Speaker 1: Bloomberg Audio Studios, Podcasts, radio News.
Speaker 2: This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along
Speaker 2: with Lisa Bromwitz and am Marie Hordern. Join us each
Speaker 2: day for insight from the best in markets, economics, and
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Speaker 2: lot to discuss President Trump extending trade talks with China
Speaker 2: for another sixty days as both countries continue to win
Speaker 2: out key differences. Joining us now to discuss that and
Speaker 2: a whole lot more. The seventy Night Secretary of the Treasury,
Speaker 2: Scott Besson, mister Secretary, good morning, good to see it.
Speaker 3: Warren John.
Speaker 2: You're a cover model. Now you're famous. Can we get
Speaker 2: that front cover up for Business Week this month? Mister Secretary?
Speaker 2: I remember when you were just Scott Besson and we
Speaker 2: could go for breakfast to get the three of us
Speaker 2: and no one would bother you. What happened.
Speaker 1: I don't know, but I hope it's not the curse
Speaker 1: the cover because it tolf his Historically, the being on
Speaker 1: the cover is a curse.
Speaker 2: So well, the secrety market is not curse that keeps
Speaker 2: grinding out all time highs. There is some confidence that
Speaker 2: we're selling some issues on the trade front. There's one
Speaker 2: issue that came up this week that we'd love to
Speaker 2: hear from you about, and that's in Vidia. Where did
Speaker 2: this agreement come from? You've been quite innovative this administration
Speaker 2: on trade issues. Where did this come from? Who came
Speaker 2: up with it?
Speaker 3: The President?
Speaker 1: The president, As I tell everyone, the President is one
Speaker 1: of the most open minded people I know. He does
Speaker 1: everything at first principles. Why do we do things this way?
Speaker 1: Why shouldn't we do it the other way? And you know,
Speaker 1: I think that this is a very unique solution allows
Speaker 1: in Nvidia to expand into China.
Speaker 3: It can make in Vidia chips.
Speaker 1: The bellweather for Chinese technology, and then the US taxpayer
Speaker 1: gets a share of that.
Speaker 2: Key was unique? Is it unique to Invidia an empty
Speaker 2: or is this a model for other companies?
Speaker 1: I think we could see it in other industries over time.
Speaker 1: I think you know right now this is unique, but
Speaker 1: now that we have the model and the beta test,
Speaker 1: why not expand it.
Speaker 4: What do you say to people who think we're putting
Speaker 4: a price on national security concerns by basically selling export licenses.
Speaker 1: There are no national security concerns here. We would not
Speaker 1: sell any of the advanced chips. So the H twenties,
Speaker 1: I don't know whether you say there are four or
Speaker 1: five six levels down the chip stack. What we do
Speaker 1: not want here, Anne Marie, is for Huawei to have
Speaker 1: a digital Belton road. So we do not want the
Speaker 1: standard to become Chinese across the world or even in China.
Speaker 4: Well, we have exclusive reporting that Beijing is now sending
Speaker 4: out letters to firms saying, actually, shrug off those H
Speaker 4: twenty and use our domestick champions. Is this something you
Speaker 4: might discuss with your counterpart.
Speaker 3: Sure, we can discuss that.
Speaker 1: But it also tells me that they are worried about
Speaker 1: the Nvidio chips becoming the standard in China. Look In
Speaker 1: video is an incredible product. A lot of the technology
Speaker 1: in China is they're piggybacking, And I'll use piggybacking as
Speaker 1: a kind word for acquiring our technology do you mean
Speaker 1: stealing your words? And yes, that's what I mean.
Speaker 3: And the.
Speaker 1: In video Jensen Wang just stays years ahead of them.
Speaker 4: Criticism came from the Wall Street Ternal Editorial Board though
Speaker 4: about this new unique policy. They say it's a step
Speaker 4: toward government control of private business. Are you concerned some
Speaker 4: of these polies are starting to look like the country
Speaker 4: you're actually trying to de risk from central planning basically
Speaker 4: out of the old No.
Speaker 1: No, no, no, not at all, because where we got
Speaker 1: was with this unfettered trade. We did not have secure
Speaker 1: trade or fair trade, and so now we are trying
Speaker 1: to make it secure. So you don't want to We're
Speaker 1: not sending out the highest level chips, and we don't
Speaker 1: want to sell everything to everybody. So there is a
Speaker 1: need for intervention. And you know, the Wall Street Journal
Speaker 1: just let her rip with kind of a bunch of grumpy
Speaker 1: old men over there.
Speaker 3: I was with them yesterday.
Speaker 2: This is going to raise some revenue. What do you
Speaker 2: plan to do with it?
Speaker 3: Paid on the debt.
Speaker 2: It's all going to go to play down the debt.
Speaker 2: Because we have heard some stories about the money going
Speaker 2: back to consumers, going back to citizens of the United States, taxpayers.
Speaker 1: Well, President President Trump's talked about that, and look at
Speaker 1: these the bottom fifty percent of wag journers in the
Speaker 1: One Big Beautiful Bill are getting a lot of money back.
Speaker 1: No tax and tips, no tax on over time, no
Speaker 1: tax on Social Security loans are going to be tax deductible.
Speaker 1: So I think if we could make a substantial dent
Speaker 1: in the debt repayment, then we could talk about a
Speaker 1: program like that.
Speaker 2: Could you share with us the kind of numbers you're
Speaker 2: thinking about at the moment, just in terms of revenue raising,
Speaker 2: and not just the Nvidia deal. I'm talking about the
Speaker 2: terraffs on top of that. What are we raising at
Speaker 2: the moment month on months.
Speaker 1: Well, Johnson, I've been saying that we could hit three
Speaker 1: hundred billion this year, and I think that number is
Speaker 1: going to be low. I think I'm going to I
Speaker 1: always like to come in low and then surprise on
Speaker 1: the upside. But I think in the next days or
Speaker 1: weeks I may have to move that number up substantially.
Speaker 2: You've heard the debate playing out on Wall Street now
Speaker 2: for a number of months. Who's going to pay the teriffs?
Speaker 2: By definition, the importer will pay the tariff. The more
Speaker 2: important question here is who absorbs the costs, whether it's
Speaker 2: the foreign supplier, whether it's the domestic company here in
Speaker 2: the United States, or the end consumer. We've got some
Speaker 2: data yesterday, You've seen it. We've all looked at it.
Speaker 2: Limited tariff pass through relative to what was expected. Because
Speaker 2: of that, a lot of people are suggesting that maybe
Speaker 2: companies are absorbing costs in a way we didn't anticipate.
Speaker 2: Perhaps the past through will be more muted in the future.
Speaker 2: Are you comfortable with where things are now or do
Speaker 2: you think things might rebalance in the months to count.
Speaker 1: Jonathan, I think your framing there is exactly right, exactly right,
Speaker 1: because that obviously that the tariff itself is paid at
Speaker 1: the port, but what if the producer in the other
Speaker 1: country has lowered their price the ten fifteen to twenty percent,
Speaker 1: so that there is no price change with the tariff.
Speaker 1: And obviously our largest trade deficit is with China, and
Speaker 1: China does not have the same profit objective that other
Speaker 1: Western democracies do, so that is an employment agency, and
Speaker 1: my view has been that they would continue to eat
Speaker 1: the tariffs. They are doing that, so I think what
Speaker 1: we've seen is likely to continue happening. I also think
Speaker 1: there are probably a lot of corporate margins that got
Speaker 1: very fat during COVID. We're seeing a return to normal
Speaker 1: pre COVID margins.
Speaker 2: You see this as some kind of redistribution between corporate
Speaker 2: America and maybe the consumer Main Street and Wall Street.
Speaker 1: I think this administration is all about Main Street, but
Speaker 1: Wall Street's at a new high. So it's this fault equivalency.
Speaker 1: It's not either or I tell everyone, I call it
Speaker 1: parallel prosperity. Wall Street's done great, Main Street can now
Speaker 1: do great.
Speaker 2: Wall Street might do even better if the Federal Serve
Speaker 2: cuts interest rates. The President was pretty clear yesterday put
Speaker 2: out this comment, Jerome too late, pal must now lower
Speaker 2: the interest rate. Is it reasonable to give them a
Speaker 2: bit more time to draw conclusions about what's happening here?
Speaker 1: Well, I think what we could see is that, let's
Speaker 1: first of all, what if the BLS data had been
Speaker 1: the higher quality and we'd had those numbers, Jonathan. So
Speaker 1: if we'd seen those numbers in May in June, I
Speaker 1: suspect we could have had rate cuts in June and July.
Speaker 1: So that tells me that there's a very good chance
Speaker 1: of a fifty basis point rate cut, and I think
Speaker 1: President Trump is very good at giving these nicknames. And
Speaker 1: I think the reason that the Jay Powell gets a
Speaker 1: nickname too late is because he wants to go into
Speaker 1: a series of rate hikes. He's not willing. He's not
Speaker 1: Alan Greenspan, who is very forward thinking. They try to
Speaker 1: be more data driven, which I think is a mistake
Speaker 1: because I think we are going back into an economy
Speaker 1: like we had in the nineties, So you know, it's
Speaker 1: just very old fashioned thinking. But I do think we
Speaker 1: could go into a series of rate cuts here, starting
Speaker 1: with a fifty basis point rate cut in September.
Speaker 4: Fifty basis rate cut in September. Does that signal that
Speaker 4: the economy, though, is not doing well.
Speaker 1: That signals that there's an adjustment and the rates are
Speaker 1: too constrictive if you look at it any model that
Speaker 1: the if you we should probably be one hundred and
Speaker 1: fifty one hundred and seventy five bases points lower. So
Speaker 1: I think the committee needs to step back. I think
Speaker 1: probably one of the most politicized governors just went off
Speaker 1: the board and that she was very very political, I believe,
Speaker 1: and I think that.
Speaker 2: Does she do that gave you that impression I'd love
Speaker 2: to know. Sorry I mentioned you're referring to Governor Kugler.
Speaker 2: What does she do that game?
Speaker 1: I think there's a lot of inside baseball. And look,
Speaker 1: Governor Kugler, you read what she was saying when Kamala
Speaker 1: Harris was running, that we needed rake cuts, we needed this,
Speaker 1: We got to phone the runway and then all of
Speaker 1: a sudden it was hard to know whether we know TDS.
Speaker 3: Was it Trump that.
Speaker 1: Dimension syndrome or Trump derangement syndrome or tariff arrangement syndrome.
Speaker 2: You get the opportunity to remake the Federal Reserve. The
Speaker 2: president gets the opportunity to remodel reshape the Federal Reserve.
Speaker 2: And I'm not talking about the remodeling that maybe the
Speaker 2: current chairman's going through. We'll talk about that another time.
Speaker 2: I want to talk about the complexion and character of
Speaker 2: the committee, the changes that you're making at the moment.
Speaker 2: Stephen Maron, let's start with Stephen. How quickly can you
Speaker 2: get more and confirmed?
Speaker 1: We'll see. The President has great sway with Leader Thom.
Speaker 1: Leader Thom has been a great partner during the tax deal,
Speaker 1: and I think that he would like to see Stephen,
Speaker 1: who I've known for a long time, get on there
Speaker 1: as soon as possible. So I'm hopeful about the September meeting.
Speaker 1: And Jonathan, the President's concerned about the building and those
Speaker 1: massive costs overrun, which just tell you that there is
Speaker 1: no accountability at that organization.
Speaker 3: There's no oversight in terms of the spending.
Speaker 1: But the President and I are both concerned about the
Speaker 1: foundations of the FED, the foundations of the FED and
Speaker 1: how did this happen and why did it happen? And
Speaker 1: you know, how did the leadership let it happen.
Speaker 4: When it comes to Director Myron, do you expect him
Speaker 4: to stay on past the January term that expires from
Speaker 4: Coogler seat?
Speaker 3: I wouldn't expect that.
Speaker 4: So who are some names you're thinking of the Cooglar seat?
Speaker 4: Because everyone has been focused on who is going to
Speaker 4: fill the chairmanship role? Who are you thinking to fill
Speaker 4: that extra seat?
Speaker 1: Well, e Marie, we're working on the big list right now.
Speaker 1: I think they're going to be a couple more names
Speaker 1: revealed today. They're going to be private sector names. So
Speaker 1: we had a series or a list of current FED members.
Speaker 1: We're going to have some private sector very well respected,
Speaker 1: very well respected people and then we will get to
Speaker 1: the second seat.
Speaker 4: Can you give us some names, a little bit of
Speaker 4: a tease, maybe people that have been on this program.
Speaker 1: Well, I just did tease telling you there'll be some
Speaker 1: private sector names.
Speaker 4: Okay, when it comes to the FED chair, though, can
Speaker 4: you give us a sense of how many names you're
Speaker 4: actually thinking about.
Speaker 3: Well, I'm going to interview.
Speaker 1: I'm going to cast a wide net ten to eleven people,
Speaker 1: and then there'll be a group of us who are
Speaker 1: meeting with them, and we want to talk about monetary policy.
Speaker 1: We want to talk about regulatory policy, which is very,
Speaker 1: very important because the FED step I think bigfoot of
Speaker 1: the other regulators. The Fed's one of three regulators, Federal Reserve,
Speaker 1: OCC and FDIC, and I think that they need to
Speaker 1: understand that they are one of three.
Speaker 3: And then the.
Speaker 1: Third is the institution itself, which I think is what
Speaker 1: President Trump has been focused on quite a bit too.
Speaker 4: After you do this process, how many names are going
Speaker 4: to give to the President and when does he start
Speaker 4: those in person interviews?
Speaker 3: We don't have a timeline.
Speaker 1: By putting Stephen Myron in that gives us more time,
Speaker 1: and again, I want to cast a wide net. The
Speaker 1: President's very open minded before he chose A Powell. Janet
Speaker 1: Yellen was interviewed, John Taylor was interviewed. Two of them
Speaker 1: couldn't have been more different, so they were under consideration.
Speaker 2: I give you credit for coming up with a really
Speaker 2: credible list to replace the frontal Reserve chair, Jake pab
Speaker 2: without a doubt. I think most people that come on
Speaker 2: this program agree with that. What I want to talk
Speaker 2: about is the BLS now because there's some controversy around
Speaker 2: this pick. I'm sure you've heard some of the concerns.
Speaker 3: E J.
Speaker 2: Anthony had said the following earlier this week before getting
Speaker 2: the pick from the President. Until this issue with Payrose
Speaker 2: is corrected, he said, quote, the BLS should suspend issuing
Speaker 2: the monthly jobs report, but keep publishing the more accurate,
Speaker 2: though less timely, quarterly data. We'd love your thoughts on this.
Speaker 2: Is that something you'd support, not at all?
Speaker 3: And look what somebody says when.
Speaker 1: There are are private citizens is very very different.
Speaker 3: You know. I called for a shadow fed chair.
Speaker 1: And now that I'm in the seat, I don't think
Speaker 1: we need to do that. And I was there when
Speaker 1: EJ was interviewed, and he is incredibly qualified, and I
Speaker 1: think The most important thing here is that we get
Speaker 1: back to the integrity of the numbers, because it just
Speaker 1: became okay, just like so many things in our government,
Speaker 1: to get sloppy. And ej is precise. He has a
Speaker 1: doctorate in economics. I think President Trump put a lot
Speaker 1: of thought into this. He was very thorough in his
Speaker 1: questioning of him. So what we want is good data,
Speaker 1: because you can't make good decisions without good data.
Speaker 3: As I just said, is very likely.
Speaker 1: That the FED would have been doing something else in
Speaker 1: June in July if they had had this data.
Speaker 2: Well, let's talk about the data we've got and the
Speaker 2: process we have, and how we might improve that process.
Speaker 2: As you know that data is prone to big revisions
Speaker 2: in your career on More Street, we've all been dealing
Speaker 2: with this for a long long time because of the
Speaker 2: process and the lack of time. And the response is
Speaker 2: it is constantly reviewed month on month as you get
Speaker 2: more responses from America. How can we improve that process
Speaker 2: so this data is less prone to these big revisions.
Speaker 1: Well, I've been in government now for seven months and
Speaker 1: I can tell you that if we take the irs,
Speaker 1: which I'm now ahead of, they've been working on a
Speaker 1: tech upgrade.
Speaker 3: Since nineteen ninety. Nineteen ninety, we.
Speaker 1: Brought in a young person to fix that. The tech
Speaker 1: upgrade has been underway for longer than he is old,
Speaker 1: so he wasn't born when the tech upgrade started. So,
Speaker 1: you know, I just think like this idea that we're
Speaker 1: accepting this mediocrity in government. Why don't we bring things
Speaker 1: into the twenty first century? Why don't we bring it
Speaker 1: into the digital age? Because I don't know about political
Speaker 1: bias one way or the other, but what I can
Speaker 1: tell you is that the sample response size kept getting
Speaker 1: smaller and smaller, and then they they filled in the cells.
Speaker 1: Anytime you get judgment versus data, then things become qualitative
Speaker 1: and not quantitative. And I think EJ is going to
Speaker 1: do a great job of bringing back quantitative standards. I
Speaker 1: think he like these attacks in the press. I think
Speaker 1: they're all wrong.
Speaker 4: It's not in the press, it's even within conservative economic
Speaker 4: circles that don't think that he is credible to run
Speaker 4: the commission. Is the Trump administration open to putting more
Speaker 4: resources then to bls, maybe lifting a hiring freez Well
Speaker 4: and Marie.
Speaker 1: That's more of a democratic idea that you know, we
Speaker 1: need more. It's always money. It's always money. It's New
Speaker 1: York City schools, Chicago schools, DC schools. You get terrible outcomes.
Speaker 1: I think that he's going to sit back, look at
Speaker 1: the process, and how can we use technology to do
Speaker 1: this better. I got the Treasury and it was shocking.
Speaker 1: We process one point five billion payments a year, and
Speaker 1: five hundred million of them, one third of them did
Speaker 1: not have what's known as a task Treasury accounting symbol
Speaker 1: on them, and people are just hitting sin sin Sin.
Speaker 1: And it wasn't a gigantic leap just to try to
Speaker 1: get people to do their jobs.
Speaker 2: This has big implications for how people view credible economic data,
Speaker 2: but also the markets as well. So let's talk about
Speaker 2: financial markets. In the bond market, you've always been a
Speaker 2: ten year man. The spread between the two year and
Speaker 2: the ten year, I think has been really stable over
Speaker 2: the last several months, where we've start to see some
Speaker 2: leakages between tens out of thirties. That thirty year bond.
Speaker 2: As a tracery secretary, I remember you referring to yourself
Speaker 2: as the nation's top bond salesman. What's the usefulness of
Speaker 2: issuing a thirty year bond when it feels like at
Speaker 2: the moment we're outsourcing borrowing cost to what happens in Japan,
Speaker 2: what might happen in the UK, what happens in Europe.
Speaker 2: What's the value of issuing that.
Speaker 1: That's a great question, Jonathan, And look, we are committed
Speaker 1: to keeping inflation expectations glow and this is a global phenomenon,
Speaker 1: whether it's the ten or the thirty. The US tenure
Speaker 1: is one of the few ten years where the yield
Speaker 1: is down on the year, So that tells me that
Speaker 1: there's credibility from Treasury, credibility from FED, that the inflation
Speaker 1: expectations are well anchored. But there's definitely leakage from the
Speaker 1: Japanese have an inflation problem. I've spoken to Governor u Wada,
Speaker 1: my opinion not his. They're behind the curve, so they're
Speaker 1: going to be hiking and they need to get their
Speaker 1: inflation problem under control. In Germany, we saw a substantial
Speaker 1: spike in German rates in the past week also, so
Speaker 1: you know, our thirty year is getting dragged along with that.
Speaker 1: We've been refilling the Treasury General account, which during the
Speaker 1: debt ceiling standoff got run down, and we're doing that
Speaker 1: with short term bills.
Speaker 2: Do you see more reason then to pare back on
Speaker 2: thirty year issuants? With all this in mind, and this
Speaker 2: is a change again for you now and to see
Speaker 2: as you look at these developments and rethink, how are
Speaker 2: your thoughts on that matter evolving?
Speaker 1: Yeah, they are evolving, and we'll see where things go.
Speaker 1: I do think as we bring down this big deficit
Speaker 1: that we inherited, I think that the US, that the
Speaker 1: entire US curve, can have a parallel shift down relative
Speaker 1: to the rest of the world.
Speaker 2: Do you think you can work with the Federal Reserve
Speaker 2: on this matter? So if we take the weighted average
Speaker 2: maturity of FED holdings at the moment, believe that's running
Speaker 2: it about nine years, the issuance of the average maturity
Speaker 2: about standing bills notes bawns, that's closer to six. Do
Speaker 2: you need to narrow that gap a little bit?
Speaker 3: Yeah.
Speaker 1: Look, I don't think the FED needs to get back
Speaker 1: into the large scale asset purchase business, and we've had
Speaker 1: very good demand, especially in the belly of the curve,
Speaker 1: which is where asset managers seem most interested.
Speaker 4: Now, when it comes to other things you're working on
Speaker 4: in Washington, D C. There's still this stock band legislation
Speaker 4: that has been circulating around Congress. Is a president prepared
Speaker 4: to sign that bill.
Speaker 1: I don't think we have the perfect bill yet, but
Speaker 1: I am going to start pushing for its single stock
Speaker 1: trading band because it is the credibility of the House
Speaker 1: and the Senate that you look at some of these
Speaker 1: eye popping returns, whether it's a Representative Pelosi, Senator Widen,
Speaker 1: every hedge fund would be jealous of them, and the
Speaker 1: American people deserve better than this. People don't shouldn't come
Speaker 1: to Washington to get rich, They should come to serve
Speaker 1: the American people. And it brings down trust in the
Speaker 1: system because I can tell you that if any private
Speaker 1: citizen traded this way, the sec would be knocking on
Speaker 1: their door.
Speaker 4: Do you think it needs to extend? They'll beyond single stocks?
Speaker 4: These individuals can still have ets and other products.
Speaker 1: Well, what I used to do my old firm was
Speaker 1: you could buy ETFs had to be widely held ETF
Speaker 1: so they couldn't be of a small size, and there
Speaker 1: was a long holding period. The House and the Senate,
Speaker 1: they're supposed to be working for the American people, their constituents.
Speaker 1: They're supposed to be making law and they shouldn't be
Speaker 1: trading every day. I'm not going to name names, but
Speaker 1: there was one person in Congress who had twelve or
Speaker 1: thirteen hundred trades two years ago, and my hedge fund
Speaker 1: didn't have that many trades.
Speaker 4: Do you think it needs to also extend to the
Speaker 4: executive branch and include the president and the vice president?
Speaker 1: I think that they would be fine on the single
Speaker 1: stock and the holding period.
Speaker 2: Maybe they're just great tritus. As the secretary. Do you
Speaker 2: not think they're just great tritus.
Speaker 3: It is a statistical anomaly.
Speaker 1: You know. Warren Buffett wrote an essay once and he
Speaker 1: talked about the zoo and Graham and Dodville, and if
Speaker 1: all the orangutangs.
Speaker 3: In that zoo kept typing the Bible, then there's something
Speaker 3: going on in that zoo.
Speaker 1: There is something going on on Capitol Hill in terms
Speaker 1: of information.
Speaker 3: Leakage that is statistically they are not sound.
Speaker 2: Do you think those restrictions should extend to the executive branch?
Speaker 3: Sorry?
Speaker 2: Do you think those restrictions should extend to the White House?
Speaker 1: Well, I mean they already extend the Treasury.
Speaker 2: Is the president about this? Is he comfortable?
Speaker 1: Well, the presidents come out and favor this, and King
Speaker 1: Jefferies is in favor of this too. And I can
Speaker 1: tell you if if I were Congress and I were
Speaker 1: looking at my ratings with the American people, I would
Speaker 1: be pushing this because again, it's an extractive class. You
Speaker 1: should not come to d C expecting to line your pocket.
Speaker 1: You should come to d C to do the people's business.
Speaker 2: We couldn't agree more. And it's been greatly disappointing to
Speaker 2: see that there's tight restrictions on how journalists trade than
Speaker 2: over some members of Congress in Washington.
Speaker 3: Yeah.
Speaker 1: I mean again, it is one of the things that
Speaker 1: I think we can do to get trust back into
Speaker 1: the system.
Speaker 2: Just wanted to finish on the President's visits to Alaska
Speaker 2: going into weekend. Emory's going to be that what do
Speaker 2: you think we can accomplish this weekend.
Speaker 1: I think the President has been thinking about this a
Speaker 1: long time. He believes, as do I, that this war
Speaker 1: never would have started if he had been president, and
Speaker 1: he is committed to ending the bloodshed, but not in
Speaker 1: any calls, not in any costs. I think everyone has
Speaker 1: been frustrated with President Putin. We expected that he would
Speaker 1: come to the table in a more fulsome way. It
Speaker 1: looks like he may be ready to negotiate. And we've
Speaker 1: put secondary terriffs on an Indian on the Indians for
Speaker 1: buying Russian oil, and I could see if things don't
Speaker 1: go well, then sanctions or secondary terriffs could go up.
Speaker 4: What about China, They're the main purchasers of Russian crude.
Speaker 1: Again, I'm not going to get ahead of the President,
Speaker 1: but the President is the best at creating leverage for
Speaker 1: himself and he will make it clear to President Putin
Speaker 1: that all options are on the table.
Speaker 4: So sanctions can go up, or they can also be loosened.
Speaker 1: Sanctions can go up, they can be loosened, they can
Speaker 1: have a definitive life, they can go on indefinitely. There's
Speaker 1: this Russian shadow fleet of ships around the world that
Speaker 1: I think we could crack down in them. But a
Speaker 1: Marie and Jonathan, the one message I would leave you
Speaker 1: with the President Trump is meeting with President Putin, and
Speaker 1: the Europeans are in the wings, carping about how he
Speaker 1: should do it, what he should do it. But the
Speaker 1: Europeans need to join us in these sanctions. They need
Speaker 1: to The Europeans need to be willing to put on
Speaker 1: these secondary sanctions. I was at the G seven meeting
Speaker 1: in Canada with President Trump, and the Europeans kept talking
Speaker 1: about Senator Graham's bill to do the secondary tariffs. And
Speaker 1: I looked at all the leaders around the table and
Speaker 1: I said, is everyone at this table willing to put
Speaker 1: a two secondary tariff on China? And you know what,
Speaker 1: everybody wanted to see what kind of shoes they were wearing.
Speaker 2: I imagine the Germans went very quiet, and that's been
Speaker 2: a problem for a long time.
Speaker 1: Yeah, it's put up her, shut up time. The president
Speaker 1: is creating his own leverage. We need the Europeans to
Speaker 1: come in and help create more leverage.
Speaker 2: Mister secretary. I'm appreciate your time. Good to see if
Speaker 2: you're enjoying this. I get the fill that you're enjoying this.
Speaker 2: All right, it's good to see it. You seem happy.
Speaker 3: I think things are going well.
Speaker 2: Janette Love, I should take us at bad Company. The
Speaker 2: team I've had rights in the following to bank. Now
Speaker 2: it's not about whether it's a count rights in September,
Speaker 2: but by how much. Jeannette joined us now from more Jenet,
Speaker 2: welcome to the program. Also a big question about who's
Speaker 2: going to be on the committee by the time we
Speaker 2: get to the middle of September, and whether step and
Speaker 2: Myron can be confirmed by then. What are you telling
Speaker 2: clients about the prospects of that happening.
Speaker 5: Yeah, I mean, so.
Speaker 6: This is something that's kind of interesting because we think
Speaker 6: that the Trump administration would definitely like him to be
Speaker 6: on the FED Board before the September meeting. And the
Speaker 6: question also is do they want him on the board
Speaker 6: before September twelfth, when the dot plots and the forecast
Speaker 6: have to be submitted. So if the Senate's not coming
Speaker 6: back until September second, We've looked at prior cabinet appointees
Speaker 6: early on in this Trump administration, as well as Murn's
Speaker 6: appointment earlier this year to the Council of Economic Advisors,
Speaker 6: and in general it takes about thirteen.
Speaker 5: Days for a cabinet member to be appointed.
Speaker 6: So if the Senate comes back on September second, that
Speaker 6: does give enough time for him to be on the
Speaker 6: FED Board by the September sixteen, seventeenth meeting, but it
Speaker 6: may not give him enough time to be in time
Speaker 6: for September twelfth, might mean that the Senate Banking Committee
Speaker 6: has to come in earlier to get this confirmation process moving,
Speaker 6: to at least hold the hearing in advance, so then
Speaker 6: they can start moving to a committee vote when they
Speaker 6: come back officially from recess, and then move to the
Speaker 6: Senate floor.
Speaker 4: Jendan, how likely is that they're going to move this quickly?
Speaker 3: You know?
Speaker 6: I think it's might depend on whether or not there's
Speaker 6: pressure coming from the Trump administration if he asks them
Speaker 6: to treat this like a early cabinet member early on
Speaker 6: in the administration. Obviously, Marco Rubio was confirmed quite quickly
Speaker 6: with only I think five days. So if it's going
Speaker 6: to depend if there's some pressure there to actually get
Speaker 6: this moving, since obviously that's not usual for members to
Speaker 6: be called back into recess called back from recess early.
Speaker 6: But I think that's where there's going to have to
Speaker 6: be that pressure point is whether or not that occurs
Speaker 6: to get the Senate to actually move and try to
Speaker 6: advance this a little bit more quickly.
Speaker 4: And when it comes to Steve Meyron, he has the
Speaker 4: benefit of already going through this process. What's the likelihood
Speaker 4: of EJ and TONI getting confirmed to run BLS?
Speaker 6: Yeah, I mean, I think that there's probably going to
Speaker 6: be deference to the administration about getting his appointees in place.
Speaker 6: We haven't really seen any major pushback significantly from.
Speaker 5: A few Trump nominees overall.
Speaker 6: And I think the other thing to kind of watch
Speaker 6: too with the Fed appointment is watch a Senator like
Speaker 6: Tim Tillis, Tom Tillis and see if he might actually
Speaker 6: start to raise some questions. Does he also have a
Speaker 6: no vote in committee that could slow down the process.
Speaker 5: I think that's something else to kind of watch out for.
Speaker 6: But I think if in terms of the BLS appointee,
Speaker 6: there's going to be an effort to try to get
Speaker 6: his appointees to the positions. That's obviously been a fight
Speaker 6: within the Republicans and the Democrats in the Senate and
Speaker 6: whether or not they should have abandoned recess in the
Speaker 6: first place, because there's been such a lag in getting
Speaker 6: some of these nominees confirmed.
Speaker 4: When it comes to Antony, though, there's been a lot
Speaker 4: of pushback in conservative economic circles about his nomination, and
Speaker 4: when you look at who's on the Senate Committee on Health, Education, Labor,
Speaker 4: and Pensions, it's some Republicans where he cannot lose a
Speaker 4: single vote that hasn't had a problem with voicing their
Speaker 4: concerns with the Trump administration. They gave Bill Cassidy, Ron
Speaker 4: Paul Susan Collins, Lisa Murkowski. Do you think he really
Speaker 4: can get out of committee?
Speaker 6: Well, I think, obviously, as we've seen in the past,
Speaker 6: what happens in the hearing is most important.
Speaker 5: So if there's information.
Speaker 6: That comes up with the hearing, that could change how
Speaker 6: those senators view the nominee and their ultimate vote.
Speaker 5: On the decision.
Speaker 6: But as we've seen in the past, some of these
Speaker 6: same senators have had to issues with prior Trump nominees,
Speaker 6: but then when push comes to shove, they actually do
Speaker 6: vote them through committee, and they do vote them through
Speaker 6: on the floor. So I think the hearing will be
Speaker 6: quite instructive, but it's always something to kind of keep in.
Speaker 4: Mind, given even conservative economists think this individual's highly bias
Speaker 4: and politicized. Our clients telling you that they're concerned about
Speaker 4: the accuracy of the data going forward.
Speaker 6: I think this is starting to become a conversation. We're
Speaker 6: starting to hear some questions about whether or not there
Speaker 6: could be some politicization coming now with a number and
Speaker 6: whether or not people can feel like they can trust
Speaker 6: the numbers as much.
Speaker 5: It's not an overt.
Speaker 6: Concern at this point, but I think that that's obviously
Speaker 6: going to be something that's going to be in the
Speaker 6: back of investors' minds just thinking about whether or not
Speaker 6: there is some option going down the road, and now
Speaker 6: that we've had this argument come up with the past
Speaker 6: BLS commissioner and with a past jobs data, whether or
Speaker 6: not there could be some sort of either manipulation or
Speaker 6: the ability to put someone in there who could have
Speaker 6: a sway on the data.
Speaker 5: Janie, I would think that that's what you.
Speaker 2: Ask if I got to jump in forgive me when
Speaker 2: you engage with clients, are they worried about this? Is
Speaker 2: there something that comes up repeatedly or something the comfortable
Speaker 2: with at the moment.
Speaker 6: At the moment, I think it's not a significant concern.
Speaker 6: I think obviously how things play out over the next
Speaker 6: couple of months will make will have a bigger impact.
Speaker 6: But of course you are hearing questions just about whether
Speaker 6: the process might have a change now that we're seeing
Speaker 6: some movement, we're seeing a shake up at the BLS,
Speaker 6: things of that nature. Obviously, there are also some client
Speaker 6: who think that, you know, some reform is necessary. So
Speaker 6: I think that there's also kind of like let's do
Speaker 6: a little bit of a wait and see approach to
Speaker 6: this and see what might happen as this new individual
Speaker 6: comes in.
Speaker 2: Jennet, thank you, appreciate your time as always, Jennet Low there,
Speaker 2: Ohstatiga is a bad company. Braz An Selder is a
Speaker 2: child swap right of the following, slightly harder services inflation
Speaker 2: suggests the possibility the core PC prints will be a
Speaker 2: little higher, though September is still clearly on the table
Speaker 2: for a federal reserve. Ray Cup Lizenne joins us right
Speaker 2: now for more. Lizane, welcome to the program. Some confidence
Speaker 2: maybe that we're seeing limited tariff pass through, but maybe
Speaker 2: I think recently some nerves emerging that perhaps we're starting
Speaker 2: to see evidence of demand destruction. How concerned list are
Speaker 2: you about that?
Speaker 7: Well, you know, one thing that I think needs to
Speaker 7: be pointed out when you look at what was perceived
Speaker 7: to be fairly benign core goods inflation up only about
Speaker 7: on and a quarter percent on a year of year basis,
Speaker 7: is what the direction has been. So many people forget
Speaker 7: that we were actually with core goods. We were in
Speaker 7: deflation territory as recently as the second half of last year,
Speaker 7: So that's a full three percentage point more than increase
Speaker 7: from where we were at the latter part of last year,
Speaker 7: where you had core goods in deflation to the tune
Speaker 7: of negative two percent. So you've gone from negative two
Speaker 7: percent to one and change, and now you've got this
Speaker 7: hook higher on the services side. So I think this
Speaker 7: kind of data, inflation data, labor market data, you really
Speaker 7: need to dig under the surface to get a true
Speaker 7: sense of what the impact is as to whether the
Speaker 7: FED will cut it depends on the next set of reports.
Speaker 7: I think the mapping to PCE suggests you could see
Speaker 7: a little bit of a hotter move that doesn't tend
Speaker 7: to be as market moving as CPI and PPI, But
Speaker 7: that's what I'd be keeping an eye on.
Speaker 2: As Honess. You know, the range of outcomes is still
Speaker 2: really really wide. The way things out right now now,
Speaker 2: they might change in several months time. We talked a
Speaker 2: lot Michael mckeby's on the program earlier, and we were
Speaker 2: talking about how much companies were absorbing at the moment
Speaker 2: and whether they pass it on in the months to
Speaker 2: come or whether they cut costs. Do you think September
Speaker 2: is still too early to draw any firm conclusions.
Speaker 7: I think it is too early. But what I will say,
Speaker 7: and this has already been under way, and I think
Speaker 7: it will continue in the September and thereafter as it
Speaker 7: relates to the FED, I think you're likely to continue
Speaker 7: to see a wider dispersion of perspectives from members of
Speaker 7: the FED, certainly when they're in the federal open mouth
Speaker 7: committee mode out there speaking, but even in things like
Speaker 7: the Summary of Economic projections and particularly the dots plot,
Speaker 7: you're seeing a wider array. We had two descents with
Speaker 7: the most recent meeting of the July meeting. I think
Speaker 7: that that sort of dissent probability stays relatively high, with
Speaker 7: a wider range depending on who the individual is on
Speaker 7: that committee expressing their views going forward. So I think
Speaker 7: that's kind of the name of the game, at least
Speaker 7: in the near term.
Speaker 4: Well, if the tariff impact is mixed under the surface,
Speaker 4: when do you think we'll actually see it fully priced in?
Speaker 7: Well, the problem is that this was not you know
Speaker 7: a lot of people talked about the inflation impact being
Speaker 7: one time in nature, one time price level reset. The
Speaker 7: problem is there's no one time as it relates to
Speaker 7: the implementation of tariffs. It has been such rifle shot
Speaker 7: on off delays terraffs being used as a tool beyond
Speaker 7: just raising revenues or improving the trade deficit. So I
Speaker 7: think we've got the rolling nature of this. You know,
Speaker 7: several years ago we talked a lot about rolling recessions,
Speaker 7: so we didn't think you were going to see an
Speaker 7: actual economic recession, but pockets of weakness at different times.
Speaker 7: I think that's manifesting itself in the inflation data too,
Speaker 7: meaning the rolling nature of it, where you see pockets
Speaker 7: of impact on the upside, you maybe get some pockets
Speaker 7: of offset on the downside, as opposed to anything that
Speaker 7: is one time in nature. And I think that will
Speaker 7: also continue to be the name of the game because
Speaker 7: there isn't anything one time about how we're getting information
Speaker 7: on tariffs, and that increasingly makes it more difficult for
Speaker 7: companies to map out a longer term pricing strategy.
Speaker 4: Well when it comes to the FED, do they even
Speaker 4: have the luxury of waiting to see the full impact.
Speaker 4: If the labor market Lausanne is weakening.
Speaker 7: That would be the primary reason why September is on
Speaker 7: the table. The FED is essentially inferred, not that they're
Speaker 7: ignoring the inflation side of their mandate, but the trigger
Speaker 7: to move back to easier policy, per what they did
Speaker 7: last fall, is probably more on the labor market side
Speaker 7: versus the inflation side, unless you have a major, major
Speaker 7: spike in inflation from here. That's precisely what happened last
Speaker 7: fall when the Fed did launch what became only three
Speaker 7: rate cuts, but they launched it with a fifty and
Speaker 7: that was because of pretty significant concerns turned out to
Speaker 7: be somewhat unfounded, but significant concerns about the labor market.
Speaker 7: So the inflation data is going to be parsed like
Speaker 7: it always is, but I think it's the labor market
Speaker 7: side of their mandate that will ultimately be the trigger
Speaker 7: for what they do.
Speaker 2: And by how much. Listen, let's push some of this
Speaker 2: conversation into the equity market record, Hon, the SMP record. Hon.
Speaker 2: Then that's that one hundred as we kick off Wednesday morning.
Speaker 2: Beneath the index. How much adjustment are you seeing in
Speaker 2: individual equities to the prospect of so called demand destruction?
Speaker 2: When you hear about companies like Kava, like Sweet Green
Speaker 2: facing a bit of a consumer slowed down.
Speaker 7: Yeah, there's a lot of consolidation happening under the surface,
Speaker 7: which if you're only looking at at what the indexers
Speaker 7: are doing, I think you don't pick up on that.
Speaker 7: I've talked to a lot of people who say, oh,
Speaker 7: TeX's the best performing sector. It's actually the second best
Speaker 7: performing sector on a year to day basis, comm services
Speaker 7: being the other. But they're often lumped together. But each
Speaker 7: of those sectors only has about a rounding sixty percent
Speaker 7: of their stocks in the same kind of breadth pattern
Speaker 7: as the index overall. In the case of the Nasdaq
Speaker 7: one hundred all time highs, but less than fifty percent
Speaker 7: of the stocks are at all time highs. You've got
Speaker 7: only actually, I think it's less than thirty percent of
Speaker 7: stocks within the S and P five hundred have outperformed
Speaker 7: the index itself over the past month, and you don't
Speaker 7: get much above a third of the index over any
Speaker 7: trailing period one year, one month, three months, six months.
Speaker 7: So there's a bit more weakness and rotation and churn
Speaker 7: happening under the surface. It's somewhat similar to what we
Speaker 7: have seen in periods in the past, both in twenty
Speaker 7: twenty three and twenty twenty four, and I think the
Speaker 7: fuller story, not the real story, but the fuller story
Speaker 7: maybe getting told under the surface of these cap weighted indexes.
Speaker 2: Do you think that narrow breadth and high current centration
Speaker 2: is necessarily something to be concerned about? Zan Then that's
Speaker 2: the ultimate question for a lot of people. I hear
Speaker 2: people point it out all the time, and then we
Speaker 2: just keep grinding out new old time highs. Is it
Speaker 2: necessarily problematic?
Speaker 7: Note if the market continues to do well, But if
Speaker 7: you look at the early part of this year, the
Speaker 7: period between February nineteenth, which at that time was an
Speaker 7: all time high and the intra day low on April ninth,
Speaker 7: those areas of the market, the megacap, tech, tech related
Speaker 7: mag seven, whatever categorization you wanted to use, those were
Speaker 7: the areas that had the bigger draw downs relative to
Speaker 7: the index. So that that period between mid February and
Speaker 7: early April was one where the indexes were dragged down
Speaker 7: even more. But you did have some ballasts within the
Speaker 7: market in areas that had not done well. So yeah,
Speaker 7: you're absolutely right. If the market continues to do well
Speaker 7: and momentum is on the market side. I think the
Speaker 7: pain trade is still probably higher, but that could be
Speaker 7: a situation that unfolds fairly quickly and akin to what
Speaker 7: we saw in that mid February to mid April period.
Speaker 2: That sound I appreciate it. Time As always, this sounds
Speaker 2: some us that a child swamp. I think what joined
Speaker 2: around the time boat by another Yankees fan? Is that right?
Speaker 8: As soon as I saw the mug, I said, why
Speaker 8: aren't you disc.
Speaker 3: I was trying HIDEX.
Speaker 4: I'm pretty sure it's our best at treasure secretaries are
Speaker 4: red SOX fans, so.
Speaker 2: I don't want to.
Speaker 4: I don't want to antagonize him, you know.
Speaker 2: On during this entire interview, Tom force Selli of PGM
Speaker 2: Joints is around the table with Tomking.
Speaker 3: Morning, get good to see you.
Speaker 2: It's going to see it. Let's talk about the state
Speaker 2: of this economy. Let's start with the labor market first.
Speaker 2: Where are we?
Speaker 8: I mean, you know, I've been on this program many
Speaker 8: times for many months saying there are all these cracks forming,
Speaker 8: and that is as true today as it was, you know,
Speaker 8: sort of six months ago when we were driving that
Speaker 8: point home.
Speaker 3: So nothing has changed for us in that regard.
Speaker 8: In fact, what I would say, is the payroll report,
Speaker 8: the much maligned recent pay roll report. To me, that
Speaker 8: was just a manifestation of all the other things that
Speaker 8: had been going on prior. So I don't, I wouldn't.
Speaker 8: We weren't all shocked and bothered by it. I think
Speaker 8: it was just sort of revealing what was already in place.
Speaker 2: So let's stay on payrolls. Yeah, step down, clearly, very obvious.
Speaker 2: We've gone from a decent clip of gains to something
Speaker 2: closer to stall speed. I want to understand from your
Speaker 2: perspective whether you think that cements this idea that we've
Speaker 2: seen a technical turn, whether it's more evidence for a
Speaker 2: structural shift, something developing on the supply side.
Speaker 8: Yeah, so we think that things are slowing down, right,
Speaker 8: I mean I think that's an important idea. Like, we
Speaker 8: don't think we're like cyclically, we're about to slip into
Speaker 8: a recession. Instead, what we've been saying is we're in
Speaker 8: the sort of muddle through backdrops, and we would define
Speaker 8: that as sort of, like you a one percent ish
Speaker 8: kind of growth, one to one and a half percent growth,
Speaker 8: And so that report is actually very consistent with our
Speaker 8: view in that regard. So when I think about FED
Speaker 8: response function. We actually think the Fed they are supposed
Speaker 8: to cut. I mean, I don't think that's for us.
Speaker 8: That's been our long standing call that they would start
Speaker 8: cutting again in September, and so we feel good about
Speaker 8: that overall. So well, sorry, we feel good about the
Speaker 8: call overall. I mean, being slowing down is never obviously
Speaker 8: agree to state you feel.
Speaker 4: Good about the call of the FED cutting in September.
Speaker 4: The Trager secretary is calling for fifty basis point.
Speaker 2: Yeah, So look, do I have sympathy for that idea?
Speaker 3: The answer to that is, tell me.
Speaker 8: What the payroll report is going to look like, you know,
Speaker 8: in a month from now or whatever it is, a
Speaker 8: couple of weeks from now, because I think you're gonna
Speaker 8: need evidence for that. If it's just a sort of
Speaker 8: another another really soft report like we saw, I don't
Speaker 8: know if that's the evidence enough to go fifty. But
Speaker 8: you know, to me, it's it's sort of semantics in
Speaker 8: some way, because whether they go fifty or twenty five,
Speaker 8: I think they're pulling forward a lot of the cuts
Speaker 8: that they sort of were prt that the FED was
Speaker 8: pricing in over the balance of the next year and
Speaker 8: a half.
Speaker 4: If they go fifty though, what signal does that mean
Speaker 4: for how the Fed thinks of the economy right now?
Speaker 8: Yeah, I think it really drives home that, look, the
Speaker 8: Fed already and I feel like a lot of us,
Speaker 8: me included, I feel like a lot of us forget this.
Speaker 8: The Fed already had cuts teed up, right, They already
Speaker 8: were expecting two cuts this year, so they were expecting
Speaker 8: a softer economic backdrop. And so I think in that context,
Speaker 8: it's just very in keeping with what they're viewing. Show
Speaker 8: me another really poor payroll report it I'll give you
Speaker 8: the evidence for Hey, maybe they need to do more,
Speaker 8: but I think for right now it's pretty consistent.
Speaker 2: We get one more papers report. I've got no idea
Speaker 2: what Senate. We'll get that on September fifth. A week later,
Speaker 2: they don't tell you, absolutely cluarless to be a less
Speaker 2: it share nothing with me. A week later we'll get
Speaker 2: the CPI report. I want to finish on inflation, and
Speaker 2: turns to that side of the dual mandate. Limited tariff
Speaker 2: passed through relative to what was expected? Do you think
Speaker 2: it remains that when the months to count?
Speaker 8: No, Actually, I think you're seeing limited passed through now
Speaker 8: because companies did a really smart thing. They built inventories
Speaker 8: in a really meaningful So that's sort of buffering the
Speaker 8: sort of the flow of the tariff inflationary impulse into inflation.
Speaker 8: But I'll give you one really interesting thing to think about.
Speaker 8: You know, it's funny we're having this conversation about our
Speaker 8: payrolls calculator, right, Obviously we can have the same conversation
Speaker 8: about inflation inflation. There are so many flaws in the
Speaker 8: calculation of inflation. So if I look at if I
Speaker 8: swap out something as simple it's not that it's so
Speaker 8: simple because it's a big component.
Speaker 3: But if I swap out.
Speaker 8: Oeer for you know, sort of a market measure of
Speaker 8: rents like apartment list.
Speaker 3: Inflation is running at a one percent pace right now.
Speaker 8: I mean, I think all of this sort I think
Speaker 8: that to me is the right way of thinking about
Speaker 8: what the starting point for.
Speaker 2: It Isn't that giving you a lead on what you
Speaker 2: think ultimately is going to happen with service inflation down
Speaker 2: the road?
Speaker 3: Yeah?
Speaker 8: So I think from our perspective, what it means is
Speaker 8: that you are going to get this lift higher in inflation.
Speaker 8: But you know you so what so you lift sort
Speaker 8: toward the target as opposed to being above target now
Speaker 8: and going even further above target. I mean, I think
Speaker 8: if you look at inflation with just making some very
Speaker 8: modest and I think very reasonable adjustments, you probably want
Speaker 8: to getting back to target.
Speaker 2: This situation that is not something that you think will
Speaker 2: constrain the fensibility to reduce right and respect to softness
Speaker 2: in the light.
Speaker 8: Yeah, I don't. I mean, I think the FED has
Speaker 8: the right line on this. I think it is going
Speaker 8: to be a temporary sort of one time shift time
Speaker 8: you say.
Speaker 2: The fedesi right line, some fedid vigils at the FED, Yes,
Speaker 2: have the right line. Yes, I don't know where the
Speaker 2: whole committee is. Where's the whole comittee on this?
Speaker 8: Yeah, I mean, and as you would expect, there's just
Speaker 8: a divergence of views, I think, seemingly at this point.
Speaker 8: But it does seem that the sort of the momentum
Speaker 8: is drifting toward people having the right line, which is
Speaker 8: to say, cutting in September.
Speaker 4: If we're not going to see the full tariff impact,
Speaker 4: say till twenty twenty six. Can you see a scenario
Speaker 4: with a FED is cutting at the end of this year,
Speaker 4: maybe starting in September and then having to think about
Speaker 4: hikes next year.
Speaker 8: Yeah, so this is a really important idea in the
Speaker 8: context of this is not COVID, right. I mean, I
Speaker 8: think people are looking at this sort of this this
Speaker 8: drift that we're going to see higher in inflation, and
Speaker 8: I think that, you know, they're scarred. I think including
Speaker 8: FED officials is specifically pell I think right called the
Speaker 8: transitory So I think they're scarred because of the whole
Speaker 8: you know, let's call it transitory mistique. But it's this
Speaker 8: is not that you know, we imply people with mountains
Speaker 8: of cash through a helicopter drop of money. We didn't
Speaker 8: create a pent up demand scenario by shutting down an
Speaker 8: otherwise really healthy economy and then turning back on.
Speaker 2: So I think the setup is so different, right to
Speaker 2: see it's going to see you, sir, good same time.
Speaker 2: Thank you for being here. Tom por Sei of PGM
Speaker 2: Fixed Income. This is the Bloomberg Sevenants podcast, bringing you
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