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Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside

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Speaker 1: my co host Matt Miller. Every business day, we bring

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Speaker 1: you interviews from CEOs, market pros, and Bloomberg experts, along

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Speaker 1: with essential market moving news. Find the Bloomberg Markets Podcast

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Speaker 1: on Apple Podcasts or wherever you listen to podcasts, and

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Speaker 1: at Bloomberg dot com slash podcast. All Right, Ed Price,

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Speaker 1: senior fellow UH and former British trade official. He's at

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Speaker 1: n y U right now. He joins us here and

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Speaker 1: thanks so much for joining us. Um, what do you

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Speaker 1: expect to hear? Well, what do you expect not to

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Speaker 1: hear from the Federal Reserve chairman today? Thanks for having

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Speaker 1: me on, guys. So what I expect not to hear

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Speaker 1: is enough. UM. I don't think the Fed will hike today.

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Speaker 1: I wouldn't be surprised if they did. I don't think

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Speaker 1: they will, but they really are behind the curve, and

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Speaker 1: I think that all you really need there is two numbers.

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Speaker 1: Unemployment three point in December CPO inflation seven point one

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Speaker 1: in December. UM, so both policy conditions and fly conditions

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Speaker 1: are inflationary, and I think that what they really need

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Speaker 1: to do is hike and hike quickly. What do you

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Speaker 1: think about the kind of inflation that we're seeing. I

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Speaker 1: was just looking through your CV and saw that you

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Speaker 1: studied economics as well as German history, so you have

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Speaker 1: the um right Hooper inflatation perspective, M from the Weimar Republic.

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Speaker 1: Are we are we looking at anything that even compares

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Speaker 1: to the eighties, let alone the eighties in America, let

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Speaker 1: alone the twenties in Germany. That's a very interesting question. No,

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Speaker 1: I don't think so necessarily. German inflation in the nine

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Speaker 1: twenties was obviously driven out of a World war. Germany

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Speaker 1: was cut off from capital markets. Germany printed its own money.

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Speaker 1: We know that story and we know how it ended.

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Speaker 1: But what we are doing now is finally undoing the

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Speaker 1: post two thousand seven makes financial crisis policy response. Um.

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Speaker 1: That's massive, right. I mean the question is how quickly

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Speaker 1: can you and should you shrink a nine trillion dollar

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Speaker 1: balance sheet? Um? So they're going to be on intended consequences.

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Speaker 1: I don't think we're going to see hyper inflation. But

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Speaker 1: the you know, the debate about whether inflation is persistent

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Speaker 1: or transitory is very much finished. It's persistent, So Ed

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Speaker 1: you've mentioned in others have as well that the FED

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Speaker 1: is behind the curve, behind the market. What makes you

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Speaker 1: say that number one and number two? Is that a

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Speaker 1: bad thing? I think it's a bad thing. Um. I

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Speaker 1: think it's a bad thing because if the FED is

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Speaker 1: behind the curve and it has to start hiking, um,

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Speaker 1: it will probably have to hike higher and faster than

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Speaker 1: it's previously indicated. So you know, we have Jamie Diamond

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Speaker 1: talking about six even seven, and we have at the

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Speaker 1: other end, um some market commentators and policymakers talking about

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Speaker 1: three UM. And I think what we're really seeing here

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Speaker 1: is that the monetary policy needs of markets are essentially

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Speaker 1: now at odds with the monetary policy needs of the

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Speaker 1: real economy. UM. So, if I may, I would describe

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Speaker 1: what the FED is doing as a trickle mandate. Okay,

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Speaker 1: so stable prices that's not going very well, full employment

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Speaker 1: that is. But this kind of third amorphous concern, which

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Speaker 1: is financial stability, that really needs low rates and that

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Speaker 1: needs quie to continue. Of course we can't do that.

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Speaker 1: So I think they're behind the curve, not just on

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Speaker 1: this inflationary cycle, but I think that they're behind the

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Speaker 1: curve of pulling out of the post two thousand seven

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Speaker 1: eight policy response. Before we get before we're out of time,

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Speaker 1: I want to ask you about the Ukraine Russia situation,

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Speaker 1: because you've advised governments and parliaments in Europe and in

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Speaker 1: the UK, and I just was wondering to myself this morning,

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Speaker 1: how much money does Western Europe pay Vladimir Putin every month?

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Speaker 1: You know, like, what, what's what's their gas bill? They

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Speaker 1: can't really um, sanction him if they need to buy

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Speaker 1: his stuff and give them their money, right, I mean, honestly,

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Speaker 1: I'm a bit more concerned about gas prices at home,

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Speaker 1: um than I am. Right. Well, well, and that's another reason, um,

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Speaker 1: and that they can't really do much about it. Who knows, right,

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Speaker 1: I mean, money is obviously a part of the international system.

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Speaker 1: Monetary relations are a part of the international system. I

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Speaker 1: think for me, Ukraine is is a distant issue right now.

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Speaker 1: I'm looking at home. I'm thinking about what the stud

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Speaker 1: is doing and, as you said in your introduction, not

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Speaker 1: doing so. If we get a house in order at home,

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Speaker 1: I think the dollar standard and the US will be

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Speaker 1: in a better position to act abroad in any number

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Speaker 1: of areas. So, ed, what what is your economic outlook?

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Speaker 1: For two, I mean, it seems like things are generally

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Speaker 1: in pretty good stead right here. And you know, the

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Speaker 1: statistics we see on on the pandemic are also trending

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Speaker 1: in the right direction. How optimistic are you for So

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Speaker 1: I think I do. It's weird, right because if you

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Speaker 1: look at the numbers, um, it does seem like this

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Speaker 1: is a good economy right um. At the same time,

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Speaker 1: if you look at sentiments and if you look at

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Speaker 1: you know, responding to polls about how their life is going,

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Speaker 1: how their wallets going, people seem a bit more gloomy.

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Speaker 1: So my take on all of this is we're actually okay,

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Speaker 1: we're coming out of the out of the pandemic um.

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Speaker 1: But again back to the FED, back to inflation. If

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Speaker 1: we don't get this right, if we don't get pulling

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Speaker 1: out of accommodation right, we could disrupt the real economy.

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Speaker 1: And we could actually disrupt the real economy through market events.

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Speaker 1: So I think, you know, we're in sort of possible

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Speaker 1: cruption territory already. Obviously we saw a rally on the

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Speaker 1: backup stocks, but I can see that happening again and

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Speaker 1: again as the FED pulls out of this of this

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Speaker 1: low rate environment, so you know, that could lead back

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Speaker 1: into the real economy and it could disrupt what has

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Speaker 1: otherwise been a pretty good recovery. And thanks so much

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Speaker 1: for joining us AID Price there, nonresident Senior Fellow at

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Speaker 1: the n y U Center for Global Affairs. All Right,

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Speaker 1: we have rates rising. UM. Coming into this year, a

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Speaker 1: lot of strategist fund managers said get ready for volatility,

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Speaker 1: and boy were they right. Robert Teater, head of Investment

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Speaker 1: Policy and Strategy Group of silver Press Asset Management, joins

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Speaker 1: is Robert the first two days of this week. What

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Speaker 1: do you make of the volatility we saw in trading

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Speaker 1: in the last couple of days in these equity markets.

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Speaker 1: It certainly has been a very volatile time. I think

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Speaker 1: you're right. A lot of us have been looking for

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Speaker 1: that to happen. It's been somewhat overdue. In my view.

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Speaker 1: It's that we're going through a number of different transitions.

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Speaker 1: So I think we're transitioning out of a unidimensional market,

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Speaker 1: meaning everything was all about COVID for a long while.

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Speaker 1: We've moved beyond that. It's now a much more multifaceted story. UM.

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Speaker 1: I think we're in an era of transition in some

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Speaker 1: of the data as well, also partly related to O

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Speaker 1: macron and a real focus on second derivative in terms

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Speaker 1: of growth rate of the economy and what's going on

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Speaker 1: with inflation. And then lastly, of course we have a

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Speaker 1: big transition from the Fed in terms of their policy,

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Speaker 1: going from very easy to perhaps gliding into neutral here

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Speaker 1: today or soon, and then perhaps tightening a bit and

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Speaker 1: being more restrictive with rates. So all of that I

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Speaker 1: think has gotten investors sort of back to basics in

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Speaker 1: terms of exiting this sort of easy, one dimensional economy

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Speaker 1: and market and back to focusing on things like earnings

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Speaker 1: and a lot of the more complicated stories that are

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Speaker 1: going on in the market today. Ben Blueberg Intelligence UH

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Speaker 1: is bullish the earnings picture. Gina Martin Adams. Yesterday, um

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Speaker 1: Our chief equity strategist said she sees fifteen percent earnings

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Speaker 1: growth this year. Did you hear that? Yeah, that's a

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Speaker 1: lot harder than I think the consensus which is high eight. Yeah, exactly. Um,

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Speaker 1: what do you see in terms of earnings growth this year?

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Speaker 1: And are you concerned that the Fed, you know, over

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Speaker 1: tightens um I talked to another economists um Raphael Atten

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Speaker 1: Coney this morning from A d A Economics, She said

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Speaker 1: she expects the FED tightening cycle to push us into

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Speaker 1: a recession next year. Yeah. Well, I I don't share

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Speaker 1: that fear. I can see why why folks have that expectation.

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Speaker 1: I mean, I think the FED is focused on a

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Speaker 1: couple of things here, and the market has been and

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Speaker 1: laser focused on the inflation part of the of the

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Speaker 1: FED mandate and what's going through the Fed's mind. But

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Speaker 1: I think they're also, of course focused on the economy

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Speaker 1: and jobs. Been very clear in emphasizing wanting to get

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Speaker 1: people back to work and having a support of economy.

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Speaker 1: Uh And the FED, you know, has has also been

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Speaker 1: very very much emphasizing the need to restore some policy flexibility.

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Speaker 1: So I think it's not all about inflation for the Fed.

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Speaker 1: It certainly seems like it in the heat of the

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Speaker 1: moment here. But I think they will be accommodative enough

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Speaker 1: to keep the economy growing so that people get back

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Speaker 1: to work. And I think that feeds into that earnings

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Speaker 1: picture that you referenced. I'm also optimistic on earnings, perhaps

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Speaker 1: not quite as much as the as the double digit

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Speaker 1: numbers that you were just talking about. Part of that

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Speaker 1: concern coming from how margins are managed. But I am

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Speaker 1: optimistic on the earnings front. Uh and for stocks as well. Okay,

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Speaker 1: one thing we haven't had to do with it just

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Speaker 1: most recently in the last several years of geopolitical risk,

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Speaker 1: and we think about the Ukraine and Russia that really

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Speaker 1: came front and center. It seems like on Monday morning, Boy,

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Speaker 1: what our investors to do there? You just have to

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Speaker 1: put that on back burner and just ignore it or

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Speaker 1: is that real? Well? I think the typical playbook is

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Speaker 1: to say to put it on the backburner. Usually when

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Speaker 1: you look back historically at these types of conflicts, there

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Speaker 1: is a short term negative reaction but tends to not

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Speaker 1: be too disruptive over the longer haul. As you mentioned,

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Speaker 1: it came at a at a very tenuous time for markets,

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Speaker 1: when there's a lot going on in this transition that

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Speaker 1: we're going through, and so I think it was more

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Speaker 1: of a shock than usual. So I do think that

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Speaker 1: played a role here as well in terms of the

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Speaker 1: down draft that we've seen earlier this year. All Right, Robert,

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Speaker 1: thanks so much for joining us. Robert Teeter there is

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Speaker 1: a head of Investment Policy and Strategy group. Great to

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Speaker 1: get your voice your insight on this as we wait

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Speaker 1: for the FED meeting. I hope we get you back

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Speaker 1: on UM soon as well. From the Silver Crest Asset Management,

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Speaker 1: Robert Teeter, head of Investment Policy and Strategy Group, No,

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Speaker 1: we've been talking about in for the past twenty minutes.

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Speaker 1: Thanks so much for joining us. What do you expect

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Speaker 1: from own pal today? Well, I'll say the soccer football thing.

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Speaker 1: It's good that that's been resolved, so I was happy

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Speaker 1: to hear that, UM. And I'm sorry I missed breakfast.

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Speaker 1: I certainly could have used it on the on the

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Speaker 1: PAL thing. I think it's a really unusual environment we

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Speaker 1: find ourselves, and I think that they'll come out and

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Speaker 1: uh be moderately hawkish looking at possibly four hikes this year.

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Speaker 1: Is that going to be enough? I don't know. I mean,

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Speaker 1: if we throw away all that, all this modern fan

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Speaker 1: stuff we've learned in the last thirty years about forward rates, etcetera.

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Speaker 1: If you buy the two year today, UM, and you

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Speaker 1: look at where inflation really is, you're locking in what

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Speaker 1: would seem to be a pretty poor real return. I

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Speaker 1: don't think we've seen in real time this type of

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Speaker 1: poor real real returns um in a long time. UM.

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Speaker 1: And so I just wonder if we're being a little

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Speaker 1: blase and thinking that, um, we're going to raise rates

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Speaker 1: and we're gonna get to the point where inflation is

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Speaker 1: really gonna roll over, and the types of implied inflation

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Speaker 1: rates you're seeing in tips, you know, getting down to

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Speaker 1: two point two percent once we get past two or

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Speaker 1: three years, is really going to be a realistic sort

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Speaker 1: of outlook. So we have concerns, Matt. You know, Laird's

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Speaker 1: got his NBA from the unterse of Chicago, and they're

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Speaker 1: pretty good with a number of freshwater economists. I mean,

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Speaker 1: they are into the numbers, Laird, what numbers do you

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Speaker 1: think this Federal Reserve is really focusing on here? Well,

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Speaker 1: I wish I knew that if I was, I would

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Speaker 1: be focusing on sort of the impulse in inflation, UM,

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Speaker 1: and the fact that, uh, probably statistically you could prove

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Speaker 1: out that the amount of conversations that people are having

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Speaker 1: about real raises being negative even though you're seeing you know,

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Speaker 1: four or five percent raises out there in the economy

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Speaker 1: and people still negotiating for more. Once you get that

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Speaker 1: embedded in the process, inflation becomes a little bit harder

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Speaker 1: of a phenomenon to beat down. And I think that

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Speaker 1: we're used to thirty years of the FED quote having

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Speaker 1: the style and being reasonably in control of this uh.

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Speaker 1: And I think we're in a new environment. I think

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Speaker 1: that the frog has been in the pot of water

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Speaker 1: for thirty years. Uh. And there's a chance that water

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Speaker 1: is boiling as it relates to inflation, and we don't

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Speaker 1: realize that at this point. What do you expect in

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Speaker 1: terms of um, you know, corporate earnings in terms of

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Speaker 1: the corporate economy and are we still looking at decent growth?

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Speaker 1: We hear high digit singles single UM numbers in terms

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Speaker 1: of the consensus, but Bloomberg Intelligence says even this year

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Speaker 1: in terms of earnings growth, yeah, yeah, I mean I

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Speaker 1: think we were relatively sanguine UM on the on the

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Speaker 1: corporate side, UM, we are underweight just on a duration basis.

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Speaker 1: We believe the strategy for bought investors here is go

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Speaker 1: with solid liquid companies that are gonna have good earnings,

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Speaker 1: stay five years and end, except maybe in the banks

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Speaker 1: where you can you can you can creep out to

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Speaker 1: ten years. Because they've had a pretty substantial widening here

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Speaker 1: in terms of the amount you're getting compensated for that risk. Um,

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Speaker 1: we don't expect that there's going to be any massive

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Speaker 1: disruption on the corporate credit side UH this year, but

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Speaker 1: obviously there's a lot of wild cards out there. You

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Speaker 1: guys mentioned Ukraine, You've got China, You've got the semiconductor supply.

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Speaker 1: You've got a lot of things that could disrupt this economy.

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Speaker 1: All right, Lard, thank you so much for joining us.

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Speaker 1: Really appreciated. Laird Landman, Generalist, portfolio manager, TCWS Fixed Income Group. Well,

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Speaker 1: during the pandemic, I think we've all done a lot

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Speaker 1: more and I mean a lot more of e commerce

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Speaker 1: buying stuff we never thought we would buy on line. Um.

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Speaker 1: And so that you know, the contact center calling up

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Speaker 1: or emailing or texting to get some new information on

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Speaker 1: a product of service you're buying. That's kind of become

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Speaker 1: the new storefront here. So there's a lot of technology

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Speaker 1: behind that. Louis Sume joins us. He's a CEO and

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Speaker 1: founder of live Vox. It's a publicly traded company NASDAC traded.

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Speaker 1: Lv o X is your symbol. Louis, thanks so much

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Speaker 1: for joining us here. Tell us about live box. What

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Speaker 1: do you guys do how do you make the e

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Speaker 1: commerce how do you participate in the e commerce UH platform? Yeah, great, thanks,

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Speaker 1: I appreciate that. Yeah, as you As you said, a

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Speaker 1: lot of customers are more commerce onlines or just just

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Speaker 1: the new way of life here and uh and as

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Speaker 1: a byproduct, some of the conversations of previously would have

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Speaker 1: happened in the store now more or less are going

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Speaker 1: to happen over the phone, or happened via chat, or

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Speaker 1: happened via SMS, and and so that makes the uh

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Speaker 1: contexts and operators have to change the way that they

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Speaker 1: that they do business because they're giving more volume and

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Speaker 1: they're getting more customers wanting kind of easy routine matters

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Speaker 1: to be handled quickly via chat or via email, via SMS,

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Speaker 1: but also with a seamless ability to get to an

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Speaker 1: agent when when it's a little bit more complex and

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Speaker 1: a little bit more difficult. And that's what we're all about,

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Speaker 1: is really giving them the technology for the simple, easy

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Speaker 1: matters so that they can have a good experience, but

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Speaker 1: also making it easy to get to the agent and

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Speaker 1: have the agent really well positioned to help the customer uh,

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Speaker 1: you know, wants to get there. There is nothing worse

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Speaker 1: than calling up a business or um or or a

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Speaker 1: store and getting an automated service, right am I? Right, Paul?

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Speaker 1: I mean when you get absolutely for your bank account,

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Speaker 1: please enter you know. UM. But I do love the

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Speaker 1: new chat functions if they work well, and I love

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Speaker 1: the ability to you know, call me back instead of waiting. UM.

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Speaker 1: You must need a lot of actual humans for that though, right,

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Speaker 1: like flesh and blood people. Well, it's a combination. I mean,

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Speaker 1: you know you've got to um, you know you've got

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Speaker 1: to address both. You know, you've got to be able

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Speaker 1: to do the quick and easy stuff UM online and

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Speaker 1: by SMS and via chat. I mean when you go

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Speaker 1: in a lot of our clients from the banking industry,

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Speaker 1: and when you go in and check a balance, check

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Speaker 1: your your checking account, look at payment status. I mean

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Speaker 1: you you you want that to be quick and easy.

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Speaker 1: And then of course if you're thinking about refinancing your mortgage,

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Speaker 1: you probably have more questions. And so at that point

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Speaker 1: you want to talk to an asient and you want

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Speaker 1: that agent to be knowledge well, and you want that

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Speaker 1: agents know you. And so you think about that's pretty

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Speaker 1: wide array of technology, right. You got the chat thoughts

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Speaker 1: and the virtual assistance helping me out with the quick

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Speaker 1: and easy. But then that agent has to be empowered

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Speaker 1: with a rich set of tools to help them be

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Speaker 1: able to quickly and easily answer your questions when you

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Speaker 1: get to the agent. Now you were running tell were

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Speaker 1: you were you running a telehealth service before this? I mean,

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Speaker 1: is this how you got um you're starting this line

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Speaker 1: of service. Yeah, Actually we started off over twenty years

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Speaker 1: ago in the in the health care sector and we

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Speaker 1: were helping doctors and helping physicians help the patients with

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Speaker 1: more administrative clinical matters and things like that. But yeah,

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Speaker 1: that's exactly what we started. But I mean, I imagine

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Speaker 1: the last two years have been just phenomenal growth for you. Absolutely.

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Speaker 1: I mean it's just driving a lot of the land

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Speaker 1: for context center services. And at the same time, the

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Speaker 1: contact centers are really struggling to hire people. I mean,

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Speaker 1: there's everybody knows there's a labor shortage out there, and

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Speaker 1: that applies to contact centers as well. So you know,

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Speaker 1: they've got this this pressure to add new technologies because

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Speaker 1: that's what the consumers expect, right, I mean, consumers expect

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Speaker 1: a easy digital experience when it's a small routine matter

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Speaker 1: and they expect to seamlessly get to an agent when

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Speaker 1: it's more complex matter, and if you don't give them that,

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Speaker 1: it doesn't really reflect well on your brand, and so

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Speaker 1: it can it can hurt you. Louis, what's kind of

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Speaker 1: the next iteration of customer service? Um? You know, it

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Speaker 1: used to be you dial up a phone and get

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Speaker 1: a live human being, and then obviously we went to

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Speaker 1: a lot more of the digital interfaces. What's the next

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Speaker 1: level do you think? Well? I think I think we're

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Speaker 1: really scratching this purface on on a lot of the

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Speaker 1: technology that's been deployed. I mean, we all know as

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Speaker 1: consumers that what I'm describing in terms of, you know,

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Speaker 1: quick and easy and then seamlessly get to an agent

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Speaker 1: when you want it and that agent knows you. I

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Speaker 1: mean that exists sometimes, but more often than not, it

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Speaker 1: does happen that way. So it's just tremendous opportunity to

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Speaker 1: make these tools, the digital the AI, the chat boughts

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Speaker 1: of virtual agents and all those things just work better.

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Speaker 1: And that's really where we're focused on and in our

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Speaker 1: our our focus here is really to leverage the cloud

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Speaker 1: to make it work better. Because it's complex technology and

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Speaker 1: and deployment from the cloud can make it a lot simpler.

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Speaker 1: And that's really the challenge is making this stuff kind

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Speaker 1: of just fulfill its promise. How far away are we

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Speaker 1: from a digital AI chatbot that works, because I could say,

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Speaker 1: as somebody, i just moved here from Berlin, so I'm

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Speaker 1: shutting down all my financial services in Germany and opening

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Speaker 1: up financial services here. And you know that the main

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Speaker 1: reason to get a private banker is because none of

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Speaker 1: these you know, Capital One or Chase or Bank America.

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Speaker 1: The chatbots have no idea what I'm saying, whether it's

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Speaker 1: an English, Spanish or German. I've tried everything. Yeah, look,

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Speaker 1: I think people have to be um practical about how

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Speaker 1: they adopt technology. You can't expect the virtual ages and

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Speaker 1: the chatbots to do too much. You know, you've got

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Speaker 1: to use them well. But then you also got to

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Speaker 1: quickly needsually get to an agent when it's beyond their capability.

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Speaker 1: And I think there's is a little bit of a

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Speaker 1: tendency for people to like say, oh wow ai AI,

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Speaker 1: I just like fall them over the technology and then

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Speaker 1: ask you to do more than I can do. And

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Speaker 1: that's really not the best approach and Louis, thanks so

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Speaker 1: much for joining us. Really appreciate it. Louisa May CEO

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Speaker 1: and founder of Live vox again at nastactorated Company l

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Speaker 1: v o x on go on your Bloomberg terminal there.

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Speaker 1: Thanks for listening to the Bloomberg Markets podcast. You can

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Speaker 1: subscribe and listen to interviews with Apple Podcasts or whatever

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Speaker 1: podcast platform you prefer. I'm Matt Miller. I'm on Twitter

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Speaker 1: at Matt Miller three and on Fall Sweeney I'm on

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Speaker 1: Twitter at pt Sweeney Before the podcast. You can always

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Speaker 1: catch us worldwide at Bloomberg Radio