1 00:00:02,529 --> 00:00:04,210 Speaker 1: Bloomberg Audio Studios. 2 00:00:04,670 --> 00:00:05,370 Speaker 2: Podcasts. 3 00:00:05,690 --> 00:00:06,210 Speaker 1: Radio. 4 00:00:06,660 --> 00:00:07,040 Speaker 3: News. 5 00:00:12,520 --> 00:00:16,660 Speaker 1: This is the Bloomberg Surveillance Podcast. Catch us live weekdays 6 00:00:16,720 --> 00:00:20,220 Speaker 1: at 7 a.m. Eastern on Apple CarPlay or Android Auto 7 00:00:20,280 --> 00:00:23,880 Speaker 1: with the Bloomberg Business app. Listen on demand wherever you 8 00:00:23,900 --> 00:00:26,980 Speaker 1: get your podcasts or watch us live on YouTube. 9 00:00:27,640 --> 00:00:29,580 Speaker 3: So she got a promotion, which means she gets to 10 00:00:29,620 --> 00:00:33,800 Speaker 3: keep her frequent flyer miles. Global Chief Investment Strategist at BlackRock. 11 00:00:34,240 --> 00:00:38,250 Speaker 3: Thrilled that Gargi Chaudhry could join us here. So when 12 00:00:38,270 --> 00:00:40,110 Speaker 3: they gave you a new title, what do they do? 13 00:00:40,170 --> 00:00:43,400 Speaker 3: Do they like Take you out to dinner or, you know, 14 00:00:43,670 --> 00:00:46,640 Speaker 3: get an extra Starbucks coffee? 15 00:00:47,120 --> 00:00:51,400 Speaker 2: Good morning, friends. It's great to be here. Well, when 16 00:00:51,600 --> 00:00:54,060 Speaker 2: you get a promotion, they tell you that you have 17 00:00:54,080 --> 00:00:55,580 Speaker 2: to travel to a few different places. 18 00:00:55,600 --> 00:00:56,280 Speaker 3: You think so? 19 00:00:57,060 --> 00:00:58,930 Speaker 2: And you get to do your old job and. 20 00:00:58,870 --> 00:01:01,070 Speaker 3: Your new job. So that's wonderful. What are you telling, 21 00:01:01,090 --> 00:01:06,090 Speaker 3: in your travels, what are you telling equity investors away 22 00:01:06,150 --> 00:01:12,110 Speaker 3: from America about American exceptionalism? and about the American AI 23 00:01:12,230 --> 00:01:12,789 Speaker 3: equity market? 24 00:01:13,090 --> 00:01:15,030 Speaker 2: So I was just in Asia for a couple of weeks. 25 00:01:15,090 --> 00:01:17,910 Speaker 2: It was fantastic. And this question about how should I 26 00:01:17,950 --> 00:01:21,510 Speaker 2: diversify away from the concentration of AI came up a lot. 27 00:01:22,690 --> 00:01:26,110 Speaker 2: And we are telling investors that AI remains our strongest conviction, 28 00:01:26,150 --> 00:01:28,729 Speaker 2: whether you do that in the US, whether you do 29 00:01:28,770 --> 00:01:31,590 Speaker 2: that in Korea, whether you do that in Taiwan, that 30 00:01:31,650 --> 00:01:34,390 Speaker 2: remains our strongest conviction. But more and more, given the 31 00:01:34,440 --> 00:01:37,550 Speaker 2: concentration in the markets, you do need to be thinking 32 00:01:37,590 --> 00:01:39,710 Speaker 2: about parts of the market. We call it the beyond 33 00:01:39,850 --> 00:01:42,170 Speaker 2: AI trade. And we talk about this in our latest 34 00:01:42,190 --> 00:01:44,970 Speaker 2: fall investment directions, where we talk about, hey, look at 35 00:01:45,010 --> 00:01:49,110 Speaker 2: parts of the market like healthcare, which historically, when you've 36 00:01:49,190 --> 00:01:53,750 Speaker 2: had the semiconductor sell-off, has held in better. Look at 37 00:01:53,790 --> 00:01:56,660 Speaker 2: parts of the market like dividends, where again, if you're 38 00:01:56,690 --> 00:02:00,780 Speaker 2: focusing on near-term cash flows, obviously paying dividends, That has, 39 00:02:00,840 --> 00:02:03,500 Speaker 2: especially in the July sell-off, been a better hedge for 40 00:02:03,520 --> 00:02:08,260 Speaker 2: the AI trade. So investors outside of the U.S. like 41 00:02:08,300 --> 00:02:12,410 Speaker 2: the AI trade, but they want opportunities to diversify away, 42 00:02:12,430 --> 00:02:14,910 Speaker 2: and they're looking for ideas to do that, both in 43 00:02:15,310 --> 00:02:18,570 Speaker 2: broad markets, but also looking at places like India and 44 00:02:18,610 --> 00:02:22,170 Speaker 2: Japan as some of the drivers of the non-AI move 45 00:02:22,210 --> 00:02:22,750 Speaker 2: in the markets. 46 00:02:22,990 --> 00:02:25,950 Speaker 4: By the way, I love your investment deck. It's so user-friendly. 47 00:02:25,970 --> 00:02:28,639 Speaker 4: I love the format that BlackRock uses. I would steal 48 00:02:28,680 --> 00:02:30,100 Speaker 4: it if I were still into the deck. 49 00:02:30,139 --> 00:02:33,040 Speaker 3: Is a deck a PowerPoint? Yeah, and it's just easy 50 00:02:33,060 --> 00:02:33,620 Speaker 3: to use. 51 00:02:33,780 --> 00:02:36,370 Speaker 4: I mean, having built a thousand of these over my career, 52 00:02:36,410 --> 00:02:37,260 Speaker 4: I like this format here. 53 00:02:37,870 --> 00:02:38,910 Speaker 3: You say outside the U.S. 54 00:02:38,950 --> 00:02:42,070 Speaker 4: You prefer emerging markets. Talk to us about that. What 55 00:02:42,130 --> 00:02:44,290 Speaker 4: is an emerging market for you, and why do you 56 00:02:44,330 --> 00:02:44,710 Speaker 4: like them? 57 00:02:45,250 --> 00:02:48,950 Speaker 2: You know, as being someone from the emerging markets, when 58 00:02:49,070 --> 00:02:51,310 Speaker 2: I started in the market, you know, call it 25 59 00:02:51,310 --> 00:02:54,750 Speaker 2: years ago, a huge amount of focus on EM was around, 60 00:02:54,790 --> 00:02:58,880 Speaker 2: you know, what's the dollar doing? What is the domestic 61 00:02:59,419 --> 00:03:02,980 Speaker 2: trajectory of balance sheets, et cetera? Right now, today, the 62 00:03:03,060 --> 00:03:05,440 Speaker 2: new emerging market, when you look at the composition of 63 00:03:05,480 --> 00:03:11,370 Speaker 2: something like IEMG, which is our iShares EM ticker, it's 64 00:03:11,430 --> 00:03:13,850 Speaker 2: very much pivoted towards the AI name. 65 00:03:14,010 --> 00:03:14,169 Speaker 1: Really? 66 00:03:14,410 --> 00:03:19,579 Speaker 2: The three biggest components of that are China, Korea, and Taiwan. 67 00:03:19,919 --> 00:03:22,880 Speaker 2: And what you're getting there is a lot of earnings growth. 68 00:03:23,570 --> 00:03:26,870 Speaker 2: And a huge amount of AI. So we are, because 69 00:03:26,910 --> 00:03:30,720 Speaker 2: we're convicted on the AI theme, we're definitely telling investors 70 00:03:30,840 --> 00:03:33,560 Speaker 2: EM is another way. It's a new EM. It's not 71 00:03:33,620 --> 00:03:35,900 Speaker 2: the old EM. It is going to give you earnings 72 00:03:35,920 --> 00:03:38,660 Speaker 2: growth of 44% that you didn't get in the past. 73 00:03:39,140 --> 00:03:42,820 Speaker 2: The positioning of the dollar does matter, but in an 74 00:03:42,880 --> 00:03:44,460 Speaker 2: AI world, maybe a little less so. 75 00:03:45,090 --> 00:03:47,880 Speaker 4: Do I get this AI exposure in emerging markets at 76 00:03:47,920 --> 00:03:49,080 Speaker 4: a lower valuation? 77 00:03:49,100 --> 00:03:50,660 Speaker 5: Because I can. 78 00:03:50,560 --> 00:03:53,720 Speaker 2: Get NVIDIA today at 17 times. 79 00:03:53,920 --> 00:03:56,100 Speaker 3: NVIDIA is 17 times earnings? 80 00:03:56,230 --> 00:03:58,870 Speaker 2: That is one of the things that we're pointing out 81 00:03:58,890 --> 00:04:02,230 Speaker 2: in investment directions given the pullback in the summer, given 82 00:04:02,310 --> 00:04:05,400 Speaker 2: the massive leverage unwind that we all know that took 83 00:04:05,460 --> 00:04:08,300 Speaker 2: place in the summer. You're going back to countries like 84 00:04:08,360 --> 00:04:11,920 Speaker 2: Korea and Taiwan, given the earnings growth at a much 85 00:04:12,140 --> 00:04:15,260 Speaker 2: lower P.E. than you were in the beginning of the year. 86 00:04:15,340 --> 00:04:18,320 Speaker 2: So better valuations given some of the volatility. But I 87 00:04:18,380 --> 00:04:20,740 Speaker 2: do want to be clear of one thing. I think 88 00:04:20,779 --> 00:04:24,960 Speaker 2: there is volatility ahead in the markets. We're constructive, but 89 00:04:25,000 --> 00:04:26,370 Speaker 2: constructive doesn't mean calm. 90 00:04:26,529 --> 00:04:29,590 Speaker 3: Henry McVeigh stopped by the other day, Bloomberg Money with KKRP. 91 00:04:30,480 --> 00:04:33,300 Speaker 3: and he's talking about a regime change where 60-40 is dead, 92 00:04:33,320 --> 00:04:36,940 Speaker 3: and you gotta plug in alternatives. Do you agree at 93 00:04:37,000 --> 00:04:41,810 Speaker 3: BlackRock that alternatives is part of everyone's long-term portfolio? 94 00:04:42,650 --> 00:04:44,950 Speaker 2: I won't go so far as to say that 60-40 95 00:04:45,050 --> 00:04:47,830 Speaker 2: is ultimately dead. What I would say is that you 96 00:04:47,890 --> 00:04:52,150 Speaker 2: need different sorts of diversification in your portfolio, and you 97 00:04:52,230 --> 00:04:54,909 Speaker 2: need to fund that from both the equity as well 98 00:04:55,010 --> 00:04:57,690 Speaker 2: as the fixed income portion of your portfolio. So absolutely. 99 00:04:58,120 --> 00:05:02,000 Speaker 2: We're telling investors, add things like liquid alts in your portfolio, 100 00:05:02,040 --> 00:05:07,300 Speaker 2: which is giving you diversification without directionality. Liquid alternatives. Again, 101 00:05:07,680 --> 00:05:10,760 Speaker 2: having strategies that can be market neutral. So you're not 102 00:05:10,820 --> 00:05:13,700 Speaker 2: going up in the same direction with the same beta 103 00:05:14,040 --> 00:05:15,540 Speaker 2: as the broad index. 104 00:05:15,620 --> 00:05:16,790 Speaker 3: Is gold a liquid alt? 105 00:05:17,190 --> 00:05:21,849 Speaker 2: Gold is not. But the iShares sticker, I-A-L-T, I-ALT, as 106 00:05:21,890 --> 00:05:24,250 Speaker 2: we love to call it, is a liquid alternative. Again, 107 00:05:24,290 --> 00:05:28,830 Speaker 2: think of traditional hedge fund strategies available in an ETF wrapper, 108 00:05:28,850 --> 00:05:32,350 Speaker 2: which is much more useful to everyone. Main thing here 109 00:05:32,529 --> 00:05:36,110 Speaker 2: is you're not taking the market direction and you're still 110 00:05:36,150 --> 00:05:38,840 Speaker 2: getting returns, diversified sources of returns. 111 00:05:38,860 --> 00:05:41,610 Speaker 3: So what kind of assets are liquid alts in? 112 00:05:42,770 --> 00:05:44,830 Speaker 2: It's in a whole host of assets. It's in the 113 00:05:44,870 --> 00:05:45,690 Speaker 2: fixed income market. 114 00:05:45,730 --> 00:05:47,570 Speaker 3: It's in the equity market. Oriental rugs? I mean, you know, 115 00:05:47,589 --> 00:05:48,610 Speaker 3: come on. No, no, no. 116 00:05:48,690 --> 00:05:51,370 Speaker 2: Public markets. It's in fixed income. It's in equities. It's 117 00:05:51,430 --> 00:05:53,969 Speaker 2: in FX. But at the same time, you're taking long, 118 00:05:54,270 --> 00:05:57,120 Speaker 2: short positions. There's so much of that. You're, you know, 119 00:05:57,130 --> 00:06:00,180 Speaker 2: especially given the AI disruption, taking advantage of the short 120 00:06:00,210 --> 00:06:03,580 Speaker 2: side of the market as well as the AI beneficiaries 121 00:06:03,620 --> 00:06:04,280 Speaker 2: and non-AI. 122 00:06:04,520 --> 00:06:09,900 Speaker 4: Tom, your iShares systematic alternative ETF thing, Majigi, iALT, it's 123 00:06:09,920 --> 00:06:10,480 Speaker 4: up 18% this year. 124 00:06:11,740 --> 00:06:13,029 Speaker 5: So just straight up into the. 125 00:06:13,080 --> 00:06:14,590 Speaker 3: It is non-correlated with NVIDIA. 126 00:06:14,630 --> 00:06:17,729 Speaker 2: It is non-correlated to broad markets. And I would also 127 00:06:17,790 --> 00:06:21,540 Speaker 2: say that in this world where you're getting that AI 128 00:06:21,600 --> 00:06:24,000 Speaker 2: risk in both stocks and bonds, given the IG issuance 129 00:06:24,020 --> 00:06:27,100 Speaker 2: that you guys were just talking about, having that non-correlated 130 00:06:27,200 --> 00:06:30,520 Speaker 2: risk without the beta is really important. So IALT, as 131 00:06:30,850 --> 00:06:37,190 Speaker 2: one way of adding non-correlated, diversified risk without taking the directionality. 132 00:06:37,230 --> 00:06:39,990 Speaker 2: So won't go as far as to say 60-40 is dead. 133 00:06:40,270 --> 00:06:42,529 Speaker 2: There's definitely a lot of income and fixed income to 134 00:06:42,550 --> 00:06:45,550 Speaker 2: be found. So definitely be clipping that with tickers like 135 00:06:45,610 --> 00:06:49,990 Speaker 2: BlackRock income. Having said that, think about adding alternatives to 136 00:06:50,010 --> 00:06:53,270 Speaker 2: your portfolio sourced from both fixed income and equities. 137 00:06:53,690 --> 00:06:54,550 Speaker 3: Can I ask a question? 138 00:06:54,589 --> 00:06:55,089 Speaker 4: Yeah, do it. 139 00:06:55,110 --> 00:06:57,610 Speaker 3: Can we go off script? Sure, absolutely. Do you do 140 00:06:57,630 --> 00:06:59,470 Speaker 3: the triathlon in the Hudson River? 141 00:06:59,880 --> 00:07:00,599 Speaker 2: I have done it. 142 00:07:00,940 --> 00:07:04,000 Speaker 3: Is it like a current? Like you go in and 143 00:07:04,060 --> 00:07:06,719 Speaker 3: all of a sudden you're waving at the Statue of Liberty? 144 00:07:07,120 --> 00:07:09,040 Speaker 2: Not that far, but there is a little bit. There 145 00:07:09,100 --> 00:07:11,720 Speaker 2: can be some current. There can also be jellyfish. 146 00:07:11,740 --> 00:07:14,080 Speaker 3: Do you swim? There can be jellyfish? 147 00:07:14,140 --> 00:07:14,610 Speaker 4: That can. 148 00:07:14,750 --> 00:07:17,170 Speaker 3: Do you swim across? Do you swim to Jersey? 149 00:07:17,690 --> 00:07:20,110 Speaker 2: You swim down. You swim downstream. So the New York 150 00:07:20,130 --> 00:07:23,850 Speaker 2: City Triathlon, which happens every summer, you swim down from 151 00:07:23,890 --> 00:07:25,310 Speaker 2: sort of the 70s or 80s down to the. 152 00:07:27,480 --> 00:07:29,460 Speaker 3: I'm thinking she doesn't use the Peloton. 153 00:07:29,520 --> 00:07:31,720 Speaker 4: No, I think with the floaties, just kind of cruising 154 00:07:31,880 --> 00:07:33,610 Speaker 4: down on the current. That's how I. 155 00:07:33,560 --> 00:07:33,880 Speaker 5: Would do it. 156 00:07:34,230 --> 00:07:36,950 Speaker 4: The triathlon people, there's just something going on there. 157 00:07:37,210 --> 00:07:40,890 Speaker 3: I interviewed the guy who did it, like won a lot. 158 00:07:40,930 --> 00:07:43,270 Speaker 3: I'm sure you know the gentleman. And he said the 159 00:07:43,330 --> 00:07:47,370 Speaker 3: biggest mistake he made was to overtrain. And the moment 160 00:07:47,390 --> 00:07:50,510 Speaker 3: he started resting between workouts, he got better. 161 00:07:50,720 --> 00:07:51,000 Speaker 4: Okay. 162 00:07:51,460 --> 00:07:52,300 Speaker 3: I'll never forget that. 163 00:07:52,340 --> 00:07:53,260 Speaker 5: Yeah, I'm all for the rest. 164 00:07:53,380 --> 00:07:54,060 Speaker 3: So I'm resting. 165 00:07:54,420 --> 00:07:56,060 Speaker 4: I can sit on the sofa with the best of them. 166 00:07:56,550 --> 00:07:58,870 Speaker 4: You know, Gargi, I mean, I don't know what you 167 00:07:58,890 --> 00:08:01,510 Speaker 4: guys do over there, BlackRock. This is good deck. I'm 168 00:08:01,550 --> 00:08:04,710 Speaker 4: all ready to go here. You know, this is a 169 00:08:04,750 --> 00:08:07,120 Speaker 4: shout out to your junior analysts who put this together. 170 00:08:07,240 --> 00:08:08,440 Speaker 2: They love hearing this. 171 00:08:08,580 --> 00:08:12,840 Speaker 3: I have 20 seconds. What was the greatest insight in 172 00:08:13,020 --> 00:08:15,780 Speaker 3: Asia that you saw? Away from the grind. What was 173 00:08:15,840 --> 00:08:17,500 Speaker 3: the Asian insight you saw? 174 00:08:18,740 --> 00:08:22,220 Speaker 2: Look, I think here in the U.S., most investor portfolios 175 00:08:22,300 --> 00:08:25,880 Speaker 2: have had a big underweight growth. to EM markets, to 176 00:08:25,960 --> 00:08:27,280 Speaker 2: Asian markets in particular. 177 00:08:27,300 --> 00:08:27,630 Speaker 3: And they're not. 178 00:08:27,780 --> 00:08:31,160 Speaker 2: It is fantastic to see the diversification portfolio sitting down 179 00:08:31,180 --> 00:08:34,570 Speaker 2: with Asian investors that care about the midterms, that have 180 00:08:34,670 --> 00:08:37,550 Speaker 2: views around how to be allocated in different U.S. sectors. 181 00:08:37,929 --> 00:08:42,190 Speaker 2: So it's the diversification in the portfolios that was really impressive. 182 00:08:42,270 --> 00:08:46,199 Speaker 3: Got to go. Gargi Shoddy, congratulations on new duties at BlackRock. 183 00:08:46,220 --> 00:08:47,400 Speaker 3: We're thrilled that she could join us. 184 00:08:49,179 --> 00:08:49,780 Speaker 6: Stay with us. 185 00:08:50,100 --> 00:08:53,319 Speaker 3: More from Bloomberg Surveillance coming up after this. 186 00:09:00,590 --> 00:09:04,170 Speaker 1: You're listening to the Bloomberg Surveillance Podcast. Catch us live 187 00:09:04,250 --> 00:09:07,430 Speaker 1: weekday afternoons from 7 to 10 a.m. Eastern. Listen on 188 00:09:07,530 --> 00:09:11,150 Speaker 1: Apple CarPlay and Android Auto with the Bloomberg Business app. 189 00:09:11,170 --> 00:09:12,709 Speaker 1: Or watch us live on YouTube. 190 00:09:13,090 --> 00:09:15,470 Speaker 3: This is indeed a joy on many levels. First of all, 191 00:09:15,510 --> 00:09:18,410 Speaker 3: he actually in the index mentions the Boston Red Sox. 192 00:09:18,470 --> 00:09:18,950 Speaker 6: Does he? 193 00:09:19,090 --> 00:09:22,689 Speaker 3: One citation, page 61. It was a fluke. All right, 194 00:09:22,750 --> 00:09:26,870 Speaker 3: Rubenstein joins us now. The new book, Inside the Owner's Box, 195 00:09:26,929 --> 00:09:30,630 Speaker 3: Conversations on Power and Leadership in Sports. David, I've got 196 00:09:30,650 --> 00:09:32,880 Speaker 3: to take a moment here. You dedicate this book to 197 00:09:32,900 --> 00:09:36,620 Speaker 3: the wonderful Robert Barnett. He represents me and my family. 198 00:09:36,660 --> 00:09:40,340 Speaker 3: He represents you. It was tragic to lose Bob Barnett. 199 00:09:40,400 --> 00:09:43,439 Speaker 3: What did Bob Barnett mean to Washington and to Baltimore? 200 00:09:44,240 --> 00:09:46,780 Speaker 7: Well, Bob Barnett was a friend of mine from law school. 201 00:09:46,820 --> 00:09:48,880 Speaker 7: I've known him, knew him for about 50 years. And 202 00:09:48,920 --> 00:09:53,450 Speaker 7: Bob developed a practice where he represented law former presidents 203 00:09:53,470 --> 00:09:56,850 Speaker 7: of the United States, senators, secretaries of state, in getting 204 00:09:56,910 --> 00:10:00,209 Speaker 7: book deals or media deals, and therefore he represented me 205 00:10:00,290 --> 00:10:02,080 Speaker 7: for many years in every book that I ever wrote 206 00:10:02,510 --> 00:10:04,460 Speaker 7: and many other people much more prominent than me. 207 00:10:04,530 --> 00:10:05,520 Speaker 6: So when he. 208 00:10:05,480 --> 00:10:09,260 Speaker 7: Died about a year ago from a tragic cancer, it 209 00:10:09,300 --> 00:10:11,460 Speaker 7: really was a real loss for people in Washington, D.C. 210 00:10:11,820 --> 00:10:14,959 Speaker 3: Wonderful. Inside the owner's box, our team, I just steal. 211 00:10:15,000 --> 00:10:16,700 Speaker 3: We have Orioles fans on our team, Paul. 212 00:10:17,480 --> 00:10:17,920 Speaker 6: I know that. 213 00:10:17,980 --> 00:10:18,560 Speaker 3: Absolutely. 214 00:10:19,120 --> 00:10:19,719 Speaker 5: Exactly right. 215 00:10:20,220 --> 00:10:25,120 Speaker 4: So, David, in your book, you interview owners of major 216 00:10:25,140 --> 00:10:26,040 Speaker 4: league sports teams. 217 00:10:25,900 --> 00:10:27,460 Speaker 5: Across the sports spectrum. 218 00:10:28,520 --> 00:10:31,480 Speaker 4: Robert Kraft of the Patriots, Ted Leonsis of the Washington 219 00:10:31,500 --> 00:10:34,580 Speaker 4: Capitals and the Wizards, and my Lawrence Hill classmate, Joe 220 00:10:34,620 --> 00:10:38,640 Speaker 4: Sy of the Brooklyn Nets. What's some of the commonalities, David, 221 00:10:38,679 --> 00:10:41,219 Speaker 4: that you found in your discussions with some of these 222 00:10:41,540 --> 00:10:42,179 Speaker 4: these owners here? 223 00:10:43,120 --> 00:10:46,800 Speaker 7: Well, very few owners actually, as children, expected to be owners. 224 00:10:46,920 --> 00:10:48,090 Speaker 6: I never expected to be an owner. 225 00:10:48,800 --> 00:10:52,670 Speaker 7: Young people probably want to be athletes, not owners. But eventually, 226 00:10:52,690 --> 00:10:54,930 Speaker 7: when they get older, they realize their athletic skills are 227 00:10:54,970 --> 00:10:56,630 Speaker 7: not as great as they once wanted them to be. 228 00:10:57,190 --> 00:10:59,430 Speaker 7: And then the owners that actually become owners, the people 229 00:10:59,450 --> 00:11:02,950 Speaker 7: that become owners, they're really more obsessed with winning. 230 00:11:02,929 --> 00:11:04,090 Speaker 6: Than they are with making money. 231 00:11:04,670 --> 00:11:07,150 Speaker 7: I interviewed owners, and I wrote a book, in part 232 00:11:07,190 --> 00:11:09,700 Speaker 7: because when I was becoming an owner... I was looking 233 00:11:09,720 --> 00:11:11,700 Speaker 7: for books on what it was like to be an owner, 234 00:11:11,760 --> 00:11:14,969 Speaker 7: and there were relatively few owner books that I could find. 235 00:11:15,490 --> 00:11:17,290 Speaker 7: And so I thought if I could interview other owners, 236 00:11:17,350 --> 00:11:19,340 Speaker 7: I would get a sense of why they became owners, 237 00:11:19,700 --> 00:11:21,300 Speaker 7: and I would give my own story about why I 238 00:11:21,340 --> 00:11:24,360 Speaker 7: became an owner of the Baltimore Orioles, my hometown baseball team. 239 00:11:25,540 --> 00:11:27,980 Speaker 4: David, you know, there once was a time when owning 240 00:11:28,059 --> 00:11:32,880 Speaker 4: a major sports franchise was the game for millionaires. And 241 00:11:32,960 --> 00:11:36,199 Speaker 4: then it became the game for billionaires. And now we've 242 00:11:36,220 --> 00:11:39,080 Speaker 4: got institutional money coming into the ownership. I think about 243 00:11:39,100 --> 00:11:41,620 Speaker 4: the Los Angeles Dodgers. I think about the NFL allowing 244 00:11:41,679 --> 00:11:44,660 Speaker 4: private equity to own minority stakes. And of course, corporate 245 00:11:44,679 --> 00:11:48,600 Speaker 4: ownership of the English Premier League teams. Where does this 246 00:11:48,660 --> 00:11:49,300 Speaker 4: go from here. 247 00:11:49,340 --> 00:11:49,660 Speaker 6: Do you think? 248 00:11:51,030 --> 00:11:53,189 Speaker 7: Well, the reason this is happening is in part because 249 00:11:53,230 --> 00:11:55,689 Speaker 7: the values of franchises have gone up so much that 250 00:11:55,750 --> 00:11:57,870 Speaker 7: very few individuals can buy a team. 251 00:11:58,470 --> 00:12:00,510 Speaker 6: So, for example, NFL franchises. 252 00:12:00,530 --> 00:12:04,220 Speaker 7: Which are now worth $ 10 billion plus, very few individuals 253 00:12:04,260 --> 00:12:05,860 Speaker 7: can write a check that can buy a team for 254 00:12:05,860 --> 00:12:06,340 Speaker 7: $ 10 billion. 255 00:12:07,120 --> 00:12:08,880 Speaker 6: Therefore, you need to get outside money. 256 00:12:09,240 --> 00:12:12,459 Speaker 7: The NFL now allows teams to buy, certain private equity firms, 257 00:12:12,480 --> 00:12:16,839 Speaker 7: to buy up to 10 percent. Other private leagues allow 258 00:12:16,960 --> 00:12:20,240 Speaker 7: sovereign wealth funds to invest, all in minority stakes. We 259 00:12:20,280 --> 00:12:22,640 Speaker 7: haven't gone to the point yet where a private equity 260 00:12:22,679 --> 00:12:25,630 Speaker 7: firm or a sovereign wealth fund can own a major 261 00:12:25,850 --> 00:12:29,890 Speaker 7: American franchise in control, but that could happen down the road. 262 00:12:29,929 --> 00:12:30,290 Speaker 6: Who knows? 263 00:12:30,670 --> 00:12:33,989 Speaker 3: David Rubenstein, Inside the Owner's Box. Folks, this is the 264 00:12:34,030 --> 00:12:38,150 Speaker 3: sports book of the year. It is absolutely piercing. Let 265 00:12:38,190 --> 00:12:41,109 Speaker 3: me give you one example. I had a great dad 266 00:12:41,170 --> 00:12:44,189 Speaker 3: who was a man of spirituality. He was of limited 267 00:12:44,309 --> 00:12:47,410 Speaker 3: financial means. He had a small dry goods business, but 268 00:12:47,450 --> 00:12:50,359 Speaker 3: he was really a person who was a spiritual leader. 269 00:12:50,460 --> 00:12:54,160 Speaker 3: He was head of all synagogues of Massachusetts for 12 years. 270 00:12:54,600 --> 00:12:57,900 Speaker 3: He never watched TV. And then as a kid, Robert 271 00:12:57,980 --> 00:13:00,920 Speaker 3: Kraft went on to win six Super Bowls. I mean, 272 00:13:00,960 --> 00:13:03,000 Speaker 3: a guy like Kraft, I mean, what he did to 273 00:13:03,059 --> 00:13:06,620 Speaker 3: pick up the, I think it was the Boston Patriots then. 274 00:13:06,990 --> 00:13:10,569 Speaker 3: Not even, give us a vignette into Robert Kraft, David, 275 00:13:10,610 --> 00:13:11,790 Speaker 3: and what you learned from him. 276 00:13:12,190 --> 00:13:15,570 Speaker 7: Well, Robert Kraft was born in Boston. He went to 277 00:13:15,610 --> 00:13:19,350 Speaker 7: college at Columbia. He actually played football at Columbia University. 278 00:13:19,929 --> 00:13:23,810 Speaker 7: And later retained his love of football. But he built 279 00:13:23,870 --> 00:13:25,490 Speaker 7: a business in the packaging business. 280 00:13:25,830 --> 00:13:27,410 Speaker 6: And basically that was his life. 281 00:13:27,809 --> 00:13:30,190 Speaker 7: And then an opportunity came along to buy a stadium 282 00:13:30,710 --> 00:13:32,710 Speaker 7: that football team was played in. And later he bought 283 00:13:32,750 --> 00:13:35,510 Speaker 7: the team itself. And then he won six Super Bowls. 284 00:13:35,550 --> 00:13:38,640 Speaker 7: He's now been to 11 Super Bowls. And I think 285 00:13:38,679 --> 00:13:41,000 Speaker 7: in the recent era, nobody's been to as many Super 286 00:13:41,040 --> 00:13:43,120 Speaker 7: Bowls and nobody's won as many Super Bowls. 287 00:13:43,559 --> 00:13:45,820 Speaker 6: And Bob Kraft loves the game of football. 288 00:13:45,880 --> 00:13:48,100 Speaker 7: And now he also owns the Revolution, which is the 289 00:13:48,460 --> 00:13:51,250 Speaker 7: men's soccer team in Boston. So he's given a great 290 00:13:51,280 --> 00:13:52,990 Speaker 7: deal to this professional sports world. 291 00:13:53,450 --> 00:13:54,450 Speaker 6: And obviously he had a. 292 00:13:54,450 --> 00:13:58,450 Speaker 7: Very famous quarterback named Tom Brady. He drafted in the 293 00:13:58,510 --> 00:14:01,590 Speaker 7: sixth round, but later became, I guess, the greatest quarterback 294 00:14:01,630 --> 00:14:02,170 Speaker 7: of all time. 295 00:14:02,470 --> 00:14:06,890 Speaker 3: Page 57. Did David Rubenstein bring Pete Alonzo to the Orioles? 296 00:14:08,790 --> 00:14:12,230 Speaker 7: Well, you know, I bought the Orioles in part because 297 00:14:12,270 --> 00:14:15,380 Speaker 7: I wanted to help my hometown of Baltimore. Baltimore, when 298 00:14:15,420 --> 00:14:17,679 Speaker 7: I was growing up, was a much bigger city, more vibrant. 299 00:14:17,700 --> 00:14:20,280 Speaker 7: It's had some challenges. And I thought that I hadn't 300 00:14:20,300 --> 00:14:24,020 Speaker 7: philanthropically done enough for Baltimore compared to other places. And 301 00:14:24,060 --> 00:14:25,840 Speaker 7: I thought if I could buy the team and revive 302 00:14:25,920 --> 00:14:28,210 Speaker 7: it a bit, it would help downtown Baltimore and help 303 00:14:28,260 --> 00:14:31,310 Speaker 7: Baltimore generally. So far, I haven't been as successful in 304 00:14:31,330 --> 00:14:34,030 Speaker 7: the field as I would like, but I've enjoyed the experience. 305 00:14:34,110 --> 00:14:37,070 Speaker 7: It's just that I try to remind people that I'm 306 00:14:37,110 --> 00:14:39,010 Speaker 7: just an owner, and when people come up to me 307 00:14:39,050 --> 00:14:41,420 Speaker 7: for autographs or selfies, I try to remind them that 308 00:14:41,440 --> 00:14:44,460 Speaker 7: I'm not a player. But sometimes when eight-year-old boys come up, 309 00:14:44,480 --> 00:14:46,479 Speaker 7: what are you supposed to say? I'm not that significant. 310 00:14:46,500 --> 00:14:49,270 Speaker 7: Don't get my autograph. So I sign the autograph, but 311 00:14:49,290 --> 00:14:50,010 Speaker 7: I don't really think that. 312 00:14:50,340 --> 00:14:51,760 Speaker 6: They're going to sell on eBay for more than a 313 00:14:52,100 --> 00:14:52,600 Speaker 6: penny or two. 314 00:14:52,900 --> 00:14:55,890 Speaker 3: The Rubenstein different folks, if you gaze at the perfect 315 00:14:55,930 --> 00:14:59,690 Speaker 3: Camden Yards, he's not up in the fancy box. Rubenstein 316 00:14:59,730 --> 00:15:02,310 Speaker 3: is in row, not row one, row like two or 317 00:15:02,430 --> 00:15:05,110 Speaker 3: three-ish near the dugout. He's got a head on. He's 318 00:15:05,130 --> 00:15:07,440 Speaker 3: going incognito. 319 00:15:07,940 --> 00:15:10,760 Speaker 4: David, as owner of the Baltimore Orioles, do you believe 320 00:15:10,780 --> 00:15:12,700 Speaker 4: there will be a work stoppage in Major League Baseball 321 00:15:12,720 --> 00:15:13,020 Speaker 4: next year? 322 00:15:14,210 --> 00:15:16,250 Speaker 6: I don't think I know what will happen. 323 00:15:16,690 --> 00:15:19,030 Speaker 7: I think the commissioner has convinced all owners that the 324 00:15:19,050 --> 00:15:21,490 Speaker 7: best thing we can do is let the commissioner and 325 00:15:21,530 --> 00:15:24,210 Speaker 7: his team try to negotiate a deal. So I think 326 00:15:24,430 --> 00:15:27,190 Speaker 7: rather than get myself in trouble and get banned from baseball, 327 00:15:27,600 --> 00:15:29,760 Speaker 7: I'm going to say, we'll just see what the negotiators 328 00:15:29,800 --> 00:15:31,900 Speaker 7: come up with. I just honestly don't know what will happen. 329 00:15:32,240 --> 00:15:34,700 Speaker 7: But clearly, I hope that we have a full season. 330 00:15:35,640 --> 00:15:37,900 Speaker 3: David, I have to digress here just in the final 331 00:15:37,960 --> 00:15:40,780 Speaker 3: questions that we have. We have an institution, I was 332 00:15:40,820 --> 00:15:44,380 Speaker 3: watching this TV show, The Americans, from like 13 years ago, 333 00:15:44,780 --> 00:15:48,830 Speaker 3: of David Rubenstein's Washington, D.C. And they're doing the beauty shots. 334 00:15:48,870 --> 00:15:51,630 Speaker 3: And off in the distance is a beauty shot of 335 00:15:51,690 --> 00:15:56,150 Speaker 3: a horizontal, gorgeous 60s architecture, the Kennedy Center. It's front 336 00:15:56,170 --> 00:16:01,250 Speaker 3: and center now in debate. David, what is the best 337 00:16:01,450 --> 00:16:05,170 Speaker 3: outcome for the Kennedy Center after President Trump? 338 00:16:06,480 --> 00:16:09,120 Speaker 7: Well, I chaired the Kennedy Center board for 14 years, 339 00:16:09,200 --> 00:16:11,970 Speaker 7: and I was on the board for 20 years. And 340 00:16:12,030 --> 00:16:13,890 Speaker 7: I obviously care a lot about the Kennedy Center. I 341 00:16:13,910 --> 00:16:16,229 Speaker 7: think I gave the Kennedy Center more than $ 100 million 342 00:16:16,290 --> 00:16:19,850 Speaker 7: in philanthropic contributions. And I want the Kennedy Center to thrive. 343 00:16:19,880 --> 00:16:24,330 Speaker 7: It was set up as a bipartisan, nonpartisan performing arts 344 00:16:24,370 --> 00:16:26,510 Speaker 7: center as a living memorial to President Kennedy. 345 00:16:26,870 --> 00:16:27,830 Speaker 6: And that's what it should be. 346 00:16:28,270 --> 00:16:30,010 Speaker 7: And I'm very hopeful that at some point we can 347 00:16:30,050 --> 00:16:34,640 Speaker 7: return it to a nonpartisan, bipartisan performing arts center that 348 00:16:34,720 --> 00:16:36,460 Speaker 7: everybody wants to go to and perform at. 349 00:16:36,460 --> 00:16:41,200 Speaker 3: Right. You and I adore Charlie Cook. Amy Walker's doing 350 00:16:41,240 --> 00:16:44,200 Speaker 3: such a beautiful job at the Cook Political Report. Charlie 351 00:16:44,240 --> 00:16:46,920 Speaker 3: Cook wrote an essay yesterday for the Cook Political Report. 352 00:16:47,360 --> 00:16:52,350 Speaker 3: It was absolutely scathing about how the Democratic Party can't 353 00:16:52,550 --> 00:16:57,450 Speaker 3: get organized to take on this midterm or, frankly, after 354 00:16:57,530 --> 00:17:00,690 Speaker 3: President Trump. What does the Democratic Party need to do 355 00:17:00,730 --> 00:17:04,929 Speaker 3: to coalesce around the values of David Rubenstein and Robert 356 00:17:04,970 --> 00:17:06,650 Speaker 3: Barnett of another time and place? 357 00:17:07,740 --> 00:17:09,560 Speaker 6: Well, we'll see what happens in the elections. 358 00:17:09,900 --> 00:17:14,260 Speaker 7: The midterm elections, traditionally, a president loses about 25 House 359 00:17:14,300 --> 00:17:16,220 Speaker 7: seats and about two or three Senate seats. 360 00:17:16,580 --> 00:17:17,680 Speaker 6: We don't know what will happen. 361 00:17:18,070 --> 00:17:21,550 Speaker 7: We've only had one experience like this before, which was 362 00:17:21,630 --> 00:17:25,129 Speaker 7: a president was in a second term that was non-consecutive. 363 00:17:25,430 --> 00:17:28,290 Speaker 7: And that was Grover Cleveland in the late 1800s. And 364 00:17:28,330 --> 00:17:30,729 Speaker 7: that was not a great outcome for his party. He 365 00:17:30,750 --> 00:17:34,790 Speaker 7: lost 133 seats in the House, the greatest loss ever. Now, 366 00:17:35,210 --> 00:17:37,350 Speaker 7: I don't know whether anything like that could happen again. 367 00:17:37,369 --> 00:17:38,010 Speaker 6: I don't think so. 368 00:17:38,430 --> 00:17:40,530 Speaker 7: But I suspect that it will be difficult for the 369 00:17:40,550 --> 00:17:43,629 Speaker 7: Republicans to hold on to both houses in this midterm 370 00:17:43,650 --> 00:17:46,129 Speaker 7: election based on the polling data that I've seen from 371 00:17:46,150 --> 00:17:47,469 Speaker 7: the Cook Report and other places. 372 00:17:47,550 --> 00:17:49,890 Speaker 6: But time will tell. And you never know how people 373 00:17:49,910 --> 00:17:50,970 Speaker 6: are going to vote in the last minute. 374 00:17:51,310 --> 00:17:54,190 Speaker 3: You going to Orioles-Yankees tonight at Yankee Stadium? You know 375 00:17:54,210 --> 00:17:56,980 Speaker 3: what I mean? It's coming up, right? 376 00:17:57,980 --> 00:18:02,000 Speaker 7: No, tonight we have a game in Camden Yards, a 377 00:18:02,060 --> 00:18:06,340 Speaker 7: rainout game we have to play against the Toronto. The 378 00:18:06,359 --> 00:18:09,260 Speaker 7: Yankees are coming up in the future after this series 379 00:18:09,320 --> 00:18:10,200 Speaker 7: is over in Baltimore. 380 00:18:10,240 --> 00:18:10,440 Speaker 6: Yes. 381 00:18:10,980 --> 00:18:14,260 Speaker 3: Defeat them. David Rubenstein. Thank you. Thank you so much. 382 00:18:14,300 --> 00:18:15,879 Speaker 3: I can't say enough about this, folks. 383 00:18:17,730 --> 00:18:18,330 Speaker 6: Stay with us. 384 00:18:18,650 --> 00:18:21,870 Speaker 3: More from Bloomberg Surveillance coming up after this. 385 00:18:29,130 --> 00:18:32,740 Speaker 1: You're listening to the Bloomberg Surveillance Podcast. Catch us live 386 00:18:32,820 --> 00:18:35,980 Speaker 1: weekday afternoons from 7 to 10 a.m. Eastern. Listen on 387 00:18:36,100 --> 00:18:39,360 Speaker 1: Apple CarPlay and Android Auto with the Bloomberg Business app. 388 00:18:39,560 --> 00:18:41,240 Speaker 1: Or watch us live on YouTube. 389 00:18:41,480 --> 00:18:43,859 Speaker 3: Joining us now for an economic break. Love having her 390 00:18:43,960 --> 00:18:48,899 Speaker 3: on with ITR up in Boston. Lauren Seidel-Baker joins us 391 00:18:48,960 --> 00:18:52,419 Speaker 3: right now. Lauren, excuse me. 392 00:18:52,440 --> 00:18:53,440 Speaker 6: Still have the plague, folks. 393 00:18:54,640 --> 00:18:58,320 Speaker 3: Lauren, is nominal GDP just going to sustain? As you 394 00:18:58,340 --> 00:19:02,359 Speaker 3: look out, does top line GDP come under 5% or 395 00:19:02,400 --> 00:19:03,400 Speaker 3: is it forever like? 396 00:19:04,940 --> 00:19:07,340 Speaker 8: I would never say forever, but for a while we 397 00:19:07,359 --> 00:19:10,830 Speaker 8: do have a runway here. I think 2027 we'll see 398 00:19:11,030 --> 00:19:14,609 Speaker 8: moderately slower growth, but still quite solid. A lot of 399 00:19:14,910 --> 00:19:18,449 Speaker 8: this year's, especially CapEx and business spending decisions, A lot 400 00:19:18,470 --> 00:19:21,670 Speaker 8: of that's been pulled into 2026. So I would expect 401 00:19:21,790 --> 00:19:24,950 Speaker 8: some of these kind of macro factors to take a 402 00:19:24,970 --> 00:19:27,709 Speaker 8: breather in 2027. The consumer is the one that I'm 403 00:19:27,790 --> 00:19:32,119 Speaker 8: personally watching very closely. We are seeing real personal incomes 404 00:19:32,150 --> 00:19:35,340 Speaker 8: declining now. So with all of this inflation, our income 405 00:19:35,380 --> 00:19:38,100 Speaker 8: is just not quite able to keep pace. That's going 406 00:19:38,119 --> 00:19:39,660 Speaker 8: to be a bit of a downside for next year. 407 00:19:39,700 --> 00:19:41,860 Speaker 8: But I don't see any recession, certainly. And I do 408 00:19:41,900 --> 00:19:43,500 Speaker 8: see these rather elevated growth rates. 409 00:19:43,640 --> 00:19:47,330 Speaker 3: And Paul, Neil Dutter writing in Business Insider over the weekend, 410 00:19:47,350 --> 00:19:50,700 Speaker 3: that's where he focused on his prediction of a slump. consumer. 411 00:19:50,800 --> 00:19:53,280 Speaker 4: I read everything he writes, that's for sure. Lauren, I'm 412 00:19:53,619 --> 00:19:56,859 Speaker 4: just looking at WTI crude oil now, just below $ 90 413 00:19:56,340 --> 00:19:57,550 Speaker 4: a barrel, but it's. 414 00:19:57,660 --> 00:19:59,070 Speaker 6: All over the place here. 415 00:19:59,450 --> 00:20:00,669 Speaker 4: I think what a lot of folks are trying to, 416 00:20:00,970 --> 00:20:02,609 Speaker 4: maybe even the Federal Reserve is trying to figure out, 417 00:20:03,030 --> 00:20:06,770 Speaker 4: what's kind of the core underlying inflation? How do you 418 00:20:06,790 --> 00:20:07,689 Speaker 4: kind of think about that? 419 00:20:09,730 --> 00:20:13,250 Speaker 8: So the Federal Reserve, we've heard new metrics for core inflation. 420 00:20:13,730 --> 00:20:16,010 Speaker 8: You know, it's not just that core PCE anymore. Are 421 00:20:16,050 --> 00:20:17,950 Speaker 8: we going to a trimmed mean or some of these 422 00:20:18,050 --> 00:20:21,370 Speaker 8: other measures? Overall, what we do here at ITR Economics 423 00:20:21,410 --> 00:20:24,690 Speaker 8: is we look at this holistically, not just the, say, 424 00:20:24,730 --> 00:20:26,960 Speaker 8: CPI or core PCE or any of those kind of 425 00:20:27,000 --> 00:20:29,020 Speaker 8: headline numbers. We really want to see what are folks 426 00:20:29,140 --> 00:20:32,379 Speaker 8: actually feeling. That's going to be different for different consumer 427 00:20:32,440 --> 00:20:36,000 Speaker 8: segments right now. So again, comping that to incomes to 428 00:20:36,060 --> 00:20:38,659 Speaker 8: see where are we on a real basis. If we 429 00:20:38,700 --> 00:20:41,320 Speaker 8: do want to go deeper into the consumer, we currently 430 00:20:41,380 --> 00:20:44,659 Speaker 8: see that lending conditions are loosening. So maybe it's easier 431 00:20:44,700 --> 00:20:46,240 Speaker 8: to get that credit if you need it. We don't 432 00:20:46,280 --> 00:20:49,330 Speaker 8: see our personal savings balances really hanging in as strongly. 433 00:20:49,690 --> 00:20:51,609 Speaker 8: So I think of the consumer's legs of a stool. 434 00:20:51,710 --> 00:20:53,430 Speaker 5: How do they combat this inflation? 435 00:20:54,090 --> 00:20:55,970 Speaker 8: As for what that exact number is, we could argue 436 00:20:55,990 --> 00:20:57,750 Speaker 8: about it all day, but the point is they're feeling it. 437 00:20:58,460 --> 00:21:00,360 Speaker 3: I mean, when you were at Wellesley, and of course, 438 00:21:00,400 --> 00:21:02,970 Speaker 3: this is under the giant Carl case that we miss 439 00:21:03,090 --> 00:21:07,889 Speaker 3: every day. Lawrence Seidel Baker, Chapter 23 of any given 440 00:21:07,950 --> 00:21:12,250 Speaker 3: intro economics book links the stock market into economics. Do 441 00:21:12,290 --> 00:21:15,189 Speaker 3: you do that? Do you link equity performance that we 442 00:21:15,290 --> 00:21:18,729 Speaker 3: see now into your view of the economy forward? 443 00:21:20,109 --> 00:21:22,130 Speaker 8: I'm going to get it tattooed on my forehead. The 444 00:21:22,170 --> 00:21:23,930 Speaker 8: stock market is not the economy. 445 00:21:24,050 --> 00:21:25,230 Speaker 3: There we go. 446 00:21:25,810 --> 00:21:28,030 Speaker 8: We want to watch the stock market, right? There's something 447 00:21:28,109 --> 00:21:31,240 Speaker 8: happening there. But right now, that is not telling us 448 00:21:31,300 --> 00:21:34,260 Speaker 8: the key economic story. It is, I think, representative of 449 00:21:34,340 --> 00:21:36,659 Speaker 8: what sectors might be driving some of this growth as 450 00:21:36,700 --> 00:21:39,660 Speaker 8: we talk AI, data centers, and I mean... As your 451 00:21:39,680 --> 00:21:43,440 Speaker 8: previous guest said, where that trickles down to the electrification, 452 00:21:43,460 --> 00:21:45,460 Speaker 8: to this new power generation that we're needing and all 453 00:21:45,480 --> 00:21:48,070 Speaker 8: of those other capabilities. At the end of the day, 454 00:21:48,180 --> 00:21:51,710 Speaker 8: that is driving a lot of the activity across especially 455 00:21:51,730 --> 00:21:54,170 Speaker 8: the B2B space right now. And that is in fact 456 00:21:54,210 --> 00:21:57,530 Speaker 8: driving higher pricing in some of these key components. It's 457 00:21:57,570 --> 00:21:59,690 Speaker 8: not quite the golden screw problem that we had back 458 00:21:59,710 --> 00:22:03,689 Speaker 8: during COVID and the immediate aftermath, but there are certainly 459 00:22:03,930 --> 00:22:07,270 Speaker 8: demand factors that are pulling up pricing in certain sectors 460 00:22:07,290 --> 00:22:10,510 Speaker 8: that are being felt much more widespread than just in 461 00:22:10,530 --> 00:22:12,730 Speaker 8: the data center space. So I'm looking at it as 462 00:22:12,770 --> 00:22:15,510 Speaker 8: a nice kind of benchmark, something to pay attention to, 463 00:22:15,570 --> 00:22:19,080 Speaker 8: but I would never put my economic takeaways from the 464 00:22:19,619 --> 00:22:20,149 Speaker 8: asset prices. 465 00:22:20,630 --> 00:22:24,480 Speaker 4: So, Lauren, just as it relates to AI spending, it's 466 00:22:24,520 --> 00:22:28,119 Speaker 4: been such a major part of the U.S. equity market story, 467 00:22:28,160 --> 00:22:30,620 Speaker 4: now the fixed income market as well. It's also been 468 00:22:30,660 --> 00:22:34,280 Speaker 4: a big story of just kind of GDP in general, 469 00:22:34,460 --> 00:22:38,889 Speaker 4: economic growth. How concerned are you that to the extent 470 00:22:38,990 --> 00:22:42,950 Speaker 4: AI spending pulls back, that would have broader economic impacts here? 471 00:22:44,910 --> 00:22:47,230 Speaker 8: Again, it certainly could, as that has been where the 472 00:22:47,270 --> 00:22:50,889 Speaker 8: growth is concentrated. But that growth, as rapid as it 473 00:22:50,990 --> 00:22:54,810 Speaker 8: has been and as just eye-popping as these percentages are, 474 00:22:55,230 --> 00:22:58,250 Speaker 8: it still is not the vast majority of our economy. 475 00:22:58,270 --> 00:23:00,830 Speaker 8: If I'm looking at GDP, two-thirds of that is driven 476 00:23:00,869 --> 00:23:05,050 Speaker 8: by the consumer. The remaining third, it's roughly evenly divided 477 00:23:05,090 --> 00:23:09,210 Speaker 8: between business investment and government spending. So We're already at 478 00:23:09,250 --> 00:23:11,889 Speaker 8: a rather small wedge. Even if AI were to dry 479 00:23:11,970 --> 00:23:14,360 Speaker 8: up tomorrow, clearly there would be an impact, but it's 480 00:23:14,390 --> 00:23:17,280 Speaker 8: not going to be half of all GDP. 481 00:23:16,900 --> 00:23:17,480 Speaker 3: Growth, right? 482 00:23:17,580 --> 00:23:20,940 Speaker 8: There certainly is a lot else going on here in 483 00:23:20,980 --> 00:23:23,940 Speaker 8: the economy. We are a very large economy here in 484 00:23:23,960 --> 00:23:25,740 Speaker 8: the United States, the largest in the world on a 485 00:23:25,760 --> 00:23:29,020 Speaker 8: GDP basis, and that is being supported by so many 486 00:23:29,100 --> 00:23:31,320 Speaker 8: other factors. AI is just the one with the high 487 00:23:31,340 --> 00:23:31,960 Speaker 8: growth right now. 488 00:23:32,119 --> 00:23:37,260 Speaker 3: Do you link your Fed expectation to trying to manage 489 00:23:37,320 --> 00:23:39,110 Speaker 3: a slowdown in the economy. 490 00:23:41,190 --> 00:23:43,129 Speaker 5: Um, Fed expectations. 491 00:23:43,190 --> 00:23:45,879 Speaker 8: I mean, I have been saying that inflation is the 492 00:23:45,900 --> 00:23:48,200 Speaker 8: key driver for, I don't know how many years now, um, 493 00:23:48,240 --> 00:23:51,179 Speaker 8: that we were expecting rates to start moving higher at 494 00:23:51,220 --> 00:23:53,820 Speaker 8: some point. We, we reached that point here this month. 495 00:23:54,280 --> 00:23:57,219 Speaker 8: So I'm still watching for inflation again, at the end 496 00:23:57,260 --> 00:24:00,180 Speaker 8: of the day, the labor market is holding in quite well. 497 00:24:00,500 --> 00:24:02,560 Speaker 8: I don't think that side of the slowdown really. 498 00:24:02,359 --> 00:24:03,179 Speaker 5: Needs to be managed. 499 00:24:03,320 --> 00:24:06,160 Speaker 8: Obviously these folks are paying attention to so many different factors, 500 00:24:06,180 --> 00:24:08,960 Speaker 8: but But if we're just going by that strict dual mandate, 501 00:24:09,260 --> 00:24:11,090 Speaker 8: inflation is the thing they need to worry about. And 502 00:24:11,109 --> 00:24:16,770 Speaker 8: I see that being a pressure from. 503 00:24:15,170 --> 00:24:15,930 Speaker 5: AI, right? 504 00:24:15,970 --> 00:24:18,310 Speaker 8: That is one of the key drivers here behind higher pricing. 505 00:24:18,670 --> 00:24:21,510 Speaker 8: So I think that is the more immediate focus. Longer term, 506 00:24:21,790 --> 00:24:22,560 Speaker 8: anything can happen. 507 00:24:22,950 --> 00:24:25,260 Speaker 3: Have you downloaded Muse yet from Meta? 508 00:24:25,460 --> 00:24:26,280 Speaker 5: I have not. 509 00:24:26,300 --> 00:24:27,180 Speaker 4: That's a hot tip. 510 00:24:27,220 --> 00:24:28,439 Speaker 2: I'm going to have to go do that today. 511 00:24:28,600 --> 00:24:31,540 Speaker 3: Paul Sweeney's way out in front of us. I have 512 00:24:31,619 --> 00:24:33,000 Speaker 3: no idea what to do with it, even if I 513 00:24:33,020 --> 00:24:34,030 Speaker 3: download it. I'm playing with it. 514 00:24:34,080 --> 00:24:34,379 Speaker 4: I don't know. 515 00:24:35,230 --> 00:24:37,530 Speaker 3: I'll figure it out. Well, good for you. I mean, seriously. 516 00:24:37,590 --> 00:24:42,609 Speaker 3: Lawrence Seidel Baker, thank you so much. Economist, ITR Economics. 517 00:24:44,430 --> 00:24:45,030 Speaker 6: Stay with us. 518 00:24:45,330 --> 00:24:48,580 Speaker 3: More from Bloomberg Surveillance coming up after this. 519 00:24:55,840 --> 00:24:59,450 Speaker 1: You're listening to the Bloomberg Surveillance Podcast. Catch us live 520 00:24:59,530 --> 00:25:02,689 Speaker 1: weekday afternoons from 7 to 10 a.m. Eastern. Listen on 521 00:25:02,810 --> 00:25:06,070 Speaker 1: Apple CarPlay and Android Auto with the Bloomberg Business app 522 00:25:06,290 --> 00:25:08,010 Speaker 1: or watch us live on YouTube. 523 00:25:08,450 --> 00:25:10,220 Speaker 3: Let's get right to it. I see Matt Lozetti on 524 00:25:10,320 --> 00:25:13,449 Speaker 3: Fed Day. And I get like one question in, and 525 00:25:13,490 --> 00:25:15,390 Speaker 3: it's really not focused because you've got to go talk 526 00:25:15,410 --> 00:25:19,120 Speaker 3: to Deutsche Bank clients worldwide. Matt was in the studio 527 00:25:20,000 --> 00:25:23,420 Speaker 3: right now. I just got to ask you, and this 528 00:25:23,500 --> 00:25:27,400 Speaker 3: is the heritage of Deutsche Bank economics, to take nominal 529 00:25:27,480 --> 00:25:31,980 Speaker 3: GDP in a roaring economy, and there's different sets of 530 00:25:32,220 --> 00:25:36,090 Speaker 3: outcomes if we try to bring ourselves down from a 531 00:25:36,170 --> 00:25:41,490 Speaker 3: roaring economy. Which outcome do you guess between dampened real 532 00:25:41,530 --> 00:25:46,649 Speaker 3: growth and dampened inflation? Where are we at three years 533 00:25:46,890 --> 00:25:48,600 Speaker 3: on this boom economy? 534 00:25:48,680 --> 00:25:50,500 Speaker 5: I mean, you're absolutely right to highlight it. 535 00:25:50,520 --> 00:25:55,240 Speaker 9: We're at 6.5% nominal GDP growth year over year. And 536 00:25:55,260 --> 00:25:57,820 Speaker 9: so I think last week when we were chatting, there's 537 00:25:57,840 --> 00:26:00,900 Speaker 9: been a lot of maybe pushback on the Fed for 538 00:26:01,260 --> 00:26:04,190 Speaker 9: hiking into a supply shock. And And it is true 539 00:26:04,210 --> 00:26:07,209 Speaker 9: that there are supply shocks ongoing. But I think we've 540 00:26:07,230 --> 00:26:11,050 Speaker 9: been arguing that there's also a pretty robust demand backdrop 541 00:26:11,150 --> 00:26:15,010 Speaker 9: driving nominal GDP growth higher. Our baseline is that we 542 00:26:15,050 --> 00:26:17,810 Speaker 9: will see inflation come down over time. But it's been 543 00:26:17,830 --> 00:26:19,990 Speaker 9: our baseline that the Fed needs to tighten monetary policy 544 00:26:20,010 --> 00:26:22,770 Speaker 9: to get there. So you probably have some slowing over 545 00:26:22,810 --> 00:26:26,730 Speaker 9: time in real growth, but also inflation coming down ultimately 546 00:26:26,750 --> 00:26:29,670 Speaker 9: over time. I think Chair Warsh is outlining a view, hopefully, 547 00:26:29,730 --> 00:26:32,820 Speaker 9: where It's mostly an inflation story, and the real economy 548 00:26:32,859 --> 00:26:35,600 Speaker 9: can continue to chug along. I think you're hearing Fed 549 00:26:35,640 --> 00:26:38,240 Speaker 9: officials beginning to debate a little bit more how much 550 00:26:38,300 --> 00:26:41,600 Speaker 9: pain might be required to get inflation down. I think Goolsbee, 551 00:26:42,260 --> 00:26:45,179 Speaker 9: Chicago Fed president, this week also brought that back. And 552 00:26:45,220 --> 00:26:47,220 Speaker 9: so we're not there yet, I think, from a full 553 00:26:47,260 --> 00:26:49,240 Speaker 9: debate from a Fed perspective, but it's possible that we 554 00:26:49,290 --> 00:26:49,910 Speaker 9: get there next year. 555 00:26:50,550 --> 00:26:52,290 Speaker 4: Matt, a lot of smart folks are telling me, stop 556 00:26:52,330 --> 00:26:55,330 Speaker 4: whining about interest rates being higher at 5% for the 10-year. 557 00:26:55,670 --> 00:26:58,429 Speaker 4: We've got a nominal GDP of 6% or whatever percent 558 00:26:58,470 --> 00:27:01,870 Speaker 4: is higher than This is where rates kind of should 559 00:27:01,910 --> 00:27:04,109 Speaker 4: be given that kind of economic growth. How do you 560 00:27:04,130 --> 00:27:07,550 Speaker 4: think about the interest rate environment with the economic backdrop here? 561 00:27:07,830 --> 00:27:10,669 Speaker 9: Yeah, I think that there's probably nothing unusual about where 562 00:27:10,710 --> 00:27:13,220 Speaker 9: interest rates are given the economic backdrop and certainly given 563 00:27:13,240 --> 00:27:16,359 Speaker 9: the fiscal picture. I think the unusual nature of it 564 00:27:16,460 --> 00:27:18,679 Speaker 9: is when we compare it to what we saw between 565 00:27:19,859 --> 00:27:24,300 Speaker 9: the GFC and the pandemic, that very unusual zero interest 566 00:27:24,320 --> 00:27:26,700 Speaker 9: rate environment. And there was a debate, I think, after 567 00:27:26,740 --> 00:27:29,420 Speaker 9: the pandemic about what has fundamentally changed that has either 568 00:27:29,910 --> 00:27:33,310 Speaker 9: it pushed us more fully away from that environment and 569 00:27:33,390 --> 00:27:35,310 Speaker 9: returned us to normal, or would we get back there? 570 00:27:35,330 --> 00:27:39,390 Speaker 9: You know, it's our view that it was anomalous, the 571 00:27:39,630 --> 00:27:42,670 Speaker 9: zero interest rate environment between the 2010s and the GFC, 572 00:27:42,690 --> 00:27:47,869 Speaker 9: that that was driven by deleveraging that you'd seen, fiscal 573 00:27:47,890 --> 00:27:51,870 Speaker 9: policy that was contractive, unusual monetary policy that we saw 574 00:27:51,890 --> 00:27:54,270 Speaker 9: across the globe. Those are all behind us. We have 575 00:27:54,290 --> 00:27:56,359 Speaker 9: an investment boom ongoing, you have fiscal policy, which is 576 00:27:56,380 --> 00:27:59,940 Speaker 9: very supportive. debt-to-GDP ratios that are rising. There's no need 577 00:27:59,960 --> 00:28:00,810 Speaker 9: for low interest rates today. 578 00:28:00,850 --> 00:28:03,470 Speaker 3: Matt Lozetti with us. Damian Sassar on deck for Global 579 00:28:03,590 --> 00:28:07,149 Speaker 3: Wall Street. Mr. Lozetti is with Deutsche Bank at the 580 00:28:07,210 --> 00:28:12,379 Speaker 3: Time Warner Center, except they renamed it the Lozetti Center 581 00:28:12,580 --> 00:28:16,220 Speaker 3: over there in the corner of Central Park as well. 582 00:28:16,240 --> 00:28:19,260 Speaker 3: I interviewed Fokerts Landau driving all of your work, I 583 00:28:19,300 --> 00:28:21,940 Speaker 3: think the day Putin walked into Ukraine or the day after. 584 00:28:22,660 --> 00:28:27,530 Speaker 3: And he absolutely nailed the fiscal impetus to come. Are 585 00:28:27,570 --> 00:28:31,340 Speaker 3: we living off continued COVID stimulus or is this a 586 00:28:31,500 --> 00:28:33,380 Speaker 3: new stimulus that we're in right now? 587 00:28:34,220 --> 00:28:36,000 Speaker 5: I don't think this is really about COVID stimulus. 588 00:28:36,420 --> 00:28:37,090 Speaker 3: We're beyond that. 589 00:28:37,310 --> 00:28:37,990 Speaker 5: We are beyond that. 590 00:28:38,350 --> 00:28:40,090 Speaker 9: In the U.S., we had the one big beautiful bill 591 00:28:40,130 --> 00:28:42,510 Speaker 9: last year, which provided tax cuts and a tailwind to 592 00:28:42,550 --> 00:28:46,110 Speaker 9: the economy. And then you just have AI-related investment, which 593 00:28:46,190 --> 00:28:48,530 Speaker 9: is driving, you know, it's a critical source. 594 00:28:48,390 --> 00:28:49,570 Speaker 5: Of investment spending. 595 00:28:49,590 --> 00:28:50,790 Speaker 3: Okay, so what happens after that? 596 00:28:51,620 --> 00:28:55,520 Speaker 9: Well, the question is, when is after that, I think. 597 00:28:55,580 --> 00:28:56,080 Speaker 3: Okay, both. 598 00:28:56,340 --> 00:28:59,000 Speaker 9: And I think after that is not over the next 599 00:28:59,040 --> 00:29:02,560 Speaker 9: six to 12 months. After that might be beyond that window. 600 00:29:02,580 --> 00:29:02,760 Speaker 3: Okay. 601 00:29:03,290 --> 00:29:06,520 Speaker 9: You do have a consumer, however, that is also growing 602 00:29:06,560 --> 00:29:08,540 Speaker 9: pretty strongly. If you look at the Atlanta Fed, they're 603 00:29:08,560 --> 00:29:12,660 Speaker 9: tracking 4% annualized growth for real consumer spending in Q3. 604 00:29:12,740 --> 00:29:14,340 Speaker 3: Unbelievable. 605 00:29:14,360 --> 00:29:16,520 Speaker 9: That's the strongest growth that we've seen there in several years. 606 00:29:17,550 --> 00:29:19,650 Speaker 9: That is about labor income. You have a labor market 607 00:29:19,670 --> 00:29:23,770 Speaker 9: that is actually turning around. You have 4.3% nominal income 608 00:29:23,790 --> 00:29:26,110 Speaker 9: growth coming for the consumer, but also big wealth effects, 609 00:29:26,130 --> 00:29:27,950 Speaker 9: and that is tied into the AI trade. 610 00:29:29,440 --> 00:29:32,260 Speaker 4: Looking at your stock, Deutsche Bank, I did not see this, Tom. 611 00:29:32,320 --> 00:29:34,690 Speaker 4: Deutsche Bank, over the last five years, compounded annual growth 612 00:29:34,730 --> 00:29:38,510 Speaker 4: of 28%. They're killing it. That is amazing. I did 613 00:29:38,550 --> 00:29:39,150 Speaker 4: not see that coming. 614 00:29:39,170 --> 00:29:42,400 Speaker 3: It was a weak moment. Peter Hooper hired Matt Lizetian. 615 00:29:42,680 --> 00:29:43,480 Speaker 3: Stock went straight up. 616 00:29:43,540 --> 00:29:45,180 Speaker 6: They more than righted this shit there. 617 00:29:45,200 --> 00:29:45,880 Speaker 5: I wish that were true. 618 00:29:46,940 --> 00:29:48,480 Speaker 4: So, Matt, what are we talking about here on the 619 00:29:48,540 --> 00:29:51,830 Speaker 4: labor side here? Is it still kind of a... Slow 620 00:29:51,850 --> 00:29:54,170 Speaker 4: to no hire, slow to no fire kind of world 621 00:29:54,350 --> 00:29:57,110 Speaker 4: out there? Because, boy, 4.2 or whatever the unemployment rate 622 00:29:57,130 --> 00:29:58,930 Speaker 4: is really seems full employment to me. 623 00:29:59,170 --> 00:30:01,489 Speaker 9: Yeah, so I think we're going through kind of phases here. 624 00:30:01,590 --> 00:30:05,080 Speaker 9: The clear slowdown that took place last year, that had 625 00:30:05,130 --> 00:30:07,860 Speaker 9: motivated the Fed to go through another cycle of rate cuts. 626 00:30:08,720 --> 00:30:10,360 Speaker 9: But since then, I think there's been a clear bottoming. 627 00:30:10,520 --> 00:30:12,560 Speaker 9: There's been a stabilization that's happened in the labor market. 628 00:30:13,160 --> 00:30:14,960 Speaker 9: And we are potentially entering a phase where the labor 629 00:30:15,000 --> 00:30:18,620 Speaker 9: market is tightening more meaningfully. We have job gains that 630 00:30:18,640 --> 00:30:20,680 Speaker 9: are above the break-even rate that is needed to keep 631 00:30:20,700 --> 00:30:24,700 Speaker 9: the unemployment rate steady. We saw yesterday's ADP weekly data 632 00:30:24,880 --> 00:30:28,160 Speaker 9: is consistent with 80,000 private sector jobs per month. That's 633 00:30:28,420 --> 00:30:31,120 Speaker 9: well above levels that we think are needed. And with that, 634 00:30:31,140 --> 00:30:34,000 Speaker 9: you've seen the unemployment rate decline, broader measures of labor 635 00:30:34,020 --> 00:30:36,760 Speaker 9: market slack decline as well, early stages of wage growth 636 00:30:36,820 --> 00:30:39,920 Speaker 9: beginning to pick up. So now I think the question is, 637 00:30:40,300 --> 00:30:43,050 Speaker 9: are we simply stabilizing here where we are? Or is 638 00:30:43,090 --> 00:30:45,910 Speaker 9: there a reacceleration that could take place? 639 00:30:45,930 --> 00:30:47,650 Speaker 3: There's a lot of people out there looking for a 640 00:30:47,730 --> 00:30:51,850 Speaker 3: slower consumer. You're looking for, to be clear here, within 641 00:30:51,950 --> 00:30:56,950 Speaker 3: core domestic final sales say. You're looking for a reacceleration. 642 00:30:57,350 --> 00:30:59,230 Speaker 9: Look, I think in the labor market, those are the 643 00:30:59,270 --> 00:31:01,550 Speaker 9: trends at the moment. There are clear cross currents for 644 00:31:01,590 --> 00:31:02,130 Speaker 9: the consumer. 645 00:31:02,270 --> 00:31:02,530 Speaker 3: Fair. 646 00:31:02,650 --> 00:31:05,450 Speaker 9: The labor market is turning. You have wage growth that 647 00:31:05,490 --> 00:31:07,710 Speaker 9: is showing a little bit of an uptick. At the 648 00:31:07,750 --> 00:31:10,910 Speaker 9: same time, energy prices are a clear headwind for that. 649 00:31:11,310 --> 00:31:13,690 Speaker 9: You mentioned interest rates and mortgage rates. So those are 650 00:31:13,760 --> 00:31:16,090 Speaker 9: also headwind. I think on balance, you keep a consumer 651 00:31:16,130 --> 00:31:18,450 Speaker 9: kind of closer to where it is. But in the 652 00:31:18,610 --> 00:31:20,370 Speaker 9: absence of what's happening in the energy market, I think 653 00:31:20,410 --> 00:31:22,510 Speaker 9: you would see stronger consumer spending. 654 00:31:22,530 --> 00:31:24,630 Speaker 3: Matt, we don't care. Okay, here's what I got. I 655 00:31:24,670 --> 00:31:29,100 Speaker 3: got UCLA playing California. I got UCLA playing San Diego. 656 00:31:29,470 --> 00:31:32,980 Speaker 3: And then last week, 3-0 UCLA did it to Purdue 657 00:31:33,920 --> 00:31:36,800 Speaker 3: in an in-league game. Now they're going to play an 658 00:31:36,880 --> 00:31:41,540 Speaker 3: in-league game against Wisconsin, I think. Oregon, okay, I'll go 659 00:31:41,560 --> 00:31:44,530 Speaker 3: with that. That's West Coast, I think. And then Maryland. 660 00:31:45,370 --> 00:31:47,510 Speaker 3: How do you, how do you, did you, did you 661 00:31:47,530 --> 00:31:49,370 Speaker 3: play football at UCLA? I can't remember. 662 00:31:49,390 --> 00:31:52,430 Speaker 5: So I played football in high school, not at UCLA. 663 00:31:53,110 --> 00:31:55,740 Speaker 3: UCLA is part of the Big Ten. It's like the 664 00:31:55,800 --> 00:31:56,960 Speaker 3: world turned upside down. 665 00:31:57,600 --> 00:32:00,500 Speaker 9: It's difficult to kind of fully comprehend. I was watching 666 00:32:00,580 --> 00:32:04,530 Speaker 9: USC play Rutgers over the weekend. And that was an 667 00:32:04,630 --> 00:32:08,190 Speaker 9: in-conference game, which was incredibly unusual. 668 00:32:08,370 --> 00:32:11,690 Speaker 3: Is the Rose Bowl lost its magnificent pass? 669 00:32:11,750 --> 00:32:13,020 Speaker 5: I don't think it can. 670 00:32:13,040 --> 00:32:15,140 Speaker 9: I mean, that's a beautiful place to go watch football 671 00:32:15,200 --> 00:32:16,720 Speaker 9: on a beautiful setting. 672 00:32:16,740 --> 00:32:18,600 Speaker 3: Have you been there with like 104,000 people? 673 00:32:18,620 --> 00:32:20,740 Speaker 5: Yeah, I saw UCLA, USC while I was at grad school. 674 00:32:20,760 --> 00:32:21,640 Speaker 3: The Deutsche Bank tickets. 675 00:32:22,060 --> 00:32:23,220 Speaker 5: I know, that was in grad school. 676 00:32:23,880 --> 00:32:26,280 Speaker 4: Yeah, I see like the women's field hockey team from, 677 00:32:26,700 --> 00:32:29,900 Speaker 4: pick any school, UCLA, in an airport coming to Piscataway, 678 00:32:29,920 --> 00:32:30,960 Speaker 4: New Jersey to play Rutgers. 679 00:32:31,000 --> 00:32:33,130 Speaker 6: I'm like, how is that possible? Makes sense. 680 00:32:33,390 --> 00:32:34,710 Speaker 5: The travel schedule has to be insane. 681 00:32:34,730 --> 00:32:35,840 Speaker 4: I don't know how the kids do it. 682 00:32:35,860 --> 00:32:38,680 Speaker 3: What's Binkram Shada think of the equity markets here? 683 00:32:39,020 --> 00:32:42,940 Speaker 9: Look, Binky, who's our U.S. equity strategist, has stayed with 684 00:32:42,980 --> 00:32:44,070 Speaker 9: his call for $ 8, 000 on the. 685 00:32:44,050 --> 00:32:45,690 Speaker 5: S & P 500. Whoa, whoa, whoa. 686 00:32:45,890 --> 00:32:49,630 Speaker 3: He's absolutely nailed this bull market. 687 00:32:49,790 --> 00:32:51,730 Speaker 5: He has, and he's stuck with the view. 688 00:32:52,610 --> 00:32:55,410 Speaker 9: I think kind of consistent with what I'm outlining for 689 00:32:55,430 --> 00:32:57,320 Speaker 9: the real economy, which I think is this broadening out 690 00:32:57,340 --> 00:32:59,560 Speaker 9: that you see in the labor market. You actually see 691 00:32:59,580 --> 00:33:01,940 Speaker 9: some broadening out within the consumer. I think he's noted 692 00:33:01,960 --> 00:33:03,540 Speaker 9: that you see that within earnings growth as well. It 693 00:33:03,600 --> 00:33:06,200 Speaker 9: is not simply about AI anymore, that you've had a 694 00:33:06,240 --> 00:33:09,460 Speaker 9: broadening out across companies and sectors in terms of earnings growth. 695 00:33:09,500 --> 00:33:11,360 Speaker 9: And so he stuck with his view of 8,000 for 696 00:33:11,380 --> 00:33:11,800 Speaker 9: the end of the year. 697 00:33:12,040 --> 00:33:14,500 Speaker 3: Matt Lazzetti, thank you so much. From UCLA, and of course, 698 00:33:14,700 --> 00:33:17,940 Speaker 3: always Chief U.S. Economist at Deutsche Bank as well. 699 00:33:18,450 --> 00:33:23,380 Speaker 1: This is the Bloomberg Surveillance Podcast, available on Apple, Spotify, 700 00:33:23,520 --> 00:33:27,760 Speaker 1: and anywhere else you get your podcasts. Listen live each weekday, 701 00:33:27,760 --> 00:33:33,200 Speaker 1: 7 to 10 a.m. Eastern, on Bloomberg.com, the iHeartRadio app, TuneIn, 702 00:33:33,520 --> 00:33:36,580 Speaker 1: and the Bloomberg Business app. You can also watch us 703 00:33:36,680 --> 00:33:40,690 Speaker 1: live every weekday on YouTube and always on the Bloomberg Terminal.