WEBVTT - Bloomberg Surveillance TV: July 9th, 2025 0:00:02.400 --> 0:00:06.760 Bloomberg Audio Studios, Podcasts, radio news. 0:00:11.600 --> 0:00:15.440 This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along 0:00:15.440 --> 0:00:18.680 with Lisa Bromwitz and Amrie Hortern. Join us each day 0:00:18.720 --> 0:00:22.239 for insight from the best in markets, economics, and geopolitics 0:00:22.400 --> 0:00:24.880 from our global headquarters in New York City. We are 0:00:24.920 --> 0:00:27.680 live on Bloomberg Television weekday mornings from six to nine 0:00:27.680 --> 0:00:31.280 am Eastern. Subscribe to the podcast on Apple, Spotify or 0:00:31.280 --> 0:00:33.919 anywhere else you listen, and as always on the Bloomberg 0:00:34.000 --> 0:00:37.880 Terminal and the Bloomberg Business App. John Parvan of Blackrock writing, 0:00:37.960 --> 0:00:40.360 we now see even more course to stay risk on 0:00:40.800 --> 0:00:43.720 and overweight US stocks. John joins us now for more. Joan, 0:00:43.760 --> 0:00:46.639 good morning, Good morning. Just explain yourself, sir, why. 0:00:46.960 --> 0:00:48.360 I mean it was done at the end of the day. 0:00:49.120 --> 0:00:51.839 You know, a huge amount of uncertainty. Of course, we've 0:00:51.880 --> 0:00:54.320 been going through that this year. We don't think there's 0:00:54.360 --> 0:00:58.120 much insight insight in saying that anymore. It's really about 0:00:58.160 --> 0:00:59.920 how you get a handle on this, and I guess 0:01:00.120 --> 0:01:02.840 strong conviction is that you know, when you look over 0:01:02.880 --> 0:01:06.360 the near term, we have more certainty about the outlook 0:01:06.440 --> 0:01:08.560 than we would have over the next few years. That's 0:01:08.560 --> 0:01:11.360 the very unusual environment we are in right now and 0:01:11.440 --> 0:01:14.000 over the near term. The world cannot change very quickly, 0:01:14.800 --> 0:01:17.560 so there'll be you know, noise, there will be headlines, 0:01:17.600 --> 0:01:20.400 there will be attempt to do stuff, but you know, 0:01:20.440 --> 0:01:21.520 there are immutable. 0:01:21.160 --> 0:01:24.080 Laws at play and that's going to shape the outcome. 0:01:24.120 --> 0:01:28.120 So we tend to, you know, over overall be you know, 0:01:28.200 --> 0:01:31.800 pro us assets and at the same time, like try 0:01:31.840 --> 0:01:33.559 to fade the extremes that you're going to see coming 0:01:34.040 --> 0:01:34.520 both ways. 0:01:34.720 --> 0:01:36.600 There is a distinction that when you say overall be 0:01:36.680 --> 0:01:40.520 pro us sets between stocks and bonds, what is the difference. 0:01:40.959 --> 0:01:43.800 Well, the difference is that like we like equities and 0:01:43.880 --> 0:01:46.800 bonds I think are are more tricky in this environment, 0:01:46.920 --> 0:01:50.240 and so US equities. We think there's like powerful mega 0:01:50.280 --> 0:01:51.400 forces that are at play. 0:01:51.680 --> 0:01:52.760 AI is a big team. 0:01:52.760 --> 0:01:55.640 We continue to believe in that that supersedes I guess 0:01:55.680 --> 0:01:58.720 the near term trained noise and so on. But when 0:01:58.760 --> 0:02:01.360 it comes to the bond and fixed income a bit. 0:02:01.440 --> 0:02:04.400 But but government modesl in particular, well, we have a 0:02:04.440 --> 0:02:06.680 lot of things that play that are for us pointing 0:02:06.680 --> 0:02:10.680 towards higher yields, higher long term meals term premium that 0:02:10.720 --> 0:02:13.079 needs to reappear, and so we remain on the way, 0:02:13.560 --> 0:02:15.560 you know, US treasuries as a result. 0:02:15.760 --> 0:02:18.600 Is this a US story or is this a global story? 0:02:18.760 --> 0:02:21.720 At a time when I believe that you prefer European 0:02:21.760 --> 0:02:24.280 bonds even though there's still issuing a lot of debt 0:02:24.320 --> 0:02:26.160 and facing some of the same kinds. 0:02:25.880 --> 0:02:29.240 Of issues, it is a US story to the extent 0:02:29.280 --> 0:02:31.760 that we think that's where the reprising is. 0:02:31.800 --> 0:02:34.440 The is the more more serious. 0:02:35.240 --> 0:02:39.079 It's also related to the greater uncertainty we have around 0:02:39.160 --> 0:02:44.200 the FED outlook, the inflation outlook, the debt, the debt picture, 0:02:44.240 --> 0:02:47.240 whereas in Europe, I mean, you know, inflation is on 0:02:47.280 --> 0:02:49.680 the way down. You can tell a very credible story 0:02:49.680 --> 0:02:52.840 for inflation will surprise on the downside. The CB has 0:02:52.840 --> 0:02:56.160 more room to cut even from here, so that leads to, 0:02:56.440 --> 0:02:59.000 you know, more support for Europe and bounds. 0:02:59.040 --> 0:03:03.640 But so way US equities underway US government bonds while 0:03:03.639 --> 0:03:08.200 you're overweight European government bonds, maybe underway European equities. I'm 0:03:08.240 --> 0:03:11.000 just wondering if you could give us a sense of 0:03:11.040 --> 0:03:13.240 the last time, just to sort of frame this out, 0:03:13.480 --> 0:03:17.760 that you are less exposed to US treasuries, particularly on 0:03:17.800 --> 0:03:20.919 the longer duration versus European ones. What was the last 0:03:20.960 --> 0:03:23.560 time you had this dynamic in black Rocks portfolio. 0:03:23.840 --> 0:03:28.880 Well, we've been for the last few years constantly underway 0:03:29.040 --> 0:03:31.560 US treasuries, so we've been of the view that inflation 0:03:31.800 --> 0:03:34.840 was a structural phenomenon this environment, that rates will need 0:03:34.880 --> 0:03:37.760 to adjust. There's a fiscal story that is not the 0:03:37.800 --> 0:03:40.440 new thing of this year. There's been a deficit story 0:03:40.480 --> 0:03:43.680 post pandemic that was putting pressure on yels. So that 0:03:43.760 --> 0:03:46.000 story has been with us for a few years now. 0:03:46.080 --> 0:03:48.000 That has been one of the strongest convictions we've been 0:03:48.040 --> 0:03:51.720 having throughout those that time. And there's been new layers 0:03:51.800 --> 0:03:54.960 now added to this, which which you know, it's unusual 0:03:55.040 --> 0:03:58.600 to say we've been structurally underweight US treasuries for so long, Right, 0:03:58.600 --> 0:04:01.120 it would have been tactically moving around that, but that's 0:04:01.120 --> 0:04:03.160 really like a lasting story for us. 0:04:03.200 --> 0:04:05.480 When it comes to these new layers. You're probably mentioning 0:04:05.520 --> 0:04:07.520 at least thinking about the one big beautiful bill. Why 0:04:07.560 --> 0:04:09.440 didn't we see more pushback from the bond market. 0:04:10.520 --> 0:04:12.920 Well, I think I think there is a lot of 0:04:13.400 --> 0:04:15.760 structural demand still for US treasury. 0:04:15.840 --> 0:04:19.520 So the reason why we're on the waight is not 0:04:20.360 --> 0:04:21.479 a bigger. 0:04:21.200 --> 0:04:25.440 Sensational story around US exceptionalism being questioned, or it's not 0:04:25.520 --> 0:04:28.719 about US Treasury is not playing their safe asset role 0:04:28.760 --> 0:04:30.479 as much as they had in the past, so we're 0:04:30.520 --> 0:04:33.600 not questioning the fundamental structure of the and there is 0:04:33.600 --> 0:04:36.359 a there's gonna be a need, a structural demand for this. 0:04:36.440 --> 0:04:40.279 So I think I think the markets are adjusting. There's 0:04:40.320 --> 0:04:42.880 no panic so far, and uh, but it's on the 0:04:43.000 --> 0:04:46.719 drifting up. I think there's room for digesting some. 0:04:46.560 --> 0:04:49.240 Of the of the big beautiful bill that. 0:04:49.240 --> 0:04:51.440 Came through, and then there's a lot of question now 0:04:51.480 --> 0:04:54.520 on how it's gonna come next. And so you know, 0:04:54.680 --> 0:04:56.360 I think I think it's gonna be up. Yield is 0:04:56.360 --> 0:04:58.800 gonna go up. There's it's gonna be absorb over time 0:04:58.800 --> 0:04:59.960 towards with with higher yield. 0:05:00.120 --> 0:05:01.920 You're saying this at a time when the president's talking 0:05:01.920 --> 0:05:05.360 about sending out more letters where tariff rates look very 0:05:05.360 --> 0:05:07.440 similar to what happened on Liberation Day. Do you think 0:05:07.520 --> 0:05:11.440 the Trump has primed the market to basically absorb his 0:05:11.520 --> 0:05:12.560 aggressive policies. 0:05:13.680 --> 0:05:14.719 Well, I don't know if I don't know if the 0:05:14.720 --> 0:05:17.560 President has prime the market in any way, but I 0:05:17.640 --> 0:05:22.080 think I think we have more conviction ourselves since April second, 0:05:22.080 --> 0:05:24.800 in April nine that what I talked about before, the 0:05:25.040 --> 0:05:28.720 immutable laws cannot change quickly in the near term, and 0:05:29.480 --> 0:05:31.200 one part of it is the bond market. To you, 0:05:31.240 --> 0:05:34.960 to actually connect to the previous discussion, the US realies 0:05:35.200 --> 0:05:37.919 on you know, foreign funding for for that that that 0:05:37.960 --> 0:05:41.559 we're talking about. That's maybe something that we would wish 0:05:41.640 --> 0:05:44.400 to be different, but that's the starting point that cannot 0:05:44.440 --> 0:05:47.400 change overnight, and I think that's going to limit the 0:05:47.440 --> 0:05:49.440 maximulus approach that you can expect to see. 0:05:49.480 --> 0:05:50.920 And we've seen that on April ninth. 0:05:51.920 --> 0:05:53.960 To us, it was the bond market that really like 0:05:54.279 --> 0:05:57.560 provided the discipline at that point, and we've seen it. 0:05:57.600 --> 0:05:59.760 So I guess that'd give us more conviction that going 0:05:59.800 --> 0:06:02.719 forward that's going to still be a constraint for the 0:06:02.720 --> 0:06:03.520 time being at least. 0:06:03.520 --> 0:06:05.680 That's an interesting thing to think about. Do you still 0:06:05.680 --> 0:06:08.040 believe that any potential self and treasuries will be self 0:06:08.080 --> 0:06:09.679 limiting because of that very fact? 0:06:09.880 --> 0:06:10.320 I think so. 0:06:10.400 --> 0:06:14.440 I think I don't think the US can sustain a 0:06:14.520 --> 0:06:17.359 massively higher yield, even though we are underweight and we 0:06:17.360 --> 0:06:19.080 think gilds are going to go up. It has to 0:06:19.120 --> 0:06:22.520 happen in a fairly gradual manner. And if there's any 0:06:22.600 --> 0:06:25.680 sign that this is like a very quick resetting. And 0:06:25.760 --> 0:06:27.880 we're in a world where like we have five percent 0:06:28.040 --> 0:06:30.880 ten years yield quickly on a sustained basis the whole 0:06:30.880 --> 0:06:33.919 budget ever at medic that is already pretty challenge, I 0:06:33.920 --> 0:06:34.800 think is out of the wind. 0:06:34.880 --> 0:06:37.640 So five percent is like a ceiling for you, Well, 0:06:37.680 --> 0:06:38.160 I think I. 0:06:38.120 --> 0:06:40.839 Think when we if we're sustainably in a five percent world, 0:06:40.880 --> 0:06:42.920 I think that changes the picture quite a bit. 0:06:42.960 --> 0:06:43.960 I don't think it's a ceiling. 0:06:44.000 --> 0:06:47.160 I mean will depend on other what the growth outlook 0:06:47.279 --> 0:06:50.000 is and and so on. So I don't think there's 0:06:50.000 --> 0:06:52.640 a hard ceiling. But it's a different world. If we 0:06:52.680 --> 0:06:55.240 are like adjusting to five percent sustained. 0:06:54.880 --> 0:06:56.320 We can I ask you, then, why is it so 0:06:56.440 --> 0:06:59.600 different given us only sixty basis points away? Why is 0:06:59.640 --> 0:07:01.240 sixty access points some important? 0:07:01.279 --> 0:07:03.680 I think it's it's not so much as sixty basis points, 0:07:03.680 --> 0:07:06.520 but like this is now the kind of the norm 0:07:06.720 --> 0:07:08.560 five percent that we expect to see over the next 0:07:08.600 --> 0:07:11.480 few years. That is a different world than were at 0:07:11.480 --> 0:07:15.800 four point four. It might bounce back and up, So 0:07:15.840 --> 0:07:17.200 that's more to sustained aspect. 0:07:17.280 --> 0:07:19.320 Even the team have been pretty consistent about this. Now 0:07:19.320 --> 0:07:21.000 for a number of years at a time when a 0:07:21.040 --> 0:07:22.800 lot of people have started to price in rate cuts 0:07:22.800 --> 0:07:24.680 back away than price them in. Again, you've been very 0:07:24.720 --> 0:07:28.200 consistent about this. There are structural reasons to expect inflation 0:07:28.280 --> 0:07:31.160 to remain higher, and you think bond yields remain elevated. 0:07:31.280 --> 0:07:33.840 How convinced the clients of that story right now when 0:07:33.880 --> 0:07:34.360 you tell it? 0:07:35.360 --> 0:07:40.640 Well, I think, well, I find that we're very convinced 0:07:40.920 --> 0:07:44.080 about this story, and I think you know, there's different 0:07:44.120 --> 0:07:46.480 views out there, but I think it's less now. We 0:07:46.560 --> 0:07:48.840 have less pushback than we would have had maybe you 0:07:48.880 --> 0:07:51.200 know when we started to order that view in twenty 0:07:51.240 --> 0:07:52.960 twenty two and so on. So I think this has 0:07:53.040 --> 0:07:57.520 become in some ways more consensus, so less push back, 0:07:57.560 --> 0:07:59.240 I guess in that sense. But yeah, no, I think 0:08:00.000 --> 0:08:03.240 I think that's not an easy. 0:08:03.080 --> 0:08:03.560 Hard to sell. 0:08:03.680 --> 0:08:05.800 Yues John, to appreciate your time. I here so much 0:08:05.880 --> 0:08:18.160 jump up on the of Black Croub with a S 0:08:18.360 --> 0:08:21.440 in New York at Mills franm and James Etkimonic morning. 0:08:21.680 --> 0:08:24.280 It is July ninth, and we have limited clarity how 0:08:24.360 --> 0:08:26.760 much additional clarity will we have on August one. 0:08:27.200 --> 0:08:29.280 We'll have more clarity. I don't think we'll have a 0:08:29.280 --> 0:08:31.200 lot of the details. I think the whole goal this 0:08:31.320 --> 0:08:33.880 year is to get as many MoU signed as possible, 0:08:34.000 --> 0:08:35.840 because I think what President Trump really wants to do 0:08:35.880 --> 0:08:37.320 is say I got a trade deal with one hundred 0:08:37.320 --> 0:08:40.040 and twelve countries. They're going to buy trillions of dollars 0:08:40.040 --> 0:08:42.600 worth of goods, even more trillions of dollars worth of 0:08:42.600 --> 0:08:44.640 market access, and we're going to work out all the 0:08:44.679 --> 0:08:47.240 details later. And I think that one of the good 0:08:47.280 --> 0:08:51.000 things about having this little extra time is what you 0:08:51.160 --> 0:08:53.440 need to do to get one of those MOUs is 0:08:53.559 --> 0:08:57.240 not all that complex. If you can work it out later, 0:08:57.800 --> 0:08:59.839 that's fine. And that's where I think the market is 0:08:59.880 --> 0:09:02.280 okay as long as we have this extra time sign 0:09:02.400 --> 0:09:04.720 the deal. And when you look at the letters that 0:09:04.720 --> 0:09:07.640 are going out, the new rates are not that much 0:09:07.720 --> 0:09:10.400 worse or sometimes even a little bit better than April second, 0:09:10.520 --> 0:09:11.840 So we're okay. 0:09:12.000 --> 0:09:14.680 The new rates are basically April second. It's basically Liberation 0:09:14.760 --> 0:09:17.160 Day part two. But in this letter, Trump does say 0:09:17.280 --> 0:09:19.920 that perhaps you could consider adjustment to this letter if 0:09:19.960 --> 0:09:22.559 you decide to come to the table, we may reconsider. 0:09:22.920 --> 0:09:26.120 But then yesterday he said it's August first. These are 0:09:26.120 --> 0:09:28.600 the rates we're not going to be adjusting. Which Trump 0:09:28.640 --> 0:09:30.440 do you believe the next Trump? 0:09:30.679 --> 0:09:33.800 I mean it's I mean, there is the only constant 0:09:33.840 --> 0:09:36.600 here has change. I mean, so I don't necessarily think 0:09:36.640 --> 0:09:39.240 that August first is necessarily a hard and true date. 0:09:39.280 --> 0:09:41.280 I don't necessarily think these rates are hard and true. 0:09:41.559 --> 0:09:43.920 I do think that there is going to be three 0:09:43.920 --> 0:09:46.760 buckets here. Bucket number one, new revenue. We have a 0:09:46.880 --> 0:09:50.720 huge new tax bill that is costing trillions of dollars, 0:09:50.720 --> 0:09:52.360 the most expensive bill in the history of the country. 0:09:52.720 --> 0:09:55.800 He needs that revenue. Bucket number two protect national security. 0:09:55.840 --> 0:09:58.160 Those are the sectorial terrors. If we are at war 0:09:58.160 --> 0:09:59.719 with China, what do we need to make here in 0:09:59.720 --> 0:10:02.800 the En States? And Bucket number three has always been 0:10:02.920 --> 0:10:05.480 can we use the force of the US economy to 0:10:05.600 --> 0:10:09.120 force policy change elsewhere? That piece is always going to 0:10:09.160 --> 0:10:11.480 be the hardest part, and that's what all these negotiations 0:10:11.480 --> 0:10:11.800 are about. 0:10:11.800 --> 0:10:15.520 Amory, So who gets a deal today or tomorrow? I'm 0:10:15.520 --> 0:10:18.320 thinking of three In particular, Japan was supposed to but 0:10:18.360 --> 0:10:20.800 they got the same second rate. India, I was getting 0:10:20.800 --> 0:10:22.800 tons of text messages yesterday saying it was imminent. I 0:10:22.840 --> 0:10:24.880 still see no language on it in the European Union, 0:10:24.880 --> 0:10:27.640 which seems to capitulate on a ten percent across the 0:10:27.640 --> 0:10:28.240 board tariff. 0:10:28.320 --> 0:10:28.520 Yeah. 0:10:28.520 --> 0:10:31.000 I think the most likely is India than Japan, and 0:10:31.040 --> 0:10:33.640 I think the least likely is the EU. I think 0:10:33.640 --> 0:10:35.560 one of the issues with the EU is the United 0:10:35.600 --> 0:10:37.920 States is asking Europe to make a decision. Are you 0:10:37.960 --> 0:10:40.280 with the United States or are you with China? And 0:10:40.320 --> 0:10:42.839 there are competing interests. You look at certain countries and 0:10:42.840 --> 0:10:45.000 they're like, absolutely the United States. A lot of that 0:10:45.080 --> 0:10:47.960 economy is tied to US. Others have more exports going 0:10:48.000 --> 0:10:52.040 into China because they are a block with disparate interest 0:10:52.280 --> 0:10:54.199 I think that's going to be very hard to get 0:10:54.240 --> 0:10:57.600 anything on the tape by April first. But I do 0:10:57.640 --> 0:11:01.360 think that Japan, India, Usustralia, a large part of the 0:11:01.400 --> 0:11:04.400 GDP globally, can get a deal by August first. 0:11:04.520 --> 0:11:06.880 Don't want to get into psychoanalysis here. What is it 0:11:06.880 --> 0:11:09.719 though about letters? Because it's always a letter? Why does 0:11:09.760 --> 0:11:11.840 everybody get a letter? And what is the importance of 0:11:11.880 --> 0:11:16.280 this versus just a verbal warning maybe a presidential tweet? 0:11:16.640 --> 0:11:19.040 You know, what is it about a physical. 0:11:18.640 --> 0:11:21.600 Letter getting sent out that it has some import for 0:11:21.679 --> 0:11:22.320 President Trump? 0:11:22.440 --> 0:11:24.520 Yeah, I think it shows action. I think it shows 0:11:24.559 --> 0:11:26.760 the kind of the ability to kind of flesh it 0:11:26.760 --> 0:11:29.559 out a little bit more. You know, these letters, if 0:11:29.559 --> 0:11:32.200 you read them, they're basically the same, and they are 0:11:32.679 --> 0:11:36.920 very clearly dictated exactly by him and probably edited by him, 0:11:36.920 --> 0:11:40.120 because it's like you see Trump's voice in these letters. 0:11:40.480 --> 0:11:42.640 I do think that there has been a concern by 0:11:42.679 --> 0:11:45.480 President Trump that the taco trade is out there and 0:11:45.520 --> 0:11:48.400 that he always caves. So he wants to show and 0:11:48.480 --> 0:11:51.080 project the strength that if you don't come to the table, 0:11:51.400 --> 0:11:54.520 this is what you get. I think the biggest questions 0:11:54.520 --> 0:11:57.480 from the you know, social media posts in these letters 0:11:57.640 --> 0:11:58.640 are some of the details. 0:11:58.640 --> 0:11:59.720 What does it mean. 0:11:59.520 --> 0:12:02.920 That you'll have higher tariffs if there's transhipment. We do 0:12:03.000 --> 0:12:05.839 not have a structure in place to deal with kind 0:12:05.880 --> 0:12:08.800 of how that country of origin would be different. That's 0:12:08.840 --> 0:12:10.679 why I think the details here are going to take 0:12:10.679 --> 0:12:13.240 a long time. But he wants to say, here are 0:12:13.320 --> 0:12:16.880 the general parameters. This is what I want. You come 0:12:16.920 --> 0:12:18.599 to the table, you tell me what you're going to 0:12:18.679 --> 0:12:18.920 give me. 0:12:19.000 --> 0:12:21.400 I'm taking, not its parenting No, it's because I plan 0:12:21.520 --> 0:12:23.680 on sending letters to the household and we do have 0:12:23.679 --> 0:12:26.400 a complaint box already. I am wondering going forward whether 0:12:26.440 --> 0:12:28.920 the reaction or non reaction that we're seeing in markets 0:12:28.960 --> 0:12:30.880 is sort of emboldening him to send some more letters 0:12:31.120 --> 0:12:32.680 and to raise those rates up even higher. 0:12:32.840 --> 0:12:33.000 Yeah. 0:12:33.040 --> 0:12:35.000 I think that's one of the big questions from clients 0:12:35.080 --> 0:12:38.880 yesterday at Raymond James is that after April second, what 0:12:39.040 --> 0:12:41.520 got him to pause these on April ninth was the 0:12:41.520 --> 0:12:44.920 market reaction. And we've had these conversations so many times. 0:12:45.080 --> 0:12:47.440 What caused Congress in the past to raise the debt 0:12:47.440 --> 0:12:49.920 limit is the market reaction? And so are you in 0:12:50.000 --> 0:12:52.640 this dangerous place that if there is no market reaction 0:12:53.160 --> 0:12:56.000 then you can get even more aggressive, And at what 0:12:56.200 --> 0:12:59.120 point is a mistake made. I don't think we're close 0:12:59.160 --> 0:13:01.280 to that, but I do think there's always a threat 0:13:01.360 --> 0:13:04.360 that if you need the market to correct and you 0:13:04.400 --> 0:13:07.199 don't get it, then you get more bold. The biggest 0:13:07.320 --> 0:13:09.640 change I've seen so far in this market is early 0:13:09.679 --> 0:13:13.160 on in administrations, they mostly focus on process. Later on 0:13:13.280 --> 0:13:15.720 they focus on outcomes. Right now, this is a market 0:13:15.880 --> 0:13:17.840 that is saying, all right, the process might be changing, 0:13:17.880 --> 0:13:20.440 but the outcome is not likely to change. The only 0:13:20.440 --> 0:13:22.200 way we get a market reaction if they think the 0:13:22.240 --> 0:13:25.400 outcome is actually going to materially worse than what they 0:13:25.440 --> 0:13:26.200 actually expected. 0:13:26.200 --> 0:13:28.480 What would a mistake be How do you characterize that? 0:13:28.559 --> 0:13:30.600 Yeah, I think a mistake would be actually going to 0:13:30.720 --> 0:13:33.520 fifty percent with the EU in that sticking on for 0:13:33.559 --> 0:13:35.400 a period of time. When I was in Europe two 0:13:35.440 --> 0:13:38.319 weeks ago speaking with investors at Raymond James, there is 0:13:38.360 --> 0:13:40.520 a real concern about the weakness of the dollar and 0:13:40.679 --> 0:13:43.960 exports getting more expensive coming from Europe into the United States, 0:13:44.520 --> 0:13:47.160 and then you have tariffs on top of that that 0:13:47.200 --> 0:13:50.559 could be a recession. Does that kind of have unintended 0:13:50.559 --> 0:13:53.959 consequences we talk about, you know, looking at yields here 0:13:53.960 --> 0:13:56.800 in the United States, we saw after April second, the 0:13:56.840 --> 0:14:00.559 thirty year go above five percent. Does the thirty year 0:14:01.080 --> 0:14:04.320 in the ten year start spiking as we start issuing 0:14:04.400 --> 0:14:06.920 debt over the next couple months to refill the Treasury 0:14:06.960 --> 0:14:09.440 General account, and does he put pressure on the Fed 0:14:09.720 --> 0:14:11.839 to build that out and then there is a bond 0:14:11.880 --> 0:14:14.720 market reaction. Those are the things that I think are 0:14:14.760 --> 0:14:17.400 the biggest debates for the second half of this year 0:14:17.480 --> 0:14:18.280 is kind of the rate. 0:14:18.160 --> 0:14:20.320 Path that last point the federalist of what are you 0:14:20.400 --> 0:14:21.680 ton of clients about the FED rice? 0:14:22.240 --> 0:14:24.440 So I think that I know that there is news 0:14:24.440 --> 0:14:27.120 out this morning that Hassard and warsh are considered to 0:14:27.160 --> 0:14:30.240 be the front runners. I'd put Waller in Bessent into 0:14:30.280 --> 0:14:33.280 that camp as well. I think Donald Trump loves people 0:14:33.320 --> 0:14:35.760 to compete for the job. What I'm watching to see 0:14:35.800 --> 0:14:38.360 is does Michael Barr step down as one of the 0:14:38.400 --> 0:14:41.440 FED governors now that he's no longer by seer for supervision. 0:14:41.960 --> 0:14:45.680 If he does, Hassard or worsh is probably going to 0:14:45.680 --> 0:14:49.760 get that seat. Coogler another governor her term expires in January, 0:14:49.960 --> 0:14:53.160 that is probably the second seat. And then all four 0:14:53.200 --> 0:14:56.240 compete to see who can be the Fed cheer come 0:14:56.280 --> 0:14:59.080 the May expiration of Powell seat and who is going 0:14:59.120 --> 0:15:01.240 to be the most ubish, who's going to be the 0:15:01.280 --> 0:15:04.280 most supportive of his agenda gets it. It's a perfect 0:15:04.320 --> 0:15:07.240 scenario for Trump to have another game of Apprentice, but 0:15:07.320 --> 0:15:08.400 this time for Fetcher. 0:15:08.440 --> 0:15:12.320 Oh Gamath thrines equally as Bruitsald that situation, some names 0:15:12.320 --> 0:15:14.160 are more credible than others. Let's put it that way. 0:15:14.280 --> 0:15:16.400 Yeah, or Bachelor. I mean, who gets a rose? 0:15:16.480 --> 0:15:16.600 Right? 0:15:16.640 --> 0:15:18.520 I mean, we could put this on a whole host 0:15:18.560 --> 0:15:21.720 of different shows. This does raise a question about how 0:15:21.760 --> 0:15:23.480 much the market's going to be voting to your point, 0:15:23.680 --> 0:15:25.360 you know who they're going to vote off the Island? 0:15:25.880 --> 0:15:29.160 Love Island? Maybe another one. Yesterday when the President was 0:15:29.240 --> 0:15:31.680 once again saying that j Powell is terrible, he then 0:15:31.720 --> 0:15:33.920 looked over to Scott Best and said, I like you better. 0:15:34.200 --> 0:15:36.720 And that made me think, oh, maybe Besson is back 0:15:36.720 --> 0:15:38.320 in this race, and it's not just the Kevins. 0:15:38.440 --> 0:15:40.200 Can you mention Theisconsin Love Islands? I was just going 0:15:40.240 --> 0:15:40.760 to say, this is. 0:15:40.680 --> 0:15:42.600 Like you mentioned this will I mean, I mean it 0:15:42.640 --> 0:15:45.240 just feels, you know, like you know, playing for the 0:15:45.320 --> 0:15:47.280 love and you only get love if you. 0:15:47.240 --> 0:15:49.640 Say what I want, and that's sort of a toxic relationship. 0:15:49.720 --> 0:15:50.680 You watched Love Island. 0:15:50.800 --> 0:15:53.200 Want to know more about the complaint books? Save that 0:15:53.240 --> 0:15:53.800 for another time. 0:15:53.920 --> 0:15:56.040 It's true, it comes out once a week, Okay. 0:15:55.920 --> 0:16:08.200 At Mosen Raymon Jenks that thank you seek joining us 0:16:08.200 --> 0:16:11.320 Matt to discuss the film of Trump tried advisay on 0:16:11.360 --> 0:16:12.880 good to see you, Good to see you. I'm sure 0:16:12.880 --> 0:16:14.920 you've been up whole night. What's the advisor clods. 0:16:15.720 --> 0:16:18.000 My advice to clients is to take the day off, 0:16:18.200 --> 0:16:20.720 see how this plays out, and then come back in 0:16:20.760 --> 0:16:22.920 two days and a week and see what the teriff 0:16:22.960 --> 0:16:26.320 landscape looks like. Because right now this is the endgame 0:16:26.520 --> 0:16:30.160 of a massive, massive negotiation, and there's just as mixed 0:16:30.200 --> 0:16:32.440 substance as there is theater. So if you're making real 0:16:32.480 --> 0:16:35.200 business decisions, you're best just taking a beat and waiting 0:16:35.240 --> 0:16:36.480 it out and see where things land. 0:16:36.600 --> 0:16:39.120 Having worked for Trump, is this the final moment where 0:16:39.160 --> 0:16:43.440 he's trying to extract the most concessions from all these countries? 0:16:44.160 --> 0:16:46.240 I think that there is a lot of that in 0:16:46.280 --> 0:16:48.880 this And what's so challenging about watching Trump from the 0:16:48.920 --> 0:16:52.240 outside and what makes him such an interesting negotiator is 0:16:52.280 --> 0:16:55.200 that there's just as much mix of substance as tactics, 0:16:55.280 --> 0:16:57.560 and so trying to understand the forest or the trees 0:16:57.600 --> 0:16:59.640 can be very difficult. But I do think this is 0:16:59.680 --> 0:17:02.600 the end game, and I think he's trying to say, Okay, 0:17:02.720 --> 0:17:05.600 country X, country Y, You've given me this deal, but 0:17:05.720 --> 0:17:08.400 are you really going to give me more? And that's 0:17:08.440 --> 0:17:10.120 what he's trying to get. Who was the White House 0:17:10.160 --> 0:17:12.720 most focused on right now? In terms of the foreign 0:17:12.800 --> 0:17:16.240 trading partners. So they've talked about these eighteen countries. We've 0:17:16.240 --> 0:17:19.760 heard anywhere from eighteen to thirty important trading partners. I 0:17:19.760 --> 0:17:22.880 think those are the ones that the administration's really focused 0:17:22.880 --> 0:17:24.080 on trying to land a deal with. 0:17:24.359 --> 0:17:26.360 You think this is the end game, so that we're 0:17:26.359 --> 0:17:28.600 going to get some clarity on August first? Is that 0:17:28.640 --> 0:17:32.080 what you're telling clients that essentially this isn't just a deadline, 0:17:32.119 --> 0:17:34.000 it's going to be moved to September fourth, and then 0:17:34.080 --> 0:17:36.040 the October first, and then on and on. 0:17:36.520 --> 0:17:39.919 Well both right, So at the same time as we 0:17:40.040 --> 0:17:42.720 do have this August first deadline in the President doubled 0:17:42.720 --> 0:17:44.919 down yesterday on true Social and said no, this is 0:17:44.920 --> 0:17:47.879 a firm deadline. They have also said that if you 0:17:47.880 --> 0:17:50.160 don't like your terif rates six months a year, two 0:17:50.200 --> 0:17:52.000 years from now, you can come back and try to 0:17:52.040 --> 0:17:55.200 lower that through negotiations. So I think we'll certainly see 0:17:55.240 --> 0:17:57.879 more certainty, and I'm actual actually hopeful that we do 0:17:58.240 --> 0:18:01.240 well in advance of August first, because has Customs needs 0:18:01.280 --> 0:18:04.320 time to adjust the HTS give importers notice of what 0:18:04.359 --> 0:18:06.560 those tarif rates are, and that process alone can take 0:18:06.560 --> 0:18:07.359