Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney alongside
Speaker 1: my co host Matt Miller. Every business day, we bring
Speaker 1: you interviews from CEOs, market pros, and Bloomberg experts, along
Speaker 1: with essential market moving news. Find the Bloomberg Markets podcast
Speaker 1: called Apple Podcasts or wherever you listen to podcasts, and
Speaker 1: at Bloomberg dot com slash podcast. Let me bring in
Speaker 1: Vince Signarelli's global macro UH strategist for Bloomberg News, to
Speaker 1: talk about. I guess central banks. It's all about central
Speaker 1: banks today, Vince. And the first question I have is
Speaker 1: something that Cameron Cries mentioned in his Macroman column. Um.
Speaker 1: The idea is that there was no vert leak that
Speaker 1: the FED purposely told the Wall Street Journal We're gonna
Speaker 1: raise seventy five basis points. And I've heard this from
Speaker 1: many market participants, some of whom claim to have actual
Speaker 1: knowledge about it. Is that possible? Do you believe it? Uh? No,
Speaker 1: aren't really honest? Would you know? UM? I don't think.
Speaker 1: I don't think the FED is of the mind to
Speaker 1: single out any one specific news source, UM to suggest
Speaker 1: that they were going to make something. Is it possible
Speaker 1: that they could raise seventy five basis points today. Absolutely, Um,
Speaker 1: but I would argue that they would be making a
Speaker 1: big mistake. The Fed really needs to explain, well, remind
Speaker 1: markets of a couple of things. Um that first of all,
Speaker 1: it takes six months from grodetary policy, that's the theory
Speaker 1: to wind its way through the economy. We just started
Speaker 1: hiking rates and expectations, I mean expectations they can affect
Speaker 1: right away. Yeah, they can, But look at the data
Speaker 1: so far. Retail sales are dropping, home prices are dropping,
Speaker 1: Compass and Reds and firing countless employees yesterday because the
Speaker 1: real estate market is cooling and they have no sales
Speaker 1: to support it. You know, this is actually if you
Speaker 1: go back to two thousand and twelve and you see
Speaker 1: look at CPI and you look at the Fed funds rate,
Speaker 1: you'll see countless gyrations in the set funds rate beginning
Speaker 1: at the end of hiking, only to crater those rates
Speaker 1: all the way back down to zero where they were
Speaker 1: in twenties fifteen when CPI collapsed, And the three month
Speaker 1: moving average of CPI across that time is pretty close
Speaker 1: to unchanged. It's it's a little higher now, but it's
Speaker 1: higher now. For supply chain reasons, for oil reasons, and
Speaker 1: for fiscal policy with overly stimulating the economy during the pandemic.
Speaker 1: Absolutely none of those things had to do with monetary policy.
Speaker 1: So acute changes in monetary policy, you're gonna make matters worse.
Speaker 1: Not that, Vince. So I'm gonna call you out of consensus.
Speaker 1: How typically your career? Are you out of consensus? Uh?
Speaker 1: About the time went years in a row? So there
Speaker 1: you go. I've never lost money, absolutely never. I've never
Speaker 1: lost money in any given years. But we're not betting
Speaker 1: on this though, right, I mean, I'm just looking at look,
Speaker 1: I'm I just um, look at this chart. If you
Speaker 1: want to access it yourself and have a Bloomberg terminal,
Speaker 1: you can type g hashtag b TV nine six two.
Speaker 1: I remember that because it's a famous Porsche Lament Porsche.
Speaker 1: But um, it's University of Michigan inflation expectations five to
Speaker 1: ten years out and they jump up like the hockey
Speaker 1: stick in Al Gore's climate change movie. Right, I mean
Speaker 1: we're expecting now, UM, or at least the University of Michigan. Uh,
Speaker 1: people were surveyed by UM. The wolverines are looking at
Speaker 1: three point three percent inflation five to ten years out.
Speaker 1: That's what the FED needs to break. What we're what?
Speaker 1: Why why won't the economy do it forth? Why won't
Speaker 1: the drop in prices do it forth? Why won't those
Speaker 1: lack of wage growth cool demands as for them? Which
Speaker 1: is what it always does? All right? So is is
Speaker 1: a Are we in a stag inflationary environment right now? Vince?
Speaker 1: Or we potentially will be? Yeah, we were heading towards.
Speaker 1: I mean, I'm I'm I'm looking at the chart you
Speaker 1: just said of inflationary expectations. I go back to December one,
Speaker 1: interest rate through zero and at the end of the
Speaker 1: set funds rate is two and a quarter to two
Speaker 1: point five. And on that chart you're just telling me
Speaker 1: about which I looked up, Uh, the end off to
Speaker 1: the end of ten year inflationary cost tenor inflation expectations
Speaker 1: were dropping. While the spec explain that to me because
Speaker 1: they don't surprise anybody, because they forecast everything, because they
Speaker 1: use for guidance to tell us, listen, next month, we're
Speaker 1: gonna start raising rates and it'll be basis points there
Speaker 1: it'll be fifty. Like what if they just came out
Speaker 1: and shocked the market the concern is they would break something.
Speaker 1: But maybe with eight point six percent headline CPI, something
Speaker 1: needs to get broke. Well, I mean with but it's
Speaker 1: it's it's it's it's starting to slowly roll over. I
Speaker 1: mean it, you know as well as I do. Spending
Speaker 1: in general is ropping because people the wage growth to
Speaker 1: go along with the price increases. We saw that in
Speaker 1: today's retail sales comes. That's not gonna go away because
Speaker 1: the FED races rates said has not. The fact is
Speaker 1: absolutely no control of disappointment. It's supply side. What are
Speaker 1: they gonna do. They're gonna try to raise rates to
Speaker 1: further curb demare. It's already happened in the housing world.
Speaker 1: What more, what more do they need to do? Raising
Speaker 1: rates is not gonna is not gonna lower the price
Speaker 1: at the stake or or or dinner at a restaurant,
Speaker 1: or or anything else. It may lower the price of housing,
Speaker 1: but that's that's just about it. It's not gonna put
Speaker 1: more money in people's pockets so they can pay for something.
Speaker 1: You know, the set has been horrible at forecasting both
Speaker 1: inflation and economic growth since Greenspan. I mean, look a
Speaker 1: year and a half ago, they were this inflation was transitory.
Speaker 1: Now they're saying it's permanent. Why is why are these
Speaker 1: Why am I so confident what they're doing? Good point.
Speaker 1: That's a good point, alright, Vince. That's why we had
Speaker 1: you on because we need the non consensus call from
Speaker 1: time to time, and Vince usually brings that game. Vince Signarella,
Speaker 1: global macro strategist at Bloomberg News. I want to bring
Speaker 1: in next guest, Jennifer Lee. She's a senior economist and
Speaker 1: managing director Demo Capital Markets. Jennifer Obviously, uh, we were
Speaker 1: focusing on the ECB earlier this morning, on their surprise
Speaker 1: announcement kind of a nothing burger. I guess, as some
Speaker 1: people are saying, now all eyes turned to this Federal Reserve,
Speaker 1: and I would think the consensus feels like seventy five
Speaker 1: basis points, although we just had Vince Signarella, macro strategist
Speaker 1: for Bloomberg News saying, you know, they don't really have
Speaker 1: to do that. Fifty would be Okay, what are you
Speaker 1: expecting this afternoon? It depends on who you're asking in
Speaker 1: our group about what we're protecting. But I think I
Speaker 1: think right now seventy basis points is probably the most
Speaker 1: likely outcome just give in that. It's almost like they
Speaker 1: backed themselves into a corner having that story come out.
Speaker 1: I don't know whether or not leak or not up
Speaker 1: a purposeful leak, but it's almost like if they don't
Speaker 1: do seventy five basis points, it won't go over well
Speaker 1: with the markets. Um, so it probably STUDI five basis
Speaker 1: points and maybe a lot more hawkish language. By the way,
Speaker 1: you're not alone out there. I've noticed, Uh sometimes a
Speaker 1: chief strategists like Marco Kolanovitch doesn't agree with his chief
Speaker 1: economist or his CEO. So, um, it seems like the
Speaker 1: people within our group, by the way, well, uh, the
Speaker 1: problem is obviously inflation, and the FED needs to deal
Speaker 1: with that. Whether it goes fifty now or seventy five
Speaker 1: now and then seventy five next week or fifty next
Speaker 1: week probably probably isn't that important, right Are they going
Speaker 1: to be able to get prices down? Can they really
Speaker 1: do anything about it? Vince was saying, you know what,
Speaker 1: this isn't something that monetary policy can necessarily solve. So
Speaker 1: monson paulicit being as the class sick blunt instrument. I mean,
Speaker 1: there's the supply side. Um, of course, all the supply
Speaker 1: factors energy prices as well from the war, that has
Speaker 1: been a big contributor to to inflation. But at the
Speaker 1: same time, on the demand side, all the money that
Speaker 1: people saved during the pandemic broadly speaking, of course, all
Speaker 1: the fiscal support that has caused a huge um increase
Speaker 1: in demand, all that contempt demand. So what the FED
Speaker 1: was trying to do and what most central bankers are
Speaker 1: trying to do is basically a collaborative. I can say
Speaker 1: that claber of the demand side with higher rates, and
Speaker 1: that will at least go some way to bring inflation lower.
Speaker 1: Maybe not quickly as quickly as we had expected, but
Speaker 1: it will go some way towards doing that. So also today, Jennifer,
Speaker 1: we had some economic data come out this morning. UM,
Speaker 1: retail sales a little bit weaker than expected. Any read
Speaker 1: through there for you, It wasn't as I mean, I
Speaker 1: don't think we should, even though consensus including US had
Speaker 1: had a small increase expected for May. I don't think
Speaker 1: some of the details were too too shocky. Um. A
Speaker 1: lot of it was ours. I think that I was
Speaker 1: going a half percent or something like that. Gasoline, gasoline
Speaker 1: and sales are up a lot, but even X autos
Speaker 1: and X gas, you know, still up mildly. Some of
Speaker 1: the discretionary stuff was interesting, like sporting goods. I think
Speaker 1: we're still higher and people were still dining out, so
Speaker 1: it wasn't all negative. But of course this is just
Speaker 1: the start, and I think we're gonna start seeing the
Speaker 1: big slow down cutting from the consumer. So how big
Speaker 1: is the question right especially considering how much the consumer
Speaker 1: um contributes to US economy growth. Is it going to
Speaker 1: be big enough to bring us into a recession? Well,
Speaker 1: right now, we're thinking more of a growth recession in
Speaker 1: terms of like just floor grows and starting to bring
Speaker 1: the unemployment rate a little bit higher. UM, not an
Speaker 1: outrates recession that we are all accustomed to hearing about.
Speaker 1: Does everyone in your group expect just that, Jennifer, Yes,
Speaker 1: that is because that is a very widespread view with
Speaker 1: an opera on our group. UM. I will continue to
Speaker 1: lean on the fact that as of right now, the
Speaker 1: labor mark it continues to be super strong, but that
Speaker 1: cannot last forever. And I think I mentioned this at
Speaker 1: least over the last few months, that you know, anyone
Speaker 1: who has several different job offers out there, you know,
Speaker 1: I hope that they're taking one of them now because
Speaker 1: it's not going to be available forever. I mean, you
Speaker 1: can I'm imagining companies who perhaps have been looking for
Speaker 1: I don't know, I'm gonna say, like, you know, a
Speaker 1: dozen people to hire, and if they haven't been able
Speaker 1: to fill those jobs, mean at this point they were
Speaker 1: thinking maybe we don't need them, you know, and demands
Speaker 1: starting to taper off, maybe we won't be needing all
Speaker 1: those you know, we don't won't be needed to hire
Speaker 1: all theople of people. So you have to imagine that
Speaker 1: it's going to start tapering off at some point. So Jennifer,
Speaker 1: just going back to last Friday with that CPI print,
Speaker 1: which was such a surprise I think to the marketplace,
Speaker 1: and we saw it into trading in the markets Friday,
Speaker 1: Monday and Tuesday. UM, a little bit of hindsight here.
Speaker 1: What's your kind of main takeaway from that. I feel
Speaker 1: that every country around the world continues to perhaps misread
Speaker 1: the inflation data or kind of expect some expecting plation
Speaker 1: to start tapering off, but again it hasn't happened. Jeff Standon,
Speaker 1: this is why you're seeing all these central banks. You know,
Speaker 1: doing stepping up to do more, you know, except of
Speaker 1: course for the bag Japan. But um, you know again
Speaker 1: because we always it's just it's just continued to surprise
Speaker 1: on the high side, and I think it's going to
Speaker 1: continue doing so until it doesn't. By the way, I
Speaker 1: was thinking today, I was putting together a list of
Speaker 1: the things I could fund shorting jgbs. I mean, what
Speaker 1: a cake walk, right? What are jgbs Japanese government bonds.
Speaker 1: I'm just gonna I'm just gonna borrow Japanese tenure bonds,
Speaker 1: sell them short and then like instead of a mortgage,
Speaker 1: or instead of corporate financing, or instead of selling treasuries,
Speaker 1: the US government could fund operations shorting jgbs. It's a
Speaker 1: there's no loss, there's no downside of this trade, Jennifer
Speaker 1: and Governor Caruda could continues to say that, you know
Speaker 1: that their economy is a lot different and that is
Speaker 1: not the time to raise rates. There you go, all right,
Speaker 1: Jennifer Lee. Always appreciate getting a few minutes of your
Speaker 1: time on this FED days. We wait the FED statement
Speaker 1: two pm. Wall Street time. I am back here stuck
Speaker 1: in New York City, UM, with my friend Katie Greifeld,
Speaker 1: with whom I anchor every Monday, the E T F
Speaker 1: I Q Show on Bloomberg Television times on Mondays, Wednesdays.
Speaker 1: Sometimes on Wednesdays we're waiting for a decision from upper upper,
Speaker 1: upper management on that. But she also focuses big lely
Speaker 1: on cryptocurrencies and it has been a world of hurt.
Speaker 1: Katie Gray felt, what with what was it called tara
Speaker 1: Um Luna and then UM what was the Celsius? And
Speaker 1: now Three Arrows? What's names? I From what I can
Speaker 1: tell talking to UM investors to traders, this is just
Speaker 1: looking like a beautiful liquidation cascade that obviously, with Tera
Speaker 1: blowing up, we knew that a lot of people, a
Speaker 1: lot of high profile backers were involved in Tera, and
Speaker 1: you've sort of seen the slow drip out of that.
Speaker 1: Slow is a relative term. Everything happens faster in crypto,
Speaker 1: and now it seems like, uh, this is really happening,
Speaker 1: uh with a much greater intensity. A lot of leverage
Speaker 1: is getting flushed out right now. And there's a lot
Speaker 1: of questions about a lot of those names you just mentioned,
Speaker 1: such as Three Arrows and some of the other big
Speaker 1: hedge funds in the space. All right, talk to us
Speaker 1: about coin Base, because that you know, a lot of
Speaker 1: folks were leading the financial services industry and saying, oh,
Speaker 1: this platform, this is the future. Um speaking of Cascade, Yes,
Speaker 1: and then boy and a lot of folks lost their
Speaker 1: jobs and so on. So what do we know about
Speaker 1: these trading platforms? Uh? You know, everybody just focuses on
Speaker 1: the bitcoin and the price of bitcoin because you can
Speaker 1: see it on your Bloomberg terminal, But how about some
Speaker 1: of these exchanges, the kind of the plumbing. It's a
Speaker 1: great point that it's not just the price of bitcoin.
Speaker 1: You have an entire industry built around it as well.
Speaker 1: And if you think about coin Base, obviously, the news
Speaker 1: from this week was that they're going to lay off
Speaker 1: eight of their workforce. This, of course, I mean they've
Speaker 1: hired aggressively just this year, a loan adding. I think people,
Speaker 1: this isn't entirely just a crypto problem. I mean, we've
Speaker 1: heard about a lot of crypto layoffs, but if you
Speaker 1: think about what's happening in the broader economy, we're seeing
Speaker 1: it with a bunch of other companies as well. I mean,
Speaker 1: if you think about what we heard about Amazon and Walmart,
Speaker 1: they overstaffed too. It's just that this is hitting at
Speaker 1: a very painful time for crypto and you are seeing
Speaker 1: again some of the biggest names out their coin base
Speaker 1: having to announce these massive layoffs. We heard from Block
Speaker 1: five this week as well, laying off of their workforce. Interestingly, though,
Speaker 1: krack In just today another exchange came out and said
Speaker 1: that there are launching a global hiring push. So some
Speaker 1: of these firms are trying to swim against the current here. Yeah.
Speaker 1: Actually I got to talk to Nick Carter yesterday from
Speaker 1: Castle Island Ventures. I was very excited about that. Him mustache. Yes,
Speaker 1: his mustache is awesome, and he says, plus, he also
Speaker 1: is one of the smartest voices on crypto. He was
Speaker 1: one of the first UM financial analysts on crypto on
Speaker 1: the street. And um he says, Look, if you're if
Speaker 1: you a good smart engineer with good experience, which a
Speaker 1: lot of those people from coin based are, it's gonna
Speaker 1: be no problem for you to find another job in
Speaker 1: crypto or in tech. In in a broader sense. Um,
Speaker 1: but there is an issue, it seems with steaked ether
Speaker 1: like this first became apparent UM when when we saw
Speaker 1: that uh lido one platform was holding thirty one of
Speaker 1: all steaked ether. It's a custodian right for others. And
Speaker 1: and now, um, we've heard that the difficulty bomb has
Speaker 1: been delayed. This was a way to kind of speed
Speaker 1: up the merger from proof of work ether to proof
Speaker 1: of steak ether. Now Three Arrows has been liquidating its
Speaker 1: steaked ether for regular ether. What's what's going on with
Speaker 1: this with the merge, as they call it, the switch
Speaker 1: to a more environmentally friendly way of minding crypto. It's
Speaker 1: a great question. We've been waving on the merged for
Speaker 1: a while. The latest we know is it's supposed to
Speaker 1: take place later this year. And like you said, I
Speaker 1: mean this ties back into the Three Rows capital conversation.
Speaker 1: One of the most prolific crypto hedge funds out there.
Speaker 1: They have a lot of exposure to steaked ether and
Speaker 1: they had ten billion dollars under management. That's a lot
Speaker 1: of money. That is a lot of money. They were
Speaker 1: one of the investors in Terra. We know that they
Speaker 1: have exposures to state ether. All of the things that
Speaker 1: are kind of going wrong right now, so with steaked ether,
Speaker 1: so it's supposed to be redeemable for one ether after
Speaker 1: the merge takes place, but we don't know when exactly
Speaker 1: that's going to happen. And what's happening now is you're
Speaker 1: seeing this big dislocation between the price of staked ether
Speaker 1: and ether itself, and that is really painful for funds
Speaker 1: such as Three Rows Capital. By the way, we're seeing
Speaker 1: on Bloomberg Television, I see Michael Sunnenshine from Gray Scale
Speaker 1: Capital is talking to Guy and Alex and Three Arrows
Speaker 1: reportedly had a more than five percent stake in the
Speaker 1: Gray Scale e T F. Right, Yes, not an e
Speaker 1: T F Are you sorry? Yes? So they this is
Speaker 1: data is as of December that they had that five
Speaker 1: percent stake in uh Grace Scales Bitcoin Trust. Unclear whether
Speaker 1: they still do, unclear whether they're selling that right now
Speaker 1: in the secondary market. But I mean, if you think
Speaker 1: about hedge funds, they would sell their most liquid things first,
Speaker 1: and I don't know. I would imagine g v D
Speaker 1: two shares are a little bit more liquid than steaked ether,
Speaker 1: but it's hard to know at this point as we
Speaker 1: again just see leverage get wiped out across the industry.
Speaker 1: And you know, with that, Katie, a lot of folks
Speaker 1: are saying I told you so. Even Bill Gates kind
Speaker 1: of jumped onto that bandwagon here, who are the true believers?
Speaker 1: Where are they? Who are they in crypto? Because uh,
Speaker 1: it was obviously it is still a very big story.
Speaker 1: It was never Bill Gates, Yes, you can start with that.
Speaker 1: He was never believer, Jamie Diamond, Warren Buffett, especially really
Speaker 1: old people. Yeah, not not true believers. Well, I mean
Speaker 1: it's funny if you think about people, if you just
Speaker 1: think about what's different between now this moment and the first.
Speaker 1: It just feels like traditional Wall Street has too many
Speaker 1: arms into crypto to completely withdrawal. So we'll see if
Speaker 1: that's a layer that's involved with this crash. But it's
Speaker 1: funny to talk about sun and Shine. So he is
Speaker 1: at Gray Skill, he's the CEO. There a song to
Speaker 1: him rate before his BTV interview. He's a true believer.
Speaker 1: He's a true believer. He made the point that you
Speaker 1: see periods like this, you get a lot of leverage
Speaker 1: flushed out, and basically it leads out the players who
Speaker 1: were maybe playing it a little too fast with the
Speaker 1: leverage too cute, too cute. It tends to be a
Speaker 1: healthy period. But that's what you would expect to hear
Speaker 1: from some of those true believers. Michael sn and Shine.
Speaker 1: Absolutely right. But the bottom line, um, even though we're
Speaker 1: seeing a lot of unwinding of leverage, this isn't going away.
Speaker 1: I mean, even though we've seen a crash in the price,
Speaker 1: it's not sound like a man your anchors a weekly
Speaker 1: crypto show. Also, because I just heard David Rubinstein say
Speaker 1: that yesterday. I mean, if you think about our world,
Speaker 1: and again I'm a journalist, I have no opinions are
Speaker 1: increasingly digital world kind of makes sense that digital money
Speaker 1: would be a part of it, that our lives would
Speaker 1: move increasingly online. I mean, I think about the true
Speaker 1: directory of my own life. All right, Katy gray Felt,
Speaker 1: thank you so much for joining us as always talking
Speaker 1: about the crypto, all things crypto. She's a Cross Asset
Speaker 1: reporter Bloomberg Quick Take co anchor. We are in Dallas, Texas.
Speaker 1: We bring in Matthew Forster, c I O and Managing
Speaker 1: director b n Y Melon Lockwood Advisors. Matt, it's a
Speaker 1: fed day today. I'd love you know, this is kind
Speaker 1: of all we've been talking about here on radio, on television.
Speaker 1: What do you guys at bing and Y melon thinking
Speaker 1: about your feather reserve. Well, some of them that might
Speaker 1: be sci fi fans might like to have read um
Speaker 1: Douglas Adams Hitchhiker's Guide to the Galaxy. And if you remember,
Speaker 1: that book comes with two bright bold words on the
Speaker 1: back that says, don't panic, right, And uh, you know,
Speaker 1: I think if you look at what has occurred around
Speaker 1: the world today with central banks, there's just a little
Speaker 1: tinge of panic. We have Ben Brunankee with an op ed, uh,
Speaker 1: you know, talking about the FED credibility and that this
Speaker 1: isn't the seventies. We have the e c B with
Speaker 1: this unusual communicate which talks about how they're gonna be
Speaker 1: flexible around anti fragmentation. Uh. These kinds of unusual terms
Speaker 1: and literally vague wording I think doesn't maybe help. Uh.
Speaker 1: And we also, of course have the FED decision today,
Speaker 1: where you know, there's some discussion about how far they
Speaker 1: could go and whether or not a move with just
Speaker 1: a couple of days ago, we were thinking that fifty
Speaker 1: basis points was baked into the cake. Um and here
Speaker 1: we have seventy five, then possibly even a hundred, and
Speaker 1: it looks like the market is completely shifted to having
Speaker 1: seventy five basis today points today, and usually the FED
Speaker 1: does not disappoint the markets when they've already built into
Speaker 1: that pricing, right. So I would have said fifty a
Speaker 1: few days ago, and now I think it's maybe likely
Speaker 1: that they got exactly and that's kind of what I
Speaker 1: would think consensus might be. Hey, man, as we look
Speaker 1: around here, I see a lot of your you know,
Speaker 1: the firms you do, your partners. I looking at Janie Henderson,
Speaker 1: I'm looking at you know, Eating Vance and all these folks,
Speaker 1: and they're here, which is good because it's been a
Speaker 1: couple of years. What are you hearing from your partners,
Speaker 1: the folks that you would be in my melandue business with,
Speaker 1: because it's been a crazy two and a half years
Speaker 1: and has sent and uh. Yeah. The important point for
Speaker 1: us to remember is that we work with all of
Speaker 1: these large firms here. We're there are suppliers to us
Speaker 1: on a third party asset manager. We've managed some of
Speaker 1: our own, uh, and so we work with all of
Speaker 1: them and we hear from them around products. So yesterday
Speaker 1: we did a little survey about how their product mix
Speaker 1: might be changing, and there's a lot of what's happened,
Speaker 1: you know, so far a year to date, and what
Speaker 1: we see is that our main partners are much more
Speaker 1: concerned about the current capital market environment. It they were
Speaker 1: just a couple of months ago. So you know, a
Speaker 1: few months ago at the end of last year, of
Speaker 1: course markets were roiling um and all of these other pieces, uh,
Speaker 1: you know for all kinds of more esoteric products, maybe
Speaker 1: niche year products were highlighting what they wanted to think about,
Speaker 1: you know, direct indexing, e s g. All kinds of
Speaker 1: other things. Now you know, they're back to focusing on
Speaker 1: the basics and protecting their clients against no really challenging
Speaker 1: capital markets that we've seen so far this year. Yeah,
Speaker 1: I like so it being why Melon talked to us
Speaker 1: about your business. I mean, again, the two and a
Speaker 1: half years of this crazy market we've been going through.
Speaker 1: Now we've got this inflation like we've never really seen
Speaker 1: and we're gonna have what they're saying is a couple
Speaker 1: more months of bad prints on the inflation front. How
Speaker 1: does that affect your business? How does that affect your clients? Well, Uh,
Speaker 1: we're we've come through this fairly well. Uh and um,
Speaker 1: that's because we've had some hedges inflaces, whether that's direct
Speaker 1: equity hedges or hedges to say around a strong dollar
Speaker 1: with reguards of our international currency, uh, exposure from international
Speaker 1: equities that may not be ever. Remember, we have we
Speaker 1: manage many different, hundreds of different portfolios for various clients.
Speaker 1: Some of those are custom builds, some of those are
Speaker 1: partners with the firms that you see here today. So
Speaker 1: we provide a large group of of investments around to
Speaker 1: our platforms and um, you know, all of those are
Speaker 1: they're doing different things here. So hopefully we can find
Speaker 1: something investors can find a way to find something that
Speaker 1: they feel comfortable within this particular mark environment. Yeah, it's crazy.
Speaker 1: I mean, anywhere you look this year, equities down plus stuff.
Speaker 1: You know, the corporate bond index of Bloomberg Corporate bought
Speaker 1: index totally turned down twelve thirteen percent. There's really been
Speaker 1: no place to hide other than maybe, you know, commodities,
Speaker 1: you know, you maybe oil in your partner. Commodities and
Speaker 1: energy have been the place to hide out. Even then,
Speaker 1: you've seen a lot of volatility, but clearly they're they're
Speaker 1: continue to be up, and I still think there's plenty
Speaker 1: of opportunities there to continue to add to some of
Speaker 1: your positions, because it doesn't look like any of these
Speaker 1: uh trends that we've seen resolution in the current Ukraine.
Speaker 1: Other things are going to happen soon enough to affect
Speaker 1: some of those market prices. Uh. You know, we'll have
Speaker 1: to see how FED tightening continues to affect those prices.
Speaker 1: I think that's likely that it will in time. But
Speaker 1: you know, from the moment, we've got these big supply
Speaker 1: and balances, uh, you know around agricultural commodities or or
Speaker 1: or energy and to tricial commodity basket. So I think
Speaker 1: there's still opportunities there. But uh, there are still places
Speaker 1: to hedge, you know, with the FED tightening so much. Again,
Speaker 1: you know, people don't a lot of American advisors don't
Speaker 1: think about this so much, but there's effects effects, you
Speaker 1: know anything, you know, and all commodities are priced in dollars,
Speaker 1: so you know, while the dollars rising, you're getting kind
Speaker 1: of a double kicker there. But your international effects exposure
Speaker 1: is not hedged in many cases. So those are the
Speaker 1: kind of things that I think you might want to
Speaker 1: think about to try to take the sting out of
Speaker 1: the equity price and clients that we've seen. All right, Matthew,
Speaker 1: thanks for coming with us. I mean again, it looks
Speaker 1: like you guys having a great conference, great turnout. We're
Speaker 1: glad to be a part of it. Uh. For nothing else,
Speaker 1: it's just good to see you know, folks at getting
Speaker 1: back together again face to face. I've seen people you know,
Speaker 1: huddling corners, you know, talking and that's kind of what
Speaker 1: it's all about. Yeah, we haven't seen because some of
Speaker 1: these colleagues I haven't met before because they're relative new hires,
Speaker 1: and that's like just great to actually get a chance
Speaker 1: to meet them. So we're all back in person and
Speaker 1: live here and have a lot of network and going on.
Speaker 1: All right, it's good stuff. Matthew Farster, c I O
Speaker 1: and Managing Director B. N Y Melon Lockwood Advisorshare joining
Speaker 1: us here at this conference here at the Gay Lord,
Speaker 1: uh Texan resort. Great facility here, huge uh and it's
Speaker 1: doing a good job taking care of all the folks here.
Speaker 1: Looking at the markets here. We still got some green
Speaker 1: on the screen. Ahead of that FED meeting two pm
Speaker 1: Wall Street times when we will get the statement and
Speaker 1: then of course to thirty or so Wall Street time
Speaker 1: PM we will get the conference with FED chairman Pal
Speaker 1: we'll face some questions. Thanks for listening to the Bloomberg
Speaker 1: Markets podcast. You can subscribe and listen to interviews with
Speaker 1: Apple Podcasts or whatever podcast platform you prefer. I'm Matt Miller.
Speaker 1: I'm on Twitter at Matt Miller. An Impulse Sweeney I'm
Speaker 1: on Twitter at pt Sweeney. Before the podcast, you can
Speaker 1: always catch us worldwide at Bloomberg Radio