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Speaker 1: Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg

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Speaker 1: Surveillance Podcast. Catch us live weekdays at seven am Eastern

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Speaker 1: on Apple CarPlay or Android Auto with the Bloomberg Business app,

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Speaker 1: Listen on demand wherever you get your podcasts, or watch

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Speaker 1: us live on YouTube.

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Speaker 2: She has been a foundation for us in our coverage

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Speaker 2: of this war. On a difficult Friday, into her afternoon

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Speaker 2: and evening in Dubai, Jaban and Versati joins us now

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Speaker 2: with Bloomberg Horizons. Jamana, I am thunderstruck by the message

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Speaker 2: spinning in the American media and people covering mar Lago

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Speaker 2: in the White House, and to look at the National

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Speaker 2: in Dubai with every story being about attack and the

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Speaker 2: results of those attacks, led by banner headlines about eight

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Speaker 2: being hit by rockets? Is the Persian golf as a

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Speaker 2: general statement aware of how surreal the war is across

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Speaker 2: so much of America.

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Speaker 3: Yeah, you know, when you use the word thunderstock, I

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Speaker 3: thought for a moment you were talking about the storms,

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Speaker 3: because that's also on the front page of the National

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Speaker 3: Divine the UAE. I've been hit by really strong storms overnight.

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Speaker 3: But I think to your point, there definitely is a

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Speaker 3: disconnect between what we feel is happening on the ground

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Speaker 3: and the skepticism about the possibility of a breakthrough versus

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Speaker 3: what is being presented back home. That is for sure,

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Speaker 3: with President Trump yesterday sort of reiterating that the talks

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Speaker 3: are going well, but the rhetoric coming from Iran doesn't

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Speaker 3: suggest So it doesn't really indicate that there are any

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Speaker 3: direct negotiations going on or that they've agreed to an

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Speaker 3: in person summit, which is what people were talking about

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Speaker 3: earlier this week. There are no signs of that happening

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Speaker 3: anytime soon.

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Speaker 4: So Jamana, I guess one of the uncertainties I guess

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Speaker 4: for market participants is we just don't know if any

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Speaker 4: conversations are going between the two sides, if there's intermediaries.

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Speaker 4: There doesn't seem to be any clear re reporting. What

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Speaker 4: do you guys know in that part of the world.

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Speaker 3: Okay, So one thing we do know for sure is

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Speaker 3: Pakistan are emerging as key mediators here. The Gulf States

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Speaker 3: themselves have ruled themselves out as mediators for obvious reasons.

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Speaker 3: They're not going to be continued to be attacked and

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Speaker 3: at the same time tried to mediate so Pakistan has

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Speaker 3: stepped up alongside Egypt and Turkey, and actually the Iranian

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Speaker 3: Forum Minister abbas I actually gave an interview yesterday to

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Speaker 3: local state TV and he said, yes, the messages from

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Speaker 3: the US are being delivered to US via Pakistan, but

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Speaker 3: you should not read that as an indication that we're

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Speaker 3: willing or wanting to end the war anytime soon. So

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Speaker 3: that is coming through from one of the I would say,

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Speaker 3: more official political voices in the Iranian regime right now. Again,

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Speaker 3: no real signs that they're looking to capitulate, and if anything,

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Speaker 3: they seem to be consolidating the control that they have

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Speaker 3: of the strait of hormones in the last twenty four hours.

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Speaker 5: Jumana.

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Speaker 2: Not to be snide or curged, but just let me

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Speaker 2: make it short and sweet. Is the United States of

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Speaker 2: America in Israel fighting the same war.

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Speaker 3: Well, they would say yes, They would say that they

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Speaker 3: are militarily aligned, the objectives are aligned. But I think

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Speaker 3: there's a key difference here, which is that the Israeli

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Speaker 3: public is overwhelmingly behind this war. Our colleagues from the

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Speaker 3: Tel Avi Boro Ethan Brunner, will say that around eighty

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Speaker 3: percent of the Israeli public is behind it. That is

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Speaker 3: not the case in the US. And for as long

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Speaker 3: as you continue to see pushing, the push up of

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Speaker 3: energy prices, the knock on effects to the US consumer

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Speaker 3: potential inflation, you are going to continue to see impact

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Speaker 3: on the president's pulling and also the public opinion really

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Speaker 3: turning tower on the steal. And we haven't even told

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Speaker 3: talked about the potential for ground troops. And there's been

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Speaker 3: a lot of reporting that the US are obviously looking

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Speaker 3: to deploy more.

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Speaker 2: Can we do Bloomberg Horizons right now, Jumana? Can we

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Speaker 2: like you know, you be the lead anchor, So, Jumana,

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Speaker 2: you're in Dubai and you have the privilege of interviewing

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Speaker 2: Anna Wong of Bloomberg Economics. Ladies and gentlemen from Dubai,

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Speaker 2: Jumana burset you with doctor Wong here in our studios.

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Speaker 5: Take it away, Jumana.

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Speaker 3: She's fantastic. I don't know if you're being serious or not,

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Speaker 3: but if she is, because I can't see the outpha,

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Speaker 3: but she is. I think the big question that everybody

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Speaker 3: is asking, Okay, the big question that everyone is asking

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Speaker 3: is does the FED actually hike into this inflation shock

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Speaker 3: or do they stand put.

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Speaker 6: Yeah, we're actually I'm here because there was a huge conference,

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Speaker 6: the ten year anniversary its ANTI conference yesterday, and I

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Speaker 6: was on the panel Rich Clarita, and we were just

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Speaker 6: debating this question. And so you know, typically the the

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Speaker 6: FED should be seeing through an oil shock. So in

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Speaker 6: the Furbus model that the FED used as a workhorse,

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Speaker 6: it would say that a one hundred dollars additional increase

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Speaker 6: in the oil price should actually result in a negative

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Speaker 6: twelve BIPs of cuts, whereas today, I think the market

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Speaker 6: has priced in about positive twelve BIPs of hikes. So

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Speaker 6: I think and that's where that's a disconnect between market

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Speaker 6: pricing and a model. But I think the market is

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Speaker 6: also thinking about all these other shocks aside from oil shocks,

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Speaker 6: such as fertilizer shocks, such as computer memory chips shock,

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Speaker 6: which personally I'm more concerned about.

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Speaker 2: Helped Youvana here, it's one hundred and eleven dollars a

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Speaker 2: barrel oil? Is that a new tip point for anamog?

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Speaker 6: Yesterday I actually modeled I showed the result of a

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Speaker 6: two hundred dollars barrel oil because I think if you

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Speaker 6: and and you know, you think about the worst case

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Speaker 6: two hundred dollars oil will cause the headline CPI to

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Speaker 6: go up to possibly six percent five point five six percent.

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Speaker 6: But even if it stays at two hundred dollars, the

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Speaker 6: important insight that the year of year will immediately fall

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Speaker 6: in twenty twenty seven and by the end of twenty

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Speaker 6: twenty seven early twenty twenty eight, it will fall back

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Speaker 6: to pre aron. So that's the nature of a transitory shock.

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Speaker 5: Jumana.

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Speaker 2: Last question, if you didn't fall off your chair there,

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Speaker 2: what does two hundred dollars a barrel oil do to

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Speaker 2: the Arab world?

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Speaker 3: Well, it depends on how long the disruptions around the

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Speaker 3: Street of Humus last for. And I think the issue

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Speaker 3: is that they're sitting on all of this oil that

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Speaker 3: they would like to get out. But they can get

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Speaker 3: it out. Obviously, in the case of Saudi Arabia and

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Speaker 3: the UAE, they've managed to divert a good sum of it,

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Speaker 3: you know, the the East West pipeline in Saudi Arabia.

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Speaker 3: One thing I will leave you with though, we were

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Speaker 3: looking at the local stock market industry's performance over the

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Speaker 3: last month. Tadowell, which is the Saudi stock market is

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Speaker 3: actually positive since this war started. It's up four percent

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Speaker 3: to account for the fact that oil prices are high. Right,

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Speaker 3: That is not the case for the rest of the region,

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Speaker 3: which obviously a lot more vulnerable and exposed from a

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Speaker 3: non oil perspective.

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Speaker 2: Shamana, thank you so much on a Friday I for

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Speaker 2: your leadership on all of this Bloomberg horizons in Dubai,

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Speaker 2: and please have some sense of a RESTful weekend. Shell

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Speaker 2: be out leading our coverage here in the coming days.

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Speaker 2: Jaman E present you again in Dubai. We continue with

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Speaker 2: Anna one of Bloomberg Economics. Okay, I don't need to

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Speaker 2: know what you and Vice Jr. Mcclareda talked about. But

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Speaker 2: at Chicago, you look at the Becker Freeman Institute define

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Speaker 2: demand destruction right now for Anna Wong. And when I

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Speaker 2: look at my Bloomberg launch pad, are we going to

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Speaker 2: enjoy demand destruction?

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Speaker 7: Yeah?

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Speaker 6: So the one big beautiful bill is probably going to

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Speaker 6: boost the average household in buying three hundred and fifty

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Speaker 6: to eight hundred dollars. And I think about demand destruction

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Speaker 6: by how much oil price has to rise in order

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Speaker 6: to completely offset this boost that they're supposed to get.

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Speaker 6: And my calculation is as long as oil price stays

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Speaker 6: above eighty three dollars per barrel, you'll see there that

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Speaker 6: And then if you look at the oil futures price,

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Speaker 6: it has it's slightly at below eighty three dollars in

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Speaker 6: the second half of this year into twenty twenty six.

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Speaker 6: So I think that is telling you there's minor demand destruction. However,

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Speaker 6: if oil price exceed the oil future curve, which I

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Speaker 6: think there's a very good case to say it should be,

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Speaker 6: then I think there would be a demand destruction. I

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Speaker 6: think that will shave off from GDP a couple percentage

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Speaker 6: point from.

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Speaker 5: This year inflation.

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Speaker 4: You know, we're seeing it at the pump right now,

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Speaker 4: it's real, it's tangible, or everybody out there. When we

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Speaker 4: see it in the numbers that maybe the FED will

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Speaker 4: really start to see it. I know they sent it's

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Speaker 4: out there, but they'll see it.

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Speaker 6: Yes, they'll see it. And I mean in my simulation

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Speaker 6: of a two hundred dollars per barrel oil, I see

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Speaker 6: gasoline price going to eight dollars per gallon, and in

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Speaker 6: that case, the headline CPI, as I said, we'll go

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Speaker 6: to five point five to six percent. But I think

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Speaker 6: the scarier thing is something that's more persistent because the

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Speaker 6: oil shock will eventually go away. And as our reporter

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Speaker 6: just said, there's all this oil stuck in the gulf.

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Speaker 6: So what happens when the straight up horn mows is

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Speaker 6: partially open? You suddenly see this flood of oil coming?

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Speaker 2: Are you talking about a swing to I mean, I've

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Speaker 2: heard this from a number of people. Were not there yet,

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Speaker 2: but in your uncertainty one of your models is this

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Speaker 2: inflation sudden disinflation?

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Speaker 6: Right, Yes, it's a risk that you cannot discount certainly.

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Speaker 6: What I've also heard is that this war will raise

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Speaker 6: the premium, you know, for oil, maybe by twenty dollars

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Speaker 6: extra dollar per barrel. So if the fair price before

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Speaker 6: before the war sixty five dollars per barrel, then it

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Speaker 6: permanently would be at eighty five dollars per barrel. But

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Speaker 6: as I said, even if oil price stay elevated at

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Speaker 6: that permanently higher level, is the delta that drives inflation, right,

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Speaker 6: as long as inflation expectations are anchored, that delta would

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Speaker 6: not keep pushing up and you will have a decline

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Speaker 6: in your.

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Speaker 5: Okay, Paul wants to jump in here, I'm being rude.

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Speaker 5: Is the FED down over anchored? Are we like almost

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Speaker 5: too fixated unanchored?

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Speaker 6: I think the FED is not fixated u anchored, And

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Speaker 6: it is because of that lack of confidence that it

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Speaker 6: will be anchored. That they are talking about their job

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Speaker 6: owning the finance market and they are kind of okay

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Speaker 6: with the financial market pricing and twelve BIPs of hikes.

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Speaker 4: You know, yesterday I was filling up my car paying

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Speaker 4: more and the woman next to me in a pickup truck,

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Speaker 4: she has a landscape business. She was filling up like

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Speaker 4: six or seven gas cans and I was talking to

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Speaker 4: her about it, and she says, this is my profit.

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Speaker 5: I just lost my week's.

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Speaker 4: Profit right there due to this hiery That was my

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Speaker 4: profit for the week on the number of jobs I had.

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Speaker 4: When are we going to which was tough to hear,

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Speaker 4: But when are.

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Speaker 5: You going to see? When will we see that?

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Speaker 4: In consumer spending?

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Speaker 6: Yeah, So suppose that the one big beautiful bill was

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Speaker 6: supposed to give an average consumer an extra three hundred

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Speaker 6: and fifty dollars to spend after this tax season, right,

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Speaker 6: and the average households spent about two hundred dollars per

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Speaker 6: month on gasoline. So if oil price has gasoline prices

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Speaker 6: increased by thirty three percent, then you're basically you know,

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Speaker 6: you you have to pay about sixty dollars more per month,

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Speaker 6: and so three hundred and fifty dollars extra tax for

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Speaker 6: fund defined by sixty is the runway. So in maybe

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Speaker 6: five to six months.

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Speaker 5: I got thirty seconds.

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Speaker 2: We got to get you up here because Tucker insists

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Speaker 2: on sitting in the chair of the news is so difficult.

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Speaker 5: Anahom okay, two hundred dollars. We're all upset here.

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Speaker 2: Paul's breaking out the Tito's maintain, what if we only

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Speaker 2: go up another twenty dollars, I mean one twenty eight,

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Speaker 2: one thirty two a Brent crude barrel.

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Speaker 5: I'm sorry, that's not good, right.

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Speaker 6: Well, it's still not good. Higher oil price is not good.

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Speaker 6: That would be the same as the peak in the

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Speaker 6: twenty twenty two peak of the energy crisis. Then, so

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Speaker 6: that would be doubling the oil price. And I will

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Speaker 6: I think a gasoline price will go up to five

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Speaker 6: dollars and in that case, headline CPI will go up

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Speaker 6: by one point eight percentage point, so two point four

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Speaker 6: pre war plus one point eight. But she's at four

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Speaker 6: point two.

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Speaker 2: You can bring a bar conversation to Did I do okay?

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Speaker 2: Picking Berry King Green as my book of the summer,

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Speaker 2: Money and Borders.

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Speaker 6: He was my former he was my undergraduate thesis advisor.

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Speaker 5: He yeah, so I did okay?

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Speaker 2: Yes, I mean people, it's a little it's a little

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Speaker 2: more weighty than Rogoff's book last year.

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Speaker 5: It's like Berry Iking Green. Serious. But if you're going

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Speaker 5: to do the dollar, you go to King Green. Right,

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Speaker 5: that's right. So I did okay. Okay, You're dismissed and

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Speaker 5: thank you so much. Stay with us more.

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Speaker 2: From Bloomberg Surveillance coming up after this.

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Speaker 1: You're listening to the Bloomberg Surveillance podcast. Catch US Live

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Speaker 1: weekday afternoons from seven to ten am Eastern Listen on

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Speaker 1: Apple Karplay and Android Otto with the Bloomberg Business app,

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Speaker 1: or watch US live on YouTube.

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Speaker 5: S SHAW with us.

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Speaker 2: Now Chief Clothes Strategy Principal Asset Management SIMA. What does

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Speaker 2: the bond market tell equity stock market and participants?

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Speaker 7: Yeah, Hi, Tom, it's good to be with you.

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Speaker 3: Well.

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Speaker 7: I think what we've been seeing in the last couple

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Speaker 7: of weeks is that the bond market has been very,

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Speaker 7: very concerned about the conflict the potential impact inflation pressures,

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Speaker 7: how centromats are going to be responding, Whereas with the

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Speaker 7: acuty market, there's ontainly been more of a reaction this week,

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Speaker 7: but there has been I think a little bit of complacency.

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Speaker 7: So there's something in between the bond market saying this

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Speaker 7: is really severe, the actually market has been a little

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Speaker 7: bit more muted. We think the reality is somewhere in between.

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Speaker 4: So, Asima, how do you what are the conversations you're

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Speaker 4: having with your clients these days? Are people pulling in

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Speaker 4: risk waiting to see how this plays out, or are

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Speaker 4: they trying to look to the other side, look through

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Speaker 4: this and try to focus on the fundamentals here. What

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Speaker 4: are those conversations.

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Speaker 7: Yeah, it's been really interesting. I think generally investors want

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Speaker 7: to see how this is going to pan out. You know,

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Speaker 7: typically gyboltical crossis they don't have a very sustained significant

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Speaker 7: impact on the market. But I think from early days

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Speaker 7: investors were more worried about this one, more concerned that

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Speaker 7: they could be a more protracted impact. And so certainly

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Speaker 7: what we're seeing is that although they're trying to stay

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Speaker 7: quite positive and looking at the constructive macro foundations that

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Speaker 7: were already in play. There are concerns about trying to

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Speaker 7: buy the dip and repositioning off the back of this.

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Speaker 7: So I think that this is something of a bit

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Speaker 7: of a parallel paralysis across investors, rather than looking at

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Speaker 7: it as an opportunity to kind of buy some things

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Speaker 7: which are on good offer at the.

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Speaker 4: Moment, baseline outlook, how do you kind of frame out

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Speaker 4: where this might check out it? I mean, a lot

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Speaker 4: of folks are concerned that this oil may in fact

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Speaker 4: be higher for longer, It may have an impact on

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Speaker 4: economic growth that may have an impact on inflation.

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Speaker 2: What's your view?

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Speaker 7: Yeah, it's almost impossible to play out how this conflict

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Speaker 7: is going to be going on. So I know a

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Speaker 7: lot of people have been trying to utilize scenarios. We've

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Speaker 7: done the same thing, But I think we are leaning

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Speaker 7: towards the idea that, look, this is going to be

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Speaker 7: more protracted. We think anti prices are going to stay

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Speaker 7: more elevated than people were anticipating, and they're going to

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Speaker 7: stay more elevated for a longer time period given the

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Speaker 7: impact to in guinefrastructure. The other thing that we're doing

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Speaker 7: is we're trying to put a little bit more emphasis

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Speaker 7: on the fact that this isn't just about the direct

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Speaker 7: energy and all prices, it's all the other goods which

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Speaker 7: are going to be impacted by the conflict. So that's helium, words,

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Speaker 7: that's sulfur, fertilizer, et cetera. So with that, we are

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Speaker 7: downgrading forecasts almost around the world, the US the least,

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Speaker 7: obviously because of energy exporter status, but we are seeing

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Speaker 7: that now. The thing that we are probably feeling more

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Speaker 7: confident about is around the Central Bank forecast and they're

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Speaker 7: rather than the leaning on scenarios and that we have

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Speaker 7: clearly stated that we're adjusting our forecasts, moving the sight

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Speaker 7: to the more hawkish ground. But there is a symmetry

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Speaker 7: across a global central bank space.

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Speaker 2: What's the value looking at risk, uncertainty, ambiguity and our

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Speaker 2: listeners and viewers Seemen can choose whichever of those they're

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Speaker 2: looking at, of do nothing? What's the value to Seema

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Speaker 2: Shah of do nothing on this Friday?

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Speaker 7: Well, I think I mean the value is that there

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Speaker 7: is so much noise, even the various posts that we're

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Speaker 7: seeing from the President, the responses that we're getting from wrong,

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Speaker 7: it's very difficult to understand how this exactly is playing out.

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Speaker 7: So trying to make moves on something which is generally

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Speaker 7: a lot of noise at the moment is I think

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Speaker 7: very difficult. It's very uncertain exactly how this is going

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Speaker 7: to play out, which is why we're seeing so many

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Speaker 7: investors just sit still and really focusing on the fact

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Speaker 7: that there has been macro strength and so once this

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Speaker 7: conflict ends, some of the things that will already employ

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Speaker 7: the various dynamics that were there will reassert themselves. But

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Speaker 7: you know, this is a very very challenging environment for

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Speaker 7: investors simply of not knowing how long this is going

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Speaker 7: to go on, for how severe it's going to be.

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Speaker 2: Past Screenian term Kein of Sema Shaw, we continue now

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Speaker 2: with the chief Global strategist Principal Asset Management Sima. What

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Speaker 2: will you write about Monday within the study of markets

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Speaker 2: in linking them into a global strategy, What's going to

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Speaker 2: be your theme to publish for Monday Morning?

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Speaker 7: I mean, gosh, it could be anything, but I think

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Speaker 7: at the moment it's really about trying to focus on

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Speaker 7: whether or not which reagions are the most exposed. We

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Speaker 7: already know that the US is looking the most resilient.

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Speaker 7: But how long that can can that persist for? And

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Speaker 7: what are the vulnerabilities that One of the interesting things

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Speaker 7: I think is it coming into this year, there was

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Speaker 7: an expectation that US consumers would be quite resilient, particularly

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Speaker 7: because of this for stimulus coming through from the One

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Speaker 7: Big Beautiful Bill. Now what we're seeing is that the

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Speaker 7: gasoline prices increase that's coming through more than offsets some

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Speaker 7: of that benefit from the One Big Beautiful Bill. So

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Speaker 7: we're trying to understand exactly how vulnerable US consumers are

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Speaker 7: this year relative to where we started the twenty twenty

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Speaker 7: six SEEMA.

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Speaker 4: We see the dollar resuming kind of a safe safe

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Speaker 4: haven status, rising from a dxy, rising from a ninety

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Speaker 4: six level to today around one hundred. Is that kind

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Speaker 4: of does that make sense for you, because boy, that

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Speaker 4: wasn't the case during the tariff situation last year when

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Speaker 4: people kind of were shedding the dollar.

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Speaker 7: I guess I think it has been a little bit

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Speaker 7: surprising given them. I think the structural aspects which we're

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Speaker 7: pushing DOLLI lower were very much in play, and particularly

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Speaker 7: when you consider that this is from a central bank perspective,

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Speaker 7: the FED is likely to be the most dubvish, So

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Speaker 7: we are expecting that once it comfort ends whatever that is,

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Speaker 7: that the dollar reasserts that down which trend that had

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Speaker 7: already been in play.

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Speaker 5: See we got to let you go.

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Speaker 2: But the headline just comes out Paul Sweeney right in

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Speaker 2: the headline for Bloomberg nasdeck one underdrops ten percent from

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Speaker 2: October high set to enter correction.

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Speaker 5: Is there a.

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Speaker 2: Sema Shaw fear of missing out when the nasdeck pulls

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Speaker 2: back ten.

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Speaker 7: I know we don't have. Really, it's really important. You

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Speaker 7: asked me before what I've been writing about, and this

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Speaker 7: is actually a key thing is that technology has been

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Speaker 7: a favorite for investors over the last couple of weeks,

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Speaker 7: but there are vulnerabilities within that tech supply chain, which

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Speaker 7: I think is starting to feed through to invest his

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Speaker 7: perspectives about how to position.

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Speaker 2: Seema, Thank you so much, Sema Shaw with us the

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Speaker 2: principal asset management, greatly appreciate that.

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Speaker 5: Stay with us.

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Speaker 2: More from Bloomberg Surveillance coming up after this.

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Speaker 1: You're listening to the Bloomberg Surveillance podcast. Catch us live

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Speaker 1: weekday afternoons from seven to ten am. E's durn Listen

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00:20:43,760 --> 00:20:47,359
Speaker 1: on Applecarplay and Android Otto with the Bloomberg Business app

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Speaker 1: or watch us live on YouTube.

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Speaker 2: We are skilled to bring you Bob Michael Global Ahead

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Speaker 2: of fixed Income JP Morgan Asset Management the real yield

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Speaker 2: out of two point one one percent.

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Speaker 5: I haven't done a standard deviation study. When does a

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Speaker 5: higher real yield.

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Speaker 2: Impinge on the American economy and on industry in America?

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Speaker 8: Well, I would argue right now it's already starting to

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Speaker 8: have an impact, because it was only a week ago

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Speaker 8: that we came out of the FMC meeting expecting a

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Speaker 8: couple rate cuts, and you looked at the labor market

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Speaker 8: that was their primary concern for good reason, it seemed

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Speaker 8: a bit soft. Now you're paying a lot more to

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Speaker 8: fill up your automobiles, and if you're a business, your

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Speaker 8: input costs or energy's gone up. I would say it's

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Speaker 8: having an impact right about now.

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Speaker 4: If that is the case, certainly for a lot of

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Speaker 4: folks that are starting to feel it. How does the

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Speaker 4: FED react to that? There's really not a whole lot

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Speaker 4: they can do, is there.

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Speaker 8: I think the problem is at these levels there's no

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Speaker 8: obvious solution because even ourselves with one hundred dollars oil,

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Speaker 8: we don't see recession. We see growth slowing down a

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Speaker 8: lot from where we had it, inflation going up a

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Speaker 8: little bit. Then they just have to wait and see

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Speaker 8: what cracks First. Does the labor market come under a

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Speaker 8: lot of pressure and unemployment go up? Or do they

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Speaker 8: see energy prices passed through to finish goods and services

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Speaker 8: and consumers still buying and demanding wage price spirals.

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Speaker 2: David Rosenberg in Toronto publishes moments Ago Rosenberg Research quotes

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Speaker 2: still no market panic inequities even with a vis out

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Speaker 2: of twenty nine point five three. How do you measure in?

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Speaker 2: Is there panic in the Bob Michael world? I mean

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Speaker 2: price down, yield up?

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Speaker 5: How does it?

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Speaker 2: You know?

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Speaker 5: Equity panic? How does it work in the bond space.

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Speaker 8: It's well, there are also volatility indicators in the bond market,

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Speaker 8: and they've actually been muted. So it's been a prizingly

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Speaker 8: orderly sell off a little bit at a time. A

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Speaker 8: lot of confidence that you have an administration looking for

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Speaker 8: an off rapp they'll find one. They watch the markets,

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Speaker 8: they know the midterm elections are coming up soon. They

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Speaker 8: have to figure out how to extricate themselves from the

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Speaker 8: Middle East, and that's what the market's hanging it's hot on.

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Speaker 4: So the FED has a little bit of leeway the

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Speaker 4: US economy. We are a net exporter of oil. But boy,

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Speaker 4: I guess we're all learning how exposed other parts of

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Speaker 4: the world are to this pinch in Mid East oil.

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Speaker 4: How do you expect other central banks around the world

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Speaker 4: to react here?

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Speaker 8: It's strange, right, because this all started with us being

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Speaker 8: told that twenty percent of oil passes through the Strait

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00:23:50,560 --> 00:23:54,399
Speaker 8: of Hormuz. So you say, okay, sixty dollars a barrel,

442
00:23:54,800 --> 00:23:57,520
Speaker 8: let's go to seventy two dollars a barrow, maybe a

443
00:23:57,560 --> 00:24:00,760
Speaker 8: little premium in there. You're up at eighty. Not you're

444
00:24:00,800 --> 00:24:03,800
Speaker 8: going right to one hundred and hanging out there and

445
00:24:03,920 --> 00:24:07,760
Speaker 8: expectations I saw one could be two hundred dollars. I

446
00:24:07,800 --> 00:24:10,040
Speaker 8: think that's a bit extreme. I think by the time

447
00:24:10,080 --> 00:24:13,000
Speaker 8: you get to one twenty to one point fifty, you'll

448
00:24:13,040 --> 00:24:17,679
Speaker 8: create a tremendous amount of demand destruction. So it's a

449
00:24:17,680 --> 00:24:21,840
Speaker 8: bit puzzling that you're there. Unlike the FED, which has

450
00:24:21,880 --> 00:24:24,800
Speaker 8: a dual mandate, they have to watch the labor market

451
00:24:25,119 --> 00:24:28,119
Speaker 8: as well as inflation, the ECB and the Bank of

452
00:24:28,119 --> 00:24:33,160
Speaker 8: England have single mandates. They have to watch inflation and

453
00:24:33,400 --> 00:24:37,879
Speaker 8: there's no differentiation between core and headline. All they know

454
00:24:38,040 --> 00:24:41,040
Speaker 8: right now is headlines going up a lot. Hence they're

455
00:24:41,080 --> 00:24:44,959
Speaker 8: talking hawkish. You would expect the ECB to hike grates

456
00:24:45,000 --> 00:24:47,520
Speaker 8: once or twice in here, or watch for the Bank

457
00:24:47,560 --> 00:24:48,120
Speaker 8: of England.

458
00:24:48,880 --> 00:24:49,840
Speaker 5: Who knows you.

459
00:24:49,960 --> 00:24:54,600
Speaker 2: Have a sterling academics which goes back as far as Persian.

460
00:24:54,760 --> 00:24:58,720
Speaker 2: You're working Greek and Latin with all of your academics

461
00:24:58,720 --> 00:25:01,560
Speaker 2: at pen and your work of course driving the bondship

462
00:25:02,119 --> 00:25:08,480
Speaker 2: from mister Diamond. The cultural overlay here of Persian patients.

463
00:25:08,840 --> 00:25:12,320
Speaker 2: What I keep reading and informed articles is these people

464
00:25:12,400 --> 00:25:16,080
Speaker 2: are patient. Is that what you would would you agree

465
00:25:16,080 --> 00:25:19,480
Speaker 2: with that Iran will be patient beyond anything?

466
00:25:20,560 --> 00:25:25,800
Speaker 8: Well, if you look at their position, there's little else

467
00:25:25,920 --> 00:25:29,400
Speaker 8: they can do, a lot of the infrastructure in their

468
00:25:29,440 --> 00:25:34,280
Speaker 8: country has been destroyed, and yet somehow they're able to

469
00:25:34,560 --> 00:25:39,560
Speaker 8: control the global supply of oil by controlling the Strait

470
00:25:39,560 --> 00:25:45,200
Speaker 8: of Hormuz with a fleet of drones, despite all the

471
00:25:45,240 --> 00:25:49,719
Speaker 8: military might of the West. And I think this is

472
00:25:49,760 --> 00:25:53,360
Speaker 8: what the market's starting to get concerned about. The administration

473
00:25:53,520 --> 00:25:57,959
Speaker 8: may want an offramp, but the Iranians don't need to

474
00:25:58,000 --> 00:25:58,680
Speaker 8: give him one.

475
00:25:59,800 --> 00:26:01,440
Speaker 5: Some bym Michael. Thank you so much.

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00:26:06,520 --> 00:26:10,800
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