Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane Jay Ley.
Speaker 1: We bring you insight from the best in economics, finance, investment,
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Speaker 1: This is wonderful as well. Time. Julia Cardano with US
Speaker 1: with Mecal Policy Advises. Julia um I look at what
Speaker 1: John Farrell just said about global accommodation, all the rate
Speaker 1: cuts out there. What's the long term price of an
Speaker 1: accommodation by the Fed Central Bank. I refuse to believe
Speaker 1: that Chairman Powell cutty rates is a free lunch. What's
Speaker 1: the price out there? Well, actually, Tom, I think what
Speaker 1: the question for us right now is whether these rate
Speaker 1: cuts are just central banks moving to a new reality
Speaker 1: of lower neutral rate that comes with lower global slower
Speaker 1: global growth, or whether this is actual, you know, new
Speaker 1: accommodation that's going to spur growth. I think that's an
Speaker 1: open question because we've seen the global economy slow down
Speaker 1: pretty dramatically. We don't have the engine that we've come
Speaker 1: to rely on, that of China. China has been fueled
Speaker 1: by this massive credit growth in recent years. They don't
Speaker 1: want to go back down that road. They're being very
Speaker 1: disciplined about it, and growth is staying very low and
Speaker 1: likely to slow further. But truly, there's there's a difference
Speaker 1: between a rate like we have in the US and
Speaker 1: the negative rates in Europe. That's not adjusting to a
Speaker 1: new normal, that's just negative. What you mean in Europe? Yes,
Speaker 1: the negative rates in Europe? Yes, I mean that. I
Speaker 1: think actually they'll highlights those same structural problems. They don't
Speaker 1: have an engine of growth. Their demographics are slow, their
Speaker 1: productivity is low, So what's going to drive growth? And
Speaker 1: they've relied on They've turned to negative rates, and as
Speaker 1: we see, they're not particularly effective. Right, They're not a
Speaker 1: great engine of growth. So I think that their negative
Speaker 1: rates highlights that they're just sort of out of ammunition. So, Julie,
Speaker 1: are you leaning towards that? Then? If you had to
Speaker 1: make a decision on where this is coming, you leaning
Speaker 1: towards the idea that we are experiencing much lower neutral
Speaker 1: rights and these central banks adjusting to that reality. Yeah,
Speaker 1: I do think that. I mean, I think if I
Speaker 1: had to describe the current policy stance for the said
Speaker 1: it would be slightly accommodative, but not tremendously so despite
Speaker 1: the rate being so low. So I do think that
Speaker 1: a lot of this is the reality of lower neutral
Speaker 1: interest rates. So square that backdrop with a job's report
Speaker 1: that is likely to be quite good today. Uh, and
Speaker 1: the figures that we got out of ADP yesterday that
Speaker 1: point into such health in the labor market. How can
Speaker 1: that person is with this backdrop of weakness as you
Speaker 1: painted well, So I wouldn't say weakness, I just slow
Speaker 1: growth isn't necessarily weak if that's the reality. And again
Speaker 1: the job first of all, I don't want to say
Speaker 1: presume the conclusion of the jobs report. One thing we've
Speaker 1: been highlighting is the surprises in both directions in the
Speaker 1: jobs reports. This year has been about fifty percent bigger
Speaker 1: than the last five years. So you know, we may
Speaker 1: be surprised in one direction or another this morning. Um,
Speaker 1: but the but what we've seen is a healthy job market.
Speaker 1: We have seen job growth slow. We need to generate
Speaker 1: about a hundred to a hundred and fifteen thousand jobs
Speaker 1: a month to just absorb population growth, and we're somewhat
Speaker 1: above that. So we're not exactly roaring. The economy is fine,
Speaker 1: it's solid, it's healthy. Consumers are feeling pretty good because
Speaker 1: the job market is good. But we're not in boom times,
Speaker 1: nor are we seeing weakness. So I think we're we're
Speaker 1: seeing that kind of steady, moderate growth picture reflected in
Speaker 1: those jobs. Now, Julia, let me ask you a question
Speaker 1: that I know RBC's Tom Pauselli has been thinking about
Speaker 1: and talking to clients about as well, the risk of
Speaker 1: confusing signs of full employment with evidence that the cyclical
Speaker 1: peak in the labor market is behind us. What are
Speaker 1: the risks right now? So, so the risks of thinking
Speaker 1: that we're overheating, is that what you're asking, you know,
Speaker 1: The idea being that as GDP comes in in and
Speaker 1: around trend growth and pay rolls growth starts to desalarate.
Speaker 1: There's just the belief by some people that we're not
Speaker 1: returning to trend growth, that the deceleration of payrolls growth
Speaker 1: is evidence that we've had a cyclical peak in the
Speaker 1: labor market and we're rolling go over. Instead of sitting
Speaker 1: here and worry about recess, precisely, instead of sitting here
Speaker 1: and saying, you know what, quite we're quite constructive we're
Speaker 1: back at trend and what you are seeing is just
Speaker 1: the natural consequence of full employment. Payrolls growth will de salarate.
Speaker 1: Are we confusing one with the others. It's very easy
Speaker 1: to confuse. And of course you know, when you are
Speaker 1: at that trend growth, that means that policymakers, for example,
Speaker 1: don't have a lot of margin for error, which is
Speaker 1: why the FED moved preemptively. Uh. Now I think that
Speaker 1: they've been a little bit disciplines. They've now moved to
Speaker 1: the sidelines and they say, you know, we need to
Speaker 1: see more evidence of what you're suggesting actual weakness. Uh,
Speaker 1: to conclude that we need to do more. So, Um,
Speaker 1: it's easy to confuse. It's hard and real time to
Speaker 1: disentangle those two. We look at things like the speed
Speaker 1: of slowing. If we're slowing rapidly and in in a
Speaker 1: worrisome way, which isn't what we've seen. We've seen sort
Speaker 1: of a gradual moderation and growth through the year. Are
Speaker 1: we aggregating too much? I mean, we're gonna come out
Speaker 1: here in one of and in thirty thirty seven minutes
Speaker 1: and we're going to aggregate aggregate, aggregate. Can we get
Speaker 1: away with that? Game given the partitions of the American
Speaker 1: labor economy. Well, that's a great point, Tom. I mean,
Speaker 1: when we see the report this morning, it's likely to
Speaker 1: show a manufacturing sector that's still that is in recession. Um,
Speaker 1: that's probably going to lose some jobs. Uh, you know,
Speaker 1: abstracting from the GM strike effect. Um. But uh. And
Speaker 1: and meanwhile, all the service sector is humming along. And
Speaker 1: in fact, the health care sector is in sort of
Speaker 1: a secular growth strate give uh state given our aging economy.
Speaker 1: So there are different sub economies. We always have to
Speaker 1: keep that in mind when we're thinking about, for example,
Speaker 1: Jonathan's question, are we slowing in a broad based way?
Speaker 1: Are we driven by weakness in one sector? I think
Speaker 1: it's worrisome in the composition of of growth and hiring
Speaker 1: that the weakness is in in investment um and in
Speaker 1: sectors that have high productivity, whereas the resiliency is in
Speaker 1: sectors with relatively low productivity. That's not a great pattern
Speaker 1: in terms of thinking about the future. So I think
Speaker 1: the details do matter a lot um, But we have
Speaker 1: a gigantic service sector. It's what powers the economy, and
Speaker 1: it has given us a really solid base where we're
Speaker 1: an ocean liner of an economy. It's very hard to
Speaker 1: put an ocean liner of an economy was dancing ocean lining.
Speaker 1: I love the sort of the noir version of the
Speaker 1: of the ocean liner of an economy. I am thinking
Speaker 1: about that, this idea that slow growth could be positive
Speaker 1: and that we're chugging along and all of these nuances.
Speaker 1: And I was speaking with David Lafferty yesterday, chief market strategist.
Speaker 1: It takes this investment managers, and he was saying, honestly,
Speaker 1: I'm looking at a blank screen for outlook, my blinker blinking.
Speaker 1: I have nothing that interesting to say with this type
Speaker 1: of backdrop, because things are going to just sort of
Speaker 1: chug along. It's kind of a boring market now heading
Speaker 1: into Julia, be careful what you say. Though. Again, whenever
Speaker 1: we think it's going to be the most worrying, that's
Speaker 1: when something can, you know, blindside us. So UM, I
Speaker 1: wouldn't say a year where we're still going to be
Speaker 1: grappling with things like trade tensions between the US and
Speaker 1: China and now a US presidential election that is on
Speaker 1: the front burner and has consequences for different sectors. Um,
Speaker 1: I don't think that's going to be a boring year.
Speaker 1: I'm not too worried about being bored next year. Judaicarnada,
Speaker 1: great to get your thoughts macro policy perspectives, President and
Speaker 1: found it. Hey, it is is ny down to John.
Speaker 1: The jobs nevers crushing the Bloomberg wire, contrary to ordinary,
Speaker 1: A gain of more than a quarter million jobs in
Speaker 1: November Topping Wall Street forecast the prior month or Vice
Speaker 1: higher again November versus October. The unemployment eight down three
Speaker 1: point five percent, a half century low average. I really
Speaker 1: earnings meantime, well, they missed the mark up point two
Speaker 1: percent versus point three percent again. Change in non farm
Speaker 1: payrolls from the Labor Department a gain of two hundred
Speaker 1: sixty six thousand Topping forecasts the prior month October revised higher.
Speaker 1: Unemployment down down at three point five percent. I'm Niel
Speaker 1: Boomberg Radio. Let's go back to me, ord if any,
Speaker 1: thank you. Here's the price action. Just wow. Equities advanced
Speaker 1: futures higher by four tents of one percent, bonds decline,
Speaker 1: yields up by three basis points on a ten year
Speaker 1: now to one eighty five yelds were coming in just
Speaker 1: a little bit so big reversal, especially at the front end,
Speaker 1: yields up by five basis points to one sixty four
Speaker 1: and affirm a dollar a big payrolls print John Ferroll
Speaker 1: to the claims number in Carl Kadona way out front
Speaker 1: on that among others, I go to three decimal points
Speaker 1: on the rate and it's what I would call a
Speaker 1: good three point five percent to three decimals three point
Speaker 1: five three five, So it's no la statistical fluky flukiness
Speaker 1: that we got to three point five. You get to
Speaker 1: Jim Glassman of JP Morgan standing by for reaction to
Speaker 1: this one. Your thoughts, Jim. Pretty impressive And to keep
Speaker 1: in mind though, the settlement of the GM strike is
Speaker 1: driving allow this. You get manufacturing bounced back. We didn't
Speaker 1: know how much guys were actually on strike. Maybe another
Speaker 1: thirty thousand were indirectly affected. And I think this is
Speaker 1: a reminder that all the manufacturer data coming out and
Speaker 1: that we're going to see over the next several weeks
Speaker 1: is going to be showing this balance back from the
Speaker 1: GM strike. So pretty impressive. And I think the unemployment
Speaker 1: rate is the key to the whole thing, because we
Speaker 1: just don't know. I think job growth is slowing down
Speaker 1: very gradually. Not here, but I think for the year
Speaker 1: it is, and I think we're gonna see you just
Speaker 1: see his unemployment stay at three and a half. It's
Speaker 1: going to be a really good story. Jim Glassman, thank
Speaker 1: you so much for the time we treasure speaking to you,
Speaker 1: particularly today from Tucson, Arizona. Mr Glassman is with Dr Glassman,
Speaker 1: I should say it's with JP Moore, John. What is
Speaker 1: so distinctive here is the U six grim unemployment number
Speaker 1: comes into recent lows six point nine percent. That's not
Speaker 1: seven percent. And I also know media duration and average duration.
Speaker 1: Those are very very good statistics as well. There's a
Speaker 1: there's a solidity to the data. And look at the
Speaker 1: yields now out four base points vaulting out to a one. Also,
Speaker 1: we should say everyone talks about the trend line being important,
Speaker 1: not necessarily one number. The revisions also were positive, adding jobs,
Speaker 1: bringing the three month average to a ten month high
Speaker 1: of two and five thousand. This is key when you
Speaker 1: talk about the longer term implications. Let's get to the
Speaker 1: longer term implications in the market moves as well. Really
Speaker 1: placed to say that you want to us from PAGM
Speaker 1: it's Mike Collinsy dropped by to the studio to give
Speaker 1: us his thoughts. Mike, your initial response place, you know,
Speaker 1: it's the same story. The job market has not been
Speaker 1: the problem for this economy. Right, it is rock solid um,
Speaker 1: very robust um. But if you look through the numbers,
Speaker 1: see the same trend we've seen, which is one of
Speaker 1: the reasons we haven't seen a big spike in wage growth.
Speaker 1: And even the wage numbers here, the monthly wage games
Speaker 1: are actually a little bit lighter than expected because it's
Speaker 1: all services. It's leisure jobs, it's business services, it's hospitality,
Speaker 1: it's a lot of second average hourly earnings climbed three
Speaker 1: point one percent from a year earlier. That exceeded projections
Speaker 1: of three percent, right, Right, The monthly number was a
Speaker 1: light but right, so we're running at three percent year
Speaker 1: over year and that's been where we that's where we've been,
Speaker 1: so that's not a change. But three percent based on
Speaker 1: historical expectations is arguably a little bit light. Right. If
Speaker 1: inflation is to you're talking about one percent real wage growth,
Speaker 1: which doesn't really pay the bills. So, um, the labor
Speaker 1: market is not the problem, right, it's the the manufacturing
Speaker 1: Chector in an international sector and you're still seeing weakness
Speaker 1: in Europe. We had that yesterday. China is not out
Speaker 1: of the woods yet. Um. You know, there's there's seems
Speaker 1: like on a manufacturing side globally you've got a good
Speaker 1: number and then a bad number. A good number and
Speaker 1: a bad numbers. So we're kind of bouncing around the box.
Speaker 1: Talk about it, Mike, the consensus cool gun into next year.
Speaker 1: You know what it is is by the rest of
Speaker 1: the world. We've heard it from Bank alfter bank after
Speaker 1: bank alfter bank. The date to this week, the labor
Speaker 1: market in America rock solid, the dates US where German
Speaker 1: industrial production Reminder, as you say, they were not out
Speaker 1: of woods yet. When you think about that consensus cool
Speaker 1: gun into next year, what does Mike Collins stand on
Speaker 1: that debate? Yeah, I mean, you know, I'm a general
Speaker 1: contrarian and a deep value investor, and if you look
Speaker 1: at the relationships in valuations globally in equities, for sure, um,
Speaker 1: it would certainly tilt you to outside the US. But
Speaker 1: you know, the US economy is clearly the bright spot
Speaker 1: in the world right now, and we expect that to continue.
Speaker 1: Right The FED, I think has done a great job.
Speaker 1: I give them a lot of credit for pivoting when
Speaker 1: they did, for cutting three times, getting that funds rate
Speaker 1: back to what I think is probably closer to a
Speaker 1: neutral rate at least in the near term, and so
Speaker 1: we're actually poised to continue to do okay in the US.
Speaker 1: That's actually I'm glad you were up the FED because
Speaker 1: I'm watching the yield curve right now and it's kind
Speaker 1: of struggling to find whether or not it's deepening or flattening.
Speaker 1: On this news you're seeing two year yields increased just
Speaker 1: a touch more than ten year yields. Here, What is
Speaker 1: the risk that the federal take data like this and
Speaker 1: stop cutting rates or even hike them? Uh and sire
Speaker 1: me the growth. Yeah, so they've definitely stopped cutting for now.
Speaker 1: They are on perma hold for the time being, and
Speaker 1: this number solidifies that um as as everybody I think
Speaker 1: is in consensus view now, the hurdle rate hike is
Speaker 1: really really high. I mean, they talk about this symmetrical
Speaker 1: inflation target. What that means is they want to see
Speaker 1: inflation core pc E well above two before they even
Speaker 1: think about hiking. And that thing is like one five,
Speaker 1: one six, right now. There's a long way to go
Speaker 1: before that thing gets gets above too, So I don't
Speaker 1: see the risk as being in a hike hike in
Speaker 1: the next six months. Your view on credit at the moment, Mike,
Speaker 1: has been fascinating, extremely bifurcated. What we've seen is the
Speaker 1: spread between the top end of high yield and the
Speaker 1: bottom end of high yield really start to move out.
Speaker 1: It's been an upping quality right in high yield. You
Speaker 1: started to think about rotating the other way anytimes. Absolutely,
Speaker 1: Just just yesterday in our trade room, we had a
Speaker 1: big discussion about this. You're seeing actually that relationship. It
Speaker 1: looks like it's starting to turn the other way again.
Speaker 1: There's been so much pessimism in the high old market.
Speaker 1: A lot of it's in the energy sector, of course,
Speaker 1: and you've got some maybe positive news about OPEC cutting
Speaker 1: production a little bit, maybe bolsters oil prices, but there's
Speaker 1: so much negativity, there's so many default so much default
Speaker 1: risk and recessions priced into that tail of the high
Speaker 1: old market that there I think there is an opportunity
Speaker 1: if you believe like we do, that you're not going
Speaker 1: to be in a recession in two thousand twenty. There's
Speaker 1: value there. I'm itching to get in and ask you
Speaker 1: more about this. This is a really important question. We're
Speaker 1: talking about the triple cs, the bottom of the junk
Speaker 1: bond market that has really lacked the broader credit market.
Speaker 1: Through through nineteen, we've had gains of fifteen percent for
Speaker 1: corporate credit. Triple cs just really haven't been there in
Speaker 1: the last few months. You're talking about buying triple cs.
Speaker 1: Some of these really really beaten down credits, right, But
Speaker 1: it's about it's about perception in psychology and valuation, right,
Speaker 1: and all those things are pointing in one direction right now,
Speaker 1: and we tend to like to go the other way there.
Speaker 1: And again, if the default probability priced in is in
Speaker 1: that basket and you're only going to get a ten
Speaker 1: percent to fault right in that basket, there's value. But
Speaker 1: obviously you have to pick your spots. I mean, credit
Speaker 1: selection is powamount in that space without a doubt. What
Speaker 1: would you say to push back that they were cheap
Speaker 1: earlier this year? Uh, they might be less cheap now,
Speaker 1: what's changed fundamentally to mean that the risk is so
Speaker 1: much lower going into the bottom of the bottom When
Speaker 1: we see the default rate actually taking up in certain sectors.
Speaker 1: I mean, you've had not only the FED cutting three times,
Speaker 1: You've had dozens of rate cuts all around the world. Right,
Speaker 1: Monetary policy has been super stimulative, and now you're finally
Speaker 1: seeing signs of of potential fiscal policy. You had some
Speaker 1: in Japan, you you may have more in the US
Speaker 1: regardless of who wins the election next year, and in
Speaker 1: Europe you might see more. So I feel like you've
Speaker 1: seen a bottoming in global economic data for the time being.
Speaker 1: I think default risk or sushion risk has has moderated
Speaker 1: for next year, and and everybody's off sides in that space. Tom,
Speaker 1: is this time now to go out of triple leverage
Speaker 1: cash and into the year. This is a stunning report.
Speaker 1: It completely refutes the gloom crew. Does the FED respond
Speaker 1: to it or do they do what they genetically do,
Speaker 1: which is just by time they buy time? They are
Speaker 1: on hold indefinitely right now. I mean, you would need
Speaker 1: to see five or ten of these reports. You need
Speaker 1: to see the stock market up another twenty percent. You
Speaker 1: need to see inflation above two Is that feasible? You're
Speaker 1: a bond guy, I'm gonna ask you that is dividend
Speaker 1: growth a proxy for the yield the coupon I can't
Speaker 1: get Let me extend that forward here in the time
Speaker 1: we've got, We're gonna keep you through the hour. This
Speaker 1: is so important, Michael. Do you shift with this report
Speaker 1: from a two thousand and twenty view of clipping up
Speaker 1: coupon two back to back years a total return pop
Speaker 1: you know, in ah in and fixed income. I don't
Speaker 1: think you're gonna see anywhere near the total returns we
Speaker 1: had this year. But can I look for any kind
Speaker 1: of game with coupon? You can? You can clip your
Speaker 1: coupon in two thousand twenty, I think, I think the
Speaker 1: long end of the curve, and we've even seen it today,
Speaker 1: the thirty years barely moving today. It's a bear flatten
Speaker 1: or the front end is bear in the bear flatteners.
Speaker 1: So the two year note is rising in yield today
Speaker 1: because the markets before this number, it was actually pricing
Speaker 1: in a small probability of a cut next year, and
Speaker 1: that's being taken out of the mark. Can you stay
Speaker 1: with us, He's coming to TV with me, He's going
Speaker 1: to TV with you. He has a few more minutes.
Speaker 1: I'm going to let you have about ninety more seconds worked.
Speaker 1: I've got I've forgot worked. That's good to do. Michael
Speaker 1: Collins was a PGM, and we thank him for being
Speaker 1: with this. We areing. Uh, the gains get extended as
Speaker 1: the US markets open on the heels of that blockbuster jobs.
Speaker 1: There are two hundred and sixties six thousand jobs added
Speaker 1: well passed expectations joining US now. Tiffany Wilding pimpco U
Speaker 1: S economists. Tiffany, can you use as a sense of
Speaker 1: just how big of a surprise this was to the
Speaker 1: upside when it comes to the job's numbers. Yeah, well,
Speaker 1: thanks for having me. Well, I think, you know, interestingly,
Speaker 1: the so Bloomberg obviously has a panel of economists. I
Speaker 1: think there's maybe a hundred and seventy eight economists on
Speaker 1: that panel. Um that that has that that present forecasts
Speaker 1: for each employment report, and and this report was above
Speaker 1: every one of those economists forecasts on the underlying panel.
Speaker 1: So that doesn't happen very frequently. I think I can
Speaker 1: only remember, you know, maybe one other time within the
Speaker 1: last several years that that's happened. So, I mean, certainly
Speaker 1: this isn't an important report, you know. Um, you know,
Speaker 1: I think there's some some interesting things going on underlying
Speaker 1: the report as well. Um, you know, obviously you had
Speaker 1: some noise because we had a strike at GM plants
Speaker 1: that um you know, that happened in October. That was resolved,
Speaker 1: so people came back to work in November. But even
Speaker 1: if you exclude those around forty to fifty workers that
Speaker 1: were coming back to work, this is still a very
Speaker 1: strong report. Yes, it really was, Tiffany, And I think
Speaker 1: the markets are reflecting that. What is your sense that's
Speaker 1: really driving this? Are these what types of jobs are
Speaker 1: being created at this late stage in the cycle. Yeah,
Speaker 1: I mean so kind of you know, again, we like
Speaker 1: to look at um, you know, any any given report
Speaker 1: obviously as noisy as we like to look at the
Speaker 1: given trends. So what you're seeing is an interesting bifurcation
Speaker 1: I think in in services versus good sector jobs. You know,
Speaker 1: so excluding the kind of the GM you know, sort
Speaker 1: of one off factors if you will, goods, uh, good
Speaker 1: sector employment has actually been decelerating this year, and that's
Speaker 1: you know, manufacturing, construction, other sectors that are related to that,
Speaker 1: like trade and transport. But on the other side, services,
Speaker 1: which looked earlier in the year like it was decelerating
Speaker 1: has actually picked up more recently, um. And and this
Speaker 1: report healthcare has was really strong. Health care sector has
Speaker 1: been really strong, you know. And I think the important
Speaker 1: thing to remember about the services sector is that that's
Speaker 1: a sector that really economists look at in the employment
Speaker 1: report because most of the other economic data that we get,
Speaker 1: at least high frequency economic data is really geared towards
Speaker 1: the good side of the US economy, you know, So
Speaker 1: we tend to get service sector data, you know, with
Speaker 1: the lag other than the employment report, you know. So
Speaker 1: it's really good news to see service sector hiring UM
Speaker 1: kind of pick up after dipping earlier this year. Michael
Speaker 1: Collins from Pigeon was in here earlier, and he was
Speaker 1: talking about how the type of jobs getting added leaves
Speaker 1: something to be desired because the job gains have really
Speaker 1: been made on the lower paying end of the spectrum.
Speaker 1: Can you give us a sense of how much this
Speaker 1: matters when people look at this data? I mean, in
Speaker 1: other words, are all job gains equal? Um? Well, so
Speaker 1: I agree with that. I think that's kind of a
Speaker 1: I think that's a bit of a longer term trend
Speaker 1: that we've seen, um, you know, as manufacturing jobs for example,
Speaker 1: has decelerated more of a secular trend over the last
Speaker 1: ten years. You've seen it just a general decline in
Speaker 1: manufacturing jobs in the US, and and service the service
Speaker 1: sector side of the economy has UM, you know, kind
Speaker 1: of picked up or absorbed you know, some of those
Speaker 1: people that that lost the manufacturing jobs. But I think
Speaker 1: one of the more interesting trends right now actually is
Speaker 1: is looking at the jobs created at large companies versus
Speaker 1: small and mid sized companies. You know, So the real
Speaker 1: acceleration in labor market growth, you know, in eighteen when
Speaker 1: growth accelerated was really coming from those small to mid
Speaker 1: size firms, and we really, UM, you know, hadn't seen
Speaker 1: that UM prior to UM you know, kind of in
Speaker 1: the in the wake of the financial crisis. So that's
Speaker 1: good news, you know, but kind of more recently, UM,
Speaker 1: that started to slow down a bit. As I mentioned,
Speaker 1: similarly to the to the good side. UM. You know,
Speaker 1: So you want to see an economy that has UM
Speaker 1: job creation across you know, many different sectors obviously, UM,
Speaker 1: many entrepreneurial, small and mid sized companies increasing jobs. That's
Speaker 1: good news. UM. So hopefully that picks up as well.
Speaker 1: So toffy. Let's gowk to the wage side of the equation.
Speaker 1: Came in a little bit better than expect at three
Speaker 1: point one percent annual growth. Um. Is that kind of
Speaker 1: where we should get comfortable? Is that kind of the
Speaker 1: best this labor market can give us? There's been some
Speaker 1: questioning that given the low level of unemployment, shouldn't wage
Speaker 1: growth actually maybe be even a little better. Yeah, Well,
Speaker 1: wage growth, even though it was revised higher today. So
Speaker 1: average hourly earnings I think on a year on your basis,
Speaker 1: was around three point one. That's actually below a recent
Speaker 1: peak that we've seen, um, you know, kind of at
Speaker 1: the end of of of of last year of three
Speaker 1: point four. So it looks like average hourly earnings growth
Speaker 1: has peeked out a little bit um. You know, I think,
Speaker 1: which presents a bit of a goldilocks environment because you're
Speaker 1: still seeing the labor market which is able to generate um,
Speaker 1: you know, two hundred and sixty six thousand job gains
Speaker 1: without a lot of wage inflation. You know. No, I
Speaker 1: think there are secular reasons still why that's happening. You know,
Speaker 1: we talk a lot about what we call labor bargaining power. UM.
Speaker 1: You know, you you hope that in a what we
Speaker 1: call a hot economy or a tight labor market, you
Speaker 1: hope that labor bargaining power starts to increase. But of
Speaker 1: course these things take time, you know. Now, I think
Speaker 1: the GM strike, the recent GM strike that we saw
Speaker 1: was kind of an anecdote of more labor market bargaining
Speaker 1: power happening in tight labor markets. But again, this takes time. UM.
Speaker 1: So you know, I think that's that that continues to
Speaker 1: be UM sort of did damp in wage pressures. You know,
Speaker 1: we're we're also just a secular decline in productivity growth. UM.
Speaker 1: That also, uh, you know, dampens wage pressures because you know,
Speaker 1: you should get paid for you know, how much uh
Speaker 1: price inflation that you we're seeing, and then how productive
Speaker 1: we are um on on the job. So those two
Speaker 1: things I think are secular reasons why you know, average
Speaker 1: EARLIE earnings are still um, you know, somewhat below the
Speaker 1: peak that we saw last cycle, UM, and they're probably
Speaker 1: likely to stay there. Tiffany Weilding of PIMCO joining us
Speaker 1: right now. We're speaking with her. She's a U S
Speaker 1: economist about the jobs figures in particular. Tiffany, people are
Speaker 1: wondering what this means for the federal reserve markets now
Speaker 1: discounting any additional rate cuts in I'm wondering whether uh
Speaker 1: FED is right to be on pause here given the
Speaker 1: job gains that we're seeing. In other words, are we
Speaker 1: in a new Goldilocks? Well, yeah, I mean I think
Speaker 1: I think we might be. Um. Certainly, the wage pressures
Speaker 1: would suggest that the FED does not need to be
Speaker 1: in a hurry to hike interest rates, you know, but
Speaker 1: at the same time, you know the fact that the
Speaker 1: US economy and job creation does look like it is
Speaker 1: re accelerating a bit after after dipping more notably over
Speaker 1: the summer or earlier this year, that would suggest that
Speaker 1: it certainly find to be on hold. So the the
Speaker 1: accommodation that the FED has already provided this year is
Speaker 1: starting to support the economy. We're starting to see that, um,
Speaker 1: and it it suggests they don't need to provide additional
Speaker 1: support at this time, and then they can remain on hold. So, Tiffany,
Speaker 1: given that scenario, as you think about your DP outlook,
Speaker 1: give us a sense of kind of how you think
Speaker 1: this maybe strengthening job market may impact economic growth next year. Yeah, well, so,
Speaker 1: labor markets do tend to lag broader economy revenues um
Speaker 1: and and profits and and things like that, you know,
Speaker 1: so you have to be a little bit careful. And
Speaker 1: the reason why economists, as I mentioned, the reason why
Speaker 1: economists look at this so uh so closely is because, um,
Speaker 1: you know, just in terms of the noisiness of this report,
Speaker 1: it is a little bit better you know than some
Speaker 1: of the other revenues or other production type of reports
Speaker 1: that we get. But we do have to remember that
Speaker 1: the labor market lags. So you know, if growth does
Speaker 1: start to decelerate again, um you know, then ultimately the
Speaker 1: labor market will decelerate again with the lag to that
Speaker 1: you know. Now, I think I think just kind of
Speaker 1: thinking about this, you know a little bit more broadly,
Speaker 1: and certainly the labor market has has been stronger, um
Speaker 1: you know, then I think many would have expected in
Speaker 1: the context of some of the uh, you know, the
Speaker 1: trade tensions that we've seen. We've also seen consumer sentiment
Speaker 1: hold up a lot better, you know, So I that
Speaker 1: that's I think also good news, um you know, for
Speaker 1: for the U. S economy, given that there has been
Speaker 1: some some disruption um and and potentially you know some
Speaker 1: negative headlines around that. Tiffany Weilding, thank you so much
Speaker 1: for taking such a time with us this morning. Tiffany Weilding,
Speaker 1: is you as economist at PIMCO joining us on the
Speaker 1: jobs figures. We welcome Bloomberg TV and of course Blomberger Radio.
Speaker 1: I'm Jonathan Faraoh for the White House's views on the
Speaker 1: jobs report were joined by Larry Cudlo, now the National
Speaker 1: Economic Council Director. Larry, it's great to see you a
Speaker 1: stunning payrolls report. I'm sure the day feels a little
Speaker 1: bit better down in d C now these numbers are
Speaker 1: out well. It does it sugny day down here. And
Speaker 1: the key point is America's working. America is working, and
Speaker 1: despite whatever you know, cynicism or criticism, the fact is
Speaker 1: the jobs numbers are actually getting better in recent months.
Speaker 1: And we scored two hundred and sixties this time around.
Speaker 1: Plus you got forty one thousand revision so from the
Speaker 1: two prior months, so they actually get you about three
Speaker 1: hundred thousand. My point is, despite I don't know a
Speaker 1: certain amount of pessimism, uh, the economy is outperforming expectations.
Speaker 1: Economic policies from the President are working and America is
Speaker 1: going back to work. And I just think that's crucial because,
Speaker 1: you know what, Jonathan, I can't remember who wrote the book.
Speaker 1: My pal over at the American Enterprise Institute, Um Brooks, right,
Speaker 1: who was his name Brooks? Anyway, America is a happy
Speaker 1: place when it's working. I mean that, and America is
Speaker 1: a cranky place when it's not working. And I think
Speaker 1: as this new rebuilding of the economy with new incentives
Speaker 1: from taxes and regulations and energy and protecting ourselves on trade,
Speaker 1: as the numbers come in, as people come out of
Speaker 1: the woodwork, as the you know, production workers are getting
Speaker 1: higher wages or faster wages than their bosses are. Anyway,
Speaker 1: all these things, this is a country that's going back
Speaker 1: to work, Jonathan, and I think it's a happier country
Speaker 1: as a result of it. Was just a couple of months.
Speaker 1: Think you said that protecting our sounds on trade? Are
Speaker 1: you saying that the current trade stance you think is
Speaker 1: actually helping the US economy? And with that in mind,
Speaker 1: is there any reason to pull back these terrists if
Speaker 1: that's the case, Well, look, I don't want to. We're
Speaker 1: in negotiations right now. As a president has said, in
Speaker 1: recent days, they're constructive, almost round the clock negotiations. Doesn't
Speaker 1: mean he's going to sign the deal. He hasn't seen
Speaker 1: the final deal yet. He's holding back, but he basically
Speaker 1: likes what he sees. So we'll see how that is
Speaker 1: if you want to pursue that in a moment or two.
Speaker 1: Uh fine, No, I had something different in mind, Jonathan,
Speaker 1: almost psychological. I think that one of press in it
Speaker 1: Trump's most important accomplishments in his first three years in
Speaker 1: office is to change and clarify the narrative on China
Speaker 1: and that this country, the USA, cannot cannot permit unfair
Speaker 1: trading practices either by our allies or are non allies. Technology, innovation,
Speaker 1: invention application, as you well know, this is the heart
Speaker 1: of the American economy. We have the freedom to create,
Speaker 1: and that freedom is what drives our economy forward at
Speaker 1: the fastest rate of any country in the world for
Speaker 1: all these years. So here's my point. His job, as
Speaker 1: he sees it, is to defend America, to protect the workers,
Speaker 1: the farmers, the manufacturers, the people working in technology. That's
Speaker 1: his job. And so when I say people are happy,
Speaker 1: I think the country has come around to the President's narrative, Yeah,
Speaker 1: we must be tough. We must be tough with China
Speaker 1: and anybody else who thinks they can willy nearly steal our,
Speaker 1: not just our technology advances, but our god given creativity.
Speaker 1: I think most people would narrative, you've been with China.
Speaker 1: Most people would argue that you have. You said the
Speaker 1: President likes what he sees. October eleventh, The President said,
Speaker 1: we have come to a deal pretty much, subject to
Speaker 1: getting it written. It will probably take three weeks, four
Speaker 1: weeks or five weeks. That was eight weeks ago. What
Speaker 1: has the president seen, what's been agreed? Well, look, presidents
Speaker 1: up to speed on everything. We're almost in around the
Speaker 1: clock negotiations. The deputy level met um. Let's see not
Speaker 1: last night, but the night before. The final strokes are
Speaker 1: not there were coming down to short strokes. We've been
Speaker 1: there now. Some of the most delicate matters have to
Speaker 1: be adjudicated, discussed, analyzed, and evaluated, and then it will
Speaker 1: be presented to President Trump and he'll take a look
Speaker 1: at it. As he said in London, and he said
Speaker 1: when he got back from London, he thinks the talks
Speaker 1: are moving ahead very nicely. He likes that they're very constructive.
Speaker 1: But but but but he's not ready yet to sign
Speaker 1: or he hasn't seen everything he wants to see. So
Speaker 1: we're moving forward nicely, covering a lot of ground. And
Speaker 1: I've learned never in forecast the outcome. And ultimately it
Speaker 1: is President Trump's gonna make the final call. As you know.
Speaker 1: That's the story, Larry. But I'm still trying to work
Speaker 1: out what's happened in the last eight weeks or so.
Speaker 1: The President on October eleventh said a tremendous deal for
Speaker 1: the farmers, a purchase from forty to fifty billion dollars
Speaker 1: of ACT products. This was his message to the farmers.
Speaker 1: I'd suggest the farmers have to go and immediately buy
Speaker 1: more land and get big attractors. What has been negotiated
Speaker 1: and what has been agreed? Can I just ask you again,
Speaker 1: was there ever any agreement whatsoever in October eleventh that
Speaker 1: involved forty two fifty billion dollars of US and agricultural products. Well, Jonathan,
Speaker 1: as you might guess, I am not going to be
Speaker 1: specific about these details. They're on the table. I think
Speaker 1: your narrative is basically correct. I can't say yes, and
Speaker 1: I can't say no. These are part of the final
Speaker 1: strokes agriculturely agricultural spending by the way, but also opening
Speaker 1: up the ag market so that we are able to
Speaker 1: export a lot of different areas that they had preventice
Speaker 1: in doing so. It's not my place today to reveal
Speaker 1: you know, these um, shall we say secret or you know,
Speaker 1: closely held talks, but I will continue to suggest that
Speaker 1: we are those. Progress has been made, great progress has
Speaker 1: been made, and we'll see how it ends up. It's
Speaker 1: almost around the clock discussions right now. But letty, the
Speaker 1: President did reveal that eight weeks ago, and I'm trying
Speaker 1: to understand whether that is still on the table or not.
Speaker 1: So I'll ask it in vaga terms, perhaps not in
Speaker 1: such specific terms. Has China shown any willingness whatsoever to
Speaker 1: agree to a dollar amount of US agricultural products? Well,
Speaker 1: I sure can't speak for them. And we have not papered,
Speaker 1: you know, we have not codified and papered and translated
Speaker 1: these lengthy documents. So we'll have to wait and see.
Speaker 1: It takes two to tango, so both sides have to agree. Um,
Speaker 1: we're waiting for that, both paperwork and translations, so we
Speaker 1: will see. I might head if I'm not mistaken, Jonathan,
Speaker 1: I don't know whether it was your organization. Somebody reported
Speaker 1: today that China withdrew some barriers to agriculture as a
Speaker 1: good will gesture. I'm not sure on all the d tales,
Speaker 1: but if it's a good will gesture, we appreciate good
Speaker 1: will gestures. They're in the process of way. You think
Speaker 1: returned tree tariffs on some of the imputs off us
Speaker 1: Paul Consoy by domestic companies. That seems to be the
Speaker 1: latest turn of things, Larry, would your message still be
Speaker 1: for the American farmer to go out and buy more land,
Speaker 1: to buy more tractors or would you tell them to wait? Um?
Speaker 1: You know it's funny. I, as a broadcaster and a
Speaker 1: Wall Street economists even before that, used to love to
Speaker 1: make forecasts. I'm kind of, um more cautious now. I
Speaker 1: don't really want to tell the farmers what they should
Speaker 1: and should not do. I'm gonna hold back on that, uh,
Speaker 1: you know, just in case any of them actually followed
Speaker 1: my advice. I I don't want to go there. I'm
Speaker 1: just saying that what I believe the President was inferring
Speaker 1: is that the discussions that we had a month or
Speaker 1: so ago with the top people, you, Hey and so forth.
Speaker 1: Uh certainly had those numbers on the table, and that
Speaker 1: our farm community great patriots that they are. They've taken
Speaker 1: some hits and they've stayed behind us and defending this
Speaker 1: China trade effort. Um. If they get it, then they
Speaker 1: probably will be buying a lot more equipment, and perhaps
Speaker 1: they should buy land. I'm just not good at forecasting
Speaker 1: farm land. I have been Iowa's Jathan. I've covered the primaries,
Speaker 1: and I where the carcasses several times. Iowa nice, it's
Speaker 1: a lovely place. But I'm not going to give them
Speaker 1: any free advice on how they should run their businesses. Okay, Well,
Speaker 1: let's pick up on December fift Investors want to know
Speaker 1: the big one. If there's no Phase one deal by
Speaker 1: December fifteenth, Larry, and we're getting closer and closer to
Speaker 1: that day, what actually happens, what's the next step? Well,
Speaker 1: I wouldn't want to speculate on Matt look Um. On
Speaker 1: the one hand, as sex Terry, Mnusians said, I think yesterday,
Speaker 1: there are no arbitrary deadlines and any of this. On
Speaker 1: the other hand, December is a very important date. Because
Speaker 1: if the trade negotiations or the deal or the agreement
Speaker 1: is not complete, our current law would restore tariffs on
Speaker 1: a number of items, as you probably know, I don't
Speaker 1: know what the exact number is, uh hundred maybe a
Speaker 1: hundred fifty billion. So December is an important date. There
Speaker 1: are no arbitrary deadlines, and we will wait and see
Speaker 1: these of course, our decisions that will be made by
Speaker 1: President Trump, depending on how the talks go between now
Speaker 1: and then, whether we have buttoned down all the buttons,
Speaker 1: and whether it is a satisfactory agreement that is great
Speaker 1: for America. So it's an important date to keep an
Speaker 1: eye on. But I don't want this morning with you.
Speaker 1: I don't want to make any conclusions and anyone of
Speaker 1: a lead anybody. I appreciate that, Larry. So let's just
Speaker 1: talk about process just a little bit. There is the
Speaker 1: December fifty round of tariffs, and then there are the
Speaker 1: October ones that were suspended. With the next move from
Speaker 1: the White House b to look back at the October
Speaker 1: round of tariffs that were suspended or move forward with
Speaker 1: the December fifty tariffs. How should we be thinking about this?
Speaker 1: I didn't want to speculate it's all very hypothetical. I
Speaker 1: was kind of hoping you were going to grill me
Speaker 1: on U S m c A and how I was
Speaker 1: going to work through China one and then get to
Speaker 1: U S m c A last, Larry, So let's finish
Speaker 1: with China just a little bit. It's not it's worth
Speaker 1: a while and it's not speculating though, is it, Larry,
Speaker 1: to try and get an understanding of where the proty is.
Speaker 1: Do we look back to October or is that done with?
Speaker 1: Or do we go forward as the next step? To
Speaker 1: go forward with the December fifteenth round of tariffs, Well, look,
Speaker 1: it's a day at the time, you know, as I said,
Speaker 1: as you noted, we have certain markers in the process.
Speaker 1: I mean, we had an a peck marker, but unfortunately
Speaker 1: all that got canceled a couple of weeks ago, So
Speaker 1: now we have a December marker. As I said, there
Speaker 1: are no arbitrary deadlines. But on the other hand, by
Speaker 1: current agreement and law, the President has suggested tariffs might
Speaker 1: be I say, might be restored on December fifte that's
Speaker 1: the arrangement. These are decisions that are up to the
Speaker 1: Commander in Chief, and he will make those decisions based
Speaker 1: on the available information. How the talks go between now
Speaker 1: and then what's today December four or December five, So
Speaker 1: we got about a week left, a little more than
Speaker 1: a week left, um President She on the other side
Speaker 1: will go through the same process. So one of the
Speaker 1: things I've learned, and you and I have been working
Speaker 1: together on this now for well over year, it very
Speaker 1: hard to make predictions, very hard to make predictions I
Speaker 1: don't expect you to make predictions today. Larry, just a
Speaker 1: little bit of insights of clarity into the discussions that
Speaker 1: you are a part of with the President of the
Speaker 1: United States. We want to understand my audience as well.
Speaker 1: The minimum condition that China needs to meet from the U.
Speaker 1: S side to avoid that December fifteenth from out of tariffs,
Speaker 1: if it's not a deal, what is the minimum condition
Speaker 1: of success, so to speak, to avoid that. I don't
Speaker 1: think that Mr Leightheiser and bastamor Liheiser has ever suggested
Speaker 1: a quote minimum condition. We have a discussion of a
Speaker 1: package that we call Phase one agriculture access, agriculture purchases,
Speaker 1: intellectual property, theft, forced transfer of technology, various tariff and
Speaker 1: non tariff barriers, uh, ownership financial services current see currency manipulation.
Speaker 1: So I probably left stuff out, but that's the package
Speaker 1: that is being discussed. There are big chapters in these
Speaker 1: big documents, as I think you know, so I do
Speaker 1: not want to single one out. There is no certain condition. Uh.
Speaker 1: We will work towards Phase one, and then what is
Speaker 1: left to be done over time would spill over into
Speaker 1: Phase two. I think it was a very sensible approach.
Speaker 1: It reflected a change in President Trump's thinking that he
Speaker 1: was willing to do this in pieces sequentially if you will,
Speaker 1: and Phase two could well be out there, but I
Speaker 1: would not. I would tell you and advise you there
Speaker 1: is no one single condition that would make or break
Speaker 1: the talks. Right now, the talks have been gone gone,
Speaker 1: they've been going on. Many people think perhaps that China
Speaker 1: is still link for the Sember fifth thinks around the tarists.
Speaker 1: To be credible, there needs to be a belief that
Speaker 1: the President of United States will actually go through with it.
Speaker 1: It's on the final one and sixty billion dollars of
Speaker 1: Chinese imports that haven't been hit from tariffs sans yet,
Speaker 1: and they include many many consumer items. As you know, Larry,
Speaker 1: from your understanding does the president that have the appetite
Speaker 1: to follow through on that if the Chinese keeps stalling, well, look,
Speaker 1: the President has proven himself and then there can be
Speaker 1: no doubt that he is a very tough negotiator. He's
Speaker 1: got in his quiver of arrows. He has various tariffs,
Speaker 1: sometimes sanctions, now negotiations. So he has proven to be
Speaker 1: a tough, canny, widely negotiator, and that is his style.
Speaker 1: I believe he wrote a book on the art of
Speaker 1: the deal, and you probably read it. I read it,
Speaker 1: and I don't want to predict what his moves will be.
Speaker 1: He will have the best information that our trade principal
Speaker 1: team gets him, and he will sit down and think
Speaker 1: things through. I do not want to forecast that, but
Speaker 1: I think we've all learned that if he is not
Speaker 1: satisfied with these talks, just as he was not satisfied
Speaker 1: with the China talks last spring and summer, as you
Speaker 1: may recall, then he would not hesitate to increase terrence.
Speaker 1: He's shown that to us. I'm not saying that's going
Speaker 1: to happen. Please don't misunderstand. I'm just saying, in terms
Speaker 1: of your open and the question, he has proven to
Speaker 1: be a very tough and very widely negotiated and Larry,
Speaker 1: what we found is that when the president is face
Speaker 1: to face with someone, that is often when we can
Speaker 1: get a result. When it's the next round of face
Speaker 1: to face talks actually schedule full You mean with me,
Speaker 1: I'm with the United States, I'm with China, with the president,
Speaker 1: with Ambassador Lighthouser, with Secretary Manu Chin. When can we
Speaker 1: get the US delegation together with a Chinese delegation and
Speaker 1: does that need to happen again before we get a
Speaker 1: phase one truce. Well, I don't know the answer to that.
Speaker 1: At the present time. No plans are on the table
Speaker 1: between the two leaders um regarding Secretary Munition and Ambassador Lightheuser.
Speaker 1: So far as I know, they have no plans to travel,
Speaker 1: but but they might travel. You know. Bear in mind
Speaker 1: you that I don't want to emphasize this too much,
Speaker 1: but I want to put it into the mix. If if, if,
Speaker 1: if a discore you have an agreement, the two heads
Speaker 1: of state don't necessarily have to sign it, or at
Speaker 1: least simultaneously in the same room. You could begin the
Speaker 1: signing process at the ministry a real level which I
Speaker 1: think on our side would be Lightheiser and Volution, I
Speaker 1: presume on their side. Vice Premier leu Hey, you could
Speaker 1: do it as a ministerial matter, you could do it
Speaker 1: as a presidential matter, or you can do both. So
Speaker 1: there's options there. I feel I can say to you directly,
Speaker 1: none of those decisions have been made. And to quote
Speaker 1: President Trump, let's get a deal first and then we'll
Speaker 1: figure out how, when, where we all do the signing. So, Larry,
Speaker 1: I understand your people would like us to wrap up
Speaker 1: this interview in if I'm allowed, I'd love to ask
Speaker 1: you just one final question, and it's a delicate one,
Speaker 1: So forgive me for going care. The administration, as you
Speaker 1: point out, and I've agreed with you, has done a
Speaker 1: fantastic job of putting real pressure on China to highlight
Speaker 1: i P theft, to highlight the issues around Falce technology
Speaker 1: transfer as well. You've changed the dialogue around those issues.
Speaker 1: But there there are serious, serious allegations of human rights
Speaker 1: abuses taking place in the country. Why is this a
Speaker 1: country to the United States wants to do a treat
Speaker 1: deal with Well, okay, interstant question, John Um. We have
Speaker 1: made it very clear President Trump, Secretary State Pompeo, Mr. Manutian,
Speaker 1: myself and others. We have made it very clear that
Speaker 1: we America always stand on the side of freedom and democracy.
Speaker 1: We have made that clear. We will that is in
Speaker 1: our bones, that is in America's DNA, that is who
Speaker 1: we are, and we will continue to make that clear.
Speaker 1: That includes not only the Hong Kong story, but as
Speaker 1: you know, disturbances and disruptions on the Chinese mainland with
Speaker 1: various groups as well. Having said that, having said that,
Speaker 1: I don't think those issues are interfering with the trade talks.
Speaker 1: You know, these are complicated relationships. You've got two big powers.
Speaker 1: A lot goes on. There's national security issues which you
Speaker 1: and I could bring up. That's another point. There is
Speaker 1: the human rights, freedom of democracy issues. That's a key point,
Speaker 1: religious freedom particularly, but also political freedom. Uh. Then we
Speaker 1: have the trade freedoms. We're looking to get trade freedoms
Speaker 1: from China. So I don't think at this stage, and
Speaker 1: I'm pretty confident about this, that the difficulties in Hong Kong,
Speaker 1: and again we have come out on the side of
Speaker 1: the freedom fighters, those have not spilled over into the
Speaker 1: trade talks. So the complexity of the issue you can
Speaker 1: still separate one from the other. And I think it's
Speaker 1: fair to say, and I've spoken to the masterd Lightiser
Speaker 1: about this, uh misdimnution, is that really the the difficulties
Speaker 1: in Hong Kong. We signed the Congressional resolution, they had
Speaker 1: their local elections which were a gigantic victory from freedom
Speaker 1: of democracy, but that never really spilled over into the
Speaker 1: trade talks. I think that's where that stands right now.
Speaker 1: But please make no mistake about where America's heart is,
Speaker 1: where our basic soul and DNA are on freedom and democracy,
Speaker 1: and of course where our diplomacy has made the same
Speaker 1: very clear, Larry, I appreciate that authenticity. To wrap up
Speaker 1: this particular interview, Larry, if we don't get to talk
Speaker 1: again before the end of the year, I just wanted
Speaker 1: to take the opportunity to say thank you for your
Speaker 1: regular contributions to to the network into the program, have
Speaker 1: a wonderful Christmas, Larry. If you and I don't get
Speaker 1: to talk again, and saying to you right back at you,
Speaker 1: Johns And it's been my great pleasure, Larry Cudler that
Speaker 1: the National Economic Council director from the White House, guys,
Speaker 1: thank you, Thanks for listening to the Bloomberg Surveillance podcast,
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