1 00:00:05,120 --> 00:00:09,200 Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane, along 2 00:00:09,240 --> 00:00:13,200 Speaker 1: with Jonathan Ferrell and Lisa Brownwitz Jaily. We bring you 3 00:00:13,280 --> 00:00:18,600 Speaker 1: insight from the best and economics, finance, investment, and international relations. 4 00:00:18,960 --> 00:00:23,840 Speaker 1: Find Bloomberg Surveillance on Apple Podcasts, sun Cloud, Bloomberg dot com, 5 00:00:23,920 --> 00:00:30,880 Speaker 1: and of course on the Bloomberg Terminal. Neil Data with 6 00:00:30,960 --> 00:00:34,320 Speaker 1: Economic Forecast out one hundred years joined us now head 7 00:00:34,320 --> 00:00:37,880 Speaker 1: of US economic Research at Renaissance Macro, and he has 8 00:00:37,920 --> 00:00:42,040 Speaker 1: been a strident optimist through gloomy times. Neil, what does 9 00:00:42,040 --> 00:00:47,479 Speaker 1: the gloom coup get wrong on this Monday morning? Well, first, 10 00:00:47,520 --> 00:00:49,640 Speaker 1: I mean, I think it's important to recognize that the 11 00:00:49,760 --> 00:00:53,320 Speaker 1: recession chatter is ubiquitous. I mean it's everywhere. I think. 12 00:00:53,320 --> 00:00:55,680 Speaker 1: I was reading an article in The Economist talking about 13 00:00:55,680 --> 00:00:58,640 Speaker 1: recession risk rising. Obviously, we're seeing a number of major 14 00:00:59,160 --> 00:01:03,000 Speaker 1: cuth side research houses, um, you know, mark up their 15 00:01:03,040 --> 00:01:07,679 Speaker 1: expectations or probabilities for recession. Um. But you know, my 16 00:01:07,800 --> 00:01:10,240 Speaker 1: view is at the risk of recession is really no 17 00:01:10,440 --> 00:01:13,200 Speaker 1: higher right now than it normally is. I mean, I 18 00:01:13,240 --> 00:01:16,119 Speaker 1: still think we're more or less in this inflationary boom 19 00:01:16,120 --> 00:01:18,880 Speaker 1: type of economy, and I think that's more or less 20 00:01:18,880 --> 00:01:23,800 Speaker 1: going to persist, um, you know, for the next twelve months. Um, 21 00:01:23,840 --> 00:01:25,760 Speaker 1: you know, when I look at you know, what's going 22 00:01:25,840 --> 00:01:27,959 Speaker 1: to drive the recession right now? I mean we're talking 23 00:01:28,000 --> 00:01:30,320 Speaker 1: about how homes aren't being built and how cars are 24 00:01:30,319 --> 00:01:33,520 Speaker 1: not getting built. So I mean what's really stretched I 25 00:01:33,520 --> 00:01:36,640 Speaker 1: mean potentially durable goods consumption. But it's hard to see 26 00:01:36,640 --> 00:01:38,560 Speaker 1: how that in and of itself is going to drive 27 00:01:38,600 --> 00:01:42,000 Speaker 1: a recession, particularly the time when consumers are still sort 28 00:01:42,000 --> 00:01:44,959 Speaker 1: of flush with cash and seeing a very strong labor market. Um, 29 00:01:45,000 --> 00:01:46,800 Speaker 1: you know, outlook, So Neil, we see a lot of 30 00:01:46,840 --> 00:01:49,800 Speaker 1: calls for recession, but is that really what's being priced in? 31 00:01:49,840 --> 00:01:51,520 Speaker 1: I mean, yes, we have seen some declines that we 32 00:01:51,560 --> 00:01:53,720 Speaker 1: have seen some areas that have gotten really hit, but 33 00:01:53,800 --> 00:01:56,600 Speaker 1: also read just as many to report saying lean into cyclicals, 34 00:01:56,600 --> 00:01:59,400 Speaker 1: go into retail. You know, by the dip. How much 35 00:01:59,440 --> 00:02:02,880 Speaker 1: have we actu priced and pessimism. I mean, if you 36 00:02:02,920 --> 00:02:06,960 Speaker 1: look at most surveys of investor you know, sentiment, it's 37 00:02:07,000 --> 00:02:10,600 Speaker 1: not exactly in a bullish so I mean consumers, for example, 38 00:02:10,639 --> 00:02:12,960 Speaker 1: the Conference Board does data on you know, do you 39 00:02:12,960 --> 00:02:14,600 Speaker 1: think stock prices are going to go up over the 40 00:02:14,680 --> 00:02:17,280 Speaker 1: next twelve months or down, and you know, more consumers 41 00:02:17,280 --> 00:02:19,400 Speaker 1: are saying they're gonna go down. So you know, I 42 00:02:19,400 --> 00:02:22,000 Speaker 1: wouldn't say that there's optimism in the markets. Um, I 43 00:02:22,040 --> 00:02:25,120 Speaker 1: think that, you know, uh, I think a sentiment around 44 00:02:25,200 --> 00:02:28,880 Speaker 1: around equities over the next year are pretty are pretty negative. Frankly, 45 00:02:29,280 --> 00:02:31,280 Speaker 1: So how would you say, how would you position this? 46 00:02:31,320 --> 00:02:32,840 Speaker 1: I mean the other way of looking at this is 47 00:02:32,880 --> 00:02:35,200 Speaker 1: how aggressive should you get leaning into risk? And I 48 00:02:35,240 --> 00:02:36,760 Speaker 1: know that we were you know, frame this, how to 49 00:02:36,840 --> 00:02:38,520 Speaker 1: frame this? And rightly? So is that you've been a 50 00:02:38,520 --> 00:02:41,600 Speaker 1: bull and frankly you've been right. Uh, but then how 51 00:02:41,680 --> 00:02:43,400 Speaker 1: much do you say, Okay, well then you need to 52 00:02:43,440 --> 00:02:45,440 Speaker 1: buy everything that's beaten up. You need to go into 53 00:02:45,440 --> 00:02:47,480 Speaker 1: the Russell two thousand, you need to buy banks. I mean, 54 00:02:47,520 --> 00:02:51,320 Speaker 1: where are you where are you taking that optimism right now? Well, 55 00:02:51,360 --> 00:02:54,320 Speaker 1: I mean it's a it's a difficult situation because right now, 56 00:02:55,360 --> 00:02:56,960 Speaker 1: you know, I mean interest rate We're in a rising 57 00:02:56,960 --> 00:03:00,520 Speaker 1: interest rate environment and that's going to have a a 58 00:03:00,600 --> 00:03:05,760 Speaker 1: negative impact on you know, certain industries that constituted very 59 00:03:05,840 --> 00:03:08,079 Speaker 1: large waiting in the equity markets, like tech, right, I mean, 60 00:03:08,160 --> 00:03:10,920 Speaker 1: so we're seeing that, I guess the way way, the 61 00:03:10,919 --> 00:03:13,480 Speaker 1: way I'm thinking about it right now, is really how 62 00:03:13,560 --> 00:03:16,240 Speaker 1: much more room is there for the markets to price 63 00:03:16,280 --> 00:03:19,720 Speaker 1: in a more aggressive FED for this year? And I 64 00:03:19,760 --> 00:03:22,280 Speaker 1: don't really think there's much more the markets can do. 65 00:03:22,400 --> 00:03:25,399 Speaker 1: We're basically pricing in neutral by year end. It's hard 66 00:03:25,440 --> 00:03:27,720 Speaker 1: to see the FED getting more hawkish than that. They've 67 00:03:27,760 --> 00:03:30,280 Speaker 1: signaled that they want to get up to neutral um, 68 00:03:30,680 --> 00:03:32,440 Speaker 1: and I think they'll do that, but you know, the 69 00:03:32,480 --> 00:03:35,560 Speaker 1: markets are already there. So perhaps that brings some reprieve 70 00:03:35,640 --> 00:03:38,000 Speaker 1: in terms of the interest rate backdrop for the back 71 00:03:38,000 --> 00:03:40,280 Speaker 1: half of the year, and maybe that provides some catalyst 72 00:03:40,720 --> 00:03:43,360 Speaker 1: for some of these cyclical areas of the market. But 73 00:03:43,400 --> 00:03:46,320 Speaker 1: I think looking beyond that, you know, it's I still 74 00:03:46,320 --> 00:03:48,360 Speaker 1: think that would probably be a trade you'd want to 75 00:03:48,400 --> 00:03:50,760 Speaker 1: rent as opposed to own, because I do think that 76 00:03:50,800 --> 00:03:54,600 Speaker 1: the markets fundamentally are haven't gotten their heads around just 77 00:03:54,720 --> 00:03:58,880 Speaker 1: how far the FED is likely to go in this cycle. UM. 78 00:03:58,920 --> 00:04:02,760 Speaker 1: I don't think the term no rate is gonna be um, 79 00:04:02,800 --> 00:04:04,760 Speaker 1: you know, two and three quarters per cent. I think 80 00:04:04,760 --> 00:04:08,800 Speaker 1: it's gonna be higher than that. Why do you know 81 00:04:08,840 --> 00:04:10,440 Speaker 1: how high? How high do you think it's going to go? 82 00:04:11,840 --> 00:04:14,520 Speaker 1: I mean, right now, I'll say higher it's you know, 83 00:04:14,560 --> 00:04:16,440 Speaker 1: you're I mean, this is one of these classic questions 84 00:04:16,480 --> 00:04:17,840 Speaker 1: where you're like, what do you think the tenure is 85 00:04:17,880 --> 00:04:19,320 Speaker 1: gonna do? I mean, I have no idea, but I 86 00:04:19,360 --> 00:04:21,719 Speaker 1: think it's like we haven't stopped. I mean, to the 87 00:04:21,720 --> 00:04:25,160 Speaker 1: accept the markets are pricing and cuts in twenty four 88 00:04:25,200 --> 00:04:27,720 Speaker 1: because of some sort of recession risk. I think those 89 00:04:27,760 --> 00:04:29,720 Speaker 1: cuts are gonna get priced out. So I do think 90 00:04:29,720 --> 00:04:31,880 Speaker 1: that there's probably some upside to the longer end of 91 00:04:31,880 --> 00:04:35,000 Speaker 1: the yield curfew. UM. I don't see why the terminal 92 00:04:35,080 --> 00:04:37,359 Speaker 1: rate can't be three and a half or four. UM. 93 00:04:37,400 --> 00:04:40,760 Speaker 1: You know, nominal GDP. We're in a very strong nominal 94 00:04:40,800 --> 00:04:45,040 Speaker 1: GDP environment, and consumers are flush with cash. They're sitting 95 00:04:45,080 --> 00:04:47,400 Speaker 1: on a large pile of excess savings, and they have 96 00:04:47,480 --> 00:04:51,240 Speaker 1: substantial rooms, substantial room to absorb more normal levels of 97 00:04:51,240 --> 00:04:54,880 Speaker 1: credit appetite. At the same time, we've seen basically China 98 00:04:55,080 --> 00:04:59,599 Speaker 1: and potentially Europe slip in to economic weakness this year. 99 00:04:59,680 --> 00:05:02,159 Speaker 1: Do we really think that's gonna be with US and 100 00:05:02,200 --> 00:05:04,240 Speaker 1: twenty four? The U S economy is unlikely to go 101 00:05:04,279 --> 00:05:08,000 Speaker 1: into a recession with China, and you're probably re accelerating 102 00:05:08,000 --> 00:05:11,000 Speaker 1: in those years. Neil I gotta interrupt the show. I 103 00:05:11,000 --> 00:05:13,200 Speaker 1: think this is so important. You've just framed out, as 104 00:05:13,279 --> 00:05:15,960 Speaker 1: Lisa notes, a terminal rate of three and a half 105 00:05:16,000 --> 00:05:21,960 Speaker 1: to four percent of radio and TV listeners worldwide, was 106 00:05:22,080 --> 00:05:28,320 Speaker 1: suggest that throws America into some form of stagflation, growth 107 00:05:28,360 --> 00:05:32,760 Speaker 1: recession or outright n b er recession. Are you saying 108 00:05:32,880 --> 00:05:36,320 Speaker 1: it won't Well, I mean, I think what you're seeing 109 00:05:37,400 --> 00:05:40,520 Speaker 1: that may. But but I think the issue is where 110 00:05:40,520 --> 00:05:43,760 Speaker 1: does the consensus think the terminal ratings? And you know 111 00:05:43,839 --> 00:05:46,000 Speaker 1: to me that the consensus thinks the terminal rate is 112 00:05:46,000 --> 00:05:48,039 Speaker 1: basically what like two and a half percent, right, I 113 00:05:48,080 --> 00:05:50,560 Speaker 1: mean that's why, uh, you know some of these parts 114 00:05:50,560 --> 00:05:53,479 Speaker 1: of the curves are are already inverted. Um. I think 115 00:05:53,520 --> 00:05:57,360 Speaker 1: that's frankly too low. So I think the markets underestimate 116 00:05:57,480 --> 00:05:59,760 Speaker 1: the extent to which the FED can go without breaking 117 00:05:59,760 --> 00:06:05,040 Speaker 1: being economy productivities slowly rising, the labor force participation rate 118 00:06:05,120 --> 00:06:08,560 Speaker 1: is continuing to climb. That all means that the FED 119 00:06:08,600 --> 00:06:13,039 Speaker 1: can go longer without breaking the economy. Neils speaking of 120 00:06:13,080 --> 00:06:15,520 Speaker 1: why the FED will go as far as it goes, 121 00:06:15,720 --> 00:06:18,760 Speaker 1: CPI data tomorrow doesn't have any real bearing on the 122 00:06:18,800 --> 00:06:22,720 Speaker 1: decisions that policymakers will make at least come may no, 123 00:06:22,960 --> 00:06:25,920 Speaker 1: the DIACE cast, the DIACE cast. So then when does 124 00:06:25,960 --> 00:06:30,040 Speaker 1: the data start to matter again? What would it take? Well, 125 00:06:30,080 --> 00:06:32,440 Speaker 1: I mean I think that for me, I primarily view 126 00:06:32,480 --> 00:06:36,479 Speaker 1: these questions around the labor market. And you know, to me, 127 00:06:36,600 --> 00:06:40,320 Speaker 1: it's about jobs, hours, and earnings. And when you look 128 00:06:40,360 --> 00:06:42,920 Speaker 1: at the some product of those three things, it's growing, 129 00:06:44,200 --> 00:06:47,000 Speaker 1: you know, eight nine at an annual rate um, you know, 130 00:06:47,080 --> 00:06:52,160 Speaker 1: so far this year, and eventually that should slow. I mean, 131 00:06:52,200 --> 00:06:55,680 Speaker 1: as you know, participation rates climb, we just start to moderate. 132 00:06:55,760 --> 00:06:59,720 Speaker 1: He won't say strong jobs growth at low rates of unemployment. 133 00:07:00,400 --> 00:07:03,800 Speaker 1: So maybe that starts to cool off somewhe um. And 134 00:07:03,839 --> 00:07:06,279 Speaker 1: that could take some pressure off of inflation, because obviously 135 00:07:06,279 --> 00:07:09,240 Speaker 1: whatever doesn't go into uh, into quantity, whatever is not real, 136 00:07:09,320 --> 00:07:12,720 Speaker 1: we'll just the remaining will be inflation. Um. So we 137 00:07:12,800 --> 00:07:14,200 Speaker 1: have to see. But to me, it's really about the 138 00:07:14,240 --> 00:07:17,360 Speaker 1: labor market. I don't think that's gonna happen anytime soon, 139 00:07:17,440 --> 00:07:20,200 Speaker 1: because I do think there's probably additional downside to the 140 00:07:20,240 --> 00:07:22,680 Speaker 1: unemployment rate over the next several months. I mean, you're 141 00:07:22,680 --> 00:07:24,920 Speaker 1: going to be in a situation where, uh, you know, 142 00:07:24,960 --> 00:07:27,280 Speaker 1: the feed is probably gonna mark down their estimates for 143 00:07:27,280 --> 00:07:31,080 Speaker 1: for unemployment UM, but I do think it's primarily about 144 00:07:31,080 --> 00:07:34,520 Speaker 1: the labor markets. On the subject of unemployment, the Fed 145 00:07:34,560 --> 00:07:36,440 Speaker 1: thinks three and a half percent is going to stay 146 00:07:36,440 --> 00:07:40,560 Speaker 1: the case through three even if it moves aggressively. Do 147 00:07:40,640 --> 00:07:44,320 Speaker 1: you buy that argument? No, No, I think they would 148 00:07:44,360 --> 00:07:46,560 Speaker 1: have to go much more aggressively in order to keep 149 00:07:46,560 --> 00:07:48,800 Speaker 1: the unemployment rate at that rate. At at three and 150 00:07:48,840 --> 00:07:51,800 Speaker 1: a half percent, will probably be in the low threes 151 00:07:51,880 --> 00:07:54,920 Speaker 1: by the end of the year. So you know, either 152 00:07:54,960 --> 00:07:56,520 Speaker 1: one of two things can happen, right, I mean, the 153 00:07:56,560 --> 00:08:02,080 Speaker 1: Fed can basically UM pencil in more rate hikes UM 154 00:08:02,120 --> 00:08:05,760 Speaker 1: in future years to make sure that the unemployment rate 155 00:08:06,320 --> 00:08:12,080 Speaker 1: UM stays at three and a half percent or UM. 156 00:08:12,120 --> 00:08:15,120 Speaker 1: They don't change their estimates for rates, and the unemployment 157 00:08:15,160 --> 00:08:18,360 Speaker 1: rate continues to punch you a primer. Thank you so much, 158 00:08:18,440 --> 00:08:27,680 Speaker 1: Really appreciate that. Really important comments there. Our interview O 159 00:08:27,680 --> 00:08:30,560 Speaker 1: the day on yield and it is yield up and 160 00:08:30,600 --> 00:08:34,480 Speaker 1: it is decidedly priced down. Marilyn Watson is head of 161 00:08:34,480 --> 00:08:37,920 Speaker 1: Global Fundamental fixed Income Strategy at black Rock and has 162 00:08:37,960 --> 00:08:41,480 Speaker 1: a wonderful view of this strange idea. If it's not 163 00:08:41,559 --> 00:08:45,680 Speaker 1: just about yield, it's about price as well. Maryland. I 164 00:08:45,760 --> 00:08:48,440 Speaker 1: just took the Age fifteen ten ure series back to 165 00:08:48,480 --> 00:08:51,559 Speaker 1: the time of bocre and we had lower yields and 166 00:08:51,720 --> 00:08:56,120 Speaker 1: higher prices of five standard deviations. In the pandemic scared 167 00:08:56,200 --> 00:09:00,200 Speaker 1: a low low yields, we reversed and we are up, 168 00:09:00,280 --> 00:09:04,600 Speaker 1: but up only one standard deviation off that long term 169 00:09:04,679 --> 00:09:08,400 Speaker 1: create moderation. Can you and black Rocks say that the 170 00:09:08,480 --> 00:09:14,160 Speaker 1: Great Moderation is over? I don't think that yet we 171 00:09:14,240 --> 00:09:16,720 Speaker 1: can say that the Great Moderation is necessarily over. I 172 00:09:16,760 --> 00:09:19,240 Speaker 1: think what we're seeing now is we are in this 173 00:09:19,600 --> 00:09:25,559 Speaker 1: period of correction having had incredibly suppressed yields for going 174 00:09:25,559 --> 00:09:29,719 Speaker 1: back several years now and then exacerbated during obviously the pandemic. 175 00:09:30,240 --> 00:09:33,520 Speaker 1: So I think what we're really seeing now is an 176 00:09:33,520 --> 00:09:37,040 Speaker 1: increase in volatility as the market really is positioning itself 177 00:09:37,120 --> 00:09:39,920 Speaker 1: for the FED to be more aggressive in terms of 178 00:09:39,960 --> 00:09:43,760 Speaker 1: quantitative tightening, both in terms of raising interest rates and 179 00:09:43,800 --> 00:09:46,360 Speaker 1: also the runoff in the balance sheet that potentially will 180 00:09:46,400 --> 00:09:48,840 Speaker 1: come maybe in May or in June um And I 181 00:09:48,880 --> 00:09:51,520 Speaker 1: think as we do start to see the FED really 182 00:09:51,520 --> 00:09:53,679 Speaker 1: start to shift away and try to move towards a 183 00:09:53,760 --> 00:09:58,000 Speaker 1: neutral point, then it's you know, it's understandable that we're 184 00:09:58,000 --> 00:09:59,839 Speaker 1: seeing a lot more volatility in the market. I think 185 00:09:59,840 --> 00:10:02,840 Speaker 1: it's also incredibly important when we continue to look at 186 00:10:02,840 --> 00:10:06,040 Speaker 1: inflation just how high it is in the US and 187 00:10:06,120 --> 00:10:08,800 Speaker 1: elsewhere around the world. Um, And as you mentioned before, 188 00:10:08,800 --> 00:10:10,960 Speaker 1: there are a number of factors that are really exacerbating this, 189 00:10:11,400 --> 00:10:14,760 Speaker 1: whether it be the lockdown in China and Changhai due 190 00:10:14,800 --> 00:10:18,640 Speaker 1: to COVID restrictions, whether it's energy and the massive impact 191 00:10:18,760 --> 00:10:22,280 Speaker 1: that that's having in Europe in particular for example. So 192 00:10:22,320 --> 00:10:25,400 Speaker 1: I think the whole confluence of factors are really you know, 193 00:10:25,480 --> 00:10:29,480 Speaker 1: exacerbating the volatility and yields and the market's expectation of 194 00:10:29,480 --> 00:10:31,920 Speaker 1: what we can see from interest rates from the FED 195 00:10:32,120 --> 00:10:33,920 Speaker 1: and also from the ECB as well as you go 196 00:10:34,000 --> 00:10:37,080 Speaker 1: forward this year. Merilyan Maryland. Earlier this morning, Tom Kennedy 197 00:10:37,120 --> 00:10:39,640 Speaker 1: of JP Morgan at a private bank asked a really 198 00:10:39,640 --> 00:10:42,560 Speaker 1: good question, how high do yields have to go to 199 00:10:42,640 --> 00:10:48,040 Speaker 1: restrain inflation? What's your view on that? Yeah, and so 200 00:10:48,040 --> 00:10:50,199 Speaker 1: so at the moment, we do think that rates could 201 00:10:50,240 --> 00:10:53,400 Speaker 1: go definitely a bit higher from here. It is our 202 00:10:53,480 --> 00:10:56,920 Speaker 1: view that inflation will probably start to roll over pretty soon. 203 00:10:57,000 --> 00:10:59,760 Speaker 1: It is obviously at very high levels, but given base effects, 204 00:11:00,320 --> 00:11:02,160 Speaker 1: UM and other things that will sort of come into play. 205 00:11:02,200 --> 00:11:04,560 Speaker 1: We do think that inflation will start to tack down, 206 00:11:04,920 --> 00:11:08,240 Speaker 1: but obviously from very incredibly high levels. I think that's 207 00:11:08,280 --> 00:11:10,280 Speaker 1: why you know, the FED has indicated it it will 208 00:11:10,320 --> 00:11:12,680 Speaker 1: be more aggressive. I think that's also why the ECB 209 00:11:12,880 --> 00:11:15,440 Speaker 1: has started to signal that, you know, it's maybe potentially 210 00:11:15,559 --> 00:11:18,480 Speaker 1: ending its asset purchase program maybe you know, in the July, 211 00:11:18,679 --> 00:11:20,920 Speaker 1: the third quarter of this year, and it's too itself 212 00:11:21,000 --> 00:11:23,080 Speaker 1: up to potentially raise rates as well by the end 213 00:11:23,080 --> 00:11:25,240 Speaker 1: of this year. So I do think that rates could 214 00:11:25,280 --> 00:11:27,480 Speaker 1: go higher. UM. I think could definitely go higher from here, 215 00:11:28,000 --> 00:11:30,760 Speaker 1: but we also do need to keep a firm iron inflation, 216 00:11:30,960 --> 00:11:33,560 Speaker 1: and I think they're the risks are huge. As I mentioned, 217 00:11:33,600 --> 00:11:36,079 Speaker 1: there are risks in terms of you know, pushing inflation 218 00:11:36,160 --> 00:11:39,120 Speaker 1: higher if we start to see issues around you know, 219 00:11:39,600 --> 00:11:43,360 Speaker 1: the restrictions in China, energy elsewhere, or we could start 220 00:11:43,400 --> 00:11:46,640 Speaker 1: to see inflation actually roll over UM and the and 221 00:11:46,679 --> 00:11:49,640 Speaker 1: the part of the equation of course is growth. You know, 222 00:11:49,800 --> 00:11:52,440 Speaker 1: there's a large risks route now around the growth in 223 00:11:52,559 --> 00:11:54,840 Speaker 1: the Eurozone. I think that's certainly a factor that was 224 00:11:55,280 --> 00:11:56,839 Speaker 1: coming to play as we look at what the e 225 00:11:56,880 --> 00:11:58,960 Speaker 1: C B may do later in this year. But also 226 00:11:59,000 --> 00:12:01,200 Speaker 1: when you look at the U US as well, I 227 00:12:01,200 --> 00:12:04,080 Speaker 1: think growth, you know, remains relatively strong. The labor market 228 00:12:04,120 --> 00:12:07,120 Speaker 1: is incredibly type um, you know, and will also you know, 229 00:12:07,200 --> 00:12:10,400 Speaker 1: continue to see the consumer um and the high level 230 00:12:10,400 --> 00:12:13,000 Speaker 1: of houssle savings that they still have the stud to 231 00:12:13,080 --> 00:12:15,360 Speaker 1: run those down as they still continue to purchase when 232 00:12:15,400 --> 00:12:18,120 Speaker 1: see vitail sales and other things. And it really depends 233 00:12:18,200 --> 00:12:20,839 Speaker 1: whether we see a shift in sentiments like how much 234 00:12:20,840 --> 00:12:22,640 Speaker 1: further that has to go. But for the time being, 235 00:12:23,120 --> 00:12:26,160 Speaker 1: I think growth remains relatively solid in the US, and 236 00:12:26,280 --> 00:12:29,880 Speaker 1: really inflation and inflation data is absolutely crysical. Now, So 237 00:12:29,960 --> 00:12:32,320 Speaker 1: in the Wall of Warrior Maryland that you talked about 238 00:12:32,320 --> 00:12:36,079 Speaker 1: the potential potential increase in inflation, potential slow down in growth, 239 00:12:36,559 --> 00:12:38,800 Speaker 1: what do you do? How much do you lean into 240 00:12:38,880 --> 00:12:42,360 Speaker 1: a risk at a time when people already are somewhat bearish. 241 00:12:42,559 --> 00:12:46,360 Speaker 1: I would just say people, I'm not gonna specify. So 242 00:12:46,400 --> 00:12:48,839 Speaker 1: at the moment that we have been short duration, now 243 00:12:48,880 --> 00:12:51,199 Speaker 1: we're relatively i would say neutral, and we still have 244 00:12:51,760 --> 00:12:55,319 Speaker 1: relatively low duration. But I think now given that the 245 00:12:55,440 --> 00:12:57,520 Speaker 1: risks are two sided, you know, we are being very 246 00:12:57,559 --> 00:12:59,960 Speaker 1: flexible we now are starting to get a little bit 247 00:13:00,000 --> 00:13:02,880 Speaker 1: will carry um in you know, front hand rates um, 248 00:13:02,960 --> 00:13:05,000 Speaker 1: So we're starting to you know, just invess a little 249 00:13:05,040 --> 00:13:08,880 Speaker 1: bit more there. We do like some mosment's securitized investment grade, 250 00:13:09,280 --> 00:13:12,320 Speaker 1: and we are looking to be very, very diversified. That 251 00:13:12,440 --> 00:13:15,520 Speaker 1: being said, of course, we are still relatively conservative at 252 00:13:15,520 --> 00:13:18,120 Speaker 1: the moment. I think the next two months when we 253 00:13:18,200 --> 00:13:23,040 Speaker 1: see you know, the further inflation data, further data around growth, 254 00:13:23,440 --> 00:13:28,120 Speaker 1: we see developments ongoing around you know, the situation in Ukraine, 255 00:13:28,480 --> 00:13:30,880 Speaker 1: the impact of sanctions. So I think there's a lot 256 00:13:31,040 --> 00:13:32,800 Speaker 1: that still needs to be factors in and that we 257 00:13:32,840 --> 00:13:36,000 Speaker 1: really need to see evidence either way of how things 258 00:13:36,040 --> 00:13:37,880 Speaker 1: are starting to shape out. But I think there are 259 00:13:38,000 --> 00:13:40,559 Speaker 1: areas now where we can see value, where we are 260 00:13:40,559 --> 00:13:44,040 Speaker 1: starting to get some yield um, and I think diversification 261 00:13:44,160 --> 00:13:46,080 Speaker 1: is really the name of the game, but also really 262 00:13:46,120 --> 00:13:50,800 Speaker 1: really understanding liquidity and the risk reward and the liquidity 263 00:13:50,960 --> 00:13:54,000 Speaker 1: around each position that we currently hold. Maryland, you talked 264 00:13:54,000 --> 00:13:56,480 Speaker 1: to her about some geopolitical risk factors that need to 265 00:13:56,520 --> 00:13:59,319 Speaker 1: be put into the equation. What about domestic politics. I'm 266 00:13:59,320 --> 00:14:01,840 Speaker 1: thinking specifically of France here and looking at a ten 267 00:14:01,920 --> 00:14:04,439 Speaker 1: year yield that started marched around forty basis points were 268 00:14:04,480 --> 00:14:07,720 Speaker 1: now in and around one what would happen to the 269 00:14:07,720 --> 00:14:10,400 Speaker 1: French bond market if Marine Lapin were to win the 270 00:14:10,440 --> 00:14:15,600 Speaker 1: runoff on April. So we have seen, as you mentioned, 271 00:14:16,240 --> 00:14:19,040 Speaker 1: a lot of politility also around around France around the 272 00:14:19,080 --> 00:14:23,840 Speaker 1: potential election, and the market is clearly signaling that's positioning 273 00:14:23,880 --> 00:14:27,600 Speaker 1: itself for it has a preference for in the market, 274 00:14:27,760 --> 00:14:30,680 Speaker 1: in the euro in terms of keeping much of the same, 275 00:14:30,720 --> 00:14:33,840 Speaker 1: so lacrowd obviously staying in power. It does remain to 276 00:14:33,840 --> 00:14:36,000 Speaker 1: be seen. And we have this run off on the April, 277 00:14:36,040 --> 00:14:37,200 Speaker 1: and I think we will start to see a lot 278 00:14:37,240 --> 00:14:42,560 Speaker 1: of volitility around that event. Um. If le pen does win, 279 00:14:42,720 --> 00:14:44,760 Speaker 1: I think it's too hard to say at the moment. 280 00:14:44,840 --> 00:14:47,400 Speaker 1: I mean, she has really been quite clear I think 281 00:14:47,400 --> 00:14:50,880 Speaker 1: around some of her economic policies, um, and I think 282 00:14:51,240 --> 00:14:52,880 Speaker 1: it really remains to be seen if she were to 283 00:14:52,880 --> 00:14:55,200 Speaker 1: get into power, what her you know, the policies that 284 00:14:55,240 --> 00:14:59,160 Speaker 1: she actually implements would be. I do think it's maybe 285 00:14:59,160 --> 00:15:01,000 Speaker 1: a little case of sort of as well, sort of 286 00:15:01,040 --> 00:15:04,160 Speaker 1: just trading around this volatility, sort of like you know, 287 00:15:04,640 --> 00:15:06,840 Speaker 1: buying the room with all the fact potentially as well. 288 00:15:06,920 --> 00:15:10,600 Speaker 1: So I think for the time being it's more around 289 00:15:10,840 --> 00:15:14,360 Speaker 1: the potential trade off between the two candidates, but in 290 00:15:14,400 --> 00:15:17,680 Speaker 1: either scenario it really remains to be seen what policies 291 00:15:17,720 --> 00:15:21,160 Speaker 1: would be implemented. Marilyn, Thank you so much. Marilan Watson 292 00:15:21,200 --> 00:15:28,480 Speaker 1: there of black Rock, This is a true joy. He 293 00:15:28,600 --> 00:15:31,440 Speaker 1: is a prolific writer on Shankai check. He is a 294 00:15:31,520 --> 00:15:34,840 Speaker 1: writer on Frances definitive. The History of modern France is 295 00:15:34,880 --> 00:15:37,560 Speaker 1: an important read. I've read it cover to cover, but 296 00:15:37,720 --> 00:15:41,920 Speaker 1: also a one volume on what there was before McCraw, 297 00:15:42,480 --> 00:15:46,560 Speaker 1: before lepan and that is, of course his magisterial book 298 00:15:47,040 --> 00:15:51,440 Speaker 1: on General de gall It can only be Jonathan Fenby. Jonathan, 299 00:15:51,480 --> 00:15:54,320 Speaker 1: thank you so much for joining us. Can you explain 300 00:15:54,920 --> 00:15:58,080 Speaker 1: the collapse of the center in the right around the 301 00:15:58,120 --> 00:16:02,600 Speaker 1: thirty nine year old maverick Mr McCraw in his second term? 302 00:16:02,640 --> 00:16:10,360 Speaker 1: What degall rot seems to be politically destroyed? Is it? Well? 303 00:16:10,440 --> 00:16:16,640 Speaker 1: The conventional left center, left, center right division on which 304 00:16:16,680 --> 00:16:19,960 Speaker 1: the Fifth Republic has rested really for the last and 305 00:16:20,080 --> 00:16:25,000 Speaker 1: fifty years or more, is now destroyed. Makon took away 306 00:16:25,200 --> 00:16:27,800 Speaker 1: a lot of the support from the socialist last time around, 307 00:16:28,160 --> 00:16:29,880 Speaker 1: and this time he seems to have taken away a 308 00:16:29,880 --> 00:16:34,240 Speaker 1: lot of support from the center right Republicans. Add to that, 309 00:16:35,080 --> 00:16:38,440 Speaker 1: the rise of le Pen and other extremists on both 310 00:16:38,520 --> 00:16:43,200 Speaker 1: left and right, and Francis politics have become completely fragmented 311 00:16:43,440 --> 00:16:46,680 Speaker 1: in the in the tumult of America. There was a 312 00:16:46,760 --> 00:16:50,240 Speaker 1: massive turnout in the last election, Mr Trump, of course, 313 00:16:50,560 --> 00:16:53,680 Speaker 1: note seventy four million people chose to vote for Trump. 314 00:16:54,120 --> 00:17:00,080 Speaker 1: Tell us the mystery of this turnout, April Well, The 315 00:17:00,400 --> 00:17:03,680 Speaker 1: question and now is how many of the people who 316 00:17:03,800 --> 00:17:08,200 Speaker 1: voted for the hard left wing candidate Jean Luc Millen 317 00:17:08,280 --> 00:17:11,160 Speaker 1: sew and there were twenty two percent went for him, 318 00:17:11,160 --> 00:17:14,840 Speaker 1: which was an unusually high and unexpectedly high number. How 319 00:17:14,880 --> 00:17:19,040 Speaker 1: many of those will who don't like Macon will still 320 00:17:19,080 --> 00:17:21,840 Speaker 1: hold their noses and vote for him, or how many 321 00:17:21,840 --> 00:17:27,200 Speaker 1: will abstain? And it's really in that uh equation that 322 00:17:27,400 --> 00:17:32,160 Speaker 1: probably the outcome of the runoff on will be decided. Jonathan, 323 00:17:32,160 --> 00:17:35,320 Speaker 1: how much is the move toward marine le Pen indicative 324 00:17:35,480 --> 00:17:37,800 Speaker 1: of this shift away from the Western order, something that 325 00:17:37,840 --> 00:17:40,280 Speaker 1: we saw with the Trump presidency and certainly that we've 326 00:17:40,280 --> 00:17:43,800 Speaker 1: seen on the margins in a number of nations. It 327 00:17:44,040 --> 00:17:49,160 Speaker 1: is in part that, but the even harder right candidate 328 00:17:49,400 --> 00:17:54,159 Speaker 1: Eric Zamore, who played the values card much more strongly 329 00:17:54,240 --> 00:17:57,000 Speaker 1: than the PEN. He didn't do as well as many 330 00:17:57,040 --> 00:17:59,840 Speaker 1: people thought he might have done. And the PEN really 331 00:18:00,040 --> 00:18:04,040 Speaker 1: picked up a lot of votes yesterday on cost of 332 00:18:04,119 --> 00:18:08,639 Speaker 1: living issues, security, law and order, all these kind of 333 00:18:08,640 --> 00:18:12,400 Speaker 1: grassroots issues which she made the center of her campaign. 334 00:18:13,240 --> 00:18:15,399 Speaker 1: And what does Emmanuel mcral need to do as he 335 00:18:15,480 --> 00:18:19,560 Speaker 1: campaigns between now in April? What is his largest task? 336 00:18:20,760 --> 00:18:23,040 Speaker 1: His largest task is to show that he cares for 337 00:18:23,080 --> 00:18:29,520 Speaker 1: the French people. His opponents made the argument going into 338 00:18:29,520 --> 00:18:32,240 Speaker 1: the first round that he was to obsess with his 339 00:18:32,400 --> 00:18:37,080 Speaker 1: position as an international statesman, having once described the president 340 00:18:37,080 --> 00:18:41,159 Speaker 1: as Jupiter like, that he floated above everyday concerns and 341 00:18:41,160 --> 00:18:44,080 Speaker 1: he's got to get show the French that he cares 342 00:18:44,160 --> 00:18:46,760 Speaker 1: for them. John, I'm absolutely fascinating by this and that 343 00:18:46,920 --> 00:18:50,000 Speaker 1: in folks, this is very different than America. Paris is 344 00:18:50,119 --> 00:18:54,040 Speaker 1: roughly thirty of the GDP of France. I mean, it's 345 00:18:54,119 --> 00:18:57,960 Speaker 1: Paris centric. Is this John? Just simply you know, as 346 00:18:57,960 --> 00:19:02,040 Speaker 1: a generalization Paris and mc krow against the nation of 347 00:19:02,160 --> 00:19:05,639 Speaker 1: the rest of France. That is certainly the way Lapin 348 00:19:05,760 --> 00:19:08,560 Speaker 1: will try to pitch it. I think for the second 349 00:19:08,720 --> 00:19:14,120 Speaker 1: round you're a metropolitan elitist who cares for the rest 350 00:19:14,160 --> 00:19:19,520 Speaker 1: of the world, the the upper elite class looking after them, 351 00:19:19,600 --> 00:19:22,120 Speaker 1: the president of the rich, and you've got the rest 352 00:19:22,119 --> 00:19:24,720 Speaker 1: of France which is being left in the doldrums. And 353 00:19:24,800 --> 00:19:29,760 Speaker 1: that's really been her main campaign theme. Okay, but John, 354 00:19:29,880 --> 00:19:32,800 Speaker 1: here here's the issue to our viewers in radio and TV. 355 00:19:33,400 --> 00:19:36,840 Speaker 1: Their view of France, as you well know, is table twelve, 356 00:19:37,000 --> 00:19:42,160 Speaker 1: table dues at oh petite France or petite sweets overlooking 357 00:19:42,520 --> 00:19:44,679 Speaker 1: the Luxembourg Garden. I mean, you sit there in the 358 00:19:44,760 --> 00:19:49,159 Speaker 1: sun and everything's great. That's not France. Is that what 359 00:19:49,240 --> 00:19:54,600 Speaker 1: Frances saying to McCrow. You're not France. Absolutely, Tom, You've 360 00:19:54,640 --> 00:19:57,680 Speaker 1: got it absolutely right there. The rest of France, those 361 00:19:57,720 --> 00:20:01,080 Speaker 1: who voted for La penn and fer melon Chan and 362 00:20:01,160 --> 00:20:04,000 Speaker 1: I emphasized again that he got twenty two percent of 363 00:20:04,080 --> 00:20:09,280 Speaker 1: the vote, althoughy finished third. They're basically telling Macon, Look, 364 00:20:10,000 --> 00:20:12,880 Speaker 1: France doesn't just exist in the smart parts of Paris. 365 00:20:13,200 --> 00:20:17,720 Speaker 1: It exists in run down towns and suburbs and deserted 366 00:20:17,800 --> 00:20:20,960 Speaker 1: farm lands. And you've got to start paying some attention 367 00:20:21,000 --> 00:20:24,000 Speaker 1: to us how much popular support is there within France. 368 00:20:24,080 --> 00:20:31,480 Speaker 1: Jonathan for France's approach to Russia towards going on in Ukraine. Well, 369 00:20:32,320 --> 00:20:35,880 Speaker 1: Ukraine in a sense has been It's been there all 370 00:20:35,920 --> 00:20:43,240 Speaker 1: through the campaign. But Macon's conversations with Putin I don't 371 00:20:43,240 --> 00:20:45,800 Speaker 1: think did him any harm because he was seen as 372 00:20:45,800 --> 00:20:48,639 Speaker 1: putting France on the world stage. On the other hand, 373 00:20:48,920 --> 00:20:52,920 Speaker 1: the far left and far right candidates who paled up 374 00:20:53,000 --> 00:20:57,720 Speaker 1: to Putin earlier on are somewhat embarrassed by this, and 375 00:20:57,760 --> 00:21:01,880 Speaker 1: Macrawl will make a lot of their those panels big 376 00:21:01,960 --> 00:21:04,600 Speaker 1: loan for a Russian bank, for instance, A lot of 377 00:21:04,600 --> 00:21:07,000 Speaker 1: that will come up in the campaign for the second round. 378 00:21:07,160 --> 00:21:10,119 Speaker 1: Jonathan Fenby, thank you so much, greatly appreciate it. Wonderful 379 00:21:10,160 --> 00:21:12,400 Speaker 1: to catch up with you again in folks. I can't 380 00:21:12,440 --> 00:21:16,200 Speaker 1: say enough about Mr Fenby's commitment to writing of France 381 00:21:16,280 --> 00:21:18,639 Speaker 1: or been other great books on France, great one volumes 382 00:21:18,720 --> 00:21:21,159 Speaker 1: under go. But Fenby is the one who over the 383 00:21:21,240 --> 00:21:25,080 Speaker 1: years has just put together truly thousands of pages on 384 00:21:25,200 --> 00:21:35,080 Speaker 1: this interesting, interesting nation. I know all right now ellen 385 00:21:35,119 --> 00:21:38,560 Speaker 1: Will joined senior fellow in Atlantic Council and definitive as 386 00:21:38,600 --> 00:21:43,200 Speaker 1: well on the Saudis ellen Wald. With the oil issues 387 00:21:43,359 --> 00:21:46,840 Speaker 1: and with demand in China, what did the Saudis do 388 00:21:48,720 --> 00:21:51,520 Speaker 1: The saudia Is I think are actually in a somewhat 389 00:21:51,960 --> 00:21:56,120 Speaker 1: difficult position at the moment with problems and in terms 390 00:21:56,119 --> 00:22:01,359 Speaker 1: of these lockdowns and potentially really could into demand in China, 391 00:22:01,560 --> 00:22:06,600 Speaker 1: especially with Russian crewde being available at a discount for 392 00:22:07,119 --> 00:22:11,720 Speaker 1: the Chinese. They may really need to make their products 393 00:22:11,760 --> 00:22:15,560 Speaker 1: more competitive. So they do have long term contracts with 394 00:22:15,840 --> 00:22:20,760 Speaker 1: certain Chinese refineries, particularly the petrochemical and refinaries that they 395 00:22:20,880 --> 00:22:24,199 Speaker 1: themselves that that a Ramco has stakes in, so they 396 00:22:24,200 --> 00:22:27,840 Speaker 1: don't need to worry about that supply. But it's basically 397 00:22:27,840 --> 00:22:31,080 Speaker 1: everything else on the margins that they're used to selling 398 00:22:31,200 --> 00:22:35,040 Speaker 1: to the Chinese that they may need to make their 399 00:22:35,080 --> 00:22:38,560 Speaker 1: products a little bit more competitive to uh, you know, 400 00:22:39,040 --> 00:22:41,400 Speaker 1: keep with this too, breac and oil and you could 401 00:22:41,400 --> 00:22:45,200 Speaker 1: see them offer a price cut. Okay, of our price cut, Ellen, 402 00:22:45,280 --> 00:22:48,160 Speaker 1: let's go to walled one on one. Is oil one 403 00:22:48,320 --> 00:22:53,320 Speaker 1: price this morning? One global price or not? Well, it's 404 00:22:53,359 --> 00:22:56,560 Speaker 1: never really one global price. We've gotten the benchmarks and 405 00:22:56,600 --> 00:22:59,520 Speaker 1: then we've got you know, the different blends that are sold. 406 00:22:59,800 --> 00:23:03,159 Speaker 1: They saw the benchmarks. So Russian crew can you know, 407 00:23:03,200 --> 00:23:06,040 Speaker 1: the Chinese can get this Russian crews for you know, 408 00:23:06,160 --> 00:23:08,760 Speaker 1: it could be as much as thirty dollars off of 409 00:23:09,040 --> 00:23:12,119 Speaker 1: the Brent benchmark, and that's a really good deal for China. 410 00:23:12,440 --> 00:23:16,640 Speaker 1: Even if they're experiencing a drop in demand, they could 411 00:23:16,720 --> 00:23:20,679 Speaker 1: use this opportunity to um put more into storage. So 412 00:23:21,080 --> 00:23:24,440 Speaker 1: I'm not sure that will necessarily see fewer in courts 413 00:23:24,480 --> 00:23:27,960 Speaker 1: going into China if China thinks they can get a discount, 414 00:23:28,160 --> 00:23:31,800 Speaker 1: but consumption in China could definitely go down and that 415 00:23:31,880 --> 00:23:36,720 Speaker 1: would hurt the independent refinery business, which does a lot 416 00:23:36,880 --> 00:23:40,359 Speaker 1: of you know business making products and selling them around Asia. 417 00:23:40,560 --> 00:23:44,520 Speaker 1: And if there's no demand coming for these products from 418 00:23:44,560 --> 00:23:47,960 Speaker 1: you know, China and other areas, that could definitely hurt 419 00:23:48,320 --> 00:23:52,600 Speaker 1: that sector in China. Is there a historical corollary for 420 00:23:52,640 --> 00:23:55,640 Speaker 1: this period in terms of uncertainty in terms of volatility 421 00:23:55,640 --> 00:23:57,440 Speaker 1: and oil price in terms of the fact that we're 422 00:23:57,480 --> 00:24:00,879 Speaker 1: asking the question is there a global price for oil 423 00:24:01,119 --> 00:24:05,000 Speaker 1: or is it basically choose your own adventure. Yeah, it's 424 00:24:05,359 --> 00:24:08,480 Speaker 1: I really think that that this is a very unprecedented 425 00:24:08,560 --> 00:24:14,199 Speaker 1: period in historically because there is so much effect in 426 00:24:14,280 --> 00:24:17,280 Speaker 1: terms of speculation and of all of these different prices 427 00:24:17,320 --> 00:24:19,960 Speaker 1: going around uh in the market today. We used to 428 00:24:20,080 --> 00:24:22,560 Speaker 1: you know, there were previous times when we had big 429 00:24:22,840 --> 00:24:26,680 Speaker 1: oil incidents. We you know, remember the nineteen seventies oil shocks, 430 00:24:26,760 --> 00:24:30,840 Speaker 1: we had the Iranian revolution. Those were all massive issues 431 00:24:30,920 --> 00:24:34,120 Speaker 1: in the oil market, except that at that time, uh, 432 00:24:34,160 --> 00:24:38,040 Speaker 1: there wasn't this kind of financialization of the oil markets. 433 00:24:38,119 --> 00:24:42,199 Speaker 1: You didn't have you know, traders trading oil every minute, 434 00:24:42,280 --> 00:24:44,879 Speaker 1: or you didn't have algorithms that we're asking on the 435 00:24:44,920 --> 00:24:48,159 Speaker 1: market in near seconds or even less than seconds. And 436 00:24:48,480 --> 00:24:54,080 Speaker 1: all of this financialization introduces more volatility, and it makes 437 00:24:54,320 --> 00:24:59,480 Speaker 1: any move much more uh, it makes it much more attenuated. 438 00:24:59,800 --> 00:25:02,480 Speaker 1: So you know, we may see, uh, the effects of 439 00:25:02,520 --> 00:25:06,240 Speaker 1: these Chinese blockdowns, but the fact that there's so much 440 00:25:06,480 --> 00:25:09,000 Speaker 1: money and so much trading and so much attention to 441 00:25:09,040 --> 00:25:11,919 Speaker 1: the oil market just makes these swings even larger and 442 00:25:11,960 --> 00:25:15,120 Speaker 1: even more volatile. Ellen you mentioned there are the Iranian revolution. 443 00:25:15,160 --> 00:25:17,600 Speaker 1: Let's talk about around in a different context. It's saying 444 00:25:17,680 --> 00:25:22,000 Speaker 1: today that the nuclear deal is in the emergency room. 445 00:25:22,040 --> 00:25:24,560 Speaker 1: It's not dead, but it's in the emergency room. What 446 00:25:24,680 --> 00:25:26,240 Speaker 1: is your base case on whether or not a deal 447 00:25:26,280 --> 00:25:29,320 Speaker 1: can ultimately be reached and how that will reflect in 448 00:25:29,359 --> 00:25:33,439 Speaker 1: oil prices. Yeah, this is this is I think a 449 00:25:33,520 --> 00:25:38,600 Speaker 1: significant issue, particularly because um several months ago, there was 450 00:25:38,640 --> 00:25:41,720 Speaker 1: a lot of optimism that we would get in Iran deal. 451 00:25:41,720 --> 00:25:44,679 Speaker 1: I remember speaking with people who are very much in 452 00:25:44,720 --> 00:25:47,520 Speaker 1: tune in in the Iran analysis area, and they were 453 00:25:47,800 --> 00:25:51,800 Speaker 1: very very positive that a deal would get done before March. 454 00:25:52,040 --> 00:25:55,760 Speaker 1: And now looking at the situation, it's a different ball game. 455 00:25:55,800 --> 00:25:59,440 Speaker 1: And I do think that the incredible rise in oil 456 00:25:59,480 --> 00:26:03,240 Speaker 1: prices and the war in Ukraine has given Iran an 457 00:26:03,240 --> 00:26:08,240 Speaker 1: advantage because they are still selling their oil and they're 458 00:26:08,320 --> 00:26:12,960 Speaker 1: making much more money, and so that doesn't that reduces 459 00:26:13,000 --> 00:26:16,239 Speaker 1: the pressure on them to come to the table and 460 00:26:16,240 --> 00:26:20,879 Speaker 1: to make concessions. So it's really created a situation in 461 00:26:20,880 --> 00:26:23,840 Speaker 1: which Iran is in the driver's seat here. Ellen, Well, 462 00:26:23,920 --> 00:26:26,160 Speaker 1: thank you so much. On a global view, Bond can't 463 00:26:26,160 --> 00:26:28,240 Speaker 1: say enough about her one volume on Saudi in the 464 00:26:28,320 --> 00:26:33,240 Speaker 1: Royalty just a superb effort on Saudi Arabia. This is 465 00:26:33,280 --> 00:26:37,280 Speaker 1: the Bloomberg Surveillance Podcast. Thanks for listening. Join us live 466 00:26:37,440 --> 00:26:40,800 Speaker 1: weekdays from seven to ten a m Eastern on Bloomberg 467 00:26:40,880 --> 00:26:44,720 Speaker 1: Radio and on Bloomberg Television each day from six to 468 00:26:44,840 --> 00:26:49,440 Speaker 1: nine am for insight from the best in economics, finance, investment, 469 00:26:49,640 --> 00:26:54,679 Speaker 1: and international relations. And subscribe to the Surveillance podcast, on 470 00:26:54,760 --> 00:26:58,600 Speaker 1: Apple Podcast, SoundCloud, Bloomberg dot com, and of course, on 471 00:26:58,680 --> 00:27:02,720 Speaker 1: the Terminal. I'm Tom keene In. This is Bloomer.