WEBVTT - Bloomberg Surveillance TV: September 18th, 2025

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

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<v Speaker 2>This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along

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<v Speaker 2>with Lisa Bromwitz and a Marie Hordernt. Join us each

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<v Speaker 2>day for insight from the best in markets, economics, and

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<v Speaker 2>geopolitics from our global headquarters in New York City. We

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<v Speaker 2>are live on Bloomberg Television weekday mornings from six to

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<v Speaker 2>nine am Eastern. Subscribe to the podcast on Apple, Spotify

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<v Speaker 2>or anywhere else you listen, and as always on the

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<v Speaker 2>Bloomberg Terminal and the Bloomberg Business App. Gagie chatter if

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<v Speaker 2>Blankcrog joins us around the table. Gargie, good Mornic, good morning.

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<v Speaker 2>I know we want to address single names, but I

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<v Speaker 2>do want to understand the concentration risk around some of

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<v Speaker 2>these stories. How much of the fate of this market

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<v Speaker 2>is in the hands of just one name, one CEO,

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<v Speaker 2>one story.

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<v Speaker 3>Sure, good morning, Good to be here. So this is

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<v Speaker 3>exactly the theme that we write about in our Fall

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<v Speaker 3>Investment Directions that we wrote in early September, still very

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<v Speaker 3>relevant now, and the theme that we highlight there is,

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<v Speaker 3>you know, we all grew up in the markets hearing

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<v Speaker 3>the old fable of don't fight the FED, Now it's

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<v Speaker 3>don't fight the FED and don't fight the AI trade,

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<v Speaker 3>because that is what is going to drive drive sectors

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<v Speaker 3>and it's what's going to drive the overall performance of

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<v Speaker 3>the index. Yes, due to some of the names very

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<v Speaker 3>much being a part of the broader index, but those

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<v Speaker 3>few names, the top ten names, are also where the

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<v Speaker 3>majority of the earnings growth is coming from. And while

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<v Speaker 3>we read these headlines, I think we shouldn't lose sight

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<v Speaker 3>of that fact that if you look at Yurtle dat

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<v Speaker 3>returns seventy five percent or so have come from of

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<v Speaker 3>the total returns have come from earnings. And when we

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<v Speaker 3>see these headlines and we recognize what the future of

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<v Speaker 3>an Intel Nvidia is going to do, I think what

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<v Speaker 3>it points to is further earnings growth.

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<v Speaker 1>Just driving the S and P higher.

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<v Speaker 3>So keep AI as a core theme in your equity portfolio.

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<v Speaker 3>But I think more and more we're recognizing that you're

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<v Speaker 3>going to have to do it active manner because there's

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<v Speaker 3>certainly going to be names that are going to be

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<v Speaker 3>losers within this AI race and winners as well.

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<v Speaker 4>How are you active in management given the potential for

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<v Speaker 4>political overlays to the tech story as we've seen from

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<v Speaker 4>the US and from China.

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<v Speaker 3>What I mean by how one can be active is

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<v Speaker 3>obviously thinking about certain sectors or certain stocks themselves that

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<v Speaker 3>can not be as much of a beneficiary. And we

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<v Speaker 3>actually saw that around this earning season, right We saw

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<v Speaker 3>some software names that are not able to use AI

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<v Speaker 3>as much as one would have thought, as much as

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<v Speaker 3>expectations were, and are absolutely losing. And then obviously you

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<v Speaker 3>have more of the hyperscalers as well as the chip

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<v Speaker 3>manufacturers that are very much able to participate. So that

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<v Speaker 3>is the active management obviously. You know, in our fall

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<v Speaker 3>investment directions we talk about doing that through and I

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<v Speaker 3>SHARE's active ticker BAI. But investors can also do it

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<v Speaker 3>with you know, broad large gap ETFs. They can do

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<v Speaker 3>it through broad large growth ETFs versus moving away from

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<v Speaker 3>small caps, which has been our theme for the year.

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<v Speaker 4>Okay, that is exactly where I wanted to go, This

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<v Speaker 4>idea of don't fight the FED and don't fight the

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<v Speaker 4>AI same are they in conflict and this is the

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<v Speaker 4>way that they were yesterday.

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<v Speaker 1>The idea that people saw this is.

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<v Speaker 4>An opportunity to go out of some of the high

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<v Speaker 4>flyers and the expensive stocks and into small caps that

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<v Speaker 4>were less highly valued. And you saw that rotation yesterday.

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<v Speaker 4>You think that's a headfach based on what you just said, Well,

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<v Speaker 4>I think so.

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<v Speaker 5>So.

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<v Speaker 3>I think that we obviously saw August as a great

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<v Speaker 3>month for small caps, and then as September came around,

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<v Speaker 3>we've seen that fading just a little bit. Historically, we've

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<v Speaker 3>looked at periods where small gaps have outperformed the large

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<v Speaker 3>gaps in more than three to five hundred basis points.

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<v Speaker 3>It hasn't really been able to be very sustainable, and

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<v Speaker 3>partly it's a growth story. In small gaps you just

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<v Speaker 3>don't have that earnings growth. But broadly we all know

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<v Speaker 3>what's happening. I think Francis was talking about it earlier

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<v Speaker 3>in terms of the economy is changing and the rules

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<v Speaker 3>that led to our investment thesis last decade will not work.

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<v Speaker 3>Now many companies are staying private for so much longer

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<v Speaker 3>that companies when they finally go public.

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<v Speaker 1>As we can see.

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<v Speaker 3>The size of IPOs going from about three to five

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<v Speaker 3>hundred million to over a billion, they are now no

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<v Speaker 3>longer small cap companies. So the market is shifting. You

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<v Speaker 3>have also from a macro perspective, rates are still higher

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<v Speaker 3>than the sort of zero regime that we were in

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<v Speaker 3>for a very long time, and you don't have the

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<v Speaker 3>earnings growth. So I think we can see certain short

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<v Speaker 3>term movements, and I think we've seen investors play that

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<v Speaker 3>via options on things like ISWM. Absolutely do that, but

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<v Speaker 3>this is not a sustainable theme. Come back to large gap,

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<v Speaker 3>come back to growth, come back to AI.

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<v Speaker 2>Stay with US. Multilemberg surveillance coming up after this, joining

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<v Speaker 2>us now to discuss the former Kansas City Fed president

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<v Speaker 2>as the George Es the Welcome back to the program.

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<v Speaker 2>I love talking to you about this because you've experienced it.

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<v Speaker 2>You've been that, you've dissented on the committee yourself personally,

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<v Speaker 2>and you've seen dot plots with huge dispersion and a

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<v Speaker 2>wide range of outcomes for the years ahead. Is this

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<v Speaker 2>different somehow from what you've seen and lived? Is this

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<v Speaker 2>somehow different what we saw yesterday?

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<v Speaker 6>Well, it's different in this sense, Jonathan. You have a

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<v Speaker 6>lot swirling around today's economic decisions that have to be

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<v Speaker 6>made about monetary policy. They come from challenges to the

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<v Speaker 6>institution itself. They're coming from an economy that is far

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<v Speaker 6>from clear in terms of what the ultimate impact is

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<v Speaker 6>and again, this is a committee that has to think

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<v Speaker 6>about the long run even as they make today's decisions.

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<v Speaker 6>And so you have dramatic changes in trade policy and

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<v Speaker 6>immigration policy, all that are hitting directly on both uncertainty

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<v Speaker 6>about where that long run is as well as where

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<v Speaker 6>are things landing today. So not surprising I think that

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<v Speaker 6>you see this kind of dispersion giving the changes going

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<v Speaker 6>on in the economy, given.

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<v Speaker 4>That kind of type of a backdrop, do you think

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<v Speaker 4>Esther that we're looking at a scenario where forward guidance

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<v Speaker 4>has no value anymore?

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<v Speaker 6>Well, I don't think this is a time you can

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<v Speaker 6>make forward guidance, and really forward guidance can be fraught anytime.

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<v Speaker 6>Because we live in a dynamic economy, things can change

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<v Speaker 6>that make it hard for the Central Bank to fulfill

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<v Speaker 6>commitments like that. And so again this is a time

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<v Speaker 6>where you hear from businesses. They are still sorting out

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<v Speaker 6>what the in game looks like here. They are still

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<v Speaker 6>sorting out what increased costs are going to mean to

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<v Speaker 6>both their bottom line to their employment status. And so

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<v Speaker 6>it's hard to put a pin that you can see

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<v Speaker 6>a clear direction for the economy. I think you heard

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<v Speaker 6>that coming out of the meeting yesterday. The committee had

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<v Speaker 6>to make a decision. They made a decision. But the

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<v Speaker 6>dispersion I think belies some of the consensus you saw esther.

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<v Speaker 4>Can you talk a little bit about how hard it

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<v Speaker 4>is to persuade fellow governors to get on your side

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<v Speaker 4>when you do when you do disagree with them, how

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<v Speaker 4>difficult it is to make that case.

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<v Speaker 6>Yes, so it's a requirement of the job. I always

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<v Speaker 6>thought in that and certainly you are trying to articulate

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<v Speaker 6>in a very thoughtful way the factors that weigh on

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<v Speaker 6>your judgment, how you put the weight on different variables,

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<v Speaker 6>which everyone around that table is doing. At the end

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<v Speaker 6>of the day, though that you are the loan dissenter,

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<v Speaker 6>that the majority makes a decision in a different place

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<v Speaker 6>doesn't necessarily undermine the argument that's being made. It simply

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<v Speaker 6>says that the weight was in another direction and there

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<v Speaker 6>was consensus built around a different view. I think what's

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<v Speaker 6>important is that you don't dismiss entirely when you hear

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<v Speaker 6>dissenting voices about what it means.

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<v Speaker 2>As so, if you look through the forecast, a lot

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<v Speaker 2>of people have called them highly contradictory through some odd

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<v Speaker 2>things going on just in terms of upgrading the outlook

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<v Speaker 2>for growth and then cutting interest rates. Some things don't

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<v Speaker 2>make sense to some people. You know, when these things

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<v Speaker 2>were introduced, the dot plot and forecast, it was to

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<v Speaker 2>enhance communication. Do you think we've got to the point

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<v Speaker 2>where it started to compromise it.

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<v Speaker 6>Well, that's been the case at many times since the

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<v Speaker 6>introduction of that dot plot, and again I think it

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<v Speaker 6>always bears reminding people this is not a committee forecast. Yes,

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<v Speaker 6>you can draw some conclusions about tendencies and the medians

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<v Speaker 6>where they come out for this committee, but when you

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<v Speaker 6>see dispersion like this, it tells you that we're looking

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<v Speaker 6>pretty short term. This idea of meeting to meeting sounds

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<v Speaker 6>right to me. You don't have a committee that agrees

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<v Speaker 6>on what the long run is, and that's true either

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<v Speaker 6>of their long run FED Funds forecast those are ranging

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<v Speaker 6>from below two and a half percent to closer to four.

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<v Speaker 6>That tells you that this idea about how restrictive they

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<v Speaker 6>are has a lot of different views coming to bear

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<v Speaker 6>at the table Astro.

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<v Speaker 2>I think a lot of people would agree with you

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<v Speaker 2>most in fact, that you shouldn't draw too many conclusions

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<v Speaker 2>from those forecasts. But there is one uncomfortable conclusion that

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<v Speaker 2>many people have drawn, and this institution is no longer

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<v Speaker 2>credibly pursuing the two percent inflation target. Is that an

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<v Speaker 2>unfair criticism?

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<v Speaker 6>Well, the committee certainly has not said that. We have

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<v Speaker 6>not heard the chairman say that. But I think the

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<v Speaker 6>actions here put them at risk over the next few months, frankly,

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<v Speaker 6>because they continue to push away from thinking that in inflation,

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<v Speaker 6>although characterized as an upside risk, is one that they

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<v Speaker 6>are not going to be able to deal with. And

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<v Speaker 6>I think the challenge there is this is a committee

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<v Speaker 6>that has relied heavily on anchored inflation expectations, and as

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<v Speaker 6>those move, and as the public which has experienced high inflation,

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<v Speaker 6>I think this will become a real challenge for the

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<v Speaker 6>committee under the forecast that they've laid out.

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<v Speaker 2>Stay with us. Mulblinberg, Savannah's coming up after this. Dannats

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<v Speaker 2>of wet Bush is standing by once to jump on it.

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<v Speaker 2>Calls the deal a huge game changer for Intel. Dan,

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<v Speaker 2>good morning and welcome to the program. Why do you

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<v Speaker 2>believe this is such a huge game changer?

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<v Speaker 7>Pop the champagne, I mean for Intel.

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<v Speaker 5>Now you have Nvidia, godfather of AI doubling down, and

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<v Speaker 5>this files obviously US government investment.

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<v Speaker 7>I mean, what this essentially does, It brings Intel into

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<v Speaker 7>the AI game. I think from a stock perspective, that

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<v Speaker 7>changes the multiple.

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<v Speaker 5>And clearly this is also going to be viewed very

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<v Speaker 5>positively in DC. I think that's something that could definitely

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<v Speaker 5>help Gens and others when it comes to China.

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<v Speaker 7>Dan.

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<v Speaker 4>I do wander though about man Deep's point, this idea

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<v Speaker 4>that this isn't Invidia going all in and developing their

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<v Speaker 4>chips for the big semiconductors so that the big hyperscalers

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<v Speaker 4>at the at the Intel foundry. This is simply a

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<v Speaker 4>five billion dollar side project about PCs. How much is

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<v Speaker 4>this essentially just an olive branch to the president and

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<v Speaker 4>not an actual move of Nvidia to try to fortify

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<v Speaker 4>Intel's plans to become the foundry.

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<v Speaker 5>You know if mandeep brings up Greade points as always,

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<v Speaker 5>But look, this is also it's a double one down

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<v Speaker 5>on investment in the US.

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<v Speaker 7>I mean, that's.

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<v Speaker 5>Also what it is now clearly that obviously I'll bring

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<v Speaker 5>to Trump administration and others. But what they're also doing

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<v Speaker 5>is when it comes to PC upgrade cycle X eighty

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<v Speaker 5>six I mean, this does give them another potential growth

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<v Speaker 5>lever and look in video right now, it's in Vidia's world,

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<v Speaker 5>everyone else's pain Rint and they know that they're in

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<v Speaker 5>a massive position of strength. But for Intel, I mean

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<v Speaker 5>about you went, you know, you went from Qullite a

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<v Speaker 5>month ago. You know, some worries about you know, in

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<v Speaker 5>terms of the CEO potentially out.

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<v Speaker 7>Now you get the investment from government and you have Intel.

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<v Speaker 5>You know, now again in Vidia, I mean, that is

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<v Speaker 5>a Goldilock scenario for Intel.

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<v Speaker 4>This is coming at a time when China is trying

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<v Speaker 4>to emphasize domestic production of their own technology and really

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<v Speaker 4>trying to create national champions there that can rival in

0:12:47.200 --> 0:12:50.480
<v Speaker 4>Vidia and other US tech giants. I just wonder whether

0:12:50.720 --> 0:12:53.760
<v Speaker 4>it is possible to continue, for the likes of Nvidia

0:12:53.880 --> 0:12:56.960
<v Speaker 4>trying to push into China, trying to sell more advanced

0:12:57.000 --> 0:13:00.680
<v Speaker 4>tips into that country, while at the same time, you know,

0:13:00.960 --> 0:13:04.760
<v Speaker 4>playing with this idea of US independence from China.

0:13:05.760 --> 0:13:07.280
<v Speaker 7>Look, it's a tight wire act.

0:13:07.320 --> 0:13:09.680
<v Speaker 5>But the reality is that there's one ship in the

0:13:09.720 --> 0:13:13.079
<v Speaker 5>world viewing the Ai revolution and that's that's what by

0:13:13.080 --> 0:13:15.880
<v Speaker 5>godfather of aigens in a video, and that's why in China,

0:13:16.000 --> 0:13:20.120
<v Speaker 5>look they could tell Chinese big tech Embijing, don't buy

0:13:20.160 --> 0:13:23.000
<v Speaker 5>in video chip that that's like telling a kid, okay,

0:13:23.080 --> 0:13:26.720
<v Speaker 5>don't eat the candy that's on the table. So that's

0:13:26.760 --> 0:13:30.640
<v Speaker 5>the reality because they're years ahead of when you look

0:13:30.679 --> 0:13:31.840
<v Speaker 5>at Huawei and others.

0:13:32.320 --> 0:13:35.839
<v Speaker 7>But at the same time, I mean, tru administration recognizes.

0:13:35.320 --> 0:13:40.679
<v Speaker 5>They have to strengthen AI infrastructure, AI ship making. And

0:13:40.720 --> 0:13:42.920
<v Speaker 5>you look at Intel, I mean they've gone obviously from

0:13:42.960 --> 0:13:43.720
<v Speaker 5>a huge laggard.

0:13:43.800 --> 0:13:45.240
<v Speaker 7>I mean Intel, you.

0:13:45.200 --> 0:13:47.720
<v Speaker 5>Know all the red tape, all the sort of black

0:13:47.760 --> 0:13:52.640
<v Speaker 5>eye moments, you finally have some positives at Intel.

0:13:54.280 --> 0:13:57.720
<v Speaker 2>Stay with us, multile Impex Savannas coming up off to this.

0:14:06.920 --> 0:14:09.960
<v Speaker 2>Native Richardson of IDP joined us in the studio Nada.

0:14:10.000 --> 0:14:10.320
<v Speaker 7>Good morning.

0:14:10.360 --> 0:14:12.360
<v Speaker 2>It's good to say running this is a tough one

0:14:12.400 --> 0:14:14.679
<v Speaker 2>to read. You help us out. Where is this lang

0:14:14.760 --> 0:14:16.160
<v Speaker 2>of market right now? What's happening?

0:14:16.600 --> 0:14:20.680
<v Speaker 8>Labor market is strong, Actually it's solid, and I think

0:14:21.160 --> 0:14:24.360
<v Speaker 8>there is a comment that has to be made it

0:14:24.480 --> 0:14:28.840
<v Speaker 8>is weakening. But the labor market is not weak. And

0:14:28.920 --> 0:14:31.400
<v Speaker 8>if you look at the stock, and that's what a

0:14:31.440 --> 0:14:33.880
<v Speaker 8>lot of your audience is used to doing, looking at

0:14:33.880 --> 0:14:35.040
<v Speaker 8>the stock and the flows.

0:14:35.080 --> 0:14:36.120
<v Speaker 1>If you look at the stock.

0:14:36.160 --> 0:14:39.160
<v Speaker 8>What you'll see is that the consumer is really smoothing

0:14:39.200 --> 0:14:40.720
<v Speaker 8>out all the rough edges.

0:14:40.480 --> 0:14:41.280
<v Speaker 1>In the economy.

0:14:41.640 --> 0:14:44.200
<v Speaker 8>And it's true for the labor market as well. There's

0:14:44.360 --> 0:14:47.400
<v Speaker 8>very little turnover in this labor market. I was really

0:14:47.480 --> 0:14:50.960
<v Speaker 8>shocked by that upward surprise and Jabos claims last week,

0:14:51.000 --> 0:14:52.760
<v Speaker 8>and now I know that that was just a mirage

0:14:53.120 --> 0:14:57.160
<v Speaker 8>and we're back to historical lows. There's very little flow

0:14:57.240 --> 0:14:59.160
<v Speaker 8>out and there's very little flow in.

0:14:59.480 --> 0:15:00.280
<v Speaker 1>But what that.

0:15:00.120 --> 0:15:03.440
<v Speaker 8>Means for the consumer is that they're not defying gravity

0:15:03.560 --> 0:15:06.120
<v Speaker 8>when you see that pop in retail sales. They are

0:15:06.440 --> 0:15:10.320
<v Speaker 8>well anchored by a functioning labor market where they are

0:15:10.440 --> 0:15:15.080
<v Speaker 8>employed and working, and those incomes are fueling spending. And

0:15:15.120 --> 0:15:18.320
<v Speaker 8>as long as that continues to happen, we can live

0:15:18.400 --> 0:15:22.440
<v Speaker 8>with the uncertainty of fewer flows and hirings in and

0:15:22.560 --> 0:15:25.800
<v Speaker 8>out of the labor market if the stock is healthy well.

0:15:25.840 --> 0:15:27.800
<v Speaker 4>And this raises the point that maybe this is a

0:15:27.840 --> 0:15:30.920
<v Speaker 4>new normal, the sort of low higher, low fire type

0:15:30.920 --> 0:15:33.760
<v Speaker 4>of churn, And I just wonder if that's true, if

0:15:33.800 --> 0:15:35.600
<v Speaker 4>that's the case, or if you do see some sort

0:15:35.640 --> 0:15:38.720
<v Speaker 4>of reacceleration hiring, especially if there is some sort of

0:15:38.720 --> 0:15:41.880
<v Speaker 4>commensurate reacceleration in the economy heading into the end of

0:15:41.920 --> 0:15:42.240
<v Speaker 4>the year.

0:15:42.480 --> 0:15:44.320
<v Speaker 8>Yeah, so that goes back to the weakening, and I

0:15:44.320 --> 0:15:46.720
<v Speaker 8>do think the labor market is weakening, but not for

0:15:46.800 --> 0:15:50.440
<v Speaker 8>the reasons that were explained yesterday. Not simply because of

0:15:50.480 --> 0:15:54.600
<v Speaker 8>the hiring rate, but really the concentration of hiring and Lisa, you.

0:15:54.560 --> 0:15:56.080
<v Speaker 1>And I have talked about this a lot.

0:15:56.320 --> 0:15:58.240
<v Speaker 8>If you look at the BLS data, if you look

0:15:58.240 --> 0:16:00.800
<v Speaker 8>at the ADP data, what you'll see is a heavily

0:16:00.960 --> 0:16:05.360
<v Speaker 8>concentrated hiring market and key consumer sectors, whether it's healthcare

0:16:05.360 --> 0:16:09.080
<v Speaker 8>for the BLS or leisure in hospitality and ADP, it's

0:16:09.120 --> 0:16:13.320
<v Speaker 8>the consumer who's driving hiring, and the consumer's wins are

0:16:13.360 --> 0:16:16.400
<v Speaker 8>really forming and shaping today's labor market.

0:16:16.480 --> 0:16:17.480
<v Speaker 1>I think that's a concern.

0:16:17.880 --> 0:16:21.200
<v Speaker 8>You want broad based hiring, you don't want it concentrated.

0:16:21.320 --> 0:16:22.960
<v Speaker 1>That's not good for the future.

0:16:23.160 --> 0:16:26.080
<v Speaker 8>So there are reasons to be concerned about this labor market,

0:16:26.200 --> 0:16:28.640
<v Speaker 8>but the ones in terms of just the number of

0:16:28.720 --> 0:16:31.800
<v Speaker 8>jobs that are added every single month. I think that's

0:16:31.840 --> 0:16:34.320
<v Speaker 8>not the biggest problem with the labor market right now.

0:16:34.360 --> 0:16:36.920
<v Speaker 4>Going forward, we've been talking about the conflict between the

0:16:36.960 --> 0:16:39.320
<v Speaker 4>real economy and this idea that there is something kind

0:16:39.320 --> 0:16:42.360
<v Speaker 4>of quirky or not totally healthy about the labor market

0:16:42.360 --> 0:16:45.080
<v Speaker 4>and the idea that you're seeing this boom in a

0:16:45.120 --> 0:16:48.080
<v Speaker 4>select number of stocks, but it does seem to be broadening.

0:16:48.600 --> 0:16:50.680
<v Speaker 4>Do you think that that also is a new normal

0:16:51.040 --> 0:16:53.920
<v Speaker 4>that companies can keep doing really well but not increase

0:16:53.960 --> 0:16:56.720
<v Speaker 4>their headcount considerably or invest in talent, or do you

0:16:56.760 --> 0:16:59.840
<v Speaker 4>think that this is something that has to reconcile.

0:17:00.000 --> 0:17:00.920
<v Speaker 1>Markets and companies.

0:17:01.000 --> 0:17:04.560
<v Speaker 8>The truth is, if you're not growing, you're not going

0:17:04.600 --> 0:17:07.440
<v Speaker 8>to be around for long. And I think that when

0:17:07.440 --> 0:17:09.640
<v Speaker 8>when we look at the labor market, what I see

0:17:09.720 --> 0:17:12.159
<v Speaker 8>is a tipping point. I see a labor market that

0:17:12.280 --> 0:17:15.240
<v Speaker 8>is very dependent on the consumer and a consumer that

0:17:15.359 --> 0:17:17.720
<v Speaker 8>is very dependent on the labor market. And I think

0:17:17.760 --> 0:17:21.560
<v Speaker 8>this is an uneasy truth. It's a delicate relationship because

0:17:21.600 --> 0:17:24.399
<v Speaker 8>anything could upend it. And that is the issue for

0:17:24.480 --> 0:17:27.359
<v Speaker 8>companies as well. If their demand is coming from a

0:17:27.440 --> 0:17:31.359
<v Speaker 8>resilient consumer only, and that consumer is dependent and most

0:17:31.359 --> 0:17:34.160
<v Speaker 8>of us are on the labor market, then you can

0:17:34.200 --> 0:17:38.320
<v Speaker 8>see how these fractures could lead to something bigger for

0:17:38.520 --> 0:17:41.840
<v Speaker 8>consumer companies right now, so they're very dependent on that

0:17:41.960 --> 0:17:45.280
<v Speaker 8>demand outlook, and it's uncertain and there's a lot of

0:17:45.359 --> 0:17:46.000
<v Speaker 8>risk around it.

0:17:46.080 --> 0:17:49.000
<v Speaker 2>So yesterday I found really messy listening to what you've

0:17:49.000 --> 0:17:51.560
<v Speaker 2>got to say about things. Could these decisions get messy up?

0:17:52.080 --> 0:17:54.200
<v Speaker 2>Given how difficult is to read things at the moment?

0:17:54.359 --> 0:17:54.560
<v Speaker 7>You know?

0:17:55.760 --> 0:17:58.480
<v Speaker 8>A Vice Church Jeffries gave us speech about two years

0:17:58.520 --> 0:18:01.840
<v Speaker 8>ago on the difference between uncertainty and risk, and that

0:18:02.119 --> 0:18:05.520
<v Speaker 8>term risk management really stood out to me because risk

0:18:05.760 --> 0:18:07.919
<v Speaker 8>is something where you don't know the outcome, but you

0:18:08.000 --> 0:18:11.080
<v Speaker 8>know the distribution, and therefore you can act to in

0:18:11.119 --> 0:18:14.240
<v Speaker 8>a way if you're the fed to, you know, try

0:18:14.320 --> 0:18:17.919
<v Speaker 8>to tilt towards an outcome that is preferred. Uncertainty, you

0:18:17.960 --> 0:18:20.240
<v Speaker 8>don't know the outcome and you don't know the distribution,

0:18:20.440 --> 0:18:23.720
<v Speaker 8>And I think we're there more now than we were

0:18:23.800 --> 0:18:27.119
<v Speaker 8>even two years ago. We have an uncertain distribution. So

0:18:27.200 --> 0:18:30.480
<v Speaker 8>it calls into question whether a short term rate move

0:18:30.640 --> 0:18:33.480
<v Speaker 8>is really going to affect these long term structural issues

0:18:33.520 --> 0:18:38.800
<v Speaker 8>tied to demographics, immigration, and higher inflation than we're used to.

0:18:39.040 --> 0:18:41.000
<v Speaker 2>With that in mind, is they get closer and closer

0:18:41.040 --> 0:18:45.160
<v Speaker 2>to neutral? How do they confront the situation you've just described.

0:18:47.680 --> 0:18:51.520
<v Speaker 8>Historically they've done so with data and really having a

0:18:51.600 --> 0:18:55.200
<v Speaker 8>strong read of not only where the economy is now,

0:18:55.240 --> 0:18:57.720
<v Speaker 8>but where it's going, and that is going to be

0:18:57.800 --> 0:19:01.440
<v Speaker 8>critical because they have to work into time dimensions right

0:19:01.480 --> 0:19:04.440
<v Speaker 8>now in the future. And right now, things look pretty good.

0:19:05.200 --> 0:19:07.439
<v Speaker 8>The stock like I said, for the labor market is

0:19:07.480 --> 0:19:11.520
<v Speaker 8>pretty good, the unemployment rate is below what we've seen historically.

0:19:12.440 --> 0:19:17.080
<v Speaker 8>But in the future, if these structural changes become live,

0:19:17.240 --> 0:19:20.920
<v Speaker 8>real time constraints to the economy, then the FED has

0:19:20.960 --> 0:19:24.080
<v Speaker 8>to act and act quickly. And that is the uncertainty

0:19:24.119 --> 0:19:26.040
<v Speaker 8>that we're all going to be grappling with.

0:19:26.480 --> 0:19:29.560
<v Speaker 4>Just a random question for me, how long before college

0:19:29.560 --> 0:19:30.840
<v Speaker 4>graduates actually get jobs?

0:19:31.400 --> 0:19:33.840
<v Speaker 8>Well, my son graduates in two years, so I'm hoping

0:19:33.880 --> 0:19:37.480
<v Speaker 8>for that, so I'm not going to come back. I

0:19:37.520 --> 0:19:42.400
<v Speaker 8>think for early career we're also seeing a complex relationship

0:19:42.480 --> 0:19:46.639
<v Speaker 8>right because we're seeing they're entering a jobs market where

0:19:46.760 --> 0:19:49.920
<v Speaker 8>AI is becoming more and more present in their skill set.

0:19:50.240 --> 0:19:53.119
<v Speaker 8>And when you think about where AI shows up for

0:19:53.160 --> 0:19:56.439
<v Speaker 8>these early careers, for careers in general, it's showing up,

0:19:56.480 --> 0:20:00.000
<v Speaker 8>according to research done by Stanford and using ADP data,

0:20:00.520 --> 0:20:04.120
<v Speaker 8>in early career in AI exposed fields. And that's not

0:20:04.200 --> 0:20:07.840
<v Speaker 8>just software developers, that's marketing, that's finance, it's anything that

0:20:07.880 --> 0:20:11.960
<v Speaker 8>you use a spreadsheet or some kind of document to

0:20:12.040 --> 0:20:15.200
<v Speaker 8>do so. I do think that there is a transition point.

0:20:15.280 --> 0:20:18.639
<v Speaker 8>The good news is, in this very stable labor market,

0:20:18.720 --> 0:20:23.560
<v Speaker 8>companies are leaning into employee engagement, employee training, employee upskilling

0:20:23.600 --> 0:20:25.760
<v Speaker 8>in a way that they weren't doing before the pandemic.

0:20:25.800 --> 0:20:27.880
<v Speaker 1>So there's hope that if.

0:20:27.800 --> 0:20:32.320
<v Speaker 8>The economy stays strong, that this early career population, which

0:20:32.359 --> 0:20:35.680
<v Speaker 8>is our future, will be trained into those durable jobs.

0:20:36.560 --> 0:20:40.120
<v Speaker 2>This is the Bloomberg Survendics podcast, bringing you the best

0:20:40.160 --> 0:20:43.240
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