WEBVTT - Single Best Idea with Tom Keene: Stephanie Roth & Michael Darda

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news.

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<v Speaker 2>Single best idea and the single best idea is in

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<v Speaker 2>doing this for decades plural. This has been one of

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<v Speaker 2>the most extraordinary weeks. And what you do, it's a blur, folks.

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<v Speaker 2>I mean, just to give you a little vignette here,

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<v Speaker 2>Cy Benson's in my ears constantly with my headphones on,

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<v Speaker 2>literally telling me what the next thing is, tick by

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<v Speaker 2>tick by tick, because Paul and I are looking at

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<v Speaker 2>eight things going on in real time and we can't

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<v Speaker 2>keep track of like what's next, or what's out three

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<v Speaker 2>things or that. And with the quality of the conversations

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<v Speaker 2>that we had this week, given this amazing news flow

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<v Speaker 2>culminating in all the terrif announcements today and then this

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<v Speaker 2>jobs report, it's just the privilege of these conversation. And

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<v Speaker 2>you remember one single sentence out there, here's the sentence

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<v Speaker 2>of the week, and it's from Lyle Brainer, the vice

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<v Speaker 2>chairman of the Fed, thrilled that she could join us

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<v Speaker 2>from Harvard, and doctor Brainer said simply, they want to

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<v Speaker 2>bring in revenue, and that was the same. I'm not

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<v Speaker 2>saying I agree that that's a public policy with tariffs,

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<v Speaker 2>but at half a trillion or four hundred billion, whatever

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<v Speaker 2>the number is, it's a big number and that's what

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<v Speaker 2>this is about. As all America faces the combination of

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<v Speaker 2>this job's economy and the tariff discussion, and then it

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<v Speaker 2>redounds back to the market with as we fill this

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<v Speaker 2>right now the doubt negative seven hundred, we'll see where

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<v Speaker 2>we end up out in the far distance of four PM.

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<v Speaker 2>Single best idea, Stephanie Roth nailed it with Wolf Research.

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<v Speaker 2>We had her in quickly for a victory lap. It's

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<v Speaker 2>rare that an economist can come in at eightousand, and

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<v Speaker 2>when the shock number was seventy three thousand, Stephanie Roth

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<v Speaker 2>goes to the Mexican border.

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<v Speaker 1>I think the main thing that we took away from

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<v Speaker 1>this print is that immigration is having a big impact

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<v Speaker 1>on the labor market. And this is not just because

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<v Speaker 1>depressing the July print, but also the reasons for the

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<v Speaker 1>big revisions that are and should be making headlines today.

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<v Speaker 1>They are because this is a labor market where headline

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<v Speaker 1>job gains. The break even steady state pace of job

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<v Speaker 1>growth has slowed down substantially, and that will be the

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<v Speaker 1>case for quite some time given the immigration policy. Yet

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<v Speaker 1>it tightens the labor market keeps the unemployment rate largely steady.

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<v Speaker 1>It puts up a pressure on inflation on top of

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<v Speaker 1>the tariff inflation.

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<v Speaker 2>In the budget, laby El modeling out a lift in

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<v Speaker 2>the unemployment rate out of eighteen months. And who knows

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<v Speaker 2>what that migration will be. But I hear four point seven,

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<v Speaker 2>four point eight eighty different flavors, different analysis. All I

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<v Speaker 2>know is four point nine is distant from five point zero.

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<v Speaker 2>Michael Darta knows that as well. Roth Michael Darta bringing

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<v Speaker 2>in the markets into our discussion of the American economy.

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<v Speaker 3>So the markets have priced in ninety one basis points

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<v Speaker 3>over the next twelve months. So does the FMC guide

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<v Speaker 3>markets for more than that or less than that?

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<v Speaker 2>You know?

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<v Speaker 1>Right now?

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<v Speaker 3>I mean, I think you've got quite a bit of

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<v Speaker 3>division on the committee. We did get two descents. That's

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<v Speaker 3>the first time too. Fed Governor's descent to.

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<v Speaker 2>This way genius is this morning.

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<v Speaker 3>Since nineteen ninety three, right, But I think the focus

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<v Speaker 3>has to be on price stability. I mean, obviously the

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<v Speaker 3>FED wants to preserve the business site, but inflation is

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<v Speaker 3>still above target. And if the FED is going to

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<v Speaker 3>be harangued and cajoled into cutting rates when it's perhaps

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<v Speaker 3>inappropriately inappropriate to do so. If inflation expectations go up,

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<v Speaker 3>then long term interest rates go up, not down. So

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<v Speaker 3>if the president's concerned about debt financing costs, let the

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<v Speaker 3>Fed do its job. You know, let's return Plation two.

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<v Speaker 3>Target and price stability is the number one way that

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<v Speaker 3>you're going to have moderate market interest rates. The other

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<v Speaker 3>way is get the fiscal house in order in Washington,

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<v Speaker 3>DC has good luck for that fate planted in that regard.

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<v Speaker 2>Michael Darter, with wisdom there from Roth Capital, I would

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<v Speaker 2>suggest we are deep into August, and all that means

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<v Speaker 2>is we're getting towards an election in twenty twenty six.

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<v Speaker 2>Some would say it's begun now, but let's be charitable

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<v Speaker 2>and saying four or five months. I don't think the

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<v Speaker 2>politicians and all of our House of Representatives is going

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<v Speaker 2>to be worrying about the inflation dynamic here. They're going

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<v Speaker 2>to be looking at that labor market and we're committed

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<v Speaker 2>to covering it here in the coming months. The Shock

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<v Speaker 2>revision today, thank you again with the leadership of Anahong

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<v Speaker 2>of Bloomberg Economics, she was brilliant. Today we're on podcasts

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<v Speaker 2>it's a new rage. They keep telling me Apple, thank

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<v Speaker 2>you so much if I thank you, and on YouTube

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<v Speaker 2>podcasts it's the single best idea