WEBVTT - Inflation is a Major Risk, Rahbari Says 0:00:06.320 --> 0:00:12.960 Ye, Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane. 0:00:13.480 --> 0:00:17.560 Daily we bring you insight from the best in economics, finance, investment, 0:00:18.000 --> 0:00:23.480 and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, 0:00:23.600 --> 0:00:34.239 Bloomberg dot Com, and of course on the Bloomberg. One 0:00:34.240 --> 0:00:36.639 of the great stories of Davos is away from all 0:00:36.680 --> 0:00:40.440 the fancy guests, the CEOs, the gazillionaires, and that this 0:00:40.640 --> 0:00:45.680 place as a wonderful set of policy makers, thinkers about 0:00:45.840 --> 0:00:49.800 what we actually do. Tony Fratto I saw last night, 0:00:49.840 --> 0:00:54.560 of course, his representation of President Bush, Eric Cantor Republican 0:00:54.600 --> 0:00:57.640 congressman for years, and it was good to see as well. 0:00:58.040 --> 0:01:00.920 Jane Spurling, he has a tennis play here from Minnesota, 0:01:01.360 --> 0:01:03.600 and of course to not one but two tours of 0:01:03.680 --> 0:01:07.880 duty with a National Economic Council for Democrat at presidents Jean, 0:01:07.959 --> 0:01:11.440 wonderful to catch up with you. How does this president 0:01:11.600 --> 0:01:15.040 avoid a double fault you're on the other side of 0:01:15.080 --> 0:01:19.000 the aisle. How does this president get through this widely 0:01:19.040 --> 0:01:25.759 anticipated speech? Well, I think it's difficult for him because 0:01:26.160 --> 0:01:29.080 you know, on one hand, he's coming to Davos at 0:01:29.080 --> 0:01:31.400 a time where it's you know, Tom, It's not like 0:01:31.959 --> 0:01:35.320 two thousand and nine, you know, where you know, or 0:01:35.440 --> 0:01:38.480 other times where that the economy is really you know, 0:01:38.520 --> 0:01:40.880 in danger. This is the time where the U. S. 0:01:40.959 --> 0:01:46.120 Economy has been growing for eight years, the global economy 0:01:46.200 --> 0:01:49.000 is looking a little bit solid, so there's not a 0:01:49.040 --> 0:01:53.160 sense of panic. He's obviously trying to in every way. 0:01:53.160 --> 0:01:55.480 He can take a little credit for it, But I 0:01:55.520 --> 0:01:58.080 think the hard thing is is that he has proven 0:01:58.760 --> 0:02:01.960 to be, both at home and abroad, a very divisive figure. 0:02:02.000 --> 0:02:04.280 And you know, Tom, I talked to some people in 0:02:04.320 --> 0:02:08.760 the travel and tourism industry who say that the travel 0:02:08.800 --> 0:02:11.959 and tourism industry and United States is not sharing as 0:02:12.080 --> 0:02:17.680 much in the recent growth because comments and attitudes uh 0:02:18.040 --> 0:02:21.960 devisiveness by you know, Trump has discouraged a lot of 0:02:21.960 --> 0:02:25.240 people from vacationing in the United States, So, you know, 0:02:25.600 --> 0:02:28.040 it's it's I think there seems to be so far 0:02:28.320 --> 0:02:32.720 some effort to try to be a tiny bit more conciliatory, 0:02:32.720 --> 0:02:34.680 but you know, I think it's going to take a 0:02:34.720 --> 0:02:37.720 lot both at home and abroad at the same time. 0:02:37.760 --> 0:02:40.040 He might do that at home right now, he has 0:02:40.080 --> 0:02:45.280 a very divisive immigration stance that that that offends people 0:02:45.320 --> 0:02:47.520 both in the countries people come from as well as 0:02:47.520 --> 0:02:50.480 the one United States. Let me bring in my colleague. Well, 0:02:50.520 --> 0:02:53.680 you know, Jeane Sproling wanted if you could just offer 0:02:53.760 --> 0:02:57.320 what specifically or who specifically do you want to meet 0:02:57.440 --> 0:03:00.320 or accomplish at Davos. Is there a person that you 0:03:00.480 --> 0:03:03.240 want to speak to that you don't know? Seriously, because 0:03:03.240 --> 0:03:04.960 I'm trying to understand. You know, a lot of people 0:03:05.000 --> 0:03:08.280 spend a lot of time and money going and there's 0:03:08.280 --> 0:03:10.200 got to be in the back of their mind this 0:03:10.280 --> 0:03:13.200 concept of Okay, it was a win. What would be 0:03:13.240 --> 0:03:18.000 a win for Gene Spurling other than meeting Tom King? Well, 0:03:18.040 --> 0:03:22.079 of course reuniting. Reuniting with Tom is a win. But 0:03:22.200 --> 0:03:24.400 you know, first of all, I'm fortunate because i'm what's 0:03:24.480 --> 0:03:28.440 called on the Stewardship Board for Economic Conclusion, so I'm 0:03:28.520 --> 0:03:32.480 invited to participate without having to pay the big fees um. 0:03:32.520 --> 0:03:35.280 But I find, you know, I find there's two things. One, 0:03:35.600 --> 0:03:37.840 you re you reunite with people. You know, I had 0:03:37.920 --> 0:03:40.560 a chance to talk at length with both Al Gore 0:03:40.760 --> 0:03:43.000 and John Kerre, you know, two people I've worked for 0:03:43.080 --> 0:03:46.680 in the past. You don't see all the time. Secondly, uh, 0:03:46.720 --> 0:03:49.520 there's issues where you can throw yourself into. So I 0:03:49.520 --> 0:03:51.920 think one of the big issues that was focused on 0:03:52.000 --> 0:03:54.760 here unfortunately not being focused on but in the United 0:03:54.800 --> 0:03:59.680 States policy wise, is the whole issue of automation. UH. 0:03:59.760 --> 0:04:02.200 You know, will this be on a continuum? Will there 0:04:02.240 --> 0:04:05.400 be less jobs? You know, who's got the best uh 0:04:05.520 --> 0:04:09.480 social safety network for dealing with this? So I got 0:04:09.480 --> 0:04:11.960 to be in a board in a meeting where I 0:04:12.000 --> 0:04:15.000 was with the Minister of Finance from Canada, with the 0:04:15.000 --> 0:04:20.240 Minister of Finance from Sweden, UH, with top officials from Norway. 0:04:20.560 --> 0:04:24.200 That ability to talk about something about what's the effect 0:04:24.240 --> 0:04:28.159 of robots of automation and compare what different countries are doing. 0:04:28.520 --> 0:04:31.360 That's something that you can do uniquely in Davos that 0:04:31.600 --> 0:04:33.320 it's very hard to do when you're just you know, 0:04:33.360 --> 0:04:37.320 sitting in the office in California and Washington v Shape Spurling. 0:04:37.720 --> 0:04:40.000 This is a way few more remit but it matters. 0:04:40.080 --> 0:04:42.720 We have Greg Valier coming up, of course, with the 0:04:43.120 --> 0:04:47.560 how Washington is fixated on the Russia's set of Russia investigations. 0:04:47.800 --> 0:04:51.320 I had breakfast this morning with Jane Harmon, the most 0:04:51.440 --> 0:04:56.000 interesting congresswoman. We were reminiscing about Watergate and our thoughts 0:04:56.080 --> 0:04:59.800 about it. How consumed is the Washington that Jane spur 0:05:00.160 --> 0:05:07.360 knows with the Mueller investigation, Well, I think that Genes 0:05:07.440 --> 0:05:13.720 s burrowing. This citizen is very concerned that this particular 0:05:13.760 --> 0:05:18.919 president is really taking down certain basic core values that 0:05:18.960 --> 0:05:22.560 would have all United US aren't. Basic respect for freedom 0:05:22.600 --> 0:05:25.560 of the press, basic respect for the truth, and basic 0:05:25.640 --> 0:05:29.560 respect for the rule of law. So for me, Tom, 0:05:29.600 --> 0:05:33.600 what I'm most concerned about is, you know, let the 0:05:33.680 --> 0:05:36.480 rule of law play out. When I see people who 0:05:36.480 --> 0:05:40.520 are unimpeachable by Bob Muller, you know, the Republican War 0:05:40.640 --> 0:05:44.160 hero FBI. When I see people attacks, when I see 0:05:44.400 --> 0:05:48.080 people in implication that some people could be above the law, 0:05:48.480 --> 0:05:52.400 those things bother me. I'm you know, I'm somebody who's 0:05:53.400 --> 0:05:56.560 you know, doesn't want to declare guilt or innocence. I 0:05:56.600 --> 0:05:59.720 want a fair investigation, but I want a commitment to 0:05:59.880 --> 0:06:03.560 the rule of law. And when I see that, deeply 0:06:03.600 --> 0:06:07.479 worried as un Jean, thank you so much for the 0:06:07.480 --> 0:06:09.840 effort to catch up with us here. And uh, I'll 0:06:09.839 --> 0:06:12.160 tell you, folks, Dalbos has never been turned on its 0:06:12.160 --> 0:06:15.000 head like this moment. Honor to speak with Jean Spurling. 0:06:29.440 --> 0:06:32.719 We are enthused that we bring to you today for 0:06:32.800 --> 0:06:37.719 an extended period. Mr Gregory Vllier, Hoverizon Investments. He writes 0:06:37.839 --> 0:06:42.760 a piercing note each morning has read across all of 0:06:42.880 --> 0:06:46.800 Washington and our political economics, and I might also point 0:06:46.839 --> 0:06:51.240 out on our economic politics as well. Greg, I want 0:06:51.279 --> 0:06:54.359 to get to the president's speech, but first we have 0:06:54.480 --> 0:06:59.120 to talk about your title today. The Mueller bombshell described 0:06:59.200 --> 0:07:03.160 for us why this time is different is Mr Mueller 0:07:03.560 --> 0:07:08.159 speaks of the president and the investigation. Well, Tom quite simply, 0:07:08.520 --> 0:07:11.840 Trump wanted Muller fired. I believe the account in the 0:07:11.840 --> 0:07:14.560 New York Times and other papers. No one really is 0:07:14.800 --> 0:07:17.520 uh denying it other than the President, of course, calls 0:07:17.520 --> 0:07:21.440 it fake news. Here's the big thing. He wanted him fired, 0:07:21.760 --> 0:07:25.680 and Underling, his attorney, said no, I think he still 0:07:25.680 --> 0:07:28.800 wants him fired. And we get more indictments in the 0:07:28.840 --> 0:07:32.280 next few weeks. The nuance in your report, and of 0:07:32.320 --> 0:07:35.760 course this is a huge distraction folks to the president 0:07:35.840 --> 0:07:39.640 in a speech urin Davos, and you go into this, Greg, 0:07:39.680 --> 0:07:45.000 it's not so much firing but pardoning. Should we anticipate 0:07:45.160 --> 0:07:49.720 that if this smooths forward, the president pardons or critically, 0:07:50.400 --> 0:07:55.360 if he pardons before the investigation's end. I think it's 0:07:55.400 --> 0:07:58.840 on the table, just as firing uh Mueller was on 0:07:58.880 --> 0:08:01.280 the table last summer. I don't think they've ever left 0:08:01.280 --> 0:08:03.880 the table. So yes, pardons, I think are still in 0:08:03.920 --> 0:08:07.000 the mix. Pim Fox, you've know the zeitgeist in America 0:08:07.040 --> 0:08:10.080 a lot better than I do here in a happy valley. Well, 0:08:10.160 --> 0:08:13.000 I just want to ask Greg Val, what do you 0:08:13.040 --> 0:08:15.200 think this is going to do for the mid term elections. 0:08:15.240 --> 0:08:18.680 What's the arithmetic for a House and Senate seats? I 0:08:18.720 --> 0:08:21.480 think I think opinions are pretty much dug in. If 0:08:21.520 --> 0:08:23.920 you like Trump, you're going to vote Republican. If you don't, 0:08:23.960 --> 0:08:26.480 you're not. I don't know if this changes that many votes, 0:08:26.520 --> 0:08:30.840 but it is a distraction from the immigration bill, from infrastructure, 0:08:30.920 --> 0:08:32.960 from the budget. All these things that have to be 0:08:33.000 --> 0:08:36.880 dealt with I think now get obscured by this explosive 0:08:36.920 --> 0:08:39.680 new story. So how many seats do you believe the 0:08:39.679 --> 0:08:42.360 Republicans might lose in the House. I'd say at least 0:08:42.360 --> 0:08:45.000 twenty twenty four is the magic number where the Democrats 0:08:45.000 --> 0:08:47.280 would take over. It's a very very close call. But 0:08:47.360 --> 0:08:50.640 let's say the House is basically tied. I think then 0:08:50.679 --> 0:08:53.400 there will be a vote to indict or impeach. Then 0:08:53.440 --> 0:08:55.800 it goes to the Senate. And here's the bottom line, guys, 0:08:55.960 --> 0:08:59.280 are there really sixty seven votes in the Senate to convict? 0:08:59.520 --> 0:09:01.559 I'm not right sure we're there, you know, I want 0:09:01.559 --> 0:09:03.840 to rip up the script here, pim and we're going 0:09:03.920 --> 0:09:06.920 here from Washington discussion folks. Of course, what the president 0:09:07.120 --> 0:09:09.120 will say in a few minutes here will shift over 0:09:09.360 --> 0:09:12.400 to Mr Villiers view on the speech. But but Greg, 0:09:12.480 --> 0:09:15.400 if this is something this is like civics one oh one. 0:09:15.760 --> 0:09:21.000 If the Democrats quote unquote take over, can they reverse 0:09:21.400 --> 0:09:26.120 what they oppose? Is a lot of this stuff unreversable, 0:09:27.400 --> 0:09:30.160 a lot of watch stuff time, the things the president 0:09:30.160 --> 0:09:33.040 has done that upset the Demoican No, I get it. Oh, 0:09:33.480 --> 0:09:37.680 here's here's another really crucial point. Trump's veto is still good. 0:09:38.400 --> 0:09:41.640 Let's say the Republicans do poorly in both houses. There 0:09:41.720 --> 0:09:44.240 still are not enough votes to override a veto. So 0:09:44.320 --> 0:09:46.880 there's not going to be some activist left wing Congress 0:09:47.040 --> 0:09:49.400 that can shut things down his throat in the next 0:09:49.440 --> 0:09:53.680 two years. The votes aren't there, Greg, is there a 0:09:53.720 --> 0:09:57.560 possibility that the president will be able to escape any 0:09:57.760 --> 0:10:01.720 particular personal blame. Sure. I mean, he's got more teflon 0:10:02.080 --> 0:10:04.520 than any president I've ever seen, you know, Trump and 0:10:04.559 --> 0:10:08.400 porn star. Nobody cares. Maybe Milannia cares, But I don't 0:10:08.440 --> 0:10:11.880 see anything really that sticks with this guy. So yeah, 0:10:11.720 --> 0:10:14.280 I'm not sure how badly it will hurt him. But again, 0:10:14.360 --> 0:10:17.720 in this city that's preparing for indictments, it's a really 0:10:17.760 --> 0:10:23.600 big deal. Well in the city, it's not the country. 0:10:23.800 --> 0:10:27.120 So is it possible that this will bring even more 0:10:27.360 --> 0:10:31.800 scorn and resignation to the legislators and to the actual 0:10:31.880 --> 0:10:35.080 political class that seems to think that this is the 0:10:35.200 --> 0:10:37.640 most important thing, whereas most people are just getting up 0:10:37.640 --> 0:10:40.040 and going to work. Yeah, that's a very good point, 0:10:40.160 --> 0:10:42.719 and people are going to have extra money in their paychecks. 0:10:42.760 --> 0:10:45.079 I think this economy is going to heat up, unemployment 0:10:45.080 --> 0:10:48.040 goes below four percent, maybe we get the three seven 0:10:48.320 --> 0:10:51.600 by the summer. So for for many Americans, this is 0:10:51.679 --> 0:10:55.640 just a witch hunt, background noise. But again, in this town, 0:10:55.960 --> 0:10:59.160 I can't overstate, guys, how big an impact the story 0:10:59.200 --> 0:11:01.679 has had this morning. If you're just joining us worldwide, 0:11:01.679 --> 0:11:04.440 thrilled to bring in for an extended amount of time, 0:11:04.440 --> 0:11:08.679 that's warning Gregory Vale Horizon investments his thoughts not only 0:11:08.720 --> 0:11:11.320 on his economic politics in Washington, but of course the 0:11:11.360 --> 0:11:15.080 moment in Davos, Switzerland, Pim Fox in New York, I'm 0:11:15.160 --> 0:11:18.719 Tom Keane in uh Davos, That's where I am right 0:11:18.760 --> 0:11:21.960 still there in Switzerland. I'm getting the point Pim, where 0:11:21.960 --> 0:11:24.680 I'm waking up going where am I? Well, Davos, Switzerland. 0:11:24.840 --> 0:11:26.480 Let me let me ask greg one of one other 0:11:26.800 --> 0:11:30.240 question here, which is that, um, all right, So let's 0:11:30.240 --> 0:11:34.360 say that this investigation, uh, it proceeds and so on. 0:11:35.679 --> 0:11:39.200 Is there a way for the president to just move 0:11:39.280 --> 0:11:42.360 beyond this by saying, Okay, they made some mistakes. The 0:11:42.440 --> 0:11:45.079 people who are going to be indicted are indicted. Let 0:11:45.120 --> 0:11:49.240 the justice system work and get back to business. I 0:11:49.320 --> 0:11:51.640 think that one of the very key factors is that 0:11:51.760 --> 0:11:56.080 it goes to Trump's family, Donald Trump Junior, Jared Kistner. 0:11:56.480 --> 0:11:59.040 It's really easy to get an indictment on perjury in 0:11:59.120 --> 0:12:01.959 a town is rule as DC, a grand jury will 0:12:01.960 --> 0:12:04.920 have died on perjury. Maybe there's something on money laundering. 0:12:05.080 --> 0:12:07.520 If it goes to his family, he's going to say 0:12:07.600 --> 0:12:10.120 enough is enough. This guy has gone too far. And 0:12:10.480 --> 0:12:14.040 within that actually this came up at breakfast this morning. Pim. 0:12:14.040 --> 0:12:18.920 We're with the idea that the president has different protections 0:12:19.040 --> 0:12:22.560 versus each and every other person. Greg, that's true that 0:12:22.920 --> 0:12:26.000 within all of this world that the president flies back to, 0:12:26.800 --> 0:12:30.640 he's playing by a different rule book because he's the president. 0:12:30.760 --> 0:12:33.720 Is that true? Absolutely? And I don't think he's used 0:12:33.760 --> 0:12:37.360 to being treated by people in quite this way, having 0:12:37.400 --> 0:12:40.320 his own family members come under scrutiny like this, so 0:12:40.640 --> 0:12:43.320 he could react in a in a very host hostile way. 0:12:43.480 --> 0:12:45.920 And you know, there's one other angle, guys. He still 0:12:45.960 --> 0:12:50.079 has tremendous support in the Republican Party, and I think 0:12:50.120 --> 0:12:52.839 a lot of Republicans and congress are scared to take 0:12:52.920 --> 0:12:56.920 him on because they lose their primaries. Let's switch to uh, 0:12:56.960 --> 0:12:59.000 the moment in hand, which is of course in Davis. 0:12:59.000 --> 0:13:02.760 We welcome all of you on Lomberg Radio worldwide, Good 0:13:02.760 --> 0:13:06.920 Morning Radio London and those listening digitally in this Europe 0:13:06.920 --> 0:13:09.120 PIM Fox in New York. I'm Tom Keane at these 0:13:09.160 --> 0:13:12.760 meetings of the World Economic Forum, and without question, I 0:13:13.040 --> 0:13:17.960 can say this, folks, without hesitation, the most extraordinary Friday 0:13:18.000 --> 0:13:21.600 in forty eight years of meetings in Davos, I've been 0:13:21.640 --> 0:13:25.199 here for fourteen years, and there's flat out no comparison. 0:13:25.280 --> 0:13:28.800 I can't measure the number of people that came to 0:13:28.840 --> 0:13:33.120 the Congress Center today by foot, by fancy Mercedes Benz 0:13:33.600 --> 0:13:37.560 or on just the little shuttle or bus who uh 0:13:37.720 --> 0:13:40.280 came with their suitcases. Where you just gotta believe they're 0:13:40.280 --> 0:13:45.080 gonna listen to this hugely anticipated speech and then get 0:13:45.080 --> 0:13:47.400 out of dodge, which is what you do on Friday, 0:13:47.440 --> 0:13:52.120 and a few people on Saturday. Uh Here in uh Davos, 0:13:52.160 --> 0:13:56.760 the President will speak, Greg Valier, uh with us. Greg. 0:13:56.800 --> 0:14:00.800 If if I look here at uh the speech and 0:14:00.840 --> 0:14:04.200 the way it's anticipated, I think it's changed. You wrote 0:14:04.200 --> 0:14:06.560 a few days ago that you thought this would really 0:14:06.559 --> 0:14:10.200 be something you were right. But what's changed the last 0:14:10.200 --> 0:14:13.400 few days is we listened to this speech. Well here's 0:14:13.440 --> 0:14:16.040 my suspicion, guys. I think there was a lot of 0:14:16.080 --> 0:14:19.480 pushback from Wall Street types who contacted Trump and his 0:14:19.600 --> 0:14:22.280 advisors and said, look, you don't want to bash your 0:14:22.320 --> 0:14:26.239 own currency in America. First is one thing, but to 0:14:26.240 --> 0:14:29.360 to talk down the dollar and to talk about trade 0:14:29.400 --> 0:14:33.080 disputes is not real constructive for the markets. So I 0:14:33.080 --> 0:14:35.640 think he's listened to that so maybe he'll tone it 0:14:35.680 --> 0:14:38.520 down a bit today. But I think there's a new 0:14:38.600 --> 0:14:41.480 mind frame on the dollar, and I think that the 0:14:41.560 --> 0:14:44.600 dollar with all of the mother stuff would trade reputes. 0:14:44.800 --> 0:14:47.360 I think the dollar may stay under pressure, Greg Value, 0:14:47.480 --> 0:15:01.800 thank you so much. With the Horizon investments. The Imberbari 0:15:02.480 --> 0:15:05.000 joining us now a head of global macro economics at 0:15:05.040 --> 0:15:07.240 City Group. That must have been wonderful news it for 0:15:07.360 --> 0:15:13.359 him to hear that Katherine Man would join your shop. Yeah, absolutely, Toma. 0:15:13.400 --> 0:15:16.400 We were absolutely delighted that Katherine will join us very 0:15:16.400 --> 0:15:18.720 shortly in a few weeks, and even more delighted that 0:15:18.760 --> 0:15:20.920 our current if economy is built about it's gonna stay 0:15:20.960 --> 0:15:23.240 with us. Yes, I think it's it's a great luck 0:15:23.600 --> 0:15:26.720 for our organization. I should point out to Professor Bowder 0:15:26.760 --> 0:15:29.520 will continue as a senior advisor to all of the 0:15:29.520 --> 0:15:32.160 City Group platform. Abram. What I noticed in there, and 0:15:32.160 --> 0:15:34.560 it made me think of Kathy Mann, was where the 0:15:34.600 --> 0:15:40.280 President twice mentioned free trade, fair trade. But then within 0:15:40.320 --> 0:15:46.840 our international economics this odd word reciprocity. What is reciprocity 0:15:46.920 --> 0:15:53.840 to a frontline economists like yourself, it is in uh, 0:15:53.960 --> 0:15:56.800 the term of cute interest, because of course this is 0:15:56.920 --> 0:16:00.800 I think very much aimed at the ongoing the dialogue 0:16:00.800 --> 0:16:05.040 with China, and I think the concern that China is 0:16:05.040 --> 0:16:08.320 not quite sticking to the same rules as many other 0:16:08.800 --> 0:16:10.760 countries in the world economy, including the YES, but not 0:16:10.800 --> 0:16:13.640 only the US, may have seen a number of other countries, 0:16:13.640 --> 0:16:17.680 the EU and Japan also have expressed concerns about elements 0:16:17.720 --> 0:16:21.440 of trade with China, and I think in this specific case, 0:16:21.720 --> 0:16:24.760 it means that we are likely to see further measures 0:16:24.800 --> 0:16:27.000 similar to some that we've seen over the last few weeks. 0:16:27.000 --> 0:16:29.880 You saw measures on solar panels, on the washing machines. 0:16:30.120 --> 0:16:33.760 I think this is a pre announcement that more is 0:16:33.800 --> 0:16:37.760 to follow in the next few months. Mr Rakbary, the 0:16:37.800 --> 0:16:41.920 Treasury Secretary Stephen Manuchin says, or at least a Bloomberg 0:16:41.960 --> 0:16:44.840 headline has him saying that he was not trying to 0:16:44.960 --> 0:16:49.200 move the dollar by his comments. What you have is 0:16:49.800 --> 0:16:54.320 any reaction or any thoughts about that. I have to say, 0:16:54.360 --> 0:16:56.960 I'm i'm I was a little bit surprised about the commons. 0:16:57.800 --> 0:17:00.600 We have in the past, together with Bill and Bower, 0:17:00.640 --> 0:17:04.040 we've written about the Treasury strong dollar policy. We always 0:17:04.080 --> 0:17:06.720 thought it's a little bit of a misnomer for two reasons. 0:17:06.720 --> 0:17:09.680 One because over the last few decades the dollar has 0:17:09.680 --> 0:17:14.600 actually depreciated fairly, fairly consistently over a longer horizons. And 0:17:14.640 --> 0:17:18.560 the second is that the Treasury is primarily concerned with, 0:17:18.920 --> 0:17:22.199 of course, funding the government and low borrowing costs. So 0:17:22.240 --> 0:17:26.520 for me, strong dollar really meant it's a stable asset, 0:17:26.640 --> 0:17:29.440 so you should extract the high price I eat low 0:17:29.640 --> 0:17:32.199 treasury yields. So it didn't make a great deal of 0:17:32.240 --> 0:17:37.320 things for me to to express these sort of uh, 0:17:37.720 --> 0:17:40.320 mixed sentiments about whether you would prefer strong or a 0:17:40.400 --> 0:17:43.200 weak dollar. But it fits with the I would say, 0:17:43.280 --> 0:17:47.480 a slightly more recantilist tone of the policy debate in 0:17:47.520 --> 0:17:50.199 Washington when it comes to trade. Okay, and is it 0:17:50.359 --> 0:17:53.960 possible that not only the Treasury secretaries comments, but more 0:17:54.000 --> 0:17:57.159 specifically the comments and the speech by President Donald Trump 0:17:57.600 --> 0:18:02.520 is part of an overall tactic for negotiations, particularly when 0:18:02.520 --> 0:18:09.840 it comes to trade, be powerful and beuh if you want, 0:18:09.880 --> 0:18:14.280 if you will, sort of strident, so that you have 0:18:14.400 --> 0:18:19.680 a negotiating position that then really puts you at an 0:18:19.680 --> 0:18:22.600 advantage when you have to sit down with Mexico and Canada, 0:18:22.640 --> 0:18:27.480 for example, U to renegotiate NAFTA, as the US Commerce 0:18:27.520 --> 0:18:33.960 Secretary Wilbur Ross saying that it is fixable. Yes, I 0:18:34.000 --> 0:18:35.960 do think that a lot of these statements obviously have 0:18:36.040 --> 0:18:39.359 a negotiations element to them, But at the same time 0:18:39.600 --> 0:18:43.879 we we shouldn't think that they are purely negotiation tactic 0:18:43.880 --> 0:18:46.159 in the sense that we we should expect them to 0:18:46.200 --> 0:18:50.160 take action to pursue more trade remedies, to improve more 0:18:50.200 --> 0:18:54.600 restrictions on important also on probably foreign investment in the 0:18:54.680 --> 0:18:57.200 United States. Of course there's going to be an element 0:18:57.200 --> 0:19:00.520 of compromise, but that rhetoric will be followed with action, 0:19:01.200 --> 0:19:06.680 Abraham with within all of this is a definition of multilateral, bilateral, 0:19:07.320 --> 0:19:10.480 and maybe a unilateral president. Now, the President made nice 0:19:10.520 --> 0:19:13.720 in the speech. Everyone can agree with that. But was 0:19:13.760 --> 0:19:17.680 it a true bilateral speech or is it a bilateral 0:19:17.720 --> 0:19:21.040 speech that says, if you play our way, then it 0:19:21.080 --> 0:19:26.000 will be bilateral. Yes, I still think I mean the 0:19:26.320 --> 0:19:29.520 I think the keyword of the administration's new approach to 0:19:29.600 --> 0:19:33.760 trade is still sovereignty. And I think sovereignty is still 0:19:33.920 --> 0:19:38.760 much easier to to make consistent with bilateral arrangements then 0:19:38.840 --> 0:19:42.879 with multilateral arrangements, in particular with bodies like the w 0:19:43.040 --> 0:19:47.240 t O, who seem to be compromising sovereignty to some degree. 0:19:47.600 --> 0:19:49.760 I don't think we learned much in this speech about 0:19:50.160 --> 0:19:52.800 about these issues, but I think it's we should expect 0:19:52.920 --> 0:19:57.199 the focus to remain on bilateral Is there a possibility 0:19:57.240 --> 0:19:59.720 that we're going to see an increase in acceleration in 0:20:00.000 --> 0:20:03.600 inflation this year? And I point to the g D 0:20:03.800 --> 0:20:06.600 the first print for gross domestic product in the United 0:20:06.640 --> 0:20:10.159 States at two point six percent. We're speaking earlier with 0:20:10.400 --> 0:20:14.480 Greg Valier uh he was talking about how the possibility 0:20:14.520 --> 0:20:19.920 that the U. S economy could overheat. It's it's certainly 0:20:20.000 --> 0:20:22.840 one of the major risks. I mean, from from our perspective, 0:20:22.920 --> 0:20:24.879 we don't think we'll see much of a pickup in 0:20:24.880 --> 0:20:28.919 invasion other than for sort of statistical reasons. We have 0:20:28.920 --> 0:20:30.879 a number of statistical pas effects over the course of 0:20:30.920 --> 0:20:34.000 this year in the US, but we think inflation underlying 0:20:34.040 --> 0:20:37.000 inflation will be fatly close to two and it's not 0:20:37.080 --> 0:20:40.000 that far even now. But at the same time, I 0:20:40.040 --> 0:20:42.880 think inflation is a major risk. We have seen growing 0:20:42.920 --> 0:20:45.520 signs that we have labor shortages and that companies find 0:20:45.520 --> 0:20:48.520 it increasingly hard to find workers, which usually you should 0:20:48.560 --> 0:20:51.399 expect to push away to somewhat, but we've also observed 0:20:51.440 --> 0:20:53.720 over the last few years that that link is by 0:20:53.720 --> 0:20:56.000 no means as as close as it as it used 0:20:56.000 --> 0:20:59.080 to be. When it came to the GDP number today, 0:20:59.400 --> 0:21:01.959 of course it was a little bit below expectations, but 0:21:02.000 --> 0:21:04.919 it's still, you know, meaningfully about what we think is 0:21:05.040 --> 0:21:08.680 probably the sustainable growth rate in the US. So at 0:21:08.680 --> 0:21:13.840 the margin, I think probably does put inflation pressure up, 0:21:13.880 --> 0:21:17.000 but as I said, really probably only very weakly. So 0:21:17.040 --> 0:21:19.480 I'm not holding my breath for inflation to pick up 0:21:19.680 --> 0:21:23.520 too aggressively this year. Does the President's speech at all 0:21:23.680 --> 0:21:27.119 challenge the particular leaders of Europe when it comes to 0:21:27.200 --> 0:21:33.160 things such as tax overhaul and regulation overhaul, I don't 0:21:33.160 --> 0:21:35.760 think necessarily the speech did, even though of course that 0:21:35.880 --> 0:21:38.959 the President did a good job. You certainly try very 0:21:38.960 --> 0:21:41.679 hard to sell the achievement of this administration. But I 0:21:41.720 --> 0:21:44.200 think the tax reform as such does. I mean both 0:21:44.640 --> 0:21:47.800 both that the corporate tax rate is being brought down 0:21:48.119 --> 0:21:52.119 significantly in the US, but also the number of other measures, 0:21:52.160 --> 0:21:55.800 the base erosion measures, FDI related measures that I think 0:21:55.960 --> 0:22:00.600 do have a meaningful competitive impact. We should say a bit. 0:22:01.600 --> 0:22:04.000 For example, looking at the corporate tax rates. The US 0:22:04.080 --> 0:22:06.080 is really just moving to the middle of the pack. 0:22:06.119 --> 0:22:08.280 It was the lag of many other countries have been 0:22:08.480 --> 0:22:12.160 reducing corporate tax rates over the last two decades. Every 0:22:12.280 --> 0:22:14.560 one more question if we could, and we can make 0:22:14.560 --> 0:22:17.080 it quick. I know you've got to get to your travels, 0:22:17.080 --> 0:22:20.080 as everyone in Davos is doing. What does the City 0:22:20.080 --> 0:22:24.280 Group call on euro is a single point estimate? Deutsche 0:22:24.280 --> 0:22:27.760 Bank and George Sarah Ellis see the drama of one thirty. 0:22:28.040 --> 0:22:30.920 Can you give us a drama single point estimate like that? 0:22:32.160 --> 0:22:35.800 I believe it's nine at the end of this year. 0:22:35.800 --> 0:22:38.240 It's very close. It's certainly the idea that it will 0:22:38.320 --> 0:22:41.959 it will continue to be strong. That is remarkable. Inari, 0:22:42.080 --> 0:22:44.960 thank you so much, just on short notice, his head 0:22:44.960 --> 0:22:49.879 of Global econom macroeconomics. I should say for UH City Group, 0:22:50.320 --> 0:23:07.880 working of course with a little Bouder and Catherinine here 0:23:07.920 --> 0:23:11.520 in Davos, we finished strong with someone who I've spoken 0:23:11.520 --> 0:23:14.560 to somewhere between six and twelve times UH, and I 0:23:14.600 --> 0:23:17.359 believe I've spoken to her on every continent of the Earth, 0:23:17.440 --> 0:23:21.480 including Antarctica. And I am finally meeting with Davos kujin 0:23:22.000 --> 0:23:24.560 Is at the London School of Economics and his shingles 0:23:24.600 --> 0:23:29.960 from Harvard University. You studied under Kenneth Rogoff. What level 0:23:30.000 --> 0:23:34.000 of torture is that the best kind of torture, the 0:23:34.040 --> 0:23:36.560 best mentor? I have to say, what do you do 0:23:36.640 --> 0:23:39.320 with Ken Rogoff when you don't get the math and 0:23:39.480 --> 0:23:43.080 he does well? I would, uh, I would? I would 0:23:43.080 --> 0:23:46.000 say I'm gonna work harder. You could work harder and 0:23:47.800 --> 0:23:50.640 there were no tears involved. I'm sure, Jen, you become 0:23:50.640 --> 0:23:55.440 an immediate and important voice on analysis of the Chinese economy. 0:23:55.480 --> 0:23:57.159 And it is perfect to have you to close out 0:23:57.200 --> 0:24:00.600 our coverage here because in every dabos the US two days, 0:24:00.600 --> 0:24:03.399 there's a backstory. And I know, Mr Trump, you're listening 0:24:03.440 --> 0:24:05.680 to this in the car to Marine one and then 0:24:05.720 --> 0:24:09.240 on ZERI on Zurich. I'm sorry, but the President of 0:24:09.359 --> 0:24:12.439 United States wasn't the backstory. What was the backstory was 0:24:12.600 --> 0:24:17.240 China and the rekindling of t p P. How badly 0:24:17.480 --> 0:24:22.639 does America need this multilateral trade agreement that I believe 0:24:22.760 --> 0:24:26.000 does not include China. Look, you know, China is making 0:24:26.000 --> 0:24:29.080 its own efforts to create its own you know, regional 0:24:29.280 --> 0:24:32.600