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Speaker 1: Bloomberg Audio Studios, podcasts, radio news.

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Speaker 2: Single best idea of what we do years ago at

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Speaker 2: Bloomberg on the economy, Bloomberg Surveillance, and it's about the conversation.

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Speaker 2: Today was fabulous birthday greetings to Lizenne Saunders of Charles Schwab.

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Speaker 2: She emphasized, you have to be in the market looking

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Speaker 2: at the stresses of fear. You can't go up unless

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Speaker 2: you have fear. I'm a big believer in that. The

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Speaker 2: fear is there right now. I'm not saying we're going

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Speaker 2: to go up, but the fear is there centered around

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Speaker 2: this FED decision tomorrow. And Lizzie Saunders is wonderful about

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Speaker 2: participating in the market. Barbara reinhert Voya same thing by

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Speaker 2: America by quality. Maybe there's some movement internationally, but she

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Speaker 2: really stayed on the US theme and said what we

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Speaker 2: saw from Microsoft to ten percent dividend increase, reaffirmation of

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Speaker 2: a new sixty billion dollars share buyback. You look at

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Speaker 2: the ratios in the Bloomberg terminal Microsoft and you just wonder, Okay,

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Speaker 2: a year and a half, two years from now, do

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Speaker 2: they do the same thing. It's just that simple. Three

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Speaker 2: great voices today. First, Jeffrey, you in from London with

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Speaker 2: B and Y. Jeff you and what he sees is

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Speaker 2: the distinction American exceptionalism.

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Speaker 3: The America believes in its people. America has people, has

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Speaker 3: the talent and continues to track that. That is the

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Speaker 3: fundamental difference. Yes, there's a bit of a demographic argument there.

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Speaker 3: But how it fosters productivity through innovation, that's that's a

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Speaker 3: lesson you're badly need to learn. Look at the Office

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Speaker 3: of Budget Responsibilities report based on the baseline scenario right

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Speaker 3: now for UK productivity, and this is the power of compounding.

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Speaker 3: Right has UK's debt to GDP ratio in twenty seventy

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Speaker 3: five at two hundred and seventy percent. If you lower

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Speaker 3: the productivity basedline by one percentage point, it goes to

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Speaker 3: six hundred and fifty percent. If you increase the productivity

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Speaker 3: baseline by one percent in the baselines one and a

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Speaker 3: half so to two and a half, which probably the

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Speaker 3: US is not far from, then you can keep that

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Speaker 3: to GDP ratio below one hundred percent. That's what the

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Speaker 3: US has going.

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Speaker 2: For the mathematics, jeff for you there in productivity in

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Speaker 2: America churs productivity a key discussion. He was on the

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Speaker 2: United Kingdom there excuse me and the productivity of America

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Speaker 2: a key discussion and really comes down to a core

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Speaker 2: belief of moving twenty five or fifty basis points. Michael

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Speaker 2: Darta a rough.

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Speaker 4: I think what the FED is doing now is simply

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Speaker 4: hyper data dependency, which carries its own risks. Right, so

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Speaker 4: the forecasting approach blew up in the FED space with

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Speaker 4: the temporary transitory and inflation taking off and staying high

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Speaker 4: for two and a half years, and so they've sort

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Speaker 4: of receded into this this posture where they're just looking

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Speaker 4: at the data. And you know that can work as

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Speaker 4: long as you're not in turning point. The problem with

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Speaker 4: just simply being data dependent is the data is released

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Speaker 4: with a lag and then it gets revised, and when

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Speaker 4: you're at turning points, you know, you tend to get

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Speaker 4: a lot of mixed data, and right now we have

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Speaker 4: mixed data. If you look at GDP, everything looks fine.

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Speaker 4: If you look at payrolls, we're slowing. If you look

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Speaker 4: at the unemployment rate and underemployment rate, it looks like

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Speaker 4: we're in recession. And so from that perspective, hyper data

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Speaker 4: dependency can lead the Central Bank to behind the curve policies,

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Speaker 4: and you know that's really what you want to try

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Speaker 4: to avoid.

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Speaker 2: And not mentioned there is we really don't know about

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Speaker 2: productivity until a look back of three years or five years,

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Speaker 2: some would even say ten years back. The mystery of

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Speaker 2: post pandemic American productivity. There is no mystery to how

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Speaker 2: ed Heiman invented modern market economics. I've always called it chart, paragraph, chart, paragraph.

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Speaker 2: Ed Heiman looked at the charts, he looked at the

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Speaker 2: paragraph of data. At Evercore ISI, he listened to his team,

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Speaker 2: including Julian Emmanuel. He says, on the recession watch, but

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Speaker 2: it hasn't happened, ed Heyman, in ten days ago. Now

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Speaker 2: he makes a shift and becomes more optimistic on the

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Speaker 2: American economic experiment Ed Hyman of Evercore.

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Speaker 5: If they don't do fifty, I'll be shocked, Okay, because

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Speaker 5: I've been at this so long and the FED picks

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Speaker 5: out somebody like Timors to communicate frankly to me and you,

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Speaker 5: this is.

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Speaker 2: Not a.

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Speaker 5: Situation where they're peddling their own view. And Timros has

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Speaker 5: said over and over the Fed is going to do fifty.

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Speaker 5: And if he's if they don't do fifty. I'm gonna

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Speaker 5: have to go back so ed.

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Speaker 2: Heymen there in the sensitivities. Let me explain this as

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Speaker 2: we go out. There's a sharp critic and I'll be honest,

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Speaker 2: my colleague John Farrell is way out front on this.

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Speaker 2: Maybe it was because they do it differently at the

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Speaker 2: Bank of England, but John Ferrell absolutely nailed this. And

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Speaker 2: the idea is that they're whispering out to select reporters,

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Speaker 2: including a wonderful Nick Timers at the Wall Street Journal.

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Speaker 2: Colby Smith's been tarden feathered in the last number of

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Speaker 2: days at the Financial Times as well. And I don't

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Speaker 2: have a strong opinion on it other than I will state,

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Speaker 2: as we heard from Michael Darta, that they are excessively

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Speaker 2: data dependent. We're dependent on giving you conversation. We'll do

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Speaker 2: that tomorrow. Of course, the FED decides at one thirty

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Speaker 2: tomorrow afternoon, before a fascinating release of the statement and

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Speaker 2: a fascinating press conference. Our Michael McKee will be leading

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Speaker 2: our coverage there. When you commute, we're on Apple car Play,

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