WEBVTT - Jay Powell and Kamala Harris Keynote Addresses 0:00:02.400 --> 0:00:06.760 Bloomberg Audio Studios, Podcasts, radio News. 0:00:11.800 --> 0:00:14.880 This is the Bloomberg Surveillance Podcast. I'm Paul Sweeney along 0:00:14.880 --> 0:00:17.240 with Tom Keen. Join us each day for insight from 0:00:17.239 --> 0:00:20.760 the best in economics, geopolitics, finance, and investment. You can 0:00:20.800 --> 0:00:24.439 also watch the show live on YouTube. Visit the Bloomberg 0:00:24.480 --> 0:00:27.760 Podcast channel on YouTube to see the show weekday mornings 0:00:27.760 --> 0:00:30.400 from seven to ten Eastern Remark Global Headquarters at New 0:00:30.480 --> 0:00:33.720 York City. Subscribe to the podcast on Apple, Spotify, or 0:00:33.760 --> 0:00:36.800 anywhere else you listen, and as always on Bloomberg Radio, 0:00:36.840 --> 0:00:39.720 the Bloomberg Terminal, and the Bloomberg Business App. Let's check 0:00:39.760 --> 0:00:41.720 in with Zanne Saunders. We need some help here, chief 0:00:41.760 --> 0:00:44.880 investment strategist for Charles Schwab Lizan. I mean, I'm looking 0:00:44.960 --> 0:00:48.120 at the S and p NASDAC both up double digits 0:00:48.159 --> 0:00:50.880 this year. We had a real scare. I guess almost 0:00:50.920 --> 0:00:54.680 three weeks ago on that crazy Monday. Where do we 0:00:54.720 --> 0:00:56.200 go here? For the remainder of the year, We're all 0:00:56.200 --> 0:00:58.960 gonna be paying attention to fed Truman Pale today, Let's 0:00:59.000 --> 0:01:00.720 think a little bit beyond that. How are you feeling 0:01:00.720 --> 0:01:01.960 about these markets going forward? 0:01:02.880 --> 0:01:05.240 Well, you talk about the big scare, and it really 0:01:05.280 --> 0:01:07.920 was just concentrated in that one week, and in particular 0:01:08.040 --> 0:01:09.800 on August fifth, and that had a lot to do 0:01:09.880 --> 0:01:12.399 with the unwinding of the year Yan Carriy tret But 0:01:12.440 --> 0:01:16.760 even before that, the calm really was only on the surface. 0:01:18.319 --> 0:01:22.800 Even before the pullback that brought the Nasdaq into correction territory, 0:01:23.200 --> 0:01:25.760 you had had no more than a seven percent draw 0:01:25.840 --> 0:01:29.640 down in the Nasdaq, but the average member maximum draw 0:01:29.720 --> 0:01:33.160 down just here to date was negative forty percent. That's 0:01:33.200 --> 0:01:37.440 now negative forty three percent, alongside at the index level 0:01:37.480 --> 0:01:40.720 the Nasdaq being down thirteen percent. So there has already 0:01:40.760 --> 0:01:43.640 been a tremendous amount of churn and rotation and even 0:01:43.680 --> 0:01:48.160 turmoil under the surface, maybe more reflective of all of 0:01:48.160 --> 0:01:51.160 these uncertainties that were still dealing with and what you 0:01:51.200 --> 0:01:53.960 would pick up if you just looked at the index level. 0:01:54.120 --> 0:01:58.200 Jackson Hole is important. Obviously, the September FOMC meeting, we're 0:01:58.200 --> 0:02:03.120 thinking twenty five, not fifty, barring a more significant surprise 0:02:03.320 --> 0:02:06.440 in some combination of the PCE that's coming up and 0:02:06.480 --> 0:02:09.840 the jobs report. But at this point we're penciling in 0:02:09.919 --> 0:02:11.520 twenty five is the start point. 0:02:11.760 --> 0:02:14.000 The zan Tom's going to be so sorry that he 0:02:14.040 --> 0:02:16.800 missed you. I just got to say, if we see 0:02:16.840 --> 0:02:21.520 those cuts not in a recession, oh hello, not in 0:02:21.520 --> 0:02:24.560 a recession, does that change the leadership profile like no 0:02:24.680 --> 0:02:27.040 financial stay with tech? Does it change how you think 0:02:27.040 --> 0:02:27.440 about it? 0:02:28.080 --> 0:02:28.280 Yeah? 0:02:28.320 --> 0:02:30.520 What does tend to happen is if you look at 0:02:30.560 --> 0:02:35.280 past cycles and you see the FED operating more slowly, 0:02:35.360 --> 0:02:38.519 ostensibly because they're not combating a recession or a financial 0:02:38.560 --> 0:02:41.840 crisis or some combination thereof. Not only do you see 0:02:42.040 --> 0:02:46.600 milder maximum draw downs within say the six months or 0:02:46.720 --> 0:02:50.040 up to a year following the initial cut, you tend 0:02:50.120 --> 0:02:53.160 to see more of a cyclical bias in terms of 0:02:53.200 --> 0:02:56.640 what does well at the factor level, at the sector level. 0:02:57.120 --> 0:03:01.799 In contrast the fast cutting cycles where sensibly they are 0:03:01.960 --> 0:03:05.320 combating a recession and or financial crisis, like was the 0:03:05.320 --> 0:03:08.000 case when the FED started cutting in six we all 0:03:08.040 --> 0:03:11.560 know what was still ahead of us. That was those 0:03:11.600 --> 0:03:15.440 were backdrops where there were greater maximum drawdowns and more 0:03:15.520 --> 0:03:20.040 defensiveness in terms of factor and sector based leadership. So 0:03:20.440 --> 0:03:23.040 I actually say to people who are looking for or 0:03:23.080 --> 0:03:26.640 hoping for an aggressive FED, be careful what you wish for. 0:03:27.000 --> 0:03:29.720 It's the why behind the FED starts a cutting cycle 0:03:29.720 --> 0:03:33.279 and the level of aggressiveness that defines how markets behave. 0:03:34.040 --> 0:03:36.800 Lizanne, what did you learn from this earning cycle that 0:03:36.840 --> 0:03:39.160 we just pretty much closing up this week? 0:03:40.120 --> 0:03:42.080 So you know, the beat rate and the percent by 0:03:42.080 --> 0:03:45.240 which companies beat was about in line with recent averages, 0:03:45.680 --> 0:03:49.440 better than long term averages. However, the same cannot be 0:03:49.480 --> 0:03:51.160 set on the top line growth, So you had a 0:03:51.200 --> 0:03:54.160 below average beat rate on revenue growth, you had a 0:03:54.160 --> 0:03:57.640 below average percent by which companies beat. Not to mention 0:03:57.760 --> 0:04:01.119 the fact that third quarter estimates trend to down even 0:04:01.200 --> 0:04:05.040 though second quarter ended up being loftier than expected. Within 0:04:05.120 --> 0:04:08.160 the sort of AI theme, I think part of the 0:04:08.240 --> 0:04:11.440 reason why you went into correction mode for call it 0:04:11.480 --> 0:04:15.160 the Magnificent seven, et cetera, that group of megacap names, 0:04:15.760 --> 0:04:18.200 is because there was a lot more emphasis on the 0:04:18.400 --> 0:04:22.880 maybe the timing gap between the expenses associated with AI 0:04:23.040 --> 0:04:26.880 and the revenue generation associated with AI. The last thing 0:04:26.880 --> 0:04:29.359 I'd say is, I think there's increasing attention on the 0:04:29.440 --> 0:04:33.000 revenue side of the equation because revenues in general tend 0:04:33.000 --> 0:04:35.560 to correlate more with what decisions made about the labor 0:04:35.600 --> 0:04:38.480 market more so than bottom line growth. So I think 0:04:38.520 --> 0:04:41.320 those weren't focus in the second quarter will continue to 0:04:41.360 --> 0:04:43.119 be as we approach the end of the third quarter. 0:04:43.279 --> 0:04:44.880 Do you think Nvidia next week is going to be 0:04:44.920 --> 0:04:46.520 a market event or an in video event? 0:04:47.440 --> 0:04:52.440 Tell me what they report, it's, I mean, certainly going 0:04:52.480 --> 0:04:57.360 to be incredibly important to either affirm what has been 0:04:57.440 --> 0:05:02.120 valuation expansion, not just there, but in in the broader space. 0:05:03.000 --> 0:05:05.839 I don't cover the stock, I don't cover any individual stocks. 0:05:06.160 --> 0:05:07.880 I don't want to say it's make or break, but 0:05:08.000 --> 0:05:10.520 these days a name like that can be make or 0:05:10.560 --> 0:05:14.560 break in terms of the importance of that report as 0:05:14.560 --> 0:05:18.279 a feeder into the narratives that have sat behind where 0:05:18.400 --> 0:05:22.160 leadership has resided, where valuation expansion has been most robust, 0:05:22.680 --> 0:05:23.600 and the opposite. 0:05:23.680 --> 0:05:25.240 And so that kind of goes to I guess a 0:05:25.320 --> 0:05:28.080 question I ask a lot zandwich. Is it seems like 0:05:28.200 --> 0:05:31.400 for the longest time this market has been driven by 0:05:31.440 --> 0:05:33.800 technology and for good reason. I mean, and technology has 0:05:33.839 --> 0:05:36.440 been a leading driver of this market. Is that still 0:05:36.480 --> 0:05:36.920 the case? 0:05:37.920 --> 0:05:42.000 It's not recently? You know, so far this quarter, the 0:05:42.080 --> 0:05:44.919 Magnificent seven is underperforming the rest of the market. If 0:05:45.000 --> 0:05:47.159 you look at the past month or so, and you 0:05:47.240 --> 0:05:49.880 look at where fun flows have been concentrated in the 0:05:49.920 --> 0:05:53.880 ETF space, it's actually been in areas like utilities and 0:05:53.920 --> 0:05:57.039 in real estate. So I think it's that anticipation of 0:05:57.080 --> 0:06:00.280 a FED finally moving into cutting mode that is given 0:06:00.320 --> 0:06:04.600 a lift to those more sensitive areas, and you've commensurately 0:06:04.720 --> 0:06:07.640 seen outflows and tech. I don't know that that persists 0:06:07.680 --> 0:06:10.159 in any kind of linear way. I think what's been 0:06:10.200 --> 0:06:12.800 shown over the past month or two is that there's 0:06:12.920 --> 0:06:17.359 not only money looking for opportunities outside of the Magnificent seven, 0:06:17.560 --> 0:06:20.799 but there's also still a lot of interest in better 0:06:21.000 --> 0:06:23.839 entry points in some of those names. So I would 0:06:23.880 --> 0:06:27.320 expect more of a choppy pattern, but you clearly have 0:06:27.400 --> 0:06:31.440 seen a shift in leadership more toward those interest sensitive 0:06:31.480 --> 0:06:34.960 areas as we await the September FOMAC meeting. 0:06:35.080 --> 0:06:37.160 Yeah, and from that top that we hit in July, 0:06:37.279 --> 0:06:39.920 the socks the semi index is down like thirteen percent, 0:06:40.320 --> 0:06:42.800 so I mean they've definitely rolling over quite a bit. 0:06:43.000 --> 0:06:45.440 Last we question LEZAN is today going to be a 0:06:45.440 --> 0:06:46.039 market event? 0:06:47.400 --> 0:06:48.040 I doubt it. 0:06:48.360 --> 0:06:51.320 I think given the emphasis on data dependency and the 0:06:51.360 --> 0:06:53.960 fact that we still have PCE and the jobs report 0:06:54.000 --> 0:06:56.440 in front of us, Powell may touch on the BLS 0:06:56.480 --> 0:07:00.360 benchmark revisions, but I can't imagine he has the data 0:07:00.400 --> 0:07:03.599 that would suggest a significantly more dubbish shift than what's 0:07:03.600 --> 0:07:06.679 built into expectations. So status quo for the most. 0:07:06.520 --> 0:07:08.599 Part, Right, Lezanne, thank you so much for joining us. 0:07:08.600 --> 0:07:11.600 Always appreciate getting a few minutes of your time. Listen Sanders. 0:07:11.600 --> 0:07:25.840 She's a chief investment strategist for Charles Schwab. We've got 0:07:25.880 --> 0:07:30.120 the Democratic Convention done in the book, same for the Republicans. 0:07:30.120 --> 0:07:33.160 So now I guess both candidates hit the campaign trail 0:07:33.240 --> 0:07:37.000 and they go hard until early November and November five 0:07:37.000 --> 0:07:39.640 when we get this election going. Tita Fordham joins us. 0:07:39.640 --> 0:07:44.160 She's a founder and geopolitical strategist for Fordham Global Insight. Tina, 0:07:44.200 --> 0:07:47.040 what do you make of the week that the Democrats 0:07:47.120 --> 0:07:49.520 had in Chicago? What do your takeaways? 0:07:50.680 --> 0:07:53.200 Well, what our high energy event? 0:07:54.080 --> 0:07:58.360 There wasn't a lot there for investors or business leaders 0:07:58.400 --> 0:08:01.720 to really grab on to, but that wasn't the point 0:08:01.800 --> 0:08:06.400 of this exercise. It was an interesting kind of romp 0:08:06.520 --> 0:08:11.920 through Democratic Party leaders from the past, with the Obamas 0:08:11.960 --> 0:08:13.320 and the Clinton's. 0:08:13.520 --> 0:08:16.320 The future with Buddhajdge and AOC. 0:08:16.160 --> 0:08:21.080 And then Harris's acceptance speech last night, so you know, 0:08:21.720 --> 0:08:22.760 quite an endeavor. 0:08:23.480 --> 0:08:26.200 It was truly historic, honestly, I mean even my ten 0:08:26.280 --> 0:08:30.040 year old daughter asked to watch her speech. Yeah, like 0:08:30.120 --> 0:08:32.360 maybe maybe she was also trying to stay up later, 0:08:32.440 --> 0:08:36.760 but she genuinely seemed to want to watch her acceptance speech. 0:08:36.800 --> 0:08:40.040 It was definitely an historic moment. As Paul pointed out 0:08:40.040 --> 0:08:44.400 earlier Tina, she also Kamala Harris moved away a little 0:08:44.400 --> 0:08:47.440 bit from some of the leftter policies that we've seen 0:08:47.440 --> 0:08:50.480 for the Democratic Party, particularly in climate What does that 0:08:50.559 --> 0:08:52.720 tell you about where she's headed and what her messaging 0:08:52.760 --> 0:08:54.760 and policy will be over the next three months. 0:08:56.360 --> 0:08:58.600 If she wants to win, she has to move to 0:08:58.679 --> 0:08:59.200 the center. 0:09:00.120 --> 0:09:03.680 What we saw last night and the messaging that was 0:09:03.679 --> 0:09:06.960 coming through this past week at the DNC was a 0:09:07.160 --> 0:09:12.200 clear shift away from the Bernie Sanders, the hard left, 0:09:12.720 --> 0:09:16.080 and from candidate Harris from twenty twenty right. 0:09:16.360 --> 0:09:18.160 She has walked back a. 0:09:18.160 --> 0:09:22.880 Number of those positions, a bit of economic populism in 0:09:22.960 --> 0:09:25.480 the little that we've seen on that front, but she 0:09:25.679 --> 0:09:29.760 was very much campaigning on being a president for all Americans, 0:09:29.840 --> 0:09:34.920 for the middle class, and also not othering herself by 0:09:35.320 --> 0:09:38.840 talking about gender or race. That's a big contrast compared 0:09:39.200 --> 0:09:41.040 to Hillary Clinton's approach. 0:09:41.600 --> 0:09:44.600 Tina, what do you expect the strategy to be from 0:09:44.640 --> 0:09:48.359 former President Donald Trump? Here over the next three months? 0:09:51.040 --> 0:09:53.000 He is going to have to catch up a lot 0:09:53.120 --> 0:09:54.800 quicker than we've seen so far. 0:09:55.679 --> 0:09:59.720 Democrats are playing offense, which is something they haven't necessarily 0:09:59.760 --> 0:10:02.920 done well. They're not historically a terribly disciplined party, which 0:10:02.920 --> 0:10:05.160 is why I think these last few days have been 0:10:05.200 --> 0:10:09.200 so effective. In September, the rubber hits the road with 0:10:09.320 --> 0:10:12.240 the polling, we'll see if there's been a convention bounce. 0:10:12.679 --> 0:10:15.240 But Trump is on the defensive and none of his 0:10:16.000 --> 0:10:18.000 lines of attack seem to have. 0:10:17.960 --> 0:10:19.959 Really stuck just yet. 0:10:20.840 --> 0:10:24.520 The debate on September tenth is going to be where 0:10:24.559 --> 0:10:27.480 all of this comes into focus, and I think it's 0:10:27.520 --> 0:10:29.680 going to be a tough night for Donald Trump. 0:10:30.920 --> 0:10:34.560 What do you think? What do you think Independence and 0:10:34.640 --> 0:10:37.920 modern Republicans are making of this race right now? 0:10:39.400 --> 0:10:42.000 Well, we're just starting to see that data coming in. 0:10:42.640 --> 0:10:46.240 Frank Luntz, the Polster, has talked about some of his 0:10:46.360 --> 0:10:50.160 focus groups where there is some evidence that Independence are 0:10:50.960 --> 0:10:54.880 moving toward Harris. Harris is still struggling though, with non 0:10:54.960 --> 0:10:57.800 college educated voters and. 0:10:59.480 --> 0:11:02.000 A number of men. But it's really early days. 0:11:02.040 --> 0:11:05.199 Remember that, you know, most people have a life and 0:11:05.280 --> 0:11:09.520 aren't political junkies who are glued to political conventions, let 0:11:09.559 --> 0:11:11.320 alone and watching them in the middle of the night 0:11:11.400 --> 0:11:14.160 as I am here in London, So it will take 0:11:14.240 --> 0:11:18.040 time to filter through. Americans don't tend to really pay 0:11:18.080 --> 0:11:22.640 attention to elections until September or October. Of course, Trump 0:11:22.720 --> 0:11:25.520 is a known quantity and Biden was a known quantity. 0:11:25.600 --> 0:11:29.160 But this past week has been Kamala Harris really introducing 0:11:29.200 --> 0:11:33.920 herself to the American people and Tim Walls alongside her, 0:11:34.160 --> 0:11:37.960 and we need to wait and see what the reception 0:11:38.080 --> 0:11:38.480 has been. 0:11:39.400 --> 0:11:42.480 Tina, how do we get to the point where these 0:11:42.520 --> 0:11:45.960 elections come down to six or seven swing states and 0:11:46.040 --> 0:11:47.959 that it? How do we get here? 0:11:50.360 --> 0:11:53.480 Well, we've been in this place for quite a while now. 0:11:54.200 --> 0:11:57.080 This is the fifth US election that I've covered as 0:11:57.120 --> 0:12:01.960 a professional political analyst. Was ever thus, as long as 0:12:02.320 --> 0:12:06.840 I can remember that these swing states hold so much sway, 0:12:08.000 --> 0:12:13.680 be careful saying that ten times fast, and it means 0:12:14.040 --> 0:12:17.720 that we're gonna be on a knife edge right going 0:12:17.880 --> 0:12:22.120 into this campaign. Harris can take nothing for granted, and 0:12:22.160 --> 0:12:28.000 Trump can't make any missteps the fundraising, the. 0:12:27.600 --> 0:12:29.800 The appearances, the messaging. 0:12:30.679 --> 0:12:33.160 I'd argue that Trump needs to come up with some 0:12:33.200 --> 0:12:37.440 other messages. What happens with our f K Junior stepping 0:12:37.480 --> 0:12:43.080 aside and potentially, you know, casting his support for Trump. 0:12:43.600 --> 0:12:48.160 We're talking about splitting the difference on one point five, 0:12:48.520 --> 0:12:52.400 you know, percentage points, but that's how close it's going 0:12:52.480 --> 0:12:52.680 to be. 0:12:53.720 --> 0:12:56.400 Yeah, there was a John Oliver piece on our f 0:12:56.480 --> 0:12:58.319 K Junior saying like we can write them off as 0:12:58.400 --> 0:13:00.760 like being crazy or whatever, but he actually has a 0:13:00.800 --> 0:13:02.080 lot of votes, and a lot of them are in 0:13:02.200 --> 0:13:05.520 swing states, and their percentage of they're very small percentages, 0:13:05.559 --> 0:13:07.839 like let's say one percent, but that could, as Tina 0:13:07.880 --> 0:13:11.240 just pointed out, swing the election. On that point, when 0:13:11.280 --> 0:13:13.600 do you think we're going to get more policy from 0:13:13.640 --> 0:13:17.000 Kamala Harris? That then CEOs in Wall Street can kind 0:13:17.000 --> 0:13:19.360 of understand her a little bit better. And when is 0:13:19.360 --> 0:13:22.319 she going to sit down with a journalist she. 0:13:22.400 --> 0:13:25.920 Promised to to dis interviews at the end of the month. 0:13:26.000 --> 0:13:28.560 I mean, let's remember what a world when in timing 0:13:28.640 --> 0:13:32.319 this has been I'd say she used the convention exactly 0:13:32.360 --> 0:13:36.120 the right way, which is unify the party. Democrats are 0:13:36.160 --> 0:13:40.079 not very disciplined, and we didn't see you know, kind 0:13:40.120 --> 0:13:42.960 of eruptions into protests of pragaza and the things that 0:13:43.000 --> 0:13:45.800 were feared. How many columns did we all read about 0:13:45.840 --> 0:13:49.080 whether this would be a replay of nineteen sixty eight Chicago. 0:13:48.800 --> 0:13:51.240 Many of many of them, Tina, Yes. 0:13:50.920 --> 0:13:55.640 Many, many, many, and nothing like that transpired. So you 0:13:55.679 --> 0:14:00.959 know that box is ticked, the party is united behind 0:14:01.040 --> 0:14:05.960 her and in mainstream message. The next stage, I would argue, 0:14:06.160 --> 0:14:09.800 is more detail on policies. We see both Harris and 0:14:09.920 --> 0:14:14.640 Trump being pretty heterodox in their economic policies in their 0:14:14.679 --> 0:14:19.680 different ways. How much Harris will provide detail, You know, 0:14:19.720 --> 0:14:23.040 there's not a lot of upside for candidates in doing that, 0:14:23.120 --> 0:14:28.080 as much as of course corporate leaders, business leaders, investors 0:14:28.160 --> 0:14:33.040 are looking for more detail. Providing that is likely to 0:14:33.080 --> 0:14:35.600 see her lose votes, and so it's going to be 0:14:35.680 --> 0:14:37.480 very careful balancing act. 0:14:37.600 --> 0:14:38.880 I do think she'll say more. 0:14:39.160 --> 0:14:43.160 She's already walked back the kind of poor reception that 0:14:43.240 --> 0:14:47.640 the price gouging on goods saw. 0:14:47.680 --> 0:14:50.880 Her policy on that didn't land very well. 0:14:51.840 --> 0:14:55.440 But right right now, she's got to make sure people 0:14:55.560 --> 0:14:59.000 know her and feel safe with her. I mean, well, 0:14:59.040 --> 0:15:02.240 if I can carry ongoing just for a moment in 0:15:03.120 --> 0:15:03.840 our business. 0:15:03.840 --> 0:15:05.880 We talked to global investors. 0:15:05.520 --> 0:15:09.600 Especially here in Europe, and the remarks that she made 0:15:09.640 --> 0:15:13.920 on the US not abdicating its global authority is actually 0:15:13.960 --> 0:15:17.600 the number one question that we have from international business. 0:15:17.680 --> 0:15:20.520 Is the US going to remain part of the global 0:15:20.560 --> 0:15:23.960 security architecture? So that was quite an important point for 0:15:24.000 --> 0:15:25.680 an international business audience. 0:15:26.080 --> 0:15:28.880 Tina, what role, if any, do you expect President Biden 0:15:28.920 --> 0:15:29.840 to play in this campaign? 0:15:30.520 --> 0:15:31.040 Good question. 0:15:33.240 --> 0:15:37.240 I suspect it will be a subdued role, and again 0:15:37.280 --> 0:15:39.280 we need to see how the numbers evolve. 0:15:39.480 --> 0:15:44.760 He was treated as a conquering hero. A lot of 0:15:44.840 --> 0:15:49.040 love for Joe Biden at the convention. It's not clear 0:15:49.200 --> 0:15:51.160 necessarily whether he would be an. 0:15:51.040 --> 0:15:55.640 Asset on the campaign trail or for fundraising. I mean, 0:15:55.720 --> 0:15:59.480 Harris's fundraising numbers have been through the roof. She's out 0:15:59.640 --> 0:16:04.600 fund raising Trump by you know, a couple of times over. 0:16:06.160 --> 0:16:09.280 But what Biden can do with his time, you know, yes, 0:16:09.320 --> 0:16:13.480 he's lame doc until January twentieth, twenty twenty five, might 0:16:13.520 --> 0:16:16.600 be quite interesting to watch. So for example, the fact 0:16:16.600 --> 0:16:19.720 that he's not campaigning, might free him up to do 0:16:19.800 --> 0:16:21.880 more on the Middle East. 0:16:21.920 --> 0:16:23.960 I think we haven't heard the last from Joe Biden. 0:16:24.720 --> 0:16:26.760 Hi very good, Tina, Thank you so much for joining us. 0:16:26.760 --> 0:16:30.360 Tina Fordham joining us here, founder and geopolitical strategist for 0:16:30.360 --> 0:16:38.960 Fordham Global Insight. We have the FED. They're in Jackson Hole, 0:16:38.960 --> 0:16:42.280 FED Chairman J Powell, A lot of economists out there 0:16:42.320 --> 0:16:44.200 is a whole world looking at Jackson Hold head aches. 0:16:44.240 --> 0:16:46.120 Do you think I don't know? I mean I think 0:16:46.120 --> 0:16:48.960 that all the economists are looking at it. Do I 0:16:49.000 --> 0:16:52.080 think my mom is tuning in? I highly doubt that. 0:16:53.000 --> 0:16:55.760 Yeah, But if I'm an economist sitting in London. 0:16:55.640 --> 0:16:57.080 I'm probably you're into it. 0:16:57.080 --> 0:16:59.640 If I'm a professor of economics, say the London Business School, 0:16:59.640 --> 0:17:03.320 like doctor Funny and Starve Rokova is, she's probably paying 0:17:03.320 --> 0:17:06.720 attention to Jackson Hall. Doctor Stvakova, thanks so much for 0:17:06.800 --> 0:17:08.520 joining us. I think I'm getting your name right with 0:17:08.520 --> 0:17:11.600 a little help. What are you looking for from FED 0:17:11.680 --> 0:17:14.440 Chairman J Powell today? Is you try to frame out 0:17:14.440 --> 0:17:15.840 what it means for the global economy. 0:17:17.080 --> 0:17:18.200 Thank you so much for having me. 0:17:18.200 --> 0:17:20.240 Always a pleasure to be here, so I. 0:17:20.200 --> 0:17:22.240 Don't believe it's going to be a speech in which 0:17:22.320 --> 0:17:23.600 power we will want. 0:17:23.440 --> 0:17:26.640 To store financial markets by surprising them in either direction. 0:17:27.160 --> 0:17:29.720 So we have the elections around the corner, and he 0:17:29.800 --> 0:17:32.920 wouldn't want to appe overly political, even more so given 0:17:32.960 --> 0:17:36.439 Trumps threats to the FED independence. So it might be 0:17:36.480 --> 0:17:39.760 one of those instances where Powell essentially puts much more 0:17:39.760 --> 0:17:42.600 weight on average market expectations than normal. So the average 0:17:42.600 --> 0:17:46.240 expectations at twenty five basis points, so if he says anything, 0:17:46.320 --> 0:17:46.960 probably will. 0:17:46.840 --> 0:17:48.679 Because it's done with just twenty five basis points. 0:17:49.000 --> 0:17:50.760 Now this brings me to forecasts. 0:17:50.800 --> 0:17:52.400 What are we going to learn if anything, in terms 0:17:52.400 --> 0:17:56.919 of forecasts for guidance GDP grow of inflation. Again, unfortunately, 0:17:56.960 --> 0:17:59.479 I don't think he's going to review that much on 0:17:59.520 --> 0:18:03.120 the one hand, and he do not want effectively to 0:18:03.520 --> 0:18:07.080 make markets revise their expectations in terms of the policy 0:18:07.119 --> 0:18:10.000 rate path up or down in order to not generate 0:18:10.080 --> 0:18:12.280 massive movements. But at the same time, there is a 0:18:12.320 --> 0:18:15.399 lot of concertainty of pots coming forward. Right, so we 0:18:15.440 --> 0:18:18.719 have elections, we have two candidates with quite different policies 0:18:19.280 --> 0:18:21.720 on the agenda, so it is hard for the FED 0:18:21.720 --> 0:18:24.200 as well as anyone else to forecast what is going 0:18:24.200 --> 0:18:27.480 to happen over the next year. Now he has to 0:18:27.480 --> 0:18:30.159 talk about something, right, So if you want to avoid 0:18:30.200 --> 0:18:32.640 expressing a concrete view on where the economy is headed, 0:18:32.680 --> 0:18:33.440 what do you talk about? 0:18:34.080 --> 0:18:37.119 So my prior and my guess is that he's going. 0:18:37.000 --> 0:18:40.240 To try to essentially focus on insights related to the 0:18:40.280 --> 0:18:43.359 topic of this year Jackson's COPE conference, which is reassessing 0:18:43.359 --> 0:18:45.320 the effectiveness and transmission of MOUNTI policy. 0:18:46.040 --> 0:18:47.560 So he can touch upon many issues. 0:18:47.600 --> 0:18:51.359 But my prior is that there should be hopefully something 0:18:51.359 --> 0:18:53.800 on the fiscal monitary policy and access, especially in times 0:18:53.880 --> 0:18:54.680 that fiscal. 0:18:54.400 --> 0:18:57.000 Policy going forward will continue playing a central stage for 0:18:57.080 --> 0:18:58.840 the FED optimal montary policy debates. 0:18:59.280 --> 0:19:03.199 So if don't get intuition on okay, what is the 0:19:03.240 --> 0:19:06.399 forecast for you know, any commitments on the policy rate, 0:19:06.480 --> 0:19:09.040 then might understand a little bit better what would be 0:19:09.080 --> 0:19:10.960 the trade off the fact we will keep a close 0:19:11.000 --> 0:19:12.399 eye on going forward. 0:19:12.960 --> 0:19:15.760 Funny, when you take a look at the at the 0:19:15.960 --> 0:19:20.639 balancing between inflation and the labor data, it does seem 0:19:20.760 --> 0:19:23.440 like there are still many FED officials who are genuinely 0:19:23.480 --> 0:19:26.760 worried about the inflationary trajectory that we need to continue 0:19:26.760 --> 0:19:30.360 to see more data to know the disinflation is taking hold. 0:19:30.520 --> 0:19:33.320 On the other hand, we clearly see some members who 0:19:33.359 --> 0:19:35.199 are willing to cut in July that are worried that 0:19:35.240 --> 0:19:37.640 a little move in the labor market data can translate 0:19:37.680 --> 0:19:41.600 into a big move into the unemployment rate. Where do 0:19:41.640 --> 0:19:44.120 you think that Ja Powell is going to tread that line? 0:19:45.760 --> 0:19:46.040 Again? 0:19:46.119 --> 0:19:48.720 I think twenty five basis points is nothing in terms 0:19:48.760 --> 0:19:51.160 of real effects on the economy, right, So I think 0:19:51.160 --> 0:19:53.840 he is going to try, really try to position himself 0:19:53.920 --> 0:19:57.159 in terms of not moving markets before the elections. 0:19:58.000 --> 0:20:01.600 So consensus expectations of twenty five basis points, is he 0:20:01.720 --> 0:20:05.320 going to come and do something drastic relatively what markets expect, 0:20:05.920 --> 0:20:09.800 endangering potential swings because, for example, if the cut is higher, 0:20:09.880 --> 0:20:12.719 trumping Video is going to blame him. You know, if 0:20:12.760 --> 0:20:14.639 there is no cut, you might Ria is going in 0:20:14.680 --> 0:20:17.600 the other direction. So I think they're just going to wait. 0:20:17.680 --> 0:20:22.520 I don't think the current data necessitates any you know, 0:20:22.600 --> 0:20:23.719 particularly big movements. 0:20:23.760 --> 0:20:27.320 Twenty five basis points cut is perfectly reasonable based on. 0:20:27.280 --> 0:20:28.440 The data that we have right now. 0:20:28.640 --> 0:20:29.800 It's what markets expect. 0:20:29.920 --> 0:20:31.960 It's pretty much safe to stick to that and just 0:20:32.040 --> 0:20:34.800 wait and see the data coming ahead, and of course 0:20:34.840 --> 0:20:35.560 the outcome. 0:20:35.240 --> 0:20:35.960 Of the elections. 0:20:36.160 --> 0:20:38.960 Now, one thing that's very interesting is and usually when 0:20:38.960 --> 0:20:41.280 we have elections, right this is this works in economics. 0:20:41.280 --> 0:20:42.399 It's uncertainty shock. 0:20:43.000 --> 0:20:47.200 And you know the before Biden and the moment Mawa, 0:20:47.200 --> 0:20:48.000 Harris and Trump. 0:20:48.040 --> 0:20:51.720 They have very different policies in terms of fiscal policies. 0:20:51.320 --> 0:20:52.560 But also regulatary policies. 0:20:53.040 --> 0:20:56.120 So you would expect that, you know, forums are going 0:20:56.160 --> 0:20:58.720 to postpone investment waiting in order to see who is 0:20:58.760 --> 0:21:01.320 going to get elected, put the inter generating Organization, which 0:21:01.320 --> 0:21:04.600 would have made the FED cut sooner. But we don't 0:21:04.600 --> 0:21:06.520 see that in the investment numbers, and that is something 0:21:06.600 --> 0:21:09.600 quite interesting. I mean, corporate tax proposals are very differently 0:21:09.960 --> 0:21:12.640 across the two campaigns. That for me is a bit 0:21:12.640 --> 0:21:15.840 puzzling that we don't see much action on the investment 0:21:15.880 --> 0:21:18.639 numbers in the US in terms of you know, essentially 0:21:18.680 --> 0:21:19.680 people delaying. 0:21:19.359 --> 0:21:21.560 Investment in order to see the resolution of the uncertainty 0:21:21.560 --> 0:21:22.439 of the elections. 0:21:22.800 --> 0:21:25.119