WEBVTT - Jobs Day, FTC, and Global Markets (Podcast) 0:00:00.840 --> 0:00:04.000 Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney alongside 0:00:04.040 --> 0:00:06.960 my co host Matt Miller. Every business day we bring 0:00:07.000 --> 0:00:11.560 you interviews from CEOs, market pros, and Bloomberg experts, along 0:00:11.560 --> 0:00:15.600 with essential market moving news. Find the Bloomberg Markets podcast 0:00:15.600 --> 0:00:18.439 called Apple Podcasts or wherever you listen to podcasts, and 0:00:18.480 --> 0:00:20.520 at Bloomberg dot com slash podcast. 0:00:20.960 --> 0:00:23.560 I want to switch gears and bring in our next 0:00:23.560 --> 0:00:26.320 two guests. Michael McKee, who's here in studio. He's the 0:00:26.360 --> 0:00:30.200 international economics and Policy correspondent as we know with Bloomberg News. 0:00:30.400 --> 0:00:33.560 And Alice Andre who's are us interest Rates and FX 0:00:33.600 --> 0:00:37.159 reporter with Bloomberg News, joining us on zoom Mike, I 0:00:37.200 --> 0:00:39.440 have to start with you and get your take from 0:00:39.479 --> 0:00:40.960 this morning's jobs print. 0:00:41.479 --> 0:00:44.440 Well, it's a pretty good outcome. Put it that way. 0:00:44.640 --> 0:00:47.720 It depends on where you sit whether think gets a 0:00:47.760 --> 0:00:49.840 good report or not. For the fan, it's a good 0:00:49.880 --> 0:00:52.720 report in the sense that it validates their view that 0:00:52.800 --> 0:00:56.520 unemployment would have to rise to bring down inflation and 0:00:56.520 --> 0:00:59.960 that their rate increases would put pressure on the labor market. 0:01:00.000 --> 0:01:02.600 And it does show the labor market is loosening up. 0:01:02.800 --> 0:01:05.320 Unemployment goes up to three point eight percent, seven hundred 0:01:05.319 --> 0:01:07.880 and thirty six thousand people join the labor force. Now, 0:01:07.959 --> 0:01:13.000 some of that is probably a senior, a seasonal adjustment issue, 0:01:13.200 --> 0:01:15.560 but it does show people coming back into the labor force, 0:01:15.600 --> 0:01:18.280 which is what the FED has also been looking for. Now, 0:01:18.319 --> 0:01:21.840 if you're a worker who's worried about keeping up with 0:01:21.920 --> 0:01:25.240 inflation with your wages, wages didn't rise as much two 0:01:25.280 --> 0:01:28.240 tens of a percent. Good news on the inflation side. 0:01:28.280 --> 0:01:31.679 Bad news and keeping up with inflation side. And then 0:01:31.720 --> 0:01:35.399 those who didn't get jobs or who lost their jobs 0:01:35.560 --> 0:01:39.280 and the unemployment went up, it basically not good news either. 0:01:39.400 --> 0:01:41.800 So a kind of a mixed report with the numbers, 0:01:41.800 --> 0:01:44.640 but in terms of the overall macro economy and the 0:01:44.680 --> 0:01:46.640 Fed outlook, good news, Alie. 0:01:46.680 --> 0:01:49.040 I want to bring you into this conversation break down 0:01:49.120 --> 0:01:54.040 what we're seeing in the bond market reaction to this report. 0:01:55.200 --> 0:01:57.840 I think that overall the bond market is viewing this 0:01:58.080 --> 0:02:02.000 as a weaker report, which was as expected, but not 0:02:02.080 --> 0:02:05.920 outright weakness. I think that traders are viewing it as 0:02:06.120 --> 0:02:10.400 a moderation accelerating. But that's exactly what the FED wants, 0:02:10.520 --> 0:02:12.560 you know, they want the labor market to come back 0:02:12.600 --> 0:02:16.680 into better balance. And I think that what the bond 0:02:16.720 --> 0:02:20.440 market is saying is that this probably puts the majority 0:02:20.480 --> 0:02:25.600 of the FED participants on hold. And I think that 0:02:26.240 --> 0:02:29.040 it also really doesn't take the final hike off of 0:02:29.120 --> 0:02:31.440 the table. And I think that bond yields are reflecting 0:02:31.480 --> 0:02:32.000 that today. 0:02:32.280 --> 0:02:35.399 Yeah, initially it was at least a ten basis point 0:02:35.480 --> 0:02:38.399 drop in the more policy reactive two year we're back 0:02:38.440 --> 0:02:41.560 to what the down three two basis points right now 0:02:42.000 --> 0:02:45.640 for eighty three. One of the questions I want to ask, 0:02:46.520 --> 0:02:48.680 did I miss the boat on rates putting all my 0:02:48.760 --> 0:02:52.359 money in nice, safe treasuries that a really healthy yield. 0:02:53.160 --> 0:02:53.240 No. 0:02:54.440 --> 0:02:56.640 I think you have some time on that. Like I said, 0:02:56.680 --> 0:02:58.640 I think that people think that the Fed's going to 0:02:58.639 --> 0:03:01.839 be on hold for a little bit, and I mean, 0:03:01.880 --> 0:03:03.840 you know, rates are probably just going to trade a 0:03:03.880 --> 0:03:06.480 bit of a range, and they're definitely going to be 0:03:06.600 --> 0:03:09.000 very data dependent. I mean, that's when we're going to 0:03:09.040 --> 0:03:11.120 see big moves is on big data days. You know, 0:03:11.160 --> 0:03:14.920 probably the next one being CPI, and you know you'll 0:03:14.919 --> 0:03:17.799 have your chance. But I think that I think it's 0:03:17.800 --> 0:03:21.320 pretty clear that the economy is not falling into recession. 0:03:21.400 --> 0:03:23.440 And I think that rates are going to stay high 0:03:23.480 --> 0:03:26.800 for a long time. I think that there's been a 0:03:26.840 --> 0:03:29.920 move in the back, you know, further out in like 0:03:31.080 --> 0:03:33.840 June and May Fed funds, and now they're reflecting that 0:03:33.960 --> 0:03:37.640 the first cut'll come in May instead of June. But 0:03:37.800 --> 0:03:40.320 you know, it was kind of a small move. I 0:03:40.360 --> 0:03:41.840 think that the thing that you really got to keep 0:03:41.840 --> 0:03:44.880 your eye on is the November Fed Funds, and they're 0:03:44.920 --> 0:03:47.440 still pricing a very good chance of another hike coming. 0:03:47.760 --> 0:03:49.640 Yeah, we have in this since it's Friday, we have 0:03:49.680 --> 0:03:52.680 a drinking game in the studio. Every time somebody uses 0:03:52.720 --> 0:03:56.880 the phrase goldilocks, we have another show. Is this goldilocks? 0:03:56.920 --> 0:04:00.720 Michael McKee, goldilocks? John, thank you. 0:04:01.080 --> 0:04:02.640 I want to see you crawl out of here. 0:04:05.040 --> 0:04:05.400 You could. 0:04:05.720 --> 0:04:10.320 That description is being used on this because it basically is, 0:04:11.480 --> 0:04:15.520 as she said, slowing, which is what the Fed wants 0:04:15.560 --> 0:04:19.360 without crashing. I mean, the economy is still growing and 0:04:19.480 --> 0:04:22.200 we're still adding jobs at a pace above the level 0:04:22.279 --> 0:04:27.000 needed to absorb new entrance to the labor force. So yeah, 0:04:27.440 --> 0:04:31.680 things are pretty much in a fairy tale world. 0:04:31.839 --> 0:04:34.320 One thing I'm curious about, Mike, is July had two 0:04:34.320 --> 0:04:37.480 more weekend days than June. How does that affect the 0:04:37.520 --> 0:04:38.200 wage print. 0:04:39.320 --> 0:04:42.760 It doesn't affect the wage print. It affects it can 0:04:42.960 --> 0:04:46.360 affect ours work. But the wages are going to be 0:04:46.400 --> 0:04:49.159 based on what you're being paid in the month, in 0:04:49.200 --> 0:04:51.279 the week that includes the twelfth of the month, the 0:04:51.279 --> 0:04:53.440 pay period that includes the twelfth of the month, which 0:04:53.480 --> 0:04:55.800 is very complicated because if you get paid once a month, 0:04:55.800 --> 0:04:58.159 it's the entire month. If you get paid every two weeks, 0:04:58.760 --> 0:05:02.520 it maybe just you know, you get into part of it. 0:05:02.560 --> 0:05:05.800 And sometimes people aren't included at all if you're a 0:05:05.839 --> 0:05:12.719 freelancer and you get unusual pay periods, which is one 0:05:12.720 --> 0:05:15.040 reason we did not see the SAG after a strike 0:05:15.080 --> 0:05:18.039 show up until this month because some of those people 0:05:18.160 --> 0:05:19.680 aren't paid on a regular basis. 0:05:19.880 --> 0:05:23.039 Also, no coming into this, you wrote a piece on 0:05:23.120 --> 0:05:25.159 the team talking about how bonds were at risk for 0:05:25.279 --> 0:05:28.880 rally based on what potentially could happen with this August data. 0:05:28.920 --> 0:05:31.799 How do you viewed the direction of the bond market 0:05:31.839 --> 0:05:34.320 and particularly yields and the ten year moving forward in 0:05:34.320 --> 0:05:36.240 the next couple of weeks To your point, because we 0:05:36.279 --> 0:05:40.400 do have that September CPI print on the thirteenth. 0:05:40.640 --> 0:05:43.920 Yeah, so, I mean it was a really pretty easy 0:05:43.920 --> 0:05:45.800 setup for the bond market today. I mean, all the 0:05:45.880 --> 0:05:48.440 metrics showed most of them. I think there was two 0:05:48.440 --> 0:05:51.520 indicators that was one of the S and P globals 0:05:51.560 --> 0:05:56.400 and claims was really the only positive thing for this 0:05:56.480 --> 0:05:59.400 payroll report. All the other ones were negative. All the 0:05:59.400 --> 0:06:01.880 sad reports, saw the isms, they were all pointing to 0:06:02.080 --> 0:06:05.560 a weaker report. And so the setup for the bomb 0:06:05.600 --> 0:06:07.960 market was pretty easy. I mean, everybody knew that it 0:06:08.000 --> 0:06:09.520 was going to rally and then we were going to 0:06:09.520 --> 0:06:13.200 sell off right away. I'm sorry that, yeah, that we 0:06:13.200 --> 0:06:15.520 were going to sell off right after that. And I 0:06:15.560 --> 0:06:17.279 think that part of it is a function of what 0:06:17.320 --> 0:06:19.680 we're waiting for on Monday, and we're looking for a 0:06:19.720 --> 0:06:21.839 lot of corporate supply to come into the bomb market, 0:06:21.880 --> 0:06:25.640 and so bond traders are just preparing for that. They're 0:06:25.800 --> 0:06:27.760 either selling because they're going to take down some of 0:06:27.800 --> 0:06:31.479 this corporate supply on Tuesday, or you're seeing issuers coming 0:06:31.560 --> 0:06:34.240 in in ratelacking. So that's part of this pullback today 0:06:35.320 --> 0:06:39.600 in prices and yields going higher as it as it 0:06:39.640 --> 0:06:42.000 moves forward. I think, like I said, we're just going 0:06:42.040 --> 0:06:45.760 to trade the range. I think that they're going to 0:06:45.920 --> 0:06:47.880 you know, bond traders are going to part and parcel 0:06:48.040 --> 0:06:50.680 every single piece of data. And one of the pieces 0:06:50.720 --> 0:06:54.920 of data that I thought was pretty interesting was yesterday's 0:06:54.960 --> 0:06:57.600 Chicago Purchasing Manager's report, and they really don't give you 0:06:57.640 --> 0:07:01.440 a whole lot of information in the report, but what 0:07:01.480 --> 0:07:04.240 you can glean from it was that new orders and 0:07:04.279 --> 0:07:11.120 production moved from contraction to expansion. And also employment, I 0:07:11.160 --> 0:07:13.440 had heard had a very big uptick, and in fact 0:07:13.560 --> 0:07:17.520 it did slow. It did it contracted, but at a 0:07:17.560 --> 0:07:20.520 slower rate. And so to me, that just really kind 0:07:20.520 --> 0:07:26.160 of gives the same picture of one that the economy 0:07:26.640 --> 0:07:29.080 is showing some glimmers of starting to pick up, which 0:07:29.120 --> 0:07:31.440 is what we've been anticipating, that we're going to see 0:07:31.440 --> 0:07:34.280 a big pickup starting in the second half, and that 0:07:34.280 --> 0:07:39.200 that's why people are hoarding their labor and they're just 0:07:39.320 --> 0:07:42.280 using layups as a complete last resort. The other thing 0:07:42.280 --> 0:07:47.040 that I wanted to say is that on Monday, the 0:07:47.120 --> 0:07:50.280 Dallas SPED Manufacturing Report talked about the fact that they're 0:07:50.320 --> 0:07:53.840 going to most participants think that they're going to raise 0:07:54.040 --> 0:07:57.320 wages at a rate of five percent this year, and 0:07:57.400 --> 0:08:01.160 so that's far and above inflation and above what we're 0:08:01.200 --> 0:08:04.240 seeing in average hourly earnings, and so you could get 0:08:04.280 --> 0:08:08.040 an uptick in inflation based on wages. Again, and most 0:08:08.080 --> 0:08:10.760 of the FED surveys had talked about this year, even 0:08:11.760 --> 0:08:14.240 recent ones, that they're just going to have to continue 0:08:14.280 --> 0:08:17.760 to raise wages, you know, first of all to keep 0:08:17.840 --> 0:08:21.080 up with the demand that's expected, but also because they 0:08:21.200 --> 0:08:24.200 just they can't afford to let go of their labor force, 0:08:24.200 --> 0:08:25.840 so they're just going to have to raise wage. 0:08:25.960 --> 0:08:26.120 Right. 0:08:26.680 --> 0:08:28.840 The other thing was is on that work week. I 0:08:28.880 --> 0:08:32.160 thought that that was pretty consistent with what we've seen 0:08:32.200 --> 0:08:36.720 from some of the FED surveys, that the uptick in 0:08:36.800 --> 0:08:40.360 the work week was consistent with you know, you put 0:08:40.360 --> 0:08:44.040 your workers to work doing other things on the factory 0:08:44.080 --> 0:08:47.800 floor or in your shop to keep them busy. 0:08:48.080 --> 0:08:51.319 Right, Mike McKay final thought in twenty seconds. 0:08:51.840 --> 0:08:54.319 Next week, number of FED speakers, Yeah, we have a 0:08:54.400 --> 0:08:55.280 number of five speakers. 0:08:55.320 --> 0:08:57.560 We have John Williams, the New York FED President, coming 0:08:57.600 --> 0:09:00.240 in here to Bloomberg and we'll get their views. But 0:09:00.280 --> 0:09:02.280 I think this kind of unless we get on the 0:09:02.320 --> 0:09:07.439 thirteenth of September a really surprising CPI report, is probably locks. 0:09:07.200 --> 0:09:09.840 In a pause. The FED does not have to raise. 0:09:09.880 --> 0:09:11.560 It doesn't make the case for raising at this. 0:09:11.600 --> 0:09:15.360 Point, right, So John Williams next week. Former Fed official 0:09:15.400 --> 0:09:17.800 Jim Bullard also on the calendar, as well as Susan Collins, 0:09:17.800 --> 0:09:22.160 So Michael McKee, International Economics and Policy correspondent with Bloomberg News, 0:09:22.280 --> 0:09:24.840 and Alice andre Us, Interest rate in FX reporter with 0:09:24.840 --> 0:09:25.800 Bloomberg News. 0:09:26.800 --> 0:09:30.640 You're listening to the tenth Can't Live program Bloomberg Markets 0:09:30.679 --> 0:09:33.800 weekdays at ten am Eastern on Bloomberg dot Com, the 0:09:33.880 --> 0:09:37.000 iHeartRadio app and the Bloomberg Business App, or listen on 0:09:37.080 --> 0:09:39.040 demand wherever you get your podcasts. 0:09:39.840 --> 0:09:43.040 Continuing the fund. So I'm glad you gave us an 0:09:43.080 --> 0:09:46.120 update obviously on what's going on with those bond yields, 0:09:46.160 --> 0:09:47.960 especially when you're looking at the ten year as well 0:09:47.960 --> 0:09:50.080 as the two year. But who better to break us 0:09:50.320 --> 0:09:53.520 down when we're looking at what's happening in the fixed 0:09:53.559 --> 0:09:56.880 income market than Ben Emmon's head of fixed income at 0:09:56.920 --> 0:09:59.120 New Edge Wealth, who I've known for a long time, 0:09:59.200 --> 0:10:01.200 joining us to talk to It is also about how 0:10:01.240 --> 0:10:03.839 markets are responding to this latest jobs report, but it's 0:10:03.840 --> 0:10:06.680 always a pleasure speaking with you. Let's start off with 0:10:06.720 --> 0:10:09.480 your take on this morning's jobs report and your sort 0:10:09.480 --> 0:10:12.160 of view on how this could impact the fixed income 0:10:12.200 --> 0:10:15.160 market ahead of the feed decision on September twentieth. 0:10:16.760 --> 0:10:20.280 I just hi, John, Happy, happy, happy labor jobs day. 0:10:20.200 --> 0:10:24.520 Right, thanks for joining us on a quieter day here heading. 0:10:24.720 --> 0:10:27.520 Day we can. Yeah, and I'm all casual here. I'm 0:10:27.559 --> 0:10:31.560 seeing myself streaming live on YouTube. You know, anguel shared 0:10:31.679 --> 0:10:35.240 in California. But you know, let's do it. So I 0:10:35.640 --> 0:10:38.240 kind of echo Mike McKee's points, like, you know, this 0:10:38.400 --> 0:10:41.280 is a job support where if you're seeing that many 0:10:41.320 --> 0:10:43.560 people getting pulled into the labor force, which is like 0:10:43.800 --> 0:10:46.640 seven hundred and thirty thousand or so, it tells you 0:10:46.720 --> 0:10:49.959 that the that the labor market is spokeled in demand 0:10:50.080 --> 0:10:52.319 from people wanting to be to get back to work 0:10:52.559 --> 0:10:55.680 to try to make more money. And that's good for 0:10:55.760 --> 0:10:59.760 the economy, right, that's productivity. That's actually a very positive 0:11:00.080 --> 0:11:03.200 and so it is an interesting reaction to bomb market. 0:11:03.240 --> 0:11:05.560 How the number came out, it was sort of in 0:11:05.640 --> 0:11:08.720 line the headline and then people go through the details 0:11:08.760 --> 0:11:11.280 to see like, yeah, there's loosing of the labor market here. 0:11:11.280 --> 0:11:13.360 That's what the Fed wants. So the yields on the 0:11:13.400 --> 0:11:16.880 short end two year go down. But then as we 0:11:16.960 --> 0:11:19.520 go on a little bit in the session, you see 0:11:19.520 --> 0:11:21.400 long term indistry started a rise a little bit and 0:11:21.400 --> 0:11:23.520 it said ICEM date that just came out, which was 0:11:23.559 --> 0:11:25.959 a bit stronger than expected. But the employment component in 0:11:26.000 --> 0:11:28.960 there too better and expected as well as prices paid. 0:11:29.360 --> 0:11:31.719 You see this shift in the YEL curve with long 0:11:31.840 --> 0:11:34.440 rates going up, and I think you take the payroll 0:11:34.440 --> 0:11:38.079 support and ICM together, it tells you like, there's not 0:11:38.200 --> 0:11:41.560 a weakening economy. This is just more people coming into 0:11:41.640 --> 0:11:44.439 labor force, so loose a labor market. But the FED 0:11:44.559 --> 0:11:46.959 is looking for. On the other hand, you know the 0:11:47.040 --> 0:11:50.640 soft landing no recession scenario stays in place, and this 0:11:50.760 --> 0:11:53.400 is why you're getting this steepening of the yel curve 0:11:54.040 --> 0:11:55.839 on both the shorter end of the yl curve and 0:11:55.920 --> 0:11:58.880 the longer hand. So that's I think very goldilocks moment. 0:11:59.040 --> 0:12:03.160 Are called Billy And you know about our drinking game 0:12:03.240 --> 0:12:08.400 here this you're guests to say Goldie lockskepally as far 0:12:08.440 --> 0:12:13.520 as inflationary components, how much bargaining power to workers have 0:12:13.840 --> 0:12:14.960 over employers? 0:12:16.760 --> 0:12:20.319 Yeah, they still do, John, because I think that the 0:12:20.520 --> 0:12:23.719 the weaighte trackers from the Atlanta fats still show a 0:12:23.800 --> 0:12:26.959 big difference between those who can quit their job and 0:12:27.080 --> 0:12:29.840 those who stay in the job, for example, and meaning 0:12:29.880 --> 0:12:32.079 people quit their job to try to find, you know, 0:12:32.240 --> 0:12:36.880 better paying jobs. That's still a difference there. You also 0:12:36.920 --> 0:12:40.160 could think of that the job openings ratio to employment 0:12:40.240 --> 0:12:43.839 that's still elevated to pre pandemic also indicates right that 0:12:44.320 --> 0:12:47.959 you know, companies are still actively looking for positions to 0:12:48.040 --> 0:12:51.560 be filled, but all of those metrics have moderated from 0:12:51.600 --> 0:12:55.199 the real elevated level. So these strikes that we're talking about, 0:12:55.280 --> 0:12:58.080 and these these weight settlements that were going through currently, 0:12:58.600 --> 0:13:02.360 it does show that labor is really having control here. 0:13:03.120 --> 0:13:07.559 Nowaw strike actually happens, it would be a negative for 0:13:07.679 --> 0:13:10.599 the economy. So it just looked like they want to 0:13:10.640 --> 0:13:13.440 try to get bargaining to a better deal. I would 0:13:13.520 --> 0:13:15.599 point that though, that this, if this leads to a 0:13:15.679 --> 0:13:18.360 real good deal for the workers, there's a little bit 0:13:18.360 --> 0:13:20.840 of that seventies idea of better than bargaining. Right, one 0:13:20.960 --> 0:13:23.439 union wins a good agreement, other unions to try to 0:13:23.480 --> 0:13:25.640 do the same thing. So I think we'll say a 0:13:25.640 --> 0:13:27.880 little bit in that dynamic one thing. 0:13:27.960 --> 0:13:31.280 I've been thinking a lot about ben is just the 0:13:31.400 --> 0:13:33.319 ten year in relation to or the S and P 0:13:33.480 --> 0:13:39.160 five hundred is trading. So say, earlier in August, we 0:13:39.240 --> 0:13:41.840 did see the ten year peak out around four thirty three. 0:13:41.920 --> 0:13:43.839 If you looked at where it peaked out back in 0:13:44.000 --> 0:13:45.880 last autumn, it was around four to twenty two. But 0:13:45.960 --> 0:13:48.160 at that time the S and P five hundred was 0:13:48.160 --> 0:13:52.600 trading around thirty five hundred. Now it's one thousand points higher. 0:13:52.920 --> 0:13:54.040 What's the difference. 0:13:56.040 --> 0:13:59.040 I think the difference one is just the economy in itself, 0:13:59.559 --> 0:14:02.560 just that at that moment in time we had much 0:14:02.640 --> 0:14:06.959 higher inflation and not growing as fast as you currently. 0:14:07.080 --> 0:14:09.520 This year turned out to be an economy that's just 0:14:09.679 --> 0:14:12.240 much better than last year, even though last years still 0:14:12.280 --> 0:14:14.920 looked like I guess if you came in in early 0:14:14.960 --> 0:14:18.520 twenty twenty two is a really boom pandemic economy. But 0:14:18.640 --> 0:14:20.800 in fact, actually we have a batter economy this year. 0:14:20.920 --> 0:14:24.440 So I think that explains the thousand points differences. In 0:14:24.520 --> 0:14:27.120 addition to that, we obviously have earnings that have not 0:14:27.880 --> 0:14:30.680 gone to do any recession. If anything, they actually showed 0:14:30.760 --> 0:14:33.680 some bottoming in that fall period and they've actually moved 0:14:33.720 --> 0:14:37.120 up higher. And the projection is still higher. That makes 0:14:37.120 --> 0:14:40.520 it also the difference. Lastly, well, the thing you're topping 0:14:40.520 --> 0:14:42.920 out of at full point three and change, just like 0:14:43.040 --> 0:14:45.400 we had this month. I think it does tell you 0:14:45.480 --> 0:14:48.880 a story about this inflation being very successful by the 0:14:48.960 --> 0:14:52.160 Federal Reserve, both on inflation and now also showing up 0:14:52.200 --> 0:14:55.560 in the labor data. I think that too expresses itself 0:14:55.600 --> 0:14:59.280 into this higher stock market, showing that one we can 0:14:59.400 --> 0:15:03.160 keep pricing, we don't have wages really spiring out of control. 0:15:03.240 --> 0:15:05.880 We certainly don't have any recession here term given the 0:15:05.960 --> 0:15:08.000 strength of the labor market. So I think that just 0:15:08.120 --> 0:15:11.560 leads you to this conclusion that you're having a stock 0:15:11.640 --> 0:15:13.480 market being better because of a better economy. 0:15:13.800 --> 0:15:16.200 So what's the level on the tenure that you're watching 0:15:16.280 --> 0:15:19.400 to where other asset classes would need to reprice, including 0:15:19.440 --> 0:15:21.960 the stock market depending on where it would be headed, say, 0:15:22.280 --> 0:15:23.280 would it be four to five? 0:15:25.040 --> 0:15:27.680 Yeah, it could be. You know, it's kind of signing 0:15:27.960 --> 0:15:30.080 boss Bill grows like it was the other day on TV, 0:15:30.200 --> 0:15:32.920 and kind of agree with him, like, there's still that 0:15:33.080 --> 0:15:35.400 risk at it. You have four point five as a 0:15:35.520 --> 0:15:38.120 level where if you do break that or test set 0:15:38.800 --> 0:15:43.200 that we're getting a different situation because there's another aspect 0:15:43.280 --> 0:15:46.400 here happening. That is that the economy is strong because 0:15:46.640 --> 0:15:49.440 we were investing in the economy with infrastructure out of 0:15:49.520 --> 0:15:53.480 projects and just business spending itself. But we're also borrowing 0:15:53.520 --> 0:15:56.480 there for a lot of money, right, and that will 0:15:56.560 --> 0:16:00.240 continue that could actually keep rates at least higher or 0:16:00.360 --> 0:16:02.960 potentially test that level of four and a half, So 0:16:03.040 --> 0:16:05.640 that we do want to watch. Despite a little bit 0:16:05.640 --> 0:16:09.040 of a rally down now from the last high, you know, 0:16:09.320 --> 0:16:12.240 just seeing it this morning, the ism data being just 0:16:12.320 --> 0:16:15.480 surprisingly a bit stronger, Price's Bay component goes up a 0:16:15.520 --> 0:16:18.080 little bit, and then you yields immediately moves up from 0:16:18.160 --> 0:16:21.320 four point oh seven to four point fifteen. That you know, 0:16:21.440 --> 0:16:23.560 that seems like an inter they move, but it's it 0:16:23.680 --> 0:16:26.640 does signify this idea of yeah, is in the economy 0:16:26.680 --> 0:16:30.240 that stays strong, be wary of how inflation could return 0:16:30.320 --> 0:16:32.760 and higher again if it stays that strong. 0:16:33.160 --> 0:16:38.800 So September off the table. What's in play at this 0:16:38.920 --> 0:16:40.320 point before the Federal Reserve? 0:16:41.600 --> 0:16:45.160 I think markets John F f calculated that the Fed 0:16:45.280 --> 0:16:48.760 needs a bit more time to assess this economy. Therefore, 0:16:48.920 --> 0:16:51.920 another meeting could be skipped, even though none of the 0:16:52.000 --> 0:16:54.760 FAT members actually has indicated any of that. By the 0:16:54.800 --> 0:16:57.080 way it's it's it still seems to be much of 0:16:57.120 --> 0:17:01.040 a live meeting. Therefore, all the data that we're getting 0:17:01.120 --> 0:17:04.159 right up to that meeting will count in that decision. 0:17:05.440 --> 0:17:08.639 But it seems that as we had several data points 0:17:08.680 --> 0:17:12.560 a bit soft on labor and inflation trending sort of sideways, 0:17:13.160 --> 0:17:16.040 that there's a possibility that the FAT said, okay, we 0:17:16.160 --> 0:17:18.600 can skip another meeting to assess a longer period of 0:17:18.760 --> 0:17:22.280 data and then make our next decision. That seems right, 0:17:22.840 --> 0:17:24.920 But we got to keep in mind that what's happening 0:17:24.960 --> 0:17:27.399 in energy markets and what's happening also with China in 0:17:27.520 --> 0:17:29.919 terms of it's all its efforts to try to boost 0:17:29.920 --> 0:17:33.439 its economy in the third fourth quarter, and on our 0:17:33.520 --> 0:17:36.840 third quarter, GDP is actually kicking off better. And now 0:17:36.960 --> 0:17:39.000 that I think we have to keep in mind that 0:17:39.080 --> 0:17:42.320 the FAT may well use the settement meeting to hike 0:17:42.440 --> 0:17:42.880 after all. 0:17:43.960 --> 0:17:46.159 So with the backdrop of all this, how are you 0:17:46.320 --> 0:17:49.280 advising clients to position in the fixed income market? 0:17:51.119 --> 0:17:53.639 So most of this year just we have been a 0:17:53.760 --> 0:17:56.480 shorter duration in the index, and that proved to be 0:17:56.600 --> 0:18:00.399 the right way because I judged that base upon the 0:18:00.520 --> 0:18:04.080 economy's resilience and strength. But then you want to what 0:18:04.240 --> 0:18:06.920 I say, follow the you curve. So if it's still 0:18:06.960 --> 0:18:09.879 an inverted you curve, if we continue to see this 0:18:10.000 --> 0:18:13.359 sort of grinding loosening of the mark of the labor 0:18:13.440 --> 0:18:17.600 market and this this inflation on inflation front go on, 0:18:17.960 --> 0:18:20.600 I continue, I would think that the UK would start 0:18:20.680 --> 0:18:23.840 to normalize. And so the real good position to be 0:18:23.960 --> 0:18:27.080 in is that intermediate part of the you curve. And 0:18:27.160 --> 0:18:29.840 then ultimately, if we do get up in a situation 0:18:29.960 --> 0:18:33.040 where employment rate is at four percent and inflation is 0:18:33.040 --> 0:18:35.440 a little lower, that you can extenduration further. So I 0:18:35.520 --> 0:18:37.359 think the intermediate part of you curve that that's what 0:18:37.440 --> 0:18:38.639 we've been advising to clients. 0:18:38.720 --> 0:18:40.960 Hey, Bin, we only have about thirty seconds left. What's 0:18:40.960 --> 0:18:42.840 the top question you hear from your clients? 0:18:44.720 --> 0:18:46.800 Well, how high can rates go and how high do 0:18:46.880 --> 0:18:49.720 they stay? And that's definitely on the top of mind. 0:18:49.960 --> 0:18:52.320 You know that, and I think that will continue to 0:18:52.400 --> 0:18:54.800 be a debate. You know, we don't know how high 0:18:54.840 --> 0:18:58.560 it will actually go from here, and I think that's 0:18:58.600 --> 0:19:00.760 an uncertainty going into twenty twenty four. 0:19:01.359 --> 0:19:03.800 Well, Ben, thanks so much for joining us. Ben Emans 0:19:04.200 --> 0:19:07.199 head of fixed income at New Edge Wealth, joining us 0:19:07.320 --> 0:19:09.880 on a slower trading day a little bit. 0:19:09.960 --> 0:19:13.000 Here, you're listening to the tape Can's our live program, 0:19:13.119 --> 0:19:17.040 Bloomberg Markets weekdays at ten am Eastern on Bloomberg Radio, 0:19:17.240 --> 0:19:19.920 the tune in app, Bloomberg dot Com, and the Bloomberg 0:19:20.000 --> 0:19:23.040 Business App. You can also listen live on Amazon Alexa 0:19:23.160 --> 0:19:26.440 from our flagship New York station, Just say Alexa Play 0:19:26.560 --> 0:19:27.840 Bloomberg eleven thirty. 0:19:29.960 --> 0:19:32.359 I want to get straight to our next guest, I mean, John, 0:19:32.520 --> 0:19:35.000 You know, we've been talking about the jobs report all morning, 0:19:35.040 --> 0:19:37.720 but I want to bring in Julia Pollock, who's joining 0:19:37.800 --> 0:19:40.160 us on zoom. She's the chief US economist at ZIP 0:19:40.240 --> 0:19:42.920 Recruiter who's going to break down some of these job numbers. 0:19:42.960 --> 0:19:44.800 So we've gotten the sort of the service level take 0:19:44.880 --> 0:19:47.560 here from the macro side of things, but I wanted 0:19:47.600 --> 0:19:49.320 to get more of your thoughts when you're looking from 0:19:49.359 --> 0:19:53.640 an industry level in the job market, what particular corners 0:19:53.720 --> 0:19:55.920 are holding up better than others at this point. 0:19:58.480 --> 0:20:01.439 Sure, so we've seen the job makes sort of shift 0:20:01.640 --> 0:20:06.720 back to normal, with healthcare and professional business services leading 0:20:06.800 --> 0:20:10.320 the way. This is an interesting report because it really 0:20:10.520 --> 0:20:14.879 shows you very clearly what's happening in certain industries. 0:20:15.520 --> 0:20:16.080 We saw. 0:20:17.480 --> 0:20:20.640 Truck transportation lose more than thirty six thousand jobs. That's 0:20:20.760 --> 0:20:25.600 largely results of yellow freight, that that business's closure. We 0:20:25.840 --> 0:20:28.879 also see signs of the Hollywood strike in this report, 0:20:28.960 --> 0:20:32.080 with more than sixteen thousand jobs lost in the movie industry. 0:20:33.040 --> 0:20:36.120 So you know, you really get a very granular look 0:20:36.160 --> 0:20:39.239 in this report at how differently things are playing out 0:20:39.240 --> 0:20:40.040 in different industries. 0:20:40.359 --> 0:20:42.440 Okay, so what does this mean for the panther A 0:20:42.480 --> 0:20:45.000 head for the federal reservist as far as the indust rates. 0:20:46.840 --> 0:20:48.719 So you know, I would liken this report to an 0:20:48.760 --> 0:20:53.239 aircraft sort of cruising at the perfect cruising altitude. If 0:20:53.280 --> 0:20:54.400 a plane goes too high. 0:20:54.600 --> 0:20:57.320 You know, got you know when you say goldielocks, we 0:20:57.840 --> 0:20:58.840 that's our drinking game. 0:20:59.040 --> 0:21:01.040 So every time I guess, so we're keeping a talent. 0:21:03.359 --> 0:21:04.760 That's a new metaphor. I like that one. 0:21:04.960 --> 0:21:06.200 Here's a new one exactly. 0:21:07.640 --> 0:21:07.840 Yeah. 0:21:08.560 --> 0:21:12.600 I was worried that perhaps the long and variable lag 0:21:12.640 --> 0:21:16.040 of monetary policy would would start to squeeze too much 0:21:16.720 --> 0:21:21.440 air out of the room and choke growth. And it 0:21:21.560 --> 0:21:24.800 doesn't appear that that's happening yet. This slave market appears 0:21:24.880 --> 0:21:30.040 to be running at a sustainable, solid pace that is 0:21:30.400 --> 0:21:33.080 not going to fuel inflation, but that is going to 0:21:33.160 --> 0:21:35.040 continue creating opportunity for workers. 0:21:35.280 --> 0:21:37.320 We did see earlier this week, we also had, as 0:21:37.400 --> 0:21:39.280 you know, the Jolt stata that came out that did 0:21:39.320 --> 0:21:41.480 show that US job openings did decline to the lowest 0:21:41.560 --> 0:21:44.720 level since early twenty twenty one. What are you sing 0:21:44.800 --> 0:21:46.639 when it comes to some of the quit rates. 0:21:48.040 --> 0:21:52.200 Yeah, So this report suggests that FED chair Waller was 0:21:52.320 --> 0:21:55.240 right that high interest rates would slow the labor market, 0:21:55.640 --> 0:21:58.320 but because there was so much excess demand, that slowing 0:21:58.359 --> 0:22:01.560 would come in the form of fall job openings, not 0:22:01.960 --> 0:22:06.280 of falling employment. And that's still what we're seeing. The 0:22:06.359 --> 0:22:08.560 labor market does appear to have come pretty much all 0:22:08.600 --> 0:22:10.320 the way back to normal when you look at just 0:22:10.400 --> 0:22:13.800 sort of the labor market dynamics, the quits rate is 0:22:13.880 --> 0:22:16.520 all the way back to normal. Online job postings on 0:22:16.640 --> 0:22:19.439 zib Regruter are all the way back to normal. Jalt's 0:22:19.480 --> 0:22:21.600 openings are still high, but they lag a little bit 0:22:21.680 --> 0:22:24.359 and they may also be a little inflated for a 0:22:24.440 --> 0:22:25.080 number of reasons. 0:22:25.480 --> 0:22:28.560 Do you see evidence there of what do we call 0:22:28.640 --> 0:22:32.760 it labor hoarding where especially small businesses that had such 0:22:32.800 --> 0:22:37.000 a difficult time at least according to the NFIB statistics, 0:22:37.800 --> 0:22:41.200 finding qualified workers. They just hanging on to the people 0:22:41.280 --> 0:22:42.080 that they have right now. 0:22:43.400 --> 0:22:47.639 You know, there are a few industries, very unique, peculiar industries, 0:22:47.960 --> 0:22:53.080 where employers are hoarding labor that is relatively idle. The 0:22:53.200 --> 0:22:57.520 examples I could give are things like consulting companies your 0:22:57.640 --> 0:23:02.400 Baines and McKenzie's. With the tech industry entering this year 0:23:02.560 --> 0:23:08.520 of efficiency, tech companies are not paying for management consultants 0:23:08.600 --> 0:23:11.840 to come in and run all kinds of projects for them, 0:23:12.200 --> 0:23:14.400 and as a result, you have all these Ivy League 0:23:14.560 --> 0:23:19.000 educated consultants sitting there watching Netflix with very very few 0:23:19.040 --> 0:23:23.720 projects to work on. That's a rare case in normal 0:23:24.119 --> 0:23:27.720 industries across America, when workers are idle, they get furloughed 0:23:27.760 --> 0:23:30.679 or laid off. That's not happening in some of these 0:23:30.880 --> 0:23:35.359 organizations because they worry about the long term impacts. You know, 0:23:35.400 --> 0:23:37.159 you don't want to lay off a bunch of Harvard 0:23:37.200 --> 0:23:39.520 graduates of who are going to be future Titans of 0:23:39.520 --> 0:23:42.040 the universe and then shoot yourself on the foot come 0:23:42.280 --> 0:23:45.520 the next recruiting season. But that's a very unique situation 0:23:46.160 --> 0:23:48.040 in most of the country. I would say the country 0:23:48.119 --> 0:23:51.640 is still understaffed. Go to a restaurant, go to an airport, 0:23:52.280 --> 0:23:55.520 you'll see lots of check in counters and very few 0:23:57.200 --> 0:24:02.320 check in associates and so long weights, low customer satisfaction. 0:24:02.680 --> 0:24:05.240 Those are still big problems in the economy. And for 0:24:05.400 --> 0:24:07.960 the most part, employment levels are below what would be 0:24:08.400 --> 0:24:10.680 predicted by spending levels and activity levels. 0:24:10.800 --> 0:24:13.840 What are you seeing when it comes to temporary employment? 0:24:15.800 --> 0:24:18.600 Very interesting. So we've seen a very large drop over 0:24:18.640 --> 0:24:21.600 the past couple of months, since since early twenty twenty 0:24:21.680 --> 0:24:24.320 two in the number of temporary health services employees. Over 0:24:24.359 --> 0:24:28.080 two hundred thousand of those jobs have been lost, and 0:24:28.800 --> 0:24:32.000 that typically is a signal of a recession. It's caused 0:24:32.440 --> 0:24:36.200 many of us that are leading economic indexes to suggest 0:24:36.280 --> 0:24:38.520 that we're going to we're in for a big downturn. 0:24:39.040 --> 0:24:42.479 So how much we are potential lag would that signal? 0:24:42.800 --> 0:24:45.560 As far as looking ahead to that, like, how far 0:24:45.600 --> 0:24:47.560 ahead would that signal potential recession? 0:24:48.240 --> 0:24:51.119 Usually it's only about three to four months ahead. But 0:24:51.200 --> 0:24:53.600 we've been seeing this indicator decline now for a year 0:24:53.600 --> 0:24:56.800 and a half, and I would argue that this time 0:24:56.960 --> 0:24:59.560 is different. The decline is a return to normal. 0:25:00.119 --> 0:25:01.720 It is a good because of the pandemic. 0:25:02.640 --> 0:25:05.919 Yes, so during the pandemic, companies were so short staffed 0:25:05.960 --> 0:25:08.840 that they were forced to rely excessively on overtime hours 0:25:08.880 --> 0:25:11.600 and external agency staff. Now, as they build up their 0:25:11.640 --> 0:25:14.240 own internal staff, they no longer need to rely so 0:25:14.280 --> 0:25:15.720 heavily on external agencies. 0:25:16.000 --> 0:25:19.719 Using the ZIP recruiter data, can I tell my college 0:25:19.760 --> 0:25:23.200 graduates where to what industries to look in? Where the 0:25:23.520 --> 0:25:27.040 biggest self? What do you get when you're a philosophy major? 0:25:27.880 --> 0:25:29.720 What are they paying philosophers these days? 0:25:31.280 --> 0:25:31.399 Right? 0:25:31.520 --> 0:25:35.280 So there are big, big differences across college majors. We 0:25:35.359 --> 0:25:37.840 have a college grad report that discusses these in some 0:25:38.000 --> 0:25:41.680 detail on our website. It is those stem fields that 0:25:41.760 --> 0:25:46.600 are still getting graduates the biggest paychecks, computer science and 0:25:46.680 --> 0:25:53.640 all the healthcare fields. Healthcare is showing unstoppable demand for workers. 0:25:54.160 --> 0:25:58.200 There are huge staffing shortages and many different occupations there. 0:26:00.000 --> 0:26:03.520 Physicians are retiring in huge numbers. We expect by the 0:26:03.600 --> 0:26:05.879 end of this decade that forty percent will be over 0:26:05.880 --> 0:26:10.680 the age of sixty five, and that's creating huge opportunity 0:26:11.000 --> 0:26:13.800 all the way down. So nurses are moving up into 0:26:13.840 --> 0:26:19.240 becoming physician assistants and nurse practitioners. Hospitals are having to 0:26:19.280 --> 0:26:22.639 pull out all the stops to retain nurses. They're increasingly 0:26:22.760 --> 0:26:27.000 offering training programs for CNAs and less educated workers to 0:26:27.119 --> 0:26:28.040 enter those kinds of roles. 0:26:28.160 --> 0:26:30.880 Julia, we'll leave about twenty seconds left. What's the top 0:26:30.960 --> 0:26:33.080 concern that employers have when you speak to them. 0:26:34.359 --> 0:26:36.960 They are still worried that there could be a downturn ahead. 0:26:37.080 --> 0:26:39.159 They're worried that the US consumer will be hit by 0:26:39.200 --> 0:26:41.440 these high interest rates on credit cards and auto loans, 0:26:41.680 --> 0:26:44.520 and they worry about the student loan debt resumption. Just 0:26:44.600 --> 0:26:45.680 around the corner, all. 0:26:45.640 --> 0:26:49.240 Right, Julia Pollock, chief US economists at ZIP Recruiter, joining 0:26:49.320 --> 0:26:51.919 us to break down the latest jobs numbers. 0:26:52.880 --> 0:26:56.720 You're listening to the Team Can't Live program Bloomberg Markets 0:26:56.760 --> 0:26:58.600 weekdays at ten am Eastern. 0:26:58.400 --> 0:26:59.520 On Bloomberg dot Com. 0:27:00.000 --> 0:27:02.360 I heard radio app and the Low Park Business app, 0:27:02.600 --> 0:27:05.040 or listen on demand wherever you get your podcast. 0:27:07.040 --> 0:27:11.600 So this morning's jobs report seeing employers adding one hundred 0:27:11.640 --> 0:27:15.160 and eighty seven one thousand jobs in August. You also 0:27:15.200 --> 0:27:17.320 see the unemployment rate tick up to about three point 0:27:17.320 --> 0:27:19.320 eight percent, but it had been hovering around three and 0:27:19.359 --> 0:27:21.639 a half percent, about a half century low for a 0:27:21.760 --> 0:27:24.520 while here. So I want to bring in Tom gimbal 0:27:24.640 --> 0:27:27.879 CEO of Losal Network to break down some of these 0:27:28.000 --> 0:27:30.600 hiring trends and some of a kind of a deep 0:27:30.680 --> 0:27:34.240 dive here within the data. Tom, thanks for joining John 0:27:34.280 --> 0:27:37.600 Tucker and myself this morning, especially on a slower Friday 0:27:38.000 --> 0:27:41.080 heading into the Labor day weekend. What's your take when 0:27:41.240 --> 0:27:43.440 you are looking at some of these headline numbers, because 0:27:43.480 --> 0:27:45.800 I know that the unemployment rate did climb a little 0:27:45.840 --> 0:27:48.680 bit to its highest level since last year, but is 0:27:48.720 --> 0:27:51.480 a lot of that due to more people just coming 0:27:51.560 --> 0:27:53.040 back into the labor force. 0:27:53.880 --> 0:27:54.080 Yeah. 0:27:54.160 --> 0:27:57.359 Absolutely, participation rate increased a little bit, which is a 0:27:57.400 --> 0:28:01.000 good sign. And we had one hundred and eighty seven 0:28:01.119 --> 0:28:04.159 thousand jobs that were added, which is good. And you 0:28:04.280 --> 0:28:07.200 got to remember the prediction was one hundred and seventy 0:28:07.280 --> 0:28:11.439 five thousand, so we exceeded that. We're not over two hundred, 0:28:11.520 --> 0:28:14.920 but we are exceeding with the average jobs that were 0:28:14.920 --> 0:28:18.119 added between twenty sixteen and twenty twenty, which was one 0:28:18.200 --> 0:28:21.480 hundred and seventy eight thousand jobs on average, So it 0:28:21.640 --> 0:28:24.640 really signals it might not be the strongest economy we've 0:28:24.680 --> 0:28:26.840 seen in the past three years, but it's definitely not weak. 0:28:27.320 --> 0:28:28.760 Now, I'm not going to give you an opening to 0:28:28.840 --> 0:28:31.159 do a commercial, but what does the Sound Network do. 0:28:32.600 --> 0:28:35.120 So we're a staffing and recruiting firm for white collar jobs. 0:28:35.119 --> 0:28:40.880 So we do search for accountants, technology, sales, marketing, et cetera. 0:28:41.160 --> 0:28:43.680 And then we also have an interim or temporary staffing 0:28:43.720 --> 0:28:45.440 group placing people in those same fields. 0:28:45.680 --> 0:28:50.120 Okay, can you gauge for us how much they're getting paid, 0:28:50.160 --> 0:28:54.040 whether it's more the salaries are increasing or what I'm 0:28:54.080 --> 0:28:56.920 trying to get a gauge of the inflationary components in 0:28:57.000 --> 0:28:57.240 all this. 0:28:58.040 --> 0:29:02.640 Totally salaries over the past during the pandemic, salaries increased 0:29:02.680 --> 0:29:04.760 the same way you saw it on the hourly side, 0:29:05.160 --> 0:29:07.920 with Target and Amazon getting up into twenty and twenty 0:29:08.000 --> 0:29:10.479 five dollars an hour. It happened in the same thing 0:29:10.560 --> 0:29:14.400 within supply chain and marketing and HR and accounting and 0:29:14.520 --> 0:29:19.720 technology is always growing. And that continued really up until 0:29:19.760 --> 0:29:22.600 the end of last year. And then now we're sitting 0:29:22.640 --> 0:29:27.600 at a standpoint where it stabilized a little bit, where 0:29:27.640 --> 0:29:30.560 we've seen that the employee isn't in control the way 0:29:30.600 --> 0:29:33.040 they were in twenty twenty one in twenty twenty two, 0:29:33.120 --> 0:29:36.240 where they could work when they wanted and demand whatever salary. 0:29:36.920 --> 0:29:39.400 And I think we see that by the labor force 0:29:39.520 --> 0:29:42.880 increasing and the unemployment rate going up, that companies are 0:29:42.960 --> 0:29:45.400 not in as much of a high demand as they 0:29:45.440 --> 0:29:45.960 were before. 0:29:46.280 --> 0:29:49.200 What industries are seeing wage increases the most. I know 0:29:49.240 --> 0:29:52.040 you were talking about obviously technology and some others over 0:29:52.080 --> 0:29:55.240 the past year, but are there some less obvious particular 0:29:55.320 --> 0:29:55.840 groups there. 0:29:56.760 --> 0:29:59.760 Well, I think it's really less about the industry and 0:29:59.840 --> 0:30:02.280 more more about the roles. You could have somebody in 0:30:02.400 --> 0:30:06.440 technology that's working in a manufacturing company and they're going 0:30:06.520 --> 0:30:09.160 to get paid more. You could have a salesperson for 0:30:09.240 --> 0:30:14.320 a technology company being paid less because all the layoffs 0:30:14.360 --> 0:30:17.200 that exist. So I think it's really more about the 0:30:17.360 --> 0:30:22.440 individual roles of people than it is about sectors anymore. 0:30:22.480 --> 0:30:26.160 And that's usually what's happened since the Great Recession is 0:30:26.240 --> 0:30:29.640 that it's been less industry. It's been industry agnostic when 0:30:29.680 --> 0:30:33.320 it comes to the recession, and more about the individuals 0:30:33.360 --> 0:30:36.880 and the roles that are in high demand. Cybersecurity continues 0:30:36.960 --> 0:30:40.560 to be super super hot. You have healthcare that continues 0:30:40.640 --> 0:30:43.480 to be really, really hot and people that are willing 0:30:43.560 --> 0:30:45.840 to do that, whether whether it be in the on 0:30:45.960 --> 0:30:48.560 the software and the technology side of healthcare. You know, 0:30:48.960 --> 0:30:51.800 remember three years ago you couldn't find a nurse, you know, 0:30:52.400 --> 0:30:55.160 pun intended to save your life, and now we don't 0:30:55.200 --> 0:30:59.719 have that same problem. So things stabilize a lot quicker. 0:30:59.800 --> 0:31:01.760 And I just don't talk about that as much as 0:31:01.840 --> 0:31:04.480 we do when things are in short supply. 0:31:05.000 --> 0:31:06.880 What are you saying when it comes to sort of 0:31:06.920 --> 0:31:10.360 the work from home dynamic and some of the concessions 0:31:10.400 --> 0:31:12.640 that employers had been giving the past few years. Is 0:31:12.680 --> 0:31:14.600 there any sort of shift you're beginning to see happen 0:31:14.680 --> 0:31:16.959 here as obviously COVID begins to easier. 0:31:17.840 --> 0:31:21.040 Yeah, I think COVID has ease. I don't think that 0:31:21.160 --> 0:31:23.600 that's really the driver anymore. And what we're dealing with 0:31:23.800 --> 0:31:28.520 now is companies that are getting out front and leading. 0:31:28.560 --> 0:31:31.320 And I think what you'll see after labor Day is 0:31:31.600 --> 0:31:35.360 more and more of companies that will be demanding people 0:31:35.440 --> 0:31:38.360 to come into the office three days a week and 0:31:38.480 --> 0:31:41.000 four days a week and the occasional five. Now they'll 0:31:41.000 --> 0:31:43.480 always be the outlier company that, in order to recruit 0:31:43.520 --> 0:31:46.000 people will say we'll let you work fully remote, but 0:31:46.040 --> 0:31:48.360 it's going to be few and far between. And I 0:31:48.440 --> 0:31:52.080 think on the big companies, you're going to see the 0:31:52.280 --> 0:31:54.800 majority of them over sixty or seventy percent, they're going 0:31:54.880 --> 0:31:57.040 to have mandatory days in the office. 0:31:57.400 --> 0:32:01.840 Is there a predictive capability to a temporary help employment? 0:32:01.920 --> 0:32:05.400 What does it tell us about what businesses view of 0:32:05.440 --> 0:32:06.040 the economy. 0:32:06.960 --> 0:32:10.160 Yeah, temporary help traditionally has been a leading indicator of 0:32:10.400 --> 0:32:15.360 when temporary wages and temporary staffing increases. It's companies putting 0:32:15.400 --> 0:32:19.360 their tone in the water following a recession or a 0:32:19.520 --> 0:32:22.600 slump in the economy, and that's how they bridge in 0:32:22.680 --> 0:32:24.120 now what we've seen. There was an article in The 0:32:24.200 --> 0:32:28.880 Journey yesterday that said temporary staffing's lagging, which really lends 0:32:28.960 --> 0:32:32.600 itself to saying that the market's cooled down a little bit. 0:32:33.640 --> 0:32:36.800 I think it's really a different, different segment of that. 0:32:36.960 --> 0:32:42.600 I think that as unemployment and participation rates increase, that 0:32:42.800 --> 0:32:45.400 companies are able to find some people on their own 0:32:45.440 --> 0:32:49.560 a little bit more, a little easier, and that's an indicator. 0:32:49.640 --> 0:32:52.000 And we're seeing that people from the gig economy are 0:32:52.080 --> 0:32:55.040 now starting to re enter the workforce, and the big 0:32:55.160 --> 0:32:58.120 one is going to be that we're still seeing, and 0:32:58.160 --> 0:33:01.160 I think this is an important indication. We're seeing tempt 0:33:01.200 --> 0:33:03.480 to perm fees continue to be steady. And what that 0:33:03.760 --> 0:33:06.680 is means is that companies bring in people to do 0:33:06.800 --> 0:33:09.800 temporary work and then they'll pay money to buy out 0:33:09.880 --> 0:33:12.760 the agreement and bring them onto their payroll. And when 0:33:12.800 --> 0:33:16.800 that's happening, the economy is still strong because companies weren't 0:33:16.840 --> 0:33:19.720 planning to hire those people permanently, but they end up 0:33:19.800 --> 0:33:22.360 doing it, and that's a really strong indicator. And I 0:33:22.440 --> 0:33:25.520 still see those numbers as being on the strong side. 0:33:25.880 --> 0:33:29.240 Hey, Tom, whenever you have particular economists who want to 0:33:29.360 --> 0:33:33.040 argue about a potential recession on the horizon in the 0:33:33.080 --> 0:33:35.840 next couple of quarters or just weakness in the economy, 0:33:35.880 --> 0:33:37.840 I mean, to your point earlier that you were alluding to, 0:33:37.920 --> 0:33:39.239 you still see that strength there. 0:33:39.440 --> 0:33:42.040 What do you tell them, Well, I think the good 0:33:42.080 --> 0:33:45.280 thing about economists is they'll stick with their prediction even 0:33:45.320 --> 0:33:47.440 if it goes for quarters and years, and then they'll 0:33:47.440 --> 0:33:49.320 eventually have it happen and they'll say I told you so, 0:33:49.440 --> 0:33:51.360 even though it has been going on for three years. 0:33:51.880 --> 0:33:54.720 And I think that's not real life. I think real 0:33:54.840 --> 0:33:59.600 life is that companies are hiring people. There's jobs for 0:33:59.680 --> 0:34:02.760 people that still don't have ideal backgrounds, which tells me 0:34:02.880 --> 0:34:06.760 it's still a strong economy. And it's not always about 0:34:07.280 --> 0:34:09.440 how much you pay somebody, it's our people willing to 0:34:09.520 --> 0:34:12.239 do the work. And you know, we've gotten to a 0:34:12.320 --> 0:34:16.839 standpoint of entitlement in the country where we've got people 0:34:16.880 --> 0:34:19.160 that simply don't want to don't want to do jobs, 0:34:19.239 --> 0:34:21.879 no matter what the dollar amount is. And that's where 0:34:21.880 --> 0:34:25.120 the disconnect is in our in our economic society. So 0:34:25.360 --> 0:34:29.600 I tell economists all the time, let's look at the 0:34:29.960 --> 0:34:32.160 companies that are hiring and the people that are taking 0:34:32.239 --> 0:34:35.160 the jobs, and what the turnover and attrition rates are 0:34:35.239 --> 0:34:37.200 and that'll tell you real things. But that's not captured 0:34:37.200 --> 0:34:37.800 in the BLS. 0:34:38.239 --> 0:34:42.719 You talked about the sectors. What about the regions of 0:34:42.840 --> 0:34:46.040 the country. Who's doing what, who's doing best and worst? 0:34:46.160 --> 0:34:47.399 And can you break that down? 0:34:48.360 --> 0:34:50.640 Yeah, I think we're starting to see that, you know, 0:34:50.880 --> 0:34:53.759 some of some of the policies and the regulations on 0:34:53.880 --> 0:34:57.720 the on the West Coast is really starting to affect 0:34:57.760 --> 0:34:59.600 some of that. And we've seen that obviously the moves 0:34:59.640 --> 0:35:03.440 of companies into Texas and Tennessee and other states. But 0:35:03.560 --> 0:35:05.600 we're seeing that if there's an area of the country 0:35:05.640 --> 0:35:10.200 where remote work is being offered more, it's coming out 0:35:10.200 --> 0:35:14.040 of California companies because a lot of people don't want 0:35:14.040 --> 0:35:18.440 to pay the taxes and have the regulation there, so 0:35:18.480 --> 0:35:20.680 we're seeing a lot more remote work there. It's easier 0:35:20.719 --> 0:35:24.239 to fire and terminate people who aren't working in the 0:35:24.280 --> 0:35:27.719 state of California. And I think the Coast sarn is 0:35:27.960 --> 0:35:31.840 as desirable as they as they once were Sands Florida. 0:35:31.960 --> 0:35:34.600 So we see a lot of uptick in Texas. We 0:35:34.680 --> 0:35:37.320 see a lot of it in Tennessee, which are you know, 0:35:37.400 --> 0:35:41.160 there's big growth areas in Austin and Nashville, and those 0:35:41.280 --> 0:35:45.160 tend to be really, really strong and hiring. In the South, 0:35:45.719 --> 0:35:47.920 the traditional you know, I call it the SEC South 0:35:48.400 --> 0:35:53.520 from Alabama over to South Carolina tends to be strong 0:35:53.640 --> 0:35:56.040 areas for small to medium sized companies. 0:35:56.320 --> 0:35:58.440 Tom, we only have about thirty seconds left. What's some 0:35:58.480 --> 0:36:01.520 of the top questions or concerns you hear from employers. 0:36:02.880 --> 0:36:06.000 Oh, I think the biggest thing is, you know, we're 0:36:06.040 --> 0:36:10.160 going into an election year, so there's a lot more 0:36:10.520 --> 0:36:13.120 there's less concern thinking that DC will want to have 0:36:13.400 --> 0:36:18.200 the economy humming going into it. But the biggest challenge 0:36:18.480 --> 0:36:22.759 that they're feeling is that of concern is if the 0:36:22.880 --> 0:36:26.239 overtime exemption salary is going to increase what they're talking 0:36:26.239 --> 0:36:28.480 about from thirty I think it's thirty eight thousand to 0:36:28.560 --> 0:36:32.359 fifty four thousand, and that'll be something that could really 0:36:32.520 --> 0:36:35.799 hurt if inflation doesn't settle down and having to pay 0:36:35.880 --> 0:36:38.240 overtime for people at entry level jobs. 0:36:38.680 --> 0:36:40.880 Tom, thanks so much for joining us. Always a pleasure. 0:36:40.880 --> 0:36:44.279 Tom Gimball, CEO of La Salle Network, breaking down what's 0:36:44.320 --> 0:36:46.600 happening with the jobs picture in hiring. 0:36:47.400 --> 0:36:51.000 You're listening to the tape Kenser Live program Bloomberg Markets 0:36:51.080 --> 0:36:54.479 weekdays at ten am Eastern on Bloomberg Radio, the tune 0:36:54.520 --> 0:36:57.439 in app, Bloomberg dot Com, and the Bloomberg Business App. 0:36:57.520 --> 0:37:00.319 You can also listen live on Amazon Alexa from our 0:37:00.360 --> 0:37:04.720 flagship New York station, Just say Alexa playing Bloomberg eleven thirty. 0:37:06.400 --> 0:37:08.600 I want to get straight to our next guest, Eddie 0:37:08.680 --> 0:37:12.440 Vanderwold of Bloomberg News. Eddie, we really appreciate your patients 0:37:12.520 --> 0:37:15.279 sticking with us this afternoon. As we just heard from 0:37:15.360 --> 0:37:17.719 President Biden, I want to get your thoughts on his 0:37:17.920 --> 0:37:21.200 comments as well as the labor market data this morning, 0:37:21.440 --> 0:37:23.880 in the manufacturing data sort of, what is your takeaway 0:37:23.920 --> 0:37:26.400 when he is talking about the resiliency here with the 0:37:26.480 --> 0:37:27.720 US economy in the job market. 0:37:28.600 --> 0:37:30.520 Yeah, absolutely, you know what I think. I think he 0:37:30.640 --> 0:37:33.480 probably has a reason to be satisfied with some of 0:37:33.520 --> 0:37:36.240 those numbers that came out today. The non fun payrolls 0:37:36.280 --> 0:37:39.759 obviously came in above expectations and in fact above the 0:37:39.840 --> 0:37:44.560 prior month's revive revisions. Now, we did see the unemployment 0:37:44.680 --> 0:37:47.000 rate tick high at a three point eight percent, but 0:37:47.160 --> 0:37:50.319 that's partly of a reason, partly because people are coming 0:37:50.400 --> 0:37:53.600 back to the jobs market. We've got more people participating 0:37:53.640 --> 0:37:57.239 in the jobs market. Now, we saw the participating participation 0:37:57.400 --> 0:38:00.520 rate pick up. Subsequently to those numbers, we had the 0:38:01.000 --> 0:38:04.120 PMI numbers come in, which showed that manufacturing in the 0:38:04.280 --> 0:38:09.320 US actually slow the less that was expected, and that 0:38:09.760 --> 0:38:12.520 turned the markets around. We're now seeing you know, the 0:38:12.680 --> 0:38:14.840 S and P pretty much flat on the day. But 0:38:14.920 --> 0:38:16.880 I think the real action for me is in the 0:38:16.960 --> 0:38:20.120 bond market, we were seeing a real steepening. We're seeing 0:38:20.600 --> 0:38:23.600 thirty year yields and ten year yields rise by about 0:38:23.880 --> 0:38:26.520 seven or eight basis points, much more than at the 0:38:26.600 --> 0:38:29.040 front end of the curve. And what that tells us 0:38:29.520 --> 0:38:32.560 is that the markets are pricing out a little bit 0:38:32.680 --> 0:38:34.960 recession risk, and of course Biden will be very happy 0:38:35.000 --> 0:38:37.200 about that coming into an election next year. 0:38:37.640 --> 0:38:39.279 I mean, talk to me about the bond market though, 0:38:39.320 --> 0:38:42.800 I mean earlier this week the two year was above 0:38:43.160 --> 0:38:47.279 five percent. Was that the last we're going to see 0:38:47.320 --> 0:38:50.080 in that or do we think that there's a potential 0:38:50.600 --> 0:38:54.040 here to kind of reverse some of the movements that 0:38:54.120 --> 0:38:55.480 we've seen over the last couple of days. 0:38:56.440 --> 0:39:00.919 Yeah, you know what, the two years tried above couple 0:39:00.960 --> 0:39:03.759 of times and hasn't light it. I don't think many 0:39:03.800 --> 0:39:06.360 in the market think that the FED is going to 0:39:06.520 --> 0:39:09.000 raise rates much more. And really the two year end 0:39:09.080 --> 0:39:10.680 of the curve is a bet on whether the Fed 0:39:10.800 --> 0:39:13.040 is going to be able to hike at going into 0:39:13.120 --> 0:39:16.000 next year or will be forced into hiking going into 0:39:16.080 --> 0:39:19.359 next year, and with inflation doing what it is doing 0:39:19.400 --> 0:39:21.759 at the moment, which is, you know, coming down slow 0:39:21.800 --> 0:39:27.520 and steadily, not many people think that. The bigger risk 0:39:27.640 --> 0:39:30.200 I think for most economists is that that the that 0:39:30.320 --> 0:39:32.320 the FED will have to cut that they will be 0:39:32.480 --> 0:39:35.839 forced into cutting because inflation slows. But at the same 0:39:35.920 --> 0:39:38.800 time the US goes into a recession, you're seeing the market, 0:39:39.239 --> 0:39:42.440 the the the you know, main street starting to shad jobs. 0:39:43.400 --> 0:39:43.920 But we're not. 0:39:44.080 --> 0:39:46.520 Seeing that at the moment. What we're seeing is that steepening. 0:39:46.560 --> 0:39:50.560 And we're sitting now with about about seventy basis points 0:39:50.960 --> 0:39:53.879 of inversion between the two year and the ten year 0:39:54.160 --> 0:39:55.239 points on the yield curve. 0:39:56.200 --> 0:39:58.720 I want to get your thoughts on China, world's second 0:39:58.840 --> 0:40:01.160 largest economy here. You know, there's concerns about some of 0:40:01.239 --> 0:40:03.960 its flagging growth, but is some of the disinflation that's 0:40:04.000 --> 0:40:07.040 happening Is that actually in favor of the FED in 0:40:07.120 --> 0:40:10.120 maybe some other corners of the global markets here as 0:40:10.160 --> 0:40:11.879 far as when you're looking at these other central banks 0:40:11.920 --> 0:40:13.160 that are still trying to fight inflation. 0:40:14.239 --> 0:40:17.920 I think China has been an exporter of this inflation, right. 0:40:18.080 --> 0:40:21.760 I think this inflation that we saw there is feeding 0:40:21.840 --> 0:40:24.879 through into goods that we buy here and therefore also 0:40:24.960 --> 0:40:28.040 into services and also into wages. But I think it's 0:40:28.120 --> 0:40:30.959 wider than that, right. I think it's more worrying because 0:40:31.040 --> 0:40:34.160 if China is slowing, that's because people across the world 0:40:34.520 --> 0:40:36.960 is not buying their goods, right, And if we're not 0:40:37.040 --> 0:40:39.239 buying their goods, that means that we're not spending money, 0:40:39.280 --> 0:40:43.040 and that's a recessionary flag. Now they've been slowly and 0:40:43.080 --> 0:40:45.920 steadily they've been you know, people were hoping for this 0:40:46.080 --> 0:40:49.960 kind of big bang stimulus in China. Instead they've been 0:40:50.000 --> 0:40:53.440 getting fairly small measures. But somebody the newsroom said to 0:40:53.520 --> 0:40:56.760 me earlier today that maybe those small measures are starting 0:40:56.760 --> 0:40:57.839 to look like a machine gun. 0:40:58.040 --> 0:40:58.160 Right. 0:40:58.360 --> 0:41:00.879 They're delivering them over and over and over. Every day 0:41:00.920 --> 0:41:02.760 that you come in there, there's a little bit more stimulus. 0:41:02.960 --> 0:41:05.160 So maybe it's not a Maybe it's not a bazuka. 0:41:05.440 --> 0:41:07.800 Maybe it's a machine gun. But the market's starting to 0:41:09.000 --> 0:41:11.759 pay attention and we are starting to see, you know, 0:41:11.960 --> 0:41:16.120 Chinese stocks doing slightly better. They still have a lot 0:41:16.200 --> 0:41:17.920 of trouble in their property sector though. 0:41:18.480 --> 0:41:18.680 Yeah. 0:41:18.840 --> 0:41:22.000 I mean every day you come in, mortgage support here, 0:41:22.239 --> 0:41:25.879 tax breaks here, stocks support here. I mean, just very quickly, 0:41:25.920 --> 0:41:28.880 we all have about twenty seconds here. But do you 0:41:29.000 --> 0:41:32.640 see more of a risk that China of China contagion 0:41:32.760 --> 0:41:33.759 than the markets are pricing in? 0:41:33.920 --> 0:41:34.440 Just yes or no? 0:41:34.520 --> 0:41:34.800 Please? 0:41:36.360 --> 0:41:40.359 I think probably yes. I think China. If China slows 0:41:40.400 --> 0:41:42.080 down significantly, that's going to be a problem for the 0:41:42.120 --> 0:41:44.319 rest of the world, right well. 0:41:44.320 --> 0:41:47.720 World's second largest economy behind US and of course Japan 0:41:47.920 --> 0:41:51.080 third largest economy. Eddie, thank you for being patient sticking 0:41:51.160 --> 0:41:55.040 with us. We really appreciate Eddie Vanderwold of Bloomberg News, 0:41:55.120 --> 0:41:57.680 of course breaking down what we were seeing with the 0:41:58.280 --> 0:42:00.279 obviously the jobs picture, and then on the back of 0:42:00.320 --> 0:42:02.040 those comments from President Joe Biden. 0:42:02.400 --> 0:42:05.480 You're listening to the tape kens our live program Bloomberg 0:42:05.600 --> 0:42:09.160 Markets weekdays at ten am Eastern on Bloomberg Radio, the 0:42:09.239 --> 0:42:12.439 tune in app, Bloomberg dot Com, and the Bloomberg Business App. 0:42:12.520 --> 0:42:15.279 You can also listen live on Amazon Alexa from our 0:42:15.360 --> 0:42:19.720 flagship New York station just say Alexa playing Bloomberg eleven thirty. 0:42:21.239 --> 0:42:23.520 When you are looking at what's happening with Amjen as 0:42:23.560 --> 0:42:26.759 well as Horizon, so Amjin can move forward with its 0:42:27.160 --> 0:42:30.719 around close to twenty eight billion dollar takeover of Horizon 0:42:30.800 --> 0:42:34.600 Therapeutics after the FTC did say Friday that it accepted 0:42:34.600 --> 0:42:38.120 a binding settlement that the combined company would bundle would 0:42:38.200 --> 0:42:42.399 not bundle together two of Horizons blockbuster drugs. I want 0:42:42.480 --> 0:42:47.879 to bring in Jennifer Ree, senior litigation analysts at Bloomberg Intelligence. 0:42:47.960 --> 0:42:50.120 She's always on top of all things when it comes 0:42:50.239 --> 0:42:53.680 to when it comes to actually stories and deals like this, 0:42:54.080 --> 0:42:56.719 joining us to talk about this FTC settlement on this 0:42:56.840 --> 0:43:00.880 Amgin Horizon deal here, Jennifer, thanks for joining us this afternoon, 0:43:01.000 --> 0:43:04.160 walk us through what this means moving forward with this deal. 0:43:05.480 --> 0:43:07.680 Well, thanks for having me. I mean, I think this 0:43:07.880 --> 0:43:10.560 was a really smart move by the STC. To be honest, 0:43:11.520 --> 0:43:15.759 they have sought a way to try to slow down consolidation, 0:43:15.960 --> 0:43:19.440 particularly in the pharmaceutical industry, and I thought, I think 0:43:19.520 --> 0:43:21.919 that they thought, you know, this is a great opportunity 0:43:22.239 --> 0:43:25.080 with this merger to try out a novel theory, try 0:43:25.160 --> 0:43:27.360 to push the law out to make it easier to 0:43:27.400 --> 0:43:30.239 block pharmaceutical deals, and to try to go to court 0:43:30.320 --> 0:43:33.719 to get a judge to stop this deal using kind 0:43:33.760 --> 0:43:37.000 of a novel theory. And what that theory was was 0:43:37.080 --> 0:43:40.400 that those two blockbuster drugs of Horizon that you just mentioned, 0:43:40.520 --> 0:43:43.560 one for chronic gout and the other for I diybory disease, 0:43:44.040 --> 0:43:47.239 would be in Amgen's hands. Amgen would be able to 0:43:47.280 --> 0:43:49.960 maintain the monopolies for those drugs because it would bundle 0:43:50.040 --> 0:43:53.799 it and provide rebates for those bundles with other blockbusters 0:43:53.880 --> 0:43:56.279 drugs that Amgen already has, and it could do that 0:43:56.480 --> 0:43:59.000 better than Horizon could on its own, and it would 0:43:59.040 --> 0:44:01.600 lock the future and of other drugs. And here's the thing. 0:44:02.400 --> 0:44:05.640 That kind of theory could almost be used in almost 0:44:05.719 --> 0:44:08.600 any pharmaceutical deal. So it was kind of a big 0:44:08.680 --> 0:44:11.320 deal for the industry. So the fact that it's settling 0:44:11.640 --> 0:44:13.680 is also a big deal for the industry because it 0:44:13.800 --> 0:44:17.320 shows that the STC kind of backed off that theory, 0:44:17.480 --> 0:44:19.040 which really is a broad theory. 0:44:19.600 --> 0:44:22.239 Okay, but dig into the details a little bit for 0:44:22.360 --> 0:44:29.680 me here. So Tapeza and christis right, apologies. Does how 0:44:29.719 --> 0:44:35.400 does bundling an agreement not to bundle those drugs accomplish 0:44:35.719 --> 0:44:36.360 this purpose? 0:44:38.520 --> 0:44:42.120 So the idea is that they if engine provided really 0:44:42.160 --> 0:44:45.400 seed rebase let's state of pharmacy benefit managers or insurers 0:44:45.560 --> 0:44:48.239 to bundle those drugs to put it on a drug formulary. 0:44:48.719 --> 0:44:51.080 What that would do would be to block out other 0:44:51.239 --> 0:44:55.440 potential up and coming new FDA approved drugs that can 0:44:55.560 --> 0:44:58.520 compete with those two. With christecks that I can't say 0:44:58.520 --> 0:45:00.720 it either any other drugs. 0:45:00.800 --> 0:45:03.520 It's always avousible, you know, they always are. 0:45:03.560 --> 0:45:06.040 I don't know why they named drugs with they really do. 0:45:07.200 --> 0:45:09.680 But the idea is that if there are other innovators 0:45:09.719 --> 0:45:12.120 out there trying to come up with a drug or 0:45:12.160 --> 0:45:14.560 get FDA approval for a drug that could treat the 0:45:14.640 --> 0:45:17.840 same condition and potentially bring prices down across the board 0:45:18.120 --> 0:45:21.040 for drugs that treat those two conditions, that they really 0:45:21.080 --> 0:45:23.120 wouldn't be able to get into the market because these 0:45:23.239 --> 0:45:26.920 bundles rebates would be too enticing for the pharmacy benefit 0:45:27.040 --> 0:45:30.279 managers to they'd have to accept them, and to accept them, 0:45:30.360 --> 0:45:32.799 they'd have to put the horizon drugs on the formulary 0:45:32.920 --> 0:45:35.440 and not these competing drugs, And so the competing drugs 0:45:35.680 --> 0:45:38.160 can't get into the market. They can't get in a foothold. 0:45:38.520 --> 0:45:41.960 So if Amgent can't bundle them, it opens up that avenue. 0:45:42.440 --> 0:45:45.280 It takes away that blockade, right and if it allows 0:45:45.360 --> 0:45:48.520 for the possibility down the road for other rivals to 0:45:48.600 --> 0:45:51.120 try to come in and compete against those two drugs, who. 0:45:51.040 --> 0:45:53.600 Do you consider to be the biggest rivals at this 0:45:53.719 --> 0:45:54.319 point for them? 0:45:56.320 --> 0:45:59.080 You know, I think that's the most speculative part of 0:45:59.160 --> 0:46:02.960 this entire law. They're really they really couldn't really name 0:46:03.040 --> 0:46:06.799 any I mean, now there may be in phase three 0:46:07.000 --> 0:46:10.400 or phase two somewhere along the FDA process, some rivals, 0:46:10.840 --> 0:46:13.839 other analysts would be better off, who know what's going 0:46:13.880 --> 0:46:16.239 on in the biotech space to speak about that. But 0:46:16.320 --> 0:46:18.880 here's the thing. It was so speculative because the FTC 0:46:19.000 --> 0:46:22.800 couldn't really say, hey, X drug or Y drug or 0:46:22.960 --> 0:46:26.640 ABC company has something coming soon. They couldn't do that. 0:46:27.160 --> 0:46:30.760 It was really speculative that maybe down the road, maybe 0:46:30.840 --> 0:46:33.480 there will be something that might compete and might not 0:46:33.640 --> 0:46:36.279 be able to So it was a tough theory for 0:46:36.360 --> 0:46:38.440 the FTC to try to win in court. And that's 0:46:38.480 --> 0:46:41.120 why I say that it was probably a smart thing 0:46:41.200 --> 0:46:43.240 for them to do to get this settlement instead. 0:46:44.719 --> 0:46:47.520 Yeah, I mean, also, what do you think that this 0:46:47.640 --> 0:46:53.920 says about the broader FTC task here? You know, we 0:46:54.040 --> 0:47:01.360 had Black Knight Ice dropping the challenge there yesterday as 0:47:01.400 --> 0:47:03.879 the FDC's realize that it's run up against the wall, 0:47:05.080 --> 0:47:06.080 you know, I sort. 0:47:05.920 --> 0:47:08.400 Of think it has. I think the FDC got a 0:47:08.440 --> 0:47:11.200 little bit tired of losing. You know, they lost two 0:47:11.320 --> 0:47:14.279 big merger challenges that were really well publicized that was 0:47:14.320 --> 0:47:17.280 a challenge to Meta trying to buy a small virtual 0:47:17.360 --> 0:47:21.320 reality company called Within, and then Microsoft trying to buy Activision. 0:47:21.560 --> 0:47:24.239 You know, these were really well known, kind of sort 0:47:24.280 --> 0:47:29.279 of spectacularly public court losses, and I think that they 0:47:29.600 --> 0:47:32.200 pulled back a little bit. They have been very aggressive. 0:47:32.320 --> 0:47:34.520 I think they do want to continue to be aggressive, 0:47:34.880 --> 0:47:37.080 but maybe they've pulled back to think about, Look, we 0:47:37.160 --> 0:47:39.120 can be aggressive, but maybe we need to pick and 0:47:39.200 --> 0:47:41.839 choose our challenges to deal just with a little bit 0:47:41.920 --> 0:47:44.600 more discretion, because when we go into court with a 0:47:44.719 --> 0:47:48.000 really tough theory, particularly if you don't have the evidence 0:47:48.040 --> 0:47:50.920 and the facts to back that new theory that you're 0:47:50.960 --> 0:47:54.359 asking a judge to accept, you know, we're really there's 0:47:54.360 --> 0:47:56.120 a good chance we're headed for a loss and we 0:47:56.280 --> 0:47:58.359 need to get a win down the road. So yeah, 0:47:58.440 --> 0:48:01.200 I think it probably show is that the STT is 0:48:01.239 --> 0:48:04.120 going to exercise a little more caution and going forward 0:48:04.200 --> 0:48:06.759 with respect to challenging specific types of deals. 0:48:07.280 --> 0:48:11.040 Jennifer Ree, senior litigation analysts at Bloomberg Intelligence, Thank you 0:48:11.200 --> 0:48:12.319 so much for joining us. 0:48:13.520 --> 0:48:16.560 Thanks for listening to the Bloomberg Markets podcast. You can 0:48:16.640 --> 0:48:20.360 subscribe and listen to interviews at Apple podcasts, or whatever 0:48:20.520 --> 0:48:24.120 podcast platform you prefer. I'm Matt Miller. I'm on Twitter 0:48:24.440 --> 0:48:27.640 at Matt Miller nineteen seventy three. And I'm fall Sweeney. 0:48:27.680 --> 0:48:30.279 I'm on Twitter at pt Sweeney. Before the podcast, you 0:48:30.360 --> 0:48:32.719 can always catch us worldwide at Bloomberg Radio