1 00:00:02,400 --> 00:00:06,760 Speaker 1: Bloomberg Audio Studios, Podcasts, radio news. 2 00:00:11,680 --> 00:00:15,480 Speaker 2: This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along 3 00:00:15,520 --> 00:00:18,720 Speaker 2: with Lisa Bromwitz and Amerie Hordern. Join us each day 4 00:00:18,760 --> 00:00:22,280 Speaker 2: for insight from the best in markets, economics, and geopolitics 5 00:00:22,440 --> 00:00:24,880 Speaker 2: from our global headquarters in New York City. We are 6 00:00:24,960 --> 00:00:27,680 Speaker 2: live on Bloomberg Television weekday mornings from six to nine 7 00:00:27,720 --> 00:00:31,319 Speaker 2: am Eastern. Subscribe to the podcast on Apple, Spotify or 8 00:00:31,320 --> 00:00:33,960 Speaker 2: anywhere else you listen, and as always on the Bloomberg 9 00:00:34,040 --> 00:00:37,239 Speaker 2: Terminal and the Bloomberg Business app. NACI is our The 10 00:00:37,280 --> 00:00:40,440 Speaker 2: chief global economist, Piper Sandler, is bracing for a soft 11 00:00:40,440 --> 00:00:43,000 Speaker 2: employment report on Friday. She joins us now for more. Nancy, 12 00:00:43,040 --> 00:00:45,960 Speaker 2: Good morning, Good morning. What's a soft employment report on Friday? 13 00:00:46,040 --> 00:00:48,760 Speaker 3: Well, we're assuming about eighty thousand. That's maybe a little 14 00:00:48,760 --> 00:00:52,239 Speaker 3: bit more than consensus, but as of now, eighty is 15 00:00:52,240 --> 00:00:56,720 Speaker 3: our best aty good these days, Probably eighty is better 16 00:00:56,760 --> 00:00:59,840 Speaker 3: than something closer to zero, to be sure. But it 17 00:00:59,880 --> 00:01:02,240 Speaker 3: is a very very clear shift down, and you see 18 00:01:02,240 --> 00:01:03,360 Speaker 3: it in a lot of data. 19 00:01:03,440 --> 00:01:04,520 Speaker 1: Companies aren't hiring. 20 00:01:04,600 --> 00:01:07,919 Speaker 3: You see that in continuing claims, they're not firing aggressively. 21 00:01:08,480 --> 00:01:12,280 Speaker 3: Initial claims are still relatively are still relatively low. Your 22 00:01:12,280 --> 00:01:14,480 Speaker 3: point earlier on the quit rate, the quick rate is 23 00:01:14,480 --> 00:01:19,039 Speaker 3: coming down. People are reluctant to leave. And just ask consumers, 24 00:01:19,080 --> 00:01:21,920 Speaker 3: I mean the Conference boards survey of is it hard 25 00:01:21,959 --> 00:01:23,520 Speaker 3: to get a job or is it easy to get 26 00:01:23,520 --> 00:01:26,200 Speaker 3: a job as a metric, I've used my entire career 27 00:01:26,280 --> 00:01:29,479 Speaker 3: and consumers say it is hard to get a job. 28 00:01:29,560 --> 00:01:32,200 Speaker 3: So there's clearly been a shift down in the labor market. 29 00:01:32,440 --> 00:01:35,319 Speaker 3: Why companies are trying to protect their profit margins is. 30 00:01:35,280 --> 00:01:39,240 Speaker 4: Eighty thousand and even worse number because of the downward revisions. 31 00:01:39,240 --> 00:01:42,600 Speaker 4: To Mike's point that the longer you wait, the more 32 00:01:42,680 --> 00:01:44,640 Speaker 4: unclear the data is in the short run, but longer 33 00:01:44,720 --> 00:01:46,520 Speaker 4: term you do get just as clear of a look 34 00:01:46,720 --> 00:01:47,920 Speaker 4: in terms of responses. 35 00:01:48,200 --> 00:01:51,320 Speaker 3: So the household employment data, which comes out with the 36 00:01:51,400 --> 00:01:56,320 Speaker 3: unemployment rate, actually historically at turning points is better than payroll. 37 00:01:56,680 --> 00:01:59,320 Speaker 3: I've studied this again my entire career was first written 38 00:01:59,320 --> 00:02:03,520 Speaker 3: about in the nineteen seventies. Unlike payroll, the household employment 39 00:02:03,600 --> 00:02:06,840 Speaker 3: data aren't revised. There's once a year population adjustment, but 40 00:02:06,880 --> 00:02:09,400 Speaker 3: you can smooth that out. There's been no growth in 41 00:02:09,440 --> 00:02:13,120 Speaker 3: the household employment survey for the past twelve months. 42 00:02:13,320 --> 00:02:13,920 Speaker 1: And then on. 43 00:02:14,160 --> 00:02:17,680 Speaker 3: Next Tuesday, you're going to see the QCEW, the quarterly 44 00:02:17,760 --> 00:02:21,560 Speaker 3: Census of Employment in wages, and that's going to likely 45 00:02:21,639 --> 00:02:25,079 Speaker 3: show a very sharp reduction in payroll from March of 46 00:02:25,160 --> 00:02:27,360 Speaker 3: twenty five back over the past year of about at 47 00:02:27,440 --> 00:02:30,320 Speaker 3: least eight hundred thousand. That is, payroll is going to 48 00:02:30,320 --> 00:02:33,440 Speaker 3: start to look more like the household data. Consumers, No, 49 00:02:33,560 --> 00:02:36,280 Speaker 3: it's a week job market. They're cutting back on highly 50 00:02:36,320 --> 00:02:39,960 Speaker 3: cyclical stuff, both on the good side and on the 51 00:02:40,000 --> 00:02:44,799 Speaker 3: service side. So the idea that you're getting new news 52 00:02:44,840 --> 00:02:46,120 Speaker 3: from the payroll report to me. 53 00:02:48,080 --> 00:02:49,280 Speaker 1: Is a little misleading. 54 00:02:49,280 --> 00:02:52,239 Speaker 3: Consumers have already reacted to this week employment backdrop. 55 00:02:52,800 --> 00:02:55,160 Speaker 4: When does this term become a problem because it's not 56 00:02:55,200 --> 00:02:57,760 Speaker 4: a downturn, it's not a downturn yet and it doesn't 57 00:02:57,760 --> 00:03:00,400 Speaker 4: seem to be heading toward any kind of recession. But 58 00:03:00,520 --> 00:03:03,600 Speaker 4: this low higher low fire dynamic has continued and people 59 00:03:03,600 --> 00:03:06,560 Speaker 4: don't feel very good. But companies are doing just fine, 60 00:03:06,560 --> 00:03:08,519 Speaker 4: as we see in the earning So when does this 61 00:03:08,600 --> 00:03:10,040 Speaker 4: become a problem. 62 00:03:10,440 --> 00:03:14,480 Speaker 3: That's so important that companies are doing well in this environment. 63 00:03:14,520 --> 00:03:16,079 Speaker 3: Before you see you can see an upturn in the 64 00:03:16,160 --> 00:03:18,920 Speaker 3: job market, companies have to make money. That's been a 65 00:03:18,960 --> 00:03:22,200 Speaker 3: beauty of the US economy over the past decades that 66 00:03:22,320 --> 00:03:25,000 Speaker 3: companies are allowed to stop hiring and or in some 67 00:03:25,040 --> 00:03:28,600 Speaker 3: cases fire people so they can rebuild their profitability, and 68 00:03:28,639 --> 00:03:30,920 Speaker 3: that thing gives them the ability to hire people. So 69 00:03:31,240 --> 00:03:33,960 Speaker 3: I think some of the most bullish news for employment 70 00:03:34,040 --> 00:03:36,320 Speaker 3: in twenty six is the fact that two q s 71 00:03:36,360 --> 00:03:38,960 Speaker 3: AP earnings came in double what they were supposed to 72 00:03:39,320 --> 00:03:42,720 Speaker 3: have been and hit a record and hit a record high. 73 00:03:43,000 --> 00:03:45,760 Speaker 3: Prior to every upturn in employment growth, you first need 74 00:03:45,800 --> 00:03:49,040 Speaker 3: an upturn in earnings and profits, and we're seeing it. 75 00:03:49,080 --> 00:03:50,880 Speaker 3: So kudos to American companies. 76 00:03:51,160 --> 00:03:53,080 Speaker 2: Is that what your full coasting now? A rebound and 77 00:03:53,160 --> 00:03:54,120 Speaker 2: economic activity? 78 00:03:54,240 --> 00:03:56,240 Speaker 3: We are this year you're one one and a half percent, 79 00:03:57,400 --> 00:04:02,080 Speaker 3: but you're already seeing capital spending turn up. Individual companies 80 00:04:02,360 --> 00:04:03,840 Speaker 3: are seeing it. You saw it in the new order 81 00:04:03,920 --> 00:04:06,920 Speaker 3: data yesterday. Why is that happening? Well, One, the Fed 82 00:04:07,160 --> 00:04:09,520 Speaker 3: cut rates one hundred basis points a year ago, and 83 00:04:09,600 --> 00:04:11,280 Speaker 3: it takes about a year for that to work through 84 00:04:11,280 --> 00:04:14,920 Speaker 3: the system. Second, you do have this full capex appreciation, 85 00:04:15,040 --> 00:04:19,359 Speaker 3: which is the most significant capital spending booster shot since 86 00:04:19,400 --> 00:04:22,400 Speaker 3: Reagan in the early early eighties. 87 00:04:22,520 --> 00:04:24,000 Speaker 1: You're seeing it in company data. 88 00:04:24,160 --> 00:04:27,320 Speaker 3: So we have three percent GDP growth next year, and 89 00:04:27,800 --> 00:04:29,920 Speaker 3: we don't think three is a new two. We think 90 00:04:30,160 --> 00:04:32,760 Speaker 3: next year inflation does shift back down to two percent. 91 00:04:33,080 --> 00:04:37,400 Speaker 3: You'll lap the tariff increases, and you'll also see further 92 00:04:37,440 --> 00:04:39,680 Speaker 3: acceleration and productivity slowing unit. 93 00:04:39,760 --> 00:04:40,719 Speaker 1: That's a great setup. 94 00:04:40,760 --> 00:04:43,919 Speaker 2: You're looking for three percent GDP, two percent inflation, where's 95 00:04:43,920 --> 00:04:44,839 Speaker 2: the FED and all of that. 96 00:04:45,360 --> 00:04:47,880 Speaker 3: We don't need an aggressive FED in this cycle. I 97 00:04:47,920 --> 00:04:50,600 Speaker 3: get one that would make me worry about inflation. In 98 00:04:50,640 --> 00:04:53,799 Speaker 3: the back half of twenty six, you have stronger potential 99 00:04:53,800 --> 00:04:55,720 Speaker 3: GDP growth, which is about two and a half two 100 00:04:55,760 --> 00:04:58,279 Speaker 3: two and a half percent. FED funds are pretty much 101 00:04:58,279 --> 00:05:01,359 Speaker 3: in line with that. Nominal GDP growth of about five 102 00:05:01,880 --> 00:05:03,719 Speaker 3: FED ones are a little bit lower than that. The 103 00:05:03,760 --> 00:05:07,200 Speaker 3: problems of the seventies happened because the FED would shove 104 00:05:07,279 --> 00:05:10,640 Speaker 3: rates down way below nominal growth, creating a boom and 105 00:05:10,640 --> 00:05:11,960 Speaker 3: then eventual bust cycle. 106 00:05:12,000 --> 00:05:14,400 Speaker 1: And so we think maybe one cut. 107 00:05:15,800 --> 00:05:18,640 Speaker 3: Would be healthy, but more than that, I would then 108 00:05:18,680 --> 00:05:20,080 Speaker 3: start to worry about inflation. 109 00:05:20,120 --> 00:05:21,039 Speaker 1: Okay, let's take a bait. 110 00:05:21,200 --> 00:05:25,160 Speaker 2: Nancy new fetchare comes along, huge selection process and they're 111 00:05:25,200 --> 00:05:27,200 Speaker 2: going to deliver one cut in twenty twenty six. 112 00:05:28,760 --> 00:05:31,080 Speaker 3: Again, if the economy is help if you go back 113 00:05:31,120 --> 00:05:32,800 Speaker 3: and look at the nineties, which is where we think 114 00:05:32,839 --> 00:05:35,200 Speaker 3: there are echoes of the nineties, The tech tech obviously 115 00:05:35,200 --> 00:05:39,200 Speaker 3: strength in the nineteen nineties, a green span ninety five, 116 00:05:39,240 --> 00:05:42,320 Speaker 3: I believe, cut rates just once and you had three 117 00:05:42,360 --> 00:05:43,680 Speaker 3: and a half percent GDP. 118 00:05:43,440 --> 00:05:44,680 Speaker 1: Growth with inflation slowing. 119 00:05:44,720 --> 00:05:47,360 Speaker 3: You didn't need a lower interest rate in environment because 120 00:05:47,400 --> 00:05:51,520 Speaker 3: you had healthy potential GDP growth, stronger productivity growth, and 121 00:05:51,760 --> 00:05:54,280 Speaker 3: strong very strong corporate profits. And those are the things 122 00:05:54,320 --> 00:05:58,480 Speaker 3: that were driving growth, not lower interest rates. Again, that 123 00:05:58,520 --> 00:06:02,520 Speaker 3: creates problems like another house rice bubble and or boom 124 00:06:02,520 --> 00:06:05,560 Speaker 3: and nominal GDP growth, which then opens the door to inflation. 125 00:06:06,040 --> 00:06:09,440 Speaker 4: How has artificial intelligence changed the nature of that rebound 126 00:06:09,640 --> 00:06:11,680 Speaker 4: given the fact that this isn't necessarily going to be 127 00:06:11,760 --> 00:06:15,479 Speaker 4: a job full recovery that can be equally distributed to 128 00:06:16,160 --> 00:06:18,520 Speaker 4: a lot of different people in different sectors. 129 00:06:18,920 --> 00:06:21,440 Speaker 3: So under the hood, there's always creative destruction in the 130 00:06:21,520 --> 00:06:23,240 Speaker 3: employment and the employment data. 131 00:06:23,360 --> 00:06:24,480 Speaker 1: Just look at the retail data. 132 00:06:24,480 --> 00:06:27,560 Speaker 3: When Amazon came on in the nineteen nineties, you decimated 133 00:06:28,560 --> 00:06:33,240 Speaker 3: retail employment in certain sectors. Online online touched sectors in particular, 134 00:06:33,400 --> 00:06:35,599 Speaker 3: but at the end of the day, overall retail employment rose, 135 00:06:36,040 --> 00:06:38,919 Speaker 3: and so creative destruction within the job market has gone on, 136 00:06:39,160 --> 00:06:41,400 Speaker 3: not just back in the early nineteen hundreds, but even 137 00:06:41,440 --> 00:06:44,719 Speaker 3: over the past ten twenty years. Tech employment has not 138 00:06:44,800 --> 00:06:47,599 Speaker 3: been a driver of the employment cycle. So I view 139 00:06:47,640 --> 00:06:52,240 Speaker 3: AI as more of a productivity enhancing, profit boosting mechanism 140 00:06:52,320 --> 00:06:55,919 Speaker 3: that actually is going to create more jobs because companies 141 00:06:55,920 --> 00:06:57,480 Speaker 3: are going to have stronger earnings. 142 00:06:57,520 --> 00:06:59,400 Speaker 1: You're using it and you love the page book. 143 00:07:00,080 --> 00:07:03,280 Speaker 4: Le's what you're doing that you think actually how it 144 00:07:03,320 --> 00:07:04,360 Speaker 4: affects your job? 145 00:07:04,560 --> 00:07:09,200 Speaker 3: Well for us, my colleagues are are very talented and 146 00:07:10,120 --> 00:07:15,040 Speaker 3: using CHATBT five you can actually write code for the 147 00:07:15,440 --> 00:07:18,240 Speaker 3: page book and get a sense of what what what 148 00:07:18,280 --> 00:07:21,360 Speaker 3: the direction of the economy is from from AI. So 149 00:07:22,200 --> 00:07:25,400 Speaker 3: I'm a product of technological innovation. I started with a typewriter. 150 00:07:25,440 --> 00:07:27,520 Speaker 3: Obviously that I went to a computer, et cetera. I'll stop, 151 00:07:27,560 --> 00:07:30,640 Speaker 3: but a technological innovation in this industry is not new. 152 00:07:31,200 --> 00:07:34,600 Speaker 3: It just improves our ability to do but hopefully not 153 00:07:34,680 --> 00:07:37,080 Speaker 3: always a better a better economic analyst. 154 00:07:38,120 --> 00:07:41,560 Speaker 2: Stay with us. Multiple IMPERG surveillance coming up after this. 155 00:07:50,840 --> 00:07:53,360 Speaker 2: Marc Abana, the head of US Right Strategy Bank for 156 00:07:53,360 --> 00:07:55,400 Speaker 2: America Global Research is with us around a table for 157 00:07:55,480 --> 00:07:57,160 Speaker 2: more mark and morning, good morning. It's going to see 158 00:07:57,200 --> 00:07:59,600 Speaker 2: you like a lot's change, what's changed for you? 159 00:07:59,680 --> 00:08:02,520 Speaker 5: So we think that investors should really be focused on 160 00:08:02,560 --> 00:08:05,920 Speaker 5: where the cutting trough in this cycle is. That's still 161 00:08:05,960 --> 00:08:09,520 Speaker 5: around three percent. The FED thinks three percent is neutral. 162 00:08:09,560 --> 00:08:11,720 Speaker 5: The market seems to believe that that's credible and that 163 00:08:11,720 --> 00:08:15,280 Speaker 5: the FED will head there increasingly. At least for our 164 00:08:15,560 --> 00:08:18,240 Speaker 5: rate strategy team, we see three percent as almost a 165 00:08:18,280 --> 00:08:22,480 Speaker 5: cutting ceiling. They're going to at least cut to there, 166 00:08:22,680 --> 00:08:25,480 Speaker 5: we think, and we think that the market is not 167 00:08:25,760 --> 00:08:30,200 Speaker 5: fully appreciating the potential range of outcomes below three percent 168 00:08:30,480 --> 00:08:32,000 Speaker 5: that the FED could take us to. 169 00:08:32,960 --> 00:08:35,120 Speaker 1: And that range of outcomes. 170 00:08:34,760 --> 00:08:38,600 Speaker 5: We think exists because you do have a moderating labor market, 171 00:08:38,679 --> 00:08:41,120 Speaker 5: you do have inflation that is expected to peak around 172 00:08:41,160 --> 00:08:43,880 Speaker 5: the end of this year or first half of next year. 173 00:08:44,320 --> 00:08:46,120 Speaker 5: But we also think that you're going to have a 174 00:08:46,120 --> 00:08:48,640 Speaker 5: composition of individuals at the FED that are going to 175 00:08:48,679 --> 00:08:52,679 Speaker 5: be targeting potentially different objectives than the current FED is. 176 00:08:53,000 --> 00:08:55,560 Speaker 5: And specifically, what I mean by that is, think about, 177 00:08:55,600 --> 00:08:58,480 Speaker 5: let's say, how the FED judges the natural rate of unemployment. 178 00:08:58,760 --> 00:09:00,720 Speaker 5: The FED thinks that in the long run this level 179 00:09:00,760 --> 00:09:03,120 Speaker 5: is four point two percent. They don't know that for sure, 180 00:09:03,160 --> 00:09:06,800 Speaker 5: but that's their estimate. What's to stop a new composition 181 00:09:06,800 --> 00:09:09,439 Speaker 5: of FED officials from targeting and potential three and a 182 00:09:09,480 --> 00:09:13,600 Speaker 5: half percent or sub four percent type of natural rate 183 00:09:13,640 --> 00:09:17,640 Speaker 5: of unemployment? And we think that you're going to increasingly 184 00:09:17,679 --> 00:09:20,959 Speaker 5: hear these types of arguments from individuals that are being 185 00:09:20,960 --> 00:09:24,200 Speaker 5: considered to adopt leadership positions at the FED. I'll certainly 186 00:09:24,200 --> 00:09:28,360 Speaker 5: be listening for that on Thursday with Myron's testimony, because 187 00:09:28,400 --> 00:09:30,880 Speaker 5: we have heard from other, let's say FED share contenders 188 00:09:31,080 --> 00:09:34,080 Speaker 5: that they're open to this idea. And if the FED 189 00:09:34,120 --> 00:09:37,560 Speaker 5: does indeed adopt that type of approach, that opens up 190 00:09:37,559 --> 00:09:39,840 Speaker 5: the range of outcomes for where the funds rate can 191 00:09:39,880 --> 00:09:42,439 Speaker 5: go well below three percent. We think you want to 192 00:09:42,440 --> 00:09:45,440 Speaker 5: be received five year ois to benefit from that. It 193 00:09:45,480 --> 00:09:47,880 Speaker 5: also means that you should be expecting that longer run 194 00:09:47,880 --> 00:09:52,240 Speaker 5: inflation expectations move up because they are still very well anchored. 195 00:09:52,240 --> 00:09:54,800 Speaker 5: We agree with the Fed's assessment on that. We think 196 00:09:54,840 --> 00:09:56,679 Speaker 5: that they can be moving up. We think that the 197 00:09:56,679 --> 00:09:58,920 Speaker 5: inflation curve can be steepening, and we think that the 198 00:09:58,920 --> 00:10:02,840 Speaker 5: nominal curve should also be steepening in that type of environment. Finally, 199 00:10:02,880 --> 00:10:05,600 Speaker 5: we like being short thirty year asset swamp spreads because 200 00:10:05,600 --> 00:10:09,880 Speaker 5: we do worry about some of this supply demand dynamic 201 00:10:10,040 --> 00:10:12,320 Speaker 5: at the back end of the rates curve. If the 202 00:10:12,360 --> 00:10:16,199 Speaker 5: Fed is let's say, cutting to rates lower than what 203 00:10:16,280 --> 00:10:20,000 Speaker 5: many of us would think are justified by fundamentals today. 204 00:10:20,559 --> 00:10:22,080 Speaker 1: Who's going to buy the bond? 205 00:10:22,559 --> 00:10:25,360 Speaker 5: If you're worried about upside inflation risks and the deficit 206 00:10:25,400 --> 00:10:29,280 Speaker 5: is still not improving materially. Who's going to take down 207 00:10:29,320 --> 00:10:31,719 Speaker 5: all that long duration treasury supply? So we think you 208 00:10:31,760 --> 00:10:33,240 Speaker 5: want to be positioned for them. We like being short 209 00:10:33,240 --> 00:10:34,960 Speaker 5: thirty r asset swap spreads to do so. 210 00:10:34,960 --> 00:10:37,200 Speaker 4: So as you talk, I'm thinking, I'm going to hide 211 00:10:37,240 --> 00:10:39,880 Speaker 4: in gold. I'm going to hide in the most pro 212 00:10:39,880 --> 00:10:43,160 Speaker 4: growth stocks because essentially they're going to juice everything. I mean, essentially, 213 00:10:43,480 --> 00:10:47,880 Speaker 4: isn't what you're saying really positive for stocks, really positive 214 00:10:47,920 --> 00:10:50,880 Speaker 4: for gold, terrible for the dollar, and don't even touch 215 00:10:50,920 --> 00:10:53,720 Speaker 4: that thirty year bond? Yes? Yes, yes, yes, okay, So 216 00:10:53,760 --> 00:10:55,840 Speaker 4: that's basically what you're looking for right now, and. 217 00:10:56,960 --> 00:11:01,319 Speaker 5: We just think that again, you can focus on fundamentals 218 00:11:01,920 --> 00:11:04,760 Speaker 5: and fundamentals and our economists, and kudos to them, are 219 00:11:04,800 --> 00:11:07,800 Speaker 5: still very much rooted in that they're thinking, this is 220 00:11:07,840 --> 00:11:10,040 Speaker 5: an economy that's not headed into a recession, where you've 221 00:11:10,080 --> 00:11:13,599 Speaker 5: got stagflationary risks, where inflation is going to be a 222 00:11:13,640 --> 00:11:15,600 Speaker 5: three percent or higher by the end of the year, 223 00:11:16,240 --> 00:11:18,160 Speaker 5: and where the FED is running the risk of a 224 00:11:18,200 --> 00:11:22,320 Speaker 5: policy mistake by cutting later this year, if that's indeed 225 00:11:22,360 --> 00:11:25,240 Speaker 5: what they do. And so they're thinking, why would the 226 00:11:25,240 --> 00:11:28,160 Speaker 5: FED be doing this? And I understand that from a 227 00:11:28,160 --> 00:11:33,160 Speaker 5: fundamental perspective, but we've all seen the headlines. We've all 228 00:11:33,200 --> 00:11:36,280 Speaker 5: seen at least or we've heard some of the approaches 229 00:11:36,360 --> 00:11:40,520 Speaker 5: that individuals were being nominated or considered for FED leadership 230 00:11:40,520 --> 00:11:44,200 Speaker 5: positions are espousing, and all of those, at least me 231 00:11:44,240 --> 00:11:46,560 Speaker 5: as a rate strategist, say, why are they going to 232 00:11:46,559 --> 00:11:47,160 Speaker 5: stop at three? 233 00:11:47,760 --> 00:11:48,640 Speaker 1: Why would they do that? 234 00:11:48,720 --> 00:11:50,760 Speaker 5: Waller is just saying, no, we're going to cut to neutral, 235 00:11:51,000 --> 00:11:52,400 Speaker 5: or I think we should be heading to neutral, and 236 00:11:52,400 --> 00:11:53,880 Speaker 5: I think neutral is three percent, But he'll be the 237 00:11:53,880 --> 00:11:55,560 Speaker 5: first to tell you that he doesn't know where neutral is. 238 00:11:56,440 --> 00:11:58,800 Speaker 5: And then once you start to contemplate some of these 239 00:11:58,840 --> 00:12:03,120 Speaker 5: other arguments, we suspect about lower natural rate of unemployment 240 00:12:03,200 --> 00:12:08,840 Speaker 5: and really strong GDP and deficit financing levels, which is 241 00:12:08,880 --> 00:12:11,040 Speaker 5: not in the FEDS mandate, but certainly you hear that 242 00:12:11,080 --> 00:12:15,120 Speaker 5: line of argument from administration officials. Once that creeps into 243 00:12:15,160 --> 00:12:17,959 Speaker 5: the dialogue, then why would they be stopping at three? 244 00:12:18,280 --> 00:12:21,000 Speaker 5: So we just think again that the distribution of rate 245 00:12:21,080 --> 00:12:24,640 Speaker 5: outcomes is much greater to the downside than what the 246 00:12:24,679 --> 00:12:28,280 Speaker 5: market is currently pricing, not necessarily due to fundamentals, but 247 00:12:28,400 --> 00:12:31,280 Speaker 5: due to a shift in the approach for how the 248 00:12:31,280 --> 00:12:33,559 Speaker 5: FED will likely be thinking about setting monetary policy. 249 00:12:33,559 --> 00:12:34,760 Speaker 2: You know, I give you a lot of credit for 250 00:12:35,160 --> 00:12:38,000 Speaker 2: trying to force people to think out sign a conventional framework, 251 00:12:38,200 --> 00:12:40,240 Speaker 2: because I think that what we could say next year 252 00:12:40,320 --> 00:12:41,559 Speaker 2: could be very unconventional. 253 00:12:41,960 --> 00:12:44,960 Speaker 4: The idea of targeting something sub four point two percent 254 00:12:45,040 --> 00:12:49,120 Speaker 4: on the jobs market and ignoring the inflation possibility. I'm 255 00:12:49,120 --> 00:12:51,120 Speaker 4: just thinking, I mean, I understand why people are pro 256 00:12:51,240 --> 00:12:53,719 Speaker 4: risk in that environment, because why wouldn't you be pro 257 00:12:53,840 --> 00:12:56,000 Speaker 4: risk at a time where they're trying to juice growth 258 00:12:56,000 --> 00:12:58,120 Speaker 4: at the expense potentially of inflation. 259 00:12:58,640 --> 00:12:59,320 Speaker 1: I done it round. 260 00:12:59,559 --> 00:13:01,960 Speaker 2: I do think against the clock fifteen twenty seconds. 261 00:13:02,080 --> 00:13:05,400 Speaker 5: Okay, so what stops this? We think two things stop this. 262 00:13:05,520 --> 00:13:08,280 Speaker 5: Number one popular discontent with show inflation the voter. 263 00:13:08,520 --> 00:13:09,960 Speaker 1: But I don't know about you. 264 00:13:10,000 --> 00:13:12,280 Speaker 5: I would imagine that it takes above three percent inflation 265 00:13:12,440 --> 00:13:14,480 Speaker 5: to really bring it, you know, individuals out to the 266 00:13:14,480 --> 00:13:16,559 Speaker 5: ballot box on this issue five or two loss of 267 00:13:16,600 --> 00:13:18,679 Speaker 5: control on the back end, and you're going to be 268 00:13:18,679 --> 00:13:21,240 Speaker 5: looking at best in cutting auction sizes in that event 269 00:13:21,440 --> 00:13:23,120 Speaker 5: or potentially defit using the balance sheet. 270 00:13:24,080 --> 00:13:37,079 Speaker 2: Stay with us multplemperg Savannan's coming up after this, whether 271 00:13:37,120 --> 00:13:39,960 Speaker 2: sayre at New York, let me Cantrell, Pimcoke, letb me Gimonic, 272 00:13:40,000 --> 00:13:42,720 Speaker 2: good morning, September seventeenth. Will she be there? 273 00:13:44,280 --> 00:13:47,080 Speaker 6: Will Lisa Cook be there? I mean we think so, 274 00:13:47,760 --> 00:13:50,760 Speaker 6: we expect so. I mean think obviously this is how 275 00:13:50,760 --> 00:13:54,360 Speaker 6: the court will adjudicate. This is sort of any one's question. 276 00:13:54,440 --> 00:13:58,199 Speaker 6: But assuming that the Court has not sort of definitively 277 00:13:58,240 --> 00:14:01,920 Speaker 6: decided whether this is fraud, we believe that she will 278 00:14:02,160 --> 00:14:05,040 Speaker 6: most likely be there. I think a bigger question in 279 00:14:05,080 --> 00:14:08,880 Speaker 6: some ways is will the Council of Economic Advisors Chairman 280 00:14:09,080 --> 00:14:12,480 Speaker 6: Myron be there? He, of course is going to be 281 00:14:12,600 --> 00:14:16,400 Speaker 6: sitting for sitting for his Senate confirmation hearing, tomorrow. We 282 00:14:16,440 --> 00:14:19,800 Speaker 6: think that is quite aggressive. So Lisa Cook Pop most 283 00:14:19,920 --> 00:14:22,880 Speaker 6: likely will be there again sort of barring any sort 284 00:14:22,920 --> 00:14:27,600 Speaker 6: of core developments, but Chairman Myron probably will not be there. 285 00:14:27,800 --> 00:14:30,320 Speaker 4: How much is it going to be a contentious fight 286 00:14:30,480 --> 00:14:34,160 Speaker 4: with Stephen Myron in those hearings tomorrow versus just paving. 287 00:14:33,880 --> 00:14:35,560 Speaker 1: The way come on down? Yeah? 288 00:14:35,600 --> 00:14:37,440 Speaker 6: Well, I think we've talked about this before. Me The 289 00:14:37,480 --> 00:14:42,200 Speaker 6: Senate confirmation process is not necessarily perfunctory. I think the 290 00:14:42,240 --> 00:14:45,360 Speaker 6: market sort of just assumes that whomever the President any 291 00:14:45,400 --> 00:14:48,800 Speaker 6: president nominates, they'll likely get confirmed. And I think for 292 00:14:49,440 --> 00:14:53,520 Speaker 6: in most cases that is true, but for this particular position, 293 00:14:53,720 --> 00:14:57,600 Speaker 6: in this particular context, we do think that any sort 294 00:14:57,600 --> 00:15:02,200 Speaker 6: of phedenominee is going to be question by Democrats, of course, 295 00:15:02,800 --> 00:15:05,880 Speaker 6: but also by Republicans. And remember that the first step 296 00:15:05,920 --> 00:15:09,320 Speaker 6: towards Senate confirmation is through the Setate Banking Committee. And 297 00:15:09,480 --> 00:15:11,080 Speaker 6: you know that again might just sort of seem like 298 00:15:11,120 --> 00:15:13,520 Speaker 6: a bunch of kind of mumboed process mumbo jumbo, but 299 00:15:13,760 --> 00:15:17,640 Speaker 6: it's actually very important because assuming no Democrats vote for 300 00:15:18,840 --> 00:15:22,120 Speaker 6: Chairman Myron for Fred Governor, that means that he cannot 301 00:15:22,160 --> 00:15:24,840 Speaker 6: lose even one Republican vote, in order to advance to 302 00:15:25,040 --> 00:15:25,880 Speaker 6: the full Senate floor. 303 00:15:25,960 --> 00:15:26,880 Speaker 1: So this so. 304 00:15:26,880 --> 00:15:30,160 Speaker 6: Tomorrow will be very very important. We do expect that 305 00:15:30,200 --> 00:15:32,880 Speaker 6: he will get confirmed, but again probably not in this 306 00:15:33,040 --> 00:15:36,200 Speaker 6: very accelerated time frame, meaning that he'll probably the earliest 307 00:15:36,200 --> 00:15:38,880 Speaker 6: he'll be seated for that film is probably October. 308 00:15:38,920 --> 00:15:40,840 Speaker 4: The controversy over the FED has sucked up a lot 309 00:15:40,840 --> 00:15:42,760 Speaker 4: of oxygen in a lot of time, and I wonder 310 00:15:42,800 --> 00:15:44,040 Speaker 4: how much we ought to. 311 00:15:44,000 --> 00:15:46,080 Speaker 1: Be putting to the idea that we could be facing. 312 00:15:45,880 --> 00:15:47,600 Speaker 4: A government shutdown in a couple of days and I 313 00:15:47,640 --> 00:15:49,560 Speaker 4: will say for a couple of weeks. And I say 314 00:15:49,600 --> 00:15:52,360 Speaker 4: this at a time where globally we're talking about government dysfunction, 315 00:15:52,480 --> 00:15:54,240 Speaker 4: how much it could be affecting some of the fiscal 316 00:15:54,280 --> 00:15:57,280 Speaker 4: worries and markets. Are you expecting us to actually shut 317 00:15:57,320 --> 00:15:59,080 Speaker 4: down again? I mean, is this actually a worry that 318 00:15:59,120 --> 00:15:59,920 Speaker 4: we have to focus on. 319 00:16:00,040 --> 00:16:02,760 Speaker 6: Well, I think that the market is predesensitized because there 320 00:16:02,800 --> 00:16:06,840 Speaker 6: have been so many headfakes around government shutdowns, around debt 321 00:16:06,880 --> 00:16:10,479 Speaker 6: ceiling fights, and so I think it's sort of understandable 322 00:16:10,560 --> 00:16:13,840 Speaker 6: that the markets sort of a inre to even this discussion. 323 00:16:14,240 --> 00:16:16,920 Speaker 6: But we do think the risk for a shutdown is 324 00:16:17,080 --> 00:16:20,440 Speaker 6: higher this time around than it has been in probably 325 00:16:20,480 --> 00:16:24,440 Speaker 6: several years, and that's because just the friction between the 326 00:16:24,480 --> 00:16:28,760 Speaker 6: Republicans and the Democrats, the requirement. Remember that in order 327 00:16:28,800 --> 00:16:32,400 Speaker 6: to fund the government, we need at least sixty votes 328 00:16:32,760 --> 00:16:36,440 Speaker 6: in the Senate. That by definition will require some democratic 329 00:16:36,480 --> 00:16:37,720 Speaker 6: cooperation in the Senate. 330 00:16:37,920 --> 00:16:38,840 Speaker 1: You may even need. 331 00:16:38,800 --> 00:16:41,840 Speaker 6: Democratic cooperation in the House as well, And just given 332 00:16:41,920 --> 00:16:47,040 Speaker 6: that lack of comity, that friction maybe an understatement. I 333 00:16:47,080 --> 00:16:51,160 Speaker 6: do think that the Democrats may very well be willing 334 00:16:51,320 --> 00:16:53,880 Speaker 6: to take the political risk and shut down the government. 335 00:16:53,960 --> 00:16:56,960 Speaker 6: Now what we've seen from an economic perspective, it doesn't 336 00:16:57,000 --> 00:17:00,680 Speaker 6: really matter unless it is a prolonged shutdown. But again, 337 00:17:00,720 --> 00:17:04,160 Speaker 6: I don't think the risk of that is necessarily zero 338 00:17:04,760 --> 00:17:07,200 Speaker 6: just given some of these sort of political dynamics. 339 00:17:07,320 --> 00:17:08,880 Speaker 2: The issue we've been talking about in the last twenty 340 00:17:08,880 --> 00:17:10,439 Speaker 2: four hours is very much close to home for you. 341 00:17:10,480 --> 00:17:12,879 Speaker 2: It's in the bomb market for the team over at PIMCO. 342 00:17:13,119 --> 00:17:15,119 Speaker 2: What's been amazing for Lisa, me and others on this 343 00:17:15,200 --> 00:17:17,520 Speaker 2: program is to see tariffs go from something that was 344 00:17:17,560 --> 00:17:20,400 Speaker 2: bombed negative in April to bomb positive as we kick 345 00:17:20,400 --> 00:17:22,560 Speaker 2: off September. How are you going to take thinking about 346 00:17:22,600 --> 00:17:22,920 Speaker 2: that now? 347 00:17:23,040 --> 00:17:23,240 Speaker 1: Yeah? 348 00:17:23,280 --> 00:17:25,720 Speaker 6: Well, I think actually in all of these these things 349 00:17:25,720 --> 00:17:27,560 Speaker 6: that we just were talking about too, I mean, from 350 00:17:27,600 --> 00:17:30,240 Speaker 6: our perspective, really lead to what we've seen in the 351 00:17:30,240 --> 00:17:33,320 Speaker 6: bomb market, which is a curve steepening kind of bias, 352 00:17:33,840 --> 00:17:36,480 Speaker 6: and that is something that we've had, we've been positioned 353 00:17:36,520 --> 00:17:39,639 Speaker 6: for that really since the beginning of this year. Clearly 354 00:17:39,680 --> 00:17:41,639 Speaker 6: there might be even more room to run on this 355 00:17:41,840 --> 00:17:45,400 Speaker 6: in terms of the concerns around FED independence, the concerns 356 00:17:45,440 --> 00:17:48,720 Speaker 6: around inflation, the concerns about a government shutdown. We think 357 00:17:48,720 --> 00:17:53,280 Speaker 6: that all reinforces lisa steepening bias. But yeah, I mean 358 00:17:53,280 --> 00:17:55,320 Speaker 6: I think you know, you know, again, this is the 359 00:17:56,160 --> 00:17:57,800 Speaker 6: kind of where we think, this is sort of our 360 00:17:57,800 --> 00:18:01,120 Speaker 6: sweet spot in terms of being active managers being able 361 00:18:01,119 --> 00:18:03,520 Speaker 6: to find some value in the bond market. But again, 362 00:18:03,600 --> 00:18:05,560 Speaker 6: all of these things that we speak up in terms 363 00:18:05,560 --> 00:18:08,720 Speaker 6: of Washington really do reinforce this idea of a bond steepening. 364 00:18:08,840 --> 00:18:11,560 Speaker 2: How much revenue are they rising through terrists at the moment. 365 00:18:11,800 --> 00:18:13,520 Speaker 1: Well, there, I mean a lot. 366 00:18:14,160 --> 00:18:16,800 Speaker 6: I mean, it's you know, to date, it's around for 367 00:18:16,840 --> 00:18:20,639 Speaker 6: fiscal years around one hundred and fifty billion dollars. So 368 00:18:20,680 --> 00:18:24,000 Speaker 6: there is of course a question of whether the government 369 00:18:24,000 --> 00:18:26,639 Speaker 6: would have to return that money. I think that is 370 00:18:26,680 --> 00:18:30,560 Speaker 6: an open question, you know. Our view here is that 371 00:18:30,720 --> 00:18:32,760 Speaker 6: this sort of this this legal process that you all 372 00:18:32,760 --> 00:18:35,840 Speaker 6: have been talking about, will play itself out, will likely 373 00:18:35,840 --> 00:18:38,960 Speaker 6: go to the Supreme Court if that is adjudicated on 374 00:18:39,000 --> 00:18:41,119 Speaker 6: a sort of a normal timeframe. That means that we 375 00:18:41,160 --> 00:18:43,159 Speaker 6: could we may not see a ruling until actually a 376 00:18:43,240 --> 00:18:45,760 Speaker 6: June of twenty twenty six. So the up sort of 377 00:18:45,800 --> 00:18:47,800 Speaker 6: the upshot for the market here is, even though there's 378 00:18:47,800 --> 00:18:50,200 Speaker 6: a lot of noise back and forth around these tariffs, 379 00:18:50,520 --> 00:18:53,479 Speaker 6: our expectation is that they stay on at least in 380 00:18:53,560 --> 00:18:57,280 Speaker 6: some form or fashion for the first forestable future. And then, 381 00:18:57,320 --> 00:18:59,639 Speaker 6: of course, as we've talked about John before, the President 382 00:18:59,680 --> 00:19:02,119 Speaker 6: has a lot of other tools. So if the Supreme 383 00:19:02,119 --> 00:19:05,199 Speaker 6: Court decides in an expedated fashion that he cannot do this, 384 00:19:05,680 --> 00:19:08,000 Speaker 6: we think that he will put tariffs on using some 385 00:19:08,080 --> 00:19:09,160 Speaker 6: of these other lovers that. 386 00:19:09,119 --> 00:19:11,360 Speaker 1: He has stay with us. 387 00:19:11,680 --> 00:19:23,840 Speaker 2: More Bloomberg surveillance coming up after this. Let's turn to 388 00:19:23,880 --> 00:19:26,639 Speaker 2: the consumer. Kay McShane, a US retail analyst that Golment 389 00:19:26,680 --> 00:19:29,520 Speaker 2: Sachs writing this, we have seen growing concerns around the 390 00:19:29,560 --> 00:19:32,879 Speaker 2: health of the US consumer. However, we expect a combination 391 00:19:33,200 --> 00:19:36,440 Speaker 2: of job growth, easing interest rates, and more benign essential 392 00:19:36,480 --> 00:19:40,560 Speaker 2: spending to translate into resilient spending power. Kate joined us 393 00:19:40,600 --> 00:19:42,560 Speaker 2: now for more. Kate, welcome to the program. Let's just 394 00:19:42,560 --> 00:19:45,480 Speaker 2: build on your routelook. We've seen a market start to 395 00:19:45,520 --> 00:19:48,080 Speaker 2: believe in a pickup in this economy. Are you hearing 396 00:19:48,119 --> 00:19:50,359 Speaker 2: the same thing from the companies you follow? 397 00:19:53,920 --> 00:19:55,240 Speaker 1: I think we are. 398 00:19:55,400 --> 00:19:57,640 Speaker 7: I think there is some hesitation going into the back 399 00:19:57,680 --> 00:20:00,240 Speaker 7: half of the year in terms of what with the 400 00:20:00,320 --> 00:20:02,680 Speaker 7: higher prices we could see as a result of tyriffs 401 00:20:02,720 --> 00:20:03,920 Speaker 7: could mean for the consumer. 402 00:20:04,320 --> 00:20:06,120 Speaker 1: But as we enter into twenty twenty. 403 00:20:05,960 --> 00:20:09,160 Speaker 7: Six, and we published on this yesterday, we do expect 404 00:20:09,160 --> 00:20:12,360 Speaker 7: to see an accelerating cash flow for the consumer, especially 405 00:20:12,359 --> 00:20:13,840 Speaker 7: with that middle income consumer. 406 00:20:14,640 --> 00:20:18,280 Speaker 4: How much Kate has the expansion or the rosier outlooks 407 00:20:18,280 --> 00:20:21,240 Speaker 4: from the retailers come from the idea of more robust 408 00:20:21,320 --> 00:20:23,919 Speaker 4: demand from consumers, and how much has come from the 409 00:20:23,960 --> 00:20:27,240 Speaker 4: fact that they can raise prices and cut staff or 410 00:20:27,240 --> 00:20:30,280 Speaker 4: cut costs around the corners and maybe deploy a little AI, 411 00:20:30,720 --> 00:20:32,120 Speaker 4: deploy a little something else. 412 00:20:35,480 --> 00:20:39,439 Speaker 7: I do think there is a strong underlying demand that's 413 00:20:39,960 --> 00:20:43,359 Speaker 7: underpinning the sales that we're hearing and seeing from retailers. 414 00:20:43,359 --> 00:20:45,639 Speaker 7: What we've heard for the last couple of years is 415 00:20:45,680 --> 00:20:48,920 Speaker 7: that while the consumer is being choiceful, they do respond 416 00:20:49,359 --> 00:20:52,280 Speaker 7: to newness and to innovation. And we've heard so far 417 00:20:52,400 --> 00:20:54,880 Speaker 7: that back to school has been very strong as well, 418 00:20:54,880 --> 00:20:57,280 Speaker 7: and back to school is usually a very good future 419 00:20:57,280 --> 00:21:00,919 Speaker 7: indicator for how holiday will turn out. And so I 420 00:21:00,960 --> 00:21:04,439 Speaker 7: do think that there is a fairly healthy consumer that 421 00:21:04,600 --> 00:21:08,479 Speaker 7: is underpinning the demand for these discretionary sales. 422 00:21:08,760 --> 00:21:11,119 Speaker 4: How much Kate is this affected by some of the 423 00:21:11,200 --> 00:21:13,640 Speaker 4: uncertainty that we've seen. There was this expectation that heading 424 00:21:13,680 --> 00:21:15,440 Speaker 4: into the end of the year there would be more 425 00:21:15,520 --> 00:21:19,520 Speaker 4: certainty around policy, more certainty about what was coming down 426 00:21:19,560 --> 00:21:21,280 Speaker 4: the pike, and now we have the question about the 427 00:21:21,320 --> 00:21:24,320 Speaker 4: legality of some of the tariffs. We have questions around 428 00:21:24,840 --> 00:21:26,800 Speaker 4: what is going to happen with the budget deficit, a 429 00:21:26,840 --> 00:21:29,919 Speaker 4: government shutdown? I mean, is that basically not on the 430 00:21:29,960 --> 00:21:32,200 Speaker 4: minds of a lot of the executives that you're talking 431 00:21:32,240 --> 00:21:32,640 Speaker 4: to there. 432 00:21:35,720 --> 00:21:39,080 Speaker 7: Oh, I think the uncertainty is definitely something all of 433 00:21:39,080 --> 00:21:42,320 Speaker 7: our companies that we cover have spoken to. I think 434 00:21:42,359 --> 00:21:44,320 Speaker 7: there is a lot of uncertainty in terms of how 435 00:21:44,359 --> 00:21:46,119 Speaker 7: things will play out again. 436 00:21:46,080 --> 00:21:47,440 Speaker 1: In the back half of the year. 437 00:21:47,880 --> 00:21:50,640 Speaker 7: I don't think we've seen as much fear from the consumer, 438 00:21:50,680 --> 00:21:53,919 Speaker 7: though we haven't heard as much of pull forward in 439 00:21:54,040 --> 00:21:57,359 Speaker 7: anticipation of potentially higher prices in the back half of 440 00:21:57,400 --> 00:22:01,240 Speaker 7: the year. Everything seems somewhat normal when it comes to 441 00:22:01,320 --> 00:22:02,840 Speaker 7: the consumer pattern of spending. 442 00:22:03,760 --> 00:22:06,640 Speaker 4: Kay, I want to just ask, we've been talking all 443 00:22:06,680 --> 00:22:10,000 Speaker 4: morning about the proliferation of artificial intelligence and how a 444 00:22:10,080 --> 00:22:12,679 Speaker 4: number of different companies are using it and how it 445 00:22:12,720 --> 00:22:16,399 Speaker 4: is migrating from the Magnificent seven to the rest of 446 00:22:16,440 --> 00:22:19,680 Speaker 4: the names the index and beyond. Are you hearing about 447 00:22:19,720 --> 00:22:24,199 Speaker 4: tangible ways that retailers are using the latest technology to 448 00:22:24,440 --> 00:22:28,560 Speaker 4: either facilitate sales, reduce costs, or even just improve. 449 00:22:28,280 --> 00:22:30,360 Speaker 1: Processes to do. 450 00:22:32,080 --> 00:22:34,760 Speaker 7: Yes. I would say within the last couple of quarters, 451 00:22:34,760 --> 00:22:40,600 Speaker 7: we have definitely seen the narrative around AI accelerate in 452 00:22:40,680 --> 00:22:43,280 Speaker 7: terms of how these companies are thinking about the future. 453 00:22:44,000 --> 00:22:46,560 Speaker 7: We do hear it in the context of efficiency, I 454 00:22:46,600 --> 00:22:50,920 Speaker 7: think a little bit more than anything else. Think supply chain, 455 00:22:51,680 --> 00:22:55,960 Speaker 7: think e commerce and product descriptions. There's a lot of 456 00:22:56,040 --> 00:22:58,360 Speaker 7: things that they're talking about kind of early on here, 457 00:22:58,400 --> 00:22:59,840 Speaker 7: but I think we're going to hear a lot more 458 00:23:00,000 --> 00:23:03,160 Speaker 7: the next couple of quarters of again, how it's improving 459 00:23:03,160 --> 00:23:04,640 Speaker 7: efficiency at all these companies. 460 00:23:05,600 --> 00:23:09,160 Speaker 2: This is the Bloomberg Surveillance Podcast, bringing you the best 461 00:23:09,160 --> 00:23:12,480 Speaker 2: in markets, economics, and geopolitics. You can watch the show 462 00:23:12,520 --> 00:23:15,480 Speaker 2: live on Bloomberg TV weekday mornings from six am to 463 00:23:15,600 --> 00:23:19,359 Speaker 2: nine am Eastern. Subscribe to the podcast on Apple, Spotify, 464 00:23:19,520 --> 00:23:21,760 Speaker 2: or anywhere else you listen, and, as always, on the 465 00:23:21,760 --> 00:23:24,200 Speaker 2: Bloomberg Terminal and the Bloomberg Business app.