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Speaker 2: Well, we start today with the news out of Vatican City.
Speaker 2: Cardinal Robert Francis Privos was elected to the head of
Speaker 2: the Catholic Church. It was the second day of voting
Speaker 2: in the Vatican. It was the first It is the
Speaker 2: first US national ever to take the role. He's sixty
Speaker 2: nine years old. He was born in Chicago. He spent
Speaker 2: much of his life outside the US, mostly in Peru
Speaker 2: and Rome. Leo the fourteenth is the name that he
Speaker 2: has taken. He spoke for about ten minutes last hour
Speaker 2: in Italian, Spanish and Latin as well. For more, we
Speaker 2: bring in Natalia Imparatory Lee Professor and Chair of Religious
Speaker 2: Studies at Manhattan College. Professor, good to have you with
Speaker 2: us this afternoon. We are sort of slowly learning details
Speaker 2: of the new pope. The big question I have is
Speaker 2: what direction do you think he will take the church in?
Speaker 3: Thanks for having me. Yeah, I think this is a
Speaker 3: really interesting choice. We can tell a lot from him
Speaker 3: by the choice of name. In choosing Leo the fourteenth,
Speaker 3: I think he's indicating that he wants to continue the
Speaker 3: work of one of the most consequential popes on the
Speaker 3: topic of social justice. So Leo the thirteenth wrote a
Speaker 3: huge encyclical called Reream Navarum, and it basically set the
Speaker 3: agenda for the social work of the church. And so
Speaker 3: I think this American pope is signaling to us that
Speaker 3: he will be on this sort of maybe a little
Speaker 3: bit kind of on the progressive vein that you saw
Speaker 3: Francis in.
Speaker 4: Yeah, it does look like that is an insane clicole
Speaker 4: that was aimed at the working class. And of course
Speaker 4: Pope Francis was first and foremost concerned with helping the poor.
Speaker 4: What about immigration? This is obviously the divisive issue on
Speaker 4: which the Catholic Church under Francis and the United States
Speaker 4: government under President Trump have had the most disagreement.
Speaker 3: Yeah, I think it's going to be really interesting because
Speaker 3: this is not a typical kind of US based Bishop
Speaker 3: that we're getting as the pope right now. This is
Speaker 3: a man who's lived all over Latin America. He's done
Speaker 3: a lot of diplomacy, he's done a lot of church
Speaker 3: building and bridge building in other places. You heard a
Speaker 3: lot of that actually in his opening speech about building
Speaker 3: bridges and walking together. And I think that he, with
Speaker 3: his experience, especially in poor areas in Peru, he understands
Speaker 3: what's going on with migrants and the sort of needs
Speaker 3: of people who aren't in desperate situations. And so I
Speaker 3: don't anticipate that he and the current president of this
Speaker 3: country will be on the same page necessarily when it
Speaker 3: comes to migration.
Speaker 2: What is the significance of a pope born in the
Speaker 2: United States, the first American born pope, the first US
Speaker 2: born pope, especially following the first South American pope.
Speaker 3: It is wild. None of us thought that this was
Speaker 3: going to happen. No one that I know in the
Speaker 3: Catholic universe thought that we would get an American, and
Speaker 3: so it's pretty crazy to have two Americans, you know,
Speaker 3: broadly understood, back to back. I think it signals a
Speaker 3: kind of move away from a European centered church to
Speaker 3: a more global reality and so you have this guy who, yes,
Speaker 3: is from a global superpower, the United States and Chicago
Speaker 3: a superpower city, but nevertheless is someone who was very
Speaker 3: immersed in Latin American culture and then in the culture
Speaker 3: of the Vatican. So you can see this sort of
Speaker 3: global preference that the cardinals are starting to show that
Speaker 3: they want to show that they have an openness to
Speaker 3: not just a European Church, but really a more global reality.
Speaker 4: What's the likelihood that he can heal the rift between
Speaker 4: the Vatican and American Catholics because it definitely had developed
Speaker 4: and you mentioned this isn't the typical American cardinal, those
Speaker 4: who had spoken out openly against Pope Francis. Can he
Speaker 4: bring the kind of al Smith Catholics back to the church?
Speaker 3: I mean, it's my sincere hope that that is the case.
Speaker 3: The question is can the al Smith Catholics get on
Speaker 3: board with the papacy. I mean, the whole point of
Speaker 3: a lot of this sort of disagreement is who is
Speaker 3: really in charge, who should really set the agenda for
Speaker 3: the Roman Catholic Church. And it's important for us, I mean,
Speaker 3: as Americans, I know, we feel a lot of like
Speaker 3: patriotism and everything right now, especially because he's an American pope,
Speaker 3: but he's going to be the pope of the whole
Speaker 3: global church, and so well, sometimes we can be a
Speaker 3: little bit shortsighted and think, oh, well, he's not responding
Speaker 3: to the things that we care about the most. But
Speaker 3: he is trying to steer this ship that's kind of enormous.
Speaker 4: Four billion people. We should remind everyone one point four
Speaker 4: billion people, right, the longest standing institution in the Western world.
Speaker 4: And do Catholics believe that the pope, the leader of
Speaker 4: the church is chosen by divine intervention, that essentially God
Speaker 4: has picked this pope.
Speaker 3: I mean yes, but let me give you a caveat right.
Speaker 3: God works through human beings. It's not that God whispered
Speaker 3: the name Prevost in the ear of every cardinal elector,
Speaker 3: and that's how it happened. Right, It's not Harry Potter.
Speaker 3: It's very much real life. And so we believe that
Speaker 3: the God doesn't let the church fall completely into error.
Speaker 3: That we believe or we trust that God is somehow
Speaker 3: in control of this church. And that is very much
Speaker 3: what sort of is we see happening in a conclave.
Speaker 3: Nobody knows what goes on inside you sort of really
Speaker 3: have to trust, and even the men who are in
Speaker 3: there are in a sense putting their trust in you know,
Speaker 3: we don't really know how this is going to turn out.
Speaker 3: We're going to sort of lay it at the feet
Speaker 3: of God. And that's that's how Catholics think God works
Speaker 3: in the world.
Speaker 2: I was pretty shocked to emerge from a meeting just
Speaker 2: after noon here in New York and see white smoke
Speaker 2: up on the Bloomberg television screen, given that the conclave
Speaker 2: just started yesterday in Vatican City, and you know, yeah,
Speaker 2: but looking into this a little more, that's not necessarily
Speaker 2: that unusual, at least in modern times. They're not necessarily
Speaker 2: going to be holed up for weeks historical context, for
Speaker 2: just the duration of this conclave. Is it surprising to
Speaker 2: you or is it pretty quick?
Speaker 3: I mean it felt quick, I feel like, because like you,
Speaker 3: I feel like they just started yesterday and what's the deal.
Speaker 3: But it's usually four to five ballots, right, That's pretty
Speaker 3: much what it's taken the last three times, four or
Speaker 3: five ballots they do. They're very efficient with their voting.
Speaker 3: I wish I definitely didn't think it was going to
Speaker 3: be prevost this quickly. So I was in a meeting
Speaker 3: with a student and I had to sort of break
Speaker 3: out and cancel it and move away from it. But yeah,
Speaker 3: the white smoke came quickly, and it was a surprise
Speaker 3: that it was prevous. Now I will say this, he
Speaker 3: is the guy who was advising Pope Francis on who
Speaker 3: to appoint as bishops, and it's really significant that he
Speaker 3: is now the new Pope. It tells us that Francis's
Speaker 3: vision for who should be in leadership in the church,
Speaker 3: which is like people who were pastors, that's what Francis
Speaker 3: really wanted. That this Leo the fourteenth is going to
Speaker 3: continue that sort of vision.
Speaker 4: He actually started off quoting Pope Francis's Easter Sunday.
Speaker 2: Words.
Speaker 4: Do you expect him to carry on Francis's work not
Speaker 4: only in terms of, you know, helping poverty, working class,
Speaker 4: but also in terms of women in the church in leadership,
Speaker 4: in terms of LGBTQ, bringing a sense of inclusiveness to
Speaker 4: this Catholic church that traditionally, at least in leadership, only
Speaker 4: relies on men.
Speaker 3: I mean, I hope. So, I don't know. I don't
Speaker 3: know where he stands on the issue of women. I
Speaker 3: can only rely on what he said from the balcony,
Speaker 3: and a lot of that was echoing so much of
Speaker 3: what Francis was saying. So you heard him hit all
Speaker 3: the greatest hits. Right. He talked about peace one hundred times.
Speaker 3: He talked about building bridges one hundred times. He talked
Speaker 3: about walking together to the Promised Land. He kept saying
Speaker 3: tutti tuti, which was like it means everyone, which was
Speaker 3: a refrain of Francis's He talked about a church that
Speaker 3: was open to all, that needed to dialogue, that needed
Speaker 3: to do encounter, and that I think signals that he
Speaker 3: wants to continue the legacy of Francis. Now as for
Speaker 3: the specifics, right, will he continue to appoint women to
Speaker 3: decision making positions in the Vatican? I hope. So that's
Speaker 3: not some toothpaste. I think that I'll go back into
Speaker 3: the tube very easily, but you won't know.
Speaker 5: Right.
Speaker 3: This is again where Catholics are like, come, Holy Spirit,
Speaker 3: let's do this.
Speaker 2: Professor, really appreciate you joining us on Bloomberg Business Week
Speaker 2: Daily this afternoon. Professor Natalia Imparatory, Professor and Chair of
Speaker 2: Religious Studies at Manhattan College.
Speaker 6: You're listening to the Bloomberg Business Weekdaily podcast. Catch US
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Speaker 2: Well a hard pivot from Vatican City and from What's
Speaker 2: going on with the Pope too. The other big story
Speaker 2: of today, and that of course, has to do with trade.
Speaker 2: President Trump announced a trade framework with the UK, hailing
Speaker 2: it is a quote breakthrough that will bring down barriers
Speaker 2: and expand market access for American imports. The President said
Speaker 2: final details of the pact would still be negotiated in
Speaker 2: the coming weeks, but under the agreement, the UK would
Speaker 2: fast track American goods through their customs process and reduce
Speaker 2: barriers on ag, chemical, energy, and industrial exports. Here's what
Speaker 2: he said a little earlier today.
Speaker 5: Both countries have agreed that the economic security is national secured,
Speaker 5: and we'll be working together as allies to ensure that
Speaker 5: we have a strong industrial base, appropriate export controls and protections.
Speaker 5: Were key technologies and industries like steel. Steel is a
Speaker 5: big factor. Both countries will become stronger with steel.
Speaker 2: That was President Trump earlier in the day from the
Speaker 2: Oval Office for more we bring in Bloomberg News, UK
Speaker 2: Government porter Joe Mays and Bloomberg Economics and US economist
Speaker 2: start Paul Joe's in London stored us here in the studio. Joe,
Speaker 2: I do want to start with you and just can
Speaker 2: textualize the framework or at least the details with what
Speaker 2: we know in the framework between what was there before
Speaker 2: Liberation Day so called Liberation Day, and what is the
Speaker 2: status now after this framework was announced. What are the
Speaker 2: big differences there?
Speaker 7: Yes, the context is that the US brought in these
Speaker 7: quite putative tariffs, particularly on the car sector, steel's aluminium,
Speaker 7: in excess of twenty five per sent for those industries
Speaker 7: and that was very damaging to the UK economy. And
Speaker 7: after the deal today there is relief for those industries.
Speaker 7: So on cars the tariff going down from twenty seven
Speaker 7: point five percent to ten percent for a quotch of
Speaker 7: one hundred thousand vehicles, which the privacy case DALM was
Speaker 7: hailing as a victory for companies like Jaguar Landrover. The
Speaker 7: steel tariff has gone from twenty five percent to zero.
Speaker 7: Similar for aluminium. So those are the real big tariff
Speaker 7: wins that the UK wants to talk about But nevertheless
Speaker 7: there are still these ten percent baseline tariffs on the
Speaker 7: arrest of goods that the UK tries with the US.
Speaker 7: So it's still a weaker position for the UK than
Speaker 7: before Donald Trump became present, but it's better than things
Speaker 7: were yesterday. That's how kiss Dalwin was framing it. So
Speaker 7: it's a limited polisical win for the UK whilst still
Speaker 7: suffering effectively from the remaining tariffs.
Speaker 4: What about US access to the UK market? And one
Speaker 4: of the things Donald Trump has talked about for a
Speaker 4: long time is that, you know, Europeans and I suppose
Speaker 4: he includes the Brits in that don't buy American products,
Speaker 4: and of course he's talking about cars. Is the UK
Speaker 4: market going to be far more open to US goods
Speaker 4: than it was before this agreements?
Speaker 7: There was included in this agreement provisions to liberalize access
Speaker 7: to UK market for food products for example, for example,
Speaker 7: beef exports can now come into the UK from the
Speaker 7: US and why they couldn't before.
Speaker 8: So that was hell as.
Speaker 7: A victory by President Trump. A tariff on ethanol exports
Speaker 7: in the UK they're also now being removed, So yes,
Speaker 7: there was a liberalization here. It wasn't an enormous liberalization that,
Speaker 7: for example, on food standards, the UK is still saying
Speaker 7: that it won't, for example, accept hormone treated beef into Britain.
Speaker 7: So that's a a kind of limitation on that liberalization,
Speaker 7: but still extreme limitation.
Speaker 2: Thanks Start, Yeah, I want to bring Start Paul in
Speaker 2: a Bloomberg Economics he joined us here in the Bloomberg
Speaker 2: Business Week studio. Equity markets certainly cheering this, and we
Speaker 2: should note that the fact that the President did make
Speaker 2: comments about buying US equities earlier in the day as
Speaker 2: well when he was in the Oval office earlier. Stuart,
Speaker 2: what is the view from your per Bloomberg Economics of
Speaker 2: what this means for the US and sort of how
Speaker 2: it could illuminate maybe a framework moving forward for deals.
Speaker 9: Just we know that we're on a de escalatory path.
Speaker 9: This concretizes some of it. It gives some sort of
Speaker 9: shape to what we could expect from deals going forward.
Speaker 9: It might be a piecemeal approach, and this can be
Speaker 9: something that takes a long time to develop. As we
Speaker 9: heard from Secretary Bessant, there are seventeen key trading partners
Speaker 9: that the US is approaching deals with. If they all
Speaker 9: take this shape, They're all going to have a relatively
Speaker 9: dull sort of impact on US economic activity. What will
Speaker 9: really shift most is sentiment around US engagement in the world. So,
Speaker 9: just recognizing that we're on this sort of de escalatory
Speaker 9: trend and that there's not going to be just a
Speaker 9: full retreat from the global stage.
Speaker 4: What would be the best for US economic activity? I mean,
Speaker 4: it doesn't seem like the President's going to lower at
Speaker 4: least the baseline tariffs billow ten percent for any country,
Speaker 4: won't do it for the UK.
Speaker 9: Yeah, So even if he doesn't lower the baseline tariff,
Speaker 9: creating enough car vouds does open up, so it does
Speaker 9: sort of generate additional economic activity, and it brings the
Speaker 9: average effective tarif rate significantly below what that ten percent
Speaker 9: baseline is. So if we think about what the average
Speaker 9: effective tarif rate was on the UK, it was just
Speaker 9: a touch above ten percent. Now with these carveouts, the
Speaker 9: average effective tarifrate in the UK drops down to about
Speaker 9: seven percent. So what does that means, Let's say for
Speaker 9: the UK in terms of economic activity and growth, where
Speaker 9: there was about about thirty basis points of drag on
Speaker 9: real GDP growth for the UK, now it'll just be
Speaker 9: about twenty basis points of drag, so that'll keep GDP
Speaker 9: growth just a touch under one percent for the full year.
Speaker 9: That's that's according to our UK forecast.
Speaker 2: Hey, Joe, on that point, based on your reporting and
Speaker 2: what you've learned about this deal, does it seem like
Speaker 2: it's a better deal for the US, it's a better
Speaker 2: deal for the UK? Or are they kind of when's
Speaker 2: the table here?
Speaker 4: Is it?
Speaker 8: When?
Speaker 10: When?
Speaker 8: Yeah?
Speaker 7: I mean it feels like a better deal for the
Speaker 7: US if your reference point is the day Donal Trump
Speaker 7: becomes president, because compared to that day, the US has
Speaker 7: gained a fair amounts here agriculture access for many products,
Speaker 7: the ethne thing I mentioned, and still has these ten
Speaker 7: per cent tariffs on the UK, and the UK is
Speaker 7: in damaged limitation mode with this deal, so better than yesterday,
Speaker 7: but clearly not as good as it was when Don
Speaker 7: Trump first became president. So yeah, I think it's the
Speaker 7: US is I think coming out of this slightly stronger
Speaker 7: or the UK also is trying to claim that the
Speaker 7: wins are on their side.
Speaker 2: As we mentioned, Joe, this is a framework right now.
Speaker 2: Some of the details continue the need to be hashed
Speaker 2: out in the coming weeks. What questions do you have,
Speaker 2: like what's the fine print here that we don't really
Speaker 2: know yet.
Speaker 7: So the UK said that this for them is really
Speaker 7: a starting point. If anything, there's still much more to
Speaker 7: happen when it comes to negotiations. That are things like
Speaker 7: the digital services tax, which the US wants to see
Speaker 7: regime used. It's dislikes by the likes of Facebook, Google,
Speaker 7: the evil musk Rey dislikes that tax. That could form
Speaker 7: part of a digital agreement that's still to be negotiated.
Speaker 7: The UK has said there's also other tariff lines which
Speaker 7: the UK would like to see removed, but that subject
Speaker 7: further negotiation. The pharmaceutical sector, for example, very important to
Speaker 7: the UK. There wasn't explicit reference to that in the
Speaker 7: agreement today, so what happens there on tariff So there's
Speaker 7: still much more to come bent President Trump was trying
Speaker 7: to say this is full comprehensive, We've maxed it out,
Speaker 7: and the UK was saying, well, actually there's a lot
Speaker 7: we still wanted to talk about here, but you know,
Speaker 7: we'll play nicely for today.
Speaker 4: Joe, I wonder about the the importance of automotive to
Speaker 4: the UK economy. It's been become clear. I think to
Speaker 4: a lot of people over the past few weeks, certainly
Speaker 4: since April second, that global trade is car trade?
Speaker 8: Really?
Speaker 4: How big is it in the UK, especially when you're
Speaker 4: just looking at exports to the US, right, because I
Speaker 4: only can think of very high end you know, Gordon
Speaker 4: Murray Automobiles, McMurtry, McLaren, Range, Rover, Rolls, Royce Bentley. It's
Speaker 4: not the mass production vehicles as Tim was mentioning, like
Speaker 4: Toyota and Nissan. Even though you make them there, you
Speaker 4: don't make them there for our market.
Speaker 7: Yeah, that's right. It's premium cars that the UK tends
Speaker 7: to sell into the US, and exports of UK cars
Speaker 7: the US were about one hundred thousand of the last counts,
Speaker 7: which is basically covered by this quota that's been announced today,
Speaker 7: one hundred thousand quota at ten percent. So you can
Speaker 7: see why the UK is happy with that arrangement. I
Speaker 7: think the UK carnistry has been broadly speaking, in decline
Speaker 7: in recent decades, but nevertheless it has carved out this
Speaker 7: niche in high end luxury vehicles and the US worst
Speaker 7: important market. So there's a kind of symbolic win here
Speaker 7: for the UK. It won't have massive impacts on the
Speaker 7: UK comedy Ritt large. It's still a very small part
Speaker 7: of the UK comedy. But nevertheless it's a kind of
Speaker 7: nice symbolic political win for Kirstamer to say, look, I
Speaker 7: have masage to reduce these tarers and he was saying
Speaker 7: today this preserves jobs across the UK, so that's something
Speaker 7: to be celebrated.
Speaker 2: We're having this conversation, Stuart, in context of a United
Speaker 2: States that has essentially said now is the time to
Speaker 2: come and negotiate. We know that the Treasury Secretary is
Speaker 2: headed to Switzerland this weekend to meet with representatives from
Speaker 2: the Chinese government. We're not talking about China here, though.
Speaker 2: Does any of this matter without a deal with China?
Speaker 9: China, of course matters. Most accounts for about what fourteen
Speaker 9: to fifteen percent of our total imports were running a
Speaker 9: trade surplus with the UK. It really doesn't matter a
Speaker 9: ton to the US if the average effective tariff rate
Speaker 9: on UK goods is somewhat higher. Once you start creating
Speaker 9: carve outs for things like pharmaceuticals and everything else under
Speaker 9: the sun, we're gonna drop from probably a current effective
Speaker 9: tarifrate of seven percent on UK imports to something closer
Speaker 9: to three percent. Not really material. What I do think
Speaker 9: is the most material is this idea that when Trump
Speaker 9: took office, the outward expression was one of an interest
Speaker 9: in withdrawing from the global stage. Now directionally we're moving
Speaker 9: in the opposite direction. We have had public statements from
Speaker 9: folks like Besant and everybody else saying that one hundred
Speaker 9: and forty five percent effective rate on China is not
Speaker 9: something that sustainable or that can stay, that can remain
Speaker 9: in perpetuity. And so again the direction is towards de escalation,
Speaker 9: and I think that that's what matters most. This is
Speaker 9: not going to be just the complete crackup of the
Speaker 9: global commercial order that was threatened. There will be a
Speaker 9: turning of the tide, in a bit of a shifting.
Speaker 9: But we knew that that was going to be the case,
Speaker 9: with friend shoring and on shoring as opposed to you know,
Speaker 9: retaliatory or reciprocal tariffs being the terminology of the day.
Speaker 9: We knew this was going to be the direction under Trump.
Speaker 11: By the way, I forgot to.
Speaker 4: I forgot to tell everyone Happy v Day because it
Speaker 4: is May eighth, right, It's victory in Europe Day. Joe,
Speaker 4: Happy ve Day. Well, what do we know about the
Speaker 4: European Union? I mean, the US UK agreement has been
Speaker 4: the main headline, but we've got another flurry of trade
Speaker 4: headlines with golf, sovereign wealth funds, with a critical minerals
Speaker 4: deal in Ukraine, and the EU talking about tariffs on
Speaker 4: ninety five billion dollars of US exports. What do we
Speaker 4: know about the EU deal?
Speaker 7: And what we know is that clearly it's a big
Speaker 7: priority for both sides to get some kind of agreement done.
Speaker 7: And we're all kind of reading the tea leaves today
Speaker 7: on the UK agreement to say, Okay, clearly the US
Speaker 7: is willing to do this entree, so might they be
Speaker 7: willing for the same on the EU. But clearly it's
Speaker 7: different when it comes to the scope of those kinds
Speaker 7: of deals. Obviously much larger economies, much more trade at stake.
Speaker 7: It's really a watching brief at this point, trying to see,
Speaker 7: you know, will there be movement in these coming weeks. Clearly,
Speaker 7: as we've just been discussing, the direction of travel from
Speaker 7: the US side is towards wanting that engagement. But the EU,
Speaker 7: we know, strikes very hard bargains. These negotiations, and it
Speaker 7: is unlikely to kind of concede too much in those
Speaker 7: kinds of talks. So, yeah, it's still a watching brief, Joe.
Speaker 2: A lot of questions about this status of American beef
Speaker 2: going to the UK. What can you tell us just
Speaker 2: about American agriculture and access to the UK market and
Speaker 2: how that could potentially change under this framework.
Speaker 7: Yeah, so this has been one of the biggest sticking
Speaker 7: points in the UK US trade talks historically. It's one
Speaker 7: of the reasons why it's been difficult to get a
Speaker 7: kind of big, comprehensive free trade agreement in recent years.
Speaker 7: And what's happened here is that the UK has said, yes,
Speaker 7: we will allow for the import of US beef, but
Speaker 7: on the condition that it reaches UK food standards. Now,
Speaker 7: those food standards are standards that the US has long
Speaker 7: criticized has been a scientific and unnecessary, but in the
Speaker 7: UK they are seen as exceptionally politically important, and we're
Speaker 7: talking here about things like hormone traded beef, hormone treated beef.
Speaker 7: And indeed, for the UK it's for important to maintain
Speaker 7: their standards if they want to deal with the EU,
Speaker 7: because the EU is particularly hot on having those standards upheld.
Speaker 7: So what the UK is done here is can walk
Speaker 7: that tightrope and kept open the option for deals with
Speaker 7: the EU by keeping that restriction in place. Benethless, given
Speaker 7: the US a win by saying you can import some
Speaker 7: beef into the UK now which tariffs and so on
Speaker 7: under a quota, but just not hormone treated beef. So
Speaker 7: you can see why it's kind of a halfway house.
Speaker 2: I want to give Stewart the last word. One of
Speaker 2: the reasons we love getting you on, Stuart is because
Speaker 2: you're able to make these quick calculations about economic impact
Speaker 2: of certain events. And I'm going to put you on
Speaker 2: the spot here and just give us your view on
Speaker 2: the pope and what it means for the US economy
Speaker 2: that he is actually the first US born pope to
Speaker 2: lead the Catholic Church. Do we have numbers here, sure?
Speaker 9: So what really matters is if he's going to come
Speaker 9: and visit the United States. Right, famously, post Francis wouldn't
Speaker 9: really return to Argentina. But if we were to see
Speaker 9: now Pope Leo the fourteenth coming to the United States,
Speaker 9: it could mean a material increase in spending. If we're
Speaker 9: just extrapolating based on the economic activity boost from let's
Speaker 9: say Francis's visit to Philadelphia or Soul in twenty fourteen
Speaker 9: and fifty, and just adjusting for inflation and accounting for
Speaker 9: what the impact to be. If the Pope visited, say Chicago,
Speaker 9: his hometown, you could expect about a billion dollars an
Speaker 9: additional economic activity. That's about five basis points of additional
Speaker 9: spending growth in any given month. A four city tour
Speaker 9: or five city tour like that is a pretty big
Speaker 9: papal pop in economic activity from a tour coming from
Speaker 9: the pope.
Speaker 2: Okay, so maybe not Taylor Swift, maybe not Beyonce, but
Speaker 2: the Pope certainly a huge economic impact.
Speaker 4: If he does a whole tour, it would be a
Speaker 4: different story, right. He wouldn't likely just go to Chicago.
Speaker 4: He would bring over the his whole entourage, probably at
Speaker 4: least one Pope mobile. So I imagine he would go
Speaker 4: you know, New York, DC, Chicago.
Speaker 9: Yeah, I mean the travel expenses, the security expenses for
Speaker 9: each city visit, that's probably close to about fifty million dollars.
Speaker 9: But yeah, this is not quite Taylor Swift, but they're
Speaker 9: still talking about filling Wrigley feel. Yeah, it's a a
Speaker 9: good amount of economic activity that generated.
Speaker 2: All right, well, a big thank you to both of
Speaker 2: you who covered a lot here. We went around the world.
Speaker 2: Joe mays Our, Bloomberg News UK Government reporter, joining us
Speaker 2: from London. Bloomberg Economics US economists store Paul.
Speaker 8: Here.
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Speaker 11: I'm Carol Massard. We're at the Principal Asset real Estate
Speaker 11: conference here in Pleasant Valley, Arizona. We're going to continue
Speaker 11: our coverage here. I want to throw out one little
Speaker 11: stat as we continue. Nearly half of family offices say
Speaker 11: they plan to increase allocations to real estate in the
Speaker 11: coming months, with an emphasis on residential industrial sectors. This
Speaker 11: is according to some research out from night Frank, So
Speaker 11: let's get to it. I'm curious what rich Hill has
Speaker 11: to say about it. He's Senior managing director, Global head
Speaker 11: of real Estate Research and Strategy at Principal Asset Management.
Speaker 11: Here at the conference in Arizona, rich. Good to have
Speaker 11: you here with us. How are you.
Speaker 8: I'm great, Thanks for having me on today.
Speaker 11: It's great to have you here. I love folks who
Speaker 11: have seen some different cycles. How do you make sense
Speaker 11: of this cycle right now?
Speaker 3: Hey?
Speaker 8: Look, every cycle's different.
Speaker 12: I like to begin by saying commercial real estate valuations
Speaker 12: are down more than twenty percent from their peak in
Speaker 12: twenty twenty two. That's a generational decline in private real
Speaker 12: estate valuations. We've only seen that two times before and
Speaker 12: aftermath of the Great Financial Crisis and in the early
Speaker 12: nineteen nineties post this SNEL crisis. So heading into this year,
Speaker 12: commercial real estate valuations felt like they were on pretty
Speaker 12: good footing. Then April came and tear us through a
Speaker 12: little wrench in that equation, leading to some questions amongst investors.
Speaker 11: Well, it's interesting too when I think about miss priced assets,
Speaker 11: So how mispriced are they then today in terms of
Speaker 11: lower too low in terms of valuation, Which are some
Speaker 11: assets that maybe still need a little bit of work here?
Speaker 12: Yeah? Great, that is a really interesting question because as
Speaker 12: you think about what's miss priced, you can think about
Speaker 12: that on absolute basis or a relative basis, where we
Speaker 12: think about assets that are mispriced. It's that are actually
Speaker 12: going to grow very strongly over the next three, five
Speaker 12: or ten years. Those are, in many cases alternative sectors
Speaker 12: that many people don't think are what could be considered
Speaker 12: traditional commercial real estate asset classes, right, things like data centers, right,
Speaker 12: or cell dours or seniors housing or single family rentals.
Speaker 12: These were asset classes that didn't exist in the commercial
Speaker 12: real estate sector twenty years ago, but are now a
Speaker 12: big portion of the commercial real estate market.
Speaker 5: Yeah.
Speaker 11: I love that you go there. There's also variations I'm
Speaker 11: assuming in terms of geography, right, when you look at
Speaker 11: what's miss priced what's not for sure?
Speaker 12: As we think about what has done really well over
Speaker 12: the past five years, it's been driven by population migrations, right,
Speaker 12: So many of the Sun Belt markets boomed in valuations,
Speaker 12: and you're beginning to see some actual growing pains in
Speaker 12: the Sun Belt market.
Speaker 8: You know.
Speaker 11: One of the things I love that you said longevity.
Speaker 11: Deborah Cafaro Aventis was on this panel I did at
Speaker 11: Milkin and just you know, she's been you know, obviously
Speaker 11: when it comes to senior living centers, obviously the healthcare
Speaker 11: sign of it, but that longevity play, especially when it
Speaker 11: comes to real estate. That's one that's going to stick
Speaker 11: with us for a while.
Speaker 8: It is.
Speaker 12: What I don't think a lot of people may understand
Speaker 12: is that the aging demographic has lived in their houses
Speaker 12: for longer periods of time. That's actually created some structural
Speaker 12: and balances in.
Speaker 8: The single family home market.
Speaker 12: But we think this aging demographic will ultimately move into
Speaker 12: seniors housing, whether it be limited service senior housing, all
Speaker 12: sorts of different seniors housing, and this is going to
Speaker 12: be a long term structural shift that's here to stay.
Speaker 11: That's a global That is a global trend. It is,
Speaker 11: it's not specific in terms of different markets. One of
Speaker 11: the things I wanted to say, I mean, looking at
Speaker 11: how US reads are performing as a group, they're up
Speaker 11: about one percent year to date. They've bounced back along
Speaker 11: with the rest of the US market. They're nearly up
Speaker 11: twelve percent since early April. You look at European reads,
Speaker 11: they've bounced nearly seventeen percents since then. What does the
Speaker 11: trend tell you about investor sentiment and the willingness to
Speaker 11: maybe go back into the market. Is it just the
Speaker 11: overall okay bounce back or is it something more substantial.
Speaker 12: We think it's something much more substantial.
Speaker 8: Reads.
Speaker 12: While they've had good years in the past couple of years,
Speaker 12: on an absolute basis, they haven't been a favorite sector
Speaker 12: in the S and P five hundred or the global
Speaker 12: stock market. But we think the listed public markets are
Speaker 12: a leading indicator on both downturns and recoveries. So the
Speaker 12: public markets are sending a signal that commercial real estate
Speaker 12: might be a relative winner in this new backdrop of
Speaker 12: higher interest rates and higher inflation. It's a really fascinating
Speaker 12: topic that I don't think is getting enough attention. List
Speaker 12: reads in the United States. Real estate in the United States,
Speaker 12: that's the fourth best sector of the S and P
Speaker 12: five hundred. Despite all the headlines you see about what's
Speaker 12: happening with tariffs, what's happening with growth, what's happening with
Speaker 12: interest rates, the public markets are telling you that you
Speaker 12: should be focusing on the commercial real.
Speaker 11: Lill how do you make sense of that in terms
Speaker 11: of a higher for maybe longer rate environment. Certainly in
Speaker 11: the United States, it's not fair to say, I mean
Speaker 11: the ECB we saw, you know, certainly has been cutting rates.
Speaker 11: Was at the Bank of England cut it. It's not
Speaker 11: all the same rate strategy when it comes to global
Speaker 11: central banks, how do you make sense of that? Though
Speaker 11: in the United States.
Speaker 12: I'm often asked, what do I think about this new
Speaker 12: normal environment of higher inflation and higher interest rates? I
Speaker 12: reject the premise of the question. What was abnormal was
Speaker 12: the last ten years of low interest rates and low inflation.
Speaker 12: Commercial real estate actually doesn't do that well in that environment,
Speaker 12: at least on a relative basis. Where commercial real estate
Speaker 12: actually does well is what happened prior to the GFC.
Speaker 12: A higherst higher inflation regime exlicit for decades, and that's
Speaker 12: actually fairly accommodative for commercial real estate because guess what,
Speaker 12: it's a growth sector.
Speaker 11: What about office? I just want to go there. I
Speaker 11: feel like we've been talking about it since the pandemic.
Speaker 11: Here we are, what five years out, and I don't
Speaker 11: know whether the big shoe has yet to drop expectations
Speaker 11: in terms of that within the real estate sector.
Speaker 12: If you're going to ask me, is office going to
Speaker 12: be an attractive sector over the next ten years or beyond, yeah,
Speaker 12: I have to tell you yes, it's going to be. Why,
Speaker 12: there's a couple different reasons. First of all, last cycles
Speaker 12: winners are rarely next cycles winners. Office properties have been
Speaker 12: beaten down so much and they're redlined by much of
Speaker 12: the investor race right now, right that they're beginning to
Speaker 12: screen at an attract evaluation, especially for the high quality,
Speaker 12: well positioned properties. I would consider myself office curious right now.
Speaker 12: I think it is an attractive asset class over the medium.
Speaker 8: To long term.
Speaker 12: The signal that you should be looking for is an
Speaker 12: opening up of lending to the office sector, and I
Speaker 12: think we're in the cusp of seeing that in twenty twenty.
Speaker 11: Five, coming from the private markets more so than the
Speaker 11: big banks.
Speaker 12: That is correct, people like Prince Alassat Management. One of
Speaker 12: the themes that we heard on our panel earlier today
Speaker 12: is well, is there an opportunity to begin lending on
Speaker 12: high quality office at a reset lower basis. I think
Speaker 12: that might make a lot of sense.
Speaker 11: I am curious. You know, as you guys have conversations
Speaker 11: here at the conference, You've got some really big clients,
Speaker 11: big investors here, what is top of mind for them
Speaker 11: when it comes to real estate? And I hate to
Speaker 11: keep putting it all into one bucket, because it's, as
Speaker 11: we know, there's different verticals, there's different geographies, and I
Speaker 11: think it's an important distinction, but I am curious what
Speaker 11: they're asking you.
Speaker 12: Yeah, what's happened over the past twenty thirty years is
Speaker 12: that commercial real estate has benefited from a secular decline
Speaker 12: in tenure treasure rates. Right, borrowers have been or investors
Speaker 12: have been able to refinance and lower lower interest rates,
Speaker 12: which has helped valuations. I think a really big theme
Speaker 12: coming out of this conference is back to basics, what
Speaker 12: property type and what market will drive long term growth.
Speaker 12: That's really refreshing to me because financial engineering has driven
Speaker 12: returns for the past decades, so rightkaid, Plus we're now
Speaker 12: getting back to all right, fine, what property type do
Speaker 12: I think I'm going to get three percent net operating
Speaker 12: income growth revenue minus expenses?
Speaker 1: Right?
Speaker 11: Where can I.
Speaker 12: Actually generate the high attractive unlevered IRRs. You actually don't
Speaker 12: need that much growth relative to history to get there.
Speaker 12: So I think there's a lot of investors acutely focused
Speaker 12: on what property types and what markets to buy.
Speaker 11: Which it's more like being back to normal, right. I mean, well,
Speaker 11: I know everybody kind of forgets that what we saw
Speaker 11: for such a long time where there was basically no
Speaker 11: cost to money. Right, that was the unusual point.
Speaker 12: Called back to the future, call it back to normal,
Speaker 12: whatever you want to. This is a really refreshing environment
Speaker 12: where you can actually block and tackle if you will.
Speaker 11: I want to ask you variations US, Europe, Asian, Middle East,
Speaker 11: you know, the supply chain as it moves around geographies
Speaker 11: that maybe didn't get a lot of attention that are
Speaker 11: now getting attention. Like I keep bringing up this idea
Speaker 11: that Disney's not going to build a theme park in
Speaker 11: the Middle East. You know, I talked to a lot
Speaker 11: of folks at Milkin who were like, we opened up
Speaker 11: in an office somewhere in the Middle East. So I am
Speaker 11: curious when you look around the world, you know, where
Speaker 11: is it all of a sudden getting a lot of
Speaker 11: investor intention when it comes to the real estate play.
Speaker 12: We think one of the most significant trends of the
Speaker 12: next five to ten years might be the European continent
Speaker 12: and specifically Europe. Yeah, and specifically building logistics on the
Speaker 12: European continent. Why is that the case, Well, the European
Speaker 12: countries might have to trade more with each other, and
Speaker 12: most warehouse facilities on the European continent are actually relatively old,
Speaker 12: call it ten fifteen, twenty years old, right, That does
Speaker 12: not accommodate new modern trade.
Speaker 8: So to be able to build new.
Speaker 12: Logistics facilities on the continent could be a really interesting
Speaker 12: theme that's coming out of the next evolution of where
Speaker 12: we go post era?
Speaker 11: Does that also include ports like ports all of a sudden,
Speaker 11: Like one of the things that came out of the
Speaker 11: discussions at Milkin too is like that West coast port
Speaker 11: one of you know that maybe it'll be busy, but
Speaker 11: maybe not as busy as it used to be. So
Speaker 11: I'm just curious when you think about that as well,
Speaker 11: the infrastructure build for that.
Speaker 12: Absolutely you have to find these right ports on the
Speaker 12: European continent and maybe even the UK that will change
Speaker 12: the shipment of goods. Maybe in the US. One of
Speaker 12: the ports that I think is most interesting in Savannah.
Speaker 12: Just to sort of levey off of what you were talking.
Speaker 11: About, We've got a lot of family down in South Carolinina,
Speaker 11: not Savannah, But nonetheless there's so much activity just to
Speaker 11: wrap up here. Where do you think is the biggest
Speaker 11: opportunity when you look out Again, real estate's a longer
Speaker 11: term play, so I think it's either three, five, ten years,
Speaker 11: where do you think will really present some really unique
Speaker 11: opportunities for investors.
Speaker 12: Yeah, so I'd just conclude commercial real estate is actually
Speaker 12: eighteen different sectors that fall under a broad umbrella. They
Speaker 12: were always opportunities someplace in the world for some property type.
Speaker 12: I do think European logistics is a really big opportunity.
Speaker 12: We think senior's housing is a really big.
Speaker 11: Opportunity globally, right globally.
Speaker 12: One of the themes that I've been really surprised about
Speaker 12: to hear because it's a relatively nichee sector, but levers
Speaker 12: off of senior's housing is medical office buildings. I've been
Speaker 12: hearing a lot of investors talk about medical office buildings.
Speaker 12: So there's going to be some really interesting opportunities that
Speaker 12: come out from the shakeup. And I'll come back to
Speaker 12: the question you asked about office. I'd be remiss if
Speaker 12: I said over the next ten or twenty years, it
Speaker 12: sort of feels like it's ready for a rebound.
Speaker 11: At some point, people are actually going back to the office,
Speaker 11: aren't they.
Speaker 12: My train into New York City is at ninety seven
Speaker 12: percent of capacity.
Speaker 11: It's happening. It's happening, really great stuff. Thank you so much.
Speaker 8: It's great meeting you. Yeah. Same.
Speaker 11: Here. Rich Hill, Senior Managing Director, Global ahead of real
Speaker 11: Estate Research and Strategy at Principal Asset Management. Here at
Speaker 11: the Principal of Real Estate Conference.
Speaker 6: You're listening to the Bloomberg Business Weekdaily Podcast. Catch us
Speaker 6: live weekday afternoons from two to five pm Eastern. Listen
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Speaker 11: Jim's back in New York. I'm here in Arizona, and
Speaker 11: I'm here at the Principal real Estate conference that's been underway.
Speaker 11: I want to jump right in and get to our
Speaker 11: next guest's Kamal Bati's President CEO of Principal Asset Management. Kamal,
Speaker 11: it's been really fun talking with your team because I think,
Speaker 11: amid uncertainty volatility, you know, when you think about some
Speaker 11: of these asset classes, like real estate, investors are in
Speaker 11: it for the long term, so there is a sense
Speaker 11: of calm and understanding that we're going to go through cycles.
Speaker 11: Talk to us a little bit about, you know, your
Speaker 11: check ins with your team on a regular basis, A
Speaker 11: mid kind of the backdrop.
Speaker 10: That we've had absolutely First of all, Carol, thank you
Speaker 10: for being here in Arizona. It's it's an honor. You know,
Speaker 10: real estate is the heart of our business. We have
Speaker 10: one of the biggest managers in the world, and it's
Speaker 10: great to have Bloomberg join us at our premier conference,
Speaker 10: So thank you for that.
Speaker 11: Adom Becaus been doing it for a quarter of a century.
Speaker 10: We have been we have some experience from market cycles,
Speaker 10: which which probably matters more than ever before. So to
Speaker 10: your question, I think, you know, sort of uncertainty seems
Speaker 10: to be the most commonly used word these days, and
Speaker 10: I would say probably the world I want to focus
Speaker 10: on is clarity because as investors, I think that probably
Speaker 10: is the more important word to focus on. What you
Speaker 10: can get clarity on and what you can get clarity on,
Speaker 10: In fact, one of the things when you really think
Speaker 10: about long term trends, because there's a lot of short
Speaker 10: term noise. The two things I think we can have
Speaker 10: absolute clarity on is the world is aging and there
Speaker 10: is money in motion in retirement. And I think if
Speaker 10: you really think about the needs of those investors in retirement,
Speaker 10: which we are a premier manager, almost three and twenty
Speaker 10: billion of our assets in retirement. The needs for those
Speaker 10: investors are like only getting more important. And if you
Speaker 10: really bring that act to an investing landscape with what
Speaker 10: we have noise in the trade, trade wars, de globalization,
Speaker 10: the one thing that is clear to us is you
Speaker 10: have to have local knowledge and footprint as you navigate
Speaker 10: this environment. You can run portfolios just with a US mindset.
Speaker 10: You've got to have intelligence on the ground, right if
Speaker 10: you're trying to do something in Asia, you're trying to
Speaker 10: do something in Europe. And that's been the key thing
Speaker 10: that I would tell investors need to focus more and
Speaker 10: more on local knowledge and clarity on what's happening in
Speaker 10: the local geographies is going to be way more important
Speaker 10: than it's.
Speaker 11: Been in the part. I think that is so smart
Speaker 11: because I do think you know, we throw out global
Speaker 11: real estate said this a couple of times in the
Speaker 11: conversations today as a bucket, but there's just so many
Speaker 11: different dices and slicing of it, if you will, in
Speaker 11: terms of the different types that are out there. You know,
Speaker 11: one of the things I am also curious, you know,
Speaker 11: you guys have been doing this for a long time
Speaker 11: and it just felt so uncomfortable, But you think of
Speaker 11: something like the Great Financial Crisis. This is nothing like
Speaker 11: what we start are the GFC right when it comes
Speaker 11: to real estate and just in general market volatility.
Speaker 10: Correct, correct, And look, you know, I think we've had
Speaker 10: such ultimate calm on what I would call political policy.
Speaker 10: You know, we over post GFC, so much of our
Speaker 10: attention went to fiscal and monetary policy. I would say
Speaker 10: monetary policy more than anything else, right, And fysical policy
Speaker 10: comes into work on and off, but it was really
Speaker 10: monetary policy was the driver of what all investors thought about.
Speaker 10: And now I think we are entering an era where
Speaker 10: I would say political policy and fiscal policy are going
Speaker 10: to be the driving forces of markets moving forward.
Speaker 8: And it's sort of you have to recalibrate your.
Speaker 11: Bettering your view.
Speaker 10: I think it's a different thing. Okay, I wouldn't call
Speaker 10: it a better thing. I think we have gotten used to.
Speaker 10: I go back to this word around clarity. Central bankers
Speaker 10: became very very good at providing clarity. Yeah, if you
Speaker 10: look at the history of how ins have reacted, such
Speaker 10: attention gets paid to interest rates, what central bankers say,
Speaker 10: and that sort of became the words they chose and
Speaker 10: how they said. It allowed investors to build a framework
Speaker 10: and invest around it. While we can rely on that,
Speaker 10: it is you can get the same level of clarity
Speaker 10: from the political policy today, not just in US but
Speaker 10: across the world, and the fiscal policy is much more
Speaker 10: in control of government organizations, and so you have to
Speaker 10: do a lot of individual work and incremental work as
Speaker 10: an investor if you want to see clarity. And I
Speaker 10: think it's going to be good for markets. Why it
Speaker 10: is going to be good for markets, in my mind
Speaker 10: is we've had sort of a collective viewpoint where markets
Speaker 10: are going, and I think there's a bigger dispersion in
Speaker 10: investors who think where the world is going.
Speaker 11: It's interesting that dispersion. I feel like that is a
Speaker 11: word I'm hearing more and more often in terms of
Speaker 11: just the variations, and you've really got to kind of
Speaker 11: do your homework. I want to go back to what
Speaker 11: you talked a little bit about longevity, retirement, the democratization
Speaker 11: especially the private market. Is that going to increasingly whether
Speaker 11: it's exposure to real estate or other important for ultimately
Speaker 11: folks really hitting their targets when it comes to retirement.
Speaker 11: And what do you want to see in terms of policies.
Speaker 10: Absolutely great question. So I was just earlier this week
Speaker 10: at Milkin and that was a big topic.
Speaker 8: Yeah, private markets.
Speaker 10: Before that, I'm on the ICI board, Carolyn, that has
Speaker 10: become a topic there. So this notion of retirement and
Speaker 10: private markets overall is a big topic.
Speaker 8: But I would say the three big.
Speaker 10: Trends in the retirement space are, in addition to private markets,
Speaker 10: there is innovation, and innovation is not just investment innovation.
Speaker 10: There is technological innovation that play a role for these
Speaker 10: products to deliver their outcome. And then the last piece
Speaker 10: is I go back to policy. These markets are highly
Speaker 10: dependent on where regulatory policy evolves, and I would say
Speaker 10: the retirement investor is absolutely not participating in private markets today.
Speaker 10: They're almost like sitting on the sideline stuck because there's
Speaker 10: no clarity on the regulatory policy front of how they
Speaker 10: should access is and while there is innovation of how
Speaker 10: to do it, it is not there yet. Going back to
Speaker 10: real estate, I would say it is probably the first
Speaker 10: door you have to enter if you want to allow
Speaker 10: private markets, and as an investor, it should be really
Speaker 10: easy to.
Speaker 8: Understand why why exactly?
Speaker 10: I would say of all the asset classes, real estate
Speaker 10: is probably the most different from bonds and stocks. You know,
Speaker 10: people talk about private equity, people talk about private credit.
Speaker 10: They are different, but they're not that different. Real Estate
Speaker 10: at the core is different, and so why are we
Speaker 10: going to do this. It's all about outcomes, So you
Speaker 10: want to add things that diversify you further. So real
Speaker 10: estate a makes the first logical argument, and academic literature
Speaker 10: even says that you've got to pick the most diversifying
Speaker 10: asset first, So that one makes sense. Two, it is
Speaker 10: deeply global, and it is wide and deep realistic exist
Speaker 10: all across the world.
Speaker 8: You know, we have read markets.
Speaker 10: And so the second thing you want to have is
Speaker 10: if you want to do it in retirement portfolios, you
Speaker 10: want to have public and private proxies for doing something.
Speaker 8: Yeah, real estate is one of those asset classes.
Speaker 10: You could buy direct or you could do reads, you
Speaker 10: could buy bonds, or you could do equity. It is
Speaker 10: a complete three sixty asset class. And at the end
Speaker 10: of the day, the saverer, which is really mom and
Speaker 10: pops who are saving for retirement, want to have an
Speaker 10: asset class that's deep and you can implement your views
Speaker 10: across the world in.
Speaker 8: A good way. That's probably the best reason I would argue, you.
Speaker 11: Know, it's funny at Milkin and one of the guests,
Speaker 11: I said, you know, it's going to be a period
Speaker 11: where like we don't really care about the public markets anymore,
Speaker 11: and like they looked at me like I was black.
Speaker 11: You know, what are you saying? But it just increasingly
Speaker 11: the shift private markets has certainly been a topic, as
Speaker 11: you know it looking for a long time, whether it's
Speaker 11: real estate like pick your thing, and I just wonder,
Speaker 11: you know, how are the majority of investors for one
Speaker 11: cage like your mom and pop, what they are missing
Speaker 11: out on?
Speaker 10: Yeah, so I would say what they're really missing on
Speaker 10: is having access to all asset classes. And as you said,
Speaker 10: they're largely in publics. But public will have.
Speaker 8: To be the core of the portfolio.
Speaker 10: You know, you need to manage liquidity in these portfolios,
Speaker 10: and it is by far the biggest component of market
Speaker 10: access today is in public market.
Speaker 11: I just got about thirty seconds left here real quickly.
Speaker 11: Secretary of Besent kicked off Milkin talking about American exceptionalism
Speaker 11: basically best place for the US. How do you see it?
Speaker 11: Because you look at real estate from a global perspective.
Speaker 10: So here's what I would say, I think just quickly, yes,
Speaker 10: just quickly, America will remain exceptional in technology. Not sure
Speaker 10: about every sector of the economy.
Speaker 11: All right, you are quick, you know how to take cues.
Speaker 11: Really really appreciate it. And it feels like a lot
Speaker 11: more optimism, a lot more open than some of the
Speaker 11: uncertainty and concerns come out. Perfect way for us to
Speaker 11: wrap up.
Speaker 8: Our coverage today.
Speaker 11: Thank you so much for inviting us. Really enjoy the conversations.
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