00:00:00 Speaker 1: Bloomberg Audio Studios, Podcasts, radio news. This is the Bloomberg Surveillance Podcast. Catch us live weekdays at seven am Eastern on Apple CarPlay or Android Auto with the Bloomberg Business app. Listen on demand wherever you get your podcasts, or watch us live on YouTube. 00:00:27 Speaker 2: James Karen joins us right now, thrilled to have him on with Morgan Stanley of course their CIO Cross Assets solutions. 00:00:34 Speaker 3: Jim Tomorrow Bloomberg Money twelve noon, and your. 00:00:38 Speaker 2: Denny will be with us. Let's get right to the yard Denny moment. Are the bond vigilantes at work? Jim Karen, good morning. I think the bond vigilantes are at work. You know, clearly oil prices are higher. It's dragging up US treasure yields. But look, I mean, you know you were mentioning it, mentioning it earlier. Dollar yen is also up around three. Global bond yields are up, right, So I don't think this is you know, we should frame this story as not an exclusive US story, but this is more of a global macro story in terms of what's taking place. It seems like inflation, you know, is moderating, but it's still high, and I think the I think the takeaway here is that inflation is going to likely stay higher for longer given what's happening in energy prices, and that resets the entire yield curve. It shifts the entire yeal curve a bit higher, Whereas we had a little bit of a break, you know, over the past couple of weeks when oil prices went down, and I think that's just reasserting itself. And you know, with all of the issues that we're getting from all of the corporates, in particularly some of the technology, large technology companies, there's a lot of weight on these bond markets, and I think that they're acting very rationally at this point. 00:01:50 Speaker 4: So, Jim, what does all that mean for our new fit chair Kevin Warsh, How do you think he's viewing what's going on out there? 00:01:59 Speaker 3: Yeah, it's a great question. 00:02:00 Speaker 2: Right. 00:02:00 Speaker 5: So when we think about what is pushing inflation potentially higher, it's a supply shock, right, It's about oil, and it's about energy. 00:02:09 Speaker 3: Prices and things like that. 00:02:11 Speaker 5: Monetary policy is there to really address a demand shock, right, So if you have high wages, you know, an overheating economy, and you know you know, wages going up, people are spending money, then yes, high interest rates can certainly help that. But when you have high oil prices as one of the culprits that's pushing inflation higher. Ultimately, what you're saying is that higher oil prices is a headwind to the economy. So therefore, with these higher oil prices, maybe we should hike rates and slow the economy further. Like, it doesn't really match up, right, This is a supply side shock. Monetary policy is generally there for demand side shocks, So I think it makes Warsh's job a little bit complicated. What he's going to have to look for is are these energy higher energy prices seeping into core inflation is becoming heavily embedded in the overall inflation and inflation expectation. Now we saw this recently, right, if there's something that gets resolved in the Middle East, oil prices can come down thirty dollars a barrel. Right, that's not the kind of thing that the FED should necessarily think about hiking into, at least not at this point. 00:03:19 Speaker 4: So, given your world cross asset solutions, what kind of screens well for you guys these days? How do you think about that. 00:03:28 Speaker 3: Yeah, it's so. 00:03:30 Speaker 5: The way that we look at this is that we can't just rely on bonds as like the easy hedge. 00:03:36 Speaker 3: Right, it used to be just a great hedge. 00:03:38 Speaker 5: Just get long bonds, don't think about it, you know, buy the index and just hold this and be a very passive bond investor. In this type of an environment, what you're seeing is that bond yields are rising and that's hurting the prices and that's hurting overall performance. So therefore what we're seeing is that we want to be underweight interest rate risk, So underweight bonds, underweight duration will. 00:04:00 Speaker 3: Own some high quality. 00:04:01 Speaker 5: But on the equity side, the areas that we think actually make a lot of sense are the quality sectors. Some of the value sectors values unperformed, you know, growth by about ten percent this year. It's not all about the hyperscalers anymore. It's about the broader economy, healthcare. We really like the healthcare sector, and actually the consumer. The consumer is actually holding up pretty well with all of this. So there are a lot of things to think about, but we have to broaden our lens. 00:04:27 Speaker 2: I love the idea of supply side analysis versus demand side and that we can all walk away and say, oh, it's just idiosyncratic of the war or whatever. There's a point, there's a tip point on yield, Jim Carron, where price goes down and things change on a ten year yield. Do you have in your head a critical yield point off of where are we right now? My eyes are feeling me four point six y nine wow percent? Do you have a number in your head? So? 00:04:57 Speaker 3: I do, And I'll first say that it's a moving target. 00:05:00 Speaker 6: Right. 00:05:00 Speaker 5: So if we if we were having this conversation six months ago, I'd say that this level would. 00:05:05 Speaker 3: Be a you know, a tipping point. 00:05:08 Speaker 5: But what we realize is that the economy has grown, earnings have been very strong, we have higher nominal growth. We're living in a higher nominal world these days. 00:05:17 Speaker 2: Right. 00:05:17 Speaker 5: Nominal GDP growth is about six percent right now, which is pretty good. So that tipping point for ten year treasury yields that turns things, you know, much more poorly. I you know, right now, my estimate would be around four point eighty five percent. So we're we're close, but we're not there yet, Jim. 00:05:36 Speaker 4: I would argue, from my perspective, no one's got a better tech call than the greater Morgan Stanley complex. Here we saw one of the leaders last night, Alphabet reports some numbers and they took their CAPEX numbers higher as which the AI and it stops trading down five percent this morning. What do you guys think is the market's AI call these days? 00:05:57 Speaker 3: Yeah? 00:05:57 Speaker 5: So, so what the market's getting very concerned about out is all of us spend, all of us CAPPEC spend. Will it turn into a return on investment in our OI as we like to say, And that's not and that's not abundantly clear that you just if you throw more money that you get a better return, you know, in an investment. And the read through on this whole thing is does this come to a does this come to a batman? In other words, in order to have the capax, you might have to issue more bonds. Therefore you become you know, more indebted as a company if you're leveraging your balance sheet in order to do that. And then if you don't get the overall return on investment, then you major repricing in the equity markets. And that's the crescendo that people are worried about right now. We're not there yet, but that would be This would be the sign. 00:06:48 Speaker 2: Jim Karen, thank you so much. Just a terrific brief this morning, against with forever Morgan Stanley. Stay with us. More from Bloomberg Surveillance coming up after this. 00:07:06 Speaker 1: You're listening to the Bloomberg Surveillance Podcast. Catch us live weekday afternoons from seven to ten am Eastern. Listen on Applecarplay and Android Otto with the Bloomberg Business app, or watch us live on YouTube. 00:07:19 Speaker 2: Matt Bloxham with this down Senior analyst Bloomberg Intelligence Paul. For those of you on radio, you just can't see it. I mean he is such a stud, Paul, and he looks like you could be in. 00:07:28 Speaker 3: The Burnham cabinet exactly. 00:07:30 Speaker 2: I mean he just looks like you know, ten downing stream. We'll call we need Matt Bloxham to do technology. Man, I'm gonna cut to the ad ludload Chase I read about Robotaxi. It's it just I'm not taking Tesla's Robotaxi from Heathrow to the hotel across from Queen Victoria Street, am I no. 00:07:54 Speaker 7: If you are saying not for a long time, unt see, we got quite a lot of way, my test thing going on in the city. So you do you see quite a few more of those cars around, but with people in them making sure that they they drive safely. But I think it's it's quite a cultural shift for a lot of people. I think this kind of concept of driverless taxes. 00:08:15 Speaker 3: Is it runny proof of concept. 00:08:19 Speaker 7: I mean, there's obviously, you know, some some good results in the US with with WEIMO. I think in Europe nothing, nothing really yet. And I think again, culturally we're quite different over here, so I think that there's a long way to go before there's kind of wide scale acceptance. Obviously, you know, I think even even if you saw an initial kind of positive reaction to it, I think that would probably be put down as a kind of curiosity value, and you'd have to see the kind of longer term trend just kind of see people really moving it. I don't see it personally. It's a kind of a big thing for quite some years to come. 00:08:55 Speaker 4: Matthew, you might be surprised because we know each other, but I actually took a weimom in Santa There, California, to an in and out Burger and back and I survived. So I mean it's coming, my friend. 00:09:06 Speaker 7: Yeah, it's definitely coming exactly, Matthew. 00:09:10 Speaker 4: You know, we heard from Google last night some people called alphabet. I'm not sure where that came from. But there was a time when higher kapex was rewarded by the stock market. I'm not sure that's the case anymore. When you talk to institutional investor clients, how are they thinking about AI these days? Do they want to see more investment or did they want to see return? Where are we in that discussion? 00:09:34 Speaker 7: I think they want to see more data about the return, you know. I think conceptually people get that you need to spend to generate revenue, but I don't think they're quite yet seeing enough of revenue being generations off the spend that's happening. And I think, if anything, that the Google capex upgrade today relative to the revenue growth is not that you know that there's a widening day connect there. And I think one of the numbers people were looking at quite closely was the order pipeline, and that grew a bit, but it didn't grow spectacularly. So I think there's more needed to show that there's a direct link between increased spending and capital and revenue. 00:10:15 Speaker 2: When you look at all this madness, there's got to be losers. 00:10:18 Speaker 3: What's the when of when we work out the losers? 00:10:23 Speaker 2: I think the railroads of the American Railroads, Matt coming out of eighteen eighty eighteen ninety, it took little forty years to get rid of them. Are we going to weed out the tech losers? Doug cast calls at the stack they're investing in all this stuff? Okay, fine, are we going to do this in two years or twenty years? 00:10:43 Speaker 7: I think it's more like the two year time frame, to be honest, you know, I think the next twelve to eighteen months is a really important part of the cycle for enterprise spending on AI and more scrutiny about where it makes sense where it doesn't. You know, we see lots and lots of anecdotal evidence coming out about companies burning through their token budgets and raining in where they're guiding people to use AI in their businesses, and they're going to be the CFOs are going to be pushing people to kind of really demonstrate those savings and those benefits much more clearly. And so if that makes things a bit more kind of just kind of discerning about where where they use AI. Then we potentially in a position where we have over capacity. It will go from undercapacity to overcapacity quite quickly. And that's where all these kind of potential big investments we're seeing in chip capacity and dacent capacity start to kind of maybe look a little bit misjudged. 00:11:45 Speaker 4: We saw, you know, a real bombshot from IBM Matthew a couple of weeks ago when they pronounced their numbers in the stockfeld the most ever in the history of IBM. I think that opened eyes for a lot of investors, like, oh, this capex you know, funnel is not like there's. 00:12:00 Speaker 3: Limits to it. 00:12:01 Speaker 4: I mean, so, how do you think about tech spending overall, because it's it doesn't seem like all this AI stuff is incremental. It may be coming from some. 00:12:09 Speaker 3: Other areas of the tech stack. 00:12:10 Speaker 4: How do you think about that? 00:12:12 Speaker 7: Yeah, that's right, and I think you to a large degree see that in the IT services space. So if you look at the recent from Accenture and Vist other art services companies, they're still seeing incredibly muted demand for traditional IT services. So there's a clear evidence I think that spending is being shifted to AI away from what has seen perhaps now deprioritized technology transformation projects. And I think that's what we've seen play out with IBM two, is that, Yeah, you know, their mainframe business, which historically had been growing quite well, certainly hit a bit of a brick ball because budgets are not limitless, and companies are realizing that they need to kind of prioritize things and there are the more important parts of the AI stack they have to spend money on. 00:12:56 Speaker 2: Which company forward are you most focused on? After seeing Google yesterday? 00:13:03 Speaker 7: Yeah, I think we're kind of very much looking at the Meta results and the Amazon results because I think it's do they Googles kind of raised them essentially in terms of Capex and do they kind of match that Kapex grace and you know, then we get into another Capex cycling. I think that stretches things even more. 00:13:21 Speaker 2: Matt, Thank you, thank you, thank you so much. Matt Bloxham with us from Queen Victorious greet Stay with us. More from Bloomberg Surveillance coming up after this. 00:13:38 Speaker 1: You're listening to the Bloomberg Surveillance podcast. Catch us live weekday afternoons from seven to ten am Eastern Listen on Applecarplay and Android Auto with the Bloomberg Business app, or watch US live on YouTube. 00:13:51 Speaker 2: Joining US now from HSBC Dearren may Or, their senior FX strategist. I need to explain that the heritage of HSBC in looking at the dynamics of the global markets a second to none. What is a distinction you're writing about right now? Are you linking in commodities? Are you linking into Spain one? The World Cup? What's the distinctive feature right now? 00:14:16 Speaker 8: Yeah? Strange we haven't managed to weave that last one in good to be back by the way. I think one of the distinctions I quite like at the moment is between a good interest rate hike and a bad interest rate hike. And you know, at the moment we've got renewed escalation and oil prices, right, so everybody's getting more hawkish about ECB banking and the FED. Normally, for currency markets that's a wash, right because your rate differentials don't move. That's the currency angle. But I think a lot in terms of how the currency market should react to that will be determined by how activity is going into the hike, right, So you have a FED where activity is relatively resilient, the labor market's resilient, you hike into that. I think it's unambiguously dollar positive. The ECB, the Bank of England, where you've got question marks over activity and growth and they're kind of forced into a hike because inflation's misbehaving. That for me is at best ambiguous for the currency, but potentially a negative for the currency. So I think in the narrative about you know, hawkysh drifts or whatever it might be, that I think could be a currency takeaway to us, the places is a dollar bullish angle. 00:15:22 Speaker 4: So I mean we kind of came into the year dubbish on the US dollar. I think the market was generally that was kind of the consensus. And then of course the war with the RN came about and that changed the narrative a little bit. Sure going forward, is there still room for this dollar to be stronger here? 00:15:38 Speaker 6: I think? 00:15:38 Speaker 8: So, I mean, to be fair, we did a pivot. You know, we came into this year. I would say we were modus dollar bears and now were modest dollar bill so we're lowercase both sides of the equation. I think, you know, the US around war did one thing. It knocked on the head the idea of de dollarization as a theme, right, because everyone scrambled for their shiny dollars when geopolitical risk was escalating, at least initially. I think a second element that's changed is I think the market's more confident about the independence of the FED. And this was a narrative in twenty five, right, President Trump Bashingham. But I think you know the perception that would be the fedst firm under pale and washes come in and if you like, not set anything dumb. So that's a win as well for the market. So I think those were two big game changing events and I think that correctly appropriately kind of caused this pivot in market kind of sentiment. 00:16:30 Speaker 2: Hong Kong and Shanghai Banking Corporation. If I look at the Bloomberg. 00:16:35 Speaker 3: Global Global Global. 00:16:37 Speaker 2: Total Return bond indext, I've got a great moderation and even with the recovery from twenty twenty two, global bonds are screaming four standard deviations off the old trend. 00:16:49 Speaker 9: We got a long way to go to get back. And it's rolled over and it's an ugly chart. What are the ramifications if oats, guilts and the rest of it breakthrough, I think a five point five zero thirty year US ban. 00:17:06 Speaker 8: So I blame Liz Trust for this. Do you remember her back in the day, Prime Minister Trust the letters? Right, Okay, Sir King's next up. Up until that point, I would have said fiscal policy anywhere, at least in G ten was kind of an irrelevance for the currency market. 00:17:21 Speaker 2: Right. 00:17:22 Speaker 8: We talked about twin deficits in the US, but I'm fifty five years old. We've had twin deficits every year i've been on this planet. Right, So, but what Liz Trust did and Quasi Quarteng is they managed to get currencies in G ten sensitive to fiscal risks. And now he's seen it with Japanese fiscal risk. We've seen it still obviously with Sterling. And I think Tom's good to bring up the oats, you know, do French politics become a new driver for well, the bomb market obviously, but by extension for the euro. So it's something we're addressing. What I think is interesting from a relative perspective is the US fiscal discussion seems to have drifted off the right since the one Big Beautiful Bill and the big beautiful actors and I just drifted off. 00:18:06 Speaker 2: From where I am. We are addicted to a COVID in a post COVID stimulus. That's all there is to it. Nominal GDPs worldwide. 00:18:15 Speaker 3: They're nuts, they are. 00:18:17 Speaker 8: But I think what we're also dicted to do is spending more than we earn. I mean, on a human level, this is the problem, right, And you know, everyone accepts it is unsustainable, but everyone seems willing to support it. But it's getting more and more expensive now. I think where's the currency overlay? I'm not sure it's the direct currency takeaway unless something's unraveling, you know, unless we have true nervousness about Japan, about the UK, France, et cetera. And that's not quite manifest here. 00:18:47 Speaker 3: Well, how much you mentioned Japan here? 00:18:48 Speaker 4: I mean, we got the yen at one sixty three and change weaker again today. I mean, what does the boj do here? 00:18:53 Speaker 3: What are they thinking? 00:18:54 Speaker 8: I don't know. I call this the Wayne Scales effect because I get on the Wayne Scales every morning and am. But that looked out rageous two weeks ago, so it doesn't look quite as outrageous when I step on this morning. And you know, yeah, at one sixty three. It's like, okay, but it was. 00:19:08 Speaker 2: You know, I get so many emails in a fin they say, Dara's doing more crypto. 00:19:13 Speaker 8: Now, yeah, explain, explain why or explain crypto because the second one's going to take it a lot longer. 00:19:21 Speaker 2: Are you are? You have you like shifted over from FX to crypto. 00:19:24 Speaker 8: I'm doing that great task. You know they call it double heading where you do two jobs at the price of one. Yeah, I'm sure you do it here. 00:19:31 Speaker 2: You know we don't as please no, but Derek crypto one twenty to sixty one, bit dog, what's the future? 00:19:40 Speaker 8: Fortunately, my my obligations around crypto don't extend to the nonsense of forecasting tokens quite yet. Where my conversations focused is token ized currencies, you know, stable coins, these elements the banks moving was I think a spectActor of technology. I definitely think this is the future of kind of financial market. 00:19:57 Speaker 3: Infrastructure in the future. 00:19:58 Speaker 8: The future will be We're all going to tokenized assets. We're going to be trading it with tokenized money, whatever shape or form that money is, and we're going to have faster settlement. 00:20:07 Speaker 2: Operation games, faster settlement because. 00:20:09 Speaker 8: People love speed. I mean, you know it's it's been like that saying no good stories started with a salad. Right, markets look for efficiency gains, and this technology does provide that. I'm not necessarily an evangelist for bitcoin or other specific token to but as a as a plumbing gig, it's twenty four You might say, what do we want twenty four seven trading? Because you like, we want to play golf for the weekend, But the reality is people want to be able to move money flexibly twenty four to seven and if you can reduce settlement risk another aspects for seven. 00:20:40 Speaker 2: Argument, do you need Paul help being heer? Do we need a first mover status? Like does JP more gonna have to step in? 00:20:48 Speaker 8: Let me give you an example. We should a tokenized bond in Hong Kong. Right for the HKMA. You settle T plus five tokenize format settles T plus one right us right, And that's and it could it could have been the same day, but no one wants bonds to settle same day because everyone has to prefund. Okay, so the technology allows for that. It means you don't tie up capital waiting for things to settle. You don't have a bunch of banks going, hey, who owns this? Do you own this? My ledger shows this, yours show? It's so it just makes complete sense work. Yeah, yeah, And I'm not just saying that because I needed to work for the next ten years. You know, I genuinely believe in my core. 00:21:24 Speaker 2: I would say to the lovely people, they just be seeing. Darren needs a third half to. 00:21:27 Speaker 8: Put that. 00:21:30 Speaker 2: Back to Captain or watch out, Jeremiah, thank you so much. 00:21:33 Speaker 3: I really really appreciate it. 00:21:34 Speaker 8: Thank you. 00:21:35 Speaker 2: Will they just be seeing? Stay with us. More from Bloomberg Surveillance coming up after this. 00:21:49 Speaker 1: You're listening to the Bloomberg Surveillance podcast. Catch us Live weekday afternoons from seven to ten am Eastern Listen on Applecarplay and Android Otto with the Bloomberg Business app or what is Live on YouTube. 00:22:02 Speaker 2: Julia Carnado perfectly timed for thus with micropolicy perspectives. Julia, how does one hundred dollars Brent again change the FED debate? 00:22:13 Speaker 6: Well, it certainly brings another round of inflation pressures on top of several layers that we've already gotten from the earlier phases of the war, from the AI build out, from tariffs, there's just layer upon layer now of upward pressure on inflation. And yes, this is also a demand shock in the sense that those higher prices are going to hurt consumer purchasing power. But at least so far, the labor market's holding up, the US economy is holding up, and so the FED is really going to need to focus on the inflation side of the mandate. 00:22:49 Speaker 4: So, Julian, when you know we've seen inflation metrics Cpippi fluctuate with the price of global oil. Here, what's the underlying inflation story to you? 00:22:59 Speaker 2: Though? 00:23:00 Speaker 4: It kind of X the energy. 00:23:02 Speaker 6: So I think the underlying story is pretty well described by the trajectory of core PCEE inflation. That's been the Fed's preferred metric. They may revisit that, but if we look at the details, they do make sense. There is a broadening in core inflation pressures. So it's not just an oil story or a food story. It is really a story of again several layers of supply shocks that are rippling through airfares, They're rippling through software prices, They're rippling still through core goods prices. We were just getting to the tail end of the tariff impulse. It seemed to US, and that was good news. We are expecting some relief on goods inflation in the second half of the year, but that is now at risk because shipping costs are going to go up and that could push up on goods prices and other inputs could be on the rise. The longer this level of oil prices, again it's not just the impulse, but that level of energy prices is so much higher it's going to ripple through supply chains and prices in a wide range of category. 00:24:14 Speaker 2: Julia on a dual mandate. When I see claims today back in nineteen sixty nine, and let's say it's an aberration, it's FIFA, or it's a Red Sox winning fifteen in a row, who knows. But the answer to Julia here is there's still a labor mandate, is that it's still they really can't raise They really can't raise rates because the market, the job market is still resilient. 00:24:39 Speaker 6: Yeah, the job market is resilient, and that gives them scope. That gives them some some scope to raise rates. I think tom one of the sort of underappreciated macro dynamics that is quite significant, but we don't talk about it as much. Because we're so busy talking about AI all the time. Is the demographic transition the US is in. 00:24:59 Speaker 4: One. 00:24:59 Speaker 6: We've got a rapidly aging, retiring baby boom population, and on top of that, we've chosen extremely restrictive immigration policy. That adds up to basically no labor force growth. That means that the unemployment rate really isn't going to rise unless the US is in a recession or heading into a recession. There isn't really the US economy doesn't need to create a lot of jobs because there isn't a lot of labor force growth. There's no labor force growth, and I think what that means is it leads to a more resilient labor market. It's really tough to knock it over again. You need to be seeing truly recessionary dynamics on the demand side. And while you know the AI boom isn't particularly a creative to the labor market, it's also enough to keep overall demand on track and the labor market hanging in there. So it's not like we're seeing companies super bullish across sects adding employees. That is definitely not the picture, But nor are people really looking to lay people off or reduce their workforce. They're sort of in a hold steady mode and that's good enough for this labor market, for this demographic transition we're in. And again that leads us back to the insulation side of the mandate. 00:26:19 Speaker 2: Julia Coronado thrilled over this UH today here as we continue to vix out two point five seven, the down future is now negative six hundredsh So this market's still deteriorating or Paul Sweeney with doctor Coronado. 00:26:34 Speaker 4: So, Joeia, what's your view of the underlying consumer here? We were just talking about the labor market. It seems like everybody who wants a job has a job. Wages are rising, maybe not in pace with inflation, But how do you view the labor of the consumer. 00:26:48 Speaker 6: So the consumer is a mixed bag. You know, we talk all the time at nauseum about the K shaped economy, but it is a reality. So you know, for say the median or average household, they've got a job, they may not be feeling great about it. Consumer sentiment around the labor market is pretty pretty low. But they have a job, they're earning income. They may be seeing some slippage and purchasing power from inflation, but they're not rolling over and retrenching and really tightening up their budgets. Meanwhile, you still have high income households feeling pretty good after years of a very bullish stock market has left their net worth you know, pretty close to all time highs. So the upper income consumer is powering more of the spending. They always power a large share, but it's certainly more than than usual. And the middle to low income consumer isn't feeling good, but they're hanging in enough to keep the economy on track. So it's not a raw, raw economy by any stretch for most people, but it's okay. It's getting by one sign. 00:28:00 Speaker 2: The real yield creeps up, maybe not like other yields, et cetera, but the inflation adjusted yield speaking volumes, is it enough now to stall business? 00:28:11 Speaker 3: We'll see. 00:28:11 Speaker 6: I mean, this is the tricky part of AI, and some people compare AI in the US to a sort of form of Dutch disease in the sense that you know, these hyperscalers and this capex build out for the AI capacity is so large and seemingly so you know, resilient or interest rate insensitive, and yet you know the Fed may need to tighten policy, and that would hurt other sectors more. Housing is already hurting. Could it hurt more? Yes, it could hurt more. And so to cool the economy down, you might need to hit non AI sectors harder to get the space you need to bring inflation pressure. 00:28:57 Speaker 3: Stout's not a great trade off. 00:28:59 Speaker 2: Gently from Texas does this? 00:29:01 Speaker 8: Yep? 00:29:01 Speaker 2: She throws out Dutch disease boy and thinks, I don't know. It was the Economist magazine in nineteen seventy seven that harken back to the Netherlands. I say, out in the North Sea in nineteen fifty nine, Is that right? 00:29:17 Speaker 3: I mean, it's just amazing. 00:29:19 Speaker 2: How it's amazing how Google Chemini save this show an hour to hour basis the Dutch disease. 00:29:27 Speaker 9: Thank you, Julia Carnile' go away, greatly appreciate it. 00:29:32 Speaker 1: This is the Bloomberg Surveillance podcast, available on Apple, Spotify, and anywhere else you get your podcasts. Listen live each weekday, seven to ten am Eastern on Bloomberg dot Com, the iHeartRadio app, tune In, and the Bloomberg Business app. You can also watch us live every weekday on YouTube and always on the Bloomberg terminal