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Speaker 1: Bloomberg Audio Studios, Podcasts, radio news.

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Speaker 2: This is the Bloomberg Surveillance Podcast. I'm Tom Keene along

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Speaker 2: with Paul Sweeney. Join us each day for insight from

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Speaker 2: the best in economics, finance, investment, and international relations. You

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Speaker 2: can also watch the show live on YouTube. Visit the

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Speaker 2: Bloomberg Podcast channel on YouTube to see the show weekday

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Speaker 2: mornings from seven to ten am Eastern from our global

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Speaker 2: headquarters in New York City. Subscribe to the podcast on Apple, Spotify,

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Speaker 2: or anywhere else you listen, and always I'm Bloomberg Radio,

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Speaker 2: the Bloomberg Terminal, and the Bloomberg Business app. The Day

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Speaker 2: Never ends in Bruce Kasmin and Michael FERRELLI ruined it

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Speaker 2: at JP Morgan because they publish their must read weekly Prospects.

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Speaker 3: It's seven o five pm Friday night.

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Speaker 4: Yeah, thank you.

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Speaker 2: I've read about eighty five percent of Faroli that I've read.

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Speaker 2: I've read in a bar, right, you know. It's the

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Speaker 2: way it is. And they're making multiple further progress towards

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Speaker 2: his Friday where they'll publish the weekly Progress. Joining us

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Speaker 2: now from JP Morgan, Michael Faroli, Michael, what in God's

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Speaker 2: name is multiple further progress? And what do you write

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Speaker 2: about Friday in your weekly Prospects?

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Speaker 1: Well, it's hard to say. I think you're referring to

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Speaker 1: the FMC statement yesterday, and I think that was probably

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Speaker 1: influenced in part by what we saw yesterday morning with

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Speaker 1: the CPI report, and that's probably going to be a

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Speaker 1: big part of what we write about tomorrow.

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Speaker 5: So I tell me, does Michael FAROLEI did you get

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Speaker 5: an office at the new JP Morgan building on.

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Speaker 3: They're above the Gold Vault, though, you know the Diamond Vault.

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Speaker 5: The vault exactly, Michael, What did you take from FED

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Speaker 5: Chairman Jay Pal's comments yesterday? It kind of feels like

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Speaker 5: he feels like he's in a pretty good position. He

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Speaker 5: doesn't need the Russian anything. What'd you take away from it?

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Speaker 1: Yeah, you know, I do think he's pretty satisfied with

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Speaker 1: where things are going. And I think he's probably satisfied

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Speaker 1: that he's taken a pretty calm approach both to the

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Speaker 1: you know, favorable inflation surprises we got in the second

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Speaker 1: half of last year the less favorable surprises we got

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Speaker 1: in the first quarter of this year. And I think

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Speaker 1: he's kept a pretty you know, good eye on the

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Speaker 1: horizon rather than getting to you know, swung around here.

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Speaker 1: But you know, I think he's happy with the progress

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Speaker 1: on inflation, labor market. I think, you know, Look, I

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Speaker 1: think over the last several press conferences he has in

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Speaker 1: the market, I think agrees came out quite dubbish.

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Speaker 3: Yesterday.

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Speaker 1: I thought he had struck the same tone that you

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Speaker 1: kind of picked up in the statement and in the

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Speaker 1: and in the Dotson's Hill coorts. I thought he was

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Speaker 1: much more balanced yesterday. But the one area where he

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Speaker 1: sounded dubbish was I think on the labor market.

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Speaker 2: Right now, folks for Global Wall Street, the single question

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Speaker 2: to Michael Frowley of the Booth School Chicago and JP Morgan, Michael,

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Speaker 2: you stop time a long time ago with a potential

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Speaker 2: GDP of America that was sub two percent. If we

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Speaker 2: impute a higher our start, if we settle for something

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Speaker 2: of a two point x percent, as Richard claredon, others

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Speaker 2: talk about if we model in a new inflation, what

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Speaker 2: does that do to your potential GDP estimate?

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Speaker 3: Does it lift?

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Speaker 1: So I'm not really yet on the higher trend growth

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Speaker 1: story I do see obviously. So first of all, I

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Speaker 1: guess we can divide trend growth and a trend labor

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Speaker 1: force growth and trend productivity growth. I think clearly labor

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Speaker 1: force growth has been stronger in recent years given the

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Speaker 1: immigration story. How much of that is sustained after now,

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Speaker 1: after the election and on into next year, I think

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Speaker 1: is more of a question. I think on productivity, it's

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Speaker 1: still hard for me to be a big believer that

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Speaker 1: in part because when you look at the capital deepening numbers,

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Speaker 1: which is essentially investment after depreciation, they really haven't changed

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Speaker 1: much since slow growth decade we had last decade. So

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Speaker 1: once that you know, that changes, I'll be more of

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Speaker 1: a believer. But I think, you know, what we saw

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Speaker 1: in the first quarter, uh was kind of to me

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Speaker 1: a return to earth after what was a pretty good

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Speaker 1: second half last year of our activity. But without those

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Speaker 1: investment numbers, I'm still kind of thinking we're in the

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Speaker 1: slow growth trend here.

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Speaker 4: Michael, what's your view on inflation here?

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Speaker 5: We've you know, we had the beginning in the first quarter,

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Speaker 5: the first three months kind of a you know pick

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Speaker 5: up and inflation activity kind of caused some people to

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Speaker 5: really step back here and think about the moderation call

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Speaker 5: and inflation. How do you think about it here? As

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Speaker 5: we as this FED tries to get to its two

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Speaker 5: percent target.

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Speaker 1: I still think the moderation is in place. And you know,

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Speaker 1: when I look at I think, in particular, when you

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Speaker 1: look at nominal wage growth, wage inflation, and I know

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Speaker 1: the links between wage and price inflation are very contentious,

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Speaker 1: but I think in the long run, no one disputes

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Speaker 1: that there's got to be some linkage there, right, And

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Speaker 1: what you've seen, for you know, for production workers, is

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Speaker 1: that wage inflation, after peaking around seven percent, has come

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Speaker 1: down to around four percent.

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Speaker 3: Now.

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Speaker 1: I know May was a little stronger for average ality inflation,

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Speaker 1: but I think when you look at you know, you

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Speaker 1: kind of look impressionistically at average hourly earnings, Atlanta FED,

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Speaker 1: wage tractor, e C, I E C, e C. All

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Speaker 1: these things kind of suggest moderation in wage inflation, which

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Speaker 1: is ongoing. And I think as long as that is

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Speaker 1: in place, I think the price inflation story to me

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Speaker 1: looks like it's in place. But again, these are stories

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Speaker 1: I think you have to kind of zoom back at

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Speaker 1: and look at a quarterly frequency. But I think the

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Speaker 1: story to me looks, you know, pretty intact.

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Speaker 2: Driver Michael, thank you so much, particularly those discussions of

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Speaker 2: potential GDP, a key part of JP Morgan research. Doctor

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Speaker 2: Feroli working at Versus Chasman.

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Speaker 5: Stuart Kaiser, us equity trading strategy A City Global Markets

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Speaker 5: three ninety Greenwich Street in Lower Manhattan, the worst elevators

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Speaker 5: on Global Wall Street, Stuart, What did you think yesterday

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Speaker 5: from the CPI print from Federal Reserve in the afternoon,

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Speaker 5: What did you guys on a trading desk at City

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Speaker 5: think about all that?

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Speaker 4: Yeah, good morning guys. You know, I would say, look,

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Speaker 4: the the CPI print was on equickally positive news, right,

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Speaker 4: I mean, the print was low, the mix, the mix

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Speaker 4: within the CPI data was positive. Markets responded. I think

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Speaker 4: as you might have expected, lower quality stocks did well.

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Speaker 4: Stuff that had been sort of under pressure from a

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Speaker 4: higher for longer narrative, you know, rallied pretty well. And

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Speaker 4: then you got the FED. You know, I think the

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Speaker 4: FED is sort of the mirror image of what they

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Speaker 4: did back in March, which was back in March, you

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Speaker 4: would have expected them to have a slightly more hawkish

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Speaker 4: narrative just based on the incoming data, and they sort

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Speaker 4: of tacked a little bit duvish, particularly pow in the

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Speaker 4: press conference. And I think the effort back then was

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Speaker 4: to keep the market centered and not let it drift

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Speaker 4: kind of too far in either direction from the base case.

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Speaker 4: And I think that's really what we got yesterday. In

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Speaker 4: the opposite direction, you would have thought, with the strong

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Speaker 4: payrolls and then the friendly CPI, the FED would have,

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Speaker 4: you know, maybe been a little bit more positive in

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Speaker 4: message and a little more dubbish and pale. I think

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Speaker 4: sounded a little hawkish, and I think that was an

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Speaker 4: intentional effort to keep the market kind of centered on

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Speaker 4: the base case outlook.

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Speaker 5: Does just feel like a market that just wants to

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Speaker 5: move higher given everything else that's out there, just wants

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Speaker 5: to move I'm quoting Alex Steel Tom she came up with,

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Speaker 5: I think the best call I've ever heard, which is

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Speaker 5: a market feels like it just wants to go higher.

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Speaker 4: Yeah, I think it does. I think, look, you have,

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Speaker 4: you know, an economy that for now is holding in solidly.

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Speaker 4: You've got double digit EPs growth, and I think those

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Speaker 4: two things, generally speaking, you'd want high or you would

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Speaker 4: expect higher equity markets in that environment. And I think

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Speaker 4: that's just sort of the situation we're in, and that's

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Speaker 4: our view, I mean, our base case view. Is higher

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Speaker 4: until and unless the labor market really comes under significant pressure.

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Speaker 4: So you know, we're gonna remain constructive.

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Speaker 3: And honor you. It's so intimidating when Stuart Kaiser walks in.

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Speaker 3: I mean, Lisa, we gotta go mathe here, we gotta

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Speaker 3: go log Euclidean math Okay, run semi log mavstack the

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Speaker 3: Stuart Kaiser chart. I ran it back to November of

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Speaker 3: twenty eighteen.

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Speaker 2: Ben Ladler shingles out at HSBC at the time, and

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Speaker 2: he says, there's something going on, shut up and buy.

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Speaker 3: And what's important here, folks log regression. We're barely out

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Speaker 3: over one standard deviation on the trend. We're not extended

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Speaker 3: in this bull market. I don't think a lot of

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Speaker 3: people know that.

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Speaker 4: Yeah, I think I think to your point toppy, especially

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Speaker 4: if you look at the Erniees growth re generating. You know,

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Speaker 4: I know a lot of people are concerned with the

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Speaker 4: large cap tech and growth rally, but you know why

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Speaker 4: are those stocks out performing Because they're the unique companies

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Speaker 4: that are generating this massive, you know, kind of EPs growth,

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Speaker 4: both realized and in the forecast. So you know, when

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Speaker 4: folks push back about us being more positive, you know,

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Speaker 4: we're just sort of anchoring back to fundamentally.

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Speaker 3: People think they're extended. I mean, I get it, Nton Navidia,

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Speaker 3: and you know Lisa owns it. We don't. Fine, but

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Speaker 3: the answer is the Nasdaq one hundred. The math doesn't

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Speaker 3: show Robert Schiller exuberance, like you know what he wrote

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Speaker 3: about Eel years ago. It's not there. Do you see

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Speaker 3: Do you see exuberance in the Nastack?

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Speaker 4: I'm sure there's a stock here there. Yes, But you know,

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Speaker 4: if you look to your point big picture, this is

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Speaker 4: not tech bubble type valuations, right, This is not you know,

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Speaker 4: tech bubble type over your skis. This is a small

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Speaker 4: number of companies generating a massive amount of earnings growth

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Speaker 4: that are getting rewarded for it. So, you know, are

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Speaker 4: we above average valuation? Yes? I think if you looked

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Speaker 4: at the S and P five hundred, you'd say you're

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Speaker 4: probably maybe even upper cortile, upper decyle. But but you know,

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Speaker 4: there's still room to expand. I think if the economy

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Speaker 4: holds in and we continue to put the type erning

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Speaker 4: growth we are.

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Speaker 5: Stuart, I just got in my inbox, you know, from

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Speaker 5: Torsten Slock, our good friend over at Apollo Global management.

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Speaker 5: He's just basically calling out kind of what we know,

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Speaker 5: but he's putting some numbers on it, which is Boy,

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Speaker 5: the big cap stocks are just really richly valued. Small

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Speaker 5: cap stocks relatively cheap here. But I'm not sure I ever,

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Speaker 5: I'm not sure I rotate out of the big caps

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Speaker 5: and try to look for value here. How do you

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Speaker 5: guys think of when you talk to your clients. I mean,

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Speaker 5: I think I just kind of owned the big caps

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Speaker 5: and go to the Jersey shore and wait for September.

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Speaker 4: Look, you know, we we like the broadening theme to

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Speaker 4: start off the year because we actually thought Ernie growth

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Speaker 4: is going to broaden out. I think that's worked probably

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Speaker 4: for a total of four weeks this year. You know

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Speaker 4: where the broadening trade has kind of worked. You know

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Speaker 4: why a small cap not working? I think it's because

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Speaker 4: that's the part of the market that's most susceptible if

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Speaker 4: you get a recession, and is most susceptible to kind

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Speaker 4: of hire for long. But so people have been very cautious,

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Speaker 4: you know, to get into that space and look, large

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Speaker 4: cap is big earnings, introducing dividends, et cetera.

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Speaker 2: This strange word profit Megnum decided LC it is his

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Speaker 2: most important word.

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Speaker 3: Profit.

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Speaker 2: Let's bring it over to something bow tie like free

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Speaker 2: cash flow? Do you see margin compression or the gloom

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Speaker 2: of a lesser free cash flow out there for say

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Speaker 2: thirty percent of the universe well run companies.

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Speaker 4: No, not yet. And I think if you were to

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Speaker 4: identify the one fundamental risk equities this year, it was

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Speaker 4: going to be what does the margin out look look like?

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Speaker 3: Right?

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Speaker 4: You know, if you look at the past four to

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Speaker 4: six quarters, you've had very high nominal GDP growth and

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Speaker 4: companies were able to So what are your.

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Speaker 3: Security analysts not you? What are your security analysts and

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Speaker 3: city groups say to that?

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Speaker 4: I think for now they're they're comfortable with the margin outlook.

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Speaker 4: You know Scott Kroner, who's are us equity strategist about

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Speaker 4: two hundred and forty five bucks.

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Speaker 5: I know when he had a real job, Yeah, big

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Speaker 5: sales manager for the West Coast.

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Speaker 4: Now he's got three real jobs. Yeah, that's even more popular.

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Speaker 4: But he was he was high end of the street

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Speaker 4: for a while on EPs, you know, basically on this

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Speaker 4: logic Tom and he remains there. So they're of the

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Speaker 4: view that it is still a relatively robust fundamental environment

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Speaker 4: for US corporates.

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Speaker 5: What is owning twenty five delta calls on either the

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Speaker 5: SPX or IWM.

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Speaker 4: What does that mean? It just me jo and some

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Speaker 4: out of the money upside in US equities. And you know,

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Speaker 4: basically we don't have very many rules of thumb. But

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Speaker 4: but for a while you could pay less than the

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Speaker 4: ten implied volatility on that. That s and p FUF option,

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Speaker 4: which is just a really attractive entry to kind of

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Speaker 4: rent rented.

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Speaker 3: Okay, so is that like betting on the Edmonton Oilers.

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Speaker 4: Yeah, I guess, I guess it is like equivalent.

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Speaker 3: To saying the Oilers can win one?

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Speaker 4: Yeah, yeah, yeah, well I mean I mean win one, yes,

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Speaker 4: win one, maybe not the whole series. Folks, get a game,

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Speaker 4: go to.

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Speaker 2: Bloomberg, type in your stock MVDA or NANCEDAC index whatever

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Speaker 2: OVDV and that will give you the delta in the gamma.

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Speaker 3: And it's got all the volatilty there x y Z,

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Speaker 3: good morning, Bruno to peer in the late Peter Carr.

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Speaker 2: Who put that together for us, it's yeah, you can

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Speaker 2: sell terminals with OVD You're done, right, you can? Yeah,

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Speaker 2: I mean you you just you know, I have no

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Speaker 2: idea what I'm looking at I'm looking at a swissy

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Speaker 2: Hungarian for it, and you throw up an OVD volatility surface.

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Speaker 3: And it's like, whoa very cool Stuart kais are on

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Speaker 3: and come come back with the market goes down. He's

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Speaker 3: your city group.

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Speaker 2: I should say, ahead of US equity trading strategy.

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Speaker 3: That was Eddie.

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Speaker 2: I don't have a revision yet on weekly claims. We'll

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Speaker 2: get it here in a moment. I'll interrupt when we

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Speaker 2: get there. But come on, the disinflation vector is in place.

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Speaker 2: We saw it yesterday at eight thirty, We see it

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Speaker 2: this morning at eight thirty.

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Speaker 4: Yeah, I would high both data points.

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Speaker 6: You know, initial jobless claims jumping up to two hundred

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Speaker 6: and forty thousand is an important data point. Now there's

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Speaker 6: volatility in the week to week data. But if that

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Speaker 6: were to stick, what's.

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Speaker 3: Your four week moving average on claims? Where it's a

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Speaker 3: whole new world after all.

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Speaker 6: I think if you're if you are two forty to

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Speaker 6: two fifty, really that tight. That is usually the numbers.

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Speaker 4: That you might begin to think about.

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Speaker 6: I mean an initial job as claims, when they move

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Speaker 6: up in a sustainable way, typically stick there. Now there's

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Speaker 6: volatility in the week to week data. We had to

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Speaker 6: jump a few weeks back up to two hundred and

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Speaker 6: thirty thousand. You have to look at what's going on

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Speaker 6: in the state level data. So I don't want to

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Speaker 6: seeing all the details. It's hard to know. But if

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Speaker 6: that sticks, that's an important data point because the labor

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Speaker 6: market has been strong because layoffs have been low. If

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Speaker 6: that changes, it changes the picture of the labor market.

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Speaker 6: I'm not saying this this morning data point did that,

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Speaker 6: but it certainly could be important if it's sticks.

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Speaker 5: Well, the Sweeney offspring are employed, so you know, we're

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Speaker 5: doing our part here. What'd you take out of the

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Speaker 5: Federal Reserves comments at Chairman's comments yesterday and just kind

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Speaker 5: of the data we saw.

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Speaker 6: Yeah, so yesterday's morning CPI was a great data point

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Speaker 6: from their perspective. It showed a softening, you know, sixteen

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Speaker 6: basis points a month a month. It was good and

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Speaker 6: a lot of the areas that they would want it

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Speaker 6: to be good. Services inflation was softer, you know, renton

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Speaker 6: O we are was a little bit disappointing. I was

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Speaker 6: surprised that they only showed one rate cut for this year.

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Speaker 6: Now now it is our baseline that they only cut

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Speaker 6: rates once, so you think that only once in December?

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Speaker 6: Okay in December, but I was still surprised that they

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Speaker 6: signaled that yesterday. I thought that they would want to

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Speaker 6: maintain more actively optionality to cut rates before meeting.

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Speaker 3: Now.

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Speaker 6: Chair Pale downplayed the signal from that dotlets as he

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Speaker 6: typically does, but at the same time, I don't think

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Speaker 6: he was as dubbish as he could have been. He

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Speaker 6: talked very strongly about the economy, about the labor market,

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Speaker 6: about wage growth being high.

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Speaker 2: Come on, you're you're at uc LA with a wonderful

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Speaker 2: faculty there and all the prig of Allen Meltzer being there,

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Speaker 2: and come on, no textbook, Obsfeld, Rogue Off all the

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Speaker 2: rest of them has multiple further progress in it. What

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Speaker 2: a bunch of malarkey. I mean, I'm sorry, there's like

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Speaker 2: three adverbs back to back. Who invented multiple further progress?

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Speaker 6: Look, the reality is we had four stronger prints to

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Speaker 6: start this year. We did get one much better print.

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Speaker 6: But the FED, looking at the economy, the labor market

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Speaker 6: report that we got on for Atlanta, FED GDP tracking

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Speaker 6: above three percent in Q two is looking at an

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Speaker 6: economy that does not urgently need so then.

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Speaker 3: Why doesn't he come out like in the old days

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Speaker 3: and say, we don't know, we're data dependent.

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Speaker 2: The market's gotta pop, the economy's gotta pop, the stock

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Speaker 2: market's gotta pop.

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Speaker 3: We're gonna wait instead of all this mumbo jumps.

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Speaker 6: So I think he did the problem is that they

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Speaker 6: have the dot plot now, and so if you if

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Speaker 6: you just think the press conference in isolation, he essentially

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Speaker 6: said that we are data dependent. We're making decisions on

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Speaker 6: a meeting by meeting basis. We have to see how

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Speaker 6: the inflation and labor market data come in. We think

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Speaker 6: the economy is strong right now, so we don't urgently

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Speaker 6: need to cut rates now. The issues they have the

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Speaker 6: dop plot. Greenspan did not have the dot plot, and

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Speaker 6: so it's harder to get away from any calendar based guidance.

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Speaker 3: Can you can you imagine Luzzetti and Folkartz, Landau and

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Speaker 3: Hooper in a room together talking about the dot plot.

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Speaker 3: They probably have to switch to German.

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Speaker 4: They get so upset rividly.

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Speaker 5: All right, initial jobs claims today, again, as Tom mentioned,

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Speaker 5: they came into two hundred and forty two thousand. Consensus

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Speaker 5: was for two and twenty five thousand, so a little

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Speaker 5: bit higher than what we've typically seen. Here was two

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Speaker 5: hundred and twenty nine thousand last period.

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Speaker 4: But I don't know.

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Speaker 5: It seems like the consumer is in good shape. The

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Speaker 5: consumer has a job, they're getting wage increases, they're spending money.

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Speaker 5: How do you feel about the consumer these days?

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Speaker 6: So there's been a lot of questions about the consumer.

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Speaker 6: You have kind of idiosyncratic reports from companies. You did

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Speaker 6: have a week consumer spending report. If you look two

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Speaker 6: weeks back now, it comes off of consumer strength.

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Speaker 4: But I would agree with you.

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Speaker 6: You know, there's this circularity between thinking about the labor

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Speaker 6: market and the consumer. You know, as long as the

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Speaker 6: labor market remains resilient and strong, and job gains are

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Speaker 6: solid and wage growth is there, there's very little reason

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Speaker 6: to think that the aggregate consumer weakens. Now there is

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Speaker 6: greater heterogeneity. You do have at the lower end of

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Speaker 6: the income distribution. There does seem to be some evidence

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Speaker 6: of stress strains that are there. From my perspective, that's

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Speaker 6: a little bit more returning to what the pre COVID

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Speaker 6: economy looked like than something that signaling a worrying slowdown

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Speaker 6: on behalf of the consumer is inflation.

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Speaker 5: You know, we think about inflation, because the FED thinks

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Speaker 5: about an inflation here when we think about a two

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Speaker 5: percent inflation rate is kind of a target. Is that

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Speaker 5: something this economy can get down to, or it just

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Speaker 5: feels like we're kind of stuck here at this I

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Speaker 5: don't know, a high twos or a three percent kind

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Speaker 5: of inflation rate.

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Speaker 4: Are we stuck there for a while? Do you think?

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Speaker 4: I don't think so.

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Speaker 6: I mean this year, from a year of year rate,

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Speaker 6: we will be stuck there. I mean you have base

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Speaker 6: effects that are difficult. Are inflation for core PC at

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Speaker 6: the end of the year's two point seven a little

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Speaker 6: bit below what the FED was, But as you look

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Speaker 6: ahead to next year, I would expect shelter inflation is

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Speaker 6: coming off. It does lag a bit, but that we

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Speaker 6: can get closer to two percent. It's probably difficult to

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Speaker 6: get into the low twos without shelter inflation coming off

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Speaker 6: more materially. But I think importantly for the Fed, they've

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Speaker 6: been clear they don't need to get down to two

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Speaker 6: percent to begin to cut rates. They just need to

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Speaker 6: have confidence that they are on the path to get there.

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Speaker 3: For our listeners are viewers on YouTube what impacts their

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Speaker 3: life with the first or even the second rate cut.

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Speaker 3: What changes.

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Speaker 6: Look, the reality is these rate cuts are priced, so

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Speaker 6: they are there into your yields. They are there in

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Speaker 6: tenyure yields, they are there in mortgage.

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Speaker 3: Right.

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Speaker 4: What about and so you need.

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Speaker 3: Surprise to mateo at Costco? Yes? What's it? I'm serious?

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Speaker 3: What's it mean? So?

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Speaker 6: I think in terms of Costco, it's actually the reverse causality,

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Speaker 6: meaning if Costco is cutting prices, then the Fed can

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Speaker 6: cut rates.

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Speaker 3: We go, we go to economous Right at Lisa, is

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Speaker 3: Costco cutting prices?

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Speaker 2: They are not.

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Speaker 7: They do have some good sale items, but no, the prices,

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Speaker 7: this is.

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Speaker 3: Important sale items. There's gonna be a lot more sale items.

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Speaker 4: Yeah.

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Speaker 6: And I think if you look at the CPI report yesterday,

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Speaker 6: there was reasonably broad based deceleration. Look at the trim

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Speaker 6: mean was weaker. You know, the median has come down

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Speaker 6: pretty materially, so so you did have broad based softening

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Speaker 6: in yesterday's inflation.

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Speaker 2: We're getting So we're gonna run the studio conversations when

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Speaker 2: we're on break for all of you worldwide and nationwide.

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Speaker 3: Some people say they're smarter than what we actually talk about.

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Speaker 3: I walk in and all Ozetti and Sweeney are talking about,

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Speaker 3: is UCLA gets seventy two million dollars for playing Rutgers

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Speaker 3: in field hockey. It's gonna be crazy.

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Speaker 5: So I mean, Matt, I know you're Villanova undergrad, but

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Speaker 5: you got your PhD at UCLA. But now your UCLA

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Speaker 5: is going to have to come all the way to

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Speaker 5: the East coast to play Big ten.

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Speaker 6: It is wild. I mean thinking about that the back

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Speaker 6: ten A PAC twelve and that that disbanding and the.

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Speaker 3: Old Stanford UCLA thing's gone.

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Speaker 6: Right, it is you know, it's disappointing to see that

438
00:20:32,280 --> 00:20:34,840
Speaker 6: that that lost kind of that history and that legacy.

439
00:20:34,800 --> 00:20:37,240
Speaker 5: Problem for the NCAA long term. That's just my opinion

440
00:20:37,240 --> 00:20:39,159
Speaker 5: because I think the only not the only thing, but

441
00:20:39,160 --> 00:20:41,679
Speaker 5: one of the big things that college athletics had going forward.

442
00:20:42,040 --> 00:20:42,960
Speaker 3: Was the rivalry.

443
00:20:43,000 --> 00:20:45,000
Speaker 2: So what's it mean for March badness? I mean, that's

444
00:20:45,040 --> 00:20:47,040
Speaker 2: what counts. I mean, Ozetti, you know he's got six

445
00:20:47,080 --> 00:20:47,920
Speaker 2: thousand square.

446
00:20:47,760 --> 00:20:50,520
Speaker 4: Villanova Duke will be there. We'll be fine, Brack Vilanovan Duke.

447
00:20:50,600 --> 00:20:52,160
Speaker 4: But for everybody else, No.

448
00:20:52,119 --> 00:20:55,760
Speaker 3: But what's it mean if the Big ten is seed

449
00:20:55,760 --> 00:20:57,760
Speaker 3: to shining seat, that's what we're talking about.

450
00:20:57,960 --> 00:20:59,600
Speaker 5: I don't know it's gonna be I mean, I think

451
00:21:00,080 --> 00:21:03,520
Speaker 5: a CEC the same way ACC has Stanford doll in it.

452
00:21:03,560 --> 00:21:05,399
Speaker 3: What's it mean for U C L A U s C.

453
00:21:05,880 --> 00:21:07,280
Speaker 3: I mean that kind of rival.

454
00:21:07,200 --> 00:21:11,239
Speaker 6: I think that very close rivalry does not change. But

455
00:21:11,359 --> 00:21:13,280
Speaker 6: when you think about, you know, the other rivalry within

456
00:21:13,320 --> 00:21:16,399
Speaker 6: the back ten per twelve, they'll certainly become weakened.

457
00:21:16,480 --> 00:21:19,320
Speaker 3: Thing focused Landos listening to this in Frankfort going what

458
00:21:19,440 --> 00:21:19,720
Speaker 3: kind of.

459
00:21:19,800 --> 00:21:22,880
Speaker 5: What is my chief US economist talking about?

460
00:21:22,960 --> 00:21:25,200
Speaker 3: Matt Lozzetti? Thank you so much to Deutsche Bank.

461
00:21:25,240 --> 00:21:27,720
Speaker 2: I really want to resell her the idea that Mattlizzetti

462
00:21:28,720 --> 00:21:30,240
Speaker 2: was out there and said, you know what, we're going

463
00:21:30,320 --> 00:21:33,280
Speaker 2: to see a slower economy. We did, but he had

464
00:21:33,280 --> 00:21:36,959
Speaker 2: the courage and literally his first essay to say, stop

465
00:21:37,119 --> 00:21:51,399
Speaker 2: guessing when the recession's coming. It's a fool's game. I

466
00:21:51,440 --> 00:21:54,679
Speaker 2: am happy, happy, happy. I get to talk to Wendy

467
00:21:54,720 --> 00:21:58,800
Speaker 2: Schiller with Paul Sweetey. She's at Brown University because she

468
00:21:58,920 --> 00:22:01,960
Speaker 2: owns the high ground on the linkage of our history

469
00:22:02,680 --> 00:22:03,680
Speaker 2: into where we are.

470
00:22:04,119 --> 00:22:06,919
Speaker 3: As I walked into the building this morning, got Officer

471
00:22:07,000 --> 00:22:10,720
Speaker 3: Korski came down the elevator as they walked into the building.

472
00:22:11,480 --> 00:22:15,480
Speaker 3: I stared at the G seven photo shoot and Ed

473
00:22:15,560 --> 00:22:20,760
Speaker 3: Duffner said, Tom, it's the Potsdam conference. Wendy Schiller, what

474
00:22:20,920 --> 00:22:24,280
Speaker 3: a train wreck of a photo shoot at the G

475
00:22:24,480 --> 00:22:29,359
Speaker 3: seven nineteen forty five Potsdam, Roosevelt dies, Truman shows up,

476
00:22:29,720 --> 00:22:33,840
Speaker 3: different guy. While they're there, Churchill's.

477
00:22:33,240 --> 00:22:36,360
Speaker 2: Thrown out of office, Clement Atley becomes a prime minister,

478
00:22:37,000 --> 00:22:40,959
Speaker 2: and Stalin's Faden's smiling all the way. Wendy Schiller, I

479
00:22:41,000 --> 00:22:44,000
Speaker 2: saw the guy from Germany going, I think I'm still

480
00:22:44,040 --> 00:22:48,240
Speaker 2: in power. Mccrom hasn't slept in a week. The president

481
00:22:48,480 --> 00:22:52,480
Speaker 2: has his own challenges. Trudeau. I don't know what Trudeau's doing.

482
00:22:52,560 --> 00:22:55,200
Speaker 2: It's a disaster and that's what Trump would say.

483
00:22:55,200 --> 00:22:58,240
Speaker 3: That's a dasher in Canada. And on the back end

484
00:22:58,280 --> 00:23:01,240
Speaker 3: of it is a Ruschie Schunach who's still dday. What

485
00:23:01,400 --> 00:23:03,679
Speaker 3: a mess. Have you ever seen a G seven like this,

486
00:23:03,760 --> 00:23:04,479
Speaker 3: Wendy Schiller?

487
00:23:05,960 --> 00:23:06,520
Speaker 7: I have not.

488
00:23:07,080 --> 00:23:10,479
Speaker 8: And the irony is that we're not facing a global

489
00:23:10,520 --> 00:23:14,320
Speaker 8: economic crisis. So, you know, a lot of these leaders,

490
00:23:14,359 --> 00:23:17,880
Speaker 8: a lot of the parties, whether the conservative or more moderate,

491
00:23:18,240 --> 00:23:22,200
Speaker 8: you know, business friendly, they're facing populist.

492
00:23:21,960 --> 00:23:23,960
Speaker 7: Sort of anger and gains.

493
00:23:24,040 --> 00:23:26,880
Speaker 8: I mean, really in the EU elections, and certainly look

494
00:23:26,880 --> 00:23:30,000
Speaker 8: at Italy, look at Hungary, look all over the place,

495
00:23:30,080 --> 00:23:32,480
Speaker 8: and you see that it's not connected as much to

496
00:23:32,560 --> 00:23:35,879
Speaker 8: economic discontent as it was as we might have expected

497
00:23:35,920 --> 00:23:37,040
Speaker 8: it to be ten years ago.

498
00:23:37,280 --> 00:23:39,640
Speaker 7: So then that's a bigger puzzle, and that's what brings

499
00:23:39,680 --> 00:23:40,480
Speaker 7: back World War Two.

500
00:23:40,720 --> 00:23:43,960
Speaker 8: So what are these deep strains or trends in Europe.

501
00:23:44,200 --> 00:23:46,879
Speaker 8: Certainly anti migrant is one of them. But if the

502
00:23:46,920 --> 00:23:49,399
Speaker 8: economy is getting better, and clearly the United States is

503
00:23:49,480 --> 00:23:52,680
Speaker 8: leading there but nonetheless getting better, yet all these sort

504
00:23:52,680 --> 00:23:56,120
Speaker 8: of moderate quote unquote liberal democracy, these leaders are fading.

505
00:23:56,400 --> 00:23:58,000
Speaker 7: Right, that's a big puzzle for us.

506
00:23:58,160 --> 00:24:02,960
Speaker 2: Off of the debate at Chicago, at Milwaukee after Labor Day,

507
00:24:03,200 --> 00:24:07,920
Speaker 2: are we going to see the same populist angst in America?

508
00:24:08,119 --> 00:24:11,720
Speaker 8: Well so, I think the trends are actually working against

509
00:24:11,760 --> 00:24:14,040
Speaker 8: that to some extent. In terms of the economy, Right,

510
00:24:14,119 --> 00:24:16,000
Speaker 8: so we have a little bit of a tick of unemployment,

511
00:24:16,000 --> 00:24:18,200
Speaker 8: but we had a really good job support and inflation,

512
00:24:18,400 --> 00:24:19,120
Speaker 8: depending on who you.

513
00:24:19,080 --> 00:24:21,359
Speaker 7: Talk to, seems to be at least calming down.

514
00:24:22,320 --> 00:24:25,440
Speaker 8: So if consumer sentiments starts to rise just a little

515
00:24:25,440 --> 00:24:27,639
Speaker 8: bit over the summer, folks can take a vacation, they

516
00:24:27,640 --> 00:24:30,080
Speaker 8: feel comfortable about that, they have a good summer, they're

517
00:24:30,080 --> 00:24:31,520
Speaker 8: feeling better about the economy.

518
00:24:31,840 --> 00:24:33,400
Speaker 7: Then I think things kind of.

519
00:24:33,400 --> 00:24:36,200
Speaker 8: Moderate a little bit on these big pushbacks in terms

520
00:24:36,240 --> 00:24:38,840
Speaker 8: of the far right. But Trump is courting big business.

521
00:24:38,840 --> 00:24:40,960
Speaker 8: He's being very strategic about it. He said, listen, don't

522
00:24:40,960 --> 00:24:43,040
Speaker 8: worry about me. I'm just going to do taxes lower

523
00:24:43,080 --> 00:24:44,679
Speaker 8: and keep them low, and I'm going to get rid

524
00:24:44,720 --> 00:24:46,800
Speaker 8: of regulation. I'm not gonna make you happy. I'm not

525
00:24:46,800 --> 00:24:48,720
Speaker 8: going to do anything scary. And that's going to be

526
00:24:48,720 --> 00:24:51,800
Speaker 8: his message today in Washington. And that's the big problem

527
00:24:51,800 --> 00:24:53,280
Speaker 8: for the Biden administration is what.

528
00:24:53,200 --> 00:24:54,560
Speaker 7: Do you do with that messaging?

529
00:24:54,960 --> 00:24:57,760
Speaker 8: And how does Trump keep that far right wing of

530
00:24:57,800 --> 00:25:00,840
Speaker 8: his party common enough not to scare a lot of

531
00:25:00,880 --> 00:25:03,560
Speaker 8: the independent voters away again in twenty twenty four.

532
00:25:04,480 --> 00:25:07,480
Speaker 5: What do we know about those independent voters, those centrist

533
00:25:07,800 --> 00:25:12,080
Speaker 5: type of voters. I guess, by and large they broke

534
00:25:12,240 --> 00:25:15,679
Speaker 5: for President Biden last time around, they broke for the

535
00:25:15,720 --> 00:25:19,960
Speaker 5: Democratic Party some of the congressional election cycles. What do

536
00:25:19,960 --> 00:25:22,280
Speaker 5: we know about that group here, which will be critical

537
00:25:22,840 --> 00:25:24,880
Speaker 5: for the presidential election coming up later this year.

538
00:25:25,520 --> 00:25:28,040
Speaker 8: The only recent information we have is after the Trump

539
00:25:28,080 --> 00:25:33,000
Speaker 8: thirty four fel Any convictions. Some palling indicated that some

540
00:25:33,040 --> 00:25:36,080
Speaker 8: percentage of those independents were less likely to vote for Trump,

541
00:25:36,240 --> 00:25:38,400
Speaker 8: but you're looking at a body that's probably not likely

542
00:25:38,480 --> 00:25:39,800
Speaker 8: to vote for Trump anyway.

543
00:25:40,040 --> 00:25:41,560
Speaker 7: What's interesting is the polling coming.

544
00:25:41,400 --> 00:25:45,600
Speaker 8: Out of Senate Democratic incumbents in swing states. They're actually

545
00:25:45,640 --> 00:25:48,720
Speaker 8: doing better than Biden, and they're doing better than the

546
00:25:48,800 --> 00:25:53,320
Speaker 8: Republican opponents or you know, supposed Republican opponents. So how

547
00:25:53,320 --> 00:25:56,360
Speaker 8: are the Democratic incomment senators holding on in swing states

548
00:25:56,480 --> 00:25:59,520
Speaker 8: and Biden is behind Trump or tied with Trump. So

549
00:25:59,600 --> 00:26:04,520
Speaker 8: that's suggest some independence maybe recalibrating thinking, hey, we'll vote

550
00:26:04,560 --> 00:26:07,240
Speaker 8: for Trump keep our low taxes at but we'll vote

551
00:26:07,240 --> 00:26:10,600
Speaker 8: for Senate Democrats to control Donald Trump and not give

552
00:26:10,640 --> 00:26:13,280
Speaker 8: the Republicans a trifecta. It seems like there could be

553
00:26:13,320 --> 00:26:15,320
Speaker 8: more split ticket voting this summer around.

554
00:26:15,720 --> 00:26:18,359
Speaker 2: Okay, let's talk about that, because it's not really the

555
00:26:18,480 --> 00:26:21,199
Speaker 2: zech ace. Yes, but you just mentioned it. Could we

556
00:26:21,240 --> 00:26:23,240
Speaker 2: see a Gope trifecta?

557
00:26:24,880 --> 00:26:26,399
Speaker 8: Well, that's the thing that I'm watching in terms of

558
00:26:26,400 --> 00:26:30,919
Speaker 8: these Senate races, particularly Wisconsin, Arizona, Pennsylvania's a little bit dodgy.

559
00:26:30,920 --> 00:26:32,400
Speaker 7: There's an open seat in Michigan.

560
00:26:32,800 --> 00:26:35,880
Speaker 8: But thinking about those races and thinking even shared Brown

561
00:26:35,920 --> 00:26:39,200
Speaker 8: in Ohio is up by four or five points against

562
00:26:39,359 --> 00:26:43,680
Speaker 8: Bernie Moreno Trump will win Ohio, I think. So that's

563
00:26:43,760 --> 00:26:45,920
Speaker 8: going to be an interesting thing. I mean, I think

564
00:26:45,960 --> 00:26:47,879
Speaker 8: the House is totally up for grabs. Right it's an

565
00:26:47,880 --> 00:26:51,080
Speaker 8: eight seat race. There may be thirty competitive seats and

566
00:26:51,160 --> 00:26:53,639
Speaker 8: eight can switch and then one party can take over

567
00:26:53,760 --> 00:26:54,840
Speaker 8: with a narrow majority.

568
00:26:55,240 --> 00:26:56,639
Speaker 7: So we don't know about the House.

569
00:26:56,640 --> 00:26:58,879
Speaker 8: But the Senate is supposed to be for the in

570
00:26:59,000 --> 00:27:02,040
Speaker 8: Republican's favor doing the map, But right now it looks

571
00:27:02,080 --> 00:27:04,639
Speaker 8: like the Democrats are holding their own and that's going

572
00:27:04,680 --> 00:27:06,040
Speaker 8: to be what I'm watching going forward.

573
00:27:06,119 --> 00:27:07,760
Speaker 3: Wendy, this isn't why we booked you.

574
00:27:08,680 --> 00:27:11,520
Speaker 2: There's Route one forty six, which comes out of Providence,

575
00:27:11,560 --> 00:27:15,240
Speaker 2: the land of Decent Pizza, up to a suburb called Boston,

576
00:27:15,880 --> 00:27:19,560
Speaker 2: and in between he is Foxborough. Did you attend the

577
00:27:19,600 --> 00:27:24,880
Speaker 2: Tom Brady Hall of Fame soiree at Gillette Stadium, Professor.

578
00:27:24,440 --> 00:27:26,600
Speaker 7: Schiller, I did not.

579
00:27:27,280 --> 00:27:31,560
Speaker 8: I harkened from the New York Long Island area and

580
00:27:31,600 --> 00:27:32,840
Speaker 8: I am a Giants fan.

581
00:27:33,000 --> 00:27:35,280
Speaker 3: Well, you could have worn your Giants jersey. I mean,

582
00:27:35,320 --> 00:27:37,440
Speaker 3: you know, you know, no, I did.

583
00:27:37,240 --> 00:27:39,080
Speaker 8: That at a Super Bowl party when the Giants beat

584
00:27:39,080 --> 00:27:40,440
Speaker 8: the Patriots and it wasn't possable.

585
00:27:40,600 --> 00:27:43,800
Speaker 3: There we go. Got that in Professor Schuller, go away.

586
00:27:43,880 --> 00:27:44,199
Speaker 3: Thank you.

587
00:27:44,280 --> 00:27:48,800
Speaker 2: At Brown University surely were their leadership in international relations.

588
00:27:49,160 --> 00:27:52,359
Speaker 2: This is a Bloomberg Surveillance podcast, bringing you the best

589
00:27:52,400 --> 00:27:57,160
Speaker 2: in economics, finance, investment, and international relations. You can also

590
00:27:57,240 --> 00:28:01,280
Speaker 2: watch the show live on YouTube. Visit the Bloomberg Podcast

591
00:28:01,400 --> 00:28:05,440
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592
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593
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594
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595
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