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Speaker 1: Welcome to the Bloomberg's Surveillance Podcast. I'm Tom Keene, along

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Speaker 1: with Jonathan Ferrell and Lisa Brownwitz Jailey. We bring you

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Speaker 1: insight from the best and economics, finance, investment, and international relations.

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Speaker 1: Find Bloomberg Surveillance on ample podcast, SoundCloud, Bloomberg dot Com,

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Speaker 1: and of course, on the Bloomberg Terminal. Jake Bryson standing

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Speaker 1: by the chief economist iver at whilst faco. J just

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Speaker 1: initially your reaction to a much much hotter CPI print, well,

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Speaker 1: I think you know, Mike nailed it earlier. I mean,

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Speaker 1: if you there's any doubt at all about seventy five,

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Speaker 1: they're definitely going seventy five. And then you know, Lisa,

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Speaker 1: I think you had a very good comment there as well.

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Speaker 1: What does this mean about November. I mean we thought

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Speaker 1: they would be stepping it back to November to fifty

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Speaker 1: in November, and at this point you would say seventy

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Speaker 1: five is certainly going to be on the table there

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Speaker 1: in November. Jay, how do you take this data, this

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Speaker 1: financialization shock over to the real economy. What does this

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Speaker 1: eight thirty numbers signal about potential slowdown and economic growth? Well,

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Speaker 1: you know, I think what you're looking at here is

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Speaker 1: there's two things that's going on with the inflation right.

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Speaker 1: One is that inflation is going to continue to eat

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Speaker 1: into nominal income. And so what we've seen if you're

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Speaker 1: looking at real disposable income year over year UM, at

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Speaker 1: least in July it was down three point seven percent UM.

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Speaker 1: And so you can't continue to have consumer spending grow

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Speaker 1: if real income is contracting like that. So that that's

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Speaker 1: the first problem with inflation. The second problem is it

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Speaker 1: puts the FED into overdrive. And if they're in overdrive,

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Speaker 1: sooner or later they're going to make a policy mistake.

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Speaker 1: And if we're talking seventy five, as far as the

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Speaker 1: eye can see, they're going to make that policy mistake

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Speaker 1: and then potentially can put the economy into into recession,

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Speaker 1: which is what we think is going to happen early

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Speaker 1: next year. J Why did almost all forecasters get this wrong? Well,

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Speaker 1: there's you know, there's there's a bunch of volatility on

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Speaker 1: a month by month sort of basis. Here, Um, we

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Speaker 1: were above consensus, but we weren't at zero point six.

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Speaker 1: You know, I think that the big thing here that's

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Speaker 1: really pushing a lot of this and this is why

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Speaker 1: it's going to be hard to bring inflation down in

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Speaker 1: the near term. Is the shelter component, you know, the

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Speaker 1: way they treat shelter, the way they treat housing in

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Speaker 1: here comes in with a long lag and we all

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Speaker 1: know what's happened over the last year or so. Housing

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Speaker 1: prices have exploded and it came into the CPI relatively slowly.

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Speaker 1: It's coming in with a vengeance. Now. The problem is

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Speaker 1: it's going to continue to come in UM as well,

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Speaker 1: and so that's going to keep the CPI inflation rate

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Speaker 1: elevated for the foreseeable future. And many FUNE officials have

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Speaker 1: given us the impression that what they wanted was two

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Speaker 1: or three softer inflation reports to rethink the trajectory of

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Speaker 1: right hikes at Leasta mentioned and you alluded to it.

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Speaker 1: Do you think this really disrupts their ability to say

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Speaker 1: in November that we need to go a different direction. Well, yeah,

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Speaker 1: I think, Well, obviously we've got a lot of data

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Speaker 1: coming out between here in November, so you know, we'll

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Speaker 1: we'll see, right but you know, if they want to

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Speaker 1: see two or three soft prints in a row, we've

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Speaker 1: just set reset the clock back to zero right now.

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Speaker 1: And so UM you know, seventy five. Obviously it's on

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Speaker 1: the table. I think in November we'll see what happens

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Speaker 1: to the real economy that we know. We'll have you know,

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Speaker 1: two more UM employment reports between now and then. That'll

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Speaker 1: be key. UM. So if you do see slowing in

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Speaker 1: the real economy, maybe it backs off. But right now

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Speaker 1: we haven't seen a lot of tremendous amount of slowing

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Speaker 1: in the real economy, and that keeps these supersized rate

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Speaker 1: hikes in play. Jay, can you tell me where you

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Speaker 1: expect to see unemployment by year end? And at the moment,

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Speaker 1: this fat as you know, it's very very focused on

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Speaker 1: the one side of the man date bringing inflation lower.

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Speaker 1: We're all trying to work out whether the two sides

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Speaker 1: of the mandate come into more conflict as we get

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Speaker 1: closer to year end. So our our view, m John

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Speaker 1: is at the end of the year, you're looking at

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Speaker 1: an unemployment rates are around three seven or so. So

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Speaker 1: I think that's still a very very tight labor market. Now,

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Speaker 1: as we go into early next year and as we

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Speaker 1: see uh, you know, the deceleration and then contraction and

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Speaker 1: economic activity, I think that's when you see the unemployment

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Speaker 1: rates start to move. But if we're still at three

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Speaker 1: seven or to say we're still below four percent, you know,

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Speaker 1: we still have a three handle at the end of

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Speaker 1: this year. I don't think the Fed is slowing down

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Speaker 1: at that point. What does this say J about the

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Speaker 1: inertial force of supposed disinflation. I think we're talking about

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Speaker 1: getting to five or four percent inflation out there. But

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Speaker 1: do we blow that up today and say simply our

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Speaker 1: path is to get to seven or six point nine

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Speaker 1: percent inflation? Well, Tom, I do believe that you are

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Speaker 1: going to continue to see So our view that inflation

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Speaker 1: starts to recede next year is predicated on our view

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Speaker 1: that you do have a recession. If you do have

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Speaker 1: a recession, then what you do see is goods prices

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Speaker 1: will definitely start to decelerate as well service prices as well.

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Speaker 1: You know. The good thing, if there's anything that that's

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Speaker 1: good here, is that we have not seen inflation expectations

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Speaker 1: become quote unmoored. That's a that's a word that the

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Speaker 1: Federal uses all the time, um, and so that's a

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Speaker 1: good thing because if that does become unmoored, then that

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Speaker 1: creates it's it's its own dynamic as well, people start

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Speaker 1: to pull forward their expenditures, which pushes up inflation. They

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Speaker 1: asked for higher and higher wage increases as well. Fortunately

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Speaker 1: we haven't seen become unmoored. But if you continue to

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Speaker 1: start to see, you know, continuously prints like this, then

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Speaker 1: you do start to worry about that happening for all

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Speaker 1: of you. On Bloomberg Radio, Bloomberg Television, Dr J Bryson

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Speaker 1: whether this as well as Fargo here a stunning inflation report, John,

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Speaker 1: Is that the right word? Stunning? Surprise? Tom, stunning inflation report.

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Speaker 1: Futures turn around and I'm doing the math in my head, John,

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Speaker 1: help me out here. Two point five percent flip flop

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Speaker 1: and what we see and the disrupts the idea that

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Speaker 1: this fed came back away anytime, Saint Thomas, a bit

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Speaker 1: of all, I'll go with this disruption, or just to

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Speaker 1: say that we got to rip up the script and

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Speaker 1: come up with a whole new dialogue. We do that

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Speaker 1: with Michael mcugh's dives into the inflation report a little more. Michael,

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Speaker 1: what is the distinction between service dynamic and goods dynamic? Well,

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Speaker 1: right now it looks like services are starting to pick

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Speaker 1: up some speed. Here theres is less energy rise by

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Speaker 1: six tenths of eight percent. That's after four tenths last month,

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Speaker 1: and now services are up six point one percent over

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Speaker 1: the year. So we are seeing service prices start to rise,

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Speaker 1: and you can see it in a number of areas. Interestingly,

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Speaker 1: education tuition, college tuition. It's time for kids to go

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Speaker 1: back to school, and that was up half a percent,

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Speaker 1: a fairly strong increase for that category, so yeah, you

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Speaker 1: would know something about that, tom. We're also seeing uh,

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Speaker 1: motor vehicle insurance up one point three percent, that's been

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Speaker 1: an ongoing issue, and airline fares four point six percent,

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Speaker 1: but they had fallen seven point eight percent the month before,

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Speaker 1: so we're losing a little of the benefit from that,

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Speaker 1: so you are seeing services rise. Uh. There was one

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Speaker 1: thing I did want to mention. Somebody asked me this

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Speaker 1: morning if we could mention this because it matters to

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Speaker 1: senior citizens. The consumer price index for urban wage earners

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Speaker 1: was up eight point seven percent. We'll have to see

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Speaker 1: what the net the average numbers come out to be

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Speaker 1: once September's numbers come in, but that will lead into

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Speaker 1: the Social Security cola, and if you're looking at an

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Speaker 1: eight point seven percent, that's gonna be pretty big from London,

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Speaker 1: which is looking at me. I'm in London and the

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Speaker 1: keys looking at me. My mcate is going ahead for me, said,

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Speaker 1: it's right to have you write that down for us.

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Speaker 1: Alongside Jake Bryson of wilst Foggo. I'm gonna totally avoid that.

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Speaker 1: I'm focused on this market. This is brutal and again

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Speaker 1: I'm gonna watch the bond space. You're gonna see a

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Speaker 1: breakthrough of the total return aggregates of Bloomberg price lower.

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Speaker 1: We have never seen this before. Devid Kelly joins us

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Speaker 1: now to talk about this, the chief global strategist at

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Speaker 1: JP Morgan Asset Management, David. We've given everyone the opportunity

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Speaker 1: to respond to the data. So far, it's about an

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Speaker 1: hour old. Now your response to it. No, it's it's

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Speaker 1: a little warmer than expected. But I'm not going to

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Speaker 1: call one tenth of a percent of an increase in

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Speaker 1: prices a hot inflation report. What's happening is it's cooling.

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Speaker 1: There's just a few hot spots there. There are problems

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Speaker 1: getting all of inflation to come down, but the cooling

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Speaker 1: trend is there. I think markets overreacting to this. UH

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Speaker 1: In particular, there's a big chunk of inflation. The CPI

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Speaker 1: thirty is in shelter and that's up seven tenths of percent,

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Speaker 1: and that's really what's driving a lot of the underlying

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Speaker 1: um you know, resilience of inflation here. But a lot

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Speaker 1: of that is you know, owner's equivalent rent. It's a

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Speaker 1: very you know, almost a mythical concept because nobody actually

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Speaker 1: pays owner's equivalent rends. So there are parts of inflation

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Speaker 1: hanging on. But I think I think it's really important

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Speaker 1: direct ignize the economy is cooling here, uh, and a

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Speaker 1: lot of the things that pushed up inflation are cooling

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Speaker 1: off also, So we shouldn't, you know, we shouldn't get

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Speaker 1: messed up by by the fact that it was a

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Speaker 1: little higher than consensus here. The big story here is

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Speaker 1: inflation is actually coming down, David. That is convenient for

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Speaker 1: a lot of the bulls. And yet the story that

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Speaker 1: people are seeing right now is that the hope was,

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Speaker 1: we would say, a much faster disinflation that would get

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Speaker 1: the Fed not perhaps a raising rates as much as

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Speaker 1: they were saying, how can you lean against this? What

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Speaker 1: parts of the market are most overreacting from your perspective, Well,

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Speaker 1: you mentioned financials, and I think what's going on is

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Speaker 1: people are assuming that this will make the FED a

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Speaker 1: bit more hole Chris, and I think that's true. I mean,

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Speaker 1: I think that the FED will now have more of

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Speaker 1: reason to go seventy five basis points next week, and

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Speaker 1: I think that's what they'll do. I think the ECB

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Speaker 1: obviously just did that. I think the Bank of England

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Speaker 1: will do the same. But I think the FED will

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Speaker 1: also leave the door open to a more increase in November,

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Speaker 1: maybe fifty basis points, maybe basis points in December, because

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Speaker 1: what they are going to see is inflation continuing actually

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Speaker 1: to cool, because that's actually what's going on. I think

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Speaker 1: we'll get about two tents percent in the September read

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Speaker 1: energy prices are going to be down month over month

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Speaker 1: in September. Also, I think we'll see the airline fairs

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Speaker 1: come down a bit more. I think lodging will come

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Speaker 1: down a bit more. We've got a big increase in

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Speaker 1: tobacco prices, no reason why we get that two months

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Speaker 1: in a row. So I just think we're over reacting

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Speaker 1: to this. Yes, it wasn't good news on inflation, it

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Speaker 1: was worse than expected, but the big trend here is

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Speaker 1: coming down. I think financials are over reacting. I have

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Speaker 1: no problem with the tenure treasury up near three fifty.

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Speaker 1: I think that's that's okay. But I think the assumption

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Speaker 1: that somehow we're not dealing with invasion or is going

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Speaker 1: to get worse, I think it's just wrong. What about

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Speaker 1: big tech, Dave? I mean, David, We're looking right now

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Speaker 1: at three point one percent decline on the NASDAC and

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Speaker 1: it's been a knee jerk whipsaw lower and it has

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Speaker 1: had legs. Do you push against that? Not not necessary.

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Speaker 1: I think you have to go stock by stock because

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Speaker 1: the the issue is there were a number of things

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Speaker 1: that were overvalued based if you ever assumed a normal

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Speaker 1: level of real interest rates, and we are getting back

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Speaker 1: to a more normal level of real interest rates, and

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Speaker 1: that is negative for UH for large cap growth stocks,

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Speaker 1: which you know, which you were standing at very high valuation.

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Speaker 1: So I do get that, and I don't you know,

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Speaker 1: I don't. I think it's really more of a return

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Speaker 1: to rationality and a lot of the pricing and markets

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Speaker 1: and that's no harm. But overall, I you know, I'm

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Speaker 1: actually a politive on the equity market, and I'm glad

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Speaker 1: to see so many people bearish, because I think that

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Speaker 1: that sets us up to do a bit better over

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Speaker 1: the next few months. David Kelly, what do you see

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Speaker 1: among corporate earnings? Were really before the gaming of what

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Speaker 1: corporate earnings are doing. But let's get out front with you.

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Speaker 1: How are corporations adapting to America's inflation? Well, it is,

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Speaker 1: it is difficult. And you know, last year we had

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Speaker 1: a spectacular year for earnings. This year, it would be

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Speaker 1: lucky if we get to get out with the or

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Speaker 1: in the year with a positive and operating earnings year

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Speaker 1: over year. I think it could be negative next year. Yeah,

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Speaker 1: I think we're going to see inflations or an earning squeeze.

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Speaker 1: I mean, I mean, the reality is you've got this

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Speaker 1: growth in wages that is real. Companies can either pass

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Speaker 1: it on or not, and I think they're gonna find

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Speaker 1: it's hard to pass it on. And I think that's

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Speaker 1: going to squeeze margins next year. So I do think

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Speaker 1: that's whether we have a recession or not, we could

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Speaker 1: end up with negative earnings growth next year. David, Like

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Speaker 1: everyone out there on my cell phone, I have a

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Speaker 1: real estate dump of whatever geography. I'm looking at doesn't

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Speaker 1: everybody go out today and mark down the price of

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Speaker 1: their house for sale. Um. Yes, and it takes a

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Speaker 1: long long time for that market to clear. But the

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Speaker 1: but the reality is the average mortgage payment on a

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Speaker 1: new home has gone up by sixty percent in the

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Speaker 1: last year, and and that really that one. I do

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Speaker 1: really blame the Federal Reserve for they kept great so

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Speaker 1: low for so long that it caused it prices and

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Speaker 1: now we can't deal with sure. I don't think there's

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Speaker 1: enough enough people to buy homes when you push them.

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Speaker 1: The average mortgage rate or average mortgage payment up by

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Speaker 1: sixty percent in the year, John, I think this is

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Speaker 1: just absolutely profound. I can't say enough about sector to

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Speaker 1: sector in inflation, the different elasticities are out there on

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Speaker 1: homeownership and how it redounds over to rent, multi family nationwide,

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Speaker 1: every region is different. Guess what this report is a

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Speaker 1: game change. Core inflation came in after than expected, and

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Speaker 1: shout is one of the most stickiest part of the

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Speaker 1: report when it comes to inflation. And David, I appreciate

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Speaker 1: what you're saying that things might be getting better, perhaps

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Speaker 1: not worse, but when you think about what the Fed

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Speaker 1: will do not what they should do. David, can you

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Speaker 1: talk to me about what you expect they will do.

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Speaker 1: They've laid out their reaction function, They've they've told us

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Speaker 1: how they respond to incoming information. Tell us what you

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Speaker 1: think that means for what they will do. Well, I

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Speaker 1: think what they'll do is they'll go seventy five basis

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Speaker 1: points next week. But I do think that in the

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Speaker 1: press conference and perhaps in the statement, they will acknowledge

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Speaker 1: the fact that inflation has cooled somewhat. But but they

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Speaker 1: will say, you know, two data points are not good

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Speaker 1: enough to to to call it a trend yet, so

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Speaker 1: they'll have some caution there, but they'll put enough doubt

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Speaker 1: in there to give them the space to only go

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Speaker 1: fifty basis points in in November. So I think I

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Speaker 1: think they want to set set it up that way.

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Speaker 1: They want to they want to put in a hawk

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Speaker 1: ish move, but give themselves the opportunity then to put

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Speaker 1: in a more dubsh language without being labeled as being

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Speaker 1: soft and inflation. But you know, again I would focus

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Speaker 1: on you know this shelter thing. Yeah, it's it's a

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Speaker 1: long lagging problem problem in inflation. But if you think

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Speaker 1: about it, how does higher interest rates help deal with

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Speaker 1: the shelter inflation problem. I mean, if it stops people

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Speaker 1: from building houses, how are you going to bring down rents?

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Speaker 1: So it's probably, you know, the very the one thing

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Speaker 1: that that they're most worried about it, or the one

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Speaker 1: thing that's keeping inflation high, is the thing that that

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Speaker 1: they can fix the least by pushing up interest rates.

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Speaker 1: There you go, Den Kelly objecting more an asset management.

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Speaker 1: The message is a little cloudier and markets s t

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Speaker 1: x c IO of flow Bank joining us. Now. We

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Speaker 1: are seeing NAZAC down two point nine percent, a reset

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Speaker 1: of the idea of a disinflationary tilts that we thought

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Speaker 1: would take hold but didn't. Are you rethinking any of

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Speaker 1: your positions today? Well, it was never going to be

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Speaker 1: a straight line down. We have a number of inflation

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Speaker 1: data points that are still showing that disinflation is happening. Clearly,

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Speaker 1: the core print for today was not fantastic, and we're

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Speaker 1: seeing the disappointment in markets, especially because we had that

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Speaker 1: expectations in the last couple of days that really ramped

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Speaker 1: up and boosted markets. From a positioning perspective. We still

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Speaker 1: have PPI tomorrow, we have the Michigan numbers coming up

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Speaker 1: at the end of the week. We had inflation expectations

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Speaker 1: in the last couple of days showing us that those

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Speaker 1: have come down quite sharply as well. So I think

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Speaker 1: the disinflation trend is going to continue, but for today

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Speaker 1: it's definitely going to be ugly. John, we're getting in

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Speaker 1: those numbers right now. Peter book fire has one of

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Speaker 1: the isolated incidents. Health insurance up year over year. Services

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Speaker 1: services is the distinction, without a doubt. With that in mind,

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Speaker 1: got this tug of war between financial conditions and what

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Speaker 1: is handling with the date and how the fetters responding

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Speaker 1: to it, and investors who are hoping all of this

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Speaker 1: goes away and next year at smooth sailing. What's your

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Speaker 1: message to people that's still doubt the resolve of this

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Speaker 1: federal reserve. Well, there wasn't going to be a pivot,

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Speaker 1: and there clearly isn't going to be a pivot anytime soon.

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Speaker 1: I think Jackson Hole dispelled that idea completely. Anything that

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Speaker 1: anything close to a pivot would just mean we're going

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Speaker 1: to stop hiking, and that you know, happens at some

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Speaker 1: point in and how many more percentage they get in

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Speaker 1: before that uh, that number is going up of course

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Speaker 1: for the with the November expectations rising as well, but

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Speaker 1: the Fed isn't going to blink. Inflation is gradually coming

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Speaker 1: down lower than anyone would like, but the result is

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Speaker 1: going to be very firm. Ste Where do I hide?

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Speaker 1: Just as simple as my head is standing, this report

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Speaker 1: wasn't what I expected. Where do I hide? To drag

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Speaker 1: myself into two thousand three? So I think it's a

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Speaker 1: bit too early to say that the entire end of

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Speaker 1: the year is going to be bad. I think at

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Speaker 1: some point we are going to have some improvement in markets.

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Speaker 1: For the time being, it feels really like the dollar

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Speaker 1: is a great place to hide. The switch Frank. You

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Speaker 1: were talking earlier about the Swiss National Bank coming in

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Speaker 1: with those hikes, so switch Frank probably is another place

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Speaker 1: to hide. But you're you know, you're making something in cash,

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Speaker 1: and I think a lot of a lot of investors

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Speaker 1: are going to be happy to sit in cash and

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Speaker 1: wait for the picture to improve, hopefully over the next

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Speaker 1: couple of weeks. ST. Thank you ST to act a

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Speaker 1: flo bank right now. It's a good oil we do this.

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Speaker 1: Regina Mayor, Global Head of Energy and KPMG steeped in

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Speaker 1: all the game the theory of her Rice University, Regina.

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Speaker 1: I want to focus on the game theory right now

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Speaker 1: of President Biden. In one chart I just saw in passing,

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Speaker 1: which is our so called strategic oil reserve, and the

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Speaker 1: proper scientific word for this is the volume we have

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Speaker 1: in reserve is truly cratered. What does that mean for America? Well,

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Speaker 1: I just think we've probably reached a tipping point where

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Speaker 1: it's time to focus on refilling the strategic control and

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Speaker 1: reserve because it is an all time low um and

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Speaker 1: I think we're sort of out of the woods from

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Speaker 1: a US energy price pressure that was driving inflation and

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Speaker 1: the things that I know the politicians were worried about

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Speaker 1: coming into the mid terms, and that was the price

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Speaker 1: at the pump. We see gasoline prices in the US

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Speaker 1: consistently go down and down and down. So I believe

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Speaker 1: if anybody was taking my advice, it's time to start

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Speaker 1: focusing on on restocking our spr and getting it a

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Speaker 1: little above where where it is today. Can you get

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Speaker 1: out the kufil a US or slide rules at KPMG

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Speaker 1: and tell me how much a gallon of gas is

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Speaker 1: gonna go up, as President Biden, your restocks a reserve

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Speaker 1: are we're going up twenty cents a gallon? Fifty two

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Speaker 1: cents a gallon? What's that statistic? Now? Actually, I think

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Speaker 1: we're out of the woods on gas prices, Tom, I

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Speaker 1: mean I think that you know, we've done with summer

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Speaker 1: driving season. We've got quite a lot of stock or

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Speaker 1: fineries are up and running again. I'm less worried about

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Speaker 1: what that would do immediately to gas prices. I will

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Speaker 1: say that what the administration did with regard to releasing

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Speaker 1: fuel from the spr was one of the key things

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Speaker 1: that the energy industry will say made a material difference

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Speaker 1: in the summer peak season and when we set gasoline

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Speaker 1: prices at their peak in June, Regina. That's a story

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Speaker 1: over in the United States. You're in Portugal right now,

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Speaker 1: in Lisbon, and we're in London, and the focus very

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Speaker 1: much as on energy, and it's a very different and

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Speaker 1: multi pronged concern because it's not all gasoline or crude,

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Speaker 1: it's natural gas, it's uh, it's it's some of the

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Speaker 1: issues of nuclear energy. Over in France, from your perspective,

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Speaker 1: is the plan that's coming to shape from the European

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Speaker 1: Union of trying to cap demand will also providing up

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Speaker 1: profits from the energy companies two households. Does this make sense?

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Speaker 1: Does it feel feasible to you? At least? I think

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Speaker 1: that he's already made quite a bit of progress. So

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Speaker 1: we have seen European gas prices draw more at a

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Speaker 1: seven week low UM and it's off its peak on August.

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Speaker 1: It's still eight times higher than normal, but there are

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Speaker 1: bright spots. Gas storage is at right now and it's

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Speaker 1: slightly above where they would have expected to be for

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Speaker 1: the five year average. The countries have been working on

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Speaker 1: securing as much supply as possible. Now they're looking at

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Speaker 1: packages to reduce demand and to cap what that would

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Speaker 1: do to household income. It's gonna cost a lot of money.

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Speaker 1: There's gotta be national budgets are going to be strained,

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Speaker 1: so it's gotta be a lot of different things that

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Speaker 1: that happened. I would not say they're out of the woods,

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Speaker 1: because if it's a particularly cold winter and if you

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Speaker 1: see Asian demands start coming back in where cargoes of

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Speaker 1: lergy are priced up in a competitive way, that's where

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Speaker 1: things get really critical again. So not out of the woods,

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Speaker 1: but the things that they have been doing in the

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Speaker 1: near term are having a measurable impact. Okay, Surgenda could

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Speaker 1: just build that out a little bit of memorable impact

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Speaker 1: in that we are seeing gas natural gas prices come

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Speaker 1: down significantly, But is that impact going to low were

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Speaker 1: them further as they are so eight times higher than

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Speaker 1: where they were a year ago, or is it going

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Speaker 1: to just keep them here, keep it just sort of

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Speaker 1: a persistent crisis rather than something that is much more

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Speaker 1: acute and immediately needing to be addressed. Definitely, we're not

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Speaker 1: out of the woods, and I think that the pullback

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Speaker 1: in recent days is probably over amplified with what's happening

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Speaker 1: in Ukraine. I think maybe there's a little bit of

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Speaker 1: a rational exuberance about what happened, and maybe some people thinking, Okay,

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Speaker 1: the war might be over and we can stop weaponizing gas.

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Speaker 1: I don't anticipate that at all. So while the measures

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Speaker 1: are important, and what I see that you working on

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Speaker 1: is a comprehensive package because you have to work on

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Speaker 1: both demand and supply, no doubt it's having a material

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Speaker 1: impact and it will have a material impact on the economy.

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Speaker 1: I'm hearing from some executives here in Portugal, that their

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Speaker 1: energy costs are in some cases a billion dollars over

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Speaker 1: write what they're expected energy costs are. All of that's

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Speaker 1: gonna have a material impact on earnings, competitiveness, and they're

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Speaker 1: gonna shutdown factories because it's too expensive to run them.

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Speaker 1: We're already saying that, and we could see a hold

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Speaker 1: on Mark on Prince and Winds. Gina Mada of KPMG

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Speaker 1: at a listban port school Tonight. This is the Bloomberg

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Speaker 1: Surveillance Podcast. Thanks for listening. Join us live weekdays from

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Speaker 1: And subscribe to the Surveillance podcast on Apple podcast, SoundCloud,

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Speaker 1: Bloomberg dot com, and of course on the terminal. I'm

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Speaker 1: Tom Keene, and this is Bloomberg