1 00:00:02,520 --> 00:00:13,760 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg 2 00:00:13,840 --> 00:00:17,920 Speaker 1: Surveillance Podcast. Catch us live weekdays at seven am Eastern 3 00:00:18,200 --> 00:00:22,000 Speaker 1: on Apple CarPlay or Android Auto with the Bloomberg Business App. 4 00:00:22,360 --> 00:00:25,680 Speaker 1: Listen on demand wherever you get your podcasts, or watch 5 00:00:25,760 --> 00:00:26,960 Speaker 1: us live on YouTube. 6 00:00:27,040 --> 00:00:30,040 Speaker 2: The world's changed, and it's gone in a Neil dotted direction. 7 00:00:30,360 --> 00:00:34,320 Speaker 3: Neil Dutta joins from Renmec. Now that extended conversation. Neil, 8 00:00:34,320 --> 00:00:37,559 Speaker 3: you've been talking about the slowdown? Did it begin at 9 00:00:37,560 --> 00:00:38,960 Speaker 3: eight fifteen yesterday? 10 00:00:40,520 --> 00:00:42,080 Speaker 4: Come on, Tom, I mean you have not been long 11 00:00:42,200 --> 00:00:45,560 Speaker 4: enough to know that I wouldn't pin all my hopes 12 00:00:45,600 --> 00:00:47,640 Speaker 4: on the ADPM Ployment report. 13 00:00:48,479 --> 00:00:52,720 Speaker 2: Okay, but there was Moldy. What kind of claims number. 14 00:00:52,479 --> 00:00:57,440 Speaker 3: Do I need to see to confirm your disrespected ADP report? 15 00:00:59,280 --> 00:01:02,520 Speaker 4: Well, I think that break even level on claims is 16 00:01:02,600 --> 00:01:05,880 Speaker 4: probably somewhere around two hundred and fifty to two hundred 17 00:01:05,880 --> 00:01:09,200 Speaker 4: and sixty thousand, So we're getting awfully close. When I 18 00:01:09,240 --> 00:01:12,280 Speaker 4: say break even, I basically mean the cutoff point between 19 00:01:12,400 --> 00:01:16,480 Speaker 4: jobs growth and jobs flat. So we're getting awfully close 20 00:01:17,160 --> 00:01:21,280 Speaker 4: to some pretty soggy employment reports. And remember, you know 21 00:01:21,319 --> 00:01:25,360 Speaker 4: you can use the jolts data to kind of calculate 22 00:01:25,400 --> 00:01:28,640 Speaker 4: what the break even level on jobless claims is. And 23 00:01:28,760 --> 00:01:31,319 Speaker 4: you know, when I run the numbers, it gets me 24 00:01:31,440 --> 00:01:34,320 Speaker 4: to around, you know, around two hundred and sixty thousand, 25 00:01:34,400 --> 00:01:37,080 Speaker 4: So you know, initial jobless claims are running about two 26 00:01:37,120 --> 00:01:41,120 Speaker 4: hundred and forty right now, and I would just say that, 27 00:01:41,560 --> 00:01:45,200 Speaker 4: you know, look, I mean anecdotally, it's really hard to 28 00:01:45,680 --> 00:01:50,400 Speaker 4: think that the labor markets are fine. Just look at 29 00:01:50,440 --> 00:01:55,800 Speaker 4: the last week Microsoft, Disney, and Procter and Gamble announcing 30 00:01:56,160 --> 00:01:59,800 Speaker 4: meaningful layoffs. I mean, if every company is restructuring at 31 00:01:59,800 --> 00:02:03,800 Speaker 4: this same time, that becomes the macroeconomic issue. So I 32 00:02:03,840 --> 00:02:06,200 Speaker 4: do think that not only are layoffs going up, but 33 00:02:06,240 --> 00:02:09,600 Speaker 4: what's more important is that the job finding rate is 34 00:02:09,680 --> 00:02:13,840 Speaker 4: really really weak, and so that means that the well 35 00:02:13,880 --> 00:02:16,639 Speaker 4: of unemployment will continue to build, you know, at least 36 00:02:16,680 --> 00:02:17,920 Speaker 4: over the foreseeable future. 37 00:02:18,320 --> 00:02:21,000 Speaker 5: Amia, We've now all had about twenty four hours to 38 00:02:21,120 --> 00:02:24,400 Speaker 5: digest at ISM data yesterday. I kind of feel like 39 00:02:25,240 --> 00:02:27,440 Speaker 5: yesterday may prove to be an important day. We had 40 00:02:27,440 --> 00:02:32,959 Speaker 5: the services INDEXICO into a contraction area. We had prices 41 00:02:33,080 --> 00:02:37,799 Speaker 5: paid surge, we had new orders really really declined well 42 00:02:37,800 --> 00:02:41,560 Speaker 5: below fifty. How do you put all that together yesterday. 43 00:02:44,320 --> 00:02:46,359 Speaker 4: Well, I mean it's true that the ISM does get 44 00:02:46,400 --> 00:02:50,480 Speaker 4: a lot of weight in the marketplace, but it's also 45 00:02:50,520 --> 00:02:56,440 Speaker 4: important to remember that, you know, the there are multiple 46 00:02:56,440 --> 00:02:58,360 Speaker 4: ways to kind of skin the cat if you were 47 00:02:58,400 --> 00:03:00,880 Speaker 4: in business economics. Right, So we got a pretty soggy 48 00:03:00,880 --> 00:03:04,519 Speaker 4: ISM services number, but we've got a very strong SMP 49 00:03:04,800 --> 00:03:09,840 Speaker 4: Global Services PMI, right, And it's important to kind of 50 00:03:09,880 --> 00:03:14,120 Speaker 4: look under the hood and see what's driving these indicators. 51 00:03:14,240 --> 00:03:14,440 Speaker 6: Right. 52 00:03:14,560 --> 00:03:17,000 Speaker 4: So you know, the ISM services, believe it or not, 53 00:03:17,760 --> 00:03:21,200 Speaker 4: has a goods producing tint to it, right, So it 54 00:03:21,280 --> 00:03:27,800 Speaker 4: includes things like mining, utilities, construction, agriculture that's in the 55 00:03:27,840 --> 00:03:31,240 Speaker 4: ISM services number, right, those are companies that are surveyed 56 00:03:31,520 --> 00:03:34,760 Speaker 4: by ISM. The SMP Global is more of a pure 57 00:03:34,840 --> 00:03:37,360 Speaker 4: services indicator, I would argue, and it has a larger 58 00:03:38,120 --> 00:03:40,839 Speaker 4: sample size. So it's not immediately clear to me that 59 00:03:40,920 --> 00:03:43,040 Speaker 4: services are falling off of a cliff in the way 60 00:03:43,080 --> 00:03:46,440 Speaker 4: that the ISM is is implying. And you kind of 61 00:03:46,480 --> 00:03:48,360 Speaker 4: just have to take all of these things sort of 62 00:03:48,840 --> 00:03:52,880 Speaker 4: on board and put it into your process and just 63 00:03:52,960 --> 00:03:57,760 Speaker 4: adjust accordingly. You know, the ISM tends to be more volatile. 64 00:03:57,840 --> 00:04:00,839 Speaker 4: I mean, it's dip below fifty. Previously you know back 65 00:04:00,840 --> 00:04:03,800 Speaker 4: in late late twenty twenty two. So you know, I 66 00:04:03,880 --> 00:04:07,360 Speaker 4: just tomorrow is going to be more definitive, right, I mean, 67 00:04:07,440 --> 00:04:10,360 Speaker 4: whatever happened with the job's number that offsets everything else 68 00:04:10,400 --> 00:04:12,240 Speaker 4: for the week, And sure you know that's sort of 69 00:04:12,360 --> 00:04:14,600 Speaker 4: I'm thinking about it. I mean, it's it's interesting to 70 00:04:14,680 --> 00:04:17,200 Speaker 4: see some of these data points kind of stacking up 71 00:04:17,240 --> 00:04:19,080 Speaker 4: in a more negative direction. And I will tell your 72 00:04:19,120 --> 00:04:22,720 Speaker 4: audience that surprises tend to line up in the same direction. Right, 73 00:04:22,760 --> 00:04:25,839 Speaker 4: So if you get a week ADP a week ism, 74 00:04:25,920 --> 00:04:27,960 Speaker 4: you know that that tends to build up, you know, 75 00:04:28,080 --> 00:04:32,280 Speaker 4: sort of towards the job's number. But ultimately the job's 76 00:04:32,320 --> 00:04:33,400 Speaker 4: number will settle the score. 77 00:04:33,480 --> 00:04:36,240 Speaker 3: We continue with Neil Dota of Renmack, my Economists of 78 00:04:36,279 --> 00:04:39,359 Speaker 3: the Year a few years ago. Brilliant optimism amid the 79 00:04:39,400 --> 00:04:41,000 Speaker 3: COVID gloom. 80 00:04:41,080 --> 00:04:41,719 Speaker 2: A little more. 81 00:04:41,600 --> 00:04:44,440 Speaker 3: Cautious maybe here over the last at twelve months. We 82 00:04:44,520 --> 00:04:47,360 Speaker 3: welcome all of you on your commute across America. Good morning, 83 00:04:47,680 --> 00:04:50,240 Speaker 3: an Apple car play? Is that the way you roll. 84 00:04:50,279 --> 00:04:51,360 Speaker 2: In your in your bamily? 85 00:04:51,560 --> 00:04:54,520 Speaker 3: Sure you got the Apple car play? Going Android Auto 86 00:04:54,600 --> 00:04:58,359 Speaker 3: out with some new software. Congratulations Google on improving Android 87 00:04:58,440 --> 00:05:02,960 Speaker 3: Auto each and every day. YouTube subscribe to Bloomberg Podcast. 88 00:05:03,200 --> 00:05:06,159 Speaker 3: It's the way Neil Dutta partakes in what we do 89 00:05:06,279 --> 00:05:10,080 Speaker 3: here each and every day, claims in sixteen minutes, Paul. 90 00:05:10,560 --> 00:05:14,479 Speaker 5: Neil, the consumer. How's the consumer doing out there? We 91 00:05:14,560 --> 00:05:19,120 Speaker 5: understand there's kind of a bifurcated consumer. Just how do 92 00:05:19,160 --> 00:05:22,240 Speaker 5: you kind of think about the US consumer going forward here? 93 00:05:23,240 --> 00:05:24,839 Speaker 4: Well, Paul, as you know, I mean, I think the 94 00:05:24,880 --> 00:05:29,960 Speaker 4: bifurcated consumer is like a constant trope on Wall Street, 95 00:05:30,080 --> 00:05:32,200 Speaker 4: k shaped. I mean, the high ends doing well as 96 00:05:32,240 --> 00:05:34,320 Speaker 4: if that's not always the case. I mean, it's sort 97 00:05:34,320 --> 00:05:37,920 Speaker 4: of I think it's kind of senseless to keep talking 98 00:05:37,960 --> 00:05:40,960 Speaker 4: about it that way. You know, Ultimately, the story about 99 00:05:41,000 --> 00:05:44,960 Speaker 4: the consumer is one of declining real incomes or slowing 100 00:05:45,000 --> 00:05:51,880 Speaker 4: real incomes and limited savings to cushion themselves from potential shocks. Right, 101 00:05:51,960 --> 00:05:56,520 Speaker 4: So that's the main story. Last year you had about 102 00:05:56,720 --> 00:05:58,800 Speaker 4: you know, maybe three percent growth, a little over three 103 00:05:58,839 --> 00:06:01,359 Speaker 4: percent growth and real conser or spending, which is a 104 00:06:01,440 --> 00:06:04,920 Speaker 4: very strong number. But that was despite real incomes then 105 00:06:04,960 --> 00:06:07,200 Speaker 4: of transfers growing at about one and a half percent. 106 00:06:07,279 --> 00:06:09,560 Speaker 4: So in other words, consumption grew twice as fast a 107 00:06:09,680 --> 00:06:14,120 Speaker 4: real incomes excluding transfers. That means that people drew down 108 00:06:14,160 --> 00:06:18,440 Speaker 4: their savings to jolt their consumption over the last twelve months. 109 00:06:18,520 --> 00:06:21,000 Speaker 4: So even if you assume the savings rate is stable, 110 00:06:21,120 --> 00:06:24,360 Speaker 4: given the ongoing weakness in the labor market, you should 111 00:06:24,360 --> 00:06:27,800 Speaker 4: expect to see consumption slowing at a minimum towards the 112 00:06:27,880 --> 00:06:30,880 Speaker 4: growth and incomes assuming a stable savings rate. So that's 113 00:06:30,920 --> 00:06:33,960 Speaker 4: what we expect, and that means that consumer spending is 114 00:06:34,000 --> 00:06:37,560 Speaker 4: probably growing, you know, maybe one and a half percent, 115 00:06:38,040 --> 00:06:43,080 Speaker 4: probably worse. And you know that on a trend basis, 116 00:06:43,160 --> 00:06:46,480 Speaker 4: and that is you know, consistent with below potential growth. 117 00:06:46,560 --> 00:06:49,040 Speaker 3: So get to get away from the Atlanta GDP number, 118 00:06:49,160 --> 00:06:53,320 Speaker 3: which is a present snampshot. You're migrate neal data from 119 00:06:53,360 --> 00:06:55,320 Speaker 3: a three and a half four percent. 120 00:06:55,320 --> 00:06:59,680 Speaker 2: OMG Atlanta GDP number down to something a lot more tepid. 121 00:06:59,720 --> 00:07:01,640 Speaker 2: Is that right? Yeah? 122 00:07:01,680 --> 00:07:04,280 Speaker 4: I mean I think the Atlanta Fed numbers overstating the 123 00:07:04,920 --> 00:07:06,880 Speaker 4: health of the economy. I mean there's a lot of 124 00:07:06,960 --> 00:07:10,080 Speaker 4: kind of you know, how much building is coming from 125 00:07:10,160 --> 00:07:13,000 Speaker 4: the first quarter? I mean, how is this? I mean, remember, 126 00:07:13,000 --> 00:07:17,160 Speaker 4: the Atlanta Fed is not a pure GDP bean count, right, 127 00:07:17,160 --> 00:07:21,600 Speaker 4: because it includes survey data like ism services, not manufacturing 128 00:07:21,640 --> 00:07:24,960 Speaker 4: for example. You know, That's why I say, I mean, 129 00:07:24,960 --> 00:07:27,680 Speaker 4: if you focus on the labor markets, it gives you 130 00:07:27,720 --> 00:07:30,480 Speaker 4: the sort of cleanest picture in terms of what underlying 131 00:07:30,520 --> 00:07:32,840 Speaker 4: GDP is doing, if you just look at total hours worked. 132 00:07:33,800 --> 00:07:36,280 Speaker 4: So I think when you look at it that way, 133 00:07:36,440 --> 00:07:40,080 Speaker 4: I mean, you're really talking about an economy that's that's 134 00:07:40,120 --> 00:07:43,440 Speaker 4: growing below potential, and that'll mean upward pressure on the 135 00:07:43,520 --> 00:07:44,760 Speaker 4: unemployment rate over time. 136 00:07:44,920 --> 00:07:48,560 Speaker 2: One final question, it's just as simple as this, did the. 137 00:07:48,480 --> 00:07:52,480 Speaker 3: FEDS mandate shift yesterday at eight fifteen or at eight 138 00:07:52,600 --> 00:07:55,840 Speaker 3: thirty this morning? Or with a vengeance, will it shift 139 00:07:55,840 --> 00:07:57,720 Speaker 3: at eight thirty one tomorrow? 140 00:08:00,160 --> 00:08:03,240 Speaker 4: Well, I definitely think that there is a you know, 141 00:08:03,280 --> 00:08:06,160 Speaker 4: the FED has a modest dubbish bias. I mean if 142 00:08:06,160 --> 00:08:10,280 Speaker 4: you look at their performance over the last number of years, 143 00:08:10,440 --> 00:08:13,400 Speaker 4: and so, you know, my sense is that once the 144 00:08:13,480 --> 00:08:19,240 Speaker 4: labor market begins to crack, they'll sort of stop worrying 145 00:08:19,280 --> 00:08:24,040 Speaker 4: about inflation and start worrying about growth. And so, you know, 146 00:08:24,160 --> 00:08:27,320 Speaker 4: given the way they're set up, he sort of needs 147 00:08:27,360 --> 00:08:30,000 Speaker 4: to see that before they can kind of pivot. But 148 00:08:30,040 --> 00:08:33,400 Speaker 4: that's ultimately what I believe is. So if you continue 149 00:08:33,400 --> 00:08:36,440 Speaker 4: to see weaker sort of employment data, you know, the 150 00:08:36,480 --> 00:08:39,280 Speaker 4: Fed will will sort of stop paying attention to what's 151 00:08:39,280 --> 00:08:42,960 Speaker 4: going on with inflation and kind of, you know, capitulate 152 00:08:43,080 --> 00:08:43,520 Speaker 4: in a way. 153 00:08:43,720 --> 00:08:46,600 Speaker 2: Yeah, thank you, dear Doughter. Greatly appreciated from right back. 154 00:08:46,640 --> 00:08:53,320 Speaker 2: Thank you. 155 00:08:53,320 --> 00:08:56,920 Speaker 1: You're listening to the Bloomberg Surveillance Podcast. Catch us live 156 00:08:56,960 --> 00:09:00,160 Speaker 1: weekday afternoons from seven to ten am Easter and on 157 00:09:00,240 --> 00:09:03,880 Speaker 1: Applecarplay and Android Auto with the Bloomberg Business app, or 158 00:09:04,040 --> 00:09:05,960 Speaker 1: watch us Live on YouTube. 159 00:09:05,760 --> 00:09:08,280 Speaker 3: To have an informed conversation here we could do that 160 00:09:08,360 --> 00:09:12,440 Speaker 3: with a panache. Vishtaperture joins us in, a chief fixed 161 00:09:12,440 --> 00:09:14,800 Speaker 3: income strategist at Morgan Stanley. 162 00:09:15,160 --> 00:09:16,040 Speaker 2: Totally unfair. 163 00:09:16,400 --> 00:09:18,679 Speaker 3: I'm mean I asked the first, you know, the first 164 00:09:18,760 --> 00:09:26,600 Speaker 3: question that matters is a disinflation lower yield vector. Is 165 00:09:26,640 --> 00:09:27,520 Speaker 3: it in place? 166 00:09:27,679 --> 00:09:29,800 Speaker 2: Still? Do you do we just have the. 167 00:09:29,760 --> 00:09:33,240 Speaker 3: Basic idea of a structural move to a lower rate 168 00:09:33,320 --> 00:09:36,040 Speaker 3: regime or have you shifted on that? 169 00:09:37,520 --> 00:09:41,800 Speaker 7: So we think it's a complicated picture, Tom, and good morning, 170 00:09:41,880 --> 00:09:42,880 Speaker 7: and thanks for having me on. 171 00:09:43,920 --> 00:09:46,240 Speaker 6: I think it's a complicated picture. 172 00:09:46,559 --> 00:09:51,240 Speaker 7: We have a view that the inflation in the immediate future, 173 00:09:51,360 --> 00:09:54,280 Speaker 7: so the third quarter of this year, we will actually 174 00:09:54,360 --> 00:09:58,320 Speaker 7: see inflation spiking as a consequence of once the effect 175 00:09:58,360 --> 00:10:01,280 Speaker 7: of tariff's really begs to show up, we expect the 176 00:10:01,440 --> 00:10:04,080 Speaker 7: code PC infation to get to you know, four and 177 00:10:04,080 --> 00:10:07,760 Speaker 7: a half five percent by third quarter, and that prevents 178 00:10:07,800 --> 00:10:10,120 Speaker 7: the ability of the FED to be able to cut 179 00:10:10,160 --> 00:10:14,200 Speaker 7: this year. So unlike what the market is pricing today, 180 00:10:14,320 --> 00:10:16,720 Speaker 7: market is pricing in litt lower two cuts in this year. 181 00:10:17,120 --> 00:10:20,080 Speaker 7: We are expecting no cuts this year, and market is 182 00:10:20,120 --> 00:10:23,400 Speaker 7: pricing roughly between two and three cuts next year. Would 183 00:10:23,400 --> 00:10:25,400 Speaker 7: think there will be a lot more cuts next year. 184 00:10:25,679 --> 00:10:28,959 Speaker 7: We're expecting seven rate cuts next year. So the picture 185 00:10:29,000 --> 00:10:33,160 Speaker 7: is a bit more complicated. I think that the right 186 00:10:33,240 --> 00:10:37,480 Speaker 7: so cutting all the way down to five. So we 187 00:10:37,559 --> 00:10:40,880 Speaker 7: are our expectation of where the profit rate is lower, 188 00:10:41,760 --> 00:10:44,120 Speaker 7: but the timing is quite a bit different than what 189 00:10:44,240 --> 00:10:45,160 Speaker 7: the market is currently. 190 00:10:45,800 --> 00:10:48,200 Speaker 5: No rate cuts this year, seven next year. These Morkings 191 00:10:48,200 --> 00:10:51,120 Speaker 5: Stanley guys are always turn up trouble. They are anti 192 00:10:51,200 --> 00:10:53,560 Speaker 5: corid census calls vishy. So what do we do in 193 00:10:53,600 --> 00:10:56,440 Speaker 5: the backdrop there? I mean, I'm looking at the two 194 00:10:56,520 --> 00:10:59,320 Speaker 5: year We're now well below four percent. I got my 195 00:11:00,080 --> 00:11:03,160 Speaker 5: ten year we're down to four thirty two. How do 196 00:11:03,200 --> 00:11:05,600 Speaker 5: you play the trade free market at this point? 197 00:11:06,720 --> 00:11:09,520 Speaker 7: So what we are suggesting really is a steepeners are 198 00:11:09,559 --> 00:11:11,079 Speaker 7: still our trade. 199 00:11:11,280 --> 00:11:13,080 Speaker 6: We do expect steepening to occur. 200 00:11:14,160 --> 00:11:19,240 Speaker 8: We think that the maybe the at the moment, tactically 201 00:11:19,320 --> 00:11:21,000 Speaker 8: we would be neutral on duration. 202 00:11:21,240 --> 00:11:24,280 Speaker 7: But we think we will around the As we go 203 00:11:24,320 --> 00:11:27,080 Speaker 7: towards the end of the year, the market will begin 204 00:11:27,120 --> 00:11:29,440 Speaker 7: to price in that the Fed will cut a lot 205 00:11:29,480 --> 00:11:32,080 Speaker 7: more because the conditions for the Fed to cut, in 206 00:11:32,120 --> 00:11:36,200 Speaker 7: our minds are inflation should not be going higher. Inflation 207 00:11:36,280 --> 00:11:40,280 Speaker 7: should be should begin to show signs of slowing, which 208 00:11:40,280 --> 00:11:43,080 Speaker 7: we expect to happen early part of next year. We 209 00:11:43,160 --> 00:11:47,240 Speaker 7: also think that the race at the pace of huge 210 00:11:47,320 --> 00:11:49,319 Speaker 7: opportion will slow substantially. 211 00:11:49,559 --> 00:11:52,600 Speaker 3: Visitaria fortuur us, we will continue. We are two minutes 212 00:11:52,600 --> 00:11:56,840 Speaker 3: away from suddenly an interesting claims number. The two sets, 213 00:11:56,880 --> 00:12:01,200 Speaker 3: the actual claims number with the revisions and those continuing 214 00:12:01,280 --> 00:12:03,480 Speaker 3: claims which made news last week. 215 00:12:03,600 --> 00:12:07,160 Speaker 5: Paul visciually given kind of your interest rate outlook and 216 00:12:07,559 --> 00:12:09,839 Speaker 5: some of the economic concertainty that that's out there, certainly 217 00:12:09,840 --> 00:12:12,320 Speaker 5: as it relates to growth into inflation, we had some 218 00:12:12,800 --> 00:12:16,400 Speaker 5: startling data yesterday. Credit risk talk to us how you 219 00:12:16,440 --> 00:12:18,600 Speaker 5: talk to your clients about credit risk? 220 00:12:19,679 --> 00:12:19,880 Speaker 6: Sure? 221 00:12:19,920 --> 00:12:24,240 Speaker 7: Yeah, I would say reasonably constructive on credit in a way, 222 00:12:24,320 --> 00:12:25,800 Speaker 7: you know, with the way I would look at it 223 00:12:25,840 --> 00:12:29,320 Speaker 7: is that we are calling for a meaningful slowdown in growth, 224 00:12:29,480 --> 00:12:32,199 Speaker 7: but we are not calling for a our base case 225 00:12:32,559 --> 00:12:35,080 Speaker 7: that's not called for a recession in the United States. 226 00:12:35,320 --> 00:12:38,400 Speaker 7: So we go from two and a half percent growth 227 00:12:38,520 --> 00:12:41,800 Speaker 7: in twenty twenty four to one percent growth in twenty five. 228 00:12:42,960 --> 00:12:46,080 Speaker 7: With twenty six and if you look at the credit fundamentals, 229 00:12:46,360 --> 00:12:50,320 Speaker 7: the credit fundamentals enter this cycle at this point in 230 00:12:50,360 --> 00:12:54,640 Speaker 7: a pretty healthy stage. So if you look at leverage metrics, 231 00:12:54,880 --> 00:12:59,200 Speaker 7: you look at interest coverage metrics, look, they don't look elevated, 232 00:12:59,200 --> 00:13:02,360 Speaker 7: they don't show hows of excessive credit risk taking. 233 00:13:02,800 --> 00:13:06,480 Speaker 6: Also, the you know we are you know we are. 234 00:13:06,559 --> 00:13:10,120 Speaker 7: If you look at the rate of upgrades downgrades, it's 235 00:13:10,360 --> 00:13:12,880 Speaker 7: stured much more in favor of upgrades. 236 00:13:15,120 --> 00:13:16,800 Speaker 6: So you put all these things together, you. 237 00:13:16,800 --> 00:13:19,920 Speaker 7: Add some more fun you know, technical factors such as 238 00:13:19,960 --> 00:13:24,439 Speaker 7: the emergence of the yield total yield based buyer, you 239 00:13:24,880 --> 00:13:28,319 Speaker 7: have a reasonably constructive outlook for high quality credit. 240 00:13:28,559 --> 00:13:31,520 Speaker 3: Officially, I look at the ten year inflation to justin yield. 241 00:13:31,520 --> 00:13:33,439 Speaker 3: I know there's a number of ways to look at it, 242 00:13:33,960 --> 00:13:37,640 Speaker 3: but the answer is that real yield is coming in. 243 00:13:38,320 --> 00:13:40,120 Speaker 2: Is that constructive for the FED? 244 00:13:40,559 --> 00:13:43,160 Speaker 3: Or is that the horse before the cart getting out 245 00:13:43,160 --> 00:13:45,079 Speaker 3: in front of rake cuts? 246 00:13:45,800 --> 00:13:49,559 Speaker 7: So I think it is this quite doesn't reflect the 247 00:13:49,600 --> 00:13:54,120 Speaker 7: effect of higher tariffs showing up in the inflation numbers yet. 248 00:13:54,280 --> 00:13:56,280 Speaker 7: So when we when we start seeing the numbers, which 249 00:13:56,280 --> 00:13:59,360 Speaker 7: we expect starting, you know, as soon as in this quarter, 250 00:13:59,440 --> 00:14:02,560 Speaker 7: the next month numbers should begin to reflect the effect 251 00:14:02,640 --> 00:14:05,440 Speaker 7: of the tariffs, So tarifs will be a pass through. 252 00:14:05,760 --> 00:14:08,560 Speaker 7: So we, as I said earlier, we expect to get 253 00:14:08,559 --> 00:14:11,880 Speaker 7: the core PC numbers, the inflation levels that the FED 254 00:14:11,920 --> 00:14:14,600 Speaker 7: cares about to get to four and a half five 255 00:14:14,600 --> 00:14:17,440 Speaker 7: percent on an annualized basis, the temal number, you know, 256 00:14:17,480 --> 00:14:20,480 Speaker 7: the month number numbers annualized basis to four and a 257 00:14:20,480 --> 00:14:24,560 Speaker 7: half five percent, which will we expect to happen sometimes 258 00:14:24,560 --> 00:14:26,560 Speaker 7: towards the end of third quarter, you know. 259 00:14:26,760 --> 00:14:31,080 Speaker 8: And that's uh. I think some of these uh. 260 00:14:30,560 --> 00:14:32,960 Speaker 7: You know that really prevent the you know, the sort 261 00:14:32,960 --> 00:14:38,480 Speaker 7: of binds the right answer the fat for cutting this year, VIC. 262 00:14:38,760 --> 00:14:41,320 Speaker 5: We we've got our friends down in Washington, DC trying 263 00:14:41,320 --> 00:14:43,720 Speaker 5: to pass some tax legislation and I don't know whatever 264 00:14:43,800 --> 00:14:47,040 Speaker 5: version you're looking at, it looks like they're penciling in 265 00:14:47,120 --> 00:14:50,000 Speaker 5: a big increase into you know, the deficits and debt. 266 00:14:50,320 --> 00:14:52,440 Speaker 5: Does your bond market does it care anymore? 267 00:14:54,280 --> 00:14:57,360 Speaker 7: I think it maybe maybe maybe the bond market doesn't 268 00:14:57,400 --> 00:14:59,880 Speaker 7: care about the projections for the ten year time for 269 00:15:00,160 --> 00:15:02,760 Speaker 7: because I think the bond market does care what the 270 00:15:02,840 --> 00:15:05,160 Speaker 7: near term is going to be. So we would have 271 00:15:05,200 --> 00:15:08,440 Speaker 7: said that the one year twenty what happens in twenty 272 00:15:08,480 --> 00:15:12,880 Speaker 7: twenty six, what would be the issuance requirements, what will 273 00:15:12,960 --> 00:15:16,000 Speaker 7: be the composition of that that issuance bond market does 274 00:15:16,040 --> 00:15:16,640 Speaker 7: care about that. 275 00:15:17,000 --> 00:15:19,640 Speaker 6: But I think where we are thinking. 276 00:15:19,520 --> 00:15:23,360 Speaker 7: Is that the the Frescolympetus coming out of this for 277 00:15:23,480 --> 00:15:28,280 Speaker 7: the next next year, amount of deficit edition is not 278 00:15:28,480 --> 00:15:30,920 Speaker 7: It's going to be a roughly three hundred billion, is 279 00:15:30,920 --> 00:15:33,120 Speaker 7: what we are That's the number we are canceling in. 280 00:15:33,600 --> 00:15:35,880 Speaker 7: I think that's that is something the market. 281 00:15:36,840 --> 00:15:39,400 Speaker 3: Vishi, thank you so much, really appreciate it. With Morgan 282 00:15:39,480 --> 00:15:42,080 Speaker 3: Stanley and as Paul mentioned, the idea of seven cuts 283 00:15:42,400 --> 00:15:45,680 Speaker 3: in twenty twenty six, stop the show. There vis tier 284 00:15:45,760 --> 00:15:49,480 Speaker 3: porture again fixed income with Morgan Stanley. 285 00:15:49,920 --> 00:15:53,800 Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday 286 00:15:53,880 --> 00:15:56,840 Speaker 1: starting at seven am Eastern on Apple Corplay and Android 287 00:15:56,880 --> 00:15:59,880 Speaker 1: Auto with the Bloomberg Business App. You can also listen 288 00:16:00,120 --> 00:16:03,280 Speaker 1: live on Amazon Alexa from our flagship New York station, 289 00:16:03,840 --> 00:16:06,480 Speaker 1: Just Say Alexa Play Bloomberg eleven thirty. 290 00:16:07,040 --> 00:16:10,320 Speaker 3: Julia carnetto right Now, Micro policy perspectives. 291 00:16:10,680 --> 00:16:13,000 Speaker 2: Julia, I thought we were going to walk through the interview. 292 00:16:13,280 --> 00:16:18,120 Speaker 3: Not incredible amount of information off the dual mandate. 293 00:16:19,000 --> 00:16:20,760 Speaker 2: If labor breaks. 294 00:16:20,720 --> 00:16:26,240 Speaker 3: Weaker, but we get some form of tariff inflation. As 295 00:16:26,280 --> 00:16:30,840 Speaker 3: a general statement, every study I've ever seen is they're 296 00:16:30,880 --> 00:16:36,080 Speaker 3: going to side on the inflation decision. Are they really 297 00:16:36,120 --> 00:16:38,680 Speaker 3: going to decide on the labor economy? I don't buy it. 298 00:16:40,280 --> 00:16:43,840 Speaker 9: Well, it really depends, as Chair Powell has said, on 299 00:16:44,000 --> 00:16:48,120 Speaker 9: the magnitude of the miss relative to their mandate. So 300 00:16:48,840 --> 00:16:51,640 Speaker 9: right now we're starting from a point where we're at 301 00:16:51,680 --> 00:16:56,640 Speaker 9: their full employment mandate by almost every metric, and we're 302 00:16:56,680 --> 00:16:59,120 Speaker 9: still missing and as Powell said, we've been missing for 303 00:16:59,160 --> 00:17:02,600 Speaker 9: four years their inflation mandate. So yes, in the near 304 00:17:02,760 --> 00:17:07,000 Speaker 9: term they are going to lean on the inflation mandate, 305 00:17:07,080 --> 00:17:10,479 Speaker 9: hold their fire on rate cuts, and wait and see 306 00:17:10,720 --> 00:17:14,719 Speaker 9: as we navigate through this tariff shock, which you know 307 00:17:15,320 --> 00:17:18,960 Speaker 9: very very likely will boost inflation at least in the 308 00:17:19,000 --> 00:17:20,800 Speaker 9: near term. Even if it does turn out to be 309 00:17:20,840 --> 00:17:23,880 Speaker 9: a one time change in prices, They're going to want 310 00:17:23,880 --> 00:17:27,720 Speaker 9: to verify that trust. But verify means so that means 311 00:17:27,760 --> 00:17:30,440 Speaker 9: that the labor market has to really get a lot 312 00:17:30,560 --> 00:17:35,959 Speaker 9: weaker and look quite recessionary, okay, before they cut rates. 313 00:17:36,160 --> 00:17:39,840 Speaker 3: Tomorrow's jobs report at eight thirty, is that going to 314 00:17:39,880 --> 00:17:43,680 Speaker 3: deliver quote a lot weaker No. 315 00:17:43,640 --> 00:17:45,400 Speaker 9: I don't expect so. I mean we have a one 316 00:17:45,440 --> 00:17:48,879 Speaker 9: hundred and fifteen k on non farm payrolls. That's a slowdown, 317 00:17:49,000 --> 00:17:52,240 Speaker 9: but sort of a gradual one. And tom the complicating 318 00:17:52,320 --> 00:17:56,199 Speaker 9: factor in interpreting payrolls in the next six months is 319 00:17:56,280 --> 00:18:00,000 Speaker 9: going to be that we are implementing very drastically reared 320 00:18:00,080 --> 00:18:06,080 Speaker 9: strictive immigration policy, and that in economic NERD terms, lowers 321 00:18:06,160 --> 00:18:09,600 Speaker 9: the potential growth rate of the labor market and GDP. 322 00:18:10,240 --> 00:18:13,119 Speaker 9: We should expect to see less hiring because there is 323 00:18:13,240 --> 00:18:16,760 Speaker 9: less labor supply. That is not a that's a sort 324 00:18:16,760 --> 00:18:19,840 Speaker 9: of structural feature that it's not up to the Fed 325 00:18:19,880 --> 00:18:23,399 Speaker 9: to offset with stimulus. So if we choose as a 326 00:18:23,480 --> 00:18:27,000 Speaker 9: nation to have fewer immigrants, then we will have less GDP. 327 00:18:27,119 --> 00:18:30,439 Speaker 9: Growth and less non farm payrolls. That so we're going 328 00:18:30,520 --> 00:18:32,840 Speaker 9: to have to really look at the unemployment rate as 329 00:18:32,840 --> 00:18:36,280 Speaker 9: the arbiter of Okay, we're seeing a slowdown in hiring, 330 00:18:37,080 --> 00:18:39,760 Speaker 9: but are we seeing the unemployment rate rise? And I 331 00:18:39,800 --> 00:18:42,159 Speaker 9: don't expect. I have the unemployment rate holding it for 332 00:18:42,320 --> 00:18:46,080 Speaker 9: two which is still, you know, quite low by historical standards. 333 00:18:46,880 --> 00:18:49,560 Speaker 5: Joeya looking back on yesterday's ISM data, I guess the 334 00:18:49,600 --> 00:18:53,080 Speaker 5: headline was the services in next dipped below fifty, suggesting 335 00:18:53,119 --> 00:18:55,879 Speaker 5: that maybe the service's economy against seventy percent of the 336 00:18:55,960 --> 00:18:58,520 Speaker 5: US economy, might be contracting. But you also had some 337 00:18:58,600 --> 00:19:03,560 Speaker 5: data showing I don't know, new orders plunging, prices paid 338 00:19:04,000 --> 00:19:06,520 Speaker 5: kind of surging here. And then you look at today's 339 00:19:07,520 --> 00:19:09,800 Speaker 5: initial job as claims that it came in higher than expected. 340 00:19:09,840 --> 00:19:12,640 Speaker 5: Are we starting to finally see in the hard data 341 00:19:13,160 --> 00:19:15,240 Speaker 5: some of the uncertainty that's been unleashed by some of 342 00:19:15,280 --> 00:19:16,400 Speaker 5: this tariff discussion. 343 00:19:17,400 --> 00:19:20,480 Speaker 9: Yes, I think the answer is a decisive yes to that. 344 00:19:20,960 --> 00:19:24,160 Speaker 9: All of the April data came in soft. We saw 345 00:19:24,240 --> 00:19:27,359 Speaker 9: decline in core retail sales, we saw decline in core 346 00:19:27,440 --> 00:19:30,760 Speaker 9: capital goods orders, we saw decline in auto sales. 347 00:19:30,800 --> 00:19:31,760 Speaker 10: In April and May. 348 00:19:32,880 --> 00:19:36,119 Speaker 9: In the trade data that we got this morning, the 349 00:19:36,160 --> 00:19:41,040 Speaker 9: detailed report, we are seeing confirmation that a lot of 350 00:19:41,080 --> 00:19:44,520 Speaker 9: the demand we saw in Q one was pull forward 351 00:19:44,560 --> 00:19:46,880 Speaker 9: ahead of tariffs, which means that we're in for a 352 00:19:46,960 --> 00:19:51,199 Speaker 9: pothole in final demand in Q two. So yeah, I 353 00:19:51,200 --> 00:19:54,960 Speaker 9: think we are seeing confirmation that number one, people did 354 00:19:55,000 --> 00:19:59,000 Speaker 9: a lot of buying and spending ahead of tariffs. So 355 00:19:59,320 --> 00:20:01,320 Speaker 9: for example, one thing we got in the trade report 356 00:20:01,359 --> 00:20:06,679 Speaker 9: today was a drop in technology imports. That was something 357 00:20:06,720 --> 00:20:10,240 Speaker 9: that had really boosted investment in Q one. That will 358 00:20:10,240 --> 00:20:13,600 Speaker 9: be a decline in Q two. So there's a little 359 00:20:13,600 --> 00:20:16,960 Speaker 9: bit too much. I think hopium built in that data 360 00:20:17,000 --> 00:20:19,520 Speaker 9: centers can save the economy, and I don't. 361 00:20:19,320 --> 00:20:19,800 Speaker 6: Think they can. 362 00:20:20,080 --> 00:20:23,200 Speaker 3: Just so you understand, they don't have Hopium in college station. 363 00:20:23,359 --> 00:20:25,480 Speaker 2: Now they have hope in Austin. 364 00:20:25,600 --> 00:20:29,200 Speaker 5: Just so, Julia, this once again, I guess I'll ask 365 00:20:29,240 --> 00:20:32,359 Speaker 5: it this way. Does this once again raise aspector that 366 00:20:32,359 --> 00:20:33,440 Speaker 5: this FED will be too late? 367 00:20:35,480 --> 00:20:37,679 Speaker 9: I mean, I think that the FED is constrained so 368 00:20:37,920 --> 00:20:42,720 Speaker 9: too late. Uh, you know, when we are making policy 369 00:20:42,960 --> 00:20:49,480 Speaker 9: choices to kind of make the monetary and fiscal trade 370 00:20:49,480 --> 00:20:53,680 Speaker 9: offs worse, right, so we are choosing to expand the deficit. 371 00:20:53,720 --> 00:20:56,760 Speaker 9: We are choosing to restrict immigration, we are choosing to 372 00:20:56,800 --> 00:21:00,240 Speaker 9: instigate a trade war. All of this makes monitor Harry 373 00:21:00,280 --> 00:21:02,760 Speaker 9: trade offs worse. That's not the Fed's fault. They didn't 374 00:21:02,760 --> 00:21:05,880 Speaker 9: make these choices. So are they going to be late? Well, 375 00:21:05,960 --> 00:21:09,520 Speaker 9: they have to make sure. They don't know right now. 376 00:21:09,560 --> 00:21:12,399 Speaker 9: Will the labor market stay resilient. We should certainly have 377 00:21:12,520 --> 00:21:15,520 Speaker 9: seen that in the last few years. Will we actually 378 00:21:15,520 --> 00:21:18,359 Speaker 9: see the burst of inflation? They're going to just have 379 00:21:18,520 --> 00:21:21,840 Speaker 9: to calibrate on the data. There's so many possible scenarios 380 00:21:21,880 --> 00:21:22,800 Speaker 9: from here. 381 00:21:23,000 --> 00:21:24,879 Speaker 2: Julia quick and you're just perfect for this. 382 00:21:25,359 --> 00:21:29,560 Speaker 3: We see Canada terrible exports to America, and then there's 383 00:21:29,560 --> 00:21:31,960 Speaker 3: a sentence by CIBC that they made it up with 384 00:21:32,000 --> 00:21:35,240 Speaker 3: buoyant exports to UK and China. Do you buy the 385 00:21:35,400 --> 00:21:40,160 Speaker 3: idea all of these troubled nations can find other venues 386 00:21:40,280 --> 00:21:42,720 Speaker 3: for their exports if we shut the door. 387 00:21:44,320 --> 00:21:47,240 Speaker 9: I mean they're going to have to find other venues. 388 00:21:48,240 --> 00:21:50,640 Speaker 9: I don't think that that's going to be a perfect 389 00:21:50,760 --> 00:21:53,439 Speaker 9: offset because the US has been the driver of the 390 00:21:53,440 --> 00:21:56,840 Speaker 9: global economy for the last few years. So I think 391 00:21:56,840 --> 00:21:59,520 Speaker 9: that this trade war is going to dent global growth. 392 00:22:00,480 --> 00:22:04,080 Speaker 9: But I think most of our trading partners, including Canada 393 00:22:04,160 --> 00:22:06,960 Speaker 9: and the UK and others, do see this as a 394 00:22:07,000 --> 00:22:09,720 Speaker 9: structural break, like the US is not going to return 395 00:22:09,800 --> 00:22:12,800 Speaker 9: to its ally status that it was, you know since 396 00:22:12,840 --> 00:22:15,640 Speaker 9: World War Two. We are choosing to turn away from 397 00:22:15,720 --> 00:22:19,919 Speaker 9: allies and choosing to be an unreliable trading partner, right 398 00:22:20,520 --> 00:22:22,880 Speaker 9: and they will have to. I mean, you'd be foolish 399 00:22:22,960 --> 00:22:25,359 Speaker 9: not to look to diversify your exports. 400 00:22:26,520 --> 00:22:29,200 Speaker 3: Julia Carnatt, thank you so much, greatly appreciate it. 401 00:22:35,359 --> 00:22:39,280 Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday 402 00:22:39,320 --> 00:22:42,719 Speaker 1: starting at seven am Eastern on Applecarplay and Android Auto 403 00:22:42,760 --> 00:22:45,560 Speaker 1: with the Bloomberg Business app. You can also watch us 404 00:22:45,600 --> 00:22:49,480 Speaker 1: live every weekday on YouTube and always on the Bloomberg terminal. 405 00:22:49,720 --> 00:22:50,919 Speaker 2: It's just a great conversation. 406 00:22:51,000 --> 00:22:53,640 Speaker 3: Paul Sweeden's going to dive in here and lead it. 407 00:22:53,640 --> 00:22:54,399 Speaker 2: It's real simple. 408 00:22:54,480 --> 00:22:58,920 Speaker 3: In eighteen forty there was a huge famine in Ireland. 409 00:22:59,480 --> 00:23:04,120 Speaker 3: Many went to Canada rather, and many from Canada went 410 00:23:04,160 --> 00:23:09,840 Speaker 3: to a nascent steel industry in Pittsburgh, including the Rooney family. 411 00:23:10,000 --> 00:23:10,240 Speaker 2: Yep. 412 00:23:10,640 --> 00:23:13,800 Speaker 3: And they will, I mean celebrate this, you know, the 413 00:23:13,920 --> 00:23:19,399 Speaker 3: Rooney family just iconic Paul, the Steelers will play in Ireland. 414 00:23:19,680 --> 00:23:21,200 Speaker 2: I know that's really. 415 00:23:21,359 --> 00:23:25,280 Speaker 5: Very, really cool exactly, and that's important for both sides. 416 00:23:25,320 --> 00:23:28,000 Speaker 5: Neil Richmond joins us. He's a Minister of State for 417 00:23:28,200 --> 00:23:32,120 Speaker 5: Diaspora and International Development for Ireland. Neil, thanks so much 418 00:23:32,160 --> 00:23:35,080 Speaker 5: for joining us here. A lot going on out there 419 00:23:35,119 --> 00:23:38,399 Speaker 5: on the geopolitical front. I'd just love to get your perspective, 420 00:23:39,080 --> 00:23:42,720 Speaker 5: the perspective of the Irish government of how it's dealing 421 00:23:42,840 --> 00:23:46,960 Speaker 5: with a lot of trade uncertainty just globally here. What's 422 00:23:46,960 --> 00:23:48,720 Speaker 5: the perspective of Ireland these days? 423 00:23:49,920 --> 00:23:51,960 Speaker 11: I suppose I'd like to say two things in that regard. 424 00:23:52,240 --> 00:23:55,800 Speaker 11: First and foremost, we are going to every length possible 425 00:23:55,840 --> 00:23:59,280 Speaker 11: to stress how rich the trade investment relationship is, not 426 00:23:59,359 --> 00:24:02,840 Speaker 11: just between the in the US, but particularly between Ireland 427 00:24:02,920 --> 00:24:05,960 Speaker 11: and the US. Ireland is the sixth largest investor in 428 00:24:06,000 --> 00:24:09,480 Speaker 11: the United States. There's more Americans employed by Irish companies 429 00:24:09,480 --> 00:24:12,000 Speaker 11: in the US than there is Irish people employed by 430 00:24:12,119 --> 00:24:15,040 Speaker 11: American companies in Ireland. But it's a really strong relationship. 431 00:24:15,280 --> 00:24:17,800 Speaker 11: The US is our largest trading partner. It's a really 432 00:24:17,840 --> 00:24:20,600 Speaker 11: strong basis in terms of life sciences sector, in terms 433 00:24:20,640 --> 00:24:22,720 Speaker 11: of agrifood and signs of tech. But in terms of 434 00:24:22,760 --> 00:24:25,520 Speaker 11: how we respond to this period of instability, to be 435 00:24:25,600 --> 00:24:28,159 Speaker 11: quite frank, and we welcome any puzz in relation to 436 00:24:28,200 --> 00:24:31,119 Speaker 11: tariffs is we're working with our European partners to make 437 00:24:31,160 --> 00:24:35,080 Speaker 11: sure that the European response to any pronouncements or decisions 438 00:24:35,240 --> 00:24:39,200 Speaker 11: is measured, is reasonable, that protects business and more importantly, 439 00:24:39,240 --> 00:24:43,359 Speaker 11: that strengthens, if anything, the trading relentship relationship between the 440 00:24:43,400 --> 00:24:45,680 Speaker 11: EU and the US. Let me be very very frank. 441 00:24:46,000 --> 00:24:49,760 Speaker 11: Tariffs are a bad thing. They're not good for our economies, 442 00:24:49,800 --> 00:24:51,880 Speaker 11: they're not good for our companies, but crucially they're not 443 00:24:52,160 --> 00:24:54,919 Speaker 11: good for the consumers, either in the United States or 444 00:24:54,960 --> 00:24:57,399 Speaker 11: in Europe. People shouldn't be having to pay more for 445 00:24:57,480 --> 00:25:00,560 Speaker 11: their drugs, or for medicines or anything else in this regard. 446 00:25:00,640 --> 00:25:02,760 Speaker 11: So that's the approach of the Irish government. We want 447 00:25:02,800 --> 00:25:05,280 Speaker 11: to work on a bilateral basis, on a European basis, 448 00:25:05,280 --> 00:25:08,119 Speaker 11: but crucially we're also working not just at a federal level, 449 00:25:08,200 --> 00:25:10,280 Speaker 11: but at a state level, which is why I've spent 450 00:25:10,320 --> 00:25:13,640 Speaker 11: the last couple of days in Pennsy Pennsylvania and Massachusetts. 451 00:25:14,320 --> 00:25:18,920 Speaker 5: So you mentioned Neil, the pharmaceutical company's strong presence in Ireland. 452 00:25:18,960 --> 00:25:22,440 Speaker 5: What are you hearing from the pharmaceutical companies with bases 453 00:25:22,520 --> 00:25:23,520 Speaker 5: in Ireland at the moment. 454 00:25:25,240 --> 00:25:27,639 Speaker 11: Yeah, we're very lucky that fourteen of the fifteen largest 455 00:25:27,640 --> 00:25:30,679 Speaker 11: pharmaceutical companies in the world have either their European or 456 00:25:30,680 --> 00:25:33,640 Speaker 11: Amia head offices in Ireland, and we're working really strongly 457 00:25:33,680 --> 00:25:36,960 Speaker 11: with them to make sure that they are able to 458 00:25:37,040 --> 00:25:40,359 Speaker 11: weather any uncertainty that their commitment to the European and 459 00:25:40,400 --> 00:25:43,080 Speaker 11: American market is strong. But I'll be quite frank they 460 00:25:43,080 --> 00:25:47,119 Speaker 11: are worried. They're worried that the decisions being taken elsewhere 461 00:25:47,320 --> 00:25:49,480 Speaker 11: might limit their ability to grow their markets. 462 00:25:49,560 --> 00:25:50,480 Speaker 6: And more importantly, what. 463 00:25:50,520 --> 00:25:52,960 Speaker 11: We're very very worried from an Irish government point of 464 00:25:53,000 --> 00:25:56,000 Speaker 11: view is we have a huge pipeline of expansion and 465 00:25:56,119 --> 00:25:58,800 Speaker 11: modernization of some of the plants that are in Ireland. 466 00:25:59,200 --> 00:26:02,040 Speaker 11: New drugs coming on stream, new device is coming on stream. 467 00:26:02,119 --> 00:26:06,879 Speaker 11: But the hesitancy in the American situation means that those 468 00:26:07,200 --> 00:26:10,399 Speaker 11: basis aren't possible to go forward in the in the 469 00:26:10,440 --> 00:26:12,240 Speaker 11: New York term, And you. 470 00:26:12,160 --> 00:26:15,119 Speaker 5: Know you mentioned this strong relationship between the US and 471 00:26:15,160 --> 00:26:17,680 Speaker 5: Ireland from the trade perspective. In fact, Ireland surplus with 472 00:26:17,720 --> 00:26:19,960 Speaker 5: the US is one of the largest. And I know 473 00:26:20,119 --> 00:26:23,560 Speaker 5: Secretary Howard Luckman has singled out Ireland in the past. 474 00:26:24,520 --> 00:26:26,960 Speaker 5: How will Ireland respond to the extent that Trump really 475 00:26:27,560 --> 00:26:30,000 Speaker 5: wants to put some pressure on Ireland specifically. 476 00:26:30,720 --> 00:26:32,760 Speaker 11: Well, well, I think one thing is when you take 477 00:26:32,920 --> 00:26:36,399 Speaker 11: trade in goods and services, it's quite a balanced relationship. 478 00:26:36,440 --> 00:26:38,399 Speaker 11: We know there's a huge surplace when it comes to 479 00:26:38,960 --> 00:26:42,119 Speaker 11: goods and goods alone, but services together, it's really a 480 00:26:42,160 --> 00:26:45,879 Speaker 11: balanced relationship. And our Deputy Prime Minister, our Minister Foreig 481 00:26:45,880 --> 00:26:49,119 Speaker 11: Affairs and Trade, has met Secretary Lutnick a couple of 482 00:26:49,119 --> 00:26:51,320 Speaker 11: times and we've spoken with them and we've really laid 483 00:26:51,320 --> 00:26:54,520 Speaker 11: out that Ireland should not be seen as a rival 484 00:26:54,560 --> 00:26:57,560 Speaker 11: to the United States. It's a complementary relationship. The vast 485 00:26:57,600 --> 00:27:01,080 Speaker 11: majority in the area of pharmacy, life science, it's the 486 00:27:01,119 --> 00:27:03,600 Speaker 11: vast majority of goods that are producing art and actually 487 00:27:03,600 --> 00:27:06,760 Speaker 11: your component goods that are finalized in the US and 488 00:27:06,760 --> 00:27:08,040 Speaker 11: then sold into the US market. 489 00:27:08,359 --> 00:27:11,679 Speaker 3: Neil Paul from New York City emails in and he says, 490 00:27:11,680 --> 00:27:14,560 Speaker 3: can you free up with your massive power with an 491 00:27:14,600 --> 00:27:19,639 Speaker 3: Irish government? The Mariana Hotel from September twenty fourth to 492 00:27:19,680 --> 00:27:23,639 Speaker 3: September twenty seventh at one thousand, five hundred and sixty 493 00:27:23,680 --> 00:27:25,240 Speaker 3: six dollars per. 494 00:27:25,160 --> 00:27:27,560 Speaker 2: Night, Neil, can you free up a couple of rooms 495 00:27:27,560 --> 00:27:29,879 Speaker 2: there for us? For the Steelers Vikings. 496 00:27:31,560 --> 00:27:33,000 Speaker 11: I can't even get a cup of coffee in the 497 00:27:33,000 --> 00:27:36,159 Speaker 11: Maria Hotel. It's such a popular, wonderful venue. But what 498 00:27:36,240 --> 00:27:38,120 Speaker 11: I will say to Paul from New York, I don't 499 00:27:38,119 --> 00:27:39,600 Speaker 11: have a spare bedroom in my house. I've got a 500 00:27:39,640 --> 00:27:41,800 Speaker 11: couple of young kids. But I know lots of wonderful 501 00:27:41,840 --> 00:27:43,320 Speaker 11: accommodation in my district. 502 00:27:43,520 --> 00:27:47,520 Speaker 2: There were just Neil, tell me about real estate and Dublin. 503 00:27:47,680 --> 00:27:49,680 Speaker 2: I look at it. I'm absolutely flabbergasted. 504 00:27:49,760 --> 00:27:52,480 Speaker 3: Paul's looking at you know, three four bedrooms there and 505 00:27:52,520 --> 00:27:54,680 Speaker 3: it's like, you know, Bono prize, boom prices. 506 00:27:55,080 --> 00:27:58,600 Speaker 2: It is tough. When does Dublin just the it can't. 507 00:27:58,280 --> 00:28:02,360 Speaker 11: Go higher, right, Neil, Well, it can, and we've made 508 00:28:02,359 --> 00:28:04,600 Speaker 11: a change there which is really welcome. At the moment, 509 00:28:04,800 --> 00:28:08,280 Speaker 11: the highest building in Dublin is seventeen stories, but we've 510 00:28:08,400 --> 00:28:10,480 Speaker 11: just see what's being constructed. 511 00:28:10,480 --> 00:28:10,840 Speaker 2: At the moment. 512 00:28:10,920 --> 00:28:12,400 Speaker 11: We have our first building that goes. 513 00:28:12,200 --> 00:28:13,240 Speaker 6: Past twenty stories. 514 00:28:13,240 --> 00:28:15,879 Speaker 11: So there was changes at a city level which removed 515 00:28:15,920 --> 00:28:18,200 Speaker 11: the high cap in Dublin city in the last couple 516 00:28:18,240 --> 00:28:21,000 Speaker 11: of years. So we're seeing a lot of introduction, particularly 517 00:28:21,040 --> 00:28:23,440 Speaker 11: right in the city center along the River of high 518 00:28:23,520 --> 00:28:26,560 Speaker 11: rise development, both in terms of office space and a 519 00:28:26,600 --> 00:28:29,320 Speaker 11: d commercial So it is going up. It is becoming 520 00:28:29,359 --> 00:28:31,240 Speaker 11: more dense, and that's really welcome. 521 00:28:31,280 --> 00:28:32,920 Speaker 6: But our biggest. 522 00:28:32,600 --> 00:28:34,280 Speaker 11: Concern from an Irish coping point of view is we 523 00:28:34,320 --> 00:28:35,720 Speaker 11: needed to go higher quicker. 524 00:28:36,080 --> 00:28:37,520 Speaker 2: Noah Richard, thank you so much. 525 00:28:37,640 --> 00:28:41,520 Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday 526 00:28:41,560 --> 00:28:44,880 Speaker 1: starting at seven am Eastern on Applecarplay and Android Auto 527 00:28:45,000 --> 00:28:47,960 Speaker 1: with the Bloomberg Business app. You can also listen live 528 00:28:48,040 --> 00:28:51,600 Speaker 1: on Amazon Alexa from our flagship New York station. Just 529 00:28:51,640 --> 00:28:54,200 Speaker 1: say Alexa play Bloomberg eleven thirty. 530 00:28:54,520 --> 00:28:56,480 Speaker 3: One of my major faults, one is I don't do 531 00:28:56,600 --> 00:29:00,440 Speaker 3: enough on municipal bonds, and the other is retire vironment 532 00:29:00,720 --> 00:29:03,160 Speaker 3: is a tragedy in America. We all know that you 533 00:29:03,200 --> 00:29:05,880 Speaker 3: don't need to be lectured by me on a Thursday morning. 534 00:29:06,000 --> 00:29:09,760 Speaker 3: She is Pension B in the United Kingdom and the 535 00:29:09,880 --> 00:29:14,760 Speaker 3: United States. Ramisavova is CEO at Pension B and joins 536 00:29:14,800 --> 00:29:18,800 Speaker 3: us here from London. In the studios. On your website, 537 00:29:18,880 --> 00:29:22,440 Speaker 3: you get fifty seven nine and twelve dollars. That's what 538 00:29:22,480 --> 00:29:24,600 Speaker 3: I got in my four to oh one K. Whatever 539 00:29:24,640 --> 00:29:26,560 Speaker 3: anybody's age is, I'll pick forty two. 540 00:29:27,400 --> 00:29:28,920 Speaker 2: It's not enough. 541 00:29:29,840 --> 00:29:33,200 Speaker 3: What percentage of people have four to one ks where 542 00:29:33,240 --> 00:29:35,360 Speaker 3: you stayed actuarily. 543 00:29:35,000 --> 00:29:40,320 Speaker 10: It's not enough, I would say the vast majority, although 544 00:29:40,640 --> 00:29:43,600 Speaker 10: not enough. Will also depend on where you want to 545 00:29:43,640 --> 00:29:47,400 Speaker 10: retire exactly how much you want to spend, But overall, 546 00:29:47,440 --> 00:29:50,320 Speaker 10: what we see in the numbers is generally speaking, the 547 00:29:50,400 --> 00:29:51,880 Speaker 10: median person does not have. 548 00:29:51,960 --> 00:29:52,760 Speaker 6: Enough and enough. 549 00:29:52,760 --> 00:29:54,640 Speaker 3: The way you do this is to put more aside 550 00:29:54,680 --> 00:29:56,920 Speaker 3: in the government. It's helping out sort of kind of 551 00:29:57,040 --> 00:30:02,120 Speaker 3: like in that what's the bogey the pension B what's 552 00:30:02,160 --> 00:30:04,800 Speaker 3: the number that I want to get to? Don't tell 553 00:30:04,800 --> 00:30:08,080 Speaker 3: me it's seven hundred thousand. That's not going to get 554 00:30:08,080 --> 00:30:08,480 Speaker 3: it done. 555 00:30:08,640 --> 00:30:10,440 Speaker 2: For John Tucker on the shore in New. 556 00:30:10,360 --> 00:30:13,480 Speaker 3: Jersey, well, I'm not leaving the shore, just to be clear, 557 00:30:13,720 --> 00:30:15,160 Speaker 3: it's just east there forever. 558 00:30:16,200 --> 00:30:18,520 Speaker 10: Well, it depends on how much you want to spend 559 00:30:18,560 --> 00:30:22,280 Speaker 10: in retirement, but the median person has around fifty to 560 00:30:22,480 --> 00:30:26,760 Speaker 10: sixty thousand dollars in four to one K savings, and 561 00:30:26,880 --> 00:30:30,040 Speaker 10: that will almost certainly not be enough anywhere A lot 562 00:30:30,080 --> 00:30:33,200 Speaker 10: of the research we've done shows that around forty percent 563 00:30:33,240 --> 00:30:36,440 Speaker 10: of Americans don't even have enough funds to retire for 564 00:30:36,600 --> 00:30:40,400 Speaker 10: one year, and so there's no real simple answer. The 565 00:30:40,400 --> 00:30:43,200 Speaker 10: best thing you can do is figure out how do 566 00:30:43,240 --> 00:30:45,800 Speaker 10: you want to live when you retire, When do you 567 00:30:45,800 --> 00:30:48,560 Speaker 10: want to retire, and then work backwards from there, and 568 00:30:48,600 --> 00:30:50,160 Speaker 10: that will tell you how much you need to start 569 00:30:50,160 --> 00:30:50,600 Speaker 10: putting in. 570 00:30:51,080 --> 00:30:53,880 Speaker 5: You walk into any Starbucks in the United States and 571 00:30:53,920 --> 00:30:56,920 Speaker 5: it's filled with people on laptops. I'm not sure what 572 00:30:56,920 --> 00:31:00,000 Speaker 5: they're doing. I've been told they're part of the gig ecademy. 573 00:31:01,640 --> 00:31:04,720 Speaker 5: What did those people do because they don't have the 574 00:31:04,960 --> 00:31:08,240 Speaker 5: matching four one ks that a lot of companies offer, 575 00:31:08,360 --> 00:31:09,600 Speaker 5: What did they do well? 576 00:31:09,960 --> 00:31:12,440 Speaker 10: I think it's a huge issue. It's a huge problem. 577 00:31:12,840 --> 00:31:17,479 Speaker 10: Studies now indicate that gig economy workers are around fifty 578 00:31:17,560 --> 00:31:21,560 Speaker 10: percent and will soon be more than fifty percent of 579 00:31:21,600 --> 00:31:26,000 Speaker 10: the entire workforce, and they don't get the standard employee 580 00:31:26,000 --> 00:31:28,720 Speaker 10: benefits that you would get in a big company, and 581 00:31:28,760 --> 00:31:32,040 Speaker 10: so retirement provision is really left up to them. One 582 00:31:32,080 --> 00:31:34,920 Speaker 10: thing that a lot of self employed workers do look 583 00:31:34,960 --> 00:31:39,160 Speaker 10: into is something called a step ira step ira, Yeah, 584 00:31:39,200 --> 00:31:42,240 Speaker 10: and that is something it's a vehicle that gives you 585 00:31:42,360 --> 00:31:47,720 Speaker 10: access to the ability to contribute substantially above the normal 586 00:31:47,880 --> 00:31:48,960 Speaker 10: IRA limits. 587 00:31:49,240 --> 00:31:50,960 Speaker 2: Denmark just went to age seventy. 588 00:31:51,040 --> 00:31:52,920 Speaker 3: I believe I got this right, folks, don't If I'm 589 00:31:52,960 --> 00:31:54,560 Speaker 3: wrong on this, you can stay with me. 590 00:31:54,600 --> 00:31:55,480 Speaker 2: It's part of the script. 591 00:31:55,720 --> 00:31:59,040 Speaker 3: Denmark went to seventy Are we not in out retirement? 592 00:31:59,080 --> 00:32:03,240 Speaker 3: What do you think John seventy two, seventy six? What 593 00:32:03,320 --> 00:32:06,280 Speaker 3: do you think we ought to be gone here here? Eighty? 594 00:32:06,600 --> 00:32:06,800 Speaker 11: Oh? 595 00:32:07,080 --> 00:32:07,400 Speaker 6: Should we? 596 00:32:08,840 --> 00:32:12,120 Speaker 2: Should we running this out to eighty years old? 597 00:32:13,680 --> 00:32:16,640 Speaker 10: For some people that is an economic reality. 598 00:32:16,840 --> 00:32:17,080 Speaker 6: Yes. 599 00:32:18,400 --> 00:32:22,320 Speaker 3: What do you say to the politicians in Washington or 600 00:32:22,400 --> 00:32:24,480 Speaker 3: in London about fix this? 601 00:32:24,720 --> 00:32:26,760 Speaker 2: What's the number one thing they need to do? 602 00:32:27,320 --> 00:32:27,520 Speaker 6: Well? 603 00:32:27,560 --> 00:32:30,440 Speaker 10: For the politicians in the US, the number one thing 604 00:32:30,680 --> 00:32:34,520 Speaker 10: is to mandate automatic enrollment across the board, and to 605 00:32:34,640 --> 00:32:37,960 Speaker 10: find a way to mandate it for gig economy workers. 606 00:32:37,960 --> 00:32:39,240 Speaker 2: Too suppy, are you know? 607 00:32:39,680 --> 00:32:42,920 Speaker 10: Yes, because when we look at the numbers, only around 608 00:32:43,000 --> 00:32:47,600 Speaker 10: fifty percent of workers are actually contributing. And the longer 609 00:32:47,640 --> 00:32:50,640 Speaker 10: you leave it, the greater the shorter This is. 610 00:32:50,640 --> 00:32:52,400 Speaker 3: Great, Grand me so well, but thank you so much 611 00:32:52,600 --> 00:32:54,600 Speaker 3: with pension me of course, they are all the good 612 00:32:54,600 --> 00:32:56,920 Speaker 3: work of Peter or zeg Now at Lazard and I 613 00:32:56,960 --> 00:32:59,000 Speaker 3: Think A Roger Ferguson and Tia Kraff. 614 00:32:59,680 --> 00:33:04,520 Speaker 1: This is the Bloomberg Surveillance Podcast, available on Apple, Spotify, 615 00:33:04,640 --> 00:33:08,920 Speaker 1: and anywhere else you get your podcasts. Listen live each weekday, 616 00:33:09,080 --> 00:33:12,520 Speaker 1: seven to ten am Eastern on Bloomberg dot com, the 617 00:33:12,600 --> 00:33:16,640 Speaker 1: iHeartRadio app tune In, and the Bloomberg Business app. You 618 00:33:16,680 --> 00:33:20,040 Speaker 1: can also watch us live every weekday on YouTube and 619 00:33:20,240 --> 00:33:21,960 Speaker 1: always on the Bloomberg terminal