1 00:00:05,040 --> 00:00:08,639 Speaker 1: This is the Bloomberg Surveillance Podcast. I'm Tom Keene along 2 00:00:08,680 --> 00:00:12,040 Speaker 1: with Paul Sweeney. Join us each day for insight from 3 00:00:12,039 --> 00:00:16,240 Speaker 1: the best in economics, finance, investment, and international relations. You 4 00:00:16,239 --> 00:00:19,599 Speaker 1: can also watch the show live on YouTube. Visit the 5 00:00:19,600 --> 00:00:24,360 Speaker 1: Bloomberg Podcast channel on YouTube to see the show weekday 6 00:00:24,360 --> 00:00:27,400 Speaker 1: mornings from seven to ten am Eastern from our global 7 00:00:27,440 --> 00:00:32,080 Speaker 1: headquarters in New York City. Subscribe to the podcast on Apple, Spotify, 8 00:00:32,440 --> 00:00:36,000 Speaker 1: or anywhere else you listen, and always i Bloomberg Radio, 9 00:00:36,200 --> 00:00:37,280 Speaker 1: the Bloomberg. 10 00:00:36,880 --> 00:00:39,400 Speaker 2: Terminal, and the Bloomberg Business App. 11 00:00:40,600 --> 00:00:44,199 Speaker 1: Definitive on our international relations, Ian Bremmer, he is with 12 00:00:44,240 --> 00:00:48,440 Speaker 1: Erasi Group. His top risks every year are beyond sobering, 13 00:00:48,920 --> 00:00:52,520 Speaker 1: one because they make you think, and two he's really 14 00:00:52,720 --> 00:00:55,920 Speaker 1: right a fair amount of the time, Ian Bremer. Should 15 00:00:55,960 --> 00:00:58,760 Speaker 1: we be stressed that this is a different Republican Party 16 00:00:59,440 --> 00:01:02,280 Speaker 1: than the report publican party of young John Bolton with 17 00:01:02,400 --> 00:01:03,120 Speaker 1: Ronald Reagan. 18 00:01:05,040 --> 00:01:08,160 Speaker 3: I'm not sure that that by itself is what drives 19 00:01:08,200 --> 00:01:14,080 Speaker 3: my concern. I think the fact that Trump owns the 20 00:01:14,120 --> 00:01:18,160 Speaker 3: Republican Party and so is a consequence he can put 21 00:01:18,160 --> 00:01:21,720 Speaker 3: a thumb on the scale on major. 22 00:01:21,480 --> 00:01:22,520 Speaker 4: Foreign policy issues. 23 00:01:22,560 --> 00:01:27,160 Speaker 3: That's a pretty big deal, but also just generally the 24 00:01:27,840 --> 00:01:34,080 Speaker 3: illegitimacy in perception of US institutions, the executive, the judiciary, 25 00:01:35,400 --> 00:01:38,960 Speaker 3: the Congress, but also the public school system, the church, 26 00:01:39,400 --> 00:01:42,959 Speaker 3: I mean, the media. When you look at how Americans 27 00:01:43,160 --> 00:01:46,920 Speaker 3: feel about their institutions over the last twenty thirty years, 28 00:01:47,000 --> 00:01:48,440 Speaker 3: it's just been getting. 29 00:01:48,080 --> 00:01:52,040 Speaker 4: Worse and worse and worse. And that, to me is 30 00:01:52,080 --> 00:01:53,640 Speaker 4: the structural underpinning here. 31 00:01:53,840 --> 00:01:56,400 Speaker 1: The getting worse and worse and worse seems to be 32 00:01:56,440 --> 00:01:58,919 Speaker 1: the heart of the matter, what anybody's politics is. Governor 33 00:01:58,960 --> 00:02:03,840 Speaker 1: Haley cited out the statistics showing the pole tilt Ian Bremmer, 34 00:02:03,880 --> 00:02:07,920 Speaker 1: who is forget about Spiro Agno, who is the American 35 00:02:08,000 --> 00:02:09,680 Speaker 1: silent majority. 36 00:02:11,560 --> 00:02:14,520 Speaker 3: I think they're people that feel like they're leaders have 37 00:02:14,639 --> 00:02:17,840 Speaker 3: left them. They're people that no longer believe in the 38 00:02:17,880 --> 00:02:22,120 Speaker 3: American dream. When you and I were kids, the United 39 00:02:22,160 --> 00:02:25,720 Speaker 3: States had the greatest class mobility of any of the 40 00:02:25,760 --> 00:02:27,000 Speaker 3: OECD nations. 41 00:02:27,040 --> 00:02:28,360 Speaker 4: Today it has the least. 42 00:02:29,480 --> 00:02:32,920 Speaker 3: And no matter how optimistic and individualistic you might be 43 00:02:33,160 --> 00:02:37,120 Speaker 3: as a nation, eventually you get hit in the face 44 00:02:37,200 --> 00:02:40,680 Speaker 3: enough and and you change your view. And I think 45 00:02:40,720 --> 00:02:43,400 Speaker 3: that that's a big piece of I mean, the US 46 00:02:43,480 --> 00:02:47,560 Speaker 3: still has incredible wealth and has all of this entrepreneurship, 47 00:02:48,160 --> 00:02:51,079 Speaker 3: and you'd rather be the United States than any other 48 00:02:51,120 --> 00:02:53,359 Speaker 3: country in the world in the aggregate. 49 00:02:53,919 --> 00:02:58,200 Speaker 4: But people don't live in the aggregate, and that's what 50 00:02:58,240 --> 00:02:58,919 Speaker 4: we're experiencing. 51 00:03:00,200 --> 00:03:02,400 Speaker 5: So Ian, I'd love to get your views on how 52 00:03:02,440 --> 00:03:07,560 Speaker 5: perhaps the US is viewed by I don't know, our allies, 53 00:03:07,919 --> 00:03:10,040 Speaker 5: our foes. I mean, it seems like it's been an 54 00:03:10,120 --> 00:03:13,279 Speaker 5: up and down, whether you know, with the Trump administration, 55 00:03:13,600 --> 00:03:17,240 Speaker 5: their policy for NATO and just kind of foreign policy 56 00:03:17,320 --> 00:03:21,200 Speaker 5: versus Biden trying to maybe get back to normalcy. How 57 00:03:21,240 --> 00:03:23,760 Speaker 5: do you think the folks outside the US view. 58 00:03:23,639 --> 00:03:29,600 Speaker 6: US incredibly inconsistent? I mean, not a country that you 59 00:03:29,600 --> 00:03:32,920 Speaker 6: can as easily count on, and therefore a lot of 60 00:03:32,960 --> 00:03:37,760 Speaker 6: hedging behavior going on, even though there aren't necessarily any 61 00:03:37,760 --> 00:03:38,560 Speaker 6: good options. 62 00:03:39,360 --> 00:03:44,680 Speaker 4: Look, I mean, I take the point that we should not. 63 00:03:44,760 --> 00:03:48,920 Speaker 3: Be blackmailing our allies to pay or else we won't 64 00:03:48,920 --> 00:03:51,920 Speaker 3: defend them. But on the other side of that argument, 65 00:03:52,840 --> 00:03:57,760 Speaker 3: what are we if, for decades they refuse to actually 66 00:03:57,960 --> 00:03:59,880 Speaker 3: make good on their defense commitments? 67 00:04:00,360 --> 00:04:02,520 Speaker 4: Should there be no consequences at all? 68 00:04:02,560 --> 00:04:06,400 Speaker 3: Because that appears to be the ex ante position, and 69 00:04:06,920 --> 00:04:08,280 Speaker 3: that's not okay either. 70 00:04:08,360 --> 00:04:08,480 Speaker 7: Right. 71 00:04:08,520 --> 00:04:12,040 Speaker 3: That it's true that if Trump tells you we won't 72 00:04:12,040 --> 00:04:14,840 Speaker 3: defend you, we'd like Russia to attack you. If you 73 00:04:14,880 --> 00:04:18,560 Speaker 3: don't pay your two percent into GDP of defense, if 74 00:04:18,560 --> 00:04:22,960 Speaker 3: you're not doing an adequate job defending yourself, that undermines NATO. 75 00:04:23,000 --> 00:04:24,760 Speaker 4: And we've heard that from the Secretary General. 76 00:04:25,120 --> 00:04:28,800 Speaker 3: But it's also true that if Canada and Germany and 77 00:04:28,880 --> 00:04:33,000 Speaker 3: France and Italy and Spain, I mean, the biggest economies 78 00:04:33,080 --> 00:04:36,680 Speaker 3: all consistently refuse to invest in their own defense. 79 00:04:36,800 --> 00:04:41,120 Speaker 4: That also emboldens Putin. Right, That emboldens Putin too. 80 00:04:41,520 --> 00:04:46,320 Speaker 3: So how is it that neither none of our leaders 81 00:04:46,640 --> 00:04:47,760 Speaker 3: seem to get it right? 82 00:04:47,839 --> 00:04:51,760 Speaker 7: We just bounce back and forth between these populist extremes 83 00:04:52,920 --> 00:04:56,680 Speaker 7: and don't think long term about what makes for a 84 00:04:56,720 --> 00:04:57,600 Speaker 7: strong alliance. 85 00:04:57,920 --> 00:05:02,680 Speaker 5: So what do you believe is the realistic future of NATO, 86 00:05:02,920 --> 00:05:05,119 Speaker 5: because boy, that is front and center now with what's 87 00:05:05,160 --> 00:05:06,400 Speaker 5: going on in Ukraine. 88 00:05:07,920 --> 00:05:12,280 Speaker 4: I think that peak NATO was last year. Putin made 89 00:05:12,279 --> 00:05:13,200 Speaker 4: a huge mistake. 90 00:05:13,279 --> 00:05:17,680 Speaker 3: You should never never ever interrupt your adversary when they're 91 00:05:17,720 --> 00:05:21,719 Speaker 3: screwing up, and NATO was getting more divided and becoming 92 00:05:21,800 --> 00:05:25,320 Speaker 3: less relevant. For many years, the Europeans just were I 93 00:05:25,320 --> 00:05:27,120 Speaker 3: wouldn't say they were giving up on it, but they 94 00:05:27,160 --> 00:05:31,080 Speaker 3: were certainly taking advantage of it. And that led to 95 00:05:31,600 --> 00:05:36,160 Speaker 3: a backlash that you saw reflected with Trump's America first, 96 00:05:36,640 --> 00:05:37,880 Speaker 3: and then Putin. 97 00:05:37,560 --> 00:05:39,200 Speaker 4: Did the stupidest possible thing. 98 00:05:39,480 --> 00:05:43,320 Speaker 8: He made NATO as desirable and relevant as humanly possible 99 00:05:43,680 --> 00:05:48,800 Speaker 8: by trying to overthrow Zelenski and sends his troops storming 100 00:05:48,839 --> 00:05:52,839 Speaker 8: toward Kiev. And not only did that make the Germans 101 00:05:52,839 --> 00:05:58,040 Speaker 8: start spending money on their defense, but it also expanded NATO, 102 00:05:58,160 --> 00:06:01,360 Speaker 8: made the Finns, made the Swedes wanted to join, made 103 00:06:01,440 --> 00:06:07,440 Speaker 8: everybody realize that NATO was an indispensable alliance. Unfortunately, Putin 104 00:06:07,640 --> 00:06:10,880 Speaker 8: understands that he cares a lot more about this issue 105 00:06:10,920 --> 00:06:14,520 Speaker 8: than anybody else does, and he's willing to wait everybody out, 106 00:06:14,839 --> 00:06:18,799 Speaker 8: and that now appears to be working in his favor 107 00:06:19,160 --> 00:06:20,200 Speaker 8: after two years of it. 108 00:06:20,320 --> 00:06:21,560 Speaker 2: Not Ian Bremer. 109 00:06:21,640 --> 00:06:24,040 Speaker 1: One of my favorite people is a hockey player from 110 00:06:24,120 --> 00:06:27,880 Speaker 1: Finland named Alex Stubb. He's young, he's vigorous. I'm not 111 00:06:27,920 --> 00:06:32,440 Speaker 1: sure that politics in a closely contested Finnish election explain 112 00:06:32,520 --> 00:06:35,680 Speaker 1: to our American audience the importance of Finland and that 113 00:06:35,839 --> 00:06:37,120 Speaker 1: heritage with Russia. 114 00:06:38,240 --> 00:06:41,200 Speaker 3: Well it does have, of now, of all of our 115 00:06:41,279 --> 00:06:47,320 Speaker 3: NATO allies, the longest border with Russia. And while they 116 00:06:47,360 --> 00:06:52,880 Speaker 3: had had a comparatively independent policy and were very unwilling, 117 00:06:53,000 --> 00:06:57,719 Speaker 3: very controversial join NATO, that flipped the entire population overnight 118 00:06:58,080 --> 00:07:03,800 Speaker 3: when the Russians invaded Ukraine in February twenty twenty two. Interestingly, 119 00:07:04,240 --> 00:07:08,479 Speaker 3: that wasn't the position despite the invasion in southeast Ukraine 120 00:07:08,839 --> 00:07:12,240 Speaker 3: with the Little Green Men and the illegal annexation of Crimea, 121 00:07:12,360 --> 00:07:16,320 Speaker 3: but all the Tanks after the denials the ball face 122 00:07:16,440 --> 00:07:19,680 Speaker 3: lies from Putin to the Germans, the French, the Americans 123 00:07:19,680 --> 00:07:22,200 Speaker 3: over the months and then willing to try to engage 124 00:07:22,200 --> 00:07:25,000 Speaker 3: in full regime change of a country of over fifty 125 00:07:25,040 --> 00:07:30,360 Speaker 3: million people. That that proved enough. And Steube, who's a 126 00:07:30,400 --> 00:07:32,360 Speaker 3: good friend, I've known him for a long time. 127 00:07:33,040 --> 00:07:33,840 Speaker 4: I mean, he is. 128 00:07:34,000 --> 00:07:38,600 Speaker 3: A very very staunch opponent of mister Putin. 129 00:07:39,440 --> 00:07:42,080 Speaker 4: And there's no question that. 130 00:07:43,840 --> 00:07:48,160 Speaker 3: The election was not determined by how you view NATO 131 00:07:48,240 --> 00:07:51,600 Speaker 3: or Russia. In fact, both of the both of the 132 00:07:51,640 --> 00:07:55,360 Speaker 3: opponents of each other, were very consistent in terms of policy. 133 00:07:55,400 --> 00:07:58,160 Speaker 3: There's very different personalities, but there wasn't a lot of 134 00:07:58,200 --> 00:08:00,400 Speaker 3: substance in this. 135 00:08:00,880 --> 00:08:02,680 Speaker 2: There is substance in Jakarta. 136 00:08:03,000 --> 00:08:05,560 Speaker 1: It is on the other side, as Patrick O'Brien said, 137 00:08:05,600 --> 00:08:06,640 Speaker 1: the far side. 138 00:08:06,400 --> 00:08:07,000 Speaker 6: Of the world. 139 00:08:07,400 --> 00:08:13,000 Speaker 1: You feature the Indonesian election briefest quickly on that, doctor Bremmer. 140 00:08:15,080 --> 00:08:20,840 Speaker 3: It's another large country after India, big democracy, no one 141 00:08:21,000 --> 00:08:27,360 Speaker 3: questioning the legitimacy of the process. Joco the existing president, 142 00:08:27,640 --> 00:08:32,920 Speaker 3: has been quite popular, and his preferred successor, mister Praboo, 143 00:08:33,160 --> 00:08:37,880 Speaker 3: a former military general, is likely to win, though probably 144 00:08:37,960 --> 00:08:41,680 Speaker 3: not in the first round, and his vice presidential running 145 00:08:41,679 --> 00:08:46,040 Speaker 3: mate is Jocobe. The president his son, so I mean 146 00:08:46,400 --> 00:08:52,640 Speaker 3: definitely will be more state enterprise oriented, will probably be 147 00:08:52,679 --> 00:08:56,640 Speaker 3: a little more populist in policy, but very consistent in 148 00:08:56,640 --> 00:09:01,920 Speaker 3: international orientation, including very good relations with the US in Japan. 149 00:09:02,800 --> 00:09:06,160 Speaker 5: Rightfully, so, most folks attention is focused on Ukraine, has 150 00:09:06,200 --> 00:09:08,720 Speaker 5: focused on the Middle East, but of course we can't 151 00:09:08,720 --> 00:09:11,760 Speaker 5: forget about what's happening with China, with Taiwan, that. 152 00:09:11,760 --> 00:09:13,319 Speaker 2: Whole part of the world. 153 00:09:14,120 --> 00:09:17,199 Speaker 5: How do you view China's view of the world over 154 00:09:17,240 --> 00:09:18,160 Speaker 5: the next year or two. 155 00:09:19,520 --> 00:09:27,760 Speaker 3: Their geopolitical position has been really undermined by an economy 156 00:09:27,760 --> 00:09:33,400 Speaker 3: that's not doing well and then overly assertive sort of 157 00:09:33,440 --> 00:09:36,319 Speaker 3: political footprint, and so you look at them. Of course, 158 00:09:36,360 --> 00:09:40,440 Speaker 3: India has a much much stronger relationship with the US 159 00:09:40,600 --> 00:09:45,600 Speaker 3: and much more contentious and combative engagement with the Chinese, 160 00:09:45,640 --> 00:09:50,200 Speaker 3: including over their contested border. The Quad has been a 161 00:09:50,240 --> 00:09:54,800 Speaker 3: strong effort of US architecture building that is a counterbalance 162 00:09:54,880 --> 00:09:58,680 Speaker 3: to China's Belt and Road. You've got the South Korea 163 00:09:59,040 --> 00:10:02,720 Speaker 3: Japan break through, probably the most important diplomatic success that 164 00:10:02,760 --> 00:10:06,760 Speaker 3: Biden has had over his three plus years. Also problematic 165 00:10:06,800 --> 00:10:10,920 Speaker 3: for the Chinese. We just mentioned Indonesia they're till, but 166 00:10:10,960 --> 00:10:14,680 Speaker 3: also the Philippines now offering the US eight military bases 167 00:10:15,320 --> 00:10:17,440 Speaker 3: after what had been a close up policy with China. 168 00:10:17,840 --> 00:10:20,880 Speaker 3: If you're China going forward right now, part of the 169 00:10:20,880 --> 00:10:23,040 Speaker 3: reason for this charm offensive, it's not just that the 170 00:10:23,040 --> 00:10:25,719 Speaker 3: economy is going badly. It's that they recognize that they've 171 00:10:25,720 --> 00:10:27,920 Speaker 3: bitten off more than they can chew, and they need 172 00:10:27,920 --> 00:10:29,880 Speaker 3: countries to not feel like China is a big, bad 173 00:10:29,920 --> 00:10:33,880 Speaker 3: boogeyman in their backyard. So this has been a better 174 00:10:33,880 --> 00:10:36,840 Speaker 3: managed policy by the Americans than what we're seeing right 175 00:10:36,880 --> 00:10:39,160 Speaker 3: now in Ukraine and what we're seeing right now in Gaza. 176 00:10:39,240 --> 00:10:43,560 Speaker 5: All right, so I guess let's just start with Ukraine, 177 00:10:44,080 --> 00:10:45,680 Speaker 5: where do we go from here. I mean, we're getting 178 00:10:45,720 --> 00:10:48,240 Speaker 5: into year three here, and I think both sides are 179 00:10:48,240 --> 00:10:49,520 Speaker 5: probably getting a little tired. 180 00:10:50,520 --> 00:10:53,840 Speaker 3: The Russians are much are waiting them out. I would 181 00:10:53,920 --> 00:10:58,040 Speaker 3: say the troops are tired. But Putin feels emboldened. And 182 00:10:58,400 --> 00:11:01,319 Speaker 3: you saw that with his two hours plus a history 183 00:11:01,400 --> 00:11:03,120 Speaker 3: lesson with Tucker Carlson a few days. 184 00:11:03,200 --> 00:11:05,160 Speaker 1: Should Tucker Carlson have done that interview? 185 00:11:06,840 --> 00:11:09,400 Speaker 3: Someone should have done that interview. But I mean, I'd 186 00:11:09,440 --> 00:11:11,760 Speaker 3: rather be a real journalist, you know. I mean, Tucker 187 00:11:11,880 --> 00:11:14,280 Speaker 3: is not that, and the fact that he is a 188 00:11:14,320 --> 00:11:20,680 Speaker 3: fabulous who supports Putin's position has been publicly sympathetic to it. 189 00:11:20,840 --> 00:11:22,160 Speaker 4: I don't think does this any. 190 00:11:21,920 --> 00:11:25,240 Speaker 3: Favors, but it's useful for the Americans to hear directly 191 00:11:25,280 --> 00:11:27,400 Speaker 3: from Putin what he has to say. 192 00:11:27,480 --> 00:11:29,400 Speaker 4: I didn't mind the fact that the interview happened. 193 00:11:29,840 --> 00:11:33,080 Speaker 3: I do think that the ability of the United States, 194 00:11:33,120 --> 00:11:36,800 Speaker 3: the willingness to continue to provide military support is utterly 195 00:11:36,920 --> 00:11:42,480 Speaker 3: essential for Ukrainians to hold their defensive lines. That's getting 196 00:11:42,640 --> 00:11:46,560 Speaker 3: a lot harder to count on going forward, and we 197 00:11:46,600 --> 00:11:48,720 Speaker 3: could easily see Ukraine start falling apart. 198 00:11:48,840 --> 00:11:51,719 Speaker 1: Doctor Bremer in ninety seconds, and this has just been 199 00:11:51,760 --> 00:11:54,560 Speaker 1: fabulous to go from Governor Haley to doctor Bolton that 200 00:11:54,600 --> 00:11:57,680 Speaker 1: Ian Bremer is the way to do this, folks Ian Bremer. 201 00:11:57,720 --> 00:12:00,480 Speaker 1: There seems to be a new Pacific Rim after the 202 00:12:00,559 --> 00:12:03,960 Speaker 1: TPP blow up and everybody anti China and all that, 203 00:12:04,559 --> 00:12:07,080 Speaker 1: And that is a projection of the United States across 204 00:12:07,120 --> 00:12:10,920 Speaker 1: four military bases, not up to Taiwan, but across the 205 00:12:11,040 --> 00:12:14,360 Speaker 1: arc of the western Philippines. Right now you got Marco 206 00:12:14,400 --> 00:12:17,440 Speaker 1: and do Terte going at it again. People talk in 207 00:12:17,520 --> 00:12:20,960 Speaker 1: Manila about a coup. Are we more in the Pacific 208 00:12:21,040 --> 00:12:23,360 Speaker 1: Rim than we were two three years ago? Is there 209 00:12:23,400 --> 00:12:25,079 Speaker 1: a new US projection? 210 00:12:26,400 --> 00:12:28,680 Speaker 4: There's no coup coming. 211 00:12:28,760 --> 00:12:33,600 Speaker 7: This is a former President du Terte losing influence and 212 00:12:33,720 --> 00:12:37,200 Speaker 7: lashing out as a consequence. But the United States remains 213 00:12:37,240 --> 00:12:39,439 Speaker 7: the only country in the world that can project its 214 00:12:39,480 --> 00:12:45,080 Speaker 7: military power globally. And China's a regional power militarily, and 215 00:12:45,120 --> 00:12:47,720 Speaker 7: their economy is not doing so well right now. And 216 00:12:47,840 --> 00:12:51,640 Speaker 7: that makes the US much more relevant for every country 217 00:12:51,880 --> 00:12:54,720 Speaker 7: who's in Asia or may have China as their lead 218 00:12:54,760 --> 00:12:57,720 Speaker 7: trade partner but doesn't want to become a supplicant from Besia. 219 00:12:57,920 --> 00:13:01,080 Speaker 1: It is a g Bremmer world. It's a new she's 220 00:13:01,120 --> 00:13:03,040 Speaker 1: zero or Chief Bremmer. We'll get a new book out 221 00:13:03,040 --> 00:13:05,880 Speaker 1: of him at some point here Ian Bremmer, and just fabulous, 222 00:13:05,880 --> 00:13:09,000 Speaker 1: And thank you doctor Bremmer for the top risks from 223 00:13:09,040 --> 00:13:09,760 Speaker 1: your Rasier. 224 00:13:09,520 --> 00:13:18,600 Speaker 2: Group that we see. 225 00:13:20,960 --> 00:13:25,160 Speaker 1: We continue strong with another former UN ambassador. He is 226 00:13:25,280 --> 00:13:29,520 Speaker 1: John Bolton, of course, united States National Security advisor with 227 00:13:29,600 --> 00:13:35,400 Speaker 1: the Trump administration, a critic of President Trump, and Ambassador 228 00:13:35,400 --> 00:13:38,440 Speaker 1: Bolton joins us this morning. Ambassador Bolton, you wrote an 229 00:13:38,559 --> 00:13:41,480 Speaker 1: essay in the FT a year or so ago. 230 00:13:41,760 --> 00:13:42,679 Speaker 2: What happened to the. 231 00:13:42,640 --> 00:13:46,880 Speaker 1: Party of your Ronald Reagan? Is Nicky Hayley the last 232 00:13:47,000 --> 00:13:49,920 Speaker 1: Ronald Reagan acolyte standing. 233 00:13:50,760 --> 00:13:54,200 Speaker 9: Well, she's the last one still running for the presidential nomination. 234 00:13:54,360 --> 00:13:58,040 Speaker 9: But I think the party at its roots is still Reagan. 235 00:13:58,320 --> 00:14:03,360 Speaker 9: I think Trump as an aberration. Obviously he's been able 236 00:14:03,360 --> 00:14:05,880 Speaker 9: to capture a significant part of the party, but I 237 00:14:05,920 --> 00:14:09,600 Speaker 9: think that you know, one day he will pass, hopefully 238 00:14:09,640 --> 00:14:12,840 Speaker 9: without doing too much more damage, and we can get 239 00:14:12,880 --> 00:14:15,800 Speaker 9: back to where we should be. His comments about NATO 240 00:14:15,920 --> 00:14:20,320 Speaker 9: and allowing Russia to attack countries not spending enough on 241 00:14:20,360 --> 00:14:22,840 Speaker 9: their defense really ought to be a wake up call. 242 00:14:23,160 --> 00:14:26,600 Speaker 1: Yeah. Paul Sweeney emailed me this weekend, and he said, 243 00:14:26,600 --> 00:14:29,440 Speaker 1: gets Trevitas, And of course they get James Travitas, the 244 00:14:29,480 --> 00:14:32,680 Speaker 1: Supreme Commander of NATO would be lovely. We don't have 245 00:14:32,760 --> 00:14:35,400 Speaker 1: them today, folks, but we do have John Bolton. What 246 00:14:35,480 --> 00:14:39,200 Speaker 1: are the ramifications to Europe to Alex Stubb winning that 247 00:14:39,280 --> 00:14:43,480 Speaker 1: election in Finland? What's the ramifications to Europe if we 248 00:14:43,520 --> 00:14:45,840 Speaker 1: get a Trump foreign policy. 249 00:14:46,480 --> 00:14:48,960 Speaker 9: Well, it would be disasters. It'd be disastrous for the 250 00:14:49,080 --> 00:14:52,280 Speaker 9: United States, but it would be worse for Europe. You know, 251 00:14:52,400 --> 00:14:56,040 Speaker 9: the Europeans can talk about an EU style defense all 252 00:14:56,080 --> 00:14:58,520 Speaker 9: they want. Really, they're going to be led by Germany 253 00:14:58,560 --> 00:15:01,920 Speaker 9: and France. You know, good luck with that. The problem 254 00:15:02,000 --> 00:15:05,400 Speaker 9: is in the United States, for too long, political leaders 255 00:15:05,400 --> 00:15:08,000 Speaker 9: have failed to make the case that we're in alliances 256 00:15:08,080 --> 00:15:12,000 Speaker 9: like NATO and bilateral alliances with Japan and South Korea 257 00:15:12,760 --> 00:15:15,480 Speaker 9: around the world, not out as an active charity. We're 258 00:15:15,520 --> 00:15:18,240 Speaker 9: just not being nice to the Europeans by being in NATO. 259 00:15:18,560 --> 00:15:22,440 Speaker 9: We're protecting vital American interest, we're protecting European interest too, 260 00:15:22,480 --> 00:15:26,640 Speaker 9: but we're doing it for ourselves primarily. And the Europeans 261 00:15:26,680 --> 00:15:30,720 Speaker 9: have not done what they should have done in terms 262 00:15:30,760 --> 00:15:34,520 Speaker 9: of their own defense expenditures. You know, maybe this will 263 00:15:34,640 --> 00:15:37,880 Speaker 9: a further wake up call to increase, but nobody should 264 00:15:37,880 --> 00:15:41,120 Speaker 9: be under operate under any illusions here. Trump is not 265 00:15:41,240 --> 00:15:45,440 Speaker 9: trying to strengthen NATO. Trump is beginning the case if 266 00:15:45,520 --> 00:15:48,280 Speaker 9: he's elected, why he's going to withdraw from NATO. 267 00:15:48,880 --> 00:15:52,280 Speaker 5: And Ambassador Bolton, I mean, obviously front lines there in 268 00:15:52,280 --> 00:15:55,520 Speaker 5: today's news is just you know, Ukraine, Russia. What is 269 00:15:55,560 --> 00:15:59,000 Speaker 5: your latest thinking on how this is developing here and 270 00:15:59,120 --> 00:16:03,320 Speaker 5: continues to develop in I guess the second year well, I. 271 00:16:03,320 --> 00:16:08,040 Speaker 9: Think Putin, taking advantage of his conversation with Tucker Carlson, 272 00:16:08,120 --> 00:16:11,040 Speaker 9: made it plain he's ready to negotiate, and I've been 273 00:16:11,080 --> 00:16:13,440 Speaker 9: worried about that for a long time. I think Biden 274 00:16:13,920 --> 00:16:16,160 Speaker 9: wants to put the wars that are going on now 275 00:16:16,240 --> 00:16:19,840 Speaker 9: behind him for purposes of the November election. He's in deep, 276 00:16:19,920 --> 00:16:24,200 Speaker 9: deep trouble, and stopping the war in Ukraine, I think 277 00:16:24,240 --> 00:16:28,200 Speaker 9: he will see that his political advantage. Unfortunately, and there 278 00:16:28,200 --> 00:16:30,200 Speaker 9: are plenty of countries in Europe that would like to 279 00:16:30,240 --> 00:16:33,800 Speaker 9: turn the page on Russia's invasion in twenty twenty two 280 00:16:33,840 --> 00:16:35,960 Speaker 9: and before that in twenty fourteen and go back to 281 00:16:36,080 --> 00:16:39,120 Speaker 9: business as usual. So I think Putin is playing to 282 00:16:39,200 --> 00:16:42,720 Speaker 9: a weakness in the Western Alliance here transatlantically to get 283 00:16:42,760 --> 00:16:43,760 Speaker 9: a ceasefire. 284 00:16:43,680 --> 00:16:44,200 Speaker 2: John Bolden. 285 00:16:44,720 --> 00:16:46,400 Speaker 1: Just because of time here I have to turn to 286 00:16:46,440 --> 00:16:51,960 Speaker 1: the Eastern Mediterranean. And over the weekend, the entire zeitgeist 287 00:16:51,960 --> 00:16:56,760 Speaker 1: to me of Democrats, of those uncommitted of Republicans, has 288 00:16:56,840 --> 00:17:02,920 Speaker 1: been wither net in Yahoo trued on domestic Israeli politics 289 00:17:03,560 --> 00:17:06,520 Speaker 1: or is that something distant and remote that the Israelis 290 00:17:06,640 --> 00:17:07,359 Speaker 1: have to solve? 291 00:17:08,760 --> 00:17:11,480 Speaker 9: Well, look, I agree with net Yahu's view that he 292 00:17:11,800 --> 00:17:14,439 Speaker 9: should he should be allowed to pursue the objective of 293 00:17:14,520 --> 00:17:17,639 Speaker 9: destroying hamas he calls a total victory. And in World 294 00:17:17,680 --> 00:17:22,600 Speaker 9: War Two, Franklin Roosevelt set the terms for German and 295 00:17:23,160 --> 00:17:27,320 Speaker 9: Japan to end World War Two? Is unconditional surrender? Get 296 00:17:27,359 --> 00:17:30,679 Speaker 9: given the October seven attack? Why isn't Israel entitled to 297 00:17:30,720 --> 00:17:33,280 Speaker 9: do that? I tell you, if Biden breaks with Netan Yahu, 298 00:17:33,640 --> 00:17:36,320 Speaker 9: he can kiss the twenty twenty four elections goodbye. 299 00:17:37,200 --> 00:17:41,520 Speaker 5: So I mean, to what end, Ambassador, do you think 300 00:17:41,520 --> 00:17:45,720 Speaker 5: that Netnahu and the Israeli objectives which a lot of 301 00:17:45,760 --> 00:17:48,120 Speaker 5: folks feel like, I'm not even sure how you even 302 00:17:48,760 --> 00:17:52,359 Speaker 5: measure whether they're achieved? How can you destroy a terrorist organization. 303 00:17:52,840 --> 00:17:56,840 Speaker 5: From your perspective, what would you recommend to mister net Yahu. 304 00:17:57,920 --> 00:18:01,040 Speaker 9: Well, how did we destroy Nazism in Germany? We killed 305 00:18:01,040 --> 00:18:03,760 Speaker 9: an awful lot of Nazis. You're not going to kill everyone. 306 00:18:04,600 --> 00:18:06,679 Speaker 9: And it's true, you don't kill the idea. But if 307 00:18:06,800 --> 00:18:10,000 Speaker 9: enough of its adherents are killed, and the Israelis claim 308 00:18:10,040 --> 00:18:14,639 Speaker 9: they've destroyed eight of the twelve Hamas fighting battalions, you 309 00:18:14,680 --> 00:18:16,359 Speaker 9: can go a long way toward that goal. 310 00:18:16,840 --> 00:18:19,520 Speaker 2: But I think John Bolton, this is so important. 311 00:18:19,520 --> 00:18:23,400 Speaker 1: There's a huge body of Americans, including Democrats, who do 312 00:18:23,480 --> 00:18:27,560 Speaker 1: not agree that we should support mister Netanyahu. Given that 313 00:18:28,080 --> 00:18:33,119 Speaker 1: American domestic tension, how do we prosecute a foreign policy 314 00:18:33,160 --> 00:18:35,399 Speaker 1: in the Eastern Mediterranean. 315 00:18:35,720 --> 00:18:38,960 Speaker 9: By having leaders who can articulate the reasons why it's 316 00:18:39,119 --> 00:18:43,320 Speaker 9: of an American interest that these terrorists be defeated. This 317 00:18:43,359 --> 00:18:46,119 Speaker 9: is not an Israeli war against Hamas. This is not 318 00:18:46,200 --> 00:18:50,000 Speaker 9: an Arab Israeli war. This is an Iranian war against Israel. 319 00:18:50,600 --> 00:18:54,280 Speaker 9: Through its terrorist proxies. They are aiming to destroy the 320 00:18:54,320 --> 00:18:58,399 Speaker 9: little Satan Israel. They're aiming to gain hegemony in the 321 00:18:58,400 --> 00:19:01,480 Speaker 9: Middle East as a whole over the city Arab. Their 322 00:19:01,520 --> 00:19:05,119 Speaker 9: Sony Arab adversaries, and ultimately their sites are in the 323 00:19:05,119 --> 00:19:06,840 Speaker 9: Great Satan and we're sitting. 324 00:19:06,560 --> 00:19:07,399 Speaker 2: In the John. 325 00:19:07,600 --> 00:19:15,639 Speaker 1: Thank you, Ambassador Bolton. Priam Misery joins us now with 326 00:19:15,760 --> 00:19:19,800 Speaker 1: JP Morgan. She's a portfolio manager, which barely describes her 327 00:19:19,960 --> 00:19:25,240 Speaker 1: arch call, which is lower rates and particularly the inflation 328 00:19:25,359 --> 00:19:26,240 Speaker 1: adjusted yield. 329 00:19:26,280 --> 00:19:27,240 Speaker 2: It's a residual. 330 00:19:27,760 --> 00:19:31,440 Speaker 1: You take the nominal yield, you subtract some measurement of inflation. 331 00:19:31,960 --> 00:19:33,200 Speaker 1: Only Bob Michael. 332 00:19:32,920 --> 00:19:35,160 Speaker 2: Knows that measure it's a secret sauce, and. 333 00:19:35,119 --> 00:19:38,320 Speaker 1: You end up with a residual, which is the real yield. 334 00:19:38,359 --> 00:19:42,879 Speaker 1: Priam Misery, you suggest the real yield will plunge lower. 335 00:19:42,920 --> 00:19:44,200 Speaker 1: What will be the catalyst? 336 00:19:45,840 --> 00:19:49,479 Speaker 10: So I think the catalyst is either the economy slowing 337 00:19:49,520 --> 00:19:53,000 Speaker 10: down much more than what's priced in, or the Fed 338 00:19:53,119 --> 00:19:55,840 Speaker 10: now some combination of the two, or the Fed that's 339 00:19:55,840 --> 00:19:59,560 Speaker 10: actually trying to lower rates to you know, keep that 340 00:19:59,600 --> 00:20:02,480 Speaker 10: softly life. I mean, I think the big debate is 341 00:20:02,520 --> 00:20:06,640 Speaker 10: what is neutral interest rate, real interest rate, our star 342 00:20:06,760 --> 00:20:09,960 Speaker 10: what economists call our star. The FED thinks it's fifty 343 00:20:09,960 --> 00:20:13,920 Speaker 10: basis points. There's some debate, you know. President Kashkari suggested 344 00:20:13,960 --> 00:20:16,920 Speaker 10: maybe it's a little higher. Maybe it's one percent and 345 00:20:17,359 --> 00:20:19,359 Speaker 10: ten year real rates, and I would look at the 346 00:20:19,920 --> 00:20:21,880 Speaker 10: ten year part of the curve that most of us 347 00:20:21,920 --> 00:20:24,959 Speaker 10: borrow households, corporates grow. In that five to ten year 348 00:20:25,000 --> 00:20:27,399 Speaker 10: part of the curve, it's running close to two percent. 349 00:20:27,880 --> 00:20:31,480 Speaker 10: So I would think as inflation comes down, the FED 350 00:20:31,520 --> 00:20:35,119 Speaker 10: gets more confidence, as Jail said that they can start 351 00:20:35,119 --> 00:20:37,800 Speaker 10: to normalize those real rates start to come down, and 352 00:20:37,840 --> 00:20:39,480 Speaker 10: at least they can get to one percent, which is 353 00:20:39,520 --> 00:20:40,639 Speaker 10: I think closer to neutral. 354 00:20:40,800 --> 00:20:44,679 Speaker 1: The gentleman from Yale, edjar Denny, suggests productivity started in 355 00:20:44,680 --> 00:20:47,679 Speaker 1: two thousand and five. Paul Sweeney pointed out to me, 356 00:20:47,720 --> 00:20:51,560 Speaker 1: there's a giant pause during COVID of our more productive, 357 00:20:51,640 --> 00:20:56,440 Speaker 1: more efficient America, and then we've reinvigorated productivity. 358 00:20:56,480 --> 00:20:56,680 Speaker 2: Here. 359 00:20:56,800 --> 00:21:01,200 Speaker 1: Priya Misra does a new American productivity that Michael Faroli 360 00:21:01,240 --> 00:21:04,800 Speaker 1: and Bruce Casmin see. Does that change your call on 361 00:21:04,880 --> 00:21:05,720 Speaker 1: interest rates? 362 00:21:06,880 --> 00:21:06,960 Speaker 3: So? 363 00:21:07,080 --> 00:21:08,879 Speaker 10: I think that would be it will go back to 364 00:21:08,920 --> 00:21:12,800 Speaker 10: what is real equilibrium interest rates, and I think the 365 00:21:12,840 --> 00:21:15,440 Speaker 10: Fed's been in the zero to fifty basis point range. 366 00:21:15,480 --> 00:21:18,200 Speaker 10: If there is an increase in productivity, maybe that gets 367 00:21:18,240 --> 00:21:20,879 Speaker 10: us closer to one percent. But here's the offset to 368 00:21:20,920 --> 00:21:23,960 Speaker 10: productivity you know, there's a lot of talk about generative 369 00:21:24,000 --> 00:21:28,120 Speaker 10: AI and technology and how that's improving productivity. It takes 370 00:21:28,160 --> 00:21:31,159 Speaker 10: a while for that to get adopted within the business sector, 371 00:21:31,240 --> 00:21:33,480 Speaker 10: within the labor market, it takes a while. So I 372 00:21:33,520 --> 00:21:37,040 Speaker 10: would say it's not clear to us that we're there yet. Secondly, 373 00:21:37,080 --> 00:21:39,720 Speaker 10: we've got demographics that go the other way. We have 374 00:21:39,760 --> 00:21:42,960 Speaker 10: an aging population, and so I would say it's productivity 375 00:21:43,080 --> 00:21:47,840 Speaker 10: and demographics or and population growth that would imply you know, 376 00:21:47,880 --> 00:21:52,439 Speaker 10: that would have implications for real neutral rate, and you know, 377 00:21:53,040 --> 00:21:55,960 Speaker 10: at least the demographics site is going the other way. 378 00:21:56,320 --> 00:21:58,439 Speaker 10: So maybe there's a move a little bit higher. And 379 00:21:58,440 --> 00:22:01,119 Speaker 10: that's why I'm arguing could as high as one percent 380 00:22:01,240 --> 00:22:04,320 Speaker 10: real rate, but I struggle to see much higher than that, 381 00:22:04,600 --> 00:22:07,719 Speaker 10: given how much time it takes and the fact that 382 00:22:07,720 --> 00:22:09,200 Speaker 10: demographics are going the other way. 383 00:22:09,400 --> 00:22:11,280 Speaker 5: All I a free We're going to have. The question, 384 00:22:11,320 --> 00:22:13,080 Speaker 5: I think for the marketplace right now is what is 385 00:22:13,119 --> 00:22:14,840 Speaker 5: the FED going to do? Not so much what are 386 00:22:14,840 --> 00:22:16,720 Speaker 5: they going to do, but when are they going to 387 00:22:16,760 --> 00:22:19,399 Speaker 5: do it in terms of maybe pulling back on rates? 388 00:22:19,440 --> 00:22:22,159 Speaker 5: And obviously the FED was pretty consistent with our language 389 00:22:22,200 --> 00:22:24,760 Speaker 5: that it's not going to be in March now there's 390 00:22:24,760 --> 00:22:26,840 Speaker 5: some question in the marketplace will they cut in May 391 00:22:27,359 --> 00:22:28,240 Speaker 5: or perhaps. 392 00:22:27,840 --> 00:22:28,480 Speaker 4: Way to June. 393 00:22:28,520 --> 00:22:30,760 Speaker 5: What do you think they will do? What do you 394 00:22:30,760 --> 00:22:32,040 Speaker 5: think that maybe they should do? 395 00:22:34,000 --> 00:22:36,680 Speaker 10: So I like that question because we have to constantly 396 00:22:36,680 --> 00:22:39,760 Speaker 10: think about what they should do, which is driving the 397 00:22:39,800 --> 00:22:42,480 Speaker 10: economic outlook and asset prices, and then what we think 398 00:22:42,480 --> 00:22:44,520 Speaker 10: they will do. I think in terms of they want 399 00:22:44,560 --> 00:22:47,320 Speaker 10: more confidence, which is why they took March off the table. 400 00:22:47,520 --> 00:22:49,359 Speaker 10: I think they want to see at least three four 401 00:22:49,400 --> 00:22:52,359 Speaker 10: months off inflation, and we have another inflation report this 402 00:22:52,440 --> 00:22:55,080 Speaker 10: week that inflation is continuing to come down, and not 403 00:22:55,240 --> 00:22:57,720 Speaker 10: just the headline number I think o core. I think 404 00:22:57,760 --> 00:23:00,320 Speaker 10: they want to see that the service side of the 405 00:23:00,320 --> 00:23:03,920 Speaker 10: inflation picture is heading lower because the goods side has 406 00:23:03,960 --> 00:23:07,160 Speaker 10: done its big goods inflation is in negative territory, we're 407 00:23:07,200 --> 00:23:09,200 Speaker 10: in deflation. I think they want to see that service 408 00:23:09,240 --> 00:23:12,320 Speaker 10: inflation continue to come down, you know, May or June. 409 00:23:12,359 --> 00:23:14,159 Speaker 10: I think it's somewhere in that time frame that we 410 00:23:14,200 --> 00:23:16,640 Speaker 10: think they'll cut what they should be doing. I think 411 00:23:16,640 --> 00:23:19,560 Speaker 10: they should be starting to normalize right here. I mean 412 00:23:19,640 --> 00:23:22,480 Speaker 10: the earlier conversation where we're talking about what is neutral 413 00:23:22,960 --> 00:23:26,119 Speaker 10: FET funds is at five and a half. So you know, 414 00:23:26,240 --> 00:23:28,679 Speaker 10: even if our star is higher and neutral rate is 415 00:23:28,680 --> 00:23:31,639 Speaker 10: closer to three percent, we're really far from three percent. 416 00:23:32,000 --> 00:23:33,920 Speaker 10: So I would have said start early, then you can 417 00:23:33,960 --> 00:23:37,840 Speaker 10: go gradual and figure out where that neutral rate is. 418 00:23:38,320 --> 00:23:42,720 Speaker 10: But realistically, March May June, what's a few months between friends. 419 00:23:42,760 --> 00:23:45,920 Speaker 10: I think they're likely to start to cut rate sometime 420 00:23:46,000 --> 00:23:47,960 Speaker 10: in the first half or early in the second half 421 00:23:47,960 --> 00:23:48,480 Speaker 10: of this year. 422 00:23:48,960 --> 00:23:51,960 Speaker 5: Well, you're right the goods inflation, as that's a thing 423 00:23:52,000 --> 00:23:55,440 Speaker 5: of the past for most people. But boy, the services side, 424 00:23:55,480 --> 00:23:58,760 Speaker 5: I mean, we have the consumer pretty strong here. The 425 00:23:58,760 --> 00:24:01,600 Speaker 5: consumer has a job, consumers wages are going up, the 426 00:24:01,640 --> 00:24:04,639 Speaker 5: consumer is spending. Maybe they're putting a little bit more 427 00:24:04,640 --> 00:24:07,000 Speaker 5: on the credit card. But the consumer seems in pretty 428 00:24:07,400 --> 00:24:09,040 Speaker 5: good stead right now. How do you see that? 429 00:24:10,440 --> 00:24:12,920 Speaker 10: So I think the economic data has been very strong, 430 00:24:12,960 --> 00:24:16,600 Speaker 10: and that explains why we've had this scenario of risk 431 00:24:16,680 --> 00:24:20,040 Speaker 10: acts doing extremely well. The market's pricing in this soft landing, 432 00:24:20,640 --> 00:24:24,240 Speaker 10: and I think rightly. So for now, I'm a little 433 00:24:24,240 --> 00:24:26,959 Speaker 10: more cautious because I think it's a fragile soft landing. 434 00:24:27,200 --> 00:24:30,439 Speaker 10: It requires inflation to continue to decline, it requires the 435 00:24:30,520 --> 00:24:33,080 Speaker 10: FAT to start to normalize policy for the soft landing 436 00:24:33,119 --> 00:24:36,280 Speaker 10: to last. So I'm a little nervous further down for 437 00:24:36,400 --> 00:24:39,160 Speaker 10: the consumer. But to your point on inflation, I think 438 00:24:39,760 --> 00:24:43,080 Speaker 10: rent inflation or housing inflation is a big component of 439 00:24:43,080 --> 00:24:46,120 Speaker 10: that service inflation that is heading lower. I mean, we've 440 00:24:46,160 --> 00:24:48,879 Speaker 10: seen new rents starting to not come down, but the 441 00:24:48,960 --> 00:24:52,240 Speaker 10: rate of increase of new rents is absolutely slowing down, 442 00:24:52,280 --> 00:24:56,119 Speaker 10: and so I think that housing inflation, the trend is clear, 443 00:24:56,160 --> 00:24:58,480 Speaker 10: it's going to come down. To your point, the consumer 444 00:24:58,520 --> 00:25:01,280 Speaker 10: is strong, but some of that is also so you know, 445 00:25:01,359 --> 00:25:04,000 Speaker 10: service inflation is not rising at the same rate. So 446 00:25:04,280 --> 00:25:06,439 Speaker 10: I think what the thread is likely to do is 447 00:25:06,480 --> 00:25:09,440 Speaker 10: not wait for two percent on service inflation. But if 448 00:25:09,480 --> 00:25:12,159 Speaker 10: the trend looks like it's heading closer to two percent, 449 00:25:12,320 --> 00:25:15,600 Speaker 10: especially with goods in deflation, they can start to get 450 00:25:15,600 --> 00:25:17,680 Speaker 10: that confidence, so at least start an organization. 451 00:25:18,080 --> 00:25:20,919 Speaker 1: I can't stand preor the phrase soft landing. I just 452 00:25:20,920 --> 00:25:24,359 Speaker 1: think it's like V shaped bottom and the rest of it. 453 00:25:24,720 --> 00:25:27,119 Speaker 1: Let's start with a guy named m Faroli. You've got 454 00:25:27,160 --> 00:25:29,600 Speaker 1: to put up with his literature every single day as 455 00:25:29,600 --> 00:25:35,840 Speaker 1: a portfolio manager. Michael Ferroli PRIA codified under two percent 456 00:25:35,960 --> 00:25:41,080 Speaker 1: potential GDP is our new definitions struggle with soft landing 457 00:25:41,520 --> 00:25:45,040 Speaker 1: that because of technology, because of productivity, we need to 458 00:25:45,119 --> 00:25:49,760 Speaker 1: lift the Ferroley one point x percent potential GDP up. 459 00:25:50,040 --> 00:25:51,879 Speaker 1: I mean, is that really what we're talking about. 460 00:25:53,320 --> 00:25:57,479 Speaker 10: I think if productivity is sustained higher, and this is 461 00:25:57,520 --> 00:26:01,719 Speaker 10: not just still residual impacts of the reopening or the 462 00:26:01,720 --> 00:26:05,280 Speaker 10: fact that we lived through COVID, I think it's still early. 463 00:26:05,760 --> 00:26:07,520 Speaker 10: I would also say a lot of the data we're 464 00:26:07,560 --> 00:26:10,440 Speaker 10: seeing in the last two months can be distorted by 465 00:26:10,480 --> 00:26:13,040 Speaker 10: seasonal seasons are always difficult to make sense of the 466 00:26:13,080 --> 00:26:16,399 Speaker 10: December numbers and then the January numbers, weather effects. I 467 00:26:16,400 --> 00:26:18,600 Speaker 10: think we need a little bit more data to have 468 00:26:18,680 --> 00:26:22,480 Speaker 10: confidence that productivity is higher, that that potential GDP is higher. 469 00:26:22,680 --> 00:26:24,480 Speaker 10: But then to your point, how does that feed into 470 00:26:24,480 --> 00:26:29,240 Speaker 10: soft landing. Soft landing implies below potential growth. So if 471 00:26:29,240 --> 00:26:31,439 Speaker 10: growth is one and a half or two percent and 472 00:26:31,520 --> 00:26:33,639 Speaker 10: inflation is a little over two percent, that would be 473 00:26:33,640 --> 00:26:36,280 Speaker 10: a soft landing. I think the reason this is so 474 00:26:36,320 --> 00:26:39,719 Speaker 10: important is does the FED take cuts off the table. 475 00:26:39,800 --> 00:26:42,119 Speaker 10: I think that has to be a reacceleration. We have 476 00:26:42,160 --> 00:26:46,640 Speaker 10: to be seeing growth three four percent, inflation progress stalling. 477 00:26:47,160 --> 00:26:49,840 Speaker 10: That's when those cuts start to get taken out, and 478 00:26:49,920 --> 00:26:53,120 Speaker 10: I think we're far from that. We think monetary policy 479 00:26:53,200 --> 00:26:56,280 Speaker 10: is still restrictive. We don't see fiscal easing at least 480 00:26:56,320 --> 00:26:58,880 Speaker 10: still the election, and so it's a question of when 481 00:26:58,920 --> 00:27:02,199 Speaker 10: do they start to normalize is what's the past, But 482 00:27:02,359 --> 00:27:04,480 Speaker 10: we're keeping an eye out for kind of your point, 483 00:27:04,560 --> 00:27:08,840 Speaker 10: what is potential growth and right is that. 484 00:27:07,880 --> 00:27:10,640 Speaker 1: That's almost a terminal value of the discussion your premser, 485 00:27:10,720 --> 00:27:12,440 Speaker 1: Thank you so much. And I can't say enough about 486 00:27:12,440 --> 00:27:15,719 Speaker 1: a careful read of the JP Morgan combine and research 487 00:27:15,800 --> 00:27:18,480 Speaker 1: with Joyce Chang and Bruce chasm and have done over there. 488 00:27:18,480 --> 00:27:32,000 Speaker 1: It's just absolutely extoring you. Today's front page headline super 489 00:27:32,000 --> 00:27:35,920 Speaker 1: Bowl affected, Lisa, I'm sorry you're not at the front. 490 00:27:35,720 --> 00:27:38,000 Speaker 4: To blow hotel and we fail. 491 00:27:38,280 --> 00:27:42,440 Speaker 11: My kids might have a snow day tomorrow, all right, 492 00:27:42,440 --> 00:27:45,359 Speaker 11: So we're starting with, of course super Bowl, right, super 493 00:27:45,400 --> 00:27:48,399 Speaker 11: Bowl commercials, that's what we're talking about. It's across all 494 00:27:48,400 --> 00:27:50,520 Speaker 11: the headlines, right, marketers. They didn't want to offend anyone, 495 00:27:50,600 --> 00:27:52,719 Speaker 11: so they stayed kind of safe. They use a lot 496 00:27:52,760 --> 00:27:55,840 Speaker 11: of humor, not controversial humor. You had a couple of 497 00:27:55,840 --> 00:27:59,720 Speaker 11: newcomers in there. You had Etsy PepsiCo's story was in there, 498 00:28:00,280 --> 00:28:06,080 Speaker 11: celebrities everywhere. Arnold Schwarzenegger was there. His commercial was hilarious, 499 00:28:06,600 --> 00:28:09,480 Speaker 11: trying to say neighbor, but he kept saying State Farm, 500 00:28:09,520 --> 00:28:13,160 Speaker 11: my neighbor, and they kept joking out. Tom Brady was everywhere. 501 00:28:13,480 --> 00:28:13,680 Speaker 3: Right. 502 00:28:13,960 --> 00:28:17,520 Speaker 11: They leaned on the female audience. They had Dove Elf Cosmetics, 503 00:28:17,680 --> 00:28:19,600 Speaker 11: but The New York Times ranked a couple of them. 504 00:28:19,640 --> 00:28:21,720 Speaker 11: I want to play a commercial from Duncan. This is 505 00:28:21,760 --> 00:28:25,000 Speaker 11: when Ben Affleck visits Jennifer Lopez at the recording studio. 506 00:28:25,560 --> 00:28:28,800 Speaker 11: Usher was another one. His halftime performance. Everybody was talking 507 00:28:28,800 --> 00:28:32,360 Speaker 11: about that too. Think about it, thirty years of his career, right, 508 00:28:32,440 --> 00:28:35,240 Speaker 11: He's forty five years old. He was dancing and moving across. 509 00:28:34,960 --> 00:28:36,879 Speaker 2: The st to be quickly here because we got to 510 00:28:36,920 --> 00:28:38,640 Speaker 2: go on to the others. But I'm going to be 511 00:28:38,640 --> 00:28:41,000 Speaker 2: able to see all these on YouTube, right, Yeah? 512 00:28:41,080 --> 00:28:43,960 Speaker 11: Yes you can. Yeah, we can see most definitely. 513 00:28:44,160 --> 00:28:46,720 Speaker 2: Like YouTube highlights. Let's become my whole next you. 514 00:28:46,600 --> 00:28:47,239 Speaker 3: Gotta do it, you can. 515 00:28:47,320 --> 00:28:49,400 Speaker 5: But Usher, all right, So the Usher halftime show, it 516 00:28:49,440 --> 00:28:52,400 Speaker 5: got like from people who know this stuff, got thumbs up. Yeah, 517 00:28:52,480 --> 00:28:53,280 Speaker 5: definitely thumbs up. 518 00:28:53,320 --> 00:28:56,480 Speaker 11: But I know you're getting to a void. Get here, No, no, no, 519 00:28:57,400 --> 00:28:59,560 Speaker 11: I think I thought it was good too, but for 520 00:29:00,080 --> 00:29:03,200 Speaker 11: people who it didn't kind of tap on their you know. 521 00:29:03,280 --> 00:29:04,000 Speaker 3: He kind of said. 522 00:29:03,840 --> 00:29:06,240 Speaker 11: Everybody sing along, and some people weren't singing because they 523 00:29:06,240 --> 00:29:08,080 Speaker 11: didn't know, and it was awkward. 524 00:29:07,720 --> 00:29:08,080 Speaker 4: A little bit. 525 00:29:08,320 --> 00:29:11,160 Speaker 5: I'm not the usher demo, but I recognized that it 526 00:29:11,200 --> 00:29:13,120 Speaker 5: was an event and it was people were fired up 527 00:29:13,120 --> 00:29:13,360 Speaker 5: about it. 528 00:29:13,440 --> 00:29:15,520 Speaker 11: Yeah, and it just it ended great. Will I am 529 00:29:15,680 --> 00:29:19,760 Speaker 11: Lil John. I mean, you can't, Alicia keys Her. I 530 00:29:19,800 --> 00:29:21,080 Speaker 11: mean it was it was just he had a lot 531 00:29:21,120 --> 00:29:22,280 Speaker 11: of people on the red piano. 532 00:29:22,360 --> 00:29:24,479 Speaker 4: Okay, next story. 533 00:29:24,520 --> 00:29:26,880 Speaker 11: I did this because both of you are romantic. 534 00:29:27,000 --> 00:29:29,640 Speaker 4: Surely you can see what I got. 535 00:29:31,240 --> 00:29:34,040 Speaker 1: Fourteenth pictures and catchers. 536 00:29:35,000 --> 00:29:38,200 Speaker 11: This is about Valentine's Day. This study from McAfee, it 537 00:29:38,280 --> 00:29:41,720 Speaker 11: says that AI is going to be playing hard in 538 00:29:41,800 --> 00:29:46,120 Speaker 11: these love letters for Valentine's Day. For adults are at 539 00:29:46,200 --> 00:29:48,600 Speaker 11: least considering and using AI to come up with these 540 00:29:48,640 --> 00:29:50,760 Speaker 11: love letters for Valentine's Day. But when it comes to men, 541 00:29:51,080 --> 00:29:53,040 Speaker 11: that number rises to forty five. 542 00:29:53,680 --> 00:29:56,080 Speaker 5: Forty five percent of men will turn to AI to 543 00:29:56,160 --> 00:29:59,440 Speaker 5: write love messages this Valentine's Day. I mean they're doing 544 00:29:59,480 --> 00:30:01,520 Speaker 5: it just to get the stock up. That's it's like 545 00:30:01,560 --> 00:30:03,440 Speaker 5: every other company, a piece of news. 546 00:30:04,160 --> 00:30:09,080 Speaker 11: The bonus points in there, happy wife, happy life, What's today? 547 00:30:09,200 --> 00:30:16,080 Speaker 5: Today's at twelfth I got to get on this. 548 00:30:16,080 --> 00:30:19,320 Speaker 1: This is a Bloomberg Surveillance podcast, bringing you the best 549 00:30:19,320 --> 00:30:24,120 Speaker 1: in economics, finance, investment, and international relations. You can also 550 00:30:24,160 --> 00:30:28,200 Speaker 1: watch the show live on YouTube. Visit the Bloomberg Podcast 551 00:30:28,320 --> 00:30:32,360 Speaker 1: channel on YouTube to see the show weekday mornings from 552 00:30:32,400 --> 00:30:34,360 Speaker 1: seven to ten am Eastern from. 553 00:30:34,200 --> 00:30:36,520 Speaker 2: Our global headquarters in New York City. 554 00:30:36,880 --> 00:30:40,680 Speaker 1: Subscribe to the podcast on Apple, Spotify, or anywhere else 555 00:30:40,720 --> 00:30:44,120 Speaker 1: you listen, and always on Bloomberg Radio, the Bloomberg 556 00:30:44,240 --> 00:30:46,720 Speaker 2: Terminal, and the Bloomberg Business app.