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Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane. Along

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Speaker 1: with Jonathan Ferrell and Lisa A. Brownowitz. Daily we bring

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Speaker 1: you insight from the best and economics, finance, investment, and

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Speaker 1: international relations. Find Bloomberg Surveillance on Apple Podcast, Suncloud, Bloomberg

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Speaker 1: dot Com, and of course on the Bloomberg terminal. This

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Speaker 1: is a joy with Amrie Harden in Rome. It is

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Speaker 1: entirely appropriate that Maria Todeo is with us, and she's

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Speaker 1: from one of truly the most famous embassy buildings in

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Speaker 1: the world is the Palazzo Finacea, and it is the

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Speaker 1: jewel of the sixteenth century. And Maria I would suggest

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Speaker 1: that Mr mccrown the people of France have to spend

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Speaker 1: zillions of francs every year keeping it in wonderful restoration.

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Speaker 1: They probably do, but you know, the French do have

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Speaker 1: a niver beauty. And on that note, we are going

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Speaker 1: straight with our guests. Unmail. Always nice to see you,

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Speaker 1: French finance minister. You have an important meeting. But before

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Speaker 1: we go into the economics, I want to talk about

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Speaker 1: the politics your president. I mean, when mccron is meeting

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Speaker 1: with President Biden. The last time they met together was

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Speaker 1: a very different scenario than the submarine crisis happened. Are

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Speaker 1: you making peace this time or are you still angry?

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Speaker 1: I don't know. We are on the process to make peace.

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Speaker 1: Of course, we have been disappointed. Everybody is aware of that.

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Speaker 1: But now this is the first step in the way

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Speaker 1: of rebuilding trust and confidence between the United States and France.

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Speaker 1: And what's that going to entail? Is there anything specifically

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Speaker 1: that will come out of the meetings. I know you

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Speaker 1: don't speak on behavin, so I would attend the meeting

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Speaker 1: with President Biden and mccon. But let's wait some minutes

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Speaker 1: before explaining anything about this meeting, okay. And you're also

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Speaker 1: very involved in the O City deal, thecent compermaniment tax.

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Speaker 1: We know that this is something you've worked on for years.

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Speaker 1: It finally does seem like it will be agreed in

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Speaker 1: Rome this weekend. How about the implementation? However, in real life,

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Speaker 1: how do you put it to work? It is a

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Speaker 1: key agreement and now the key question is implementation. So

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Speaker 1: we will do our best as the next EU presidency,

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Speaker 1: the fronts will have the EU presidency to implement the

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Speaker 1: tupidas of this international taxation, digital taxation and minimum taxation.

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Speaker 1: Our goal is to have this international taxation system being

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Speaker 1: fully implemented, no letters than twenty three. And what's your

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Speaker 1: message to Facebook, Google? Is it prepared to pay more?

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Speaker 1: They have to pay, so how much more and powerful

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Speaker 1: they're making profits, they have to pay. This is fairness

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Speaker 1: And you think they get that now, I think they

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Speaker 1: get that. But let's have a look at the consequences

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Speaker 1: of the COVID crisis and the econdemic crisis. Facebook, Google

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Speaker 1: and all the digital giants of the big winners of

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Speaker 1: this crisis. So it's fair that they have to pay

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Speaker 1: the due level of taxes. And you know you mentioned

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Speaker 1: the economic recovery. We are seeing in Europe that it

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Speaker 1: is speeding up, but we do have problems on the

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Speaker 1: supply chain. I know that's something that you say. You're

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Speaker 1: also concerned in terms of the big French names that

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Speaker 1: operate globally. How big an issue is the shortage economy?

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Speaker 1: Do you buy into this theory that we're heading into

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Speaker 1: a period of type types? Very good news on the

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Speaker 1: economic recovery. You know that the last figure for funds

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Speaker 1: for the third quarter of the year is three percent

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Speaker 1: of growth, which means that we will reach our goal

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Speaker 1: of having six point twenty of growth, and we already have.

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Speaker 1: We covered the same level of growth and the one

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Speaker 1: we had before the crisis. So that's excellent news. The

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Speaker 1: economic coqwy is quick, it is rapid, and it is solid.

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Speaker 1: Then we are facing the negative consequences of this economic recovery. Bottlenecks,

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Speaker 1: shortages on the labor market, on the semi conductors, on

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Speaker 1: the whole materials. It might affect the level of gowth

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Speaker 1: over the next month and over the next years. It

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Speaker 1: means that we clearly need all the twenty countries to

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Speaker 1: address the issue and to find very concrete solutions to

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Speaker 1: these bottlenecks. And of course, feeding into this as a

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Speaker 1: debata around inflation yesterdays, who used to do your job

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Speaker 1: in the past. She said, it's it's heating up, but

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Speaker 1: it's temporary. The factors are pushing up inflation will fade away.

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Speaker 1: To buy her theory, yes, I fully share her point

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Speaker 1: of view. I think it is temporary inflation. Nevertheless, once

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Speaker 1: again we should be very careful about this question of bottlenecks.

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Speaker 1: Let's just have a look at the question of semi conductors.

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Speaker 1: Now you have the automotive industry being directly hit by

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Speaker 1: the lack of semi conductors, which means that the right solution,

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Speaker 1: and we share the same point of view as the

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Speaker 1: one expressed by Proson Biden, is to be more independent.

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Speaker 1: Mccommed it very clear. We won't Europe to be more independent,

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Speaker 1: to invest in new factories so that we can have

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Speaker 1: our own semiconductors, not being too much dependent on Asia,

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Speaker 1: on South Korea or other nations. And Europe has made

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Speaker 1: that very clear too. I want to also follow up

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Speaker 1: on the e c B question. I know you don't

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Speaker 1: want to talk about the central bank, but yesterday we

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Speaker 1: did see markets pricing that there will be an entrance

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Speaker 1: rate hike by the end of next year in Europe.

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Speaker 1: Is that premature? Does this economy still need more stimulus?

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Speaker 1: As a market reading it wrong? I think that we

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Speaker 1: have to go step by step. The first step was

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Speaker 1: to protect our salaries and our companies against the most

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Speaker 1: important crisis since nineteen nine. Second step the economic recovery.

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Speaker 1: We are successful on the economic recovery. That's very good

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Speaker 1: news for all of us, to the United States and Europe.

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Speaker 1: The third step will be to come back to some

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Speaker 1: public finances, but we should not hurry up in coming

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Speaker 1: back to some public finances or otherwise you run the

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Speaker 1: risk of killing growth. And the best response to the

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Speaker 1: economic crisis is more gross sustainable growth for all the people.

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Speaker 1: Just a very final question energy. This is a big

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Speaker 1: conversation in Europe. We're seeing the bills are going through

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Speaker 1: the roof. Your government has announced measures to help. Is

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Speaker 1: that on households? Are you willing to work more with

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Speaker 1: Russia perhaps on that front or does it prove the

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Speaker 1: case the nuclear energy is the French way is actually valid.

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Speaker 1: She proves the case that nuclear energy is one of

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Speaker 1: the best solutions. If you want to be dependent on

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Speaker 1: Russia and on vere putting, that's your choice, that's not

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Speaker 1: my choice. My choice is to have fronts on the

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Speaker 1: open countries, being totally independent, which means investing more in

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Speaker 1: nuclear energies, investing more in renewable energies, so that we

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Speaker 1: can have a mix which makes Europe fully independence from

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Speaker 1: the other countries, perhaps more more French, less German, at

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Speaker 1: least on the energy energy, more French rather than German. Yes, okay,

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Speaker 1: well one of them. Oil. Thank you so much for

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Speaker 1: your time. Always like seeing you, and I hope of

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Speaker 1: the meeting with the Treasure Secretary goes well, thanks so much,

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Speaker 1: Thank you. Tom all right today, oh thank you so much.

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Speaker 1: On radio and television worldwide Maria today O from the

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Speaker 1: Embassy of the Republic of France in Rome. Were the

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Speaker 1: reset view on the American economy with Bank of America.

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Speaker 1: Michelle Meyer joins us. Right now, Michelle, what have you

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Speaker 1: done to reset off of two percent yesterday? UM, So

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Speaker 1: we were tracking right around two percent, so it came

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Speaker 1: in pretty close expectations given all the high frequency data

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Speaker 1: we were looking at UM and we are holding to

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Speaker 1: review that the fourth quarter should show a rebound. We're

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Speaker 1: seeing stronger signs of consumer spending. When we look at

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Speaker 1: our aggregated UM card data, we're seeing a really healthy

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Speaker 1: UM move higher in spending with UM the services economy

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Speaker 1: red gauging UM with potentially an early start to the

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Speaker 1: holiday shopping season. So we think we're going to see

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Speaker 1: stronger consumer spending into the fourth quarter, business investment continuing,

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Speaker 1: and some further contribution from inventories. There's a while to

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Speaker 1: go in terms of inventory cycles. So our foecast is

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Speaker 1: six percent real GDP growth. Thank you four which is

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Speaker 1: again and I pick up from the third quarter. Major

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Speaker 1: Inside Baseball, Michelle Meyer, how can you count inventories were

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Speaker 1: the upset of supply shock? Okay, so this gets wonky,

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Speaker 1: as you can expect, but for gen let's just do it.

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Speaker 1: For GDP calculations, it's the change in the change in inventories.

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Speaker 1: So if you're simply contracting by less, it's actually a

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Speaker 1: positive contribution for GDP growth. And that's what we saw

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Speaker 1: in the third quarter. Inventories were still down, but not

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Speaker 1: as down as they were in a second quarter, so

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Speaker 1: that added two percentage points to GDP growth. So we

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Speaker 1: were so far away from a point where we're actually

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Speaker 1: adding to inventory levels, but simply subtracting less will support

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Speaker 1: the GDP adding up process going forward, Spending will be

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Speaker 1: a key issue, Wages a key issue. We just got

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Speaker 1: some spending data. How much does that enlighten us about

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Speaker 1: what happened with a third quarter GDP reading and what

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Speaker 1: we can expect going forward. Absolutely, I think the consumer

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Speaker 1: is very much what we should be paying attention to.

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Speaker 1: And Lisa, as you noted, it's important to understand the

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Speaker 1: money in and the money out right, So I a

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Speaker 1: hundred percent agree with you that the wage data this

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Speaker 1: morning was by far the most important statistic. That was

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Speaker 1: a big increase in the employment costs Index UM, and

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Speaker 1: that shows that there's more purchasing power for the consumer,

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Speaker 1: but it also tells us that there's more inflationary pressure

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Speaker 1: building in the broader economy. Businesses will be able to

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Speaker 1: pass more of those costs on they're doing it. We're

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Speaker 1: seeing in terms of these price pressures UM. But I

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Speaker 1: think the big picture for the consumer is that there's

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Speaker 1: still a lot of cash out there. There's a lot

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Speaker 1: of availability to borrow to the extent that that's necessary.

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Speaker 1: We are seeing some pick up in UM spending on

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Speaker 1: credit cards amongst lower income consumers UM, and the savings rate,

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Speaker 1: although coming down in today's report, is still pretty elevated.

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Speaker 1: So I think the extent that consumers have items to buy,

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Speaker 1: are feeling comfortable re engaging in the services economy, we

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Speaker 1: will see that play out in the data, even if

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Speaker 1: it means coming with more price pressure. Michelle, let's just

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Speaker 1: sit on that employment cost index for a minute, because

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Speaker 1: I just did the data and this is actually the

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Speaker 1: highest read ever in data going back to the I mean,

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Speaker 1: this is a shocking increase in wages in how much

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Speaker 1: is that labor is demanding. What does this mean in

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Speaker 1: terms of the stickiness of inflation and frankly, the response

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Speaker 1: from central bankers as the FED meets next week. Yeah,

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Speaker 1: So the employment cross the next is the Fed's preferred

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Speaker 1: measure of wages. So they can look past some of

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Speaker 1: the noise and the average early ernies numbers because of

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Speaker 1: composition issues, et cetera. But employment costs Index they pay

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Speaker 1: a lot of attention to. And this is a big

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Speaker 1: burt and it's very much consistent with what we're staying

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Speaker 1: in terms of the high quit rate, the high amount

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Speaker 1: of job openings, the fact that purchasing power has shifted

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Speaker 1: to the employee UM and we're seeing that in terms

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Speaker 1: of these labor costs. So when you have wage growth

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Speaker 1: of this magnitude, especially if it proves to be persistent

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Speaker 1: the keyword um, it pushes, you know, you get this

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Speaker 1: wage price push into broader prices and that sets up

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Speaker 1: for a much more of a sticky path higher of inflation.

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Speaker 1: And the Feed is going to pay very close attention

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Speaker 1: to that well. And obviously we'll be watching the Fed

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Speaker 1: decision on Wednesday next week, But then on Friday, we

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Speaker 1: have a job's report and given some of those labor

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Speaker 1: market dynamics that Lisa was referring to, what are you

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Speaker 1: expecting to see from the month of October given September

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Speaker 1: took us all by surprise in many ways, so we

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Speaker 1: think we will see an acceleration. We're looking for four

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Speaker 1: hundred and fifty thousand non farm puerial growth um in

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Speaker 1: the next report, which is a nice pick up from

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Speaker 1: the last two months, but not quite to the levels

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Speaker 1: that we were prior to the pandemic. And I think

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Speaker 1: one of the key components within the report will be

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Speaker 1: the labor force participation rate, whether or not we're seeing

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Speaker 1: move back up supply into labor market, because that's absolutely

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Speaker 1: critical in order to step some of the inflationary pressure

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Speaker 1: and also keep this business cycle going. You know, we're

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Speaker 1: dealing with very large supply side constraints in any sign

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Speaker 1: that that's opening up or creating some relief is going

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Speaker 1: to be critical. Michelle, Thank you so much, Michelle Meyer,

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Speaker 1: Bank of America with us for briefing everyone. Really changing

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Speaker 1: and adjusting your folks. I really can't say enough about

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Speaker 1: house to house right now. We monitor your problems in

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Speaker 1: the fixed income market, and there's no one better to

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Speaker 1: do that with George Boy who writes brilliantly clear research notes. George,

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Speaker 1: you go all calculus on us and say, get over it.

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Speaker 1: We're seeing a deceleration in the fixed income market. Explain that. Yeah, sure, thanks,

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Speaker 1: thanks Tom, good morning. Um. You know what we're seeing

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Speaker 1: is it is a deceleration in the bond market. You know,

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Speaker 1: we've seen a pretty big move over the last week

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Speaker 1: or so at the long end of the curve as

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Speaker 1: bond yields have dropped UM and the curve is flattened.

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Speaker 1: The curve is flattened pretty meaningfully, and very very importantly,

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Speaker 1: we've seen a mild inversion out at the very long

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Speaker 1: end between the twenty year and the ten year UH

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Speaker 1: tenure point on the curves. And and people have rushed

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Speaker 1: to assume that this is now a sort of a

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Speaker 1: meaningful indicator that we're headed for a hard landing. UM

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Speaker 1: And I think that's that's kind of getting a little

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Speaker 1: bit ahead of the curve, as they say, um And

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Speaker 1: And the reality is is that there there are tremendous

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Speaker 1: technicals that that drive fixed income markets. It's it's the

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Speaker 1: shape of the curve. One of the best indicators you

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Speaker 1: can look at for sort of the direction of the economy,

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Speaker 1: the direction of growth and and ultimately markets, and a

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Speaker 1: flattening curve usually kind of raises some alarm bells. But

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Speaker 1: but when we look at the curve, what we see

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Speaker 1: is a curve that's actually is actually what's called, you know,

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Speaker 1: what we would call, you know, a bare flatten er.

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Speaker 1: Yields are moving incrementally higher. It's not one direction and

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Speaker 1: it's not universal, but they are moving higher. And so

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Speaker 1: the fact that yields overall are moving higher while the

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Speaker 1: curve flattens, that underscores to us a message that the

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Speaker 1: economy is decelerating, it's not headed for a hard landing,

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Speaker 1: that the economy is still doing well. We saw kind

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Speaker 1: of a soft patch in the in the in the

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Speaker 1: third quarter, as we saw yesterday, but the the underpinnings

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Speaker 1: of demand are very robust. Yes, supply constraints are impacting growth,

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Speaker 1: end user is still pretty healthy. I like the discrepancy

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Speaker 1: that you make, or there's sort of the distinction that

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Speaker 1: you make between heading toward recession, creating off a cliff,

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Speaker 1: and just slowing down, which is what pretty much everyone

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Speaker 1: expects to see. But a lot of this is predicated

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Speaker 1: on central banks raising rates sooner than they say they will.

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Speaker 1: Do you buy that story that the market is telling

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Speaker 1: or do you buy what central bankers are trying to us? Well,

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Speaker 1: I I think that the market is certainly testing the

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Speaker 1: limits of the central banks, and I think what the

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Speaker 1: central banks have told us is they are again using

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Speaker 1: the yield curve as as an example. They definitively want

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Speaker 1: to be behind the curve. They're gonna let the market

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Speaker 1: move ahead and ultimately sort of guide where they need

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Speaker 1: to be. Now you can you can debate whether or

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Speaker 1: not the markets getting ahead of itself. You know, current

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Speaker 1: levels of inflation are quite high by historical standards and

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Speaker 1: are remaining higher than than people would have expected. But

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Speaker 1: there is a good chance that they do start to

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Speaker 1: decelerate as well as we get into next year. Supply

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Speaker 1: supply side constraints don't last forever. They do start to

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Speaker 1: get some level of relief, and so, you know, I

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Speaker 1: think the market is sort of pressure pro pressuring the

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Speaker 1: sort of the limits of the Fed. FED has been

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Speaker 1: very clear they're going to you know, they plan to

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Speaker 1: start to taper. We're going to hear from them next

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Speaker 1: week and then you know that will sort of set

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Speaker 1: the stage for other central banks around the world are

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Speaker 1: already in ocean. And so the reality is, is that

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Speaker 1: sort of the extreme liquidity that's been in the market

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Speaker 1: now for you know, eighteen months or so, you know,

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Speaker 1: is starting to come out and is starting to decelerate.

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Speaker 1: But we're going from extreme extreme liquidity to less liquidity.

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Speaker 1: So it's not negative, it's not tightening, it's just less.

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Speaker 1: But is there a tipping point? And I think this

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Speaker 1: is what people are looking at when they say things

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Speaker 1: like a hawkish dot, the idea that there's a similar

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Speaker 1: kind of sentiment in central banks around the world where

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Speaker 1: you saw all yields go down for years together globally

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Speaker 1: in tandem, and now we're starting to see it move

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Speaker 1: in the opposite direction in tandem. Could we reach a

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Speaker 1: tipping point where it starts to accelerate on itself and

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Speaker 1: people start to try to normalize rates with something more

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Speaker 1: akin to inflation and growth. We could reach a tipping point.

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Speaker 1: I think that's a fair point. It's and I think

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Speaker 1: this is sort of the game of cat and mouse

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Speaker 1: between markets and between central bankers. You know, I think

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Speaker 1: our our our view is that that that the FED

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Speaker 1: is trying to recalibrate fixed income markets. I mean they

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Speaker 1: see the same data we do, and so, you know,

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Speaker 1: sort of moving yields higher, allowing yields to move higher

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Speaker 1: to be more in sync with both inflation and growth

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Speaker 1: is effectively one of their objectives when they can't let

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Speaker 1: it move too far, too fast. Your point about a

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Speaker 1: tipping point is that do central bankers lose control of

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Speaker 1: the plot, do they allow or do they are they

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Speaker 1: unable to sort of control the pace of the move.

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Speaker 1: So far that has not been the case, and so

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Speaker 1: and and that's sort of exactly what we're seeing right now,

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Speaker 1: is that you know, there is still very very strong technicals, goods,

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Speaker 1: technical support within the fixed income market. There's a chronic

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Speaker 1: shortage of duration globally, and and sort of liability managers,

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Speaker 1: pension funds, insurance companies and others still move to sort

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Speaker 1: of try and immunize their liabilities. It's not a value trade,

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Speaker 1: it's it's a it's a requirement they need to buy duration.

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Speaker 1: And so when you get to a point like we

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Speaker 1: are now, stock markets at all time highs, we're heading

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Speaker 1: into your end. You sell some stocks, you buy some bonds,

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Speaker 1: You immunize your liability. Those those are very strong technicals

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Speaker 1: that we think keep this market in check. The big picture,

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Speaker 1: Fine yields are moving higher. I mean, that's that's our

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Speaker 1: central case. It's a matter of pace. So then George,

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Speaker 1: what's the read through to credit. Have we seen the tights? Yeah,

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Speaker 1: we do think we've seen the tights actually, um, you know,

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Speaker 1: and what we've seen in historical uh you know periods,

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Speaker 1: is that one central bank policy does start to change,

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Speaker 1: you know, sort of it becomes more of a carry

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Speaker 1: trade than a compression trade. And that's very consistent with

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Speaker 1: what we've seen over the last couple of months. Now

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Speaker 1: that carry trade can last years, many years in some instances,

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Speaker 1: So it is a little bit dangerous to get too

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Speaker 1: far ahead of the curve, again using the curve as

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Speaker 1: the analogy. But but importantly, you do start to move

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Speaker 1: your portfolio around, You start to move up in quality,

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Speaker 1: you start to move sort of down in sort of

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Speaker 1: what we call spread duration, so slightly shorter maturities. You

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Speaker 1: try to sort of buffer yourself against those potential spikes

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Speaker 1: and volatility. But it is still much too early to

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Speaker 1: just simply cut and run, you know. We can find

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Speaker 1: good value in places like structured credit. We want predictable

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Speaker 1: cash flows and we want to try and minimize that

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Speaker 1: that volatile How of you on the Boy continuum. I'm

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Speaker 1: in the triple leverage all cash fund, so I bring

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Speaker 1: bring in the duration and George Boy, thank you so much.

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Speaker 1: Not enough. Scott Clemens, partner in chief investment strategist at

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Speaker 1: Brown Brothers Harriman, joining us right now. I would love

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Speaker 1: to get your sense, Scott, what you make of the

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Speaker 1: volatility on the front end of the yield curve across

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Speaker 1: the world bleeding into longer end over the past few days,

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Speaker 1: when there really hasn't been a major identifiable catalyst. And

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Speaker 1: I think you're right, what we're seeing is just a

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Speaker 1: reflection of continued uncertainty in the economy. The big sort

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Speaker 1: of hundred thousand foot lesson of the last eighteen months

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Speaker 1: is that for all of its volatility, the economy financial

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Speaker 1: markets are pretty finely tuned, and when you dislocate them,

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Speaker 1: as COVID did for the past eighteen months, complex systems

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Speaker 1: do not heal quickly. And in almost any data series

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Speaker 1: you look at, be at the bond market, being inflation GDP,

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Speaker 1: the labor market, anything is still showing these signs of fibrillation,

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Speaker 1: and that's going to take some time to sort out.

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Speaker 1: So right now the bond market is being pushed and

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Speaker 1: pulled between what do I believe a two percent GDP

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Speaker 1: growth figure for the third core that we got yesterday,

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Speaker 1: or do I believe that inflation is the new normal?

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Speaker 1: And I think we're going to see more of this

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Speaker 1: volatility on a daily basis as bond market participants sort

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Speaker 1: those issues out. Scott Clemens, Brown Brothers Hareman goes back

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Speaker 1: almost as far as the setting of the obelisk in St.

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Speaker 1: Peter's square. It's a venerable and ancient firm. Your guys

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Speaker 1: idea of short term is three years. I'm going to

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Speaker 1: even say the BBH rule is short term is five

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Speaker 1: or ten years. How do our listeners and viewers in

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Speaker 1: that For a true BBH long term um, you focus

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Speaker 1: on the fundamentals and you accept the notion that price

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Speaker 1: volatility is a feature of financial markets. It is not

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Speaker 1: a bug. If anything, I have been surprised that we

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Speaker 1: haven't had more volatility in financial markets over the past

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Speaker 1: eighteen months. We're getting a little bit now on the

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Speaker 1: bond market. We had a little bit in the UH

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Speaker 1: the equity markets in September to me the incoming tide.

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Speaker 1: The real driver of the equity market in particular is

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Speaker 1: the growth we're seeing in corporate earnings and and furthermore,

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Speaker 1: the growth and profitability of corporate earnings. That's fundamental. That's

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Speaker 1: not day to day price volatility. That's the fuel that

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Speaker 1: drives markets forward. And I think that's sort of an

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Speaker 1: undertold story driving markets forward on a secular basis. Not

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Speaker 1: to deny the likelihood even of short term volatility and prices. Well,

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Speaker 1: let's talk about those earnings. Because things were going well

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Speaker 1: and then two of the biggest companies out there, Apple

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Speaker 1: and Amazon had big disappointments after the bell. If tech

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Speaker 1: isn't leading the way, what does that mean for the

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Speaker 1: broader equity market. Well, Kayley, it's certainly something that worries

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Speaker 1: me because the markets have become so top heavy in

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Speaker 1: a handful of very familiar names that that that we

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Speaker 1: all and all your viewers know about that a stumble

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Speaker 1: in some of those very large names like Apple, like Amazon,

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Speaker 1: for example, could dent the markets just by virtue of

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Speaker 1: them being such a large representation in the markets. Here

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Speaker 1: here too, we're cautioning our investors to look through that

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Speaker 1: headline volatility. And we're active investors, so we can choose

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Speaker 1: to avoid some of those large names in technology and

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Speaker 1: find those companies that have been left behind and those

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Speaker 1: companies that have certain characteristics that we think we'll see

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Speaker 1: them through thick and thin, almost no matter where we

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Speaker 1: are in the economic cycle or where we are in

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Speaker 1: the market cycle. But as a potential source of near

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Speaker 1: term price volatility, absolutely, some of these large technology stocks

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Speaker 1: stumbling for one reason or another is a potential source

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Speaker 1: of price volatility at the index level. Scott Clemens a

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Speaker 1: personal note, and I really would love you to speak

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Speaker 1: to this. Ground zero of all that we invented here

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Speaker 1: with Bloomberg on the economy and Bloomberg Surveillance is nineteen

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Speaker 1: o seven in the structure of American finance. You are

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Speaker 1: on the board of the Morgan Library, and there is

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Speaker 1: that study of JP Morgan's from nineteen o seven when

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Speaker 1: he saved this nation by simply writing a check. What

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Speaker 1: is it like for you, so active with the Morgan Library,

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Speaker 1: to be in that room where we began our modern finance. Well, Tom, you,

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Speaker 1: you and your producers have done their homework, and thank

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Speaker 1: you for noting that it is remarkable. And the advice

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Speaker 1: that I give to young investors, professional or amateur everywhere

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Speaker 1: is to study history. Because although regulations change, markets change

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Speaker 1: in interest rates change, the fed changes, human nature is

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Speaker 1: the mutable, and the human nature that drove the panics

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Speaker 1: of the nineteen hundred nineteenth century in the early twentieth

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Speaker 1: century still happened today. It's greed, it's lust, it's fear,

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Speaker 1: its anxiety, it's desire. In rereading that history in nineteen

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Speaker 1: oh seven, in particular, in the actions that Mr Morgan

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Speaker 1: took in that library, which looks just as it did

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Speaker 1: in nineteen seven, is a wonderful testimony to how fragile

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Speaker 1: this economy is, but in the long run, how durable

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Speaker 1: it is as well, because here we still are. Scott Clemence,

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Speaker 1: thank you so much. With Brown Brothers Harriman. This is

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Speaker 1: the Bloomberg Surveillance Podcast. Thanks for listening. Join us live

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Speaker 1: weekdays from seven to ten am Eastern on Bloomberg Radio

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Speaker 1: and on Bloomberg Television each day from six to nine

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Speaker 1: am for insight from the best in economics, finance, investment,

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Speaker 1: and international relations. And subscribe to the Surveillance Podcast on

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Speaker 1: Apple podcast, SoundCloud, Bloomberg dot com, and of course, on

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Speaker 1: the terminal. I'm Tom Keene, and this is Bloomer