WEBVTT - Credit Suisse, UBS Facing DOJ Probe

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<v Speaker 1>This is Bloomberg Daybreak Asia for this Friday, March twenty

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<v Speaker 1>fourth in Hong Kong, Thursday March twenty third in New

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<v Speaker 1>York and coming up today. Treasury Secretary Janet Yellen says

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<v Speaker 1>regulators would be prepared for further steps to protect bank

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<v Speaker 1>deposits if warranted. Credit Suisen Ubs are said to be

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<v Speaker 1>among the banks under scrutiny in a probe by the DOJ,

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<v Speaker 1>and the payment's company Block says it will explore legal

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<v Speaker 1>action against short seller Hindenburg Research TikTok CEO faces an

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<v Speaker 1>extremely contentious House committee. He says operations will come from

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<v Speaker 1>within the US China me while says we will have

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<v Speaker 1>to approve any attempt to sell while denying direct control.

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<v Speaker 1>I'med Baxter with Global News. That's all straight ahead on

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<v Speaker 1>Bloomberg Daybreak Asia, the business news you need to start

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<v Speaker 1>your day in just one fifteen minute podcast available on Apple, Spotify,

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<v Speaker 1>the Bloomberg Business App and everywhere you get your podcast.

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<v Speaker 1>Good morning, I'm Dog Prisoner and I'm Brian Curtiz. Here

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<v Speaker 1>are the stories we're following today. Treasury Secretary Janet Yellen

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<v Speaker 1>tried to soothe the US lawmaker concerns about whether American

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<v Speaker 1>bank deposits are safe. Here's Yellen speaking before a US

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<v Speaker 1>House subcommittee. The strong actions we've taken ensure that Americans

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<v Speaker 1>deposits are safe. Certainly, we would be prepared to take

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<v Speaker 1>additional actions if warranted. On Wednesday, bankstocks tumbled after Yellen

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<v Speaker 1>said that Treasury officials had neither considered nor examined the

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<v Speaker 1>possibility of expanding federal insurance temporarily to all US bank deposits.

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<v Speaker 1>She said that such a move would require congressional approval. Well,

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<v Speaker 1>we are told that both Credit Suite and UBS are

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<v Speaker 1>among the banks under scrutiny now in a probe by

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<v Speaker 1>the US Department of Justice. That story from Bloomberg's Charlie Pellett.

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<v Speaker 1>Those sources say investigators are looking into whether financial professionals

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<v Speaker 1>helped Russian allegs evade sanctions. The sources say the Swiss

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<v Speaker 1>banks were included in a recent wave of subpoenas sent

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<v Speaker 1>out by the government. The information requests were sent before

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<v Speaker 1>the crisis that engulfed Credit Suite and resulted in UBS's

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<v Speaker 1>proposed takeover of its rival. According to one of the sources,

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<v Speaker 1>the Justice Department inquiries are focused on identifying which bank

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<v Speaker 1>employees dealt with sanctioned clients and how those clients were

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<v Speaker 1>vetted over the past several years in New York Charlie

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<v Speaker 1>Pellett Bloomberg Daybreak Asia, while the payment company Block said

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<v Speaker 1>it will explore legal action against Hindenburg Research after a

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<v Speaker 1>damning report. It comes after the short seller issued a

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<v Speaker 1>report following a two year investigation into Block. The report

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<v Speaker 1>alleged that Block facilitated scammers taking advantage of government stimulus

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<v Speaker 1>programs back during the pandemic. Block called Hindenburgh's claims inaccurate

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<v Speaker 1>and misleading. More from Bloomberg's Jenny Seraine. I think any

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<v Speaker 1>implication that criminal actors are using Blocks cash app to

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<v Speaker 1>facilitate their transactions is really bad news. I think that's

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<v Speaker 1>when you get regulators looking at you. They could impose

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<v Speaker 1>different kinds of penalties, whether that's monetary or different remediation activities.

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<v Speaker 1>So that's something that investors will really keen on and

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<v Speaker 1>want to see further proof of Blocksher is slid as

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<v Speaker 1>much as twenty two percent after the news today, closing

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<v Speaker 1>down fifteen percent, the company's biggest intra day decline in

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<v Speaker 1>three years. Well US prosecutors have charged the co founder

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<v Speaker 1>of Terraform Labs Do Quan with fraud after he was

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<v Speaker 1>detained earlier in Montenegro. We have that story from Bloomberg's

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<v Speaker 1>David and Glass. Quan was caught while trying to fly

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<v Speaker 1>to Dubai allegedly using falsified cost The weekend travel documents

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<v Speaker 1>his whereabouts have been the source of constant speculation since September.

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<v Speaker 1>Quan was earlier accused of fraud by the US Securities

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<v Speaker 1>and Exchange Commission. The entrepreneur presided over a forty bill

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<v Speaker 1>million dollar cryptocurrency implosion last year. The terror USD stable

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<v Speaker 1>coin he helped create and its sister token Luna, suddenly cratered.

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<v Speaker 1>South Korea also issued a warrant for his arrest. The

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<v Speaker 1>country stripped him of his passport and said he's the

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<v Speaker 1>subject of an inner pole red notice. In Hong Kong,

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<v Speaker 1>I'm David Ingless lumbrig de Brick Asia. The Bank of

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<v Speaker 1>England raised its benchmark lending rate as expected, by a

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<v Speaker 1>quarter percentage point to four and a quarter percent. The

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<v Speaker 1>central bank brushed aside concerns about the banking system after

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<v Speaker 1>the rescue of two major institutions abroad. It suggests that

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<v Speaker 1>policymakers see inflation as the main priority, and BOE Governor

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<v Speaker 1>Andrew Bailey signaled that further rate hikes may be required.

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<v Speaker 1>We've seen signs of inflation really peaking now, but of

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<v Speaker 1>course it's far too high now. We think it's going

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<v Speaker 1>to come down sharply really from the early summer onwards,

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<v Speaker 1>but we haven't seen that happen yet. We had some

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<v Speaker 1>news this week which was unfortunately going a bit the

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<v Speaker 1>other way with it was probably some one off elementths

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<v Speaker 1>of that, but we need to see it starting to

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<v Speaker 1>come down progressively and get back to talkt The Bank

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<v Speaker 1>of England is predicting that the UK will avoid the

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<v Speaker 1>recession it had predicted earlier this year, and the central

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<v Speaker 1>Bank upgraded its growth outlook over the coming months. However,

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<v Speaker 1>the BOA did not comment on its forecast for the

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<v Speaker 1>second half of the year. I'm Brian Curtis along with

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<v Speaker 1>Doug Christener. Paul Allen will join us in a short while,

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<v Speaker 1>so Doug. The SMB five hundred is flat over the

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<v Speaker 1>past month. So here are some of the numbers that

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<v Speaker 1>promise you. The Russell two thousand, an index of smaller

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<v Speaker 1>sized companies down ten percent in a month. Microsoft up

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<v Speaker 1>nine percent in a month, so that's a nineteen percentage

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<v Speaker 1>point swing. The KBW Bank Index is down twenty eight

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<v Speaker 1>percent in a month. Google or Alphabet is up sixteen percent.

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<v Speaker 1>That's a forty four percentage point swing. Now, these trends,

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<v Speaker 1>I would suggest to you, would seem to be a

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<v Speaker 1>little stretched, and the read through that is probably that

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<v Speaker 1>the benchmarks will need to fall from here. But I

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<v Speaker 1>think you have to put your finger on the banks.

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<v Speaker 1>I mean, the weakness that you cited in the Russell

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<v Speaker 1>has to do with the high concentration of small and

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<v Speaker 1>medium sized lenders, and I think it's fair to say

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<v Speaker 1>that these stocks have been just under enormous pressure right now.

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<v Speaker 1>And this is one of the things I think that

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<v Speaker 1>Janet Yellen is trying to address, to solidify that customer

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<v Speaker 1>base so that those folks aren't inclined to continue to

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<v Speaker 1>move assets from those perceived weaker institutions to stronger ones,

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<v Speaker 1>right And this is the thing that is I think

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<v Speaker 1>troubling the market right now, particularly when you consider a

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<v Speaker 1>situation like First Republic. Really that problem has not been

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<v Speaker 1>solved yet. I mentioned that the KBW Bank Index was

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<v Speaker 1>down twenty eight percent in a month, and that's not

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<v Speaker 1>even the regional index. But think about it. You have

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<v Speaker 1>four four forms of tightening at the moment, the new

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<v Speaker 1>rate hikes and the Fed said they may not be

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<v Speaker 1>done yet, qt the long and variable lag of the

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<v Speaker 1>previous hikes, and then the bank's cutting lending. Now we

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<v Speaker 1>can argue that we are probably close to the end

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<v Speaker 1>of the new rate hikes, but we're probably only at

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<v Speaker 1>the beginning of the bank's tightening. And then on top

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<v Speaker 1>of that, how has this impacted sentiment, not just on

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<v Speaker 1>the part of consumers but businesses as well. That's probably

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<v Speaker 1>going to contribute to a little bit of contraction, I

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<v Speaker 1>would imagine, assuming that a sentiment begins to decline or

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<v Speaker 1>is declining already. And we'll see whether these implicit deposit

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<v Speaker 1>guarantees are enough. They're not explicit, but I think that

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<v Speaker 1>many people do realize that the authorities are prepared to

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<v Speaker 1>step in if there is a run coming at a

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<v Speaker 1>particular bank. Anyway, lots more to talk about. We'll get

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<v Speaker 1>to our guests in a few moments, but now it's

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<v Speaker 1>time for Global news. TikTok CEO show ch ran into

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<v Speaker 1>a pretty hostile group of lawmakers in the House Energy

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<v Speaker 1>and Commerce Committee Today at Baxter is tracking that he

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<v Speaker 1>has global news from the nine to sixty newsroom in Strancisco. Ahad, yeah, boy,

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<v Speaker 1>you talking about a tough crowd, Brian. The tone set

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<v Speaker 1>by Representative Kathy Rogers TikTok is a weapon by the

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<v Speaker 1>Chinese Communist Party to spy on you, manipulate what you see,

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<v Speaker 1>and exploit for future generations. Now, one of the allegations

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<v Speaker 1>is a China demand's removal of some content the massacre

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<v Speaker 1>in Tianamen Square. That kind of content is available on

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<v Speaker 1>our platform. You can go and search it. I will

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<v Speaker 1>remind you that making falls from misleading statements to Congress

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<v Speaker 1>as a federal crime. I understand again. You can go

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<v Speaker 1>on the platform. You will find that content. So show

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<v Speaker 1>says assurances should come from Fars in order to assure

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<v Speaker 1>everybody here and all our uses, while a commitment is

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<v Speaker 1>to move day data into the United States to be

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<v Speaker 1>stored on American soil by an American company overseen by

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<v Speaker 1>American personnel. But Bloomberg's Alex Baranca says this is the

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<v Speaker 1>most contentious and hostile hearing she's heard in a long time,

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<v Speaker 1>and there was another exchange with Arab Zona Republican Debbie

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<v Speaker 1>Lasco that I think was really illustrative. She laid out

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<v Speaker 1>that other countries like India have banned the app, the

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<v Speaker 1>FBI has voiced concerns about the app, and ask you,

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<v Speaker 1>why then, do all of these folks have concerns if

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<v Speaker 1>you're sitting here in front of us today saying nothing's wrong.

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<v Speaker 1>He came back and said, look, those concerns are hypothetical.

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<v Speaker 1>They are theoretical. That kind of gap has been kind

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<v Speaker 1>of the theme all day where she feels like he's

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<v Speaker 1>not getting enough substance to combat with the facts that

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<v Speaker 1>he loves to bring to the table, and the lawmakers meanwhile,

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<v Speaker 1>are just not believing anything he said, leading to kind

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<v Speaker 1>of a really contentious back and forth at the hearing today.

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<v Speaker 1>So even Democrats or o'kanna, for example, saying the only

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<v Speaker 1>solutions of sale, Senator Marc o'rubio coming out saying two

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<v Speaker 1>options or sale or commerce deprivment regulation. Now, China has

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<v Speaker 1>issued a statement saying that it would firmly oppose any

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<v Speaker 1>sale if TikTok forced by Washington, saying it would undermine

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<v Speaker 1>confidence in all commerce globally Bloomberg's Dan flatly says, I'd

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<v Speaker 1>really dnded any argument by show of any separation. Now

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<v Speaker 1>that's been a very big concern of you concluding this

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<v Speaker 1>national security review that TikTok has been working with the

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<v Speaker 1>US government is whether China would have any say in

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<v Speaker 1>how that would be concluded. And it also kind of

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<v Speaker 1>cuts against his arguments that TikTok will not share data

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<v Speaker 1>with China, because if they have to approve the sale

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<v Speaker 1>of this business, then you know they are obviously involved operations.

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<v Speaker 1>But Henrietta Treys Veta Partners on Bloomberg says about more

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<v Speaker 1>than just TikTok today, it's a more holistic approach to

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<v Speaker 1>social media because we're talking about domestic problems from mental

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<v Speaker 1>health to national security issues, and it's not unique to

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<v Speaker 1>just TikTok. So what they're looking at in legislation that

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<v Speaker 1>I think can actually pass is more akin to passing

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<v Speaker 1>the back onto the Department of Commerce to have it

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<v Speaker 1>regulate TikTok in all social media apps. Yeah, and she

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<v Speaker 1>says regulation as opposed to sale here. But very interesting,

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<v Speaker 1>by the way, political Tight wrote for democrats as a

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<v Speaker 1>younger demographic group is more heavily TikTokers if you will,

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<v Speaker 1>and the fair would be they could just set out

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<v Speaker 1>twenty twenty four. This is just the beginning Global news.

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<v Speaker 1>I'm more than twenty seven hundred journalists and listen over

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<v Speaker 1>one hundred twenty countries. In San Francisco. I'm Ad Baxter,

0:11:05.800 --> 0:11:08.760
<v Speaker 1>and this is Bloomberg. And I'm Brian Curtis here in

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<v Speaker 1>Hong Kong. This is Bloomberg Daybreak. Agia Paul Allen joins

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<v Speaker 1>us now in Sydney, and our guest is Joanna Gayegos,

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<v Speaker 1>co founder of Bond Blocks, on her market outlook, Well,

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<v Speaker 1>let's start off with that gap that I mentioned. You've

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<v Speaker 1>got bank stocks going down a couple of percent every day,

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<v Speaker 1>and you've got Microsoft going up two percent every day.

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<v Speaker 1>That can't continue, can it. Yeah, it's hard to make

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<v Speaker 1>calls right now. I think it's been hard all quarter

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<v Speaker 1>to understand where the markets were going to be going.

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<v Speaker 1>And some of that recovery and technology may be reflective

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<v Speaker 1>of the actions that those firms are taking to manage

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<v Speaker 1>costs and think about what's coming up in twenty twenty three.

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<v Speaker 1>But what we think about for twenty twenty three is bonds. Obviously,

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<v Speaker 1>we're a nasset manager that focused solely on fixed income,

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<v Speaker 1>and we think there's a lot that we can lean

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<v Speaker 1>into right now because yields have changed so dramatically in

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<v Speaker 1>twenty twenty three. It helps investors really take advantage of

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<v Speaker 1>the power of that carrying their portfolio and actually do

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<v Speaker 1>something in the total return space their portfolio, which just

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<v Speaker 1>isn't straightforward in equities right now from where we sit,

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<v Speaker 1>is it particularly straightforward and bonds though either. I mean,

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<v Speaker 1>you say it's a place to hide up from volatility.

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<v Speaker 1>But take a look at the two year. You know,

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<v Speaker 1>a couple of weeks ago, we're about five. Now we're

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<v Speaker 1>three point eight three. Yet the whipstoring seems to be

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<v Speaker 1>happening in across assic classes. For sure, there was a

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<v Speaker 1>volatility this month in the two year, But think about

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<v Speaker 1>this very simple trade. You know, if you're in the short,

0:12:35.840 --> 0:12:38.040
<v Speaker 1>shortest part of the curve, it may be a great

0:12:38.040 --> 0:12:40.520
<v Speaker 1>place to wait out and figure out what you're going

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<v Speaker 1>to do next, because you're getting paid, you know, upwards

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<v Speaker 1>of four and a half percent for at least being invested.

0:12:46.640 --> 0:12:48.360
<v Speaker 1>And I think that's the action that we want to

0:12:48.400 --> 0:12:53.199
<v Speaker 1>see investors take, is consider that we also maybe recharacterize

0:12:53.320 --> 0:12:55.880
<v Speaker 1>looking at credit because of some of the fundamentals that

0:12:55.920 --> 0:12:58.960
<v Speaker 1>look pretty strong across credit, not only what you mentioned,

0:12:59.000 --> 0:13:01.600
<v Speaker 1>but the capital appreciation is there too, that movement that

0:13:01.679 --> 0:13:05.760
<v Speaker 1>Paul brought to It's basically the bond is going up,

0:13:05.800 --> 0:13:07.679
<v Speaker 1>so the yield is falling a lot. If you think

0:13:07.720 --> 0:13:11.000
<v Speaker 1>that that's the trend that will hold in, that recession

0:13:11.040 --> 0:13:12.920
<v Speaker 1>could be coming and bonds will go up and the

0:13:13.000 --> 0:13:15.240
<v Speaker 1>yields will go down, you're not only getting the hefty

0:13:15.320 --> 0:13:18.080
<v Speaker 1>yield that you bought, but you're getting the capital appreciation too. Yeah,

0:13:18.120 --> 0:13:20.319
<v Speaker 1>I think, but you're referencing is somewhere in between the

0:13:20.400 --> 0:13:23.360
<v Speaker 1>two year and the three year. Just this month year

0:13:23.400 --> 0:13:26.560
<v Speaker 1>to date, sorry, month to date that ranges from being

0:13:26.679 --> 0:13:28.720
<v Speaker 1>up two to three percent in a month on the

0:13:28.760 --> 0:13:32.200
<v Speaker 1>price return plus the yield. So bonds really need to

0:13:32.240 --> 0:13:35.240
<v Speaker 1>be part of your consideration for twenty twenty three, really

0:13:35.280 --> 0:13:37.760
<v Speaker 1>need they're They're very powerful in your portfolio a way

0:13:37.800 --> 0:13:41.439
<v Speaker 1>that they haven't been for over a decade and longer.

0:13:41.600 --> 0:13:44.360
<v Speaker 1>And you know it's you hear people say bonds are back,

0:13:44.400 --> 0:13:47.440
<v Speaker 1>but we want to see investors really consider taking action

0:13:47.440 --> 0:13:50.840
<v Speaker 1>in their portfolio with them. Yeah, we've also got trade

0:13:50.840 --> 0:13:54.280
<v Speaker 1>as effectively pricing and cuts from the fit by yeah,

0:13:54.320 --> 0:13:57.480
<v Speaker 1>and do you feel that's a realistic scenario, So the

0:13:57.520 --> 0:14:00.840
<v Speaker 1>markets pricing that in the FED definitely didn't say that yesterday.

0:14:00.960 --> 0:14:03.120
<v Speaker 1>They didn't indicate that there'd be any rate cuts in

0:14:03.160 --> 0:14:06.280
<v Speaker 1>twenty twenty three. But if you do want to again

0:14:06.400 --> 0:14:10.160
<v Speaker 1>lean into the end of the rate hiking cycle and

0:14:10.280 --> 0:14:13.360
<v Speaker 1>possibly the softening of the economy or downturn in the economy,

0:14:13.400 --> 0:14:17.199
<v Speaker 1>you might consider adding more duration your portfolio, taking on

0:14:17.800 --> 0:14:20.480
<v Speaker 1>reposition your portfolio to go longer out on the curve,

0:14:20.520 --> 0:14:23.640
<v Speaker 1>just even in treasuries with you no credit risk. But

0:14:23.720 --> 0:14:26.400
<v Speaker 1>we are seeing some activity in our products that even

0:14:26.440 --> 0:14:28.960
<v Speaker 1>just this week we saw, you know, a little bit

0:14:29.120 --> 0:14:31.640
<v Speaker 1>taking stepouts in the two three years also the five

0:14:31.680 --> 0:14:34.320
<v Speaker 1>and seven year traded for US. And so we think

0:14:34.320 --> 0:14:36.320
<v Speaker 1>that people if you do take that view and the

0:14:36.360 --> 0:14:38.240
<v Speaker 1>market does have that view that rates may be going

0:14:38.280 --> 0:14:40.680
<v Speaker 1>down at the end of the year, you can step

0:14:40.720 --> 0:14:42.880
<v Speaker 1>into that. In a way, I think it's really smart

0:14:42.960 --> 0:14:46.240
<v Speaker 1>using treasury products. Well, you have four forms of tightening

0:14:46.280 --> 0:14:48.240
<v Speaker 1>that I mentioned earlier. I just run through them quickly

0:14:48.240 --> 0:14:50.600
<v Speaker 1>again and get your response to the last one, because

0:14:50.600 --> 0:14:53.120
<v Speaker 1>that's the only one that's kind of controversial new rate

0:14:53.200 --> 0:14:56.600
<v Speaker 1>hikes QT, the long and variable lag of the previous

0:14:56.720 --> 0:14:59.720
<v Speaker 1>rate hikes. Those are all working to suppress the economy

0:14:59.760 --> 0:15:02.680
<v Speaker 1>and bring down inflation. The last one, the fourth one,

0:15:03.040 --> 0:15:05.920
<v Speaker 1>would be the bank's cutting lending and the tightening that

0:15:05.920 --> 0:15:09.080
<v Speaker 1>that provides. And even if you think that the new

0:15:09.360 --> 0:15:11.160
<v Speaker 1>the new rate hikes are almost at the end of

0:15:11.200 --> 0:15:14.560
<v Speaker 1>their run, the banks are only just getting started with this. Now,

0:15:14.640 --> 0:15:18.360
<v Speaker 1>how pervasive would this be? Yeah, I think it's complementary. Um.

0:15:18.480 --> 0:15:20.720
<v Speaker 1>It's not a great thing to talk about when you're

0:15:20.720 --> 0:15:24.960
<v Speaker 1>thinking about tightening um liquidity or lending standards at the banks,

0:15:25.000 --> 0:15:28.320
<v Speaker 1>because that does affect companies and starts to really put

0:15:29.240 --> 0:15:32.520
<v Speaker 1>a little bit of pressure on the economy. But at

0:15:32.520 --> 0:15:35.680
<v Speaker 1>the same time, it just it would help the other

0:15:35.720 --> 0:15:39.560
<v Speaker 1>inflationary fight that's going on that the Feds waging. And

0:15:39.640 --> 0:15:42.240
<v Speaker 1>so it would be complementary. And you know, if we

0:15:42.320 --> 0:15:44.920
<v Speaker 1>have to get the only way forward is through that

0:15:45.000 --> 0:15:47.640
<v Speaker 1>may be inevitable, and that may be a side effect

0:15:47.760 --> 0:15:52.480
<v Speaker 1>of this UM financial stability issue in place or in

0:15:52.560 --> 0:15:55.560
<v Speaker 1>today that you know, could help us get through this UM.

0:15:55.800 --> 0:15:58.720
<v Speaker 1>But hopefully it will be you know, as as soft

0:15:58.840 --> 0:16:01.440
<v Speaker 1>landings as we would hope it would be but that

0:16:01.560 --> 0:16:04.200
<v Speaker 1>is what market expects. That market expects some kind of

0:16:04.240 --> 0:16:07.640
<v Speaker 1>downturned right now and is looking at rates reducing by

0:16:07.640 --> 0:16:08.880
<v Speaker 1>the end of the year. That is not with the

0:16:08.880 --> 0:16:10.880
<v Speaker 1>FED is saying. And you know, if you take that view,

0:16:10.920 --> 0:16:13.840
<v Speaker 1>you have ways to the risk to your argument. The

0:16:13.920 --> 0:16:17.160
<v Speaker 1>risk to your argument and your thesis is that inflation

0:16:17.240 --> 0:16:19.440
<v Speaker 1>doesn't come down because you're not going to be very

0:16:19.480 --> 0:16:21.680
<v Speaker 1>happy getting a bond yielding three to four percent of

0:16:21.760 --> 0:16:24.640
<v Speaker 1>inflation is running at seven percent, So that's the main

0:16:24.880 --> 0:16:26.960
<v Speaker 1>threat to your argument. Do you think that inflation is

0:16:27.000 --> 0:16:29.440
<v Speaker 1>that sticky? I don't. I don't I really have a

0:16:29.520 --> 0:16:32.400
<v Speaker 1>view if it's that sticky. I think this quarter is

0:16:32.400 --> 0:16:34.960
<v Speaker 1>just so dramatic in terms of what we thought we

0:16:34.960 --> 0:16:37.840
<v Speaker 1>were going into the year expecting, and we need more

0:16:37.880 --> 0:16:43.160
<v Speaker 1>time to process all the conflicting economic data, the confounding

0:16:44.000 --> 0:16:47.400
<v Speaker 1>banking situation. So I think everyone needs more time, but

0:16:47.440 --> 0:16:50.880
<v Speaker 1>I think they're still You can't deny the opportunities and

0:16:51.080 --> 0:16:54.120
<v Speaker 1>using yield in your portfolio this year to help combat

0:16:54.240 --> 0:16:56.560
<v Speaker 1>any of it. Some of it you need to need

0:16:56.560 --> 0:17:02.200
<v Speaker 1>to really consider it before you just you know, go away. Yeah. Look,

0:17:02.200 --> 0:17:05.119
<v Speaker 1>we also had Jaipal this week reiterating its commitment to

0:17:05.160 --> 0:17:08.880
<v Speaker 1>that two percent inflation target that does seem very little,

0:17:08.920 --> 0:17:11.840
<v Speaker 1>very far away. Yeah, do you think it's realistic? And

0:17:11.880 --> 0:17:14.800
<v Speaker 1>if so, how long before we get there? Well, the

0:17:14.840 --> 0:17:17.280
<v Speaker 1>thing is is that even through all of last year,

0:17:17.440 --> 0:17:20.640
<v Speaker 1>when we ignored what the FED said, the FED double down,

0:17:20.680 --> 0:17:23.840
<v Speaker 1>and the FED has just demonstrated conviction and vigilance against

0:17:23.840 --> 0:17:28.280
<v Speaker 1>this fight on inflation. So m realistic if if, if

0:17:28.400 --> 0:17:30.960
<v Speaker 1>you know, some of the other confounding factors come to

0:17:31.000 --> 0:17:34.159
<v Speaker 1>be with either financial stability or an economic downturn or

0:17:34.480 --> 0:17:38.359
<v Speaker 1>tightening lending standards, like, it's realistic that the Fed's going

0:17:38.400 --> 0:17:41.240
<v Speaker 1>to continue their fight, and they reiterated it yesterday. And

0:17:41.680 --> 0:17:44.120
<v Speaker 1>we know many many were calling for a pause, many

0:17:44.160 --> 0:17:46.640
<v Speaker 1>were calling for you know, a lookout point to see

0:17:46.680 --> 0:17:49.239
<v Speaker 1>what would be next. But they seem that they're going

0:17:49.240 --> 0:17:51.400
<v Speaker 1>to charge ahead and that's their goal. And I think

0:17:51.440 --> 0:17:55.240
<v Speaker 1>other central banks have also conveyed the same. So you

0:17:55.520 --> 0:17:58.760
<v Speaker 1>mentioned we talked about sovereigns, so we haven't talked about munis.

0:17:58.960 --> 0:18:02.399
<v Speaker 1>You did also mention credit. For you what's the sweet

0:18:02.400 --> 0:18:08.359
<v Speaker 1>spot in credit? So we we really like UM people

0:18:08.359 --> 0:18:11.000
<v Speaker 1>to consider high yield and one of the sweet spots

0:18:11.080 --> 0:18:14.080
<v Speaker 1>we see is in UM we have a product that

0:18:14.200 --> 0:18:17.239
<v Speaker 1>focuses on credit ratings, and there's a we have a

0:18:17.240 --> 0:18:20.719
<v Speaker 1>product that only has single b names in it, and

0:18:20.800 --> 0:18:22.919
<v Speaker 1>so we really want people to think about, you know,

0:18:23.000 --> 0:18:25.640
<v Speaker 1>some of the fundamentals that are in high yield right now,

0:18:25.680 --> 0:18:29.520
<v Speaker 1>either in the credit rating side or even in sectors.

0:18:29.560 --> 0:18:33.320
<v Speaker 1>Because there's a lot of resiliency in corporate balance sheets UM,

0:18:33.520 --> 0:18:35.600
<v Speaker 1>that would lend that some of these some of these

0:18:35.640 --> 0:18:40.720
<v Speaker 1>hild issuers have resiliency through this downturn and may actually

0:18:40.720 --> 0:18:44.000
<v Speaker 1>be rising stars out of high yield and maybe being

0:18:44.200 --> 0:18:47.600
<v Speaker 1>upgraded to UM investment grade. But we would think the

0:18:47.680 --> 0:18:50.800
<v Speaker 1>single bum space is one of the sweet spots because

0:18:50.840 --> 0:18:54.320
<v Speaker 1>of its lower duration related you know, in relative to

0:18:54.720 --> 0:18:58.200
<v Speaker 1>investment grade, and people should consider looking at different cuts

0:18:58.240 --> 0:19:04.000
<v Speaker 1>of credit are closely even in hygyel. This is Bloomberg

0:19:04.080 --> 0:19:06.960
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