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 Jailely. We bring you 3 00:00:13,320 --> 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 Podcast, Suncloud, Bloomberg dot com, 5 00:00:23,920 --> 00:00:31,760 Speaker 1: and of course on the Bloomberg terminal. What's so important 6 00:00:31,760 --> 00:00:35,760 Speaker 1: here is the style of writing of peril. We're gonna 7 00:00:35,760 --> 00:00:38,240 Speaker 1: get him on in a moment, but Lisa bob Wood 8 00:00:38,640 --> 00:00:42,159 Speaker 1: fourteen bestsellers, there is a method to his madness and 9 00:00:42,200 --> 00:00:45,960 Speaker 1: it really highlights the different dynamic that Mark's Washington, d C. 10 00:00:46,120 --> 00:00:48,159 Speaker 1: And I'm talking about that with President Trump, which he 11 00:00:48,200 --> 00:00:51,279 Speaker 1: talks about, but also going forward to the Puden administration 12 00:00:51,479 --> 00:00:54,480 Speaker 1: and what they face going forward. There's a new frustration 13 00:00:54,800 --> 00:00:58,720 Speaker 1: with the status quo. There's fusible urgency. But the division 14 00:00:58,800 --> 00:01:01,240 Speaker 1: here lies in what sauls it. Do you grind away 15 00:01:01,360 --> 00:01:04,400 Speaker 1: at sort of the old you know, the old establishments, 16 00:01:04,680 --> 00:01:06,000 Speaker 1: or do you just sit down and say I'm not 17 00:01:06,040 --> 00:01:08,640 Speaker 1: gonna move until it all comes down. Robert Costa out 18 00:01:08,640 --> 00:01:11,640 Speaker 1: of Notre Dame Holding Court in Cambridge, where Dr Larrion 19 00:01:11,840 --> 00:01:14,440 Speaker 1: is and with him is Bob Woodward, and they have 20 00:01:14,520 --> 00:01:16,759 Speaker 1: teamed up for Peril. You've seen it out on all 21 00:01:16,800 --> 00:01:19,880 Speaker 1: sorts of media. We're thrilled they could join us this morning. 22 00:01:19,920 --> 00:01:22,440 Speaker 1: Bob Woodward, why did you pick Robert Costa? You could 23 00:01:22,480 --> 00:01:26,759 Speaker 1: have picked anybody in politics. Why did you pick young Costa? 24 00:01:27,840 --> 00:01:31,479 Speaker 1: Because young Costa is the best reporter I've ever seen 25 00:01:31,800 --> 00:01:38,360 Speaker 1: and his work ethic makes mine look weak. Uh. He 26 00:01:38,560 --> 00:01:42,759 Speaker 1: just threw himself into this years working at the Post. 27 00:01:42,840 --> 00:01:49,680 Speaker 1: He understands the Republican Party, understands Washington. Uh, like no one. Uh. 28 00:01:49,760 --> 00:01:54,880 Speaker 1: He taught me a great deal. And Uh it was 29 00:01:56,200 --> 00:01:59,360 Speaker 1: you know one if I was saying to somebody, said, 30 00:01:59,360 --> 00:02:02,400 Speaker 1: well who most of the work, and I said, actually, 31 00:02:02,800 --> 00:02:07,120 Speaker 1: we each did six. Uh. It's the kind of partnership 32 00:02:07,400 --> 00:02:13,560 Speaker 1: where everyone over performs. And uh, I think over performance 33 00:02:13,680 --> 00:02:17,240 Speaker 1: for him is just the natural state. Well, congratulations on 34 00:02:17,280 --> 00:02:19,800 Speaker 1: the book, and folks, again, this is Woodward and Consta 35 00:02:19,800 --> 00:02:21,959 Speaker 1: and Bob Woodward with a courage at seventy eight to 36 00:02:22,040 --> 00:02:24,280 Speaker 1: say I'm going to go out and find somebody to 37 00:02:24,320 --> 00:02:27,200 Speaker 1: do this with me. Robert Constant, the immediacy of the 38 00:02:27,200 --> 00:02:29,800 Speaker 1: book is stunning. You've done loads of interviews on the 39 00:02:29,880 --> 00:02:31,480 Speaker 1: look back I don't want to do that. I want 40 00:02:31,520 --> 00:02:34,200 Speaker 1: to talk about the future. And Robert Consta, you and 41 00:02:34,280 --> 00:02:37,200 Speaker 1: your book by saying the peril remains, What do you 42 00:02:37,240 --> 00:02:40,880 Speaker 1: mean by that? Well, I couldn't have a better reporting 43 00:02:40,919 --> 00:02:43,720 Speaker 1: partner in Bob Woodward. He has taught me so much 44 00:02:43,760 --> 00:02:47,760 Speaker 1: into that question about peril remains. Uh. That's a theme 45 00:02:47,840 --> 00:02:50,600 Speaker 1: that runs throughout the book. And it's built not just 46 00:02:50,760 --> 00:02:53,600 Speaker 1: it's not an opinion. It's based on reporting. And that's 47 00:02:53,600 --> 00:02:57,600 Speaker 1: the Woodword method. Tell the story of American politics, American 48 00:02:57,639 --> 00:03:00,960 Speaker 1: democracy through scenes. And you see the end of our book. 49 00:03:01,240 --> 00:03:04,360 Speaker 1: President Trump's out there on the political campaign trail. He 50 00:03:04,440 --> 00:03:07,280 Speaker 1: has a warlike cadence and some of these speeches saying 51 00:03:07,280 --> 00:03:09,720 Speaker 1: we will never surrender, never give in. When it comes 52 00:03:09,720 --> 00:03:15,520 Speaker 1: to conceding the election, he's demanding a comeback, you know, 53 00:03:15,760 --> 00:03:17,960 Speaker 1: Robert Costa, I'm gonna look at what we see with 54 00:03:18,000 --> 00:03:21,800 Speaker 1: Greg Grandin in the Great American Myth, looking at jackson 55 00:03:21,919 --> 00:03:25,120 Speaker 1: Ian history and how it folds over to the GOP. 56 00:03:25,840 --> 00:03:29,480 Speaker 1: Robert Costa, what kind of Republican party do you perceive 57 00:03:30,000 --> 00:03:34,560 Speaker 1: in two thousand and twenty four a Republican party riven 58 00:03:34,600 --> 00:03:37,880 Speaker 1: by divisions? You see in our books someone like Leader McConnell, 59 00:03:38,120 --> 00:03:40,640 Speaker 1: the Senate Minority leader, wants to move on. But so 60 00:03:40,720 --> 00:03:43,480 Speaker 1: many people inside the GOP, on Capitol Hill and beyond 61 00:03:43,520 --> 00:03:47,160 Speaker 1: believe President Trump still has political capital and so his 62 00:03:47,240 --> 00:03:51,200 Speaker 1: decision on will really dominate where this party goes at 63 00:03:51,200 --> 00:03:54,200 Speaker 1: this point. But there's competition. Vice President Pen's a complicated 64 00:03:54,200 --> 00:03:56,800 Speaker 1: political figure, as our book shows. He may want to 65 00:03:56,800 --> 00:03:59,360 Speaker 1: have his own say, his own bid, and there are 66 00:03:59,360 --> 00:04:04,200 Speaker 1: other stars out there, but President Trump he remains the 67 00:04:04,000 --> 00:04:08,520 Speaker 1: the political force inside the GOP. There's a question right now, Bob, 68 00:04:08,520 --> 00:04:12,200 Speaker 1: what of what the current administration is facing in terms 69 00:04:12,280 --> 00:04:15,440 Speaker 1: of getting a Washington back to a semblance of what 70 00:04:15,600 --> 00:04:19,159 Speaker 1: is considered or was considered normal. Considering all of your 71 00:04:19,160 --> 00:04:23,720 Speaker 1: coverage backs in the Nixonian days, how dysfunctional is today's 72 00:04:23,920 --> 00:04:27,000 Speaker 1: government based on some of the changes and the upheavals 73 00:04:27,000 --> 00:04:30,120 Speaker 1: that we've seen over the past number of years. Well, 74 00:04:30,160 --> 00:04:35,320 Speaker 1: that's an important question. I mean, it continues. Our point 75 00:04:35,400 --> 00:04:40,480 Speaker 1: here is that Trump triggered a national security crisis that 76 00:04:40,520 --> 00:04:44,960 Speaker 1: we didn't know about was a secret during the transition 77 00:04:45,240 --> 00:04:50,560 Speaker 1: from Trump to Biden and uh As Costa says, look, 78 00:04:50,640 --> 00:04:55,600 Speaker 1: everything is peril. And if we look at Biden right now. 79 00:04:55,720 --> 00:05:01,520 Speaker 1: He's got immense problems with Afghanistan with the virus, and 80 00:05:02,160 --> 00:05:06,279 Speaker 1: he's trying to work out some sort of legislation to 81 00:05:06,480 --> 00:05:12,680 Speaker 1: get his program through, and he's running into some obstacles 82 00:05:12,720 --> 00:05:16,320 Speaker 1: in his own party. In the Democratic Party, he's supposed 83 00:05:16,360 --> 00:05:20,360 Speaker 1: to be the leader and say okay, everyone do this, 84 00:05:20,520 --> 00:05:25,520 Speaker 1: but that's not the way Washington works. And Uh, maybe 85 00:05:25,560 --> 00:05:30,320 Speaker 1: it's inevitable that people are going to be outliers. People 86 00:05:30,560 --> 00:05:38,560 Speaker 1: uh the Senator Mansion, Senator uh sisma that they are 87 00:05:38,640 --> 00:05:41,520 Speaker 1: going to just say we're not going to march to 88 00:05:41,640 --> 00:05:45,760 Speaker 1: somebody else's vision, We've got our own, which really raises 89 00:05:45,760 --> 00:05:49,320 Speaker 1: a question about this new dynamic, this new increasing frustration 90 00:05:49,520 --> 00:05:52,880 Speaker 1: about a dysfunction of Washington, and how you go about 91 00:05:52,920 --> 00:05:55,040 Speaker 1: handling it. And Bob, I just want to know if 92 00:05:55,080 --> 00:05:57,960 Speaker 1: you think if there's any precedent in terms of a 93 00:05:58,000 --> 00:06:00,160 Speaker 1: group to saying we are not going to work with 94 00:06:00,200 --> 00:06:03,640 Speaker 1: the establishment, period, full stop, unless we get everything we want, 95 00:06:03,680 --> 00:06:07,080 Speaker 1: which seems to be an increasing fringe on both sides 96 00:06:07,120 --> 00:06:10,840 Speaker 1: of the aisle, both Democrats and Republicans. Well, there are 97 00:06:10,960 --> 00:06:15,480 Speaker 1: presidents presidents. President Clinton had a hard time getting his 98 00:06:15,720 --> 00:06:19,280 Speaker 1: plan through. It It was a squeaker until the end. 99 00:06:19,640 --> 00:06:24,640 Speaker 1: So we are going to see. But the debate in Washington, 100 00:06:24,839 --> 00:06:28,440 Speaker 1: as you well know, always one of them is about 101 00:06:28,520 --> 00:06:32,960 Speaker 1: taxing and spending. How much spending? How much taxing? And uh, 102 00:06:33,560 --> 00:06:41,039 Speaker 1: Biden has gone for the everything three point five trillion 103 00:06:41,120 --> 00:06:46,280 Speaker 1: dollars is a big spending package. And uh, we're going 104 00:06:46,320 --> 00:06:49,480 Speaker 1: to see. And if you talk to people, I mean, 105 00:06:49,560 --> 00:06:52,599 Speaker 1: Costa knows this better than anyone. There's a lot of 106 00:06:52,680 --> 00:06:56,120 Speaker 1: uncertainty out there, and there is a lot of peril, 107 00:06:56,720 --> 00:07:01,040 Speaker 1: if I may use that phrase, about where this does 108 00:07:01,279 --> 00:07:04,720 Speaker 1: does the Democratic Party come apart? On Bloombard Radio and 109 00:07:04,760 --> 00:07:08,000 Speaker 1: Bloomberg Television worldwide, we welcome you, Robert Costa and Bob 110 00:07:08,000 --> 00:07:10,880 Speaker 1: Woodward with us an effort of peril. Can't say enough 111 00:07:10,880 --> 00:07:14,560 Speaker 1: about it once again after fourteen bestsellers, Bob Woodward on 112 00:07:14,720 --> 00:07:18,800 Speaker 1: deep background, as they say, Robert Costa, page two oh 113 00:07:18,840 --> 00:07:22,200 Speaker 1: one of Peril to me is everything about the future 114 00:07:22,280 --> 00:07:26,080 Speaker 1: of the GOP. Mike Lee of Utah, born in Arizona, 115 00:07:26,440 --> 00:07:30,240 Speaker 1: wants to sit at Barry Goldwater's desk. There was a 116 00:07:30,240 --> 00:07:33,520 Speaker 1: time of peril in nine four I lived at as 117 00:07:33,560 --> 00:07:37,280 Speaker 1: a kid. This peril here, how do you perceive it? 118 00:07:37,360 --> 00:07:43,120 Speaker 1: Worked out across both parties. The Mike Lee example, the 119 00:07:43,160 --> 00:07:46,160 Speaker 1: senator from Utah, is such a prism into the GOP 120 00:07:46,400 --> 00:07:50,000 Speaker 1: right now. He was presented with the Eastman memo. Conservative 121 00:07:50,080 --> 00:07:53,920 Speaker 1: lawyer Johnny Eastman presents this memo to Senator Lee based 122 00:07:53,920 --> 00:07:58,760 Speaker 1: on our reporting about throwing out some electors on January six, 123 00:07:58,800 --> 00:08:01,120 Speaker 1: about searching for altraing at electors that may be out 124 00:08:01,120 --> 00:08:04,119 Speaker 1: there in the States, and Lee long story short finds 125 00:08:04,120 --> 00:08:05,960 Speaker 1: this is not the case. He does a lot of 126 00:08:06,160 --> 00:08:08,960 Speaker 1: reporting on his own to probe the Eastman memo, and 127 00:08:09,000 --> 00:08:11,600 Speaker 1: he finds there's no such thing as alternate electors out there, 128 00:08:11,960 --> 00:08:14,520 Speaker 1: but this memo and John Eastman, they were in the 129 00:08:14,600 --> 00:08:17,440 Speaker 1: Oval office. Our book shows on January four, two days 130 00:08:17,760 --> 00:08:20,320 Speaker 1: before the insurrection. This is not just some memo or 131 00:08:20,360 --> 00:08:22,880 Speaker 1: some fantasy. This was something that was actively going on. 132 00:08:22,960 --> 00:08:25,600 Speaker 1: Pay attention to what word always tells me, to the action, 133 00:08:25,720 --> 00:08:30,080 Speaker 1: where what are people doing, and saying, I look, Robert Costa, 134 00:08:30,080 --> 00:08:31,760 Speaker 1: and I can go to your time at Cambridge, where 135 00:08:31,800 --> 00:08:35,400 Speaker 1: I believe you effort of the fractures career of Winston Churchill. 136 00:08:35,559 --> 00:08:38,360 Speaker 1: Let's swing to the Democrats right now and look at 137 00:08:38,360 --> 00:08:42,199 Speaker 1: their peril. I would suggest Robert Costa that these Democrats 138 00:08:42,200 --> 00:08:46,880 Speaker 1: are remembered only by Bob Woodward in Washington, back pre Obama, 139 00:08:47,080 --> 00:08:51,560 Speaker 1: back pre Clinton. Is this Francis Democratic Party now like 140 00:08:52,160 --> 00:08:56,720 Speaker 1: way back or is it something new. There's a scene 141 00:08:56,760 --> 00:08:59,600 Speaker 1: in the book where Biden looks up. President Biden looks 142 00:08:59,640 --> 00:09:01,800 Speaker 1: up at a portrait of FDR and he says, this 143 00:09:01,880 --> 00:09:04,080 Speaker 1: is a time for that kind of transformational change. What 144 00:09:04,160 --> 00:09:06,360 Speaker 1: you really see in the Democratic Party in our reporting 145 00:09:06,800 --> 00:09:10,120 Speaker 1: is while Biden won the presidency, Bernie Sanders and his 146 00:09:10,200 --> 00:09:13,600 Speaker 1: progressive movement have one power. They are in alignment with Biden. 147 00:09:13,920 --> 00:09:17,079 Speaker 1: Sanders made the decision in April and May of to 148 00:09:17,200 --> 00:09:19,800 Speaker 1: work with Biden rather than against him. And you see 149 00:09:19,840 --> 00:09:22,559 Speaker 1: Biden moving to the left on his one point nine 150 00:09:22,559 --> 00:09:24,960 Speaker 1: trillion dollar rescue plan, which we detail in the book, 151 00:09:24,960 --> 00:09:28,080 Speaker 1: and even now on this massive plan he's proposing, and 152 00:09:28,120 --> 00:09:31,000 Speaker 1: that's currently on the rocks on Capitol Hill. Biden is 153 00:09:31,000 --> 00:09:32,920 Speaker 1: not moving towards the center and trying to be the 154 00:09:32,960 --> 00:09:36,240 Speaker 1: guy cutting a deal with Mitch McConnell. And that dynamic continues. 155 00:09:36,320 --> 00:09:39,040 Speaker 1: He wants to have a progressive legacy, even though he's 156 00:09:39,120 --> 00:09:42,400 Speaker 1: known as moderate. Joe Biden from Delaware, Bob but just 157 00:09:42,440 --> 00:09:44,679 Speaker 1: taking a step back when you look at all of the 158 00:09:44,640 --> 00:09:47,480 Speaker 1: the reporting that you did for peril, what's your big 159 00:09:47,520 --> 00:09:51,040 Speaker 1: takeaway in the new nature of the United States democracy 160 00:09:51,080 --> 00:09:55,160 Speaker 1: in this new very fractus era. Well, then it's being 161 00:09:55,200 --> 00:09:59,040 Speaker 1: tested and stretched by both parties. And I remember talking 162 00:09:59,080 --> 00:10:03,400 Speaker 1: with President Trump when he was in office in nineteen, 163 00:10:03,559 --> 00:10:07,559 Speaker 1: going into the Oval office and saying that the old 164 00:10:07,720 --> 00:10:14,280 Speaker 1: order in both parties, Republican and Democratic, uh, is changing, 165 00:10:14,559 --> 00:10:19,800 Speaker 1: is evaporating. Uh and uh he just he said yes, 166 00:10:19,920 --> 00:10:23,720 Speaker 1: And I said, it looks like you seized history's clock 167 00:10:23,800 --> 00:10:28,160 Speaker 1: in sixteen. And he just jumped in his chair behind 168 00:10:28,240 --> 00:10:32,640 Speaker 1: the resolute desk, saying, yes, I'll do it again, talking 169 00:10:32,679 --> 00:10:37,040 Speaker 1: about coming up. And of course he didn't. He lost. 170 00:10:37,200 --> 00:10:43,119 Speaker 1: But the big Trump theme now is the election was stolen. 171 00:10:43,920 --> 00:10:47,439 Speaker 1: We dug into this as much as you can, and 172 00:10:47,480 --> 00:10:51,600 Speaker 1: we found these memos in this documentation that the biggest 173 00:10:51,640 --> 00:10:57,920 Speaker 1: Trump supporters realized there was no stolen election. What is 174 00:10:57,960 --> 00:11:02,440 Speaker 1: Trump running on essentially his campaign is, well, they stole 175 00:11:02,480 --> 00:11:08,800 Speaker 1: it in though there's no evidence, and uh, somehow I 176 00:11:08,920 --> 00:11:14,800 Speaker 1: can run in four and and get it back. What 177 00:11:16,160 --> 00:11:18,960 Speaker 1: the average voter sits and looks at all of this, 178 00:11:19,120 --> 00:11:22,200 Speaker 1: what does it mean to them, who's going to offer 179 00:11:22,880 --> 00:11:26,320 Speaker 1: a better life and a better program? That should be 180 00:11:26,440 --> 00:11:29,920 Speaker 1: the issue. Maybe that will surface in all of this. 181 00:11:30,280 --> 00:11:32,920 Speaker 1: We have to continue on this, folks, with another one 182 00:11:32,920 --> 00:11:36,480 Speaker 1: hour conversation with Robert Costan Bob Wooder. It is peril, 183 00:11:37,040 --> 00:11:42,520 Speaker 1: highly readable. It's a classic Woodward shocking, deep background effect. 184 00:11:42,640 --> 00:11:45,640 Speaker 1: It opens with General Miley, I might point out as well, 185 00:11:45,679 --> 00:11:48,120 Speaker 1: and of course it is a look past as Woodward 186 00:11:48,160 --> 00:11:51,679 Speaker 1: and cost to look to the future of our nation's politics. 187 00:11:57,640 --> 00:12:01,760 Speaker 1: Jordan Rochester that joins us next tomorrow G ten fex strategist. 188 00:12:02,880 --> 00:12:06,079 Speaker 1: He will be there for Spurs Villa this weekend. I'm 189 00:12:06,080 --> 00:12:07,600 Speaker 1: not sure what that's got to do when it comes 190 00:12:07,640 --> 00:12:10,520 Speaker 1: to pandas or anything. Jordan, Hello, great to have you 191 00:12:10,559 --> 00:12:14,080 Speaker 1: with us. Good morning everyone. Let's start with sterling. Jordan's 192 00:12:14,760 --> 00:12:18,680 Speaker 1: that has become really, really unpredictable, hard to trade. And 193 00:12:18,720 --> 00:12:20,320 Speaker 1: I know you're scratching your head and I've read you 194 00:12:20,400 --> 00:12:23,480 Speaker 1: know earlier this week you've been really transparent, open, honest, 195 00:12:23,640 --> 00:12:26,079 Speaker 1: you didn't have a clue either. What are people saying 196 00:12:26,120 --> 00:12:29,280 Speaker 1: to you? John? I think it's we've gone back to 197 00:12:29,320 --> 00:12:31,600 Speaker 1: the old ways of looking at the pounds, even though 198 00:12:31,640 --> 00:12:34,000 Speaker 1: it's not Brexit. We're not talking about trees made a 199 00:12:34,040 --> 00:12:36,520 Speaker 1: given the press conference, Boris Johnson doing this, none of 200 00:12:36,520 --> 00:12:39,880 Speaker 1: that Houses of Parliament stuff. But we're looking at Stirling 201 00:12:39,920 --> 00:12:44,000 Speaker 1: with an inflation premium view. What's that about. We got 202 00:12:44,000 --> 00:12:46,880 Speaker 1: this fuel crisis, petrol people are struggling to get petrol 203 00:12:46,880 --> 00:12:49,400 Speaker 1: in their cars. The UK is highly exposed to this 204 00:12:49,480 --> 00:12:52,520 Speaker 1: gas crisis that's taking place in European energy markets. Was 205 00:12:52,559 --> 00:12:55,000 Speaker 1: seeing the price of energy in the UK, just like 206 00:12:55,040 --> 00:12:57,640 Speaker 1: the rest of your spiraling quite a lot higher. But 207 00:12:57,760 --> 00:12:59,800 Speaker 1: the one thing that has really made it really difficult 208 00:12:59,800 --> 00:13:02,319 Speaker 1: for us or john is we priced in banking and 209 00:13:02,400 --> 00:13:06,360 Speaker 1: rate hikes, re rate hikes, price for next year, the 210 00:13:06,400 --> 00:13:08,800 Speaker 1: pounds law. So it tells me we've got to adopt 211 00:13:08,840 --> 00:13:11,199 Speaker 1: the old sort of framework, which is keep an eye 212 00:13:11,200 --> 00:13:14,719 Speaker 1: out for UK inflation expectations. If they keep rising, if 213 00:13:14,840 --> 00:13:17,800 Speaker 1: energy prices keep rising, that's gonna weigh on the pound. Jordan, 214 00:13:17,840 --> 00:13:19,560 Speaker 1: I'm going to ask a question, and I need to 215 00:13:19,559 --> 00:13:21,600 Speaker 1: be a little bit open about this because I'll get 216 00:13:21,600 --> 00:13:23,240 Speaker 1: a lot of hate mail. This is not my view. 217 00:13:23,559 --> 00:13:26,360 Speaker 1: Before everyone starts sending me hate mail. Is this trading 218 00:13:26,720 --> 00:13:31,439 Speaker 1: like an m currency now? Jordan's yeah, it's the question 219 00:13:31,480 --> 00:13:33,840 Speaker 1: you always get asked. It's trading like can developed currency 220 00:13:34,240 --> 00:13:37,720 Speaker 1: that's having an inflation problem um and emerging markets typically 221 00:13:37,800 --> 00:13:40,840 Speaker 1: have higher rates of inflation. So yes, in that respect, 222 00:13:40,840 --> 00:13:43,040 Speaker 1: it's trading like in the end currency because we're focusing 223 00:13:43,080 --> 00:13:45,280 Speaker 1: on that inflation metrics. But it's still one of the 224 00:13:45,320 --> 00:13:48,280 Speaker 1: reserve currencies of the world outside the dollar, So we're 225 00:13:48,280 --> 00:13:50,520 Speaker 1: not going to go too far and say it's untradeable, 226 00:13:50,600 --> 00:13:53,599 Speaker 1: and you can definitely trade it. It's just very unpredictable 227 00:13:55,120 --> 00:13:57,520 Speaker 1: during time. King, good morning to you as well. Is 228 00:13:57,559 --> 00:14:00,839 Speaker 1: this such regime shift? Jim Bollard talks about a regime shift. 229 00:14:01,000 --> 00:14:04,160 Speaker 1: We finally have a sum no dollar giving us a 230 00:14:04,160 --> 00:14:07,800 Speaker 1: big figure move kind of millieon for Q four. Is 231 00:14:07,840 --> 00:14:10,959 Speaker 1: it a time to make big figures? I think this 232 00:14:11,080 --> 00:14:14,360 Speaker 1: time we've had months now of your A dollar, for example, 233 00:14:14,440 --> 00:14:16,480 Speaker 1: being in a very tight range throughout the summer, and 234 00:14:16,520 --> 00:14:18,160 Speaker 1: I think as folks have gone back to the office 235 00:14:18,160 --> 00:14:20,280 Speaker 1: and we've gone back to work in September, it's kind 236 00:14:20,280 --> 00:14:22,080 Speaker 1: of woken everybody up to the risks that we're building 237 00:14:22,120 --> 00:14:24,400 Speaker 1: up over that summer period, and you're A dollar has 238 00:14:24,400 --> 00:14:26,840 Speaker 1: been in a range and we've had leverage. So the 239 00:14:26,880 --> 00:14:29,880 Speaker 1: headphonding community have been short the Euro, but not the 240 00:14:29,920 --> 00:14:32,080 Speaker 1: real money community. Tom. So what I've been saying to 241 00:14:32,080 --> 00:14:35,000 Speaker 1: clients is I think euro is having its end moment. 242 00:14:35,280 --> 00:14:37,200 Speaker 1: You think backs to Q one this year when US 243 00:14:37,320 --> 00:14:40,360 Speaker 1: rates moved higher after Georgia Senate rate results. The real 244 00:14:40,400 --> 00:14:42,600 Speaker 1: money community through in the towel and all their dollar 245 00:14:42,640 --> 00:14:44,840 Speaker 1: shorts against the end, they went long all the end. 246 00:14:45,080 --> 00:14:47,960 Speaker 1: They didn't do the same neuro The European reopening story 247 00:14:48,160 --> 00:14:51,280 Speaker 1: was still very attractive, and we had et F flows 248 00:14:51,280 --> 00:14:53,800 Speaker 1: into Europe, but that's for the FX that hasn't worked. 249 00:14:54,240 --> 00:14:56,360 Speaker 1: And now we've broken below one sixteen, which is the 250 00:14:56,360 --> 00:14:58,680 Speaker 1: line the sand for me. I think this is regime changed, Tom, 251 00:14:58,920 --> 00:15:00,520 Speaker 1: and we're looking for one four seen in the euro 252 00:15:00,560 --> 00:15:03,080 Speaker 1: against the dollar. All right, that's the short term, But Jordan, 253 00:15:03,200 --> 00:15:06,680 Speaker 1: you do see the Euro going back to versus the dollar. 254 00:15:06,760 --> 00:15:08,920 Speaker 1: I believe. I believe that that was your car. Can 255 00:15:08,960 --> 00:15:11,080 Speaker 1: you talk about the path to get there and how 256 00:15:11,120 --> 00:15:15,400 Speaker 1: the ECB responds to some of the inflationary inputs, even 257 00:15:15,440 --> 00:15:20,000 Speaker 1: though they call them transitory. Absolutely, Yeah, the dollar view 258 00:15:20,040 --> 00:15:22,520 Speaker 1: is still predicated on a global recovery. But right now 259 00:15:22,560 --> 00:15:25,320 Speaker 1: we're going through a slowdown data. The surveys are all 260 00:15:25,320 --> 00:15:27,320 Speaker 1: slowing down, So that's why we're talking about dollar strength 261 00:15:27,400 --> 00:15:29,240 Speaker 1: right here and now. If we get into the sort 262 00:15:29,280 --> 00:15:31,640 Speaker 1: of Q one next year, we'll have hopefully of pricing 263 00:15:31,720 --> 00:15:33,440 Speaker 1: quite a lot of that slow down, and then we'll 264 00:15:33,440 --> 00:15:36,840 Speaker 1: start to focus on the positives again. The European mobility 265 00:15:36,920 --> 00:15:39,560 Speaker 1: data is fantastic. The returns of work in Europe has 266 00:15:39,560 --> 00:15:41,960 Speaker 1: been much stronger than it actually has been in the US, 267 00:15:41,960 --> 00:15:45,239 Speaker 1: according to the Google Apple data and every other statistics 268 00:15:45,320 --> 00:15:47,320 Speaker 1: we look at for So that means maybe there's a 269 00:15:47,360 --> 00:15:50,840 Speaker 1: European performance story next year. And also by December we 270 00:15:50,920 --> 00:15:53,760 Speaker 1: might have got the German coalition to announce the policies 271 00:15:53,760 --> 00:15:57,440 Speaker 1: they will actually do. Whichever coalition is actually formed, maybe 272 00:15:57,440 --> 00:16:00,600 Speaker 1: the market focuses on those growth numbers and could boost 273 00:16:00,640 --> 00:16:03,720 Speaker 1: euro again. But fully e c B. They've got the 274 00:16:03,720 --> 00:16:06,160 Speaker 1: same situation for the UK. Energy prices are going up. 275 00:16:06,320 --> 00:16:10,240 Speaker 1: They're actually nearly double more important for European inflation. Nine 276 00:16:10,240 --> 00:16:13,000 Speaker 1: and a half per cent of inflation basket in euro 277 00:16:13,600 --> 00:16:16,040 Speaker 1: is energy, so energy costs rising is a big deal 278 00:16:16,080 --> 00:16:18,560 Speaker 1: for their actual inflation forecast. But they'll be able to 279 00:16:18,640 --> 00:16:21,280 Speaker 1: rest on the fact they've had a decade of low inflation, 280 00:16:21,640 --> 00:16:23,600 Speaker 1: so the idea of them raising rates next year or 281 00:16:23,640 --> 00:16:25,840 Speaker 1: the year after it is very low. But for markets, 282 00:16:25,880 --> 00:16:29,560 Speaker 1: what will be looking at. There's already one rate hYP 283 00:16:29,640 --> 00:16:32,200 Speaker 1: price into the ECB by that's the end of it. 284 00:16:32,480 --> 00:16:36,800 Speaker 1: So do we see the re spe raise rates three 285 00:16:36,880 --> 00:16:38,680 Speaker 1: years away? I have to I have to really raise 286 00:16:38,720 --> 00:16:41,280 Speaker 1: a question about this because central bankers have broadly said 287 00:16:41,560 --> 00:16:44,280 Speaker 1: that energy prices are not something that they look at 288 00:16:44,280 --> 00:16:47,160 Speaker 1: for core inflation. That isn't going to necessarily bleed into 289 00:16:47,160 --> 00:16:50,040 Speaker 1: their view in terms of whether to raise rates, since 290 00:16:50,040 --> 00:16:53,080 Speaker 1: it has factors that go beyond monetary policy. Why is 291 00:16:53,080 --> 00:16:56,480 Speaker 1: this time different? This time is different because we've just 292 00:16:56,520 --> 00:16:58,800 Speaker 1: had a record fiscal stimulus in Europe and the US, 293 00:16:59,200 --> 00:17:02,440 Speaker 1: and also we're having massive supply chain problems, so it 294 00:17:02,520 --> 00:17:04,879 Speaker 1: isn't going to be just energy. It's gonna be a 295 00:17:04,920 --> 00:17:07,440 Speaker 1: lot of other parts of the CPI basket are going up. 296 00:17:07,760 --> 00:17:09,440 Speaker 1: And the main thing for me is look at those 297 00:17:09,440 --> 00:17:14,280 Speaker 1: consumer inflation expectations. They're not falling, they're rising. They're rising slowly, 298 00:17:14,320 --> 00:17:17,560 Speaker 1: but over time, as energy prices feed through to people's budgets, 299 00:17:17,560 --> 00:17:19,680 Speaker 1: when they see the price of their electricity bills, when 300 00:17:19,680 --> 00:17:21,280 Speaker 1: they start to go to the shop and see food 301 00:17:21,280 --> 00:17:24,000 Speaker 1: and clothing going up, They'll start to think, maybe inflation 302 00:17:24,000 --> 00:17:26,639 Speaker 1: is higher than to present, to raise my inflation expectation, 303 00:17:27,000 --> 00:17:28,760 Speaker 1: and that sort of feed through perhaps two wages. I'm 304 00:17:28,800 --> 00:17:31,000 Speaker 1: not talking about a wage spiral. I'm not talking about 305 00:17:31,040 --> 00:17:33,960 Speaker 1: inflationary spiral. But we are talking about the direction is 306 00:17:33,960 --> 00:17:38,040 Speaker 1: probably higher inflation expectations, not lower, and that's something central 307 00:17:38,040 --> 00:17:40,080 Speaker 1: banks respond to. I got one prediction from you, then 308 00:17:40,080 --> 00:17:41,960 Speaker 1: you're a dollar looking for one fourteen. Let's get a 309 00:17:42,000 --> 00:17:45,600 Speaker 1: second spurs Villa Sunday afternoon. You'll be there, Jordan, What 310 00:17:45,640 --> 00:17:49,280 Speaker 1: are you looking for? If we get anything, just anything 311 00:17:49,320 --> 00:17:51,560 Speaker 1: close to the shock result of one nil against Man, 312 00:17:51,600 --> 00:17:55,280 Speaker 1: you all be happy, absolutely happy. We're talking about how 313 00:17:55,280 --> 00:18:00,239 Speaker 1: many beaver Town bread beverages are you gonna have? At 314 00:18:00,280 --> 00:18:02,960 Speaker 1: least a couple, at least a couple, for sure. Can't 315 00:18:03,000 --> 00:18:05,080 Speaker 1: drink comment a stands though, anymore, can you? Jordan? Really, 316 00:18:05,119 --> 00:18:09,840 Speaker 1: I didn't know that that to change. To bring the 317 00:18:09,880 --> 00:18:13,240 Speaker 1: base back into the stands, you have to except halftime. 318 00:18:13,560 --> 00:18:16,120 Speaker 1: You have to drink really quickly and then come back out, 319 00:18:16,880 --> 00:18:19,360 Speaker 1: which is what you see. The stands are still slightly 320 00:18:19,359 --> 00:18:26,000 Speaker 1: empty until about forty minute so much every day about it. Janda, 321 00:18:26,119 --> 00:18:38,600 Speaker 1: thank you. Joanna Rochester there fourteen eurox strategist. Right now, 322 00:18:38,640 --> 00:18:41,840 Speaker 1: we consider Washington, and we do it with someone who 323 00:18:41,920 --> 00:18:45,919 Speaker 1: is steeped and I mean steeped and what infrastructure can do. 324 00:18:46,200 --> 00:18:49,679 Speaker 1: Captain Clark is the Assistant Speaker of the House, but 325 00:18:49,840 --> 00:18:53,440 Speaker 1: far more she represents the fifth district of the Commonwealth 326 00:18:53,480 --> 00:18:57,720 Speaker 1: of Massachusetts and is adjacent to the most successful infrastructure 327 00:18:57,960 --> 00:19:01,920 Speaker 1: project ever done. Karatin Clark. I stood in Boston and 328 00:19:02,119 --> 00:19:07,639 Speaker 1: abject awe and looked across the torn down Southeast Expressway 329 00:19:07,640 --> 00:19:11,040 Speaker 1: at the north end I had never ever, ever seen 330 00:19:11,600 --> 00:19:15,760 Speaker 1: in my life. Can we bring that infrastructure success to 331 00:19:15,880 --> 00:19:20,680 Speaker 1: the rest of America. We are going to do just that, 332 00:19:21,119 --> 00:19:24,080 Speaker 1: and that project, the Big Dig, shows what we can 333 00:19:24,160 --> 00:19:28,520 Speaker 1: do not only create good jobs, improve our roads and bridges, 334 00:19:28,920 --> 00:19:32,960 Speaker 1: but also reconnect communities. And we've seen that play out 335 00:19:33,080 --> 00:19:37,520 Speaker 1: over and over again that communities, especially communities of color 336 00:19:37,600 --> 00:19:41,440 Speaker 1: and low income communities have been cut off. And so 337 00:19:41,560 --> 00:19:46,720 Speaker 1: our Infrastructure Plan plans to do that physically and also 338 00:19:46,880 --> 00:19:49,080 Speaker 1: help those who have been cut off by lack of 339 00:19:49,160 --> 00:19:53,080 Speaker 1: opportunity to be part of a royal economy that we're 340 00:19:53,080 --> 00:19:55,720 Speaker 1: going to build Congressman. I'll go with that. I think 341 00:19:55,760 --> 00:19:58,880 Speaker 1: that's very very good idea. But do you do it 342 00:19:59,040 --> 00:20:02,520 Speaker 1: linked to a social program or is today's action going 343 00:20:02,600 --> 00:20:06,600 Speaker 1: to be you and Speaker Pelosi are gonna delink infrastructure 344 00:20:06,680 --> 00:20:12,560 Speaker 1: and future big digs from a social agenda. We this 345 00:20:12,680 --> 00:20:18,399 Speaker 1: is all about building a great economy getting people back 346 00:20:18,440 --> 00:20:22,160 Speaker 1: to work. So these are always part of one build 347 00:20:22,160 --> 00:20:26,640 Speaker 1: back better agenda. There's roads, there's bridges, there's broadband, there's 348 00:20:26,640 --> 00:20:29,159 Speaker 1: getting the let out of our water, and there is 349 00:20:29,200 --> 00:20:33,359 Speaker 1: making investments to have the workforce of the future. We know, 350 00:20:33,600 --> 00:20:37,679 Speaker 1: whether you are Warren Buffett or the local restaurants that 351 00:20:37,760 --> 00:20:41,520 Speaker 1: I recently held a round table with, childcare is a 352 00:20:41,600 --> 00:20:45,960 Speaker 1: huge barrier for getting people back to work. Is about 353 00:20:46,000 --> 00:20:48,879 Speaker 1: the economy. Look, the nation's in crisis. Even if you 354 00:20:48,920 --> 00:20:51,320 Speaker 1: were playing baseball last night and that double play you 355 00:20:51,359 --> 00:20:54,879 Speaker 1: went into was terrible, terthy Clark. I want to know 356 00:20:55,160 --> 00:20:59,360 Speaker 1: right now you mentioned bad water. Dan Kildee Flint, Michigan, 357 00:20:59,800 --> 00:21:03,320 Speaker 1: his lived bad water. He's got to go out for 358 00:21:03,400 --> 00:21:07,280 Speaker 1: you and Speaker Pelosi and count the votes today. Can 359 00:21:07,320 --> 00:21:11,760 Speaker 1: you count the votes attaching this infrastructure bill to a 360 00:21:11,840 --> 00:21:18,600 Speaker 1: three point five trillion dollar social agenda? Of liberals. This 361 00:21:18,800 --> 00:21:22,480 Speaker 1: is the agenda of the American people. This is the 362 00:21:22,600 --> 00:21:27,160 Speaker 1: agenda of American business. Do we want a full recovery 363 00:21:27,280 --> 00:21:31,360 Speaker 1: or do we not? These are absolutely on parallel tracks, 364 00:21:31,880 --> 00:21:36,639 Speaker 1: and they are the President's agenda, built from his conversations 365 00:21:37,040 --> 00:21:40,960 Speaker 1: throughout this country. So whether you're in rural America and 366 00:21:41,000 --> 00:21:45,480 Speaker 1: you can't find childcare, or you need to get the 367 00:21:45,640 --> 00:21:48,800 Speaker 1: lead out of the water in our urban cities or 368 00:21:48,920 --> 00:21:52,320 Speaker 1: in our suburbs, this is all part of how we 369 00:21:52,800 --> 00:21:57,040 Speaker 1: addressed this moment of economic, racial and climate justice. And 370 00:21:57,119 --> 00:21:59,200 Speaker 1: this woman, do you think that there will be actually 371 00:21:59,240 --> 00:22:01,440 Speaker 1: a vote today in the House of Representatives on the 372 00:22:02,320 --> 00:22:07,040 Speaker 1: billion dollar bipartisan plan. We are working every day to 373 00:22:07,160 --> 00:22:09,760 Speaker 1: make sure that we have a path to get to 374 00:22:09,760 --> 00:22:12,000 Speaker 1: the vote. And I can tell you this about the 375 00:22:12,000 --> 00:22:17,040 Speaker 1: Democratic Caucus. We are united in behind this Build Back 376 00:22:17,119 --> 00:22:21,280 Speaker 1: Better agenda because we know that this is what our 377 00:22:21,320 --> 00:22:25,680 Speaker 1: economy needs to meet this moment a great challenge. But Congresswoman, 378 00:22:25,720 --> 00:22:28,520 Speaker 1: what happens if that vote is not held today because 379 00:22:28,520 --> 00:22:30,760 Speaker 1: there are not enough votes to get on board and 380 00:22:30,800 --> 00:22:34,119 Speaker 1: to agree on the build Back Better part of the 381 00:22:34,160 --> 00:22:37,880 Speaker 1: whole package. The two part issue that the Democrats would 382 00:22:37,880 --> 00:22:42,000 Speaker 1: like to pass what I know for sure is that 383 00:22:42,080 --> 00:22:45,440 Speaker 1: we are going to pass both parts of these Whether 384 00:22:45,520 --> 00:22:48,439 Speaker 1: if we can do that today, that's what we're working 385 00:22:48,640 --> 00:22:52,680 Speaker 1: every minute of today to make sure happens. But if 386 00:22:52,720 --> 00:22:56,639 Speaker 1: it doesn't, that doesn't mean this is over. This is 387 00:22:56,680 --> 00:23:00,680 Speaker 1: a commitment. This is why the American people sent Joe 388 00:23:00,680 --> 00:23:04,720 Speaker 1: Biden to Washington, why we have the majorities and there 389 00:23:04,840 --> 00:23:09,240 Speaker 1: is a deep unity around making sure that we rebuild 390 00:23:09,320 --> 00:23:13,280 Speaker 1: this economy, we address the urgency of climate change, and 391 00:23:13,320 --> 00:23:17,080 Speaker 1: we make these critical investments in the American people so 392 00:23:17,200 --> 00:23:19,199 Speaker 1: they can get back to work. To be clear here, 393 00:23:19,200 --> 00:23:23,520 Speaker 1: then you don't think today is an important day. Today, 394 00:23:23,520 --> 00:23:27,840 Speaker 1: it's a critical day, toote. I'm just trying to find 395 00:23:27,840 --> 00:23:29,399 Speaker 1: out commerce room, because you know how this works. We 396 00:23:29,440 --> 00:23:31,560 Speaker 1: have these long conversations. You read the script. We got 397 00:23:31,600 --> 00:23:33,359 Speaker 1: a way, and I'm still not sure if there's a 398 00:23:33,400 --> 00:23:38,840 Speaker 1: vote today, well, we're still in negotiations. We want to 399 00:23:38,880 --> 00:23:41,879 Speaker 1: get to yes. Everybody does. And that is what the 400 00:23:41,880 --> 00:23:44,359 Speaker 1: White House is working at. That is what leadership is 401 00:23:44,400 --> 00:23:46,920 Speaker 1: working at. That's what our whole caucus is working at. 402 00:23:47,400 --> 00:23:50,360 Speaker 1: But whether that vote happens today, and I hope it does, 403 00:23:51,320 --> 00:23:54,919 Speaker 1: this is not over. If we haven't reached that point 404 00:23:54,960 --> 00:23:59,720 Speaker 1: in our negotiations. Our commitment is to getting this entire agenda, 405 00:24:00,560 --> 00:24:04,040 Speaker 1: and that will happen. That is our you know, that 406 00:24:04,200 --> 00:24:08,280 Speaker 1: is what is happening because we are committed to the 407 00:24:08,320 --> 00:24:11,879 Speaker 1: American people and meeting this moment a great challenge with 408 00:24:12,000 --> 00:24:15,280 Speaker 1: one of great progress. But we also have a deadline 409 00:24:15,320 --> 00:24:19,480 Speaker 1: today of keeping government open and I we will also 410 00:24:19,840 --> 00:24:23,440 Speaker 1: deliver on that. We will not allow a government shutdown, 411 00:24:24,160 --> 00:24:27,480 Speaker 1: and we are going to take up you know, go 412 00:24:27,600 --> 00:24:31,520 Speaker 1: back and make sure that, as your opening said, we 413 00:24:31,720 --> 00:24:34,879 Speaker 1: deal with this issue of the debt ceiling. It is 414 00:24:34,920 --> 00:24:40,800 Speaker 1: a primary responsibility. We have already accrued the debt. The 415 00:24:40,920 --> 00:24:44,760 Speaker 1: spending is in our past. This is about moving forward, 416 00:24:45,080 --> 00:24:48,119 Speaker 1: and Democrats are going to ensure that we protect the 417 00:24:48,160 --> 00:24:50,679 Speaker 1: full faith and credit of the United States. Have a 418 00:24:50,680 --> 00:24:53,640 Speaker 1: feeling will be talking about us again. Representative Catherine Clark, 419 00:24:53,680 --> 00:24:56,800 Speaker 1: the assistant speak for the House of Representatives, congresswoman, thank 420 00:24:56,800 --> 00:25:05,040 Speaker 1: you so much, Thank you very much. Michelle was talking 421 00:25:05,040 --> 00:25:09,280 Speaker 1: about Christmas in September. Let's get that, Solmes in September. 422 00:25:09,320 --> 00:25:11,800 Speaker 1: You want to do Christmas in September's Christmas in September? 423 00:25:11,880 --> 00:25:13,840 Speaker 1: Right now. Michelle Meyer was just the Bank of American 424 00:25:13,880 --> 00:25:16,600 Speaker 1: of course, they've got a granularity which she helped invent 425 00:25:16,600 --> 00:25:19,760 Speaker 1: out of Boston University in housing and in the American 426 00:25:19,840 --> 00:25:26,240 Speaker 1: consumer discuss Christmas in September, really, Michelle, Um, Yeah, you know, 427 00:25:26,320 --> 00:25:29,560 Speaker 1: it's not obviously quite Christmas in September, but the idea 428 00:25:29,680 --> 00:25:33,560 Speaker 1: is that we are seeing evidence that consumers are spending 429 00:25:33,720 --> 00:25:36,880 Speaker 1: earlier this holiday step in Um. And you know, when 430 00:25:36,920 --> 00:25:40,840 Speaker 1: you look holistically at the the aggregated Bank America card data, 431 00:25:41,280 --> 00:25:44,919 Speaker 1: September showed some real momentum. And part of that is 432 00:25:45,000 --> 00:25:48,760 Speaker 1: this broadening of spender cross goods in particularly an area 433 00:25:48,840 --> 00:25:51,960 Speaker 1: of light cooling in electronics, things that are most sensitive 434 00:25:51,960 --> 00:25:54,240 Speaker 1: to holiday sales, which could be a function of this 435 00:25:54,400 --> 00:25:57,720 Speaker 1: full forward of holiday spending. But you're also seeing this 436 00:25:57,720 --> 00:26:00,760 Speaker 1: this kind of mini re engagement on the easier side too, 437 00:26:00,800 --> 00:26:03,480 Speaker 1: which has been super encouraging. So the car data we've 438 00:26:03,480 --> 00:26:06,320 Speaker 1: been following has been really quite positive for the consumer 439 00:26:06,320 --> 00:26:08,600 Speaker 1: and make me feel pretty encouraged as we head into 440 00:26:08,600 --> 00:26:10,840 Speaker 1: the next quarter. Yeah, everybody knows we're just pulling forward 441 00:26:10,880 --> 00:26:13,800 Speaker 1: from December twenty three when I begin my shopping. Great, 442 00:26:14,119 --> 00:26:17,280 Speaker 1: have you adjusted your GDP? View our theme today? On 443 00:26:17,320 --> 00:26:21,960 Speaker 1: September thirty, no visibility. Q four no visibility Q one 444 00:26:22,040 --> 00:26:25,800 Speaker 1: give us some visibility. Yeah, well, I think we're seeing 445 00:26:25,840 --> 00:26:28,399 Speaker 1: just that with our high frequency data that we're setting up, 446 00:26:28,640 --> 00:26:31,440 Speaker 1: which should be a better que for UM. So Q 447 00:26:31,640 --> 00:26:34,080 Speaker 1: three GDP is coming in right around four percent, give 448 00:26:34,160 --> 00:26:37,159 Speaker 1: or take a you know, a few tents here UM. 449 00:26:37,200 --> 00:26:40,200 Speaker 1: But Q four it looks like, you know, our baseline 450 00:26:40,200 --> 00:26:43,600 Speaker 1: forecast has been for six percent growth and I'm holding 451 00:26:43,640 --> 00:26:46,720 Speaker 1: to that number, and the data that we're tracking, the 452 00:26:46,800 --> 00:26:50,840 Speaker 1: hybriduency data that's in flexing higher UM, suggests we could 453 00:26:51,000 --> 00:26:53,800 Speaker 1: very much succeed on that forecast for six percent. So 454 00:26:53,960 --> 00:26:57,000 Speaker 1: I think the demand is there. The indications are that 455 00:26:57,359 --> 00:27:00,359 Speaker 1: we're seeing this reengagement in the economy start, which is 456 00:27:00,359 --> 00:27:04,080 Speaker 1: really encouraging. As the cases come down, the real question 457 00:27:04,440 --> 00:27:07,000 Speaker 1: will be on the supply side. You know, how much 458 00:27:07,080 --> 00:27:10,360 Speaker 1: capacity is there to realize the strength that we're now 459 00:27:10,400 --> 00:27:12,840 Speaker 1: seeing on on demand. And the flip side of that 460 00:27:13,040 --> 00:27:15,280 Speaker 1: is higher prices, which we're seeing in a whole range 461 00:27:15,280 --> 00:27:18,320 Speaker 1: of places right And I'm wondering, you know, the sort 462 00:27:18,359 --> 00:27:21,760 Speaker 1: of stickiness here that we're looking at going forward and 463 00:27:21,800 --> 00:27:24,879 Speaker 1: the disinflationary kind of trend that people were talking about 464 00:27:24,880 --> 00:27:27,119 Speaker 1: before and people are spending more for the same amount 465 00:27:27,119 --> 00:27:30,000 Speaker 1: of stuff. What's your view on how that's affecting consumer 466 00:27:30,080 --> 00:27:33,680 Speaker 1: sentiment and their willingness to spend. Yeah, I mean that's 467 00:27:33,720 --> 00:27:36,280 Speaker 1: exactly right. There's all this demand out there and there's 468 00:27:36,320 --> 00:27:39,520 Speaker 1: limited supplies and unfortunately the supply chain issues have gotten worse, 469 00:27:39,680 --> 00:27:42,679 Speaker 1: not better. Um So that's a real concern. And what 470 00:27:42,760 --> 00:27:45,119 Speaker 1: that means is that there will be you know, higher 471 00:27:45,160 --> 00:27:47,760 Speaker 1: prices that ready is being and they will continue. And 472 00:27:47,800 --> 00:27:50,480 Speaker 1: if people are buying early in the holiday season, it 473 00:27:50,520 --> 00:27:52,159 Speaker 1: means that you probably don't have the same level of 474 00:27:52,200 --> 00:27:55,880 Speaker 1: discounting that you've had em prior holiday seasons, especially environment 475 00:27:55,920 --> 00:27:59,159 Speaker 1: low inventories. So what does that mean, Well, consumers are 476 00:27:59,160 --> 00:28:02,400 Speaker 1: taking notice right look at the University of Michigan survey. 477 00:28:02,680 --> 00:28:05,840 Speaker 1: You know, people are more discouraged because prices are high 478 00:28:05,880 --> 00:28:08,119 Speaker 1: and they can't get some of the items that are 479 00:28:08,160 --> 00:28:11,000 Speaker 1: looking to purchase. Um So when you when you consider 480 00:28:11,000 --> 00:28:13,439 Speaker 1: adding up for GDP, you know you're looking at in 481 00:28:13,480 --> 00:28:16,520 Speaker 1: real terms, inflation adjusted terms, so you could get this 482 00:28:16,520 --> 00:28:19,679 Speaker 1: bigger divide where nominal really you know, accelerates into the 483 00:28:19,680 --> 00:28:23,600 Speaker 1: fourth quarter, but real GDP maybe struggles a bit more. 484 00:28:23,640 --> 00:28:25,360 Speaker 1: So that's something that we're keeping an eye off. While 485 00:28:25,359 --> 00:28:28,240 Speaker 1: when we think about the supply streams, your specialty is 486 00:28:28,280 --> 00:28:30,280 Speaker 1: the housing market. That's where you made your name, and 487 00:28:30,280 --> 00:28:34,560 Speaker 1: we're watching the housing market actually embody this inflationary push, 488 00:28:34,760 --> 00:28:38,280 Speaker 1: possibly more than any other. The idea of twenty year 489 00:28:38,360 --> 00:28:41,720 Speaker 1: over year gains month after month after month. How does 490 00:28:41,800 --> 00:28:46,200 Speaker 1: this factor into discretionary spending to inflation more broadly at 491 00:28:46,200 --> 00:28:48,480 Speaker 1: a time when J. Powell says a lot of this 492 00:28:48,800 --> 00:28:52,840 Speaker 1: is just transitory and supply chain related, well, look, I mean, 493 00:28:52,840 --> 00:28:55,400 Speaker 1: I think housing is a perfect his study of this 494 00:28:56,000 --> 00:28:59,240 Speaker 1: imbalance between demand and supply in the market where demand 495 00:28:59,280 --> 00:29:02,280 Speaker 1: has just you know, climbs higher in the housing market 496 00:29:02,320 --> 00:29:05,800 Speaker 1: in a very constrained environment. Now builders are responding, that's good, 497 00:29:05,840 --> 00:29:09,200 Speaker 1: inventories picking up. Look at the new home sales report, 498 00:29:09,280 --> 00:29:11,880 Speaker 1: the months apply figure there is now touching around six 499 00:29:11,960 --> 00:29:15,560 Speaker 1: months UM. So that's that's quite good. We're making progress. 500 00:29:15,680 --> 00:29:17,680 Speaker 1: But we're not at a point yet where home prices 501 00:29:17,720 --> 00:29:19,840 Speaker 1: they're starting to cool. We're not at a point yet 502 00:29:19,880 --> 00:29:21,680 Speaker 1: where you've kind of lost on with the frenzy in 503 00:29:21,720 --> 00:29:23,560 Speaker 1: the market. Still there. When you look at the number 504 00:29:23,560 --> 00:29:25,480 Speaker 1: of days in the market for sale and these homes 505 00:29:25,760 --> 00:29:28,840 Speaker 1: things are moving quickly. There's also a lot more cash buyers, 506 00:29:28,840 --> 00:29:31,640 Speaker 1: there's a lot more investors in the market. Um So, 507 00:29:31,640 --> 00:29:33,640 Speaker 1: so what does this mean broadly, Well, it does fuel 508 00:29:33,680 --> 00:29:35,719 Speaker 1: this kind of inflation sentiment. It's one of the factors 509 00:29:35,760 --> 00:29:38,240 Speaker 1: that you want to think about when you're considering inflation 510 00:29:38,320 --> 00:29:43,120 Speaker 1: expectations and how people perceive the the the inflationary environment. 511 00:29:43,440 --> 00:29:46,800 Speaker 1: But then also just more on a nuanced view, right, 512 00:29:47,320 --> 00:29:51,080 Speaker 1: it does ultimately impact the rental market, which ultimately impacts 513 00:29:51,200 --> 00:29:53,760 Speaker 1: owners equivalent rent and now starting to show through very 514 00:29:54,000 --> 00:29:57,880 Speaker 1: clearly in the hyperguency data. So we should anticipate that 515 00:29:57,920 --> 00:30:00,800 Speaker 1: owners equivalent rent moves up into net year even if 516 00:30:00,800 --> 00:30:04,040 Speaker 1: some of these more transitory factors that have been boosting 517 00:30:04,080 --> 00:30:07,800 Speaker 1: inflation waiting. That's great, dear Michelle Myron or Wheelhouse when 518 00:30:07,880 --> 00:30:11,120 Speaker 1: we first met our zillion years ago a lot, you know, Michelle, 519 00:30:11,160 --> 00:30:14,080 Speaker 1: I want to talk here about transitory and it's what 520 00:30:14,240 --> 00:30:17,400 Speaker 1: everybody's talking about in these two Americas, and one of 521 00:30:17,400 --> 00:30:20,440 Speaker 1: them is in America flat on its back. Is a 522 00:30:20,520 --> 00:30:24,320 Speaker 1: negative real wage here to stay? Or is a negative 523 00:30:24,360 --> 00:30:29,400 Speaker 1: real wage transitory? Well, right now, it's particularly painful in 524 00:30:29,400 --> 00:30:31,320 Speaker 1: a year of a year basis because you've seen these 525 00:30:31,360 --> 00:30:35,440 Speaker 1: extraordinary games and inflation. But when you look forward, I 526 00:30:35,480 --> 00:30:38,960 Speaker 1: think the wage environment is quite positive, particularly for the 527 00:30:39,000 --> 00:30:41,720 Speaker 1: lower income consumer that's gonna be a lot more sensitive 528 00:30:41,880 --> 00:30:46,120 Speaker 1: to moves and inflation. So I think, you know, given 529 00:30:46,440 --> 00:30:49,960 Speaker 1: the incredible demand for workers that we've been saying, particularly 530 00:30:50,000 --> 00:30:54,080 Speaker 1: in the lower income part of the population, wages have 531 00:30:54,160 --> 00:30:56,800 Speaker 1: been rising and I would expect that to continue. Now. 532 00:30:56,800 --> 00:30:59,680 Speaker 1: Of course, yes, you have to consider the case of 533 00:30:59,720 --> 00:31:03,040 Speaker 1: wage increase is relative to the peace of underlying inflations 534 00:31:03,080 --> 00:31:06,000 Speaker 1: and back out that real wage number. And right now 535 00:31:06,000 --> 00:31:08,480 Speaker 1: it is a bit more problematic. But I think into 536 00:31:08,520 --> 00:31:11,840 Speaker 1: next year you get some cooling in some of these 537 00:31:11,840 --> 00:31:15,800 Speaker 1: components where inflation has just been extraordinarily high, and meanwhile 538 00:31:15,840 --> 00:31:17,720 Speaker 1: we just continue to creep up, and I think that's 539 00:31:17,720 --> 00:31:23,360 Speaker 1: a favorable backdrop. I look where you know, I look 540 00:31:23,360 --> 00:31:25,960 Speaker 1: where we are, Michelle. I've got to interrupt the train 541 00:31:26,000 --> 00:31:28,680 Speaker 1: of thought here when we see young go out through 542 00:31:28,720 --> 00:31:32,920 Speaker 1: one twelve onto one thirteen dovetail Bank of America Foreign 543 00:31:32,920 --> 00:31:37,920 Speaker 1: exchange analysis into your Great American economic view, How does 544 00:31:38,000 --> 00:31:44,000 Speaker 1: strong dollar change your calculus? Look, I mean, the strong 545 00:31:44,040 --> 00:31:46,560 Speaker 1: dollar presumably is a function the fact that it's a 546 00:31:46,640 --> 00:31:50,000 Speaker 1: strong economy. So I would argue that the dollar strength 547 00:31:50,000 --> 00:31:54,360 Speaker 1: that we've seen has not been unwarranted um or unsupported 548 00:31:54,400 --> 00:31:58,040 Speaker 1: by the fundamentals in the U S economy. Um so. 549 00:31:58,480 --> 00:32:00,720 Speaker 1: But yeah, of course, when you have you think about 550 00:32:00,800 --> 00:32:03,240 Speaker 1: the effets moves, do you think about the balance of trade, 551 00:32:03,520 --> 00:32:06,080 Speaker 1: you think about the cost of goods, and all of 552 00:32:06,120 --> 00:32:09,640 Speaker 1: those things are obviously going to be impacted negatively when 553 00:32:09,640 --> 00:32:11,720 Speaker 1: you have a strengthening in the dollar. But I would 554 00:32:11,800 --> 00:32:14,640 Speaker 1: argue very much with our effect JADG just believe that 555 00:32:14,720 --> 00:32:17,840 Speaker 1: the movement the dollar is justified and given what you're 556 00:32:17,840 --> 00:32:21,040 Speaker 1: seeing in the US accom So before we let you go, Michelle, 557 00:32:21,040 --> 00:32:22,800 Speaker 1: we've heard a lot of FED speak over the past 558 00:32:22,800 --> 00:32:25,400 Speaker 1: couple of days. It will continue today, Uh Fetcher J. 559 00:32:25,520 --> 00:32:28,480 Speaker 1: Powell on the hill? Is there anything that he has 560 00:32:28,520 --> 00:32:31,200 Speaker 1: said over the past couple of sessions that we've heard 561 00:32:31,200 --> 00:32:35,560 Speaker 1: from him that's been of interest? So, you know, you 562 00:32:35,640 --> 00:32:37,440 Speaker 1: kind of always have to read between the lines. And 563 00:32:37,480 --> 00:32:40,160 Speaker 1: I think that there's been a real emphasis on the 564 00:32:40,200 --> 00:32:43,320 Speaker 1: supply side of the economy because it seems like there's 565 00:32:43,320 --> 00:32:46,680 Speaker 1: this discussion within the FED over whether or not all 566 00:32:46,760 --> 00:32:50,440 Speaker 1: this demand side policy are accommodated monetary policy that stimulates 567 00:32:50,440 --> 00:32:55,000 Speaker 1: the demand side is the right prescription if you're really 568 00:32:55,040 --> 00:32:57,760 Speaker 1: facing a bigger supply side shock. So they're trying to 569 00:32:57,800 --> 00:33:01,920 Speaker 1: figure out how permanent the supply side issues are UM, 570 00:33:02,040 --> 00:33:04,200 Speaker 1: and one of the ways to gage that, frankly, is 571 00:33:04,240 --> 00:33:07,160 Speaker 1: just to go back to inflation. What you talked about before, Lesta, 572 00:33:07,440 --> 00:33:11,160 Speaker 1: particularly long run inflation expectations UM. The extent to which 573 00:33:11,200 --> 00:33:13,720 Speaker 1: long run inflation expectations move up will tell the fact 574 00:33:13,800 --> 00:33:16,600 Speaker 1: that they have a more permanent constrain the supply side, 575 00:33:16,880 --> 00:33:18,800 Speaker 1: and that will prompt them to pivot when it comes 576 00:33:18,840 --> 00:33:21,520 Speaker 1: to Douvich monitor policy. They're not seeing it yet, but 577 00:33:21,560 --> 00:33:25,000 Speaker 1: they're obviously very very very keen to focus on this 578 00:33:25,080 --> 00:33:27,400 Speaker 1: topic and looking at it very carefully, which makes a 579 00:33:27,440 --> 00:33:31,560 Speaker 1: lot of them. Michelle, Happy Christmas to you the family. Thanks. 580 00:33:32,520 --> 00:33:36,280 Speaker 1: I love that. Thank you dragging her kids out to 581 00:33:36,320 --> 00:33:41,320 Speaker 1: see Santa pretending that it's fifth from Thanks America. That 582 00:33:41,400 --> 00:33:46,800 Speaker 1: the wonderful. This is the Bloomberg Surveillance Podcast. Thanks for listening. 583 00:33:47,160 --> 00:33:50,480 Speaker 1: Join us live weekdays from seven to ten am Eastern 584 00:33:50,720 --> 00:33:54,760 Speaker 1: on Bloomberg Radio and on Bloomberg Television each day from 585 00:33:54,840 --> 00:33:59,480 Speaker 1: six to nine am for insight from the best in economics. Finance, 586 00:33:59,560 --> 00:34:04,920 Speaker 1: invest and international relations. And subscribe to the Surveillance podcast 587 00:34:05,160 --> 00:34:08,800 Speaker 1: on Apple podcast, SoundCloud, Bloomberg dot com, and of course, 588 00:34:09,120 --> 00:34:13,400 Speaker 1: on the terminal. I'm Tom keene In. This is Bloomberg.