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Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside

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Speaker 1: my co host Matt Miller. Every business day we bring

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Speaker 1: you interviews from CEOs, market pros, and Bloomberg experts, along

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Speaker 1: with essential market moving news. Find the Bloomberg Markets Podcast

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Speaker 1: called Apple Podcasts or wherever you listen to podcasts, and

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Speaker 1: at Bloomberg dot com Slash podcast. Geopolitics certainly moving markets

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Speaker 1: today and pretty much every day this week as well.

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Speaker 1: But let's step back take a look at some of

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Speaker 1: these fundamentals. Because we do have inflation, we do have

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Speaker 1: rising interest rates, we do have a slowing economy. Howard

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Speaker 1: risk assets to perform in that environment. Let's check in

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Speaker 1: with Mark yesco CEO, CEE, IO and founder of Morgan

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Speaker 1: Creep Capital Management, located in some third rate hamlet called

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Speaker 1: Chapel Hill, North Carolina. I mean, I guess you couldn't

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Speaker 1: find any office space in Mark. Paul's a duke guy

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Speaker 1: in Durham, North Carolina. But we'll check in with Mark anyway, Mark,

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Speaker 1: what are you telling your clients here as a kind

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Speaker 1: raise all some of these you know, these bricks in

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Speaker 1: this wall of worry here. Now it's a great, great

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Speaker 1: point and uh, you know, congrats to the boys at

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Speaker 1: the University of New Jersey at Durham down the road.

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Speaker 1: Very good. Um, but look, we we are cautious in

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Speaker 1: the current environment. You know, we were living in a

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Speaker 1: world of financial repression. As to me is the biggest problem.

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Speaker 1: Savers are just being punished with these low interest rates.

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Speaker 1: And although the Feds making noises about raising I actually

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Speaker 1: don't think they can. So that'll cause that'll take one

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Speaker 1: of the stressors away when they finally do what I'll

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Speaker 1: call the Powell pivot and he finally admits that he

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Speaker 1: really can't raise rates. You mentioned that economic growth is

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Speaker 1: slowing very dramatically. We're just gonna see negative growth in

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Speaker 1: Europe in the first quarter, could possibly see little zero

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Speaker 1: growth in the US. And then corporate profits are rolling over.

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Speaker 1: Earnings estimates are being slashed. So we feel that you

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Speaker 1: should be head with a capital duh. And hedge funds

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Speaker 1: are are likely to have a much better year this

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Speaker 1: year than they did last year. We still do like

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Speaker 1: one area, which is oil. We think energy is an

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Speaker 1: interesting place to be. Things like MLPs good place to hide.

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Speaker 1: They're just very very cheap because even if everybody wants

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Speaker 1: an e V. It will take a thirty years to

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Speaker 1: everyone to have an EV, so it's going to take

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Speaker 1: a while before oil is not necessary. That what's true,

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Speaker 1: that's that's the only thing that you know, some of

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Speaker 1: us have range anxiety, right, we like to travel long distances. Um.

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Speaker 1: But but then I think the last thing we're telling

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Speaker 1: people is, uh, don't really stress too much about the

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Speaker 1: noise of geopolitics, really focus on the signal, and um,

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Speaker 1: you know, we think there's lower risk of some big event.

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Speaker 1: And then I think many in the DC area would

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Speaker 1: have us believe, but um, you know, we're we're we're cautious,

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Speaker 1: but but not completely out of markets. So why do

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Speaker 1: you think we've seen such an outperformance of you know,

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Speaker 1: we were just graphing oil. Um, since the pandemic against

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Speaker 1: the producers and the underlying commodity has done so much better.

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Speaker 1: It's great, great, great point. And I think that the challenges,

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Speaker 1: particularly in the US, we had a lot of producers

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Speaker 1: that were over levered and a whole bunch of them

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Speaker 1: went out of business. So that clearly impacts the indices

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Speaker 1: that that you know, the broad baskets of those producers.

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Speaker 1: There are some individual companies you know my favorite Diamondback Energy.

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Speaker 1: I would say Fang has outperformed Fang, Facebook, Amazon, Netflix,

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Speaker 1: Google over the past year. Again this year, we think

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Speaker 1: it all out performed for a while. Uh. And then

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Speaker 1: there's a other company like ovent Iv and Marathon Oxy

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Speaker 1: which has done really really well, outperformed oil. But you're right,

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Speaker 1: the basket has underperformed because there's just a lot of

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Speaker 1: companies that uh. And this across all industries. You know,

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Speaker 1: we we extended credit to not so credit worthy businesses. Um.

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Speaker 1: I say we, I mean the economy, and some of

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Speaker 1: those went out of business I guess in in the

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Speaker 1: lockdowns after the pandemic, and it's it's really been tough.

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Speaker 1: And I think that's one of the reasons oil prices

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Speaker 1: surged so much, is so much supply came offline. So

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Speaker 1: Mark in the fixed income space, do you guys see

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Speaker 1: opportunities there? Again, we have a federal reserve that is

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Speaker 1: clearly signaled a rising interest rates and if you look

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Speaker 1: at the w I r P functional on the Bloomberg terminal,

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Speaker 1: could be as many seven hikes two. How do you

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Speaker 1: think about that as a rates to fixed income opportunities? Yeah,

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Speaker 1: I'm gonna take the under. I'm gonna take the way

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Speaker 1: under on that. I don't think there'll be anywhere close

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Speaker 1: to seven. I don't even think there'll be, you know,

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Speaker 1: three or four. I think they probably will try to

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Speaker 1: hike here in March. I think they'll probably whimp out

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Speaker 1: and not do fifty basis points. Um. You know, the

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Speaker 1: challenges have been behind the curve since two thousand. Uh,

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Speaker 1: for a hundred and something years, the average short term

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Speaker 1: rate roughly equal nominal GDP growth. And you know that

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Speaker 1: hasn't been true for eight years. And I think they

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Speaker 1: should get back to a normal functioning interest rate environment. Uh,

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Speaker 1: because that's what capitalism is predicated on. That you know,

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Speaker 1: you can put your capital at work and get and

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Speaker 1: get paid for it. Think about being in Europe or Japan,

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Speaker 1: you have to pay banks to keep your money. At

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Speaker 1: least here you get zero point five. That's why we

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Speaker 1: actually came up with this thing csh new E t

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Speaker 1: F that takes advantage of spack arbitrage to give people

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Speaker 1: something you know, we think low single digits on their

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Speaker 1: their savings. Because we think traditional bonds, high yield bonds

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Speaker 1: are very high. Taking credit risk, you're taking duration risk.

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Speaker 1: Both of which look kind of dicey in this market.

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Speaker 1: So having at least something on your your savings leaving

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Speaker 1: makes a lot of sense. All right, Mark, thank you

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Speaker 1: so much. We appreciate checking in with you. Mark. Yesco

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Speaker 1: uh He is with CEO, c I O and founder

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Speaker 1: Morgan Creek Capital Management based in Chapel Hill, North Carolina,

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Speaker 1: which is actually a very very beautiful community there, despite

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Speaker 1: the University of North Carolina. And you want to see

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Speaker 1: such a great school and they have such a great

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Speaker 1: basketball history. Yeah, just not quite as great as their

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Speaker 1: friends down route fifteen five oh one at the Duke University.

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Speaker 1: But yeah, we all respect the u n C. Chapel

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Speaker 1: Hill there. You're good, good hoops and we love playing

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Speaker 1: against them. We have our E t S. She wants

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Speaker 1: to talk ETFs, dying to talk ETFs. I was gonna say,

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Speaker 1: Maestro mice Straw maybe has taken there's already an et

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Speaker 1: US are here E t F S arena in the

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Speaker 1: house right now. And we were talking about an e

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Speaker 1: t F fund earlier, weren't we U E s H

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Speaker 1: hre we talking about E s H earlier? Which is

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Speaker 1: um no, I think those are the sp futures. No,

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Speaker 1: it was it was some e t F fund that

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Speaker 1: somehow dealt with SPACs in a way to that's leverage

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Speaker 1: on leverage there, Katie, What do you got for us?

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Speaker 1: We can talk about spack ets, we can talk about

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Speaker 1: fix income et s because it doesn't sound exciting, but

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Speaker 1: there have been a ton of really interesting launches when

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Speaker 1: it comes to fix income e t s this week.

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Speaker 1: I mean, just today you had State Street and Blackstone

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Speaker 1: launch and e t F that will be half high yield,

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Speaker 1: half clos and they're trying to really appeal to the

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Speaker 1: retail crowd there, which caught my eye. You also have

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Speaker 1: a bunch of black black Rock alumni debuting UH seven

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Speaker 1: junk on et just today, and then earlier this week

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Speaker 1: you also had a CDs e t F debut. So

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Speaker 1: it's been a really fascinating week for just bond ETFs

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Speaker 1: in general. Speaking of leverage on leverage, Yeah, who buys

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Speaker 1: ETFs these days? Is it retail? Is it institutional? Is

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Speaker 1: it hedge funds? These things? It's a really interesting mix

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Speaker 1: of both. I mean, institutional and professional traders love et

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Speaker 1: s because the liquidity there is so much greater than

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Speaker 1: you would get in buying any sort of individual bond.

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Speaker 1: So they use them often as liquidity sleeves, but you

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Speaker 1: also have a very sleeve liquidity sleeve. I do too.

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Speaker 1: I try to put that in stories whenever I can.

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Speaker 1: But I mean they do appeal appeal to retail because

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Speaker 1: some of the products, or some of the asset classes

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Speaker 1: you can get exposure to through an e t F.

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Speaker 1: I mean, if you're a retail trader, you're never gonna

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Speaker 1: be buying, you know, Russian debt, You're never going to

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Speaker 1: be buying oil futures, those types of asset classes that

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Speaker 1: you really can't get exposure to, but now you can

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Speaker 1: through an e t F. You invite it on any

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Speaker 1: sort of brokerage platform. So it's Tony from UBS ever

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Speaker 1: calls me and pitches an e t F to me,

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Speaker 1: that might be the end of our Oh no, are

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Speaker 1: you not in E t F. I don't know, Yeah,

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Speaker 1: I guess I can. I mean that the low fees,

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Speaker 1: I guess they're targeted, which is pretty cool. I don't know,

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Speaker 1: it just feels a little I'd love to see s

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Speaker 1: h C s mark Yusco. Right, yes, exactly exactly. So

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Speaker 1: we were talking to mark Yusco about and by the way,

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Speaker 1: you know how I found that I couldn't remember what

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Speaker 1: I had typed in, and I just typed an h

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Speaker 1: I S t go and it shows you the history

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Speaker 1: of all the commands that you've typed down the Bloombergs.

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Speaker 1: You can scroll back. That is a very cool in itself.

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Speaker 1: That is a good another function. You know, I was

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Speaker 1: reading about this fund and I was so mad that

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Speaker 1: I didn't write about it because it's really interesting. Basically that, um,

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Speaker 1: it feels like he's pitching this e t F A

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Speaker 1: is you can use it almost as a money market fund,

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Speaker 1: like just store your cash here. You're probably going to

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Speaker 1: get a few basis above treasury is not very exciting,

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Speaker 1: but you know it should work all right. So the

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Speaker 1: new issue market for e t f s, where are

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Speaker 1: we kind of over the last twelve months? Is it

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Speaker 1: accelerating and we kind of peaked on fire? They say, yeah, no,

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Speaker 1: you saw a record number of e t f s

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Speaker 1: launched last year, which is interesting to me because they've

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Speaker 1: all been mostly active and thematic. But if you look

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Speaker 1: at where the money is going, it's all too pretty

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Speaker 1: vanilla funds. It's all SMP five hundred index tracking funds.

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Speaker 1: So you're seeing this huge surge in issue once. But

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Speaker 1: I mean those new funds are attracting very little of

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Speaker 1: the actual money that's flowing into the e t F market,

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Speaker 1: which is largely just dominated by Vanguard and black Rock UM.

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Speaker 1: And Vanguard has been the boss of e t s

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Speaker 1: really since their inceptions. Right, they own, they own this market.

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Speaker 1: They well, okay, this is the storyline that you have

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Speaker 1: to watch very closely. Black or Vanguard's share of the

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Speaker 1: e t F market has grown every since go year,

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Speaker 1: for twenty years straight. Black Rock is still your incumbent.

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Speaker 1: I think they control about thirty four percent of all

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Speaker 1: U S E t F assets, Vanguards at twenty nine

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Speaker 1: per cent. So that flippening it's going to happen one day,

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Speaker 1: maybe it's not this year. But I also just think

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Speaker 1: because of you know, the uh, the legend of Jack

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Speaker 1: Bogel and to me, e t F s fits so

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Speaker 1: well with that passive investing legend. But of course they

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Speaker 1: probably have active investing e t f s there as well.

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Speaker 1: They do, and Vanguard will be quick to tell you

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Speaker 1: that they do have active ETFs. But if you look

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Speaker 1: at their AD two product and they just have a

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Speaker 1: D two products, which is also mind blowing. It's mostly passive.

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Speaker 1: That's where all the money is. And I SPACE E

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Speaker 1: t F gets all the Bloomberg News written stuff on

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Speaker 1: E t F and E t F. E t F

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Speaker 1: go is a great et F and b I E

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Speaker 1: t F s to get the research there. Alright, let's

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Speaker 1: talk global oil Brent crude nine cents. We were on

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Speaker 1: I guess we still are on a one watch. I'm

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Speaker 1: hearing some hundred dollar numbers coming out of Wall Street.

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Speaker 1: But when we want to talk oil or commodities, pork bellies, crypto,

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Speaker 1: we go to Mike McLane. He's from Bloomberg Intelligence Commodities. Uh.

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Speaker 1: Analysts there. Uh, Mike, you're in a Bloomberg Interactive broker studio.

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Speaker 1: He's here, folks. Usually he's down in Miami Beach kicking

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Speaker 1: back at the pool with a cocktail with an umbrella

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Speaker 1: in it. But he is here in New York working

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Speaker 1: this week. Mike, what do you make a crude oil? Here?

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Speaker 1: Are we gonna see that one handle? I think it's

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Speaker 1: part of the process that it did in two thousand

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Speaker 1: and eight. Elevator escalator up, elevator down. So right now

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Speaker 1: we're in that upstage today is not so great, but

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Speaker 1: it's factoring a pretty significant armed conflict between you know,

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Speaker 1: with in Europe with a large exporter of crudel and

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Speaker 1: a large exporter of grains. To me, that's otherwise. Once

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Speaker 1: we get through this period, it happens, are not crudel

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Speaker 1: is going back to fifty and that is are below

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Speaker 1: and because two and two thousand and eight it's peaked

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Speaker 1: at one and then dropped the forty um the next

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Speaker 1: year and then what happened was that we went up

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Speaker 1: to a hundred for till two thousand eleven. Then the

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Speaker 1: whole U. S. Shelle Revolution happened. Oil sands in Canada.

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Speaker 1: That's happening again now. The differences Matt loves is the

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Speaker 1: evs are really kicking in. That's it's and our consumption

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Speaker 1: in North America peaked in two thousand eighteen, and so

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Speaker 1: it's starting to head lower. So also the key thing

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Speaker 1: is war. Okay, war keeps it elevated and the shorter term,

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Speaker 1: but the big picture is higher prices bringing more supply,

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Speaker 1: and it's worse this time. So here's what that part

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Speaker 1: at that part, I don't we don't see happening yet,

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Speaker 1: right We don't see the shale guys recounts pulling more

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Speaker 1: oil out of the ground. We don't see Texas pulling

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Speaker 1: the trigger. They just don't seem to be downey at

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Speaker 1: Why why lagging? So what are we doing right now?

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Speaker 1: We're the reciprocal negative negative prices. We're going to do

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Speaker 1: the exact opposite within the next year. Might be three

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Speaker 1: months high prices. Now back to the more enduring trends.

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Speaker 1: So let's give you this fact. Crude picked at one

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Speaker 1: in July m July two thou eight. I think we're

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Speaker 1: catch up to p P. I'd be two hundred dollars.

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Speaker 1: So that's a bear market that's bouncing with an range.

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Speaker 1: So yes, it's a lot of fear, but this is

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Speaker 1: just the facts of the market. If you can, you

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Speaker 1: can create more of it. We use less of it.

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Speaker 1: And you know, I came from a corn mail background.

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Speaker 1: Twelve percent of our gasoline is from ethanol, which I

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Speaker 1: know you love. I'm against that. Well, I'm not against

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Speaker 1: it if you don't care about your motor, you know,

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Speaker 1: but it's not good. I don't want to put that

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Speaker 1: in my I will drive the extra mile to get

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Speaker 1: pure gasoline. Really, I don't want, Yes, you do. I

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Speaker 1: don't care, do I you don't care? I don't care?

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Speaker 1: All right? So alright, So, but supply and demand here

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Speaker 1: OPEC has remained pretty disciplined. Is that something you expect

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Speaker 1: to continue it does? Does OPEC really have that much

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Speaker 1: spare capacity? Well, one of the things we've been hearing

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Speaker 1: from the guests we bring on is okay, Saudi does,

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Speaker 1: and you can see it with OPEC GO. It's a

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Speaker 1: really cool chart for spare capacity. Um. But the guests

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Speaker 1: that we have on lately have been doubtful that other

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Speaker 1: countries really have that much spare capacity. And actually you

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Speaker 1: don't see anything on OPEC GO besides Saudi Arabia and

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Speaker 1: the UAE. Don't underestimate how prices bring on supply and commodities.

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Speaker 1: I learned what I used to have hair. It's just exactly,

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Speaker 1: it's just so entertaining the hair because I remember how

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Speaker 1: we were gonna have peak oil ten years ago, what

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Speaker 1: really peaked consumption in North America, So that will come.

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Speaker 1: The discipline is impressive. Iran could come back and look

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Speaker 1: at Venezuela. They have as much oils crude at some

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Speaker 1: point that comes back in higher prices, bringing that on.

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Speaker 1: But I think what's happening now is more than macro.

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Speaker 1: I think we're beginning part of the great reversion of

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Speaker 1: this massive period of economic fiscal, monetary stimulus. And so

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Speaker 1: if if we don't have the war, we face the

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Speaker 1: fet If we do have the war, we have other

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Speaker 1: issues of potential recession. But you know, the unique thing

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Speaker 1: that's really been happening lately, I was impressed with how

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Speaker 1: bitcoin has been a leading indicat If you come in

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Speaker 1: the morning like today, bitcoin was heavy the stock markets. Yeah,

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Speaker 1: you see, you watch the ticker and then you have

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Speaker 1: those days when stock markets down and Bitcoin starts taking

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Speaker 1: up the stock market files. It's amazing how this crypto

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Speaker 1: has become the leading in the lead the indicator markets.

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Speaker 1: But in a big picture, I think that's what comes

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Speaker 1: out ahead. So I published a piece recently. As we know,

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Speaker 1: lack of supply decline to supply increasing adoptions not not

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Speaker 1: part of multiples portfolios. Bitcoin and you look at crude

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Speaker 1: oil we're using lesson. You mentioned ethano I driven electric

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Speaker 1: and I've had it for eight years now. It's great electric.

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Speaker 1: You know what, if any beach, I'll drive it all

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Speaker 1: the way. It's I lawed you wait, a Shaddy Vault

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Speaker 1: or a bolt A Vault, so they don't make them anymore,

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Speaker 1: but it's a hybrid. Yeah, So basically I love that

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Speaker 1: car exactly. Um I test drove that when they first

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Speaker 1: came out. So my thing is, as I've been telling

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Speaker 1: Paul and anyone who listened, I love the idea of

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Speaker 1: electric cars. I love the acceleration of electric cars. I

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Speaker 1: missed the vibrations and the sound of an internal combustion

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Speaker 1: engine and shifting gears obviously as well. I love a

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Speaker 1: good hybrid, so I loved the Chevy Vault when that

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Speaker 1: came out, and I don't know why they don't make

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Speaker 1: it anymore. I love the BMW now has um An

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Speaker 1: X five that has an in line six, so fantastic

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Speaker 1: power plant. That's the power plant that made them famous,

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Speaker 1: and a huge like thirty kilowatt battery. So you can

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Speaker 1: drive miles without a motor, but when you need it,

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Speaker 1: you kick it on. It's your enthusiasm is to me,

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Speaker 1: that's profound because that's where it's going, and it's happening

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Speaker 1: more in the wealthier companies. But I heard last year

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Speaker 1: in China of new auto sales were e vs. Now.

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Speaker 1: You mentioned hybrids. My mine gets ninety miles for the

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Speaker 1: getting per Gillan and my brother's a mechanics. Is a

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Speaker 1: cool thing about these is they the engine doesn't work,

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Speaker 1: card they last forever because we use electric for stop

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Speaker 1: and go and the engine only works for the long

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Speaker 1: distances it works. It's a good system. I wish they

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Speaker 1: would make cars where you could easily swap out the

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Speaker 1: batteries because my concern is I buy one now or

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Speaker 1: the thirty kilowatt battery, and in ten years from now

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Speaker 1: there's a five kilowatt battery and the same size. Mike McLoone,

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Speaker 1: thank you so much. We appreciate it. We didn't get

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Speaker 1: to talk pork bellies. We got tripped up by cryptos

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Speaker 1: and concentrated orange. You will do or bellies next time,

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Speaker 1: I guarantee it. This Federal Reserve is looking clearly at

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Speaker 1: some of the economic data coming up, and we want

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Speaker 1: to check in with Michael McKee covers all things economics

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Speaker 1: for us. Here, Michael, as you think about this Federal Reserve,

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Speaker 1: we're talking about hiking rates. W I r P is

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Speaker 1: saying seven rate hikes this year. What do you think

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Speaker 1: the federal reserve is really looking at in terms of data.

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Speaker 1: Can I also say the word function looks better than

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Speaker 1: ever you. I know we're on radio you can't see it,

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Speaker 1: but it's so improved to the old word functions. So

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Speaker 1: I highly recommend people check it out. The thing that's

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Speaker 1: interesting is that we consider one rate hike to be

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Speaker 1: twenty five basis points. That always is that just the

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Speaker 1: standard rate hike measurement. Well, it became that under Alan

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Speaker 1: Greenspan the years before they used to announce what was

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Speaker 1: going on, they would raise it by all kinds of numbers,

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Speaker 1: fifteen or ten or thirty five five, whatever they thought

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Speaker 1: was necessary, particularly in the Vulcar years when they were

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Speaker 1: doing UH monetary aggregates as a guide, so they were

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Speaker 1: trying to figure out how much money they'd be creating.

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Speaker 1: But um, at this point the Fed is UH looking

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Speaker 1: at to answer your question, inflation and unemployment. Unemployment, they

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Speaker 1: noted in the Minutes yesterday had pretty much gotten to

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Speaker 1: where they wanted it to be. It's inflation they're worried about.

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Speaker 1: So the Fed is at this point planning on moving

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Speaker 1: in March. By the way, has employment changed that much

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Speaker 1: or did they just start to get worried enough about

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Speaker 1: inflation that they felt like it was changed a huge amount.

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Speaker 1: I mean, it's it's already down basically to almost where

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Speaker 1: it was before the pandemic. We were at three point

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Speaker 1: five three point six, and now we're at three, while

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Speaker 1: we're at four, but we were at three point nine.

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Speaker 1: As more people come back, so pretty much at full employment,

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Speaker 1: we're not going to get the same statistics that we

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Speaker 1: got before the pandemic because people have not come back

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Speaker 1: into the labor force. So that great resignation starts. Yeah,

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Speaker 1: well we're all working, so I don't I don't see

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Speaker 1: any of it's not in this room. But but you're right, man,

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Speaker 1: it's basis points become the standard. And now they don't

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Speaker 1: even do it by basis points. They're doing it by

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Speaker 1: range of now and then it will be fifty. And

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Speaker 1: what the market is doing, and this is your w I. R. P.

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Speaker 1: Lesson is looking at what the effective Fed funds rate

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Speaker 1: is likely to be, which is right now around seven

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Speaker 1: basis points. So if you look at the next move

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Speaker 1: and you see that the implied rate is thirty two

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Speaker 1: basis points, then that's a twenty five basis point move.

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Speaker 1: So uh, it's it's a little complicated, but once you

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Speaker 1: get used to it. YouTube you know, in terms of

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Speaker 1: that um uh measured policy behavior and the transparency that

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Speaker 1: the FED wants to I mean, are we gonna stick

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Speaker 1: with that throughout the pal FED? Will we ever get

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Speaker 1: back to them saying, you know what, let's have an

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Speaker 1: emergency meeting and you know what, we'll raise my fifty

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Speaker 1: basis points now or forty five. Well, they've had emergency meetings.

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Speaker 1: They had an emergency meeting, but they can only do

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Speaker 1: an emergency meeting to cut right, Because the could do

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Speaker 1: an emergency meeting to raise if they felt it was necessary.

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Speaker 1: It's it's hard to do because I'm doubtful you're legally

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Speaker 1: they can do it, but you're right, it's it would

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Speaker 1: be a shock to markets. Uh. And it was pretty

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Speaker 1: obvious when we hit the pandemic and markets seized up

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Speaker 1: and weren't working that they had to cut rate. So

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Speaker 1: the meeting, the emergency meeting they held was not a

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Speaker 1: bad thing. But do you know who was saying this yesterday?

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Speaker 1: Actually I was struggling to remember because I'm getting it

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Speaker 1: was Daniel D. Martino booth Um, And to be fair,

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Speaker 1: her book was titled fed Up, so you can tell

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Speaker 1: where she's coming from. But she was saying yesterday, you

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Speaker 1: know this isn't cool because the FED is so careful

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Speaker 1: when it comes to markets, right, they want to spoot

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Speaker 1: the markets, but they don't care about the common man

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Speaker 1: paying five dollars at the pump. If they wanted to

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Speaker 1: tackle inflation right now, she was she was saying, and

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Speaker 1: Paul made a great counter argument that it's really about

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Speaker 1: the supply chain. If they wanted to fight inflation, they

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Speaker 1: would just have an emergency meeting and raise fifty basis

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Speaker 1: points now and maybe six eight months from now. That

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Speaker 1: would slow start to slow business activity. Policy working with

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Speaker 1: a lag, so it's not really going to help. I mean,

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Speaker 1: we were surprised by retail sales yesterday and how good

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Speaker 1: they were, and we've been surprised by how strong consumer

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Speaker 1: credit has been. People want to spend money. Well, retail

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Speaker 1: sales disappointed the last two reports. Think about how bad

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Speaker 1: it was in December, and that was Christmas, but that

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Speaker 1: was because October was better, So I mean we pulled

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Speaker 1: it forward. That's you're just basically outlining that why it's

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Speaker 1: so hard for anyone to do monetary policy these days,

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Speaker 1: especially when you're working with a blunt instrument like one

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Speaker 1: interest rate. Well, and of Paul's point, if you're if

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Speaker 1: it's supply constraints that are causing inflation, you know, if

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Speaker 1: if I'm paying so much more for my GMC yukon

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Speaker 1: a T four because they just can't make enough, it

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Speaker 1: doesn't matter if the FED raises rates. Does the FEDS

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Speaker 1: going to raise rates on March sixteenth and on March seventeenth.

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Speaker 1: We aren't going to suddenly have a big supply of

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Speaker 1: semi conductors that all of a sudden show up. So

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Speaker 1: the car problem is going to continue. And that's the issue,

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Speaker 1: is we bought I mean, we've had several separate issues

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00:23:33,200 --> 00:23:37,480
Speaker 1: that get rolled into one. The semiconductor's issue was a

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00:23:37,560 --> 00:23:40,760
Speaker 1: result of a number of factory problems, and then the

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Speaker 1: car issues, uh flowed from that. But then we have

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00:23:45,920 --> 00:23:48,479
Speaker 1: other supply chain issues where we ordered so many goods

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Speaker 1: that they couldn't keep up with the shipping of the mall.

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Speaker 1: And that's slowly beginning to rationalize, but we're not there yet. Yeah,

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Speaker 1: we just had the lead class go on from Bloomberg

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Speaker 1: Intelligence covers all the ocean shipping companies, the railroads, the

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00:24:02,720 --> 00:24:04,640
Speaker 1: truck and companies. He sees it all, and he says

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00:24:05,160 --> 00:24:07,720
Speaker 1: he consisted going to stretch into next year. You know,

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Speaker 1: he kind of thought it might be at mid event

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Speaker 1: where we get some meaningful improvement in supply chain. But

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00:24:12,920 --> 00:24:16,240
Speaker 1: now he's pushing that out even further. So that written

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Speaker 1: the Rails. I have took a great Canadian Pacific investor

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00:24:20,160 --> 00:24:23,760
Speaker 1: trip through the Canadian Rockies. It was awesome and three

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Speaker 1: day trip, a lot of fun. You know, I bets

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Speaker 1: written the rails? What Greg Jarrett? Yeah, I'm sure he

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Speaker 1: hasn't hold as a whole bolt, you know out in

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Speaker 1: the West. Thanks for listening to the Bloomberg Markets podcast.

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Speaker 1: You can subscribe and listen to introduce Apple Podcasts or

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00:24:39,280 --> 00:24:42,840
Speaker 1: whatever podcast platform you prefer. But I'm Matt Miller. I'm

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00:24:42,880 --> 00:24:46,919
Speaker 1: on Twitter and Matt Miller talking about on False Swinney.

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00:24:46,920 --> 00:24:49,480
Speaker 1: I'm on Twitter at pt Sweeney before the podcast. You

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Speaker 1: can always catch us worldwide at Bloomberg Radio.