1 00:00:00,080 --> 00:00:12,960 Speaker 1: Yeah, Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane 2 00:00:13,480 --> 00:00:17,560 Speaker 1: Jay Ley. We bring you insight from the best in economics, finance, investment, 3 00:00:18,000 --> 00:00:23,480 Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, 4 00:00:23,600 --> 00:00:30,560 Speaker 1: Bloomberg dot Com, and of course on the Bloomberg. Jonathan 5 00:00:30,600 --> 00:00:33,920 Speaker 1: Gollub was the Credit Squeeze. Of course, as great notoriety 6 00:00:33,960 --> 00:00:38,520 Speaker 1: as I've never heard him say, go to cash. John 7 00:00:38,560 --> 00:00:41,199 Speaker 1: Gollub joins, us are we are? How distant are we 8 00:00:41,280 --> 00:00:44,600 Speaker 1: from go to cash? Well, Tom, don't They will be 9 00:00:44,640 --> 00:00:46,279 Speaker 1: a time when I get on hair and say that, 10 00:00:46,320 --> 00:00:51,000 Speaker 1: And it's not. Let's listen to the likelihood of having 11 00:00:51,479 --> 00:00:56,120 Speaker 1: a recession unless something catastrophic shows up tomorrow is super 12 00:00:56,200 --> 00:00:58,760 Speaker 1: low that the financial risk is is weeks and no, 13 00:00:58,880 --> 00:01:00,720 Speaker 1: I think I think everything's great. Go back with credit 14 00:01:00,720 --> 00:01:02,720 Speaker 1: Swiss research. This is off d l J and the 15 00:01:02,720 --> 00:01:06,320 Speaker 1: merger with credit years ago. Tom Gelvan's great research price 16 00:01:06,400 --> 00:01:09,440 Speaker 1: to sales. I think of Mark Flannery, who was iconic 17 00:01:09,480 --> 00:01:14,120 Speaker 1: in oil, the Excel spreadsheety of your shop. How do 18 00:01:14,160 --> 00:01:17,320 Speaker 1: you fold the business data that you see now in 19 00:01:17,360 --> 00:01:20,640 Speaker 1: America into what we just heard on the trade war? 20 00:01:22,040 --> 00:01:25,000 Speaker 1: You know, I don't think they reconcile. And what I 21 00:01:25,000 --> 00:01:27,399 Speaker 1: mean by that is is it when, when, if, if 22 00:01:27,440 --> 00:01:30,120 Speaker 1: this trade stuff gets sloppy, it's going to hit the 23 00:01:30,160 --> 00:01:33,480 Speaker 1: PE multiple the valuations we put on stocks, not on 24 00:01:33,520 --> 00:01:36,440 Speaker 1: the underlying earnings, or if it's gonna hit earnings, take that. 25 00:01:37,120 --> 00:01:39,800 Speaker 1: How do you you tell me it's all numerator based. 26 00:01:40,720 --> 00:01:43,200 Speaker 1: If the PE modiple comes in, it's all numerator based 27 00:01:43,400 --> 00:01:46,319 Speaker 1: and on the dominator earnings, on on the stuff related 28 00:01:46,319 --> 00:01:49,200 Speaker 1: to trade. Absolutely this right, right this minute. This is 29 00:01:49,240 --> 00:01:52,600 Speaker 1: a sentiment issue that this is going to create. I mean, 30 00:01:52,640 --> 00:01:54,200 Speaker 1: what is a concern that all of a sudden the 31 00:01:54,240 --> 00:01:57,440 Speaker 1: consumer sees this, they stop spending because they get concerned 32 00:01:57,440 --> 00:02:01,280 Speaker 1: about the economy and their jobs. Businesses get concerned because 33 00:02:01,320 --> 00:02:03,040 Speaker 1: they don't know how to spend money, and they don't 34 00:02:03,040 --> 00:02:05,400 Speaker 1: know whether they deal with the future. And and mind 35 00:02:05,440 --> 00:02:09,040 Speaker 1: you those might be there, but right now, in terms 36 00:02:09,040 --> 00:02:12,359 Speaker 1: of actual basis points of earnings, very very little, John, 37 00:02:12,440 --> 00:02:14,000 Speaker 1: You came out with a note you and the same 38 00:02:14,040 --> 00:02:16,840 Speaker 1: I've a credit swats very recently and understanding got a 39 00:02:16,840 --> 00:02:18,760 Speaker 1: bit of pushback, So won't me through it? The case 40 00:02:19,240 --> 00:02:25,360 Speaker 1: for much higher valuations, make the case for much higher valuations, well, funny. 41 00:02:25,400 --> 00:02:27,640 Speaker 1: It's a funny thing is is the second you put 42 00:02:27,639 --> 00:02:29,680 Speaker 1: a piece like like that, you get pushed back from 43 00:02:29,680 --> 00:02:32,240 Speaker 1: all the time this. Yeah, I mean, here's here's the 44 00:02:32,240 --> 00:02:35,639 Speaker 1: bottom line. Businesses in the United States have gone what 45 00:02:35,680 --> 00:02:39,600 Speaker 1: I call capital light. They've gone towards services, they've outsourced 46 00:02:39,639 --> 00:02:43,720 Speaker 1: production overseas, They've are they're running their businesses with much 47 00:02:43,840 --> 00:02:47,440 Speaker 1: less capital and the result is that they are returning 48 00:02:47,560 --> 00:02:51,000 Speaker 1: more of their cash flows back to shareholders in the 49 00:02:51,040 --> 00:02:54,239 Speaker 1: form of dividends and buy backs. When we think about 50 00:02:54,320 --> 00:02:58,320 Speaker 1: a piece multiple on stocks, the reason we use earnings 51 00:02:58,360 --> 00:03:01,880 Speaker 1: is because it's a proxy for the cash flows of 52 00:03:01,880 --> 00:03:05,200 Speaker 1: the company over time. But if the businesses are generating 53 00:03:05,200 --> 00:03:08,640 Speaker 1: more cash flow per dollar earnings, then the stock is 54 00:03:08,680 --> 00:03:11,880 Speaker 1: worth more than it has historically. UM. Just to put 55 00:03:11,919 --> 00:03:18,040 Speaker 1: in perspective, UM, right now PSU are about fift above 56 00:03:18,280 --> 00:03:22,160 Speaker 1: long term averages, but the price to cash flow is 57 00:03:23,360 --> 00:03:26,240 Speaker 1: below its long term averages. That's a huge difference. So 58 00:03:26,280 --> 00:03:29,000 Speaker 1: the immediate question you'll get asked, I'm sure, is that, okay, 59 00:03:29,000 --> 00:03:31,320 Speaker 1: this is the index level. Stories it won't sect the 60 00:03:31,400 --> 00:03:33,359 Speaker 1: scuming get or is it across the board? Lift the 61 00:03:33,400 --> 00:03:35,760 Speaker 1: lid on the index floor us, what's happening beneath the 62 00:03:35,800 --> 00:03:37,840 Speaker 1: su Yeah, and that's that's a that's a great question. 63 00:03:37,920 --> 00:03:39,840 Speaker 1: And I think that there's two stories here. The first 64 00:03:39,960 --> 00:03:44,320 Speaker 1: is that tech companies are so much more cash flow rich, 65 00:03:44,400 --> 00:03:48,360 Speaker 1: their margins are so much higher that as the market 66 00:03:48,600 --> 00:03:52,120 Speaker 1: becomes more tech dominated, the cash flow generation for the 67 00:03:52,160 --> 00:03:56,520 Speaker 1: whole market is lifted up about fifty five of the 68 00:03:56,680 --> 00:03:59,400 Speaker 1: of the benefit is the fact that the SMP today 69 00:03:59,440 --> 00:04:03,040 Speaker 1: does not look d SMP of a decade ago. Is 70 00:04:03,200 --> 00:04:06,480 Speaker 1: individual companies literally doing something different today than they did 71 00:04:06,480 --> 00:04:09,200 Speaker 1: ten years ago, And so it's it's a mix of both. 72 00:04:09,360 --> 00:04:11,680 Speaker 1: You're you're very Mathew. Today is this because there was 73 00:04:11,720 --> 00:04:14,120 Speaker 1: no English football this weekend the walls there was the 74 00:04:14,160 --> 00:04:18,120 Speaker 1: f A Cup final. While we're pivoting to small because 75 00:04:20,279 --> 00:04:24,880 Speaker 1: Jonathan this, Mathew, the SMP is not what it was 76 00:04:25,000 --> 00:04:27,520 Speaker 1: ten years ago. I mean, we get that with Amazon 77 00:04:27,680 --> 00:04:31,000 Speaker 1: and Apple and the others expand on that. Well, just 78 00:04:31,160 --> 00:04:32,719 Speaker 1: just say, Tom, you and I on on the TV 79 00:04:32,800 --> 00:04:36,080 Speaker 1: show before this, we're talking about the consumer discretionary space. 80 00:04:36,200 --> 00:04:39,240 Speaker 1: Just think about what a retailer is today and how 81 00:04:39,360 --> 00:04:42,840 Speaker 1: we purchase things. Think about the margins that we go 82 00:04:43,000 --> 00:04:46,440 Speaker 1: to Amazon, right, and the and the margin potential there, 83 00:04:46,480 --> 00:04:50,000 Speaker 1: The growth potential there is just much great. The efficiencies 84 00:04:50,360 --> 00:04:53,600 Speaker 1: of the business models are are greater there, and that's 85 00:04:53,640 --> 00:04:57,279 Speaker 1: really what's changing. And frankly, even companies you're talking about before, 86 00:04:57,440 --> 00:05:00,760 Speaker 1: even businesses in old sect or is the you know 87 00:05:00,960 --> 00:05:06,039 Speaker 1: in airlines and autos are using technology better. They're outsourcing 88 00:05:06,320 --> 00:05:10,080 Speaker 1: to oversee suppliers um in ways that that allow them 89 00:05:10,120 --> 00:05:12,239 Speaker 1: to generate more cash well for a dollar or sale. 90 00:05:12,480 --> 00:05:14,440 Speaker 1: Jonathan Golla, Great to have you with us, is monic. 91 00:05:14,600 --> 00:05:30,440 Speaker 1: Appreciate your time. Shan Ali bask with us now on finance. 92 00:05:30,520 --> 00:05:33,160 Speaker 1: But there's only one finance story that matters, and that's 93 00:05:33,240 --> 00:05:36,440 Speaker 1: Deutsche Bank. Has been an ongoing story of Bloomberg reporting 94 00:05:36,480 --> 00:05:39,480 Speaker 1: and many other shops. The New York Times this weekend 95 00:05:39,600 --> 00:05:42,640 Speaker 1: crushes Deutsche Bank, where they sort of knew what was 96 00:05:42,720 --> 00:05:46,560 Speaker 1: going on and they didn't do it with an updation. 97 00:05:47,480 --> 00:05:50,440 Speaker 1: How will the regulators in the United States, How will 98 00:05:50,480 --> 00:05:53,520 Speaker 1: the regulators in Germany react to what The New York 99 00:05:53,560 --> 00:05:56,040 Speaker 1: Times reported this weekend? What's a big deal about the 100 00:05:56,040 --> 00:05:58,000 Speaker 1: New York Times story? As they said, yes, they saw 101 00:05:58,040 --> 00:06:01,920 Speaker 1: suspicious activity, but they did not file suspicious activity reports 102 00:06:02,000 --> 00:06:04,560 Speaker 1: to the Treasury depart what's the history of regulators in 103 00:06:04,640 --> 00:06:08,360 Speaker 1: America on that kind of printed journalism, if you will. 104 00:06:08,520 --> 00:06:12,120 Speaker 1: They're they're tough on it, right, I mean, and they 105 00:06:12,200 --> 00:06:14,480 Speaker 1: also I mean it's not even just people familiar. They 106 00:06:14,520 --> 00:06:17,040 Speaker 1: had somebody on the record exactly the division over the 107 00:06:17,120 --> 00:06:20,200 Speaker 1: weekend that was pretty staggerant. So what happens today? I mean, 108 00:06:20,240 --> 00:06:22,640 Speaker 1: if somebody die, they go, okay, wait till Monday, they 109 00:06:22,680 --> 00:06:25,480 Speaker 1: pick up the phone and they say that's it. Or 110 00:06:25,560 --> 00:06:28,240 Speaker 1: do they lecture the German regulators? I mean, what's the 111 00:06:28,440 --> 00:06:33,000 Speaker 1: history of our US regulators deal with what's in the 112 00:06:33,080 --> 00:06:37,279 Speaker 1: New York Times when some Senator or some congressman sees it. Frankly, 113 00:06:37,360 --> 00:06:40,200 Speaker 1: progress is very, very very slow, and you know, the 114 00:06:40,320 --> 00:06:42,160 Speaker 1: U s could probably be better at working with their 115 00:06:42,200 --> 00:06:45,320 Speaker 1: international counterparts. But you know, you've got to be sure 116 00:06:45,400 --> 00:06:46,920 Speaker 1: that when it comes to a bank of the scale 117 00:06:46,960 --> 00:06:49,080 Speaker 1: that they are talking to each other. The dons can 118 00:06:49,160 --> 00:06:51,240 Speaker 1: matter that one of the biggest money laundering scanals of 119 00:06:51,320 --> 00:06:55,040 Speaker 1: all separate from this report. From this report, that's another 120 00:06:55,080 --> 00:06:58,160 Speaker 1: issue that our own reporting also showed that they also 121 00:06:58,200 --> 00:07:01,039 Speaker 1: didn't file suspicious activity report. It's when it in regard 122 00:07:01,120 --> 00:07:04,560 Speaker 1: to when they found it. Jackson did you see this 123 00:07:04,680 --> 00:07:07,160 Speaker 1: this weekend, John, you were standing outside Glossier trying to 124 00:07:07,200 --> 00:07:10,640 Speaker 1: get in. But um, but you know still you see that, 125 00:07:10,800 --> 00:07:13,720 Speaker 1: I know you see this article. You see this article 126 00:07:13,840 --> 00:07:17,240 Speaker 1: and you go, Okay, when is enough enough? What did 127 00:07:17,360 --> 00:07:20,400 Speaker 1: you think is the story was advanced by the Times. 128 00:07:20,720 --> 00:07:23,080 Speaker 1: The biggest piece of the story for me was, I mean, 129 00:07:23,120 --> 00:07:25,120 Speaker 1: this comes in the middle of subpoenas by the House 130 00:07:25,160 --> 00:07:28,600 Speaker 1: Financial Service Committee looking for more information about Donald Trump 131 00:07:28,640 --> 00:07:30,840 Speaker 1: and its relationship to Deeutge Bank. And then on top 132 00:07:30,920 --> 00:07:34,400 Speaker 1: of that, some of this was found as early as seventeen, 133 00:07:34,720 --> 00:07:37,080 Speaker 1: which is definitely. Um. You know, there are a lot 134 00:07:37,120 --> 00:07:39,160 Speaker 1: of the same people working at Deutsche Bank now that 135 00:07:39,240 --> 00:07:41,520 Speaker 1: there were then, So you can't keep on blaming the 136 00:07:41,600 --> 00:07:44,280 Speaker 1: past when when some of the stuff was happening so soon. 137 00:07:44,440 --> 00:07:47,560 Speaker 1: The ubs kind in the stock this morning. Pretty aggressive 138 00:07:47,600 --> 00:07:50,400 Speaker 1: price target. I guess that would have been aggressive many 139 00:07:50,480 --> 00:07:53,560 Speaker 1: years ago at five seventy now seemingly set to bright 140 00:07:53,600 --> 00:07:56,200 Speaker 1: six where it's six sixty five right now, So ups 141 00:07:56,480 --> 00:08:00,760 Speaker 1: with the second lowest price target on the street, five seventy. 142 00:08:01,280 --> 00:08:03,560 Speaker 1: Want me through the problems outside of the politics, Shinnale, 143 00:08:03,800 --> 00:08:05,760 Speaker 1: It is not looking good right now. Right we were 144 00:08:05,800 --> 00:08:08,120 Speaker 1: just talking about some of the regulatory issues. But let's 145 00:08:08,160 --> 00:08:10,240 Speaker 1: talk about how they have an annual meeting coming up 146 00:08:10,640 --> 00:08:13,440 Speaker 1: just on Thursday, and how some people are very much 147 00:08:13,440 --> 00:08:16,040 Speaker 1: against the current management, very much against the board, and 148 00:08:16,120 --> 00:08:18,160 Speaker 1: so it might get pretty contentious. We have a story 149 00:08:18,200 --> 00:08:21,120 Speaker 1: out this morning saying black Rock has outsourced um its 150 00:08:21,160 --> 00:08:25,760 Speaker 1: decision making to another firm. That it means that no 151 00:08:25,880 --> 00:08:28,280 Speaker 1: matter what happens, black Rock wants to say put their 152 00:08:28,280 --> 00:08:30,160 Speaker 1: hands back and say we did the best possible thing 153 00:08:30,200 --> 00:08:33,200 Speaker 1: for our shareholders and got independent advice as well. Uh. 154 00:08:33,280 --> 00:08:35,800 Speaker 1: The Deutsche Bank stories a complicated one, right, because there 155 00:08:36,000 --> 00:08:39,240 Speaker 1: is not a really clear future ahead. Um, do you 156 00:08:39,320 --> 00:08:41,200 Speaker 1: have the same people at the top of the helm 157 00:08:41,240 --> 00:08:43,240 Speaker 1: who have been there forever, who know where all the 158 00:08:43,280 --> 00:08:45,640 Speaker 1: bodies are buried, or do you have somebody else come 159 00:08:45,679 --> 00:08:48,280 Speaker 1: in and carve a new, more aggressive future for this bank. 160 00:08:48,400 --> 00:08:51,520 Speaker 1: So we're talking potentially a leadership change again at Deutsche Bank. 161 00:08:51,600 --> 00:08:53,199 Speaker 1: Rage right, that that's a question if there was a 162 00:08:53,240 --> 00:08:56,640 Speaker 1: leadership change again, that how do you create a new strategy? 163 00:08:56,720 --> 00:09:00,760 Speaker 1: Takes the years to implementage new strategy. Also, You're favorite question, Tom, 164 00:09:00,840 --> 00:09:02,839 Speaker 1: is anyone going to ever buy Deutsche Bank? If you 165 00:09:02,920 --> 00:09:04,840 Speaker 1: buy Deutsche bank, you have to buy all their legal 166 00:09:04,920 --> 00:09:09,040 Speaker 1: problems also, and so who's going to inherit firm? Where 167 00:09:09,240 --> 00:09:13,160 Speaker 1: the trajectory is on the decline with mounting legal I 168 00:09:13,280 --> 00:09:15,960 Speaker 1: took a long term trend study today from two thousand 169 00:09:16,080 --> 00:09:19,760 Speaker 1: seven and two standard deviations, which is a hugely rare 170 00:09:19,800 --> 00:09:23,800 Speaker 1: event for any bank, including Deutsche Bank. Is six point 171 00:09:23,960 --> 00:09:27,680 Speaker 1: one zero euros per share? Where right now at six 172 00:09:27,800 --> 00:09:30,120 Speaker 1: point six four. Folks, all you need to know is 173 00:09:30,160 --> 00:09:32,040 Speaker 1: that's a lot closer than it was a week or 174 00:09:32,080 --> 00:09:35,240 Speaker 1: two weeks ago. Is there a tip point in share 175 00:09:35,360 --> 00:09:38,920 Speaker 1: price where all this dialogue changes. It's funny. I feel like, um, 176 00:09:39,000 --> 00:09:40,880 Speaker 1: you know, we've talked about this every other week and 177 00:09:41,000 --> 00:09:48,320 Speaker 1: it doesn't seem nine exactly. I'll keep going lower. You don't. 178 00:09:48,920 --> 00:09:52,079 Speaker 1: You don't have any single point like the three digits. 179 00:09:52,800 --> 00:09:54,720 Speaker 1: I have no crystal ball for you on that one. 180 00:09:54,760 --> 00:09:56,240 Speaker 1: Where are we up? We're giving an update on the 181 00:09:56,280 --> 00:09:58,320 Speaker 1: rest of the American banking I mean we're shaping up 182 00:09:58,360 --> 00:10:01,040 Speaker 1: this may we get into on where everybody takes eight 183 00:10:01,080 --> 00:10:03,679 Speaker 1: weeks of vacation, like John Farrell, we come back, we 184 00:10:03,760 --> 00:10:06,640 Speaker 1: do the business plan for how are the American banks 185 00:10:06,679 --> 00:10:09,920 Speaker 1: doing right now? You know, big question Mark right. I mean, 186 00:10:09,960 --> 00:10:11,720 Speaker 1: there's some things that are kind of propping things up 187 00:10:11,800 --> 00:10:13,520 Speaker 1: at the I p O market being one of them. 188 00:10:13,600 --> 00:10:16,400 Speaker 1: But after Uber being so shaky last week, we're going 189 00:10:16,440 --> 00:10:18,240 Speaker 1: to see how these next big ones come to market, 190 00:10:18,280 --> 00:10:20,280 Speaker 1: and that's kind of propping up a lot of activity 191 00:10:20,720 --> 00:10:23,280 Speaker 1: right now. Um, But the question is it village just 192 00:10:23,320 --> 00:10:25,680 Speaker 1: depends on how the markets hold up and whether people 193 00:10:25,880 --> 00:10:29,400 Speaker 1: want to trade or stand the sideline or with business 194 00:10:29,559 --> 00:10:32,560 Speaker 1: in business loans like confidence was the theme last week? 195 00:10:32,640 --> 00:10:36,400 Speaker 1: Do they the loans flat? We got to thank sal 196 00:10:38,080 --> 00:10:53,679 Speaker 1: bloom Bag Investment Banking Report. And now, folks, someone we 197 00:10:53,760 --> 00:10:57,240 Speaker 1: don't speak to nearly enough, one of our truly most 198 00:10:57,440 --> 00:11:02,360 Speaker 1: pression viewers of American politics, William Schneider. You know Bill 199 00:11:02,400 --> 00:11:05,360 Speaker 1: Schneider from CNN over the years now at George Mason 200 00:11:05,840 --> 00:11:13,120 Speaker 1: and his exceptionally direct book standoff, How America Became Ungovernable 201 00:11:13,920 --> 00:11:17,000 Speaker 1: was out a year ago, it was true, it was 202 00:11:17,080 --> 00:11:19,760 Speaker 1: out now, it's true, and in a year from now 203 00:11:19,920 --> 00:11:22,719 Speaker 1: it will still be true. Bill Schneider, How big is 204 00:11:22,760 --> 00:11:26,760 Speaker 1: the standoff right now? May two thousand and nineteen. It's 205 00:11:26,800 --> 00:11:29,800 Speaker 1: getting bigger and bigger. They're about to take legal action 206 00:11:29,840 --> 00:11:34,319 Speaker 1: between the President and Congress. The president Trump essentially won't 207 00:11:34,360 --> 00:11:38,080 Speaker 1: respond to Congress. Uh, he's attacked yet high, he's attacked 208 00:11:38,120 --> 00:11:41,640 Speaker 1: the CIA. Nothing gets done. It's gridlock. What you were 209 00:11:41,720 --> 00:11:43,880 Speaker 1: great at, the charm of you and Gurgen going at 210 00:11:43,920 --> 00:11:45,560 Speaker 1: it and the others as well, and seen and years 211 00:11:45,600 --> 00:11:50,480 Speaker 1: ago is parsing in always fractious Democratic Party. We had 212 00:11:50,559 --> 00:11:53,800 Speaker 1: the royal years of the Clintons, maybe onto the Obamas, 213 00:11:54,080 --> 00:11:57,720 Speaker 1: and we are back to the fractional tone of a Democrat. 214 00:11:57,880 --> 00:12:02,240 Speaker 1: Synthesize that for us right now. Well, let me say this. 215 00:12:02,400 --> 00:12:05,760 Speaker 1: I'm old enough to know when the Democrats was actually 216 00:12:05,840 --> 00:12:10,080 Speaker 1: worse over civil rights, over the Vietnam War, started writing 217 00:12:10,120 --> 00:12:13,000 Speaker 1: in the streets of a Democratic convention. It's not good 218 00:12:13,120 --> 00:12:15,880 Speaker 1: now because look what have we got twenty four Democrats 219 00:12:16,000 --> 00:12:19,360 Speaker 1: running from president. But they're not in open warfare against 220 00:12:19,440 --> 00:12:22,960 Speaker 1: each other. There's a division between the front runner, Joe Biden, 221 00:12:23,040 --> 00:12:25,360 Speaker 1: and a lot of the progressive Democrats. But that's something 222 00:12:25,440 --> 00:12:27,480 Speaker 1: we've seen in the Democratic Party for a long time. 223 00:12:27,559 --> 00:12:30,720 Speaker 1: And then hot civil rights are Vietnam. But how does 224 00:12:30,920 --> 00:12:34,800 Speaker 1: that play out? The certitude of Biden out front? How 225 00:12:34,840 --> 00:12:38,840 Speaker 1: does that play right now? Well, Biden is out front, 226 00:12:39,040 --> 00:12:41,199 Speaker 1: He's a familiar figure, and I think there is a 227 00:12:41,320 --> 00:12:45,480 Speaker 1: reason for it. Biden offers voters something they're longing for 228 00:12:45,760 --> 00:12:49,800 Speaker 1: that they're not getting from President Trump. In one word, normalcy. 229 00:12:50,440 --> 00:12:53,360 Speaker 1: Normalcy sounds kind of boring. It's not a very exciting thing. 230 00:12:53,679 --> 00:12:56,319 Speaker 1: Democrats like to fall in love with John Kennedy and 231 00:12:56,400 --> 00:12:59,559 Speaker 1: Bill Clinton and Barack Obama, someone who sweeped them off 232 00:12:59,559 --> 00:13:02,440 Speaker 1: their feet. But I think after Donald Trump, what they 233 00:13:02,480 --> 00:13:04,960 Speaker 1: may what they may want is not a great lover, 234 00:13:05,400 --> 00:13:07,880 Speaker 1: but a good provider. And that's the way Joe Biden 235 00:13:08,000 --> 00:13:11,840 Speaker 1: is running. Well, Bill, didn't the electorate tell us seen 236 00:13:11,880 --> 00:13:14,520 Speaker 1: that that's not what the American people want, That they 237 00:13:14,600 --> 00:13:19,160 Speaker 1: want something radically different, And doesn't that not play into 238 00:13:19,360 --> 00:13:23,559 Speaker 1: Mr Biden's hands? Uh, Well, that was in sixteen, that 239 00:13:23,679 --> 00:13:26,880 Speaker 1: was two years ago. Things change. I think what's happened 240 00:13:26,960 --> 00:13:30,000 Speaker 1: is there's a lot of Trump fatigue setting in. Uh. 241 00:13:30,120 --> 00:13:35,560 Speaker 1: He's chaotic, he's disruptive. Every day we hear new shocks, firings, 242 00:13:35,840 --> 00:13:41,600 Speaker 1: sudden policy reversals, insulting tweets, blaydon lies, angry threats. People 243 00:13:41,640 --> 00:13:44,720 Speaker 1: are really getting tired of that. And that's why Biden 244 00:13:44,760 --> 00:13:47,719 Speaker 1: looks attractive. He looks you know, he is old. He 245 00:13:47,760 --> 00:13:51,080 Speaker 1: would be the oldest president ever elected for the first time. Uh. 246 00:13:51,440 --> 00:13:53,800 Speaker 1: But he looks like a return to normalcy, and to 247 00:13:53,880 --> 00:13:56,560 Speaker 1: an awful lot of voters that's exactly what they want. 248 00:13:56,880 --> 00:13:59,400 Speaker 1: We can talk to William Snyder about old. How do 249 00:13:59,480 --> 00:14:03,440 Speaker 1: you think old will play in the campaign? Bill Schnyder, Well, 250 00:14:04,400 --> 00:14:07,560 Speaker 1: it's going to be interesting because the top two Democrats 251 00:14:07,600 --> 00:14:09,320 Speaker 1: in the field of what do we now have twenty 252 00:14:09,360 --> 00:14:13,199 Speaker 1: four with the mayor di Blasio getting in Oh my god. Um, 253 00:14:13,960 --> 00:14:16,679 Speaker 1: But age doesn't seem to be a big issue at 254 00:14:16,720 --> 00:14:20,720 Speaker 1: this point. My guess is that in the primary process, 255 00:14:20,880 --> 00:14:23,120 Speaker 1: when we see a lot of candidates drop out, the 256 00:14:23,240 --> 00:14:27,960 Speaker 1: race could very well end up between two sep two Gendarians. 257 00:14:28,520 --> 00:14:30,960 Speaker 1: There would be Joe Biden, who next year will be 258 00:14:31,280 --> 00:14:35,040 Speaker 1: seventy seven and Bernie Sanders, who will be seventy eight 259 00:14:35,440 --> 00:14:40,760 Speaker 1: and represents a constituency that wants revenge because they figured 260 00:14:41,160 --> 00:14:44,240 Speaker 1: he was treated badly by the Democratic establishment. So we 261 00:14:44,280 --> 00:14:48,120 Speaker 1: could see and I call it a steel cage deathmatch 262 00:14:48,960 --> 00:14:53,000 Speaker 1: two dies in their late seventies. Interesting. He's joining US 263 00:14:53,040 --> 00:14:55,320 Speaker 1: Coast Coast williams Center. Bill Snyder with us, you know 264 00:14:55,560 --> 00:14:59,760 Speaker 1: for years with his excellence in driving the American discourse forward. 265 00:14:59,800 --> 00:15:02,560 Speaker 1: It's see that his book is Standoff Paul, So Bill, 266 00:15:02,640 --> 00:15:05,080 Speaker 1: how about some of the more progressive members of the 267 00:15:05,120 --> 00:15:07,360 Speaker 1: Democratic Party that are in the race, whether it's Senator 268 00:15:07,440 --> 00:15:09,800 Speaker 1: Warren or or someone else, how do you think they 269 00:15:09,840 --> 00:15:12,520 Speaker 1: are going to fare during the primary season? And do 270 00:15:12,600 --> 00:15:15,560 Speaker 1: you think any one of those types of candidates I 271 00:15:15,680 --> 00:15:18,600 Speaker 1: eat not a centrist, could in fact go up against 272 00:15:18,880 --> 00:15:22,200 Speaker 1: Mr Trump. Well, I think the likeliest candidate to do 273 00:15:22,320 --> 00:15:25,520 Speaker 1: that would be Bernie Sanders. He's got a following. They're 274 00:15:25,560 --> 00:15:27,720 Speaker 1: angry because they feel as if they were cheated out 275 00:15:27,720 --> 00:15:31,480 Speaker 1: of the nomination and the Democratic establishment wasn't very nice 276 00:15:31,520 --> 00:15:35,200 Speaker 1: to them. Uh, there were revelations of the emails from 277 00:15:35,200 --> 00:15:38,200 Speaker 1: the Democratic National Committee. They want revenge and that's a 278 00:15:38,280 --> 00:15:41,560 Speaker 1: powerful motive in politics. That's why I say it's going 279 00:15:41,640 --> 00:15:44,440 Speaker 1: to be as a standoff at the end between Biden 280 00:15:44,600 --> 00:15:47,760 Speaker 1: and Sanders. And my guess is that Biden will win, 281 00:15:47,920 --> 00:15:51,960 Speaker 1: although it wouldn't surprise me if Sanders wont He Sanders 282 00:15:52,160 --> 00:15:54,840 Speaker 1: look right now, he's running ahead of Trump. Uh, you 283 00:15:54,920 --> 00:15:57,360 Speaker 1: can't say he's unelectable, but he would be a very 284 00:15:57,440 --> 00:16:00,480 Speaker 1: unusual candidate for the Democrats to nominate. So Bill. Let's 285 00:16:00,520 --> 00:16:04,240 Speaker 1: assume that former Vice President Biden does win the Democratic nomination. 286 00:16:04,680 --> 00:16:06,480 Speaker 1: Can he close? How do you think he will run 287 00:16:06,480 --> 00:16:11,000 Speaker 1: against President Trump? Well, he's already running against President Trump. 288 00:16:11,040 --> 00:16:13,520 Speaker 1: And a lot of Democrats were scratching their heads. They're saying, 289 00:16:13,640 --> 00:16:16,800 Speaker 1: what he already thinks he's the nominee. Well, that's his strategy. 290 00:16:17,080 --> 00:16:20,840 Speaker 1: He wants to make the point he can beat Donald Trump. 291 00:16:21,360 --> 00:16:23,240 Speaker 1: And there are lots of polls of the elector that 292 00:16:23,320 --> 00:16:26,160 Speaker 1: suggests that might be possible. Because in the polls that 293 00:16:26,240 --> 00:16:28,920 Speaker 1: I saw, something interesting is happening. People are saying what 294 00:16:29,040 --> 00:16:31,920 Speaker 1: they want is political experience, what they want is a 295 00:16:32,000 --> 00:16:37,280 Speaker 1: political insider. There was a Monmouth University poll that asked 296 00:16:37,600 --> 00:16:40,640 Speaker 1: which candidate would you prefer as the party nominee? A 297 00:16:40,760 --> 00:16:43,320 Speaker 1: Democrat you agree with on most issues but would have 298 00:16:43,400 --> 00:16:45,680 Speaker 1: a hard time beating Trump, or a Democrat you do 299 00:16:45,840 --> 00:16:47,960 Speaker 1: not agree with our most issues, but would be a 300 00:16:48,000 --> 00:16:53,280 Speaker 1: stronger candidate against Donald Trump. Electability beat ideology hands down. 301 00:16:55,920 --> 00:16:58,280 Speaker 1: One final question, because we have to go to some 302 00:16:58,400 --> 00:17:02,600 Speaker 1: breaking news, but very simply, what does Vice President Biden 303 00:17:02,840 --> 00:17:06,280 Speaker 1: have to do in a given state, Let's say Wisconsin, 304 00:17:06,800 --> 00:17:14,560 Speaker 1: its Secretary Clinton didn't do. He has to get voters excited. Uh, 305 00:17:15,000 --> 00:17:17,680 Speaker 1: he has to resist the urge. And this is I 306 00:17:17,760 --> 00:17:21,680 Speaker 1: think not part of Biden's personality to be condescending. I 307 00:17:21,760 --> 00:17:25,120 Speaker 1: think Clinton lost in large part because she seemed condescending 308 00:17:25,200 --> 00:17:28,159 Speaker 1: to most voters. She was a charter member of the 309 00:17:28,200 --> 00:17:32,320 Speaker 1: political establishment. I remember she called the Trump people a 310 00:17:32,440 --> 00:17:37,160 Speaker 1: basket of deplorables, the world's most condescending statement. Biden isn't 311 00:17:37,240 --> 00:17:40,480 Speaker 1: like that, Biden. When Biden campaigns, uh, he's one of you. 312 00:17:41,080 --> 00:17:45,639 Speaker 1: He has has a connection with working class voters. Clinton, 313 00:17:45,960 --> 00:17:48,760 Speaker 1: I think was a little remote from ordinary voters. Biden 314 00:17:48,880 --> 00:17:51,360 Speaker 1: is making it clear that he's on the same wavelength. 315 00:17:51,520 --> 00:17:53,640 Speaker 1: It is a premier The book is standoff, of course, 316 00:17:53,680 --> 00:17:56,280 Speaker 1: from William Schneider at George Mason, of course for years 317 00:17:56,280 --> 00:17:58,320 Speaker 1: at sen and Bill Snyder. Thank you so much. Really 318 00:17:58,359 --> 00:18:02,560 Speaker 1: look forward to catching up you in the political months ahead. 319 00:18:03,160 --> 00:18:19,800 Speaker 1: Is well. Our Michael McKee is in Florida, the Federal 320 00:18:19,840 --> 00:18:23,880 Speaker 1: Reserve Bank Atlanta meeting here is Michael McKee. Well, thank 321 00:18:23,920 --> 00:18:26,040 Speaker 1: you very much, and we'd like to thank our guests, 322 00:18:26,119 --> 00:18:29,199 Speaker 1: the President of the Atlanta Federal Reserve Bank, Raphael Bostick, 323 00:18:29,240 --> 00:18:32,400 Speaker 1: thanks for joining us on Bloomberg Television. And radio worldwide. 324 00:18:32,720 --> 00:18:35,720 Speaker 1: I know you've been traveling around your district a lot lately, 325 00:18:35,920 --> 00:18:38,080 Speaker 1: and I want to find out from you what the 326 00:18:38,160 --> 00:18:41,320 Speaker 1: district is thinking about the economy these days. What are 327 00:18:41,400 --> 00:18:44,159 Speaker 1: companies thinking about the economy and what they're going to 328 00:18:44,240 --> 00:18:46,840 Speaker 1: do going forward. Well, first of all, it's good to 329 00:18:46,920 --> 00:18:49,000 Speaker 1: have you here, thanks for coming down. And I would 330 00:18:49,000 --> 00:18:51,600 Speaker 1: say that as I go around the sixth district, I 331 00:18:51,640 --> 00:18:55,959 Speaker 1: talked to UNESS leaders. Um, they all pretty uniformly are 332 00:18:56,000 --> 00:18:59,000 Speaker 1: pretty confident and please with how the economy is going 333 00:18:59,359 --> 00:19:02,920 Speaker 1: right now. Um, they know that the economy's growth is 334 00:19:03,000 --> 00:19:04,240 Speaker 1: not going to be at the pace that it was 335 00:19:04,359 --> 00:19:07,280 Speaker 1: last year and there was so much extra stimulus, but 336 00:19:07,440 --> 00:19:10,520 Speaker 1: they're not expecting and they're not seeing a significant drop 337 00:19:10,600 --> 00:19:12,840 Speaker 1: off to suggest that the economy is going to be 338 00:19:13,000 --> 00:19:17,359 Speaker 1: weaker for them. Their consumer demands is remain strong and 339 00:19:17,720 --> 00:19:20,400 Speaker 1: they're pretty optimistic now. The one thing I would say, though, 340 00:19:20,720 --> 00:19:23,600 Speaker 1: is that as you go across the district, there is variation. 341 00:19:23,720 --> 00:19:26,200 Speaker 1: So if you go to the big cities, we definitely 342 00:19:26,240 --> 00:19:28,280 Speaker 1: see a lot of robust growth, but there are many 343 00:19:28,359 --> 00:19:30,520 Speaker 1: parts of the district where we're not seeing that same 344 00:19:30,560 --> 00:19:32,919 Speaker 1: sort of robust and some of the smaller towns, places 345 00:19:32,920 --> 00:19:36,200 Speaker 1: that are more rural. There's a lot of variation across 346 00:19:36,320 --> 00:19:39,560 Speaker 1: the district, and I've been really trying to get my 347 00:19:39,720 --> 00:19:43,280 Speaker 1: finger on that pulsive variation, UH, to really appreciate some 348 00:19:43,400 --> 00:19:46,119 Speaker 1: of the challenges that some particular communities are having. Well, 349 00:19:46,160 --> 00:19:48,840 Speaker 1: the company is reporting higher input costs, either from tariffs 350 00:19:48,920 --> 00:19:52,040 Speaker 1: or because your capacity constrained in this ecatom, So they 351 00:19:52,080 --> 00:19:55,639 Speaker 1: are reporting that to date. What they're telling me is that, 352 00:19:56,160 --> 00:19:58,760 Speaker 1: um the increases haven't been so great that they can't 353 00:19:58,800 --> 00:20:01,560 Speaker 1: manage it, so they have passing through most of those 354 00:20:01,680 --> 00:20:07,240 Speaker 1: costs to the final product consumer. But they have expressed 355 00:20:07,560 --> 00:20:10,400 Speaker 1: some concern that you know, there are limits to how 356 00:20:10,520 --> 00:20:14,159 Speaker 1: far how long they can forbear, and we may be 357 00:20:14,240 --> 00:20:19,600 Speaker 1: approaching those depending on how tariffs evolve and the negotiations. 358 00:20:19,880 --> 00:20:22,119 Speaker 1: But what do they say about investment going forward? Are 359 00:20:22,160 --> 00:20:25,119 Speaker 1: they going to be adding to capacity or is it 360 00:20:25,440 --> 00:20:27,879 Speaker 1: tariffs holding them back, or is it uncertainty or is 361 00:20:27,920 --> 00:20:31,159 Speaker 1: it just lack of enough demand to increasing enough. Well, 362 00:20:31,200 --> 00:20:33,680 Speaker 1: there's some variation in this. Some say, you know, we 363 00:20:33,840 --> 00:20:36,520 Speaker 1: have we're meeting we're meeting demand. We're doing fine, and 364 00:20:36,680 --> 00:20:41,080 Speaker 1: so they really aren't investment opportunities. Most are telling us 365 00:20:41,359 --> 00:20:43,920 Speaker 1: that you know, there are going to be opportunities, but 366 00:20:44,080 --> 00:20:47,880 Speaker 1: the uncertainty definitely has affected them. Uh. And until they're 367 00:20:48,119 --> 00:20:51,080 Speaker 1: confident about what the rules of tomorrow are going to be, 368 00:20:51,400 --> 00:20:53,440 Speaker 1: they're gonna wait and see. And and that's an important 369 00:20:53,560 --> 00:20:56,800 Speaker 1: thing for us to be mindful of, is is my 370 00:20:56,920 --> 00:20:59,680 Speaker 1: team goes around and tries to understand what's going to 371 00:20:59,760 --> 00:21:02,600 Speaker 1: happen moving forward. Uh. And then there are a whole 372 00:21:02,640 --> 00:21:05,840 Speaker 1: host of others who are trying to figure out what 373 00:21:06,040 --> 00:21:10,159 Speaker 1: opportunities might be. They're trying to incorporate new technologies to 374 00:21:10,680 --> 00:21:13,560 Speaker 1: increase the productivity of their workers, and that's happening over 375 00:21:13,680 --> 00:21:16,920 Speaker 1: a much longer arc, and so a lot of the 376 00:21:18,200 --> 00:21:20,840 Speaker 1: the the resolution of that will just take time to 377 00:21:20,880 --> 00:21:23,680 Speaker 1: play out. What about consumers. Earnings have been growing above 378 00:21:23,760 --> 00:21:25,680 Speaker 1: three percent now, which has sort of been a rough 379 00:21:25,760 --> 00:21:28,600 Speaker 1: target for the FIT. Uh do they notice that? And 380 00:21:28,800 --> 00:21:30,320 Speaker 1: do you think we're going to see a ramp up 381 00:21:30,400 --> 00:21:33,399 Speaker 1: in consumer spending or people kind of sated with everything 382 00:21:33,480 --> 00:21:36,960 Speaker 1: they bought. So that's a very good question. Consumer spending 383 00:21:37,000 --> 00:21:39,480 Speaker 1: has been strong, and it's been robust for for quite 384 00:21:39,560 --> 00:21:42,840 Speaker 1: some time, and I've not really heard or seeing any 385 00:21:43,080 --> 00:21:46,600 Speaker 1: signs to suggest that that's going to fall off considerably 386 00:21:46,920 --> 00:21:49,840 Speaker 1: now certainly, Um, I'm also not seeing signs that is 387 00:21:49,880 --> 00:21:52,720 Speaker 1: gonna go ramp up. So so I'm not expecting to 388 00:21:52,800 --> 00:21:56,399 Speaker 1: see a big acceleration in consumer spending. But I'm not 389 00:21:56,520 --> 00:21:59,280 Speaker 1: seeing anything that would suggest that we're gonna see any weakness. 390 00:21:59,560 --> 00:22:02,120 Speaker 1: Are weak getting in the months to come. Well, when 391 00:22:02,160 --> 00:22:04,080 Speaker 1: you put it together the businesses in the consumers in 392 00:22:04,160 --> 00:22:06,520 Speaker 1: your district, do you get an impression that we're late cycle? 393 00:22:06,680 --> 00:22:09,200 Speaker 1: Mid cycle? Where are we? So? I don't actually even 394 00:22:09,280 --> 00:22:11,560 Speaker 1: like to talk about it like that. The economy is 395 00:22:11,640 --> 00:22:15,040 Speaker 1: operating the way that is operated, and it's really operating 396 00:22:15,040 --> 00:22:18,200 Speaker 1: in a sustained way. That growth is robust and it 397 00:22:18,359 --> 00:22:20,879 Speaker 1: is there's something that looks like I can go on 398 00:22:21,000 --> 00:22:24,240 Speaker 1: for quite some time for me. I think about the 399 00:22:24,359 --> 00:22:26,560 Speaker 1: cycle if you want to talk about it, uh, in 400 00:22:26,640 --> 00:22:29,240 Speaker 1: the context of risk taking and are we starting to 401 00:22:29,320 --> 00:22:32,720 Speaker 1: see signs that businesses and consumers are taking more risks 402 00:22:32,760 --> 00:22:35,240 Speaker 1: than than they might have otherwise and starting to take 403 00:22:35,280 --> 00:22:38,080 Speaker 1: a risk that some might consider to be imprudent. When 404 00:22:38,119 --> 00:22:40,320 Speaker 1: you start to see those kind of risks, that to 405 00:22:40,480 --> 00:22:43,040 Speaker 1: me is the equivalent of this late cycle that you 406 00:22:43,080 --> 00:22:45,359 Speaker 1: would talk about and I'm really not seeing that. You know, 407 00:22:45,440 --> 00:22:50,520 Speaker 1: businesses are being pretty prudent. The debt that consumers are 408 00:22:50,600 --> 00:22:55,200 Speaker 1: taking on is happening mainly at the higher credit quality 409 00:22:55,280 --> 00:22:58,280 Speaker 1: levels among housholds with higher credit quality. So I'm not 410 00:22:58,359 --> 00:23:01,679 Speaker 1: seeing risks to suggest that that we're at a tipping 411 00:23:01,760 --> 00:23:05,359 Speaker 1: point where the economy should um or might turn. But 412 00:23:05,440 --> 00:23:08,080 Speaker 1: do you think at this point the markets are then 413 00:23:08,119 --> 00:23:10,359 Speaker 1: ahead of themselves and thinking that you've got to do 414 00:23:10,480 --> 00:23:12,480 Speaker 1: a rate move either one way or another. They're betting 415 00:23:12,480 --> 00:23:15,399 Speaker 1: at the moment on on rate cuts. Yeah. Well, I 416 00:23:15,520 --> 00:23:18,680 Speaker 1: am not in the position right now where I think 417 00:23:18,760 --> 00:23:21,040 Speaker 1: that a move in one direction or the other is 418 00:23:21,080 --> 00:23:24,200 Speaker 1: more likely. There are a lot of risks out there which, 419 00:23:24,520 --> 00:23:28,360 Speaker 1: if they come to fruition, might have the economy weekend, 420 00:23:28,680 --> 00:23:31,480 Speaker 1: and if that happens, then a rate cut might be appropriate. 421 00:23:31,800 --> 00:23:34,680 Speaker 1: But there are also a lot of sources of uncertainty 422 00:23:35,000 --> 00:23:37,199 Speaker 1: that if there resolves in particular ways, the economy might 423 00:23:37,200 --> 00:23:39,840 Speaker 1: actually get a whole lot stronger, which could suggest that 424 00:23:39,920 --> 00:23:42,120 Speaker 1: we might want to do a rate hike right now. 425 00:23:42,680 --> 00:23:44,920 Speaker 1: There are still uncertainty right so so it's hard to 426 00:23:45,000 --> 00:23:48,520 Speaker 1: say what the next move will likely be. But I 427 00:23:48,680 --> 00:23:50,760 Speaker 1: am certainly not in a case where if you ask 428 00:23:50,800 --> 00:23:53,560 Speaker 1: me how the scales are, I don't feel like for me, 429 00:23:53,720 --> 00:23:56,359 Speaker 1: they are tilted more to the cut than to the hike. 430 00:23:56,440 --> 00:23:59,320 Speaker 1: I think we're pretty much in balance. Well, monetary policy 431 00:23:59,359 --> 00:24:01,680 Speaker 1: works with long and variable lags, as they say, So, 432 00:24:01,960 --> 00:24:05,200 Speaker 1: do you think that the December rate hike was still justified? 433 00:24:05,280 --> 00:24:07,800 Speaker 1: Could it be a mistake? Could the Fed be slowing 434 00:24:07,880 --> 00:24:10,399 Speaker 1: the economy as the year goes up? So I actually 435 00:24:10,440 --> 00:24:12,800 Speaker 1: don't think it was a mistake. You know, it fit 436 00:24:13,160 --> 00:24:16,720 Speaker 1: in my model. I was very supportive of the cut 437 00:24:16,760 --> 00:24:19,720 Speaker 1: in December. I thought that that was going to be one, 438 00:24:20,200 --> 00:24:21,960 Speaker 1: probably the last one, and we'd have to see what 439 00:24:22,040 --> 00:24:24,360 Speaker 1: happened with the economy. And you know, when I talk 440 00:24:24,440 --> 00:24:28,480 Speaker 1: about the arc of my policy, um, it really goes 441 00:24:28,520 --> 00:24:32,360 Speaker 1: to the feedback I was getting from businesses. Early businesses 442 00:24:32,440 --> 00:24:35,639 Speaker 1: were excited, they were energized. We had just had the 443 00:24:35,680 --> 00:24:38,560 Speaker 1: tax reform. They saw a lot of possibilities. When I 444 00:24:38,640 --> 00:24:41,080 Speaker 1: got to the middle of the year, to the about September, 445 00:24:41,320 --> 00:24:43,280 Speaker 1: business leaders were telling me something very different. They's like, 446 00:24:43,480 --> 00:24:45,720 Speaker 1: you know, we're comfortable, we're gonna move on, but they're 447 00:24:45,800 --> 00:24:49,399 Speaker 1: uncertainty in and you guys might want to just hold 448 00:24:49,480 --> 00:24:52,520 Speaker 1: off for a bit, and that became sort of a 449 00:24:52,640 --> 00:24:55,760 Speaker 1: common theme in what I was hearing. So I I 450 00:24:55,880 --> 00:24:58,240 Speaker 1: listened to them frankly, and you know, they said, you 451 00:24:58,480 --> 00:25:03,000 Speaker 1: guys are good. We think that you should look and 452 00:25:03,320 --> 00:25:05,320 Speaker 1: take your time and don't be rushing to a number. 453 00:25:05,640 --> 00:25:08,119 Speaker 1: And that's pretty much how we're operating. So so I 454 00:25:08,160 --> 00:25:11,560 Speaker 1: actually think that the policy course that we've done has 455 00:25:11,640 --> 00:25:15,160 Speaker 1: been exactly on point. I think the economic performance would 456 00:25:15,200 --> 00:25:18,920 Speaker 1: bear that out. We've seen growth continue above the long 457 00:25:19,040 --> 00:25:22,320 Speaker 1: term trend, and we haven't seen very much inflation as 458 00:25:22,359 --> 00:25:25,200 Speaker 1: well to suggest that the economy is overheating. And so 459 00:25:25,520 --> 00:25:27,600 Speaker 1: I think we're in a pretty good place. Before we 460 00:25:27,720 --> 00:25:29,760 Speaker 1: let you go, you get to travel around and talk 461 00:25:29,800 --> 00:25:31,680 Speaker 1: to all these people. And I'm curious the media live 462 00:25:31,720 --> 00:25:34,920 Speaker 1: in these bubbles in Wall Street bubble in New York, 463 00:25:35,040 --> 00:25:37,720 Speaker 1: political bubble in Washington. What do people tell you about 464 00:25:37,720 --> 00:25:41,159 Speaker 1: their economic decision making? How much is it affected by 465 00:25:41,320 --> 00:25:43,879 Speaker 1: what happens on Wall Street, in the stock market, or 466 00:25:43,960 --> 00:25:47,360 Speaker 1: what happens with Donald Trump? So there are two those 467 00:25:47,400 --> 00:25:50,359 Speaker 1: are two very different issues. First, with the stock market, 468 00:25:50,920 --> 00:25:54,120 Speaker 1: it's important to remember that almost half of Americans don't 469 00:25:54,240 --> 00:25:56,840 Speaker 1: have a position in the stock market. And so their 470 00:25:56,880 --> 00:26:00,440 Speaker 1: decisions are really based on other things, what's happening in 471 00:26:00,560 --> 00:26:04,400 Speaker 1: the dollar store and Walmart versus their prospects for having 472 00:26:04,480 --> 00:26:08,480 Speaker 1: a job. And what we've seen the last there would 473 00:26:08,520 --> 00:26:12,320 Speaker 1: be a ten year expansion is growing confidence that the 474 00:26:12,400 --> 00:26:14,640 Speaker 1: job they have today is going to be around tomorrow, 475 00:26:15,160 --> 00:26:17,800 Speaker 1: and also growing confidence that the economy is going to 476 00:26:17,880 --> 00:26:20,040 Speaker 1: continue to perform in a way that they can start 477 00:26:20,119 --> 00:26:22,520 Speaker 1: to make longer plans. So I think that from an 478 00:26:22,560 --> 00:26:26,560 Speaker 1: economic perspective, UM is much more the general performance that 479 00:26:26,920 --> 00:26:30,240 Speaker 1: is more important than Walton than stock market per se 480 00:26:30,600 --> 00:26:33,280 Speaker 1: In terms of Washington, you know, I hear a lot 481 00:26:33,359 --> 00:26:37,080 Speaker 1: of your different viewpoints on the politics of Washington. UM, 482 00:26:37,480 --> 00:26:40,240 Speaker 1: there's frustration, UH. There are a lot of folks who 483 00:26:40,320 --> 00:26:43,159 Speaker 1: feel that, UM, we should be able to get to 484 00:26:43,400 --> 00:26:48,160 Speaker 1: more bipartisan positions that could really get policies that would 485 00:26:48,200 --> 00:26:51,520 Speaker 1: help the economy move forward. But in general, I think 486 00:26:51,640 --> 00:26:56,000 Speaker 1: that even the political UH landscape has not been one 487 00:26:56,560 --> 00:27:00,920 Speaker 1: UM that has really caused people to lose faith in 488 00:27:01,000 --> 00:27:05,480 Speaker 1: the economy. And I'll tell you, the president's approach is 489 00:27:05,560 --> 00:27:08,359 Speaker 1: very different than his predecessor, and it's taken people a 490 00:27:08,480 --> 00:27:11,600 Speaker 1: while to get comfortable with that. But in our last 491 00:27:11,640 --> 00:27:15,000 Speaker 1: board meeting, um one of my board members said she 492 00:27:15,280 --> 00:27:19,720 Speaker 1: feels that on some level we've adjusted and adapted and 493 00:27:19,880 --> 00:27:22,840 Speaker 1: so are less being less affected by the day to 494 00:27:22,920 --> 00:27:24,840 Speaker 1: day swings and the new things that come on a 495 00:27:24,960 --> 00:27:27,679 Speaker 1: dated on a regular basis. Well, thank you very much, 496 00:27:27,840 --> 00:27:31,640 Speaker 1: Raphaelbustic Keith, the president of the Atlanta Federal Reserve, Thank 497 00:27:31,680 --> 00:27:35,119 Speaker 1: you very much for joining us. Thanks for listening to 498 00:27:35,200 --> 00:27:39,680 Speaker 1: the Bloomberg Surveillance podcast. Subscribe and listen to interviews on 499 00:27:39,760 --> 00:27:45,600 Speaker 1: Apple Podcasts, SoundCloud, or whichever podcast platform you prefer. I'm 500 00:27:45,680 --> 00:27:48,919 Speaker 1: on Twitter at Tom Keane before the podcast. You can 501 00:27:49,000 --> 00:27:52,200 Speaker 1: always catch us worldwide. I'm Bloomberg Radio.