Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: The single best idea on a really really strange Tuesday
Speaker 2: before FED meeting. Of course, we'll do the FED meeting tomorrow,
Speaker 2: the FED decize we do that at one thirty Wall
Speaker 2: Street time, looking forward to that. And my phrase for
Speaker 2: this coming off the reading I've done is x post
Speaker 2: is after the fact, So the FED takes in the
Speaker 2: data and then only x after the fact x post.
Speaker 2: But I'm calling it x post squared because not only
Speaker 2: are the ex post worried about inflation and what's going
Speaker 2: to happen there, the ex post worried about jobs, jobs,
Speaker 2: jobs as well, and a squared function means more than
Speaker 2: just adding them together. And I think that shows the
Speaker 2: bizarreness the uncertainty of this FED meeting. As someone who's
Speaker 2: really focused on this is Tursten's Slock of Apollo Global Management.
Speaker 2: Let's listen.
Speaker 1: We are absolutely in staflation. If you look at the
Speaker 1: quantifications from the Yald budget lab from the pin Waton
Speaker 1: budget model from the Tax Foundation, from the Pierson Institute,
Speaker 1: they find that inflation over the next twelve months will
Speaker 1: go up by one percent is point. So if we
Speaker 1: have inflation going up, they fetch would be hiking. But
Speaker 1: if at the same time we have less economic activity,
Speaker 1: the fetch would be cutting. So executary point which one
Speaker 1: is what's really most interesting also about this discussion is
Speaker 1: that the dot plot is actually revealing that they're leaning
Speaker 1: towards looking at growth, because the dot plot is saying
Speaker 1: that the next move is a cut. So if that's
Speaker 1: the case, we have our answer right there that they're
Speaker 1: fed things that in a stacklation scenario the focus should
Speaker 1: be on growth. And that's of course where the Arthur
Speaker 1: Burns and the pul Volca discussions will come in, because
Speaker 1: is that a mistake If inflation is about to go
Speaker 1: remember COPC today's two point eight, and if we add
Speaker 1: one percent to then we get to three point eight.
Speaker 1: Can you be cutting? If inflationans move up to t
Speaker 1: pot two to three point eight. That gets a really
Speaker 1: really complex decision.
Speaker 2: Three point eight and that's a much smaller number than
Speaker 2: four point zero. I can't imagine a bundled in three
Speaker 2: month moving average or four point zero. I don't hear
Speaker 2: many people modeling that yet, So it's not get in
Speaker 2: front of ourselves. One of the secrets of Bloomberg's surveillance
Speaker 2: and we learned this ages ago. We are so humbled
Speaker 2: that our guests tune into the show before they're on
Speaker 2: the linkage here of the guest guest to guest to
Speaker 2: guests can really be valuable. From Blackrock listening to Torsten
Speaker 2: Slock at Apollo Global Management, here's Jeffrey Rosenberg.
Speaker 3: I'm not sure Torsten wrote about this or certainly people
Speaker 3: are talking about the kind of typical pattern when you
Speaker 3: get a shock to the system like the one that
Speaker 3: we had, is the soft survey based data starts to
Speaker 3: erode reflective of that shock on more of a forward
Speaker 3: looking basis, because you're asking people in real time, what
Speaker 3: are your expectations going forward? That erodes before the hard
Speaker 3: data does. Now, what we're coming off of here, of course,
Speaker 3: is that following the soft data in the most last
Speaker 3: in the most recent decline in soft data was a
Speaker 3: really bad strategy because the soft data ended up not
Speaker 3: being validated in the hard data. So we have this
Speaker 3: period in time. It's typical where you have the break
Speaker 3: between soft data and hard data. And now what we're
Speaker 3: going to look for and what the FED we'll talk
Speaker 3: about is does it show up in the hard data?
Speaker 3: What's critical for FED policy is they're not going to
Speaker 3: be forecast depending here. They're not going to forecast and
Speaker 3: move policy based on the soft data. They're going to wait,
Speaker 3: and by waiting, they will be late, and they're going
Speaker 3: to be happy to be late. Well, whether financial markets
Speaker 3: are happy that they're late, that'll be a different question.
Speaker 2: Jeffrey Rosenberg fired up there Black Rock as well. I
Speaker 2: hope we have them on the FED meeting off to
Speaker 2: see what the agenda is. He does their thematic investing
Speaker 2: with a particular focus on fixed income. We're focused on
Speaker 2: your interest in US on your commute. Thank you so much,
Speaker 2: major shout out to ninety two ninety We had a
Speaker 2: lot of fun today with a met gala and to
Speaker 2: see Clario there, a singer songwriter out of Conquered Carlisle
Speaker 2: High School out in the burbs by Blue Jay Recording
Speaker 2: out in Conquered in Carlisle, Massachusetts. Very cool, Lincoln there.
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