1 00:00:02,520 --> 00:00:16,600 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. 2 00:00:14,680 --> 00:00:18,560 Speaker 2: The single best idea on a really really strange Tuesday 3 00:00:18,640 --> 00:00:21,480 Speaker 2: before FED meeting. Of course, we'll do the FED meeting tomorrow, 4 00:00:21,560 --> 00:00:23,439 Speaker 2: the FED decize we do that at one thirty Wall 5 00:00:23,480 --> 00:00:27,280 Speaker 2: Street time, looking forward to that. And my phrase for 6 00:00:27,320 --> 00:00:31,160 Speaker 2: this coming off the reading I've done is x post 7 00:00:31,240 --> 00:00:35,559 Speaker 2: is after the fact, So the FED takes in the 8 00:00:35,680 --> 00:00:39,879 Speaker 2: data and then only x after the fact x post. 9 00:00:40,400 --> 00:00:43,880 Speaker 2: But I'm calling it x post squared because not only 10 00:00:43,880 --> 00:00:46,279 Speaker 2: are the ex post worried about inflation and what's going 11 00:00:46,320 --> 00:00:48,880 Speaker 2: to happen there, the ex post worried about jobs, jobs, 12 00:00:48,960 --> 00:00:52,640 Speaker 2: jobs as well, and a squared function means more than 13 00:00:52,720 --> 00:00:55,400 Speaker 2: just adding them together. And I think that shows the 14 00:00:55,440 --> 00:00:59,880 Speaker 2: bizarreness the uncertainty of this FED meeting. As someone who's 15 00:01:00,160 --> 00:01:04,680 Speaker 2: really focused on this is Tursten's Slock of Apollo Global Management. 16 00:01:04,760 --> 00:01:05,279 Speaker 2: Let's listen. 17 00:01:05,440 --> 00:01:07,520 Speaker 1: We are absolutely in staflation. If you look at the 18 00:01:07,560 --> 00:01:10,600 Speaker 1: quantifications from the Yald budget lab from the pin Waton 19 00:01:10,600 --> 00:01:13,480 Speaker 1: budget model from the Tax Foundation, from the Pierson Institute, 20 00:01:13,560 --> 00:01:15,680 Speaker 1: they find that inflation over the next twelve months will 21 00:01:15,720 --> 00:01:18,120 Speaker 1: go up by one percent is point. So if we 22 00:01:18,160 --> 00:01:20,319 Speaker 1: have inflation going up, they fetch would be hiking. But 23 00:01:20,360 --> 00:01:22,320 Speaker 1: if at the same time we have less economic activity, 24 00:01:22,360 --> 00:01:24,800 Speaker 1: the fetch would be cutting. So executary point which one 25 00:01:24,880 --> 00:01:27,640 Speaker 1: is what's really most interesting also about this discussion is 26 00:01:27,680 --> 00:01:30,600 Speaker 1: that the dot plot is actually revealing that they're leaning 27 00:01:30,600 --> 00:01:33,080 Speaker 1: towards looking at growth, because the dot plot is saying 28 00:01:33,120 --> 00:01:35,040 Speaker 1: that the next move is a cut. So if that's 29 00:01:35,040 --> 00:01:37,080 Speaker 1: the case, we have our answer right there that they're 30 00:01:37,080 --> 00:01:39,800 Speaker 1: fed things that in a stacklation scenario the focus should 31 00:01:39,800 --> 00:01:41,800 Speaker 1: be on growth. And that's of course where the Arthur 32 00:01:41,840 --> 00:01:44,720 Speaker 1: Burns and the pul Volca discussions will come in, because 33 00:01:44,840 --> 00:01:46,880 Speaker 1: is that a mistake If inflation is about to go 34 00:01:46,959 --> 00:01:49,640 Speaker 1: remember COPC today's two point eight, and if we add 35 00:01:49,680 --> 00:01:51,320 Speaker 1: one percent to then we get to three point eight. 36 00:01:51,480 --> 00:01:53,360 Speaker 1: Can you be cutting? If inflationans move up to t 37 00:01:53,520 --> 00:01:55,600 Speaker 1: pot two to three point eight. That gets a really 38 00:01:55,600 --> 00:01:56,680 Speaker 1: really complex decision. 39 00:01:56,960 --> 00:01:59,600 Speaker 2: Three point eight and that's a much smaller number than 40 00:01:59,680 --> 00:02:02,920 Speaker 2: four point zero. I can't imagine a bundled in three 41 00:02:02,920 --> 00:02:04,960 Speaker 2: month moving average or four point zero. I don't hear 42 00:02:04,960 --> 00:02:07,920 Speaker 2: many people modeling that yet, So it's not get in 43 00:02:07,920 --> 00:02:11,880 Speaker 2: front of ourselves. One of the secrets of Bloomberg's surveillance 44 00:02:11,919 --> 00:02:16,480 Speaker 2: and we learned this ages ago. We are so humbled 45 00:02:17,200 --> 00:02:20,959 Speaker 2: that our guests tune into the show before they're on 46 00:02:21,120 --> 00:02:23,360 Speaker 2: the linkage here of the guest guest to guest to 47 00:02:23,400 --> 00:02:27,960 Speaker 2: guests can really be valuable. From Blackrock listening to Torsten 48 00:02:28,080 --> 00:02:31,360 Speaker 2: Slock at Apollo Global Management, here's Jeffrey Rosenberg. 49 00:02:31,480 --> 00:02:34,440 Speaker 3: I'm not sure Torsten wrote about this or certainly people 50 00:02:34,440 --> 00:02:37,480 Speaker 3: are talking about the kind of typical pattern when you 51 00:02:37,639 --> 00:02:41,280 Speaker 3: get a shock to the system like the one that 52 00:02:41,320 --> 00:02:45,000 Speaker 3: we had, is the soft survey based data starts to 53 00:02:45,040 --> 00:02:49,640 Speaker 3: erode reflective of that shock on more of a forward 54 00:02:49,639 --> 00:02:52,840 Speaker 3: looking basis, because you're asking people in real time, what 55 00:02:52,880 --> 00:02:57,000 Speaker 3: are your expectations going forward? That erodes before the hard 56 00:02:57,080 --> 00:02:59,919 Speaker 3: data does. Now, what we're coming off of here, of course, 57 00:03:00,400 --> 00:03:03,880 Speaker 3: is that following the soft data in the most last 58 00:03:03,960 --> 00:03:06,120 Speaker 3: in the most recent decline in soft data was a 59 00:03:06,160 --> 00:03:09,120 Speaker 3: really bad strategy because the soft data ended up not 60 00:03:09,240 --> 00:03:11,760 Speaker 3: being validated in the hard data. So we have this 61 00:03:11,800 --> 00:03:14,720 Speaker 3: period in time. It's typical where you have the break 62 00:03:14,720 --> 00:03:16,919 Speaker 3: between soft data and hard data. And now what we're 63 00:03:16,919 --> 00:03:18,679 Speaker 3: going to look for and what the FED we'll talk 64 00:03:18,720 --> 00:03:20,960 Speaker 3: about is does it show up in the hard data? 65 00:03:21,080 --> 00:03:23,920 Speaker 3: What's critical for FED policy is they're not going to 66 00:03:23,960 --> 00:03:27,000 Speaker 3: be forecast depending here. They're not going to forecast and 67 00:03:27,040 --> 00:03:30,560 Speaker 3: move policy based on the soft data. They're going to wait, 68 00:03:30,720 --> 00:03:34,080 Speaker 3: and by waiting, they will be late, and they're going 69 00:03:34,160 --> 00:03:37,320 Speaker 3: to be happy to be late. Well, whether financial markets 70 00:03:37,360 --> 00:03:39,160 Speaker 3: are happy that they're late, that'll be a different question. 71 00:03:39,280 --> 00:03:42,360 Speaker 2: Jeffrey Rosenberg fired up there Black Rock as well. I 72 00:03:42,400 --> 00:03:43,920 Speaker 2: hope we have them on the FED meeting off to 73 00:03:43,960 --> 00:03:48,640 Speaker 2: see what the agenda is. He does their thematic investing 74 00:03:48,680 --> 00:03:52,960 Speaker 2: with a particular focus on fixed income. We're focused on 75 00:03:53,120 --> 00:03:55,880 Speaker 2: your interest in US on your commute. Thank you so much, 76 00:03:56,520 --> 00:03:58,600 Speaker 2: major shout out to ninety two ninety We had a 77 00:03:58,640 --> 00:04:01,280 Speaker 2: lot of fun today with a met gala and to 78 00:04:01,360 --> 00:04:06,400 Speaker 2: see Clario there, a singer songwriter out of Conquered Carlisle 79 00:04:06,800 --> 00:04:10,680 Speaker 2: High School out in the burbs by Blue Jay Recording 80 00:04:10,800 --> 00:04:15,000 Speaker 2: out in Conquered in Carlisle, Massachusetts. Very cool, Lincoln there. 81 00:04:15,200 --> 00:04:18,920 Speaker 2: Good morning to ninety two nine FM and you're met 82 00:04:19,000 --> 00:04:21,600 Speaker 2: Gala on your commune across the nation and of course 83 00:04:21,640 --> 00:04:26,320 Speaker 2: on YouTube, subscribe to Bloomberg Podcasts and on YouTube podcast 84 00:04:26,839 --> 00:04:32,560 Speaker 2: it's single best idea