WEBVTT - Bloomberg Surveillance TV: August 13th, 2025 0:00:00.080 --> 0:00:06.760 Bloomberg Audio Studios, Podcasts, radio News. 0:00:11.600 --> 0:00:15.440 This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along 0:00:15.440 --> 0:00:18.400 with Lisa Bromwitz and am Marie Hordern. Join us each 0:00:18.480 --> 0:00:21.360 day for insight from the best in markets, economics, and 0:00:21.400 --> 0:00:24.720 geopolitics from our global headquarters in New York City. We 0:00:24.760 --> 0:00:27.400 are live on Bloomberg Television weekday mornings from six to 0:00:27.480 --> 0:00:31.000 nine am Eastern. Subscribe to the podcast on Apple, Spotify 0:00:31.200 --> 0:00:33.479 or anywhere else you listen, and as always on the 0:00:33.479 --> 0:00:36.760 Bloomberg Terminal and the Bloomberg Business App. We've got a 0:00:36.760 --> 0:00:39.720 lot to discuss President Trump extending trade talks with China 0:00:39.920 --> 0:00:42.520 for another sixty days as both countries continue to win 0:00:42.560 --> 0:00:45.120 out key differences. Joining us now to discuss that and 0:00:45.120 --> 0:00:47.639 a whole lot more. The seventy Night Secretary of the Treasury, 0:00:47.960 --> 0:00:50.280 Scott Besson, mister Secretary, good morning, good to see it. 0:00:50.320 --> 0:00:50.800 Warren John. 0:00:51.159 --> 0:00:53.720 You're a cover model. Now you're famous. Can we get 0:00:53.720 --> 0:00:57.279 that front cover up for Business Week this month? Mister Secretary? 0:00:57.320 --> 0:00:59.040 I remember when you were just Scott Besson and we 0:00:59.040 --> 0:01:00.640 could go for breakfast to get the three of us 0:01:00.640 --> 0:01:02.040 and no one would bother you. What happened. 0:01:02.240 --> 0:01:04.120 I don't know, but I hope it's not the curse 0:01:04.280 --> 0:01:11.480 the cover because it tolf his Historically, the being on 0:01:11.520 --> 0:01:12.560 the cover is a curse. 0:01:12.680 --> 0:01:15.120 So well, the secrety market is not curse that keeps 0:01:15.120 --> 0:01:17.680 grinding out all time highs. There is some confidence that 0:01:17.720 --> 0:01:20.560 we're selling some issues on the trade front. There's one 0:01:20.600 --> 0:01:22.440 issue that came up this week that we'd love to 0:01:22.440 --> 0:01:25.000 hear from you about, and that's in Vidia. Where did 0:01:25.000 --> 0:01:28.880 this agreement come from? You've been quite innovative this administration 0:01:28.959 --> 0:01:31.479 on trade issues. Where did this come from? Who came 0:01:31.560 --> 0:01:31.960 up with it? 0:01:32.600 --> 0:01:33.200 The President? 0:01:33.720 --> 0:01:37.920 The president, As I tell everyone, the President is one 0:01:37.959 --> 0:01:40.360 of the most open minded people I know. He does 0:01:40.400 --> 0:01:43.479 everything at first principles. Why do we do things this way? 0:01:43.520 --> 0:01:46.280 Why shouldn't we do it the other way? And you know, 0:01:46.560 --> 0:01:49.920 I think that this is a very unique solution allows 0:01:49.960 --> 0:01:52.680 in Nvidia to expand into China. 0:01:53.080 --> 0:01:55.400 It can make in Vidia chips. 0:01:55.440 --> 0:02:01.600 The bellweather for Chinese technology, and then the US taxpayer 0:02:01.640 --> 0:02:02.520 gets a share of that. 0:02:02.760 --> 0:02:05.840 Key was unique? Is it unique to Invidia an empty 0:02:06.080 --> 0:02:08.000 or is this a model for other companies? 0:02:08.360 --> 0:02:11.480 I think we could see it in other industries over time. 0:02:11.520 --> 0:02:15.280 I think you know right now this is unique, but 0:02:15.960 --> 0:02:18.760 now that we have the model and the beta test, 0:02:19.080 --> 0:02:20.040 why not expand it. 0:02:20.240 --> 0:02:21.880 What do you say to people who think we're putting 0:02:21.919 --> 0:02:26.480 a price on national security concerns by basically selling export licenses. 0:02:27.480 --> 0:02:30.080 There are no national security concerns here. We would not 0:02:30.960 --> 0:02:34.320 sell any of the advanced chips. So the H twenties, 0:02:34.600 --> 0:02:36.240 I don't know whether you say there are four or 0:02:36.240 --> 0:02:39.880 five six levels down the chip stack. What we do 0:02:40.000 --> 0:02:44.280 not want here, Anne Marie, is for Huawei to have 0:02:44.360 --> 0:02:48.800 a digital Belton road. So we do not want the 0:02:48.919 --> 0:02:52.800 standard to become Chinese across the world or even in China. 0:02:53.000 --> 0:02:55.560 Well, we have exclusive reporting that Beijing is now sending 0:02:55.560 --> 0:02:58.440 out letters to firms saying, actually, shrug off those H 0:02:58.560 --> 0:03:02.000 twenty and use our domestick champions. Is this something you 0:03:02.080 --> 0:03:04.160 might discuss with your counterpart. 0:03:04.200 --> 0:03:05.760 Sure, we can discuss that. 0:03:05.919 --> 0:03:09.919 But it also tells me that they are worried about 0:03:09.960 --> 0:03:14.079 the Nvidio chips becoming the standard in China. Look In 0:03:14.200 --> 0:03:18.120 video is an incredible product. A lot of the technology 0:03:18.160 --> 0:03:22.640 in China is they're piggybacking, And I'll use piggybacking as 0:03:22.680 --> 0:03:27.960 a kind word for acquiring our technology do you mean 0:03:28.000 --> 0:03:31.799 stealing your words? And yes, that's what I mean. 0:03:32.200 --> 0:03:33.000 And the. 0:03:34.440 --> 0:03:38.160 In video Jensen Wang just stays years ahead of them. 0:03:38.560 --> 0:03:41.240 Criticism came from the Wall Street Ternal Editorial Board though 0:03:41.320 --> 0:03:44.480 about this new unique policy. They say it's a step 0:03:44.480 --> 0:03:48.640 toward government control of private business. Are you concerned some 0:03:48.720 --> 0:03:50.880 of these polies are starting to look like the country 0:03:50.920 --> 0:03:54.840 you're actually trying to de risk from central planning basically 0:03:54.840 --> 0:03:55.520 out of the old No. 0:03:55.720 --> 0:03:59.040 No, no, no, not at all, because where we got 0:03:59.600 --> 0:04:04.960 was with this unfettered trade. We did not have secure 0:04:05.040 --> 0:04:08.080 trade or fair trade, and so now we are trying 0:04:08.120 --> 0:04:12.080 to make it secure. So you don't want to We're 0:04:12.120 --> 0:04:16.480 not sending out the highest level chips, and we don't 0:04:16.480 --> 0:04:20.599 want to sell everything to everybody. So there is a 0:04:20.680 --> 0:04:25.040 need for intervention. And you know, the Wall Street Journal 0:04:25.680 --> 0:04:28.440 just let her rip with kind of a bunch of grumpy 0:04:28.480 --> 0:04:29.520 old men over there. 0:04:29.600 --> 0:04:30.680 I was with them yesterday. 0:04:31.720 --> 0:04:33.520 This is going to raise some revenue. What do you 0:04:33.520 --> 0:04:34.320 plan to do with it? 0:04:34.760 --> 0:04:35.640 Paid on the debt. 0:04:36.000 --> 0:04:37.480 It's all going to go to play down the debt. 0:04:37.520 --> 0:04:39.800 Because we have heard some stories about the money going 0:04:39.839 --> 0:04:44.480 back to consumers, going back to citizens of the United States, taxpayers. 0:04:43.960 --> 0:04:48.040 Well, President President Trump's talked about that, and look at 0:04:47.440 --> 0:04:52.440 these the bottom fifty percent of wag journers in the 0:04:52.440 --> 0:04:55.440 One Big Beautiful Bill are getting a lot of money back. 0:04:55.520 --> 0:04:58.200 No tax and tips, no tax on over time, no 0:04:58.320 --> 0:05:02.760 tax on Social Security loans are going to be tax deductible. 0:05:03.040 --> 0:05:06.160 So I think if we could make a substantial dent 0:05:06.400 --> 0:05:09.159 in the debt repayment, then we could talk about a 0:05:09.200 --> 0:05:09.920 program like that. 0:05:10.000 --> 0:05:11.480 Could you share with us the kind of numbers you're 0:05:11.520 --> 0:05:13.919 thinking about at the moment, just in terms of revenue raising, 0:05:13.960 --> 0:05:15.680 and not just the Nvidia deal. I'm talking about the 0:05:15.760 --> 0:05:17.360 terraffs on top of that. What are we raising at 0:05:17.360 --> 0:05:18.600 the moment month on months. 0:05:18.440 --> 0:05:21.520 Well, Johnson, I've been saying that we could hit three 0:05:21.600 --> 0:05:24.440 hundred billion this year, and I think that number is 0:05:24.440 --> 0:05:26.560 going to be low. I think I'm going to I 0:05:26.640 --> 0:05:30.240 always like to come in low and then surprise on 0:05:30.279 --> 0:05:32.880 the upside. But I think in the next days or 0:05:32.960 --> 0:05:37.000 weeks I may have to move that number up substantially. 0:05:37.279 --> 0:05:39.120 You've heard the debate playing out on Wall Street now 0:05:39.160 --> 0:05:41.119 for a number of months. Who's going to pay the teriffs? 0:05:41.160 --> 0:05:43.160 By definition, the importer will pay the tariff. The more 0:05:43.200 --> 0:05:45.920 important question here is who absorbs the costs, whether it's 0:05:45.960 --> 0:05:48.200 the foreign supplier, whether it's the domestic company here in 0:05:48.200 --> 0:05:50.279 the United States, or the end consumer. We've got some 0:05:50.360 --> 0:05:53.200 data yesterday, You've seen it. We've all looked at it. 0:05:53.520 --> 0:05:57.799 Limited tariff pass through relative to what was expected. Because 0:05:57.800 --> 0:05:59.680 of that, a lot of people are suggesting that maybe 0:05:59.760 --> 0:06:02.360 companies are absorbing costs in a way we didn't anticipate. 0:06:02.520 --> 0:06:04.720 Perhaps the past through will be more muted in the future. 0:06:04.960 --> 0:06:07.960 Are you comfortable with where things are now or do 0:06:08.040 --> 0:06:10.360 you think things might rebalance in the months to count. 0:06:10.360 --> 0:06:14.200 Jonathan, I think your framing there is exactly right, exactly right, 0:06:14.320 --> 0:06:18.760 because that obviously that the tariff itself is paid at 0:06:18.760 --> 0:06:22.600 the port, but what if the producer in the other 0:06:22.839 --> 0:06:27.080 country has lowered their price the ten fifteen to twenty percent, 0:06:27.200 --> 0:06:30.000 so that there is no price change with the tariff. 0:06:30.400 --> 0:06:35.160 And obviously our largest trade deficit is with China, and 0:06:35.360 --> 0:06:38.800 China does not have the same profit objective that other 0:06:38.920 --> 0:06:43.600 Western democracies do, so that is an employment agency, and 0:06:43.720 --> 0:06:47.279 my view has been that they would continue to eat 0:06:47.320 --> 0:06:51.320 the tariffs. They are doing that, so I think what 0:06:51.360 --> 0:06:54.880 we've seen is likely to continue happening. I also think 0:06:54.960 --> 0:06:57.360 there are probably a lot of corporate margins that got 0:06:57.480 --> 0:07:03.159 very fat during COVID. We're seeing a return to normal 0:07:03.240 --> 0:07:04.320 pre COVID margins. 0:07:04.440 --> 0:07:06.880 You see this as some kind of redistribution between corporate 0:07:06.920 --> 0:07:10.080 America and maybe the consumer Main Street and Wall Street. 0:07:10.840 --> 0:07:14.600 I think this administration is all about Main Street, but 0:07:14.680 --> 0:07:19.640 Wall Street's at a new high. So it's this fault equivalency. 0:07:19.760 --> 0:07:22.960 It's not either or I tell everyone, I call it 0:07:23.000 --> 0:07:27.280 parallel prosperity. Wall Street's done great, Main Street can now 0:07:27.360 --> 0:07:27.760 do great. 0:07:27.960 --> 0:07:30.200 Wall Street might do even better if the Federal Serve 0:07:30.240 --> 0:07:32.720 cuts interest rates. The President was pretty clear yesterday put 0:07:32.720 --> 0:07:35.720 out this comment, Jerome too late, pal must now lower 0:07:36.040 --> 0:07:38.360 the interest rate. Is it reasonable to give them a 0:07:38.400 --> 0:07:40.840 bit more time to draw conclusions about what's happening here? 0:07:41.240 --> 0:07:44.520 Well, I think what we could see is that, let's 0:07:44.640 --> 0:07:47.920 first of all, what if the BLS data had been 0:07:48.480 --> 0:07:51.920 the higher quality and we'd had those numbers, Jonathan. So 0:07:53.080 --> 0:07:57.800 if we'd seen those numbers in May in June, I 0:07:57.840 --> 0:08:01.200 suspect we could have had rate cuts in June and July. 0:08:01.480 --> 0:08:05.000 So that tells me that there's a very good chance 0:08:05.040 --> 0:08:09.040 of a fifty basis point rate cut, and I think 0:08:09.720 --> 0:08:12.400 President Trump is very good at giving these nicknames. And 0:08:12.480 --> 0:08:17.280 I think the reason that the Jay Powell gets a 0:08:17.360 --> 0:08:20.080 nickname too late is because he wants to go into 0:08:20.120 --> 0:08:23.000 a series of rate hikes. He's not willing. He's not 0:08:23.120 --> 0:08:26.600 Alan Greenspan, who is very forward thinking. They try to 0:08:26.640 --> 0:08:28.960 be more data driven, which I think is a mistake 0:08:29.360 --> 0:08:32.480 because I think we are going back into an economy 0:08:32.559 --> 0:08:35.720 like we had in the nineties, So you know, it's 0:08:35.880 --> 0:08:39.760 just very old fashioned thinking. But I do think we 0:08:39.840 --> 0:08:43.200 could go into a series of rate cuts here, starting 0:08:43.800 --> 0:08:46.240 with a fifty basis point rate cut in September. 0:08:46.400 --> 0:08:49.560 Fifty basis rate cut in September. Does that signal that 0:08:49.600 --> 0:08:51.600 the economy, though, is not doing well. 0:08:52.120 --> 0:08:57.360 That signals that there's an adjustment and the rates are 0:08:57.640 --> 0:09:01.520 too constrictive if you look at it any model that 0:09:01.840 --> 0:09:05.839 the if you we should probably be one hundred and 0:09:05.880 --> 0:09:09.079 fifty one hundred and seventy five bases points lower. So 0:09:10.000 --> 0:09:14.000 I think the committee needs to step back. I think 0:09:15.400 --> 0:09:19.920 probably one of the most politicized governors just went off 0:09:19.960 --> 0:09:26.320 the board and that she was very very political, I believe, 0:09:26.840 --> 0:09:28.400 and I think that. 0:09:29.920 --> 0:09:31.959 Does she do that gave you that impression I'd love 0:09:32.000 --> 0:09:34.560 to know. Sorry I mentioned you're referring to Governor Kugler. 0:09:34.600 --> 0:09:35.319 What does she do that game? 0:09:35.880 --> 0:09:38.440 I think there's a lot of inside baseball. And look, 0:09:38.880 --> 0:09:42.079 Governor Kugler, you read what she was saying when Kamala 0:09:42.080 --> 0:09:45.840 Harris was running, that we needed rake cuts, we needed this, 0:09:46.000 --> 0:09:48.719 We got to phone the runway and then all of 0:09:48.760 --> 0:09:53.080 a sudden it was hard to know whether we know TDS. 0:09:53.160 --> 0:09:53.800 Was it Trump that. 0:09:55.640 --> 0:09:59.880 Dimension syndrome or Trump derangement syndrome or tariff arrangement syndrome. 0:10:00.320 --> 0:10:02.800 You get the opportunity to remake the Federal Reserve. The 0:10:02.840 --> 0:10:05.960 president gets the opportunity to remodel reshape the Federal Reserve. 0:10:06.240 --> 0:10:08.600 And I'm not talking about the remodeling that maybe the 0:10:08.640 --> 0:10:10.720 current chairman's going through. We'll talk about that another time. 0:10:10.760 --> 0:10:12.800 I want to talk about the complexion and character of 0:10:12.840 --> 0:10:15.240 the committee, the changes that you're making at the moment. 0:10:15.320 --> 0:10:17.880 Stephen Maron, let's start with Stephen. How quickly can you 0:10:17.920 --> 0:10:18.800 get more and confirmed? 0:10:19.400 --> 0:10:24.880 We'll see. The President has great sway with Leader Thom. 0:10:25.000 --> 0:10:27.880 Leader Thom has been a great partner during the tax deal, 0:10:28.000 --> 0:10:31.559 and I think that he would like to see Stephen, 0:10:31.600 --> 0:10:34.240 who I've known for a long time, get on there 0:10:34.400 --> 0:10:38.240 as soon as possible. So I'm hopeful about the September meeting. 0:10:38.640 --> 0:10:43.000 And Jonathan, the President's concerned about the building and those 0:10:43.120 --> 0:10:47.200 massive costs overrun, which just tell you that there is 0:10:47.240 --> 0:10:49.120 no accountability at that organization. 0:10:49.679 --> 0:10:52.160 There's no oversight in terms of the spending. 0:10:52.559 --> 0:10:55.000 But the President and I are both concerned about the 0:10:55.040 --> 0:10:58.360 foundations of the FED, the foundations of the FED and 0:10:59.160 --> 0:11:02.280 how did this happen and why did it happen? And 0:11:02.400 --> 0:11:04.320 you know, how did the leadership let it happen. 0:11:04.400 --> 0:11:06.559 When it comes to Director Myron, do you expect him 0:11:06.600 --> 0:11:09.960 to stay on past the January term that expires from 0:11:10.040 --> 0:11:10.720 Coogler seat? 0:11:11.040 --> 0:11:12.000 I wouldn't expect that. 0:11:12.600 --> 0:11:15.120 So who are some names you're thinking of the Cooglar seat? 0:11:15.120 --> 0:11:17.320 Because everyone has been focused on who is going to 0:11:17.320 --> 0:11:20.240 fill the chairmanship role? Who are you thinking to fill 0:11:20.240 --> 0:11:20.959 that extra seat? 0:11:21.000 --> 0:11:26.400 Well, e Marie, we're working on the big list right now. 0:11:26.960 --> 0:11:29.079 I think they're going to be a couple more names 0:11:29.800 --> 0:11:32.679 revealed today. They're going to be private sector names. So 0:11:33.280 --> 0:11:38.200 we had a series or a list of current FED members. 0:11:38.240 --> 0:11:41.160 We're going to have some private sector very well respected, 0:11:41.640 --> 0:11:47.080 very well respected people and then we will get to 0:11:47.200 --> 0:11:48.120 the second seat. 0:11:48.679 --> 0:11:50.160 Can you give us some names, a little bit of 0:11:50.200 --> 0:11:52.600 a tease, maybe people that have been on this program. 0:11:52.920 --> 0:11:54.840 Well, I just did tease telling you there'll be some 0:11:54.920 --> 0:11:56.000 private sector names. 0:11:56.040 --> 0:11:58.719 Okay, when it comes to the FED chair, though, can 0:11:58.760 --> 0:12:00.600 you give us a sense of how many names you're 0:12:00.640 --> 0:12:01.880 actually thinking about. 0:12:01.920 --> 0:12:03.760 Well, I'm going to interview. 0:12:03.760 --> 0:12:07.000 I'm going to cast a wide net ten to eleven people, 0:12:07.600 --> 0:12:10.240 and then there'll be a group of us who are 0:12:10.240 --> 0:12:14.040 meeting with them, and we want to talk about monetary policy. 0:12:14.120 --> 0:12:17.840 We want to talk about regulatory policy, which is very, 0:12:18.040 --> 0:12:22.199 very important because the FED step I think bigfoot of 0:12:22.240 --> 0:12:25.760 the other regulators. The Fed's one of three regulators, Federal Reserve, 0:12:25.880 --> 0:12:32.320 OCC and FDIC, and I think that they need to 0:12:32.520 --> 0:12:34.199 understand that they are one of three. 0:12:34.640 --> 0:12:35.440 And then the. 0:12:35.320 --> 0:12:38.760 Third is the institution itself, which I think is what 0:12:38.880 --> 0:12:41.200 President Trump has been focused on quite a bit too. 0:12:41.520 --> 0:12:43.880 After you do this process, how many names are going 0:12:43.920 --> 0:12:45.720 to give to the President and when does he start 0:12:45.720 --> 0:12:46.840 those in person interviews? 0:12:47.400 --> 0:12:48.520 We don't have a timeline. 0:12:48.880 --> 0:12:53.200 By putting Stephen Myron in that gives us more time, 0:12:53.559 --> 0:12:56.240 and again, I want to cast a wide net. The 0:12:56.280 --> 0:13:03.160 President's very open minded before he chose A Powell. Janet 0:13:03.240 --> 0:13:07.000 Yellen was interviewed, John Taylor was interviewed. Two of them 0:13:07.080 --> 0:13:10.679 couldn't have been more different, so they were under consideration. 0:13:11.280 --> 0:13:12.679 I give you credit for coming up with a really 0:13:12.760 --> 0:13:15.440 credible list to replace the frontal Reserve chair, Jake pab 0:13:15.480 --> 0:13:16.760 without a doubt. I think most people that come on 0:13:16.800 --> 0:13:18.720 this program agree with that. What I want to talk 0:13:18.720 --> 0:13:21.000 about is the BLS now because there's some controversy around 0:13:21.000 --> 0:13:22.679 this pick. I'm sure you've heard some of the concerns. 0:13:22.920 --> 0:13:23.160 E J. 0:13:23.240 --> 0:13:25.760 Anthony had said the following earlier this week before getting 0:13:26.040 --> 0:13:28.720 the pick from the President. Until this issue with Payrose 0:13:28.760 --> 0:13:31.120 is corrected, he said, quote, the BLS should suspend issuing 0:13:31.160 --> 0:13:34.160 the monthly jobs report, but keep publishing the more accurate, 0:13:34.200 --> 0:13:37.760 though less timely, quarterly data. We'd love your thoughts on this. 0:13:38.000 --> 0:13:40.520 Is that something you'd support, not at all? 0:13:40.600 --> 0:13:43.280 And look what somebody says when. 0:13:43.120 --> 0:13:46.800 There are are private citizens is very very different. 0:13:47.400 --> 0:13:50.079 You know. I called for a shadow fed chair. 0:13:50.320 --> 0:13:54.280 And now that I'm in the seat, I don't think 0:13:54.320 --> 0:13:57.600 we need to do that. And I was there when 0:13:57.720 --> 0:14:02.600 EJ was interviewed, and he is incredibly qualified, and I 0:14:02.640 --> 0:14:05.160 think The most important thing here is that we get 0:14:05.200 --> 0:14:07.840 back to the integrity of the numbers, because it just 0:14:07.920 --> 0:14:11.760 became okay, just like so many things in our government, 0:14:12.960 --> 0:14:18.240 to get sloppy. And ej is precise. He has a 0:14:18.640 --> 0:14:22.880 doctorate in economics. I think President Trump put a lot 0:14:22.920 --> 0:14:26.800 of thought into this. He was very thorough in his 0:14:27.000 --> 0:14:30.120 questioning of him. So what we want is good data, 0:14:30.200 --> 0:14:33.080 because you can't make good decisions without good data. 0:14:33.240 --> 0:14:35.920 As I just said, is very likely. 0:14:35.760 --> 0:14:40.000 That the FED would have been doing something else in 0:14:40.120 --> 0:14:42.880 June in July if they had had this data. 0:14:43.120 --> 0:14:45.160 Well, let's talk about the data we've got and the 0:14:45.200 --> 0:14:47.920 process we have, and how we might improve that process. 0:14:48.320 --> 0:14:50.360 As you know that data is prone to big revisions 0:14:50.360 --> 0:14:52.280 in your career on More Street, we've all been dealing 0:14:52.280 --> 0:14:54.160 with this for a long long time because of the 0:14:54.200 --> 0:14:56.040 process and the lack of time. And the response is 0:14:56.240 --> 0:14:59.040 it is constantly reviewed month on month as you get 0:14:59.040 --> 0:15:03.040 more responses from America. How can we improve that process 0:15:03.240 --> 0:15:06.200 so this data is less prone to these big revisions. 0:15:06.360 --> 0:15:09.840 Well, I've been in government now for seven months and 0:15:10.080 --> 0:15:13.240 I can tell you that if we take the irs, 0:15:13.320 --> 0:15:16.360 which I'm now ahead of, they've been working on a 0:15:16.400 --> 0:15:17.840 tech upgrade. 0:15:17.360 --> 0:15:19.800 Since nineteen ninety. Nineteen ninety, we. 0:15:19.800 --> 0:15:24.920 Brought in a young person to fix that. The tech 0:15:25.000 --> 0:15:29.400 upgrade has been underway for longer than he is old, 0:15:29.840 --> 0:15:32.680 so he wasn't born when the tech upgrade started. So, 0:15:32.960 --> 0:15:35.080 you know, I just think like this idea that we're 0:15:35.080 --> 0:15:39.120 accepting this mediocrity in government. Why don't we bring things 0:15:39.160 --> 0:15:42.360 into the twenty first century? Why don't we bring it 0:15:42.400 --> 0:15:47.600 into the digital age? Because I don't know about political 0:15:47.640 --> 0:15:50.400 bias one way or the other, but what I can 0:15:50.560 --> 0:15:54.560 tell you is that the sample response size kept getting 0:15:54.600 --> 0:15:59.240 smaller and smaller, and then they they filled in the cells. 0:16:00.160 --> 0:16:04.880 Anytime you get judgment versus data, then things become qualitative 0:16:04.880 --> 0:16:07.160 and not quantitative. And I think EJ is going to 0:16:07.200 --> 0:16:11.000 do a great job of bringing back quantitative standards. I 0:16:11.320 --> 0:16:14.960 think he like these attacks in the press. I think 0:16:15.000 --> 0:16:15.600 they're all wrong. 0:16:16.080 --> 0:16:19.360 It's not in the press, it's even within conservative economic 0:16:19.440 --> 0:16:22.320 circles that don't think that he is credible to run 0:16:22.440 --> 0:16:25.600 the commission. Is the Trump administration open to putting more 0:16:25.640 --> 0:16:28.400 resources then to bls, maybe lifting a hiring freez Well 0:16:28.840 --> 0:16:29.320 and Marie. 0:16:29.320 --> 0:16:31.920 That's more of a democratic idea that you know, we 0:16:31.960 --> 0:16:36.320 need more. It's always money. It's always money. It's New 0:16:36.400 --> 0:16:40.400 York City schools, Chicago schools, DC schools. You get terrible outcomes. 0:16:40.760 --> 0:16:42.920 I think that he's going to sit back, look at 0:16:42.920 --> 0:16:46.080 the process, and how can we use technology to do 0:16:46.760 --> 0:16:50.400 this better. I got the Treasury and it was shocking. 0:16:50.560 --> 0:16:54.800 We process one point five billion payments a year, and 0:16:55.240 --> 0:16:58.160 five hundred million of them, one third of them did 0:16:58.200 --> 0:17:02.680 not have what's known as a task Treasury accounting symbol 0:17:02.840 --> 0:17:06.000 on them, and people are just hitting sin sin Sin. 0:17:06.480 --> 0:17:10.240 And it wasn't a gigantic leap just to try to 0:17:10.240 --> 0:17:11.680 get people to do their jobs. 0:17:11.920 --> 0:17:15.560 This has big implications for how people view credible economic data, 0:17:15.600 --> 0:17:17.480 but also the markets as well. So let's talk about 0:17:17.480 --> 0:17:19.920 financial markets. In the bond market, you've always been a 0:17:20.000 --> 0:17:22.320 ten year man. The spread between the two year and 0:17:22.320 --> 0:17:24.600 the ten year, I think has been really stable over 0:17:24.600 --> 0:17:26.480 the last several months, where we've start to see some 0:17:26.560 --> 0:17:30.040 leakages between tens out of thirties. That thirty year bond. 0:17:30.240 --> 0:17:32.399 As a tracery secretary, I remember you referring to yourself 0:17:32.440 --> 0:17:35.480 as the nation's top bond salesman. What's the usefulness of 0:17:35.560 --> 0:17:38.200 issuing a thirty year bond when it feels like at 0:17:38.200 --> 0:17:42.080 the moment we're outsourcing borrowing cost to what happens in Japan, 0:17:42.320 --> 0:17:44.800 what might happen in the UK, what happens in Europe. 0:17:44.800 --> 0:17:47.199 What's the value of issuing that. 0:17:47.200 --> 0:17:50.760 That's a great question, Jonathan, And look, we are committed 0:17:50.800 --> 0:17:55.840 to keeping inflation expectations glow and this is a global phenomenon, 0:17:56.520 --> 0:18:00.119 whether it's the ten or the thirty. The US tenure 0:18:00.240 --> 0:18:02.480 is one of the few ten years where the yield 0:18:02.720 --> 0:18:06.040 is down on the year, So that tells me that 0:18:06.240 --> 0:18:11.840 there's credibility from Treasury, credibility from FED, that the inflation 0:18:12.000 --> 0:18:16.560 expectations are well anchored. But there's definitely leakage from the 0:18:16.880 --> 0:18:20.760 Japanese have an inflation problem. I've spoken to Governor u Wada, 0:18:21.480 --> 0:18:24.720 my opinion not his. They're behind the curve, so they're 0:18:24.760 --> 0:18:28.240 going to be hiking and they need to get their 0:18:28.240 --> 0:18:32.960 inflation problem under control. In Germany, we saw a substantial 0:18:33.000 --> 0:18:37.159 spike in German rates in the past week also, so 0:18:37.440 --> 0:18:41.359 you know, our thirty year is getting dragged along with that. 0:18:41.480 --> 0:18:47.159 We've been refilling the Treasury General account, which during the 0:18:47.200 --> 0:18:50.480 debt ceiling standoff got run down, and we're doing that 0:18:50.560 --> 0:18:51.680 with short term bills. 0:18:52.000 --> 0:18:54.119 Do you see more reason then to pare back on 0:18:54.200 --> 0:18:56.560 thirty year issuants? With all this in mind, and this 0:18:56.640 --> 0:18:58.200 is a change again for you now and to see 0:18:58.200 --> 0:19:01.000 as you look at these developments and rethink, how are 0:19:01.040 --> 0:19:02.440 your thoughts on that matter evolving? 0:19:02.880 --> 0:19:06.960 Yeah, they are evolving, and we'll see where things go. 0:19:07.600 --> 0:19:12.440 I do think as we bring down this big deficit 0:19:12.520 --> 0:19:16.719 that we inherited, I think that the US, that the 0:19:16.880 --> 0:19:20.920 entire US curve, can have a parallel shift down relative 0:19:20.960 --> 0:19:21.840 to the rest of the world. 0:19:21.920 --> 0:19:23.480 Do you think you can work with the Federal Reserve 0:19:23.480 --> 0:19:25.959 on this matter? So if we take the weighted average 0:19:25.960 --> 0:19:28.520 maturity of FED holdings at the moment, believe that's running 0:19:28.520 --> 0:19:31.600 it about nine years, the issuance of the average maturity 0:19:31.560 --> 0:19:35.040 about standing bills notes bawns, that's closer to six. Do 0:19:35.080 --> 0:19:36.920 you need to narrow that gap a little bit? 0:19:37.800 --> 0:19:38.000 Yeah. 0:19:38.160 --> 0:19:41.280 Look, I don't think the FED needs to get back 0:19:41.280 --> 0:19:46.120 into the large scale asset purchase business, and we've had 0:19:46.359 --> 0:19:50.000 very good demand, especially in the belly of the curve, 0:19:50.200 --> 0:19:54.200 which is where asset managers seem most interested. 0:19:54.280 --> 0:19:56.560 Now, when it comes to other things you're working on 0:19:56.600 --> 0:19:59.879 in Washington, D C. There's still this stock band legislation 0:20:00.119 --> 0:20:03.159 that has been circulating around Congress. Is a president prepared 0:20:03.200 --> 0:20:03.920 to sign that bill. 0:20:05.520 --> 0:20:09.320 I don't think we have the perfect bill yet, but 0:20:09.520 --> 0:20:13.600 I am going to start pushing for its single stock 0:20:13.720 --> 0:20:18.679 trading band because it is the credibility of the House 0:20:18.760 --> 0:20:21.600 and the Senate that you look at some of these 0:20:21.640 --> 0:20:27.680 eye popping returns, whether it's a Representative Pelosi, Senator Widen, 0:20:28.480 --> 0:20:31.520 every hedge fund would be jealous of them, and the 0:20:31.560 --> 0:20:35.760 American people deserve better than this. People don't shouldn't come 0:20:35.800 --> 0:20:37.879 to Washington to get rich, They should come to serve 0:20:37.920 --> 0:20:42.040 the American people. And it brings down trust in the 0:20:42.119 --> 0:20:45.080 system because I can tell you that if any private 0:20:45.119 --> 0:20:48.600 citizen traded this way, the sec would be knocking on 0:20:48.600 --> 0:20:48.920 their door. 0:20:49.000 --> 0:20:51.320 Do you think it needs to extend? They'll beyond single stocks? 0:20:51.359 --> 0:20:55.560 These individuals can still have ets and other products. 0:20:55.720 --> 0:20:58.639 Well, what I used to do my old firm was 0:20:58.680 --> 0:21:01.960 you could buy ETFs had to be widely held ETF 0:21:02.080 --> 0:21:06.600 so they couldn't be of a small size, and there 0:21:06.640 --> 0:21:09.960 was a long holding period. The House and the Senate, 0:21:10.040 --> 0:21:13.000 they're supposed to be working for the American people, their constituents. 0:21:12.960 --> 0:21:18.879 They're supposed to be making law and they shouldn't be 0:21:18.880 --> 0:21:21.879 trading every day. I'm not going to name names, but 0:21:21.920 --> 0:21:25.000 there was one person in Congress who had twelve or 0:21:25.040 --> 0:21:28.560 thirteen hundred trades two years ago, and my hedge fund 0:21:28.560 --> 0:21:29.480 didn't have that many trades. 0:21:29.520 --> 0:21:31.520 Do you think it needs to also extend to the 0:21:31.520 --> 0:21:34.040 executive branch and include the president and the vice president? 0:21:34.760 --> 0:21:39.159 I think that they would be fine on the single 0:21:39.160 --> 0:21:40.959 stock and the holding period. 0:21:41.200 --> 0:21:43.760 Maybe they're just great tritus. As the secretary. Do you 0:21:43.760 --> 0:21:45.120 not think they're just great tritus. 0:21:46.280 --> 0:21:48.320 It is a statistical anomaly. 0:21:48.400 --> 0:21:51.359 You know. Warren Buffett wrote an essay once and he 0:21:51.440 --> 0:21:53.959 talked about the zoo and Graham and Dodville, and if 0:21:54.000 --> 0:21:55.840 all the orangutangs. 0:21:55.080 --> 0:21:58.800 In that zoo kept typing the Bible, then there's something 0:21:58.840 --> 0:21:59.840 going on in that zoo. 0:22:00.040 --> 0:22:03.200 There is something going on on Capitol Hill in terms 0:22:03.240 --> 0:22:04.479 of information. 0:22:04.119 --> 0:22:10.200 Leakage that is statistically they are not sound. 0:22:10.320 --> 0:22:12.840 Do you think those restrictions should extend to the executive branch? 0:22:13.240 --> 0:22:13.560 Sorry? 0:22:13.720 --> 0:22:15.800 Do you think those restrictions should extend to the White House? 0:22:15.920 --> 0:22:18.800 Well, I mean they already extend the Treasury. 0:22:19.200 --> 0:22:23.480 Is the president about this? Is he comfortable? 0:22:23.480 --> 0:22:27.080 Well, the presidents come out and favor this, and King 0:22:27.160 --> 0:22:29.880 Jefferies is in favor of this too. And I can 0:22:29.920 --> 0:22:32.840 tell you if if I were Congress and I were 0:22:32.920 --> 0:22:36.360 looking at my ratings with the American people, I would 0:22:36.440 --> 0:22:40.560 be pushing this because again, it's an extractive class. You 0:22:40.600 --> 0:22:44.760 should not come to d C expecting to line your pocket. 0:22:44.920 --> 0:22:47.399 You should come to d C to do the people's business. 0:22:47.400 --> 0:22:49.760 We couldn't agree more. And it's been greatly disappointing to 0:22:49.760 --> 0:22:52.679 see that there's tight restrictions on how journalists trade than 0:22:52.720 --> 0:22:54.840 over some members of Congress in Washington. 0:22:54.960 --> 0:22:55.160 Yeah. 0:22:55.560 --> 0:22:59.800 I mean again, it is one of the things that 0:22:59.880 --> 0:23:02.240 I think we can do to get trust back into 0:23:02.280 --> 0:23:02.760 the system. 0:23:03.000 --> 0:23:05.280 Just wanted to finish on the President's visits to Alaska 0:23:05.440 --> 0:23:07.320 going into weekend. Emory's going to be that what do 0:23:07.320 --> 0:23:08.920 you think we can accomplish this weekend. 0:23:09.440 --> 0:23:16.359 I think the President has been thinking about this a 0:23:16.440 --> 0:23:20.800 long time. He believes, as do I, that this war 0:23:20.960 --> 0:23:23.600 never would have started if he had been president, and 0:23:23.640 --> 0:23:26.679 he is committed to ending the bloodshed, but not in 0:23:26.720 --> 0:23:31.040 any calls, not in any costs. I think everyone has 0:23:31.119 --> 0:23:34.919 been frustrated with President Putin. We expected that he would 0:23:35.119 --> 0:23:38.040 come to the table in a more fulsome way. It 0:23:38.119 --> 0:23:41.960 looks like he may be ready to negotiate. And we've 0:23:42.040 --> 0:23:47.560 put secondary terriffs on an Indian on the Indians for 0:23:47.680 --> 0:23:51.240 buying Russian oil, and I could see if things don't 0:23:51.280 --> 0:23:56.000 go well, then sanctions or secondary terriffs could go up. 0:23:56.320 --> 0:23:59.480 What about China, They're the main purchasers of Russian crude. 0:24:00.320 --> 0:24:03.960 Again, I'm not going to get ahead of the President, 0:24:04.080 --> 0:24:07.640 but the President is the best at creating leverage for 0:24:07.760 --> 0:24:11.159 himself and he will make it clear to President Putin 0:24:11.240 --> 0:24:13.439 that all options are on the table. 0:24:13.840 --> 0:24:16.680 So sanctions can go up, or they can also be loosened. 0:24:17.960 --> 0:24:21.840 Sanctions can go up, they can be loosened, they can 0:24:22.520 --> 0:24:27.920 have a definitive life, they can go on indefinitely. There's 0:24:27.960 --> 0:24:32.080 this Russian shadow fleet of ships around the world that 0:24:32.280 --> 0:24:35.280 I think we could crack down in them. But a 0:24:35.400 --> 0:24:37.960 Marie and Jonathan, the one message I would leave you 0:24:38.000 --> 0:24:42.520 with the President Trump is meeting with President Putin, and 0:24:42.119 --> 0:24:46.440 the Europeans are in the wings, carping about how he 0:24:46.480 --> 0:24:48.439 should do it, what he should do it. But the 0:24:48.480 --> 0:24:52.440 Europeans need to join us in these sanctions. They need 0:24:52.480 --> 0:24:55.040 to The Europeans need to be willing to put on 0:24:55.119 --> 0:24:58.679 these secondary sanctions. I was at the G seven meeting 0:24:58.960 --> 0:25:04.000 in Canada with President Trump, and the Europeans kept talking 0:25:04.000 --> 0:25:08.320 about Senator Graham's bill to do the secondary tariffs. And 0:25:08.520 --> 0:25:11.040 I looked at all the leaders around the table and 0:25:11.080 --> 0:25:15.480 I said, is everyone at this table willing to put 0:25:15.520 --> 0:25:19.680 a two secondary tariff on China? And you know what, 0:25:20.040 --> 0:25:22.439 everybody wanted to see what kind of shoes they were wearing. 0:25:22.800 --> 0:25:25.000 I imagine the Germans went very quiet, and that's been 0:25:25.040 --> 0:25:26.080 a problem for a long time. 0:25:26.800 --> 0:25:29.880 Yeah, it's put up her, shut up time. The president 0:25:29.920 --> 0:25:33.199 is creating his own leverage. We need the Europeans to 0:25:33.320 --> 0:25:35.359 come in and help create more leverage. 0:25:35.440 --> 0:25:37.720 Mister secretary. I'm appreciate your time. Good to see if 0:25:37.720 --> 0:25:39.639 you're enjoying this. I get the fill that you're enjoying this. 0:25:39.760 --> 0:25:41.960 All right, it's good to see it. You seem happy. 0:25:42.680 --> 0:25:44.400 I think things are going well. 0:25:54.480 --> 0:25:56.440 Janette Love, I should take us at bad Company. The 0:25:56.440 --> 0:25:58.159 team I've had rights in the following to bank. Now 0:25:58.160 --> 0:26:00.000 it's not about whether it's a count rights in September, 0:26:00.400 --> 0:26:02.680 but by how much. Jeannette joined us now from more Jenet, 0:26:02.720 --> 0:26:04.800 welcome to the program. Also a big question about who's 0:26:04.800 --> 0:26:06.240 going to be on the committee by the time we 0:26:06.240 --> 0:26:07.919 get to the middle of September, and whether step and 0:26:07.960 --> 0:26:10.200 Myron can be confirmed by then. What are you telling 0:26:10.200 --> 0:26:11.760 clients about the prospects of that happening. 0:26:12.760 --> 0:26:13.360 Yeah, I mean, so. 0:26:13.359 --> 0:26:15.440 This is something that's kind of interesting because we think 0:26:15.440 --> 0:26:18.000 that the Trump administration would definitely like him to be 0:26:18.240 --> 0:26:21.800 on the FED Board before the September meeting. And the 0:26:21.880 --> 0:26:24.160 question also is do they want him on the board 0:26:24.200 --> 0:26:27.040 before September twelfth, when the dot plots and the forecast 0:26:27.080 --> 0:26:29.679 have to be submitted. So if the Senate's not coming 0:26:29.720 --> 0:26:34.720 back until September second, We've looked at prior cabinet appointees 0:26:34.800 --> 0:26:38.560 early on in this Trump administration, as well as Murn's 0:26:39.080 --> 0:26:42.800 appointment earlier this year to the Council of Economic Advisors, 0:26:42.960 --> 0:26:45.040 and in general it takes about thirteen. 0:26:44.720 --> 0:26:47.040 Days for a cabinet member to be appointed. 0:26:47.400 --> 0:26:50.199 So if the Senate comes back on September second, that 0:26:50.280 --> 0:26:52.119 does give enough time for him to be on the 0:26:52.160 --> 0:26:55.719 FED Board by the September sixteen, seventeenth meeting, but it 0:26:55.760 --> 0:26:58.280 may not give him enough time to be in time 0:26:58.320 --> 0:27:01.600 for September twelfth, might mean that the Senate Banking Committee 0:27:01.600 --> 0:27:05.159 has to come in earlier to get this confirmation process moving, 0:27:05.200 --> 0:27:07.280 to at least hold the hearing in advance, so then 0:27:07.280 --> 0:27:09.040 they can start moving to a committee vote when they 0:27:09.040 --> 0:27:11.439 come back officially from recess, and then move to the 0:27:11.440 --> 0:27:12.080 Senate floor. 0:27:12.359 --> 0:27:14.719 Jendan, how likely is that they're going to move this quickly? 0:27:15.760 --> 0:27:15.959 You know? 0:27:16.000 --> 0:27:17.760 I think it's might depend on whether or not there's 0:27:17.800 --> 0:27:20.560 pressure coming from the Trump administration if he asks them 0:27:20.600 --> 0:27:24.119 to treat this like a early cabinet member early on 0:27:24.160 --> 0:27:27.680 in the administration. Obviously, Marco Rubio was confirmed quite quickly 0:27:27.760 --> 0:27:30.119 with only I think five days. So if it's going 0:27:30.160 --> 0:27:32.560 to depend if there's some pressure there to actually get 0:27:32.560 --> 0:27:36.520 this moving, since obviously that's not usual for members to 0:27:36.560 --> 0:27:39.600 be called back into recess called back from recess early. 0:27:39.920 --> 0:27:41.439 But I think that's where there's going to have to 0:27:41.440 --> 0:27:44.320 be that pressure point is whether or not that occurs 0:27:44.359 --> 0:27:46.159 to get the Senate to actually move and try to 0:27:46.160 --> 0:27:47.680 advance this a little bit more quickly. 0:27:47.800 --> 0:27:49.240 And when it comes to Steve Meyron, he has the 0:27:49.280 --> 0:27:52.520 benefit of already going through this process. What's the likelihood 0:27:52.520 --> 0:27:55.360 of EJ and TONI getting confirmed to run BLS? 0:27:56.640 --> 0:27:58.639 Yeah, I mean, I think that there's probably going to 0:27:58.680 --> 0:28:03.200 be deference to the administration about getting his appointees in place. 0:28:03.240 --> 0:28:08.120 We haven't really seen any major pushback significantly from. 0:28:08.080 --> 0:28:10.159 A few Trump nominees overall. 0:28:10.840 --> 0:28:12.520 And I think the other thing to kind of watch 0:28:12.560 --> 0:28:15.840 too with the Fed appointment is watch a Senator like 0:28:16.040 --> 0:28:19.119 Tim Tillis, Tom Tillis and see if he might actually 0:28:19.119 --> 0:28:22.720 start to raise some questions. Does he also have a 0:28:23.520 --> 0:28:26.280 no vote in committee that could slow down the process. 0:28:26.320 --> 0:28:28.280 I think that's something else to kind of watch out for. 0:28:28.760 --> 0:28:31.680 But I think if in terms of the BLS appointee, 0:28:31.760 --> 0:28:33.520 there's going to be an effort to try to get 0:28:33.560 --> 0:28:37.240 his appointees to the positions. That's obviously been a fight 0:28:37.440 --> 0:28:40.280 within the Republicans and the Democrats in the Senate and 0:28:40.320 --> 0:28:42.320 whether or not they should have abandoned recess in the 0:28:42.320 --> 0:28:45.240 first place, because there's been such a lag in getting 0:28:45.240 --> 0:28:46.840 some of these nominees confirmed. 0:28:47.120 --> 0:28:49.000 When it comes to Antony, though, there's been a lot 0:28:49.040 --> 0:28:52.800 of pushback in conservative economic circles about his nomination, and 0:28:52.840 --> 0:28:56.160 when you look at who's on the Senate Committee on Health, Education, Labor, 0:28:56.200 --> 0:28:59.080 and Pensions, it's some Republicans where he cannot lose a 0:28:59.080 --> 0:29:03.120 single vote that hasn't had a problem with voicing their 0:29:03.200 --> 0:29:06.160 concerns with the Trump administration. They gave Bill Cassidy, Ron 0:29:06.200 --> 0:29:09.480 Paul Susan Collins, Lisa Murkowski. Do you think he really 0:29:09.520 --> 0:29:10.600 can get out of committee? 0:29:11.640 --> 0:29:14.000 Well, I think, obviously, as we've seen in the past, 0:29:14.160 --> 0:29:16.120 what happens in the hearing is most important. 0:29:16.400 --> 0:29:18.560 So if there's information. 0:29:18.160 --> 0:29:20.440 That comes up with the hearing, that could change how 0:29:20.480 --> 0:29:23.800 those senators view the nominee and their ultimate vote. 0:29:23.520 --> 0:29:24.160 On the decision. 0:29:24.400 --> 0:29:26.440 But as we've seen in the past, some of these 0:29:26.440 --> 0:29:29.480 same senators have had to issues with prior Trump nominees, 0:29:29.640 --> 0:29:31.640 but then when push comes to shove, they actually do 0:29:31.800 --> 0:29:33.880 vote them through committee, and they do vote them through 0:29:33.920 --> 0:29:35.560 on the floor. So I think the hearing will be 0:29:35.640 --> 0:29:38.400 quite instructive, but it's always something to kind of keep in. 0:29:38.360 --> 0:29:43.480 Mind, given even conservative economists think this individual's highly bias 0:29:43.640 --> 0:29:48.360 and politicized. Our clients telling you that they're concerned about 0:29:48.360 --> 0:29:51.120 the accuracy of the data going forward. 0:29:52.120 --> 0:29:54.760 I think this is starting to become a conversation. We're 0:29:54.800 --> 0:29:57.160 starting to hear some questions about whether or not there 0:29:57.160 --> 0:30:00.440 could be some politicization coming now with a number and 0:30:00.480 --> 0:30:02.440 whether or not people can feel like they can trust 0:30:02.440 --> 0:30:03.400 the numbers as much. 0:30:03.640 --> 0:30:05.040 It's not an overt. 0:30:04.680 --> 0:30:07.080 Concern at this point, but I think that that's obviously 0:30:07.120 --> 0:30:08.760 going to be something that's going to be in the 0:30:08.800 --> 0:30:11.800 back of investors' minds just thinking about whether or not 0:30:12.160 --> 0:30:15.520 there is some option going down the road, and now 0:30:15.520 --> 0:30:18.160 that we've had this argument come up with the past 0:30:18.720 --> 0:30:22.040 BLS commissioner and with a past jobs data, whether or 0:30:22.080 --> 0:30:25.400 not there could be some sort of either manipulation or 0:30:25.560 --> 0:30:27.720 the ability to put someone in there who could have 0:30:28.000 --> 0:30:29.120 a sway on the data. 0:30:29.680 --> 0:30:30.800 Janie, I would think that that's what you. 0:30:30.920 --> 0:30:33.120 Ask if I got to jump in forgive me when 0:30:33.160 --> 0:30:35.520 you engage with clients, are they worried about this? Is 0:30:35.520 --> 0:30:38.240 there something that comes up repeatedly or something the comfortable 0:30:38.240 --> 0:30:38.840 with at the moment. 0:30:39.520 --> 0:30:42.560 At the moment, I think it's not a significant concern. 0:30:42.640 --> 0:30:44.920 I think obviously how things play out over the next 0:30:44.920 --> 0:30:48.040 couple of months will make will have a bigger impact. 0:30:48.360 --> 0:30:50.640 But of course you are hearing questions just about whether 0:30:50.720 --> 0:30:54.080 the process might have a change now that we're seeing 0:30:54.160 --> 0:30:56.880 some movement, we're seeing a shake up at the BLS, 0:30:56.960 --> 0:30:59.960 things of that nature. Obviously, there are also some client 0:31:00.120 --> 0:31:02.400 who think that, you know, some reform is necessary. So 0:31:02.440 --> 0:31:04.120 I think that there's also kind of like let's do 0:31:04.160 --> 0:31:05.840 a little bit of a wait and see approach to 0:31:05.960 --> 0:31:08.920 this and see what might happen as this new individual 0:31:08.960 --> 0:31:09.360 comes in. 0:31:09.560 --> 0:31:12.040 Jennet, thank you, appreciate your time as always, Jennet Low there, 0:31:12.120 --> 0:31:24.680 Ohstatiga is a bad company. Braz An Selder is a 0:31:24.760 --> 0:31:27.760 child swap right of the following, slightly harder services inflation 0:31:27.800 --> 0:31:31.040 suggests the possibility the core PC prints will be a 0:31:31.040 --> 0:31:34.440 little higher, though September is still clearly on the table 0:31:34.640 --> 0:31:36.840 for a federal reserve. Ray Cup Lizenne joins us right 0:31:36.840 --> 0:31:39.480 now for more. Lizane, welcome to the program. Some confidence 0:31:39.560 --> 0:31:43.040 maybe that we're seeing limited tariff pass through, but maybe 0:31:43.080 --> 0:31:46.520 I think recently some nerves emerging that perhaps we're starting 0:31:46.520 --> 0:31:49.560 to see evidence of demand destruction. How concerned list are 0:31:49.560 --> 0:31:50.160 you about that? 0:31:51.080 --> 0:31:53.120 Well, you know, one thing that I think needs to 0:31:53.120 --> 0:31:55.560 be pointed out when you look at what was perceived 0:31:55.560 --> 0:31:59.880 to be fairly benign core goods inflation up only about 0:32:00.040 --> 0:32:02.000 on and a quarter percent on a year of year basis, 0:32:02.160 --> 0:32:06.120 is what the direction has been. So many people forget 0:32:06.120 --> 0:32:08.280 that we were actually with core goods. We were in 0:32:08.360 --> 0:32:12.080 deflation territory as recently as the second half of last year, 0:32:12.160 --> 0:32:16.440 So that's a full three percentage point more than increase 0:32:16.520 --> 0:32:19.040 from where we were at the latter part of last year, 0:32:19.120 --> 0:32:22.200 where you had core goods in deflation to the tune 0:32:22.240 --> 0:32:24.680 of negative two percent. So you've gone from negative two 0:32:24.720 --> 0:32:27.160 percent to one and change, and now you've got this 0:32:27.200 --> 0:32:30.440 hook higher on the services side. So I think this 0:32:30.640 --> 0:32:33.880 kind of data, inflation data, labor market data, you really 0:32:33.920 --> 0:32:35.960 need to dig under the surface to get a true 0:32:36.000 --> 0:32:39.600 sense of what the impact is as to whether the 0:32:39.600 --> 0:32:43.400 FED will cut it depends on the next set of reports. 0:32:43.440 --> 0:32:47.040 I think the mapping to PCE suggests you could see 0:32:47.080 --> 0:32:49.280 a little bit of a hotter move that doesn't tend 0:32:49.320 --> 0:32:53.320 to be as market moving as CPI and PPI, But 0:32:54.080 --> 0:32:55.360 that's what I'd be keeping an eye on. 0:32:55.400 --> 0:32:57.360 As Honess. You know, the range of outcomes is still 0:32:57.400 --> 0:33:00.120 really really wide. The way things out right now now, 0:33:00.440 --> 0:33:02.800 they might change in several months time. We talked a 0:33:02.840 --> 0:33:04.800 lot Michael mckeby's on the program earlier, and we were 0:33:04.840 --> 0:33:07.600 talking about how much companies were absorbing at the moment 0:33:07.680 --> 0:33:09.680 and whether they pass it on in the months to 0:33:09.680 --> 0:33:12.600 come or whether they cut costs. Do you think September 0:33:12.640 --> 0:33:14.920 is still too early to draw any firm conclusions. 0:33:16.160 --> 0:33:18.360 I think it is too early. But what I will say, 0:33:18.880 --> 0:33:20.560 and this has already been under way, and I think 0:33:20.560 --> 0:33:22.760 it will continue in the September and thereafter as it 0:33:22.800 --> 0:33:25.560 relates to the FED, I think you're likely to continue 0:33:25.600 --> 0:33:29.080 to see a wider dispersion of perspectives from members of 0:33:29.080 --> 0:33:32.640 the FED, certainly when they're in the federal open mouth 0:33:32.640 --> 0:33:35.800 committee mode out there speaking, but even in things like 0:33:35.840 --> 0:33:39.320 the Summary of Economic projections and particularly the dots plot, 0:33:39.480 --> 0:33:43.560 you're seeing a wider array. We had two descents with 0:33:43.640 --> 0:33:46.120 the most recent meeting of the July meeting. I think 0:33:46.160 --> 0:33:50.400 that that sort of dissent probability stays relatively high, with 0:33:50.520 --> 0:33:54.440 a wider range depending on who the individual is on 0:33:54.520 --> 0:33:57.640 that committee expressing their views going forward. So I think 0:33:57.680 --> 0:33:59.320 that's kind of the name of the game, at least 0:33:59.320 --> 0:33:59.960 in the near term. 0:34:00.040 --> 0:34:02.960 Well, if the tariff impact is mixed under the surface, 0:34:03.120 --> 0:34:05.840 when do you think we'll actually see it fully priced in? 0:34:07.400 --> 0:34:10.160 Well, the problem is that this was not you know 0:34:10.239 --> 0:34:13.279 a lot of people talked about the inflation impact being 0:34:13.360 --> 0:34:16.360 one time in nature, one time price level reset. The 0:34:16.360 --> 0:34:18.960 problem is there's no one time as it relates to 0:34:19.160 --> 0:34:22.640 the implementation of tariffs. It has been such rifle shot 0:34:22.760 --> 0:34:28.160 on off delays terraffs being used as a tool beyond 0:34:28.600 --> 0:34:33.160 just raising revenues or improving the trade deficit. So I 0:34:33.200 --> 0:34:35.799 think we've got the rolling nature of this. You know, 0:34:36.200 --> 0:34:39.200 several years ago we talked a lot about rolling recessions, 0:34:39.200 --> 0:34:40.520 so we didn't think you were going to see an 0:34:40.520 --> 0:34:44.040 actual economic recession, but pockets of weakness at different times. 0:34:44.160 --> 0:34:47.200 I think that's manifesting itself in the inflation data too, 0:34:47.320 --> 0:34:50.760 meaning the rolling nature of it, where you see pockets 0:34:50.800 --> 0:34:54.040 of impact on the upside, you maybe get some pockets 0:34:54.080 --> 0:34:57.400 of offset on the downside, as opposed to anything that 0:34:57.520 --> 0:34:59.719 is one time in nature. And I think that will 0:34:59.719 --> 0:35:01.840 also continue to be the name of the game because 0:35:02.120 --> 0:35:06.520 there isn't anything one time about how we're getting information 0:35:06.640 --> 0:35:10.000 on tariffs, and that increasingly makes it more difficult for 0:35:10.080 --> 0:35:13.360 companies to map out a longer term pricing strategy. 0:35:13.480 --> 0:35:14.879 Well when it comes to the FED, do they even 0:35:14.880 --> 0:35:17.280 have the luxury of waiting to see the full impact. 0:35:17.360 --> 0:35:19.800 If the labor market Lausanne is weakening. 0:35:20.840 --> 0:35:23.239 That would be the primary reason why September is on 0:35:23.239 --> 0:35:25.520 the table. The FED is essentially inferred, not that they're 0:35:25.560 --> 0:35:28.360 ignoring the inflation side of their mandate, but the trigger 0:35:28.360 --> 0:35:30.919 to move back to easier policy, per what they did 0:35:31.000 --> 0:35:34.400 last fall, is probably more on the labor market side 0:35:34.719 --> 0:35:37.200 versus the inflation side, unless you have a major, major 0:35:37.200 --> 0:35:40.360 spike in inflation from here. That's precisely what happened last 0:35:40.360 --> 0:35:43.520 fall when the Fed did launch what became only three 0:35:43.600 --> 0:35:46.040 rate cuts, but they launched it with a fifty and 0:35:46.080 --> 0:35:49.040 that was because of pretty significant concerns turned out to 0:35:49.040 --> 0:35:52.920 be somewhat unfounded, but significant concerns about the labor market. 0:35:53.040 --> 0:35:55.400 So the inflation data is going to be parsed like 0:35:55.440 --> 0:35:57.840 it always is, but I think it's the labor market 0:35:57.880 --> 0:36:01.000 side of their mandate that will ultimately be the trigger 0:36:01.040 --> 0:36:01.759 for what they do. 0:36:02.040 --> 0:36:04.200 And by how much. Listen, let's push some of this 0:36:04.280 --> 0:36:08.200 conversation into the equity market record, Hon, the SMP record. Hon. 0:36:08.239 --> 0:36:10.480 Then that's that one hundred as we kick off Wednesday morning. 0:36:10.640 --> 0:36:13.600 Beneath the index. How much adjustment are you seeing in 0:36:13.680 --> 0:36:16.520 individual equities to the prospect of so called demand destruction? 0:36:16.560 --> 0:36:19.080 When you hear about companies like Kava, like Sweet Green 0:36:19.160 --> 0:36:20.960 facing a bit of a consumer slowed down. 0:36:21.600 --> 0:36:24.720 Yeah, there's a lot of consolidation happening under the surface, 0:36:24.760 --> 0:36:27.040 which if you're only looking at at what the indexers 0:36:27.040 --> 0:36:29.080 are doing, I think you don't pick up on that. 0:36:29.680 --> 0:36:31.440 I've talked to a lot of people who say, oh, 0:36:31.480 --> 0:36:34.359 TeX's the best performing sector. It's actually the second best 0:36:34.360 --> 0:36:37.320 performing sector on a year to day basis, comm services 0:36:37.320 --> 0:36:40.959 being the other. But they're often lumped together. But each 0:36:41.000 --> 0:36:44.760 of those sectors only has about a rounding sixty percent 0:36:44.760 --> 0:36:48.200 of their stocks in the same kind of breadth pattern 0:36:48.320 --> 0:36:50.520 as the index overall. In the case of the Nasdaq 0:36:50.600 --> 0:36:53.680 one hundred all time highs, but less than fifty percent 0:36:53.680 --> 0:36:56.640 of the stocks are at all time highs. You've got 0:36:56.680 --> 0:36:59.799 only actually, I think it's less than thirty percent of 0:37:00.320 --> 0:37:03.799 stocks within the S and P five hundred have outperformed 0:37:03.800 --> 0:37:06.160 the index itself over the past month, and you don't 0:37:06.200 --> 0:37:09.359 get much above a third of the index over any 0:37:09.400 --> 0:37:12.680 trailing period one year, one month, three months, six months. 0:37:12.680 --> 0:37:16.560 So there's a bit more weakness and rotation and churn 0:37:17.040 --> 0:37:20.920 happening under the surface. It's somewhat similar to what we 0:37:21.000 --> 0:37:23.320 have seen in periods in the past, both in twenty 0:37:23.360 --> 0:37:25.960 twenty three and twenty twenty four, and I think the 0:37:26.080 --> 0:37:29.120 fuller story, not the real story, but the fuller story 0:37:29.680 --> 0:37:33.719 maybe getting told under the surface of these cap weighted indexes. 0:37:33.840 --> 0:37:36.200 Do you think that narrow breadth and high current centration 0:37:36.320 --> 0:37:39.160 is necessarily something to be concerned about? Zan Then that's 0:37:39.160 --> 0:37:40.879 the ultimate question for a lot of people. I hear 0:37:40.920 --> 0:37:43.239 people point it out all the time, and then we 0:37:43.320 --> 0:37:45.160 just keep grinding out new old time highs. Is it 0:37:45.280 --> 0:37:46.440 necessarily problematic? 0:37:47.200 --> 0:37:49.640 Note if the market continues to do well, But if 0:37:49.680 --> 0:37:51.400 you look at the early part of this year, the 0:37:51.440 --> 0:37:55.319 period between February nineteenth, which at that time was an 0:37:55.320 --> 0:37:59.080 all time high and the intra day low on April ninth, 0:37:59.520 --> 0:38:03.080 those areas of the market, the megacap, tech, tech related 0:38:03.200 --> 0:38:06.520 mag seven, whatever categorization you wanted to use, those were 0:38:06.560 --> 0:38:09.440 the areas that had the bigger draw downs relative to 0:38:09.480 --> 0:38:12.719 the index. So that that period between mid February and 0:38:12.760 --> 0:38:17.040 early April was one where the indexes were dragged down 0:38:17.080 --> 0:38:21.319 even more. But you did have some ballasts within the 0:38:21.360 --> 0:38:24.399 market in areas that had not done well. So yeah, 0:38:24.400 --> 0:38:27.359 you're absolutely right. If the market continues to do well 0:38:27.400 --> 0:38:29.239 and momentum is on the market side. I think the 0:38:29.280 --> 0:38:33.200 pain trade is still probably higher, but that could be 0:38:33.280 --> 0:38:36.120 a situation that unfolds fairly quickly and akin to what 0:38:36.160 --> 0:38:38.400 we saw in that mid February to mid April period. 0:38:38.560 --> 0:38:40.759 That sound I appreciate it. Time As always, this sounds 0:38:40.760 --> 0:38:52.719 some us that a child swamp. I think what joined 0:38:52.719 --> 0:38:55.080 around the time boat by another Yankees fan? Is that right? 0:38:56.480 --> 0:38:58.160 As soon as I saw the mug, I said, why 0:38:58.160 --> 0:38:58.719 aren't you disc. 0:38:58.760 --> 0:38:59.360 I was trying HIDEX. 0:38:59.400 --> 0:39:01.440 I'm pretty sure it's our best at treasure secretaries are 0:39:01.440 --> 0:39:02.399 red SOX fans, so. 0:39:02.360 --> 0:39:02.880 I don't want to. 0:39:03.480 --> 0:39:05.279 I don't want to antagonize him, you know. 0:39:05.360 --> 0:39:08.040 On during this entire interview, Tom force Selli of PGM 0:39:08.120 --> 0:39:09.279 Joints is around the table with Tomking. 0:39:09.320 --> 0:39:10.080 Morning, get good to see you. 0:39:10.120 --> 0:39:11.520 It's going to see it. Let's talk about the state 0:39:11.520 --> 0:39:13.720 of this economy. Let's start with the labor market first. 0:39:13.880 --> 0:39:14.480 Where are we? 0:39:15.200 --> 0:39:17.799 I mean, you know, I've been on this program many 0:39:17.800 --> 0:39:19.960 times for many months saying there are all these cracks forming, 0:39:20.040 --> 0:39:23.000 and that is as true today as it was, you know, 0:39:23.040 --> 0:39:24.640 sort of six months ago when we were driving that 0:39:24.680 --> 0:39:25.160 point home. 0:39:25.239 --> 0:39:27.359 So nothing has changed for us in that regard. 0:39:27.400 --> 0:39:29.320 In fact, what I would say, is the payroll report, 0:39:29.360 --> 0:39:32.560 the much maligned recent pay roll report. To me, that 0:39:32.640 --> 0:39:34.640 was just a manifestation of all the other things that 0:39:34.640 --> 0:39:37.120 had been going on prior. So I don't, I wouldn't. 0:39:37.320 --> 0:39:40.040 We weren't all shocked and bothered by it. I think 0:39:40.040 --> 0:39:41.960 it was just sort of revealing what was already in place. 0:39:42.000 --> 0:39:45.320 So let's stay on payrolls. Yeah, step down, clearly, very obvious. 0:39:45.360 --> 0:39:47.160 We've gone from a decent clip of gains to something 0:39:47.200 --> 0:39:49.480 closer to stall speed. I want to understand from your 0:39:49.520 --> 0:39:51.759 perspective whether you think that cements this idea that we've 0:39:51.760 --> 0:39:54.040 seen a technical turn, whether it's more evidence for a 0:39:54.040 --> 0:39:56.440 structural shift, something developing on the supply side. 0:39:56.520 --> 0:39:58.680 Yeah, so we think that things are slowing down, right, 0:39:58.719 --> 0:40:00.200 I mean I think that's an important idea. Like, we 0:40:00.239 --> 0:40:02.319 don't think we're like cyclically, we're about to slip into 0:40:02.320 --> 0:40:04.920 a recession. Instead, what we've been saying is we're in 0:40:04.960 --> 0:40:06.919 the sort of muddle through backdrops, and we would define 0:40:06.920 --> 0:40:08.440 that as sort of, like you a one percent ish 0:40:08.560 --> 0:40:10.440 kind of growth, one to one and a half percent growth, 0:40:10.920 --> 0:40:13.520 And so that report is actually very consistent with our 0:40:13.600 --> 0:40:15.640 view in that regard. So when I think about FED 0:40:15.719 --> 0:40:18.840 response function. We actually think the Fed they are supposed 0:40:18.840 --> 0:40:21.160 to cut. I mean, I don't think that's for us. 0:40:21.200 --> 0:40:22.960 That's been our long standing call that they would start 0:40:23.000 --> 0:40:26.359 cutting again in September, and so we feel good about 0:40:26.360 --> 0:40:29.239 that overall. So well, sorry, we feel good about the 0:40:29.239 --> 0:40:31.520 call overall. I mean, being slowing down is never obviously 0:40:31.520 --> 0:40:32.760 agree to state you feel. 0:40:32.520 --> 0:40:34.360 Good about the call of the FED cutting in September. 0:40:34.680 --> 0:40:37.200 The Trager secretary is calling for fifty basis point. 0:40:37.840 --> 0:40:40.680 Yeah, So look, do I have sympathy for that idea? 0:40:40.920 --> 0:40:42.480 The answer to that is, tell me. 0:40:42.400 --> 0:40:44.040 What the payroll report is going to look like, you know, 0:40:44.080 --> 0:40:45.560 in a month from now or whatever it is, a 0:40:45.560 --> 0:40:47.000 couple of weeks from now, because I think you're gonna 0:40:47.040 --> 0:40:48.600 need evidence for that. If it's just a sort of 0:40:48.600 --> 0:40:51.439 another another really soft report like we saw, I don't 0:40:51.440 --> 0:40:53.960 know if that's the evidence enough to go fifty. But 0:40:54.680 --> 0:40:56.440 you know, to me, it's it's sort of semantics in 0:40:56.480 --> 0:40:59.239 some way, because whether they go fifty or twenty five, 0:40:59.360 --> 0:41:01.680 I think they're pulling forward a lot of the cuts 0:41:01.719 --> 0:41:03.680 that they sort of were prt that the FED was 0:41:03.719 --> 0:41:05.360 pricing in over the balance of the next year and 0:41:05.400 --> 0:41:05.680 a half. 0:41:05.760 --> 0:41:07.879 If they go fifty though, what signal does that mean 0:41:07.920 --> 0:41:10.200 for how the Fed thinks of the economy right now? 0:41:10.280 --> 0:41:12.799 Yeah, I think it really drives home that, look, the 0:41:12.840 --> 0:41:15.120 Fed already and I feel like a lot of us, 0:41:15.640 --> 0:41:18.200 me included, I feel like a lot of us forget this. 0:41:18.440 --> 0:41:20.880 The Fed already had cuts teed up, right, They already 0:41:20.920 --> 0:41:23.359 were expecting two cuts this year, so they were expecting 0:41:23.560 --> 0:41:26.640 a softer economic backdrop. And so I think in that context, 0:41:26.680 --> 0:41:29.680 it's just very in keeping with what they're viewing. Show 0:41:29.719 --> 0:41:31.840 me another really poor payroll report it I'll give you 0:41:31.880 --> 0:41:33.560 the evidence for Hey, maybe they need to do more, 0:41:33.680 --> 0:41:35.640 but I think for right now it's pretty consistent. 0:41:35.719 --> 0:41:37.560 We get one more papers report. I've got no idea 0:41:37.600 --> 0:41:39.759 what Senate. We'll get that on September fifth. A week later, 0:41:39.880 --> 0:41:41.839 they don't tell you, absolutely cluarless to be a less 0:41:41.880 --> 0:41:44.200 it share nothing with me. A week later we'll get 0:41:44.239 --> 0:41:46.440 the CPI report. I want to finish on inflation, and 0:41:46.440 --> 0:41:49.480 turns to that side of the dual mandate. Limited tariff 0:41:49.480 --> 0:41:52.279 passed through relative to what was expected? Do you think 0:41:52.280 --> 0:41:53.880 it remains that when the months to count? 0:41:53.960 --> 0:41:56.680 No, Actually, I think you're seeing limited passed through now 0:41:56.719 --> 0:41:59.240 because companies did a really smart thing. They built inventories 0:41:59.239 --> 0:42:01.759 in a really meaningful So that's sort of buffering the 0:42:02.000 --> 0:42:06.120 sort of the flow of the tariff inflationary impulse into inflation. 0:42:06.480 --> 0:42:08.640 But I'll give you one really interesting thing to think about. 0:42:09.440 --> 0:42:12.000 You know, it's funny we're having this conversation about our 0:42:12.040 --> 0:42:14.720 payrolls calculator, right, Obviously we can have the same conversation 0:42:14.719 --> 0:42:18.160 about inflation inflation. There are so many flaws in the 0:42:18.160 --> 0:42:21.000 calculation of inflation. So if I look at if I 0:42:21.040 --> 0:42:23.040 swap out something as simple it's not that it's so 0:42:23.040 --> 0:42:24.680 simple because it's a big component. 0:42:24.880 --> 0:42:25.880 But if I swap out. 0:42:25.719 --> 0:42:29.880 Oeer for you know, sort of a market measure of 0:42:29.960 --> 0:42:32.040 rents like apartment list. 0:42:32.120 --> 0:42:34.279 Inflation is running at a one percent pace right now. 0:42:35.760 --> 0:42:38.359 I mean, I think all of this sort I think 0:42:38.400 --> 0:42:40.000 that to me is the right way of thinking about 0:42:40.040 --> 0:42:41.879 what the starting point for. 0:42:41.840 --> 0:42:43.560 It Isn't that giving you a lead on what you 0:42:43.600 --> 0:42:45.879 think ultimately is going to happen with service inflation down 0:42:45.880 --> 0:42:46.200 the road? 0:42:46.360 --> 0:42:46.600 Yeah? 0:42:46.640 --> 0:42:49.319 So I think from our perspective, what it means is 0:42:49.320 --> 0:42:51.360 that you are going to get this lift higher in inflation. 0:42:51.680 --> 0:42:53.680 But you know you so what so you lift sort 0:42:53.760 --> 0:42:56.120 toward the target as opposed to being above target now 0:42:56.120 --> 0:42:58.080 and going even further above target. I mean, I think 0:42:58.160 --> 0:43:00.439 if you look at inflation with just making some very 0:43:00.480 --> 0:43:02.960 modest and I think very reasonable adjustments, you probably want 0:43:03.000 --> 0:43:04.319 to getting back to target. 0:43:04.040 --> 0:43:06.080 This situation that is not something that you think will 0:43:06.080 --> 0:43:09.680 constrain the fensibility to reduce right and respect to softness 0:43:09.680 --> 0:43:09.920 in the light. 0:43:10.080 --> 0:43:12.239 Yeah, I don't. I mean, I think the FED has 0:43:12.239 --> 0:43:13.480 the right line on this. I think it is going 0:43:13.520 --> 0:43:15.319 to be a temporary sort of one time shift time 0:43:15.480 --> 0:43:15.840 you say. 0:43:15.719 --> 0:43:18.759 The fedesi right line, some fedid vigils at the FED, Yes, 0:43:18.800 --> 0:43:20.239 have the right line. Yes, I don't know where the 0:43:20.239 --> 0:43:21.879 whole committee is. Where's the whole comittee on this? 0:43:21.960 --> 0:43:23.680 Yeah, I mean, and as you would expect, there's just 0:43:23.719 --> 0:43:26.000 a divergence of views, I think, seemingly at this point. 0:43:26.040 --> 0:43:28.920 But it does seem that the sort of the momentum 0:43:29.000 --> 0:43:31.239 is drifting toward people having the right line, which is 0:43:31.280 --> 0:43:32.200 to say, cutting in September. 0:43:32.280 --> 0:43:33.840 If we're not going to see the full tariff impact, 0:43:33.920 --> 0:43:36.520 say till twenty twenty six. Can you see a scenario 0:43:36.520 --> 0:43:38.719 with a FED is cutting at the end of this year, 0:43:38.760 --> 0:43:41.120 maybe starting in September and then having to think about 0:43:41.200 --> 0:43:42.040 hikes next year. 0:43:42.480 --> 0:43:45.160 Yeah, so this is a really important idea in the 0:43:45.160 --> 0:43:47.160 context of this is not COVID, right. I mean, I 0:43:47.160 --> 0:43:48.799 think people are looking at this sort of this this 0:43:48.880 --> 0:43:51.880 drift that we're going to see higher in inflation, and 0:43:51.920 --> 0:43:54.400 I think that, you know, they're scarred. I think including 0:43:54.440 --> 0:43:57.600 FED officials is specifically pell I think right called the 0:43:57.640 --> 0:44:00.480 transitory So I think they're scarred because of the whole 0:44:00.520 --> 0:44:04.120 you know, let's call it transitory mistique. But it's this 0:44:04.160 --> 0:44:07.040 is not that you know, we imply people with mountains 0:44:07.040 --> 0:44:09.160 of cash through a helicopter drop of money. We didn't 0:44:09.160 --> 0:44:11.560 create a pent up demand scenario by shutting down an 0:44:11.600 --> 0:44:13.480 otherwise really healthy economy and then turning back on. 0:44:13.560 --> 0:44:16.920 So I think the setup is so different, right to 0:44:17.239 --> 0:44:19.040 see it's going to see you, sir, good same time. 0:44:19.120 --> 0:44:21.040 Thank you for being here. Tom por Sei of PGM 0:44:21.200 --> 0:44:25.560 Fixed Income. This is the Bloomberg Sevenants podcast, bringing you 0:44:25.880 --> 0:44:29.239 the best in markets, economics, antient politics. You can watch 0:44:29.280 --> 0:44:32.040 the show live on bloomblog TV weekday mornings from six 0:44:32.080 --> 0:44:36.480 am to nine am Eastern. Subscribe to the podcast on Apple, Spotify, 0:44:36.640 --> 0:44:38.840 or anywhere else you listen, and, as always on the 0:44:38.840 --> 0:44:41.279 bloom blog, terminal and the Bloomberg Business app.