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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 2: Victoria Fernandez, Jordan Rochester, Michael McKee, Francis Donald, and Lincoln.

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Speaker 2: We go into this inflation reports strong with Neil Dutta

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Speaker 2: of Renaissance Macro. Neil, you're more cautious now on real GDP,

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Speaker 2: on the growth of the nation, all the inflation numbers

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Speaker 2: pretty much on the survey, but I really want to

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Speaker 2: focus out on real personal spending decline way off survey

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Speaker 2: in personal income with a nice lift as well. I've

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Speaker 2: got retail inventories which I don't understand. We're going to

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Speaker 2: skip that. I got a little bit of an equity lift.

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Speaker 2: I went right to the ten year real yield came

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Speaker 2: in a little bit, but it comes right back. Neil Dunta,

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Speaker 2: am I right that this was a nothing burger?

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Speaker 3: I mean, real personal consumption fell quite a bit to

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Speaker 3: start the quarter. That's that's probably gonna put downward pressure

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Speaker 3: on tracking estimates of first quarter GDP and will probably

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Speaker 3: prompt some marketing to market of forecasts among among the consensus.

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Speaker 3: So you know, I don't right, is it a nothing burger?

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Speaker 3: I mean, I think the inflation numbers came in in

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Speaker 3: line with expectations, but real GDP is probably getting worse.

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Speaker 2: Not This is critical folks with real spending. I mean,

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Speaker 2: what we see on the eco screen of the the Bloomberg,

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Speaker 2: real personal spending came in light personal spending itself came

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Speaker 2: in like a little bit of a constructive revision. But

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Speaker 2: you know, Neil, Neil, it's unfair to ask this, but

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Speaker 2: why it's onfair Friday? I mean, do you go, can

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Speaker 2: you model out subtwo JDP looking at two quarters of

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Speaker 2: data to the fourth of July.

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Speaker 3: Yes, I think that's possible. I mean, look, most of

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Speaker 3: the upside surprise in GDP growth last year was in

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Speaker 3: two areas, consumption and government spending an investment. That's what

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Speaker 3: drove most of the growth. So if you think those

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Speaker 3: two areas are going to slow, it doesn't really take much.

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Speaker 3: At the same time, you lay around the fact that

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Speaker 3: residential construction is likely to get worse, not better. And

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Speaker 3: you know, I mean export activity was a driver for

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Speaker 3: growth last year. I mean, if this trade stuff keeps up,

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Speaker 3: I mean there may be some risk to exports as well.

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Speaker 3: So I don't think it's that much of a stretch.

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Speaker 3: I mean you're talking about a zero point five percent

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Speaker 3: monthly contraction and real consumer spending. I mean these tracking

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Speaker 3: estimates might be at one percent for the quarter after today.

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Speaker 4: Yeah, that's kind of where I wanted to go, Neil,

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Speaker 4: because I am to this amateur economist here. That's the

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Speaker 4: number that kind of jumps out. I mean, I'll just

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Speaker 4: highlight it for the audience, real personal spending. The consensus

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Speaker 4: was for decline of zero point one percent, came in

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Speaker 4: a decline of zero point five percent, So missed there

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Speaker 4: any Compare it to last period where it was revised

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Speaker 4: higher to positive zero point five percent, So a big

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Speaker 4: delta there. I do know that, you know, you economists

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Speaker 4: tell me that the consumers seventy percent of the economy.

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Speaker 4: So that really does get your attention? Does that? Is

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Speaker 4: that a number that moves around a lot?

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Speaker 3: Real? Well, I mean consumer spending tends to be you know,

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Speaker 3: more more stable. I mean a lot of acyclical areas

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Speaker 3: of consumption, right, I mean, so that you know, people

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Speaker 3: have to go out and kind of spend, but ultimately,

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Speaker 3: you know, generally speaking, consumption follows u income growth, and

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Speaker 3: you know, I mean what what what you can basically

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Speaker 3: say is that you know, in January, I mean there

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Speaker 3: was a there was an increase in in precautionary saving maybe,

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Speaker 3: I mean that that's basically what it's income. But again

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Speaker 3: that goes to totally against what people are sort of

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Speaker 3: worried about right now, which is inflation expectations. Right I mean,

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Speaker 3: that's allegedly the reason why the FED is holding off

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Speaker 3: everyone's planning to you mish. Now, guys, think about what

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Speaker 3: inflation expectations should mean. It should mean number one, people

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Speaker 3: are going to bid up their wages because we know

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Speaker 3: that wage growth is set with short run inflation expectations

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Speaker 3: in mind. I mean, I don't know, good luck to

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Speaker 3: any worker that's going to try that right now. I

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Speaker 3: mean you're in for a root awaken. Importantly, it's you

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Speaker 3: try to spend more to beat the higher prices later,

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Speaker 3: there's no evidence that that's happening. You're seeing precautionary saving,

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Speaker 3: not precautionary spending. So this notion that inflation expectations arising,

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Speaker 3: and this is why the Fed needs to hold off.

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Speaker 2: Is all right, Neil, I want to get one more

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Speaker 2: question in here. I think it's so important, Ian Lingoln's

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Speaker 2: being patient to wait for Neil Dudda. Is there a

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Speaker 2: wealth effect of the fancy people in the personal income,

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Speaker 2: personal spending? Do you see the stock market? Do you

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Speaker 2: see the way Paul Sweeney made money on Nvidia? Is

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Speaker 2: that in those statistics this morning?

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Speaker 3: Well, I mean there was a great article from the

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Speaker 3: Welfare Journal about a week ago, I believe, about just

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Speaker 3: talking about how consumption is being driven increasingly by the

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Speaker 3: high end, and so you know, obviously it's affected by

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Speaker 3: what's going on with asset prices. But what I know

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Speaker 3: about asset prices is that you know, stocks are not

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Speaker 3: making new highs. They haven't been number two. You know

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Speaker 3: a lot of these sort of alternative assets like crypto

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Speaker 3: have come under pressure. And more importantly for everyone else,

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Speaker 3: home prices are moderating because inventories are jumping. So you know,

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Speaker 3: to the extent that the wealth effect was an important

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Speaker 3: driver of consumer spending, that's looking a little bit shaky

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Speaker 3: now as well, Neil.

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Speaker 2: Thank you so much, Neil. Data Adren Mac just brilliant

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Speaker 2: there as we looked at PC and as Paul Sweeney

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Speaker 2: you mentioned real consumer spending, real personal spending with a shock,

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Speaker 2: a little bit negative maybe new GDP markdowns. So we'll

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Speaker 2: get to the bond market in a moment. Here with

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Speaker 2: Ian Linga our economic indicators, what we do each and

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Speaker 2: every day, but particularly on these important key days. It's

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Speaker 2: brought to you by IBKR. Will the year over year

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Speaker 2: change in the US business inflation us PPI? Will it

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Speaker 2: exceed three percent in February of twenty twenty five At

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Speaker 2: seven days a week, grows on a week as well.

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Speaker 2: Joining us now with BEMO Capital Markets, Ian lingas Ian,

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Speaker 2: I'm looking at lower yields. Neil Dudd has given me

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Speaker 2: lower GDP. Do we finally have in place the vaunted

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Speaker 2: Lincoln vector where we get shockingly lower trends in yield?

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Speaker 5: Well, I do think that we're overdue for a continued

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Speaker 5: drift lower in rates. I wouldn't be very surprised to

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Speaker 5: see the current move get ten year yields a lot

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Speaker 5: closer to four percent.

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Speaker 2: So that gets your.

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Speaker 4: That gets your attention. So how do you think the

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Speaker 4: Fed ian is going to look at some of this

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Speaker 4: data today as they try to get a gauge on

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Speaker 4: their balance between the labor market and prices.

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Speaker 5: Well, I think the core PCE was in line with expectations.

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Speaker 5: I think that to a large extent, the inflation profile

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Speaker 5: is known. What's unknown is what's going on in Washington.

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Speaker 5: How does that lead through to sentiment in the employment market?

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Speaker 5: And that jobless claims figures from yesterday we're a bit troubling.

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Speaker 5: We're at two forty two. It's the highest since early December.

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Speaker 4: So again, that kind of suggests that it feels like

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Speaker 4: the federal reserves, just like the rest of us, they're

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Speaker 4: just kind of looking down to Washington, DC, trying to say,

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Speaker 4: on top of all the newsflow coming out here, how

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Speaker 4: long can they sit on the sidelines, do you think, Ian?

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Speaker 5: Well, I think that the Fed can avoid cutting rates

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Speaker 5: again at least through the first two quarters. I think

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Speaker 5: it's very reasonable to assume that they skip the next

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Speaker 5: few meetings. The first rate cut maybe comes in September,

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Speaker 5: but there's a lot of uncertainty between now and then.

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Speaker 5: The only way that things are going to shift dramatically

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Speaker 5: is if we see a for the correction the equity

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Speaker 5: market that titans financial conditions, or an increase in the

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Speaker 5: unemployment rate, both of which are possible.

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Speaker 2: We have to do an audible here. We're going to

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Speaker 2: come back to interest rates of the ling and Ian.

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Speaker 2: Canada just reported a whole series of economic datas and

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Speaker 2: I'm sorry it's positive including I think I see here

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Speaker 2: third quarter GDP revised from a gloomy one percent up

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Speaker 2: to two point two percent. Is as well. You've got

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Speaker 2: the Bank of Montreal combine working for you. How do

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Speaker 2: you filter in the response of Ontario, Quebec, Alberta. How

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Speaker 2: do you when you see their response to propose tariffs

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Speaker 2: from sixteen hundred Pennsylvania Avenue, What does that do to America?

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Speaker 2: What does that do to our GDP? And then on

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Speaker 2: to your four percent four point zero percent ten year yield?

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Speaker 5: Well, we do know that the Canadian economy is a

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Speaker 5: lot more rate sensitive, and the Bank of Canada has

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Speaker 5: been quite a bit more aggressive on the ray cutting side.

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Speaker 5: So seeing the Canadian economy respond positively, isn't that surprising?

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Speaker 5: What I worry about, and I think that most Canadian

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Speaker 5: banks do, is what happens with this looming twenty five

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Speaker 5: percent on the fourth of March. Does that really derail

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Speaker 5: growth in Canada? The short answer would be it probably

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Speaker 5: takes a We probably see a material hit which should

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Speaker 5: translate through to lower rates, and the US probably gets

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Speaker 5: a bit of downdraft as well. So I think that

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Speaker 5: there's a lot of cross currents brewing in favor of

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Speaker 5: lower yields in the near term.

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Speaker 2: So what does Bank of Montreal say about Doug Ford

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Speaker 2: of Ontario and what he's going to do in windsor

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Speaker 2: Canada to put x tens of thousands of Americans out

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Speaker 2: of work? How does Bank of Montreal see that sequence?

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Speaker 2: If we get it.

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Speaker 5: Well, I think that the short answer is we're all

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Speaker 5: in the position where there are a lot of political uncertainties,

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Speaker 5: and the back and forth between leaders, whether it's coming

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Speaker 5: from Trump, whether it's coming out of China, whether it's

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Speaker 5: coming from Canada or Mexico, will continue to fuel this uncertainty.

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Speaker 4: So how do you think this, I guess. Coming back

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Speaker 4: to the US here we had some the real personal

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Speaker 4: spending came in materially weaker than expected.

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Speaker 2: There.

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Speaker 4: How does the FED look at that kind of data.

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Speaker 5: Well, I think the first thing that FED would say

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Speaker 5: is the consumer remains on str footing. Take a look

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Speaker 5: at the longer term trends and there's no real reason

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Speaker 5: to start worrying about the consumer. Yet it's one data point.

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Speaker 5: I'm looking at that and I'm saying, Okay, this is

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Speaker 5: not going in the right direction. If Q one ends

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Speaker 5: up ad with a one percent annualized growth rate, that

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Speaker 5: will matter to the FED because that is the type

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Speaker 5: of economic slowing in an environment where we might see

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Speaker 5: higher inflation in the medium term or near to medium term,

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Speaker 5: and that's a recipe for stagflation, and that's got to

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Speaker 5: be a concern for the fact.

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Speaker 2: And your commute across the nation. Good morning to those

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Speaker 2: of you in Canada waking ump as well from the

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Speaker 2: Maritimes out to British Columbia, we say, good morning. It's

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Speaker 2: Bloomberg surveillance. With all of our digital efforts on radio,

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Speaker 2: including Apple CarPlay, Android audio, and the shock is serious.

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Speaker 2: How well that's doing for us? Good morning on YouTube.

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Speaker 2: Subscribe to Bloomberg Podcast. Humbled by the audience today, Thank

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Speaker 2: you so much for tuning in, Ian Linn with US

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Speaker 2: Now Capital Markets.

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Speaker 4: Ian, we're looking at a ten year US treasury written

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Speaker 4: around four and a quarter percent right here, and I

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Speaker 4: guess you could say it's still kind of within a

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Speaker 4: range we've seen for a while here. But where do

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Speaker 4: you think we end up the year on the US

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Speaker 4: ten year treasury?

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Speaker 5: Well, when the FED is on hold, like we expect

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Speaker 5: them to be for the next couple of quarters, that

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Speaker 5: tends to translate into a range of about one hundred

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Speaker 5: and ten basis points for tins, and so I think

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Speaker 5: that by the end of this year we'll be back

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Speaker 5: towards the bottom of that range, which puts US at

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Speaker 5: four percent ten year yields. I think the bigger drama

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Speaker 5: is going to play out in a two year sector,

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Speaker 5: and we see two year yields at three point fifty

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Speaker 5: by the end of the year.

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Speaker 2: I mean, this is where Michael Purvis was a tall back.

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Speaker 2: And I think he's scheduled next week. Okay, he's fly

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Speaker 2: fishing somewhere. Good for him right now. But you know,

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Speaker 2: to the point the short term paper, the Sweeney yield,

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Speaker 2: I mean, did he just say three fifty? Did? Is

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Speaker 2: that what I heard? Lah?

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Speaker 3: Four?

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Speaker 2: Four points? The two year are yeah? Points are right

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Speaker 2: now yep. Equity markets churning here up eighteen right now.

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Speaker 2: The VIX comes in a little bit of better tape

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Speaker 2: twenty point eight zero on the VIX.

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Speaker 4: Palla and a lot of folks out there, both academics

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Speaker 4: and practitioners say, this Federal Reserve historically is used kind

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Speaker 4: of not bad data, but certainly historically dated data, backward

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Speaker 4: looking data, and if you look at the real time stuff,

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Speaker 4: you could make the call that inflation's already whipped, and

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Speaker 4: you know, maybe they should be maybe even cutting rates here.

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Speaker 4: How do you think about that.

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Speaker 5: I'm very open to the idea that it's difficult for

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Speaker 5: monetary policy makers to use hard data because there is

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Speaker 5: the lag in data collection, there's the lag in reporting. However,

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Speaker 5: I don't think that the idea that if we look

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Speaker 5: at the real time data, for example, oil prices for

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Speaker 5: some of the more obvious markets, that the FED should

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Speaker 5: be basing their monetary policy decisions.

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Speaker 2: Off of that.

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Speaker 5: Instead, it is those forward looking indicators, look at break evens,

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Speaker 5: look at the survey based measures, and that's what the

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Speaker 5: FED is worried about. And I think that that's why

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Speaker 5: the Fed's going to be reluctant to start cutting again.

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Speaker 2: So on a yield basis, if we get a lined

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Speaker 2: four point zero, just you know, you're sitting around and

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Speaker 2: having a little bats. I mean, Ian, just cut to

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Speaker 2: the chase. What does it mean for the housing market?

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Speaker 2: Is it like boom recovery or is the ambiguity that

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Speaker 2: wages are slow as Neil Datta talked about, where we

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Speaker 2: don't get a housing recovery.

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Speaker 5: I think that the housing market is going to struggle.

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Speaker 5: Part of the reason is that the mortgage rate to

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Speaker 5: treasury spread is still relatively wide for a variety of reasons.

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Speaker 5: And as long as mortgages are high, then translating this

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Speaker 5: through to a stronger housing market is going to be difficult,

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Speaker 5: especially if we see an increase in the unemployment market

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Speaker 5: or the unemployment rate. That's where I start to get

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Speaker 5: really worried about housing.

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Speaker 2: Great summary, Ian Lannon, thank you so much. With female

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Speaker 2: capital market's working in fixed income there, we're going to

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Speaker 2: come back to economics. Francis Donald with us here really

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Speaker 2: off the shock as Paul mentioned of consumption of personal spending.

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Speaker 4: My attention there everybody writing.

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Speaker 2: This weekend, Paul I wonted do we start to see

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Speaker 2: sub two percent statistics? Yeah, there's a lot going on here, folks.

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Speaker 2: It's always important to talk to Francis Donald with RBC,

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Speaker 2: the Royal Bank of Canada on inflation and growth. But

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Speaker 2: based on conversation one, two three of this hour and

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Speaker 2: following on to McKeon the Fed, Francis Donald, all of

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Speaker 2: a sudden, maybe the conversation of the day. Are you

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Speaker 2: going to write for Monday, Francis Donald of sub two

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Speaker 2: percent real GDP.

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Speaker 6: I don't think we're there yet, Tom, So our forecast

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Speaker 6: for twenty twenty five was two percent, and that's a

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Speaker 6: bit of an annoying forecast because two percent is sort

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Speaker 6: of the break even point for a lot of equity models.

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Speaker 6: So a lot of are hoping you're going to go

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Speaker 6: sub two percent or above two percent, But one point

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Speaker 6: nine isn't going to make or break the US economy.

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Speaker 6: And you know what, Tom, I know there's a lot

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Speaker 6: of January data that just landed, but the path of

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Speaker 6: the US economy, there are so many potential outcomes based

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Speaker 6: off of the sequence and size of Washington policy that

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Speaker 6: even if you see downgrades from two percent to one

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Speaker 6: point eight, that's probably not changing your outlook on what's ahead.

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Speaker 6: It's just marginally changing your starting place. So I am

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Speaker 6: more focused on headlines related to tariffs today, a little

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Speaker 6: bit of the upside surprises we've been seeing in Europe

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Speaker 6: and Canada. Maybe changing the starting place for the two.

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Speaker 6: Wouldn't get too hung up on a GDP forecast, said

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Speaker 6: from an economy.

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Speaker 2: Rist, I listened to ed Yard Danny, who's been, of

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Speaker 2: course talking of the roaring twenties here, and he was

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Speaker 2: heated that yes, there's a lot of noise now and

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Speaker 2: a lot of worry in that we're pulled back four

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Speaker 2: percent off this grateful market. Francis Donald, what's your vision

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Speaker 2: for the end of the year. Do we once again

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Speaker 2: get a growth recovery as we have the last two years?

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Speaker 6: Well, Tom, were big believer that there's two economies at

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Speaker 6: play in the United States. There's the wealthy who are

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Speaker 6: benefiting from non income gains that is stock markets, house prices,

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Speaker 6: their net savers, or they're doing great with those high

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Speaker 6: interest rates. That part of the economy is incredibly resilient

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Speaker 6: and that part of the economy is absolutely experiencing the

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Speaker 6: roaring twenties and are likely to continue to do so

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Speaker 6: absent some sort of wealth shock. And then there's an

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Speaker 6: entire segment of America, in fact, the other ninety percent,

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Speaker 6: that are struggling under the weight of high interest rates,

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Speaker 6: and you're going to see that start to creep into

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Speaker 6: some of this data. They're still responsible for fifty percent

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Speaker 6: of the economy. This is so critical to twenty twenty

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Speaker 6: five because it's muddying our ability to read so much

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Speaker 6: of the soft data versus the hard data. High income

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Speaker 6: Americans are going to lift aggregate data probably through to

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Speaker 6: your end unless they see a wealth shock, of course,

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Speaker 6: and other pockets of the economy are going to look

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Speaker 6: very much like they're in recession. So we are looking

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Speaker 6: at things like consumer credit data. We've actually seeing credit

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Speaker 6: card usage as a share of retail sales popping higher.

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Speaker 6: That's higher rates coming into play. And if we don't

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Speaker 6: get rate relief big segments of the United States, then

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Speaker 6: big parts of the United States will see absolutely sub

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Speaker 6: two percent growth. So for markets, the aggregate matters. For

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Speaker 6: corporations who are thinking about their operating environment. When we

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Speaker 6: talk to our clients. We're saying to them, who is

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Speaker 6: your client group? Because I can't give you one headline

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Speaker 6: number in the United States anymore to explain the entire

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Speaker 6: path of the US economy. We just got to get deeper.

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Speaker 2: So we got to get Francis Donald on twice. Yep,

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Speaker 2: we can have it on now about the booming economy,

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Speaker 2: and you and Alice can have around at eleven am

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Speaker 2: about the gloom exact. That's the way we roll.

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Speaker 4: So Francis, can we still kind of refer to the

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Speaker 4: US economy as you know one of exceptionalism. Is that

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Speaker 4: still a storyline.

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Speaker 6: And you're still going to see US resilience in play,

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Speaker 6: probably for several months at least, based on the path

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Speaker 6: that we're seeing now. No, is that exceptionalism as high

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Speaker 6: as maybe those who had expected it six months ago. No,

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Speaker 6: there are some downside the prizes. One of them is

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Speaker 6: that the Trump administration, a lot of the enthusiasm economically

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Speaker 6: was that we'd see those corporate tax cuts in that deregulation.

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Speaker 6: But I remember a few months ago talking to the

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Speaker 6: two of you in New York that it's going to

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Speaker 6: matter what the sequence of policies are and we're not

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Speaker 6: getting a sequence that's really market friendly right now. We're

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Speaker 6: hearing about tariffs and maybe fiscal pullback before we get

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Speaker 6: some of that juicy reflationary type of content. So this

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Speaker 6: is going to be really important heading into twenty twenty five.

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Speaker 2: You got an entire combine. I remember the day Royal

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Speaker 2: Bank Canada took out Minnesota, Piper Jeffrey. I believe it was.

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Speaker 2: And you know you've done such a great job with

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Speaker 2: a cross border view at RBC. Francis Donald, what is

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Speaker 2: your summation of the power of Canada with a tariff response?

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Speaker 2: Dare I say tariff retaliation to a quoted twenty five

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Speaker 2: percent statistic? Can Canada get surgical about that to put

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Speaker 2: Americans out of a job? To shift the president of

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Speaker 2: the United States.

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Speaker 6: Well, just a reminder, I'll give you a list, Tom,

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Speaker 6: Canada provides sixty percent of oil imports to the United States,

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Speaker 6: ninety percent of electricity imports, ninety nine percent of natural gas,

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Speaker 6: eighty five percent of potash, ninety eight percent of canola,

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Speaker 6: thirty four percent of your meat, and let's not forget

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Speaker 6: critical minerals, which is nineteen percent of US imports, twenty

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Speaker 6: seven percent of your uranium imports come from Canada. Canada

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Speaker 6: helps to heat the United States, it helps to feed

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Speaker 6: the United States, and this is not twenty eighteen anymore.

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Speaker 6: The US is struggling under an electrical grid and have

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Speaker 6: substantial energy needs that Canada can help to rectify. So

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Speaker 6: I think the focus should be on how much can

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Speaker 6: Canada support US exceptionalism going forward, and what is the

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Speaker 6: upside of actual increased collaboration between the two countries. That's

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Speaker 6: the story that I think will resonate because President Trump

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Speaker 6: has huge ambition for what the US economy can be common.

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Speaker 6: There is a lot of upside for the US as well.

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Speaker 6: Canada upside equals US upside.

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Speaker 4: We spent a lot of.

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Speaker 6: Time thinking that Canada benefits from the United States. The

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Speaker 6: reverse is also true, and we got to push that narrative,

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Speaker 6: not just for Canadians but for Americans as well.

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Speaker 4: She running for office, awesomes. That was wonderful, proud Canadian

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Speaker 4: right there. So he Francis, I think I first became

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Speaker 4: sensitive to this K shaped economy and what it really

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Speaker 4: means and how pronounced it is maybe in the twenty

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Speaker 4: sixteen election cycle, and now here we are, you know, gosh,

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Speaker 4: almost ten years later, it still seems like it's still

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Speaker 4: a thing. Is this a permanent part of the US

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Speaker 4: economy going forward?

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Speaker 7: Do you think?

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Speaker 2: Oh?

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Speaker 3: Yes?

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Speaker 6: And actually in twenty sixteen and through to twenty twenty,

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Speaker 6: we would talk about the K shape and the concept

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Speaker 6: that there was actually like halves and have not so

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Speaker 6: and that was a structural situation. The problem that we're

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Speaker 6: encountering now, especially in the past two years, is that

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Speaker 6: in the past, the haves and the have nots actually

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Speaker 6: moved more or less the same throughout. So good times

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Speaker 6: were good times for everybody. Bad times were the reverse.

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Speaker 6: The reason there's so much focused from economists like myself

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Speaker 6: and from RBC on the K shape is that not

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Speaker 6: only do we have this huge inequality, but their economic

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Speaker 6: situations are not moving together. They're moving separately. So in

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Speaker 6: the past you could look at one group and know

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Speaker 6: more or less how the other ones were moving. That's

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Speaker 6: just not the case anymore. It's broken our models, and

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Speaker 6: it changes how we have to talk to clients about

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Speaker 6: who their end customers are.

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Speaker 2: Francis got to leave it there, Thank you so much.

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Speaker 2: Francis Donald with RBC.

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

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Speaker 2: Why don't you drag in here? Jordan Rochester? Who's you know?

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Speaker 2: I mean? He's rewriting his rewrite from exactly usearch.

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Speaker 4: You're at zoo, absolutely, Tom Jordan Rochester fit macro strategy

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Speaker 4: for our friends over there at Zuo. Jordan, what's your

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Speaker 4: feeling here about? You know, this flooding the zone approach

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Speaker 4: from this White House and maybe some of the policy

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Speaker 4: uncertainty that creates in the marketplace When you talk to

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Speaker 4: your clients, how do you kind of suggest they deal

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Speaker 4: with that?

437
00:23:40,840 --> 00:23:44,240
Speaker 8: Well, from a politics perspective, it's getting things done, which

438
00:23:44,320 --> 00:23:47,120
Speaker 8: is pretty painful for us in markets keeping a track

439
00:23:47,160 --> 00:23:49,840
Speaker 8: of it all. Flooding the zone means you split and

440
00:23:49,880 --> 00:23:53,120
Speaker 8: divide your opposition. They're not sure which agenda to oppose

441
00:23:53,440 --> 00:23:56,160
Speaker 8: in that day's media round. But for us in markets,

442
00:23:56,240 --> 00:23:59,480
Speaker 8: each one has a different investable theme. You've got tariffs

443
00:23:59,480 --> 00:24:02,879
Speaker 8: hanging over Europe, Mexico, Canada, China like a Damocles sword,

444
00:24:03,280 --> 00:24:05,919
Speaker 8: with the risk of near term dollar appreciation. But to

445
00:24:06,000 --> 00:24:08,639
Speaker 8: be honest, this market is trying to call the bluff

446
00:24:08,680 --> 00:24:11,760
Speaker 8: of this president and doubting whether these tarots will go

447
00:24:11,800 --> 00:24:14,760
Speaker 8: ahead with the numbers he's put forward or at the

448
00:24:14,800 --> 00:24:18,000
Speaker 8: pace that they've been announced. So this weekend could be

449
00:24:18,000 --> 00:24:20,280
Speaker 8: a big one. The market still has quite a few

450
00:24:20,280 --> 00:24:22,440
Speaker 8: people out there thinking it won't happen in the way

451
00:24:22,440 --> 00:24:24,760
Speaker 8: that he said, such as the twenty five percent. Then

452
00:24:24,800 --> 00:24:27,800
Speaker 8: you've got the DOGE labor cuts, and that's going to

453
00:24:27,840 --> 00:24:31,320
Speaker 8: really weigh on NFP prints in the months ahead. If

454
00:24:31,320 --> 00:24:34,440
Speaker 8: you were to listen to the pr campaign from Elon Musk,

455
00:24:34,720 --> 00:24:37,440
Speaker 8: the actual numbers so far are quite small, a lot

456
00:24:37,480 --> 00:24:39,919
Speaker 8: smaller than what he would be suggesting. But we are

457
00:24:40,000 --> 00:24:42,120
Speaker 8: aware that in the next couple of months, if things

458
00:24:42,160 --> 00:24:44,800
Speaker 8: accelerate from Doge, it could be tricky for the Fed.

459
00:24:45,440 --> 00:24:48,320
Speaker 8: This market will still probably try to price him rate cuts,

460
00:24:48,720 --> 00:24:51,439
Speaker 8: not rate hikes, even though we think the Fed's on

461
00:24:51,480 --> 00:24:53,080
Speaker 8: hold for the rest of the year. And then you've

462
00:24:53,080 --> 00:24:56,200
Speaker 8: got a deregulation agenda. Surely this is an administration that's

463
00:24:56,200 --> 00:24:59,320
Speaker 8: good for business, but the tariff policy is kind of

464
00:24:59,320 --> 00:25:02,520
Speaker 8: conflicting with so, and ask your question, he's studying the

465
00:25:02,600 --> 00:25:05,520
Speaker 8: zone many different policies. Each one has a very big

466
00:25:05,560 --> 00:25:07,840
Speaker 8: impact on markets. Some of them conflict with each other,

467
00:25:07,880 --> 00:25:09,680
Speaker 8: and it kind of leaves us all scratching our heads.

468
00:25:10,480 --> 00:25:13,960
Speaker 4: So I guess from the currency perspective, Jordan, do I

469
00:25:14,080 --> 00:25:16,600
Speaker 4: just kind of buy the US dollar and just go

470
00:25:16,920 --> 00:25:19,040
Speaker 4: sit on the sit in a corner there and wait.

471
00:25:20,320 --> 00:25:22,800
Speaker 8: If it wasn't for tariffs, I'd be telling clients to

472
00:25:22,920 --> 00:25:26,520
Speaker 8: sell the dollar, because there's a great sort of make

473
00:25:26,600 --> 00:25:31,520
Speaker 8: Europe great again mega not megafeme in Europe. However, the

474
00:25:31,560 --> 00:25:34,520
Speaker 8: tariffs are a big deal for everyone's terms of trade

475
00:25:34,560 --> 00:25:36,600
Speaker 8: if they are to happen in the numbers that we

476
00:25:36,680 --> 00:25:39,080
Speaker 8: expecting them to see. Imagine if Europe gets a ten

477
00:25:39,119 --> 00:25:42,479
Speaker 8: percent tariff for example, across the board, reciprocal or not,

478
00:25:43,040 --> 00:25:45,959
Speaker 8: that would mean a lot for Euro valuations. So what

479
00:25:46,000 --> 00:25:49,160
Speaker 8: we're saving to clients right now is, yes, by the dollar,

480
00:25:49,240 --> 00:25:51,160
Speaker 8: we think euro could go down to one or two

481
00:25:51,600 --> 00:25:54,399
Speaker 8: even parity if the number of tariffs is higher than

482
00:25:54,440 --> 00:25:57,000
Speaker 8: what we expect, and then actually that would be a

483
00:25:57,040 --> 00:25:59,560
Speaker 8: great opportunity at some stage to take the other side

484
00:26:00,720 --> 00:26:02,760
Speaker 8: is a down in euro and then up in the

485
00:26:02,800 --> 00:26:04,600
Speaker 8: second half of this year, because I think the EU

486
00:26:04,880 --> 00:26:07,280
Speaker 8: will get their act together and respond to this American

487
00:26:07,320 --> 00:26:11,199
Speaker 8: threat by doing reform, more issuance of fiscal issuance, and

488
00:26:11,240 --> 00:26:14,280
Speaker 8: we'll see a better investment outlook for Eurozone in the

489
00:26:14,320 --> 00:26:15,440
Speaker 8: second quarter, you know.

490
00:26:15,440 --> 00:26:19,240
Speaker 2: Jordan, I I look at the ability to try for

491
00:26:19,359 --> 00:26:22,439
Speaker 2: all of our listeners and viewers to get a single

492
00:26:22,560 --> 00:26:27,040
Speaker 2: point terminal view. Let's call it December of this year.

493
00:26:27,200 --> 00:26:30,800
Speaker 2: Dare I say into twenty twenty six, you have the

494
00:26:30,880 --> 00:26:36,320
Speaker 2: luxury of constant Rizzuto in Rochester at Missuo. Do you

495
00:26:36,359 --> 00:26:40,679
Speaker 2: guys have a combined view that gets us in the

496
00:26:40,760 --> 00:26:43,000
Speaker 2: next year or are all bets off.

497
00:26:44,240 --> 00:26:46,560
Speaker 8: Well, it's hard to predict what the weather will be

498
00:26:46,600 --> 00:26:48,920
Speaker 8: tomorrow time. Let them know what's going to happen next year.

499
00:26:49,480 --> 00:26:52,600
Speaker 8: But I imagine what's going to probably happen is we

500
00:26:52,760 --> 00:26:55,639
Speaker 8: have a lot of the events in politics in the

501
00:26:55,640 --> 00:26:57,840
Speaker 8: first half of this year and the second half of

502
00:26:57,840 --> 00:27:00,800
Speaker 8: this year more about the implications for the economy. What

503
00:27:00,800 --> 00:27:02,480
Speaker 8: do I mean by that? We've got tariffs in the

504
00:27:02,480 --> 00:27:05,280
Speaker 8: next one month or two. I think a reconciliation bill

505
00:27:05,280 --> 00:27:07,960
Speaker 8: will probably pass through Congress in the second quarter. It

506
00:27:08,000 --> 00:27:10,760
Speaker 8: might even be April. Joe Biden got his done in

507
00:27:10,840 --> 00:27:14,640
Speaker 8: March twenty twenty one. So it's very possible that all

508
00:27:14,640 --> 00:27:17,840
Speaker 8: the politics happens in the first half, the second half

509
00:27:17,840 --> 00:27:19,960
Speaker 8: will be about the implication of it, and I think

510
00:27:19,960 --> 00:27:24,480
Speaker 8: that we'll see European growth start to outperform us this market.

511
00:27:24,520 --> 00:27:27,320
Speaker 8: Tom is trying to bring forward that theme. I just

512
00:27:27,359 --> 00:27:29,560
Speaker 8: think we're not there yet. We need the tariffs to

513
00:27:29,600 --> 00:27:31,639
Speaker 8: go through first before I can jump on it.

514
00:27:33,040 --> 00:27:36,040
Speaker 4: Pound Sterling here, Jordan, what's the call here?

515
00:27:37,720 --> 00:27:40,080
Speaker 8: I think Sterling lower. We're looking for something like one

516
00:27:40,200 --> 00:27:44,000
Speaker 8: twenty two during the stage of the next few months,

517
00:27:44,040 --> 00:27:47,680
Speaker 8: and that's on the back of the tariffs. I also

518
00:27:47,840 --> 00:27:51,240
Speaker 8: think that there's a domestic weakness story that's creeping up.

519
00:27:51,640 --> 00:27:53,720
Speaker 8: Last year, the best strategy I had was to tell

520
00:27:53,720 --> 00:27:56,600
Speaker 8: clients to hold back from doing Dubvish calls on the

521
00:27:56,600 --> 00:28:00,119
Speaker 8: Bank of England because we had very sticky inflation. The

522
00:28:00,160 --> 00:28:03,440
Speaker 8: budget has changed things dramatically. There's been a tax height

523
00:28:03,520 --> 00:28:06,560
Speaker 8: for employers and what we've seen is a collapse in

524
00:28:06,600 --> 00:28:09,680
Speaker 8: the employment intentions of firms After that tax hike. It

525
00:28:09,800 --> 00:28:13,560
Speaker 8: costs everybody across the United Kingdom one point seven percent

526
00:28:13,640 --> 00:28:18,960
Speaker 8: more to employ staff per year from April onwards. So

527
00:28:19,000 --> 00:28:21,320
Speaker 8: I think what we'll see is in the April numbers

528
00:28:21,320 --> 00:28:23,840
Speaker 8: that we get in May quite a substantial weakness in

529
00:28:23,880 --> 00:28:26,640
Speaker 8: the labor market feeding through to growth, and then by

530
00:28:26,640 --> 00:28:29,800
Speaker 8: the June meeting the banking and cuts. That's something that's

531
00:28:29,840 --> 00:28:32,840
Speaker 8: a bit of a non consensus view because everyone thinks

532
00:28:32,840 --> 00:28:35,800
Speaker 8: the banking cuts every quarter. I think they accelerate it

533
00:28:35,840 --> 00:28:38,080
Speaker 8: when they get to June's data round and that should

534
00:28:38,080 --> 00:28:39,000
Speaker 8: push Stirling lower.

535
00:28:39,160 --> 00:28:42,800
Speaker 2: Jordan right here. A final question is you away tariffs?

536
00:28:42,840 --> 00:28:45,640
Speaker 2: And I get that. I have great respect for the idea,

537
00:28:45,760 --> 00:28:49,520
Speaker 2: wait for the facts. Is there a tradable big figure

538
00:28:49,640 --> 00:28:52,640
Speaker 2: move in any of the major currencies right now?

539
00:28:53,760 --> 00:28:56,680
Speaker 8: I think there is, and it's on a Japanese bank,

540
00:28:56,720 --> 00:28:59,720
Speaker 8: and I think Japan is the one. There's a structural

541
00:28:59,800 --> 00:29:03,240
Speaker 8: change taking place in Japan that's decorrelated it from the

542
00:29:03,280 --> 00:29:06,080
Speaker 8: rest of the cycle. Now dolly ed of course follows

543
00:29:06,600 --> 00:29:09,640
Speaker 8: US interest rates just like everything else. But if you

544
00:29:09,680 --> 00:29:13,520
Speaker 8: look at Japanese rates, structurally higher yields is the story, Tom,

545
00:29:13,560 --> 00:29:15,280
Speaker 8: and I think that's a sharp ratio that's going to

546
00:29:15,280 --> 00:29:15,920
Speaker 8: be pretty high.

547
00:29:16,640 --> 00:29:20,760
Speaker 2: This is really critical. Then do you suggest that the

548
00:29:20,800 --> 00:29:25,920
Speaker 2: reflation theories plural of Japan have succeeded.

549
00:29:27,400 --> 00:29:30,800
Speaker 8: I think they're in their infancy, but they're going to succeed.

550
00:29:30,960 --> 00:29:33,080
Speaker 8: If you look at the labor market, we are seeing

551
00:29:33,120 --> 00:29:37,040
Speaker 8: some of the largest wage hikes Tom since the nineteen nineties.

552
00:29:37,280 --> 00:29:40,040
Speaker 8: You've got part time workers getting six to seven percent.

553
00:29:40,240 --> 00:29:43,240
Speaker 8: You've got the overall economy at five You've got full

554
00:29:43,280 --> 00:29:45,160
Speaker 8: time salaried workers at three percent.

555
00:29:45,360 --> 00:29:45,760
Speaker 2: These are all.

556
00:29:45,760 --> 00:29:49,240
Speaker 8: Numbers above two. And we've got the upcoming shunt to negotiations.

557
00:29:49,280 --> 00:29:51,800
Speaker 8: Tom will get somewhat wind as to what we're going

558
00:29:51,840 --> 00:29:53,320
Speaker 8: to get out of those numbers. But I think the

559
00:29:53,360 --> 00:29:55,640
Speaker 8: numbers going to be another strong five percent like it

560
00:29:55,680 --> 00:29:58,560
Speaker 8: was last year or higher. You might have seen the

561
00:29:58,560 --> 00:30:01,280
Speaker 8: Bloomberg story early in the week about steel workers asking

562
00:30:01,320 --> 00:30:05,360
Speaker 8: for fourteen percent numbers we've just not heard of before

563
00:30:05,720 --> 00:30:08,840
Speaker 8: in Japan. So if the chinto goes well, I think

564
00:30:08,880 --> 00:30:10,760
Speaker 8: that we're going to see this wage story become self

565
00:30:10,800 --> 00:30:13,960
Speaker 8: fulfilling and Japanese core inflation will be stronger than what

566
00:30:13,960 --> 00:30:14,840
Speaker 8: the bank pack expects.

567
00:30:15,120 --> 00:30:19,360
Speaker 2: I would respectfully suggest, folks, I haven't heard that conversation

568
00:30:20,200 --> 00:30:24,120
Speaker 2: that we just had with Jordan Rochester good thirty thirty years.

569
00:30:24,200 --> 00:30:24,880
Speaker 4: Yeah, I think you're right.

570
00:30:24,840 --> 00:30:26,200
Speaker 2: I think I think you're right to go like that

571
00:30:26,320 --> 00:30:28,280
Speaker 2: was Fabulous, Jordan Rochester and the Zoo.

572
00:30:28,720 --> 00:30:32,600
Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday

573
00:30:32,640 --> 00:30:35,680
Speaker 1: starting at seven am Eastern on Apple Corplay and Android

574
00:30:35,680 --> 00:30:38,720
Speaker 1: Auto with the Bloomberg Business App. You can also listen

575
00:30:38,800 --> 00:30:42,080
Speaker 1: live on Amazon Alexa from our flagship New York station.

576
00:30:42,640 --> 00:30:45,280
Speaker 1: Just say Alexa play Bloomberg eleven thirty.

577
00:30:45,480 --> 00:30:50,080
Speaker 2: There is a wall. There's any number of walls in Washington,

578
00:30:50,360 --> 00:30:53,760
Speaker 2: to say the least, there is a CIA Memorial Wall,

579
00:30:54,520 --> 00:30:59,600
Speaker 2: of which there are one hundred and forty entries. There

580
00:30:59,600 --> 00:31:02,280
Speaker 2: are a one hundred and six named, and there are

581
00:31:02,360 --> 00:31:06,840
Speaker 2: thirty four names on the CIA Memorial Wall not named.

582
00:31:07,440 --> 00:31:11,720
Speaker 2: Some do others talk. We now speak to one of

583
00:31:11,760 --> 00:31:15,400
Speaker 2: the great doers of the American military, Mick mulroy. He

584
00:31:15,480 --> 00:31:20,000
Speaker 2: is godfather to four of the kids of those people

585
00:31:20,200 --> 00:31:23,440
Speaker 2: on the CIA Memorial Wall. Mick, I'm going to cut

586
00:31:23,480 --> 00:31:26,000
Speaker 2: to the chase. We just saw the Chairman of the

587
00:31:26,080 --> 00:31:30,040
Speaker 2: Joint Chiefs of Staff shown the door. Can our listeners,

588
00:31:30,400 --> 00:31:34,200
Speaker 2: can our viewers know that our military is at work

589
00:31:34,560 --> 00:31:38,080
Speaker 2: in an organized, productive manner on this Friday morning.

590
00:31:40,200 --> 00:31:42,360
Speaker 7: So good to be with you all again, I'd say,

591
00:31:42,760 --> 00:31:46,160
Speaker 7: of course, the president does get to choose who he's

592
00:31:46,240 --> 00:31:49,240
Speaker 7: going to have as his key advisors to include the military.

593
00:31:49,280 --> 00:31:52,120
Speaker 7: But I'd also say, and we'll disclosure. I know General

594
00:31:52,120 --> 00:31:56,280
Speaker 7: Brown that he was an example of meritocracy at work.

595
00:31:56,320 --> 00:31:59,880
Speaker 7: He was exceptional throughout his career. The facts speak for them.

596
00:32:00,080 --> 00:32:05,520
Speaker 7: Elves fighter pilot, squadron commander, Wing Commander, Deputy at Central Command,

597
00:32:05,920 --> 00:32:07,880
Speaker 7: in charge of all the Air Force in the Indo

598
00:32:07,960 --> 00:32:11,200
Speaker 7: Pacific and then of course Chief of Staff for the

599
00:32:11,240 --> 00:32:15,760
Speaker 7: Air Force appointed in the first Trump administration, so highly qualified.

600
00:32:15,800 --> 00:32:19,000
Speaker 7: If there was issues with DEI, that's a policy issue.

601
00:32:19,640 --> 00:32:22,520
Speaker 7: Just so everybody knows, the US military, even the highest

602
00:32:22,560 --> 00:32:26,640
Speaker 7: ranking don't do policy. They essentially advise and they carry

603
00:32:26,640 --> 00:32:30,200
Speaker 7: out orders by the civilian leadership of the Pentagon, including

604
00:32:30,440 --> 00:32:33,080
Speaker 7: you know, obviously the Secretary of Defense at his staff.

605
00:32:33,400 --> 00:32:35,760
Speaker 7: So if that was an issue, then then that could

606
00:32:35,800 --> 00:32:39,040
Speaker 7: have been addressed without the need, of course to remove

607
00:32:39,880 --> 00:32:40,120
Speaker 7: c Q.

608
00:32:40,280 --> 00:32:40,920
Speaker 2: Brown early.

609
00:32:41,640 --> 00:32:44,520
Speaker 7: He had many much time left on his post normally

610
00:32:44,560 --> 00:32:45,720
Speaker 7: that is not something that changes.

611
00:32:46,000 --> 00:32:47,640
Speaker 2: How to be quick here because Paul wants to get

612
00:32:47,640 --> 00:32:49,640
Speaker 2: in here. MC moulroy as simple as I can. And

613
00:32:49,720 --> 00:32:53,440
Speaker 2: the first term we had Kelly, we had McMaster. You

614
00:32:53,480 --> 00:32:56,960
Speaker 2: said at the table with General Madis. We don't have

615
00:32:57,120 --> 00:33:00,640
Speaker 2: those people now, do we. This is a new approach

616
00:33:01,040 --> 00:33:02,560
Speaker 2: to Trump too, isn't it.

617
00:33:04,440 --> 00:33:09,040
Speaker 7: Yes, I mean, certainly, I think the three you mentioned

618
00:33:09,040 --> 00:33:11,640
Speaker 7: are three of the best leaders of our generation, at

619
00:33:11,720 --> 00:33:15,959
Speaker 7: least from my perspective, especially Secretary of Matis. But this

620
00:33:16,080 --> 00:33:18,479
Speaker 7: is obviously a different cabinet. It seems to be. You know,

621
00:33:18,520 --> 00:33:21,920
Speaker 7: you can pick on experience and accomplishment, you can pick

622
00:33:21,960 --> 00:33:26,000
Speaker 7: on loyalty to the president and political ideology, and I

623
00:33:26,040 --> 00:33:29,800
Speaker 7: think I think the latter is really came through in

624
00:33:29,840 --> 00:33:32,200
Speaker 7: this And that's again, a president gets to choose that,

625
00:33:32,240 --> 00:33:34,640
Speaker 7: but every president gets to choose that. So it's kind

626
00:33:34,640 --> 00:33:37,240
Speaker 7: of as an argument that you can make. But essentially

627
00:33:37,280 --> 00:33:41,040
Speaker 7: so did President by right. So I would say he

628
00:33:41,160 --> 00:33:45,239
Speaker 7: picked these individuals primarily for their loyalty to him and

629
00:33:45,280 --> 00:33:48,720
Speaker 7: their political ideology, and that's his choice. But that is

630
00:33:48,760 --> 00:33:51,880
Speaker 7: a difference, I think than the first cabinet, which was

631
00:33:52,160 --> 00:33:56,160
Speaker 7: picked primarily for accomplishment and a long level of experience

632
00:33:56,360 --> 00:33:57,840
Speaker 7: in the job that they were going into.

633
00:33:58,480 --> 00:34:02,160
Speaker 4: Nick, President Zelensky Ukraine, coming to the White House today,

634
00:34:02,440 --> 00:34:04,360
Speaker 4: can you give us the latest sense of how you

635
00:34:04,520 --> 00:34:07,960
Speaker 4: think this situation in Ukraine could play out in the

636
00:34:08,000 --> 00:34:11,080
Speaker 4: coming days, weeks and maybe even months.

637
00:34:12,280 --> 00:34:14,680
Speaker 7: Sure, this was a big week. We had the French

638
00:34:14,719 --> 00:34:17,719
Speaker 7: president and the uk Prime minister, and now we have

639
00:34:17,840 --> 00:34:22,799
Speaker 7: President Zelenski coming today and maybe I think likely or

640
00:34:22,800 --> 00:34:26,880
Speaker 7: he wouldn't be here signing this rare earth mineral agreement.

641
00:34:26,920 --> 00:34:30,160
Speaker 7: So starting with that, it's essentially ended up being that

642
00:34:30,320 --> 00:34:34,040
Speaker 7: American companies will get access whatever that means to fifty

643
00:34:34,040 --> 00:34:38,640
Speaker 7: percent of the minerals in Ukraine, which is substantial. I mean,

644
00:34:38,680 --> 00:34:43,239
Speaker 7: I've seen reports from reputable groups that it's trillions. Half

645
00:34:43,280 --> 00:34:45,000
Speaker 7: of it or more than half of it's under the

646
00:34:45,160 --> 00:34:48,440
Speaker 7: part of Ukraine that's currently occupied by Russia. So from

647
00:34:48,440 --> 00:34:50,960
Speaker 7: the Ukrainian perspective, if the US wants access to that,

648
00:34:51,000 --> 00:34:54,720
Speaker 7: they need to help Ukraine gain their territory back. What's

649
00:34:54,800 --> 00:34:57,479
Speaker 7: not in here and what Ukraine really wanted, of course,

650
00:34:57,520 --> 00:35:00,959
Speaker 7: were security guarantees. That is the biggest thing they need,

651
00:35:01,000 --> 00:35:04,360
Speaker 7: and ultimately there probably won't be a ceasefire agreement unless

652
00:35:04,360 --> 00:35:08,439
Speaker 7: there's some security guarantees because Russia has violated, specifically when

653
00:35:08,440 --> 00:35:11,520
Speaker 7: it comes to Ukraine, the agreement not to attack them

654
00:35:11,600 --> 00:35:14,080
Speaker 7: multiple times, starting in nineteen ninety four when they give

655
00:35:14,160 --> 00:35:18,680
Speaker 7: up clear nuclear weapons. In twenty fourteen after they already

656
00:35:19,080 --> 00:35:21,880
Speaker 7: you know, annexed CRIMEA. They agreed not to do it again,

657
00:35:22,120 --> 00:35:24,920
Speaker 7: they did in twenty twenty two, So there should be

658
00:35:25,080 --> 00:35:27,960
Speaker 7: zero trust on whether they will carry this out unless

659
00:35:28,000 --> 00:35:33,440
Speaker 7: there's a security guarantee by NATO or European partners or

660
00:35:33,560 --> 00:35:36,239
Speaker 7: the United States are all the above. If there's not,

661
00:35:36,640 --> 00:35:39,080
Speaker 7: then it's hard to see how Ukraine would accept a

662
00:35:39,120 --> 00:35:42,839
Speaker 7: ceasefire that would simply allow Russia to prepare to then

663
00:35:42,960 --> 00:35:46,440
Speaker 7: attack them again. But we all should hope that's the case.

664
00:35:46,520 --> 00:35:49,239
Speaker 7: We all should hope that, of course, President Trump and

665
00:35:49,280 --> 00:35:52,560
Speaker 7: his administration are successful in getting us to a ceasefire

666
00:35:52,600 --> 00:35:56,800
Speaker 7: that's lasting to stop this and this war that Russia started.

667
00:35:56,920 --> 00:35:58,960
Speaker 4: Mick, is there any scenario that you can think of

668
00:35:59,040 --> 00:36:01,880
Speaker 4: where President Putin and President Trump could come up with

669
00:36:01,920 --> 00:36:05,920
Speaker 4: some type of peace record that does not include Ukraine

670
00:36:05,920 --> 00:36:07,200
Speaker 4: at the negotiating table.

671
00:36:09,000 --> 00:36:12,439
Speaker 7: No, because ultimately Ukraine has to decide and not to fight.

672
00:36:12,560 --> 00:36:16,040
Speaker 7: I mean, they would be hard pressed to continue to fight,

673
00:36:16,400 --> 00:36:19,520
Speaker 7: particularly by June when all of the ammunition we've already

674
00:36:19,520 --> 00:36:22,080
Speaker 7: provided to start running out without the US support. But

675
00:36:22,120 --> 00:36:25,239
Speaker 7: they can, especially if Europe really steps up, and they've

676
00:36:25,280 --> 00:36:28,960
Speaker 7: already proven that they beat the odds, right, Most analysts,

677
00:36:29,040 --> 00:36:31,120
Speaker 7: like myself we predicting three weeks and it would have

678
00:36:31,120 --> 00:36:34,920
Speaker 7: been over an hour over three years, So don't count

679
00:36:34,920 --> 00:36:37,760
Speaker 7: them out. But the US needs to continue to support.

680
00:36:37,840 --> 00:36:40,960
Speaker 7: It's not just altruistic, it is in our own interests.

681
00:36:40,960 --> 00:36:45,239
Speaker 7: They are depleting the Russian military so substantially that within

682
00:36:45,280 --> 00:36:47,839
Speaker 7: the last two years they lost more soldiers than we

683
00:36:47,880 --> 00:36:50,440
Speaker 7: lost during the entirety of a war in Iraq. It

684
00:36:50,520 --> 00:36:53,359
Speaker 7: is really taxing on them and it's difficult for them

685
00:36:53,400 --> 00:36:56,160
Speaker 7: to maintain this, but it will be difficult for Ukraine

686
00:36:56,200 --> 00:37:00,000
Speaker 7: to keep up that level without the US full support.

687
00:37:00,280 --> 00:37:02,640
Speaker 2: Nick, what is the signal to our allies of what

688
00:37:02,680 --> 00:37:05,160
Speaker 2: we witnessed at the United Nations this week back to

689
00:37:05,280 --> 00:37:09,280
Speaker 2: nineteen forty five, we went with Team Russia.

690
00:37:11,200 --> 00:37:14,720
Speaker 7: So certainly scared the Bejesus out of them, quite frankly.

691
00:37:15,160 --> 00:37:17,160
Speaker 7: And there's two parts of that, right. So they are

692
00:37:17,280 --> 00:37:20,439
Speaker 7: very used to their allies being what it has been,

693
00:37:20,560 --> 00:37:22,760
Speaker 7: you know for decades, which is the United States in NATO,

694
00:37:22,880 --> 00:37:26,680
Speaker 7: the most significant military alliance in history. Where I can

695
00:37:26,840 --> 00:37:29,880
Speaker 7: say that they have fallen short they be in our

696
00:37:29,920 --> 00:37:32,640
Speaker 7: European allies. If they have essentially left a lot of

697
00:37:32,640 --> 00:37:35,239
Speaker 7: their security over to the United States. They had the

698
00:37:35,239 --> 00:37:37,600
Speaker 7: biggest brother on the block, so they were fine with

699
00:37:37,680 --> 00:37:40,600
Speaker 7: spending their money on things other than their own national defense.

700
00:37:40,800 --> 00:37:43,600
Speaker 7: They've woken up to that they are all increasing their

701
00:37:45,239 --> 00:37:49,160
Speaker 7: expenditures on their own national security beyond what the NATO

702
00:37:49,280 --> 00:37:51,880
Speaker 7: calls for, which is two percent, some going as three up,

703
00:37:52,000 --> 00:37:54,759
Speaker 7: potentially even a five percent. That's a good thing for them,

704
00:37:54,800 --> 00:37:57,520
Speaker 7: it's a good thing for NATO, and many presidents, to

705
00:37:57,560 --> 00:38:00,759
Speaker 7: include President Trump, have been pushing rightfully for them to

706
00:38:00,800 --> 00:38:03,080
Speaker 7: do that. So that's a good thing. But the problem

707
00:38:03,160 --> 00:38:04,840
Speaker 7: is they might get to a point where they just

708
00:38:04,880 --> 00:38:07,239
Speaker 7: don't trust the United States when it comes to our

709
00:38:07,280 --> 00:38:11,080
Speaker 7: allegiance to NATO. I know Secretary Ribo have said that's

710
00:38:11,120 --> 00:38:14,680
Speaker 7: not the case, so as national security fighter Waltz, I

711
00:38:14,719 --> 00:38:17,440
Speaker 7: believe that's the case. But that has scared them so

712
00:38:17,560 --> 00:38:20,160
Speaker 7: much that they are now concerned and potentially even starting

713
00:38:20,520 --> 00:38:21,840
Speaker 7: an alternative to NATO.

714
00:38:22,400 --> 00:38:24,120
Speaker 2: Mick, we got to leave it there. We can talk

715
00:38:24,160 --> 00:38:27,280
Speaker 2: for hours with the Lobo Institute, McLaury with his service

716
00:38:27,280 --> 00:38:34,440
Speaker 2: to the nation, with the Marines, and with the CIA.

717
00:38:35,760 --> 00:38:39,640
Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday

718
00:38:39,680 --> 00:38:43,000
Speaker 1: starting at seven am Eastern on Applecarplay and Android Auto

719
00:38:43,120 --> 00:38:45,960
Speaker 1: with the Bloomberg Business app. You can also watch us

720
00:38:46,000 --> 00:38:49,840
Speaker 1: live every weekday on YouTube and always on the Bloomberg terminal.

721
00:38:50,400 --> 00:38:52,760
Speaker 2: You look at the front pages of Lisa Matteo Report,

722
00:38:53,080 --> 00:38:55,439
Speaker 2: you're not mentioned in Taylor and Travis, are you?

723
00:38:55,440 --> 00:38:58,759
Speaker 9: No, we're not. Okay, definitely to stay it away from that.

724
00:38:59,160 --> 00:39:01,680
Speaker 9: What we are talking about is, of course AI. We

725
00:39:01,719 --> 00:39:03,920
Speaker 9: always talk about it, but people are finding new ways

726
00:39:03,960 --> 00:39:08,319
Speaker 9: to use it. That includes cheating on job interviews. So

727
00:39:08,360 --> 00:39:11,120
Speaker 9: the way they're doing it, they're using these generative AI

728
00:39:11,239 --> 00:39:15,279
Speaker 9: tools like coding assistance, teleprompter apps that feed them live

729
00:39:15,320 --> 00:39:19,359
Speaker 9: answers when they're doing video interviews. So Business Insider are saying,

730
00:39:19,400 --> 00:39:21,319
Speaker 9: Amazon they want to put a stop to it because

731
00:39:21,360 --> 00:39:23,759
Speaker 9: they're seeing more of it, so they change their guidelines

732
00:39:23,800 --> 00:39:26,600
Speaker 9: and their job applications so you can be disqualified if

733
00:39:26,600 --> 00:39:29,000
Speaker 9: you use any of these things. The question is, how

734
00:39:29,000 --> 00:39:31,200
Speaker 9: do you know if someone's using it? Yeah, So Amazon

735
00:39:31,239 --> 00:39:33,960
Speaker 9: actually put out some guidelines. So for example, those watching

736
00:39:34,000 --> 00:39:37,000
Speaker 9: on YouTube, if I'm doing the job interview here, I'm

737
00:39:37,080 --> 00:39:39,439
Speaker 9: usually looking and if you ask me a question, I'll

738
00:39:39,440 --> 00:39:42,000
Speaker 9: be typing, you know, because you're typing in the question,

739
00:39:42,239 --> 00:39:43,920
Speaker 9: you know, so what AI will response. So if you

740
00:39:43,920 --> 00:39:46,359
Speaker 9: see someone typing, that's a red flag. And then if

741
00:39:46,360 --> 00:39:48,600
Speaker 9: you see someone you know answering your question but they're

742
00:39:48,680 --> 00:39:51,680
Speaker 9: kind of like looking like they're reading like this. If

743
00:39:51,680 --> 00:39:54,640
Speaker 9: you're on YouTube, that's another red flag. So what they're

744
00:39:54,640 --> 00:39:57,239
Speaker 9: doing is they're trying to like cut back on this

745
00:39:57,280 --> 00:39:59,240
Speaker 9: because more and more people and it's not just Amazon

746
00:39:59,239 --> 00:40:00,880
Speaker 9: is saying it. Other these are saying that people are

747
00:40:00,920 --> 00:40:03,040
Speaker 9: doing this, They're cheating on these resumes.

748
00:40:03,520 --> 00:40:06,359
Speaker 4: There's there's a certainly be a story on bloomber guest today.

749
00:40:06,440 --> 00:40:10,319
Speaker 4: There's certain keywords that people are facing on. Then you know,

750
00:40:10,440 --> 00:40:12,440
Speaker 4: you see it on somebody's resume. You can tell the

751
00:40:12,880 --> 00:40:15,600
Speaker 4: resume was created by Yeah.

752
00:40:15,520 --> 00:40:18,960
Speaker 2: I'm getting the buzz that for college applications is definite.

753
00:40:19,320 --> 00:40:23,279
Speaker 2: They can tell a heartbeat college. I don't know other

754
00:40:23,360 --> 00:40:25,080
Speaker 2: than good luck with that.

755
00:40:26,400 --> 00:40:27,920
Speaker 9: Okay, this was interesting.

756
00:40:28,320 --> 00:40:31,759
Speaker 2: Screaming from the screen. We could tell you this is interesting.

757
00:40:32,600 --> 00:40:35,520
Speaker 9: The erosion that's eating away at those homes in Nantucket.

758
00:40:35,640 --> 00:40:37,960
Speaker 9: So it gets like into a deeper look into it.

759
00:40:38,000 --> 00:40:40,120
Speaker 9: Some of the pictures are amazing. If you look at

760
00:40:40,120 --> 00:40:43,239
Speaker 9: this article, but they say emergency crews. They're scrambling. They

761
00:40:43,280 --> 00:40:46,080
Speaker 9: basically use these steel beams. They put them under the homes,

762
00:40:46,080 --> 00:40:48,040
Speaker 9: they jack them up, and they roll them back about

763
00:40:48,040 --> 00:40:50,480
Speaker 9: a huge you know, a few hundred feet back. But

764
00:40:50,560 --> 00:40:53,000
Speaker 9: it's happening more often since twenty twenty three. Houses on

765
00:40:53,040 --> 00:40:56,480
Speaker 9: the street is called Cheap Pond Road. They've been condemned, demolish.

766
00:40:56,600 --> 00:40:58,279
Speaker 9: Some are moving back and some are They just have

767
00:40:58,320 --> 00:41:00,920
Speaker 9: to sell for pennies on the dollar, so they're losing out.

768
00:41:01,040 --> 00:41:02,840
Speaker 9: But here's what the residents are saying. And Paul, this

769
00:41:02,920 --> 00:41:05,200
Speaker 9: goes to you in the Jersey Shore because Nantucket doesn't

770
00:41:05,239 --> 00:41:09,040
Speaker 9: have those jetties and those sand like replenishment projects like

771
00:41:09,080 --> 00:41:10,759
Speaker 9: the Jersey Shore. I mean, I remember sitting on the

772
00:41:10,760 --> 00:41:12,799
Speaker 9: beach and the Jersey Store and seeing those ships come

773
00:41:12,800 --> 00:41:13,319
Speaker 9: in and I was.

774
00:41:13,280 --> 00:41:15,160
Speaker 4: Like, what are they doing right right now as we speak.

775
00:41:15,360 --> 00:41:17,440
Speaker 9: Yeah, and that's what they're doing. But they're saying Nantucket

776
00:41:17,440 --> 00:41:18,279
Speaker 9: doesn't have that.

777
00:41:18,680 --> 00:41:21,200
Speaker 2: They're out in the middle of nowhere where the erosion

778
00:41:21,239 --> 00:41:23,200
Speaker 2: has been there for years. And I don't pretend to

779
00:41:23,200 --> 00:41:25,200
Speaker 2: be an expert on it, but you know, I'm looking

780
00:41:25,200 --> 00:41:28,239
Speaker 2: at it right here now on Chester Street in Nantucket.

781
00:41:28,280 --> 00:41:30,880
Speaker 2: You know, Lee real Estate has it, and it's a

782
00:41:30,960 --> 00:41:34,760
Speaker 2: nice little small bungalow on the street, distant from the water.

783
00:41:34,880 --> 00:41:37,560
Speaker 2: It's like you could shoot a movie in front of it.

784
00:41:38,000 --> 00:41:42,560
Speaker 2: Are you ready? Three point eight million dollars and it's

785
00:41:42,680 --> 00:41:46,560
Speaker 2: I mean it's it's three bedroomish. Yeah, you know.

786
00:41:47,080 --> 00:41:48,560
Speaker 9: Well the problem a lot of these people bought during

787
00:41:48,600 --> 00:41:52,960
Speaker 9: the Yeah, their their values going down because they're going

788
00:41:52,960 --> 00:41:55,520
Speaker 9: to be falling into the water. Positive three million. Crazy.

789
00:41:56,600 --> 00:41:58,320
Speaker 4: If you're going to buy a home on Nantucket or

790
00:41:58,360 --> 00:42:01,560
Speaker 4: kit caud my personal je, you have to also be

791
00:42:01,640 --> 00:42:05,040
Speaker 4: able to have a fractional ownership in a plane. If

792
00:42:05,080 --> 00:42:06,880
Speaker 4: you can't do that, then don't buy it, because if

793
00:42:06,880 --> 00:42:09,680
Speaker 4: you're not flying up there easily, you can't drive. Yeah,

794
00:42:09,760 --> 00:42:10,480
Speaker 4: it's a disaster.

795
00:42:10,760 --> 00:42:11,600
Speaker 2: Okay, what else?

796
00:42:11,960 --> 00:42:14,440
Speaker 9: Last one, this big mistake by City Group. It's actually

797
00:42:14,440 --> 00:42:17,399
Speaker 9: coming to light now. The Financial Times has it. They

798
00:42:17,560 --> 00:42:21,600
Speaker 9: credited client's account with eighty one trillion dollars. It was

799
00:42:21,640 --> 00:42:23,680
Speaker 9: meant to send only two hundred.

800
00:42:23,400 --> 00:42:25,279
Speaker 2: And eighty dollars.

801
00:42:25,400 --> 00:42:28,600
Speaker 9: It has been last April never reported because it was

802
00:42:28,640 --> 00:42:31,439
Speaker 9: like a near miss, but the Financial Times looked into

803
00:42:31,480 --> 00:42:33,719
Speaker 9: it. It said it was missed by a payments employee, missed

804
00:42:33,719 --> 00:42:37,160
Speaker 9: by a second official a third banker finally found it.

805
00:42:37,239 --> 00:42:39,719
Speaker 9: The payment was reversed several hours later, so that is

806
00:42:39,760 --> 00:42:42,560
Speaker 9: good news. No funds left the bank, but it just

807
00:42:42,600 --> 00:42:44,880
Speaker 9: shows that you know they're going after that.

808
00:42:44,960 --> 00:42:47,399
Speaker 4: As a former bank teller, it happens. If I had

809
00:42:47,440 --> 00:42:49,919
Speaker 4: a three thousand dollars miss at the end of the day,

810
00:42:50,120 --> 00:42:51,719
Speaker 4: I could find that in five minutes. If I had

811
00:42:51,719 --> 00:42:54,560
Speaker 4: a twenty three dollars eighty seven dollars miss, could never

812
00:42:54,600 --> 00:42:56,520
Speaker 4: find it, and they take it out of your paycheck.

813
00:42:56,360 --> 00:42:59,040
Speaker 9: Eighty one trillion, I know the round numbers.

814
00:42:59,080 --> 00:43:00,960
Speaker 2: They can find easy, and they took it out of

815
00:43:01,000 --> 00:43:04,960
Speaker 2: the paycheck. My sister went through this exactly. Thank you

816
00:43:05,040 --> 00:43:08,319
Speaker 2: the newspapers withou. Lisa Matail greatly appreciate that.

817
00:43:08,920 --> 00:43:13,759
Speaker 1: This is the Bloomberg Surveillance podcast, available on Apple, Spotify,

818
00:43:13,880 --> 00:43:17,680
Speaker 1: and anywhere else you get your podcasts. Listen live each

819
00:43:17,719 --> 00:43:21,520
Speaker 1: weekday seven to ten am Eastern on Bloomberg dot Com,

820
00:43:21,680 --> 00:43:25,480
Speaker 1: the iHeartRadio app, tune In, and the Bloomberg Business app.

821
00:43:25,800 --> 00:43:28,840
Speaker 1: You can also watch us live every weekday on YouTube

822
00:43:29,200 --> 00:43:31,200
Speaker 1: and always on the Bloomberg terminal