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Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane along

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Speaker 1: with Jonathan Ferroll and Lisa Brownwitz Jaily. We bring you

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Speaker 1: insight from the best and economics, finance, investment, and international relations.

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Speaker 1: Find Bloomberg Surveillance on Apple podcast, Suncloud, Bloomberg dot com,

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Speaker 1: and of course on the Bloomberg terminal. Michael cap and

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Speaker 1: joint Chief US Economist at Barclays, and the course it's

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Speaker 1: tour of duty at the International Monetary Fund is noted. Michael,

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Speaker 1: I want to talk about the second derivative of inflation,

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Speaker 1: the rate of change. Of the rate of change that

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Speaker 1: we're all living's personified by my favorite indicator, the Cleveland

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Speaker 1: Median is out two point eight standard deviations. It's on

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Speaker 1: the edge of we've never seen this. What kind of

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Speaker 1: report will we never see in twelve minutes, Well, it

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Speaker 1: could be a really interesting part of this report is

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Speaker 1: we all expect the headline to be driven by energy, gas,

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Speaker 1: food prices, everything that we've been discussing and you've been

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Speaker 1: discussing on on your show in recent weeks. What we

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Speaker 1: will be looking for underneath that is any indication that

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Speaker 1: actually goods prices are starting to roll over, there are

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Speaker 1: signs use car prices could be falling in the next

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Speaker 1: months ahead, and even new car prices this month we

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Speaker 1: think might be falling. So we could see a bit

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Speaker 1: of a dichotom here that the anticipated decline in goods

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Speaker 1: prices that we've all been waiting for perhaps might show

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Speaker 1: up a teeny bit in this report, but would be

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Speaker 1: completely overwhelmed by, of course, what would we would be

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Speaker 1: seeing and at the headline level from from energy and gas,

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Speaker 1: whether it's Dallas trimmed or Cleveland Media, and let's go

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Speaker 1: inside those trims. What inside the report will give you

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Speaker 1: the best indication of America's inflation trend. Wow, that's just

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Speaker 1: I mean, that's I would say. I would point to

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Speaker 1: his service. We we all expect at some point for

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Speaker 1: goods prices to moderate. So the underlying trend, we still

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Speaker 1: think the long run will be driven by the services components,

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Speaker 1: so shelter rent, owner's equivalent rent, and we as we

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Speaker 1: have been discussing for some time, a lot of upward

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Speaker 1: pressure there as well. So underlying inflation over the long

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Speaker 1: run in the US is about services. It's less about energy,

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Speaker 1: it's less about goods. So that if you if you

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Speaker 1: can strip things away and think of, well, inflation should

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Speaker 1: be moving lower over time, where might it settle in

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Speaker 1: than you'd want to focus on services. The former New

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Speaker 1: York Fed president built down. They came on this program

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Speaker 1: Mike a number of weeks ago and found it was

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Speaker 1: a few months ago, and he said the Fed forecasts

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Speaker 1: were in fancy land. This is the forecast for growth

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Speaker 1: in twenty two four percent for core pc A two

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Speaker 1: point seven percent. Is that fancy land? Well, the Fed

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Speaker 1: forecast always assume policy works and you get an optimal outcome,

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Speaker 1: which in this case is a soft landing. I've been

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Speaker 1: thinking their growth forecasting me have been too optimistic. Uh,

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Speaker 1: when they were at four, we were at two nine,

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Speaker 1: and now we're at to six. Um. I think you

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Speaker 1: mentioned you were on with my good friend Seth Carpenter

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Speaker 1: a few a few segments ago. They've been revising their

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Speaker 1: growth lower in the US through down forty basis points.

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Speaker 1: He said, So that four percent number has to come

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Speaker 1: down a lot for a variety of reasons. And yes,

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Speaker 1: they've got to bring that inflation number higher just because

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Speaker 1: of where spot inflation is. I still think the outlook

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Speaker 1: will will be a Goldilocks soft landing forecast. The FED

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Speaker 1: has to kind of forecast that. But yes, I think

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Speaker 1: some reckoning here in the in the data will will

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Speaker 1: mean big changes in their outlook. Mike, I want to

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Speaker 1: sit on that point that you made. This assumes that

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Speaker 1: their policy we calibrations will work. Do you think that

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Speaker 1: that is in question? Yes, I do, and that's it's

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Speaker 1: not necessarily a direct criticism of the FED. I would

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Speaker 1: just say that you know, the FED, as as you

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Speaker 1: all know, has focuses on things like core and trim means,

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Speaker 1: and it's a cognition that there are some prices that

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Speaker 1: are set in markets that are largely beyond their control

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Speaker 1: and and we've been getting movements in those prices recently,

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Speaker 1: and we're all constantly revising our forecast higher and saying, oh, yes,

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Speaker 1: the peak is coming, it's this month, it's getting pushed out.

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Speaker 1: So yes, I think the the ability for central banks

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Speaker 1: to control inflation in this environment without generating a substantial

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Speaker 1: contraction and demand is certainly a question. And Mike, you

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Speaker 1: talked about their assuming and they kind of have to

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Speaker 1: this goldilock soft landing kind of outlook from your perspective,

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Speaker 1: given the speed that we have seen of the increase

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Speaker 1: in cp I and the increase and some of these

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Speaker 1: inflationary inputs. Do you think that a soft landing is

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Speaker 1: possible at all? I do think it's possible, and I

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Speaker 1: would still say it's probable, but I think the odds

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Speaker 1: of that come down. And in terms of you mentioned

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Speaker 1: the speed of the move and inflation or sorry in

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Speaker 1: the move of prices and in this case energy that

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Speaker 1: that is important. Some of the work that we've done

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Speaker 1: suggested is more about the speed of the move in

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Speaker 1: oil prices than the level uh and and what tends

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Speaker 1: to happen in cases where where gasoline prices shoot higher

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Speaker 1: in in a very short period of time, consumers don't

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Speaker 1: know what to do, so they pause, and what they

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Speaker 1: do is they stop buying durable So durables is the

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Speaker 1: most sensitive part of consumer spending to changes in oil prices.

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Speaker 1: And if you look at history, it'll it'll say when

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Speaker 1: when the three month annualized change and cp I exceeds

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Speaker 1: nine percent, we we tend to get major pullbacks in

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Speaker 1: durable spending. That happened for example in the go for

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Speaker 1: obviously echoes of that in the current situation and following

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Speaker 1: Hurricane Katrina, so major disruptions to oil a sharp rise

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Speaker 1: and energy prices, consumers tend to pull back discreetly on

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Speaker 1: durable's purchases. A CP president Christine the Counts just walked

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Speaker 1: into the ride. Her opening statement before we turn to

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Speaker 1: her her full counts in the Q and ice sction

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Speaker 1: at the u CP my game and we have to

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Speaker 1: come to USA from Barkeley. You've had a bit of

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Speaker 1: time to pull through this one. You'll take you away. Well,

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Speaker 1: it's probably the first time that we've talked in two

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Speaker 1: years where we got a forecast spot on so um,

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Speaker 1: you know, I guess we're happy about that. But look,

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Speaker 1: I think your your main point was, Look, this is

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Speaker 1: a report that came in before the recent conflict. So

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Speaker 1: the contours were as we had expected. We were looking

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Speaker 1: for gas to be up seven percent, so very much

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Speaker 1: in the line with with what Michael had reported. Their

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Speaker 1: food prices up up strongly, right, this is where the

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Speaker 1: new impulses is coming from. So for the moment, we've

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Speaker 1: got a little reprieve from goods prices. Let's see if

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Speaker 1: that continues. If it does, it will provide some offset

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Speaker 1: from headline inflation, but inflation is not likely to roll

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Speaker 1: over and begin to come down for for several more

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Speaker 1: months here. So I think this kind of sets the

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Speaker 1: stage for where we are now, and we need to

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Speaker 1: see how long this conflict plays out and how disruptive

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Speaker 1: the sanctions regime actually is. Michael gape In, Honestly, the

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Speaker 1: reaction in mark kids is not that significant. People were

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Speaker 1: prepared for this because you and others got it spot on.

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Speaker 1: How much does that tell you about how much or

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Speaker 1: how little people are pricing in seven point nine percent

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Speaker 1: given where yields are. Yeah, I mean it's a difficult

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Speaker 1: situation to be a bond trader at the moment. So

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Speaker 1: I think where yields are is is consistent with again

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Speaker 1: medium term expectations that this is going to uh come,

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Speaker 1: that inflation will come down and be back at levels

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Speaker 1: that that we're more comfortable with. That's obviously a bet

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Speaker 1: that the market is making, and one of the reasons

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Speaker 1: they're doing that is because of what the ECB said

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Speaker 1: this morning and the reaction in bond yields in Europe,

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Speaker 1: what the FET has been saying. It's like, yes, inflation

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Speaker 1: is high, but we will do what we need to

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Speaker 1: do to bring that down. And that's why long and

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Speaker 1: yields are where they are. Michael Gabin, I have hinged

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Speaker 1: on this report for I'm going to say four, if

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Speaker 1: not six weeks. How does this change the question you

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Speaker 1: would give Chairman Powell on March. I think that the

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Speaker 1: question I would give him is is beyond this? I

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Speaker 1: think the question I would give him is about how

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Speaker 1: do you how do you conduct monetary policy in an

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Speaker 1: environment where the inflation that you're getting is largely beyond

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Speaker 1: your control and uncertainty is has been rising right? And

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Speaker 1: I think the answer to that is, you know, tread carefully. Move.

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Speaker 1: I think sitting on the sideline is an option. I

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Speaker 1: think they have to move. But when you're in an environment,

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Speaker 1: when you don't know exactly what your policy move is

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Speaker 1: going to bring in terms of response from markets, you

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Speaker 1: have to go cautiously. My cap of Barclays, the team

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Speaker 1: here at Bloomberg putting tremendous efforts to get you the

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Speaker 1: right voices out of Europe and what is happening at

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Speaker 1: the moment. No one is doing that better than Maria today.

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Speaker 1: Let's kind of chat with Maria right now. Good morning, Maria,

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Speaker 1: Good morning Jonathan. I'm very happy to say I'm joined

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Speaker 1: by the Prime Minister of Stonia. Minister Kallis, thank you

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Speaker 1: so much for being with us. Of course, you have

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Speaker 1: been incredibly outspoken about the Russian threat. You set it

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Speaker 1: from the beginning. This is a real issue in Europe.

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Speaker 1: Of course, now we see there's a word stending now

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Speaker 1: for fourteen days, today's surgery leave of the Russian for

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Speaker 1: a minister acting as if nothing was happening. How can

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Speaker 1: you engage with a Russia that seems to be completely

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Speaker 1: oblivious to what's happening. You can't, That's that's the thing.

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Speaker 1: They don't have any diplomatic will to you know, find

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Speaker 1: a solution. They are building this narrative that they are

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Speaker 1: selling back home in Russia that you know, the West

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Speaker 1: is attacking, you know, there are biological weapons. I mean,

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Speaker 1: this is now the third story that they are trying

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Speaker 1: to sell to the people to you know, say, why

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Speaker 1: are we doing this? Why are we attacking our Slavic brothers?

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Speaker 1: And it's very hard to explain really, and you see

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Speaker 1: Slavic brothers because that's that's but that's also a very

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Speaker 1: important point here of course, as a culture that is

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Speaker 1: shared by by Eastern opinions. But I wonder when Sergei

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Speaker 1: Lavrov says, we're not here to talk about a ceasefire.

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Speaker 1: This was not the goal, and the Ukrainian Prime minister

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Speaker 1: hints it's latinerie put In the mix of decisions here

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Speaker 1: and he does not want to meet with Zelinski. How

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Speaker 1: can you have a diplomatic way forward here? Um, I

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Speaker 1: don't think that they have the political will to have

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Speaker 1: a diplomatic way forward. I mean they want to cause

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Speaker 1: as much damage as possible. Um. It seems to me

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Speaker 1: that Puttin, in poker terms, has gone all in, so

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Speaker 1: he either wins or he loses. And I think it's

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Speaker 1: it's up to everybody to make sure that Putin doesn't

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Speaker 1: win this war. And when you say that Putin doesn't

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Speaker 1: win the world, what does that mean? That that means

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Speaker 1: that Ukraine, Ukrainians should win this war, which means that

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Speaker 1: we shouldn't give in. We should help Ukraine every way

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Speaker 1: we can humanitarian aid, military aid, political support, so that

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Speaker 1: Ukraine would be able to defend its country. And there's

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Speaker 1: a line of thought you know very well in Europe

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Speaker 1: that says is best not to put Vladimir Putting in

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Speaker 1: the corner because that makes In dangerous. Is that a mistake.

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Speaker 1: But um, you know, we haven't put him in the corner.

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Speaker 1: But he has still done everything that we are seeing

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Speaker 1: right now, and it's heartbreaking to see what he's doing.

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Speaker 1: If we look at the bigger picture. He has been

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Speaker 1: planning this for for quite some time, I mean in

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Speaker 1: all over the world, I mean creating or increasing it's

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Speaker 1: it's influence, also trying to you know, cooperate with different

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Speaker 1: countries and and and plan carefully this this attack as well,

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Speaker 1: and also you know, having tests like Crimea don bus

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Speaker 1: Um that went quite peacefully. So probably he had a

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Speaker 1: thought that it's going to go easy overall Ukraine as well,

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Speaker 1: but it's it's not because Ukrainians are fighting for the

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Speaker 1: country and these people are fighting like hell and have

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Speaker 1: been doing this for two weeks. But I wonder when

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Speaker 1: you look at what Vladimie Putting is doing right now,

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Speaker 1: is this an aspiration to return to the old Soviet Union?

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Speaker 1: We know that he said the end of the USSR

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Speaker 1: was the biggest tragedy ever in Russia. Is it about

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Speaker 1: going back to the U S s R. He has

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Speaker 1: been very open about his imperialistic dreams, so I mean

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Speaker 1: years already talking about these things. Um, so so, and

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Speaker 1: also being very open about not recognizing Ukraine as an

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Speaker 1: independent country. So I think we should take him for

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Speaker 1: his words, what his thoughts and plans are. But it's

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Speaker 1: also up to us to make sure that it doesn't

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Speaker 1: execute those plans. And of course I'm want to ask

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Speaker 1: you about NATO. Your country belongs to native of course

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Speaker 1: also the European Union. When it comes to NATO, are

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Speaker 1: we going to see from now on an operation that

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Speaker 1: is bigger in number, longer in time, more weapons. Is

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Speaker 1: this a collaboration that will see NATO becoming stronger? Yes,

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Speaker 1: I think so, because so far we have had this

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Speaker 1: NATO's deterrence poster. But now we are moving to the

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Speaker 1: defense plan, which means that you know, there are different capabilities,

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Speaker 1: how these things work together, how we cooperate with different

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Speaker 1: different troops on different soils, different countries. So, um, this

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Speaker 1: is how NATO should work. I mean the defense plans,

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Speaker 1: because it's a defense alliance, more troops on the ground,

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Speaker 1: and of course, my ministers, just a final question. We

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Speaker 1: know that today there are two big topics. One do

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Speaker 1: include energy in the sanctions? And should Ukraine be part

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Speaker 1: of the European Union? What's your answer to those two questions.

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Speaker 1: I think we have to give hope to Ukraine and

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Speaker 1: and some really clear political signal that they are part

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Speaker 1: of the European family and they have a way to

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Speaker 1: uh to Europe because they are literally fighting for Europe

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Speaker 1: right now. Um. So this this is we need to

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Speaker 1: give them some kind of message. Um. What comes to energy,

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Speaker 1: of course we talk about the sanctions and and there

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Speaker 1: is already the fourth package of sanctions on top of it.

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Speaker 1: But what we have to understand that different European countries

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Speaker 1: have different energy dependence. So so it has two sides.

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Speaker 1: One side is of course that we want to hurt

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Speaker 1: the war machine of Putin and and you know, deprive

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Speaker 1: him of of of his income. But the other side

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Speaker 1: is that our public has to support the decisions made

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Speaker 1: as well. So you don't see a full band on imports.

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Speaker 1: I don't think so No, I don't think so. Well.

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Speaker 1: Prime Minister Callis, thank you so much. Has always appreciated

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Speaker 1: your time here on Bloomer Television. Jonathan Tom Maria fantastic

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Speaker 1: work as always. Going to catch up Maria today with

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Speaker 1: the Prime Minister of Estonia Tom and eight member which

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Speaker 1: shares a border to the East with Russia. Right now,

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Speaker 1: Pierre Truwortz joins us out of the University of Texas

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Speaker 1: in the combine at LBJ. He is now at the

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Speaker 1: London School of Economic x and Professor of International Relations

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Speaker 1: Peter Chubo. It's one of my iconic reads is Magna

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Speaker 1: Decide of Lse and the wonderful Marxist Revenge. It is

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Speaker 1: a clarion call of modern capitalism. Here's a guy talking

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Speaker 1: about the shadows of Nazism, Denazification and the rest. Hearkening

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Speaker 1: back to the empire, hearkening back to post lenin uss

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Speaker 1: Are and it's all a shambles. What is Putin's theory

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Speaker 1: this morning? Well, Tom, great to be with you. I mean,

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Speaker 1: look how everyone wants to size up who's Putin's motivations

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Speaker 1: and they range from security imperatives, a response to NATO

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Speaker 1: and EU expansion, to what you're suggesting here Russian irredentism

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Speaker 1: like restoring the glorious Soviet Empire to the autocratic nature

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Speaker 1: of his regime. This guy made a massive miscalculation on

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Speaker 1: two fronts. First, he underestimated Western resolve and unity, the

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Speaker 1: capacity to respond collectively. And secondly, I think he just

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Speaker 1: thought Ukraine was too fractured to respond the way they

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Speaker 1: have responded, and it's just you know, he's created I mean,

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Speaker 1: it's like a shambles in that sense. Doesn't mean that

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Speaker 1: Russia is gonna lose, it's not going to get anything

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Speaker 1: that it wants. He's demonstrating that he's prepared to go

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Speaker 1: where people just you just don't want to go, do It'

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Speaker 1: alluding to it the top all of these horrific photos

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Speaker 1: in pictures to bring it to America, Peter, do we

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Speaker 1: need a Ulysses Grant right now? Do you see the

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Speaker 1: West with any idea of the sacrifices required to stop

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Speaker 1: this guy? Yeah? I think. I mean, look that the

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Speaker 1: West is in a You're in a difficult position. You're

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Speaker 1: not dealing with an ordinary power, You're dealing with a

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Speaker 1: nuclear power. I mean it's guy's like armed to the

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Speaker 1: teeth with nuclear weapons. And so the problem here is

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Speaker 1: to provide sufficient support to the Ukrainians on many different dimensions,

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Speaker 1: but you know, immediately on military grounds, to be able

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Speaker 1: to let them push back and sustain the war effort,

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Speaker 1: but at the same time to avoid things that allow

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Speaker 1: Putent to escalate that give them an excuse to do it.

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Speaker 1: That's why no flies zone, That's why the EU will

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Speaker 1: probably be very careful in response. And you know at

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Speaker 1: Versailles today and tomorrow over how to respond to the

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Speaker 1: Ukraine's request for expedited membership into into into the EU

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Speaker 1: Peter we heard from yesterday. Certainly markets were hoping for

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Speaker 1: some sort of diplomatic solution that we're diplomatic talks based

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Speaker 1: on what we have seen. Is there any potential diplomatic

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Speaker 1: resolution to this conflict? Do you have any optimism around that? Well?

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Speaker 1: I think you know, I mean, we're all reading tea leads.

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Speaker 1: I was not surprised by and I'm sure you weren't

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Speaker 1: either by what just the outcome in interur Key this

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Speaker 1: morning here. Um, Look, these talks are important because it's

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Speaker 1: a way for each side to get a better sense

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Speaker 1: of the other side's political resolve and importantly, I think

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Speaker 1: to get clarity on minimal acceptable positions. They all both

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Speaker 1: sides began with their maximal positions, and what I see

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Speaker 1: is change on both fronts. The problem here is somebody alluded,

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Speaker 1: maybe it was tom earlier and before I came on,

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Speaker 1: lav Rov is not really speaking with Putin's confidence and

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Speaker 1: so that you don't know, you know, exactly anything that

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Speaker 1: he agrees to will be signed off or agreed to

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Speaker 1: at home. But if we've seen two things so far,

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Speaker 1: just let me finish on this point. One is what

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Speaker 1: we're hearing from this to these negotiations but also the

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Speaker 1: negotiations involving the Israeli Prime minister is that Putin is

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Speaker 1: no longer looking for regime change. Okay, that you know,

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Speaker 1: the Zelenski government has to go. And on Zelenski side,

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Speaker 1: what we've heard is that they're willing to accept some

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Speaker 1: form of neutrality in lieu of NATO membership. So there's

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Speaker 1: movement on both of those things. The problem here is

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Speaker 1: that both sides are making judgments diplomatically based on what's

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Speaker 1: going on on the ground, and that is very opaque. Peter.

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Speaker 1: Are the sanctions working quickly enough to exert the pressure

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Speaker 1: on Vladimir Putin and frankly on his surrounding circle enough

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Speaker 1: to really boost the prospects of some sort of resolution here? Yeah,

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Speaker 1: So you know, Lisa, that's like the I don't know

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Speaker 1: sixty four million dollar question, because I mean, the thing

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Speaker 1: is is that what those sanctions require is the Ukrainians

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Speaker 1: to resist, and the longer they can resist for the

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Speaker 1: sanctions to take their bite, and the harder it will

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Speaker 1: be for Putin to convince average Russians and also his selectorate,

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Speaker 1: those very close to him, that the cost of the

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Speaker 1: war in blood and treasure is worth the effort. But

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Speaker 1: that's the story. It's not gonna happen overnight. Peter Kellis

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Speaker 1: of Estonia joined us in the last hour. She and

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Speaker 1: her nation, with all of her heritage, of her family

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Speaker 1: back to World War One. What level of threat are

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Speaker 1: the Baltic States under this morning? There's I mean, I

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Speaker 1: have reason to be concerned, but the main reason for

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Speaker 1: them to be concerned is not I think that Putin

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Speaker 1: is going to pivot militarily. Um, I don't think right

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Speaker 1: now Putin. Putin's got his handsful as it is. The

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Speaker 1: danger is inadvertent escalation. It seems to me that this

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Speaker 1: thing just tumbles and in ways that none of us

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Speaker 1: can kind of anticipate. And that's why, you know, I

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Speaker 1: think that the Biden team has been smart about the

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Speaker 1: way they're handling this so far. Most of the Europeans

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Speaker 1: have as well, and you know, but I think that

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Speaker 1: this is this is a real present problem for them

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Speaker 1: that this thing could stand in ways that you know,

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Speaker 1: I mean just everybody's nightmare scenario. Peter, thank you said

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Speaker 1: as always fantastic catch. It's that of the London School

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Speaker 1: of Economics, Mark Chandler always has plans with Bannockburn their

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Speaker 1: chief markets throughout to just Mark, I'm gonna go big

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Speaker 1: and broad off of your magisterial book where you took

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Speaker 1: the skies and astronomy and the fixedness of the stars

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Speaker 1: into guessing our uncertainties. As Christine Legard has said this morning,

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Speaker 1: the uncertainties are unmeasurable. How do we get a cast

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Speaker 1: on the stars right now? Given a war in Ukraine? Yeah,

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Speaker 1: what a tough situation we find ourselves in. I think

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Speaker 1: that both the latlinits see uh today from Laguard but

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Speaker 1: also we're going to see next week from the stead

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Speaker 1: of Reserve, is that the net impact of this war

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Speaker 1: is too sort of sharpened both blades. One blades inflation,

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Speaker 1: it's going to raise inflation, and the other blade is

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Speaker 1: slower growth. And that's what we're seeing. The e CBS

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Speaker 1: forecast higher inflation. We could growth will probably get the

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Speaker 1: same thing from the Fed. Powell gave us a nice

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Speaker 1: rule of thumb. At a recent press conference, every ten

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Speaker 1: dollar a barrel rise in oil prices. He says that

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Speaker 1: a rule of thumb takes list the CPI by about

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Speaker 1: point two and takes off about point one off of growth.

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Speaker 1: So here we are, you know, at with oil at

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Speaker 1: a hundred and twelve dollars, so it's maybe a thirty

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Speaker 1: dollar rally since the war began. Just giving some sense

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Speaker 1: of the ECB headlines, because there were a lot of

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Speaker 1: them the press conference with Christine Laguard just ended. The

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Speaker 1: ECB forecasts assumes an exchange trade of one dollars and

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Speaker 1: twelve cents, and this comes as a growing number of

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Speaker 1: prognosticators have said that the euro is going to face

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Speaker 1: a weakening trend if there isn't some sort of hiking

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Speaker 1: action or more hawkish action by the e c B.

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Speaker 1: How much do you think that was the reason behind

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Speaker 1: what seemed to be a pivot in today's announcement. Yeah,

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Speaker 1: I at least I think that we really misunderstand how

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Speaker 1: the ECB thinks of the Euro and oil prices. These

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Speaker 1: are not really forecasts, but these are really the forward rate.

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Speaker 1: And because the interest rate differential is such that I

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Speaker 1: think that there's really no predictive value in here. They're

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Speaker 1: just saying that if the euro doesn't really change much

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Speaker 1: from much recent averages, what would this mean for growth?

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Speaker 1: What would this mean for inflation? So I don't take

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Speaker 1: I think what happened was that initially the ECB statement

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Speaker 1: made it sound like they were more hawkish reducing the

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Speaker 1: asset purchases at a faster pace. But once the guard

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Speaker 1: got to the microphone, it was very clear that she

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Speaker 1: said this was not the case. It's sort of reminds

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Speaker 1: me of what happens that the last press conference with Powell,

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Speaker 1: the statement elisious stocks rallied as soon as Paul began

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Speaker 1: talking stocks of earthed and sold off. What's the safe

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Speaker 1: haven calculus right now? Mark Chanleng, just the final question,

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Speaker 1: do you here the safe haven measurement? Here you see

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Speaker 1: swissy move, gold move other safe haven equivalence. What's that

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Speaker 1: dynamic that you see right now? Yeah, so I'd say

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Speaker 1: the gold, but I'd say that most interestingly lately has

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Speaker 1: been the strength of the Australian and New Zealand dollars

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Speaker 1: and the Brazilian currency. And this is as commodity. This

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Speaker 1: is things that can hurt when you drop on your feet.

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Speaker 1: That's what people are buying. And the other thing I

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Speaker 1: point out is just the Italian bonds spread over German bounds.

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Speaker 1: The Italian bonds have sold off sharply. They the yield,

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Speaker 1: the ten year yield up twenty basis points, the German

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Speaker 1: yield up less than five Okay, we'll have to leave it.

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Speaker 1: Their Mark channel is just a huge news flow this morning,

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Speaker 1: Lisa Brown, what's Mark channel? There? With Banneker, I should say,

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Speaker 1: this is the Bloomberg Surveillance Podcast. Thanks for listening. Join

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Speaker 1: Apple Podcasts, SoundCloud, Bloomberg dot com, and of course on

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Speaker 1: the terminal. I'm Tom keene In. This is Bloomberg