trillion dollar market cap up three percent year to date,

1086
00:50:48,040 --> 00:50:50,759
Speaker 2: up twenty four percent over the trailing four months. This

1087
00:50:50,800 --> 00:50:52,759
Speaker 2: has become a story that used to be all driven

1088
00:50:52,800 --> 00:50:55,239
Speaker 2: by subscriber growth and growth and growth, and then it

1089
00:50:55,239 --> 00:50:57,800
Speaker 2: became a cost cutting story, which worked great for the stock.

1090
00:50:58,440 --> 00:51:01,480
Speaker 2: And now that we're going to how to MoMA, ties, Instagram, WhatsApp,

1091
00:51:01,520 --> 00:51:02,240
Speaker 2: all that kind of stuff.

1092
00:51:02,239 --> 00:51:03,880
Speaker 5: Now it's an a I play too for like.

1093
00:51:03,880 --> 00:51:06,520
Speaker 2: A high press another exactly right now. Now they've got

1094
00:51:06,560 --> 00:51:09,239
Speaker 2: the AI think go ahead, all right, very good, lisha

1095
00:51:09,239 --> 00:51:11,840
Speaker 2: miteo with the newspapers. We appreciate that.

1096
00:51:11,920 --> 00:51:17,040
Speaker 1: As always, this is the Bloomberg Surveillance podcast, available on Apple,

1097
00:51:17,200 --> 00:51:21,400
Speaker 1: Spotify and anywhere else you get your podcasts. Listen live

1098
00:51:21,480 --> 00:51:25,560
Speaker 1: each weekday, seven to ten am Eastern on Bloomberg dot com,

1099
00:51:25,719 --> 00:51:29,520
Speaker 1: the iHeartRadio app tune In, and the Bloomberg Business app.

1100
00:51:29,800 --> 00:51:32,920
Speaker 1: You can also watch us live every weekday on YouTube

1101
00:51:33,239 --> 00:51:35,240
Speaker 1: and always on the Bloomberg terminal