1 00:00:02,520 --> 00:00:13,760 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg 2 00:00:13,840 --> 00:00:17,920 Speaker 1: Surveillance Podcast. Catch us live weekdays at seven am Eastern 3 00:00:18,200 --> 00:00:22,000 Speaker 1: on Apple CarPlay or Android Auto with the Bloomberg Business app. 4 00:00:22,360 --> 00:00:25,680 Speaker 1: Listen on demand wherever you get your podcasts, or watch 5 00:00:25,760 --> 00:00:26,960 Speaker 1: us live on YouTube. 6 00:00:27,040 --> 00:00:29,920 Speaker 2: Bremercam Patison here for a good conversation to start the 7 00:00:29,920 --> 00:00:32,479 Speaker 2: morning off, and of course we devolve that to a 8 00:00:32,560 --> 00:00:35,680 Speaker 2: dollar discussion. And on premiere she's focused on crypto. We'll 9 00:00:35,680 --> 00:00:38,239 Speaker 2: get to that in a moment. Her effort at the 10 00:00:38,240 --> 00:00:41,880 Speaker 2: Council on Foreign Relations is noticed. I can't say enough 11 00:00:41,880 --> 00:00:45,040 Speaker 2: about the new edition of Foreign Affairs magazine. You'll see 12 00:00:45,040 --> 00:00:47,080 Speaker 2: it in the next couple days or so. It's just 13 00:00:47,240 --> 00:00:51,040 Speaker 2: absolutely extraordinary. I've got to go to dollar here right now. 14 00:00:51,640 --> 00:00:55,040 Speaker 2: It's dollar had your money? Is it threatened by all 15 00:00:55,080 --> 00:00:56,440 Speaker 2: that's going on in Washington? 16 00:00:57,720 --> 00:01:00,080 Speaker 3: Longer term, yes, I think there is a threat to 17 00:01:00,160 --> 00:01:02,880 Speaker 3: the dollar from some of these policies. You know, the 18 00:01:03,000 --> 00:01:07,959 Speaker 3: US relies on demand for treasuries and the idea that 19 00:01:08,040 --> 00:01:10,800 Speaker 3: the Treasury is going to be the biggest bond mark 20 00:01:10,880 --> 00:01:15,120 Speaker 3: in the world. Liquid safe, always transactional, and if you're 21 00:01:15,160 --> 00:01:19,720 Speaker 3: putting tariffs on allies, as well as adversaries. Over time, 22 00:01:19,760 --> 00:01:22,480 Speaker 3: they may want to diversify away from those assets. Now, 23 00:01:22,520 --> 00:01:24,240 Speaker 3: there aren't a lot of places for them to go, 24 00:01:24,319 --> 00:01:26,920 Speaker 3: but one place we've seen clearly over the last couple 25 00:01:26,959 --> 00:01:30,479 Speaker 3: of years is gold. And you are seeing data showing 26 00:01:30,600 --> 00:01:33,960 Speaker 3: China reducing its treasury holdings. Obviously we know Russia did 27 00:01:34,000 --> 00:01:37,080 Speaker 3: over the last several years. So the policies we're putting 28 00:01:37,080 --> 00:01:40,080 Speaker 3: forward today, I think do create some risk. Now there's 29 00:01:40,440 --> 00:01:42,640 Speaker 3: new sources of demand that we can talk about when 30 00:01:42,640 --> 00:01:45,280 Speaker 3: we get to crypto, but when we think about foreign 31 00:01:45,319 --> 00:01:48,440 Speaker 3: holdings of US bonds, I think that is a source 32 00:01:48,480 --> 00:01:51,720 Speaker 3: of risk that could push yields higher and weigh on growth. 33 00:01:52,160 --> 00:01:53,560 Speaker 4: You know, does it do you get a sense that 34 00:01:53,640 --> 00:01:55,680 Speaker 4: this White House, this economic team at the White House, 35 00:01:55,720 --> 00:01:59,240 Speaker 4: that they have a sense that, generally speaking, markets do 36 00:01:59,360 --> 00:02:03,720 Speaker 4: not like uns certainty, whether it's uncertainty a policy, uncertainly, 37 00:02:03,920 --> 00:02:08,200 Speaker 4: uncertainty of rhetoric. Is that something that has an audience, 38 00:02:08,320 --> 00:02:09,880 Speaker 4: do you think down there in DC? Or is it 39 00:02:09,919 --> 00:02:12,079 Speaker 4: just kind of overshadowed by this is a president that 40 00:02:12,120 --> 00:02:13,320 Speaker 4: wants to do what he wants to do. 41 00:02:13,840 --> 00:02:16,800 Speaker 3: President Trump has said in the last few weeks that 42 00:02:16,880 --> 00:02:19,120 Speaker 3: he knows there might be some short term pain to 43 00:02:19,200 --> 00:02:22,240 Speaker 3: get to these long term goals. I think there's probably 44 00:02:22,240 --> 00:02:24,880 Speaker 3: a degree of pain reflected in the markets that would 45 00:02:24,919 --> 00:02:27,639 Speaker 3: get his and his team's attention and maybe cause them 46 00:02:27,680 --> 00:02:32,040 Speaker 3: to take a step back, at least temporarily. But I 47 00:02:32,960 --> 00:02:36,079 Speaker 3: don't honestly know if today, looking at the sell off 48 00:02:36,080 --> 00:02:38,120 Speaker 3: we saw in the stock market last week and the 49 00:02:38,160 --> 00:02:41,400 Speaker 3: continued softness we're seeing this week registers. 50 00:02:41,760 --> 00:02:44,840 Speaker 2: I look at the file through of all this, and 51 00:02:44,880 --> 00:02:46,560 Speaker 2: I guess I go back, like a lot of people, 52 00:02:46,600 --> 00:02:50,680 Speaker 2: to real GDP. The fact is Atlanta GDP now a 53 00:02:50,720 --> 00:02:53,760 Speaker 2: snapshot of where we are right now, is coming in 54 00:02:53,800 --> 00:02:58,440 Speaker 2: with a vengeance. Do you sense a momentum to to, 55 00:02:58,560 --> 00:03:01,160 Speaker 2: you know, to make some news here on a What's today? Tuesday? 56 00:03:01,240 --> 00:03:04,520 Speaker 4: Tuesday, Tuesday morning? Both? 57 00:03:05,000 --> 00:03:07,800 Speaker 2: Yes, I'm worrying about both. I got the stitches out 58 00:03:07,840 --> 00:03:11,480 Speaker 2: from where the damn dog bit me just as simple 59 00:03:11,520 --> 00:03:15,360 Speaker 2: as I can. Are we heading towards two point five 60 00:03:15,400 --> 00:03:17,079 Speaker 2: percent or lower real GDP? 61 00:03:17,520 --> 00:03:21,040 Speaker 3: Well, here's what's so interesting, Tom. You know, last year 62 00:03:21,160 --> 00:03:24,080 Speaker 3: GDP was much stronger than expected. We've gone into this 63 00:03:24,200 --> 00:03:27,200 Speaker 3: year strong. We've seen that in the most recent earning season. 64 00:03:27,480 --> 00:03:30,760 Speaker 3: But that's all backward looking. What drives the economy is 65 00:03:30,840 --> 00:03:34,040 Speaker 3: confidence and incomes. So people still have incomes, the job 66 00:03:34,080 --> 00:03:37,640 Speaker 3: markets still strong outside of certain DC agencies. I don't 67 00:03:37,680 --> 00:03:41,440 Speaker 3: mean to be snarky about that, but confidence is where 68 00:03:41,440 --> 00:03:45,120 Speaker 3: we're seeing some question marks. The other piece that's changing 69 00:03:45,480 --> 00:03:49,600 Speaker 3: is economic surprises. A lot of economists revised up their 70 00:03:49,640 --> 00:03:52,840 Speaker 3: expectations immediately after the election. What we've seen over the 71 00:03:52,920 --> 00:03:57,760 Speaker 3: last several weeks now is data coming in below expectations, disappointing, 72 00:03:58,200 --> 00:03:59,839 Speaker 3: and that indicator coming down. 73 00:04:00,160 --> 00:04:00,280 Speaker 5: Now. 74 00:04:00,280 --> 00:04:02,960 Speaker 3: I want to be careful on causation, but it's correlating 75 00:04:03,240 --> 00:04:06,480 Speaker 3: beautifully with the ten year yield. So the market's pricing 76 00:04:06,520 --> 00:04:08,920 Speaker 3: in two FED cuts again, the ten year yield is 77 00:04:08,920 --> 00:04:12,000 Speaker 3: getting lower. All of that is coming hand in hand 78 00:04:12,080 --> 00:04:17,520 Speaker 3: with both worries about the forward looking economic outlook and disappointments. 79 00:04:17,200 --> 00:04:19,800 Speaker 2: To four digits. Paul Patterson's in the room, so we 80 00:04:19,880 --> 00:04:22,520 Speaker 2: got to, you know, go to four decimal points absolutely 81 00:04:22,560 --> 00:04:26,839 Speaker 2: one point eight nine four and the ten year real yield. 82 00:04:27,000 --> 00:04:29,320 Speaker 2: That's an ian linga number top go. 83 00:04:29,480 --> 00:04:31,640 Speaker 4: These are the top stories on the Bloomberg criminal Tom 84 00:04:31,640 --> 00:04:32,640 Speaker 4: guess what's number one? 85 00:04:32,680 --> 00:04:32,880 Speaker 2: Here? 86 00:04:33,000 --> 00:04:38,160 Speaker 4: Your favorite bitcoin? Bitcoin slides below ninety thousand is crypto 87 00:04:38,240 --> 00:04:42,080 Speaker 4: sell off gathers steam To me, I know you're recently 88 00:04:42,080 --> 00:04:46,080 Speaker 4: at with a piece and CFR on the crypto. I 89 00:04:46,200 --> 00:04:48,600 Speaker 4: kind of just view bitcoin is just a sense of 90 00:04:49,400 --> 00:04:53,479 Speaker 4: risk appetite out there in the marketplace. That's it is. 91 00:04:53,520 --> 00:04:55,120 Speaker 4: Are we saying risk off a little bit here? 92 00:04:55,240 --> 00:05:00,799 Speaker 3: Yeah, I mean it's Bitcoin correlates very well tech stocks, 93 00:05:00,839 --> 00:05:02,760 Speaker 3: which is not surprising. At the end of the day. 94 00:05:03,080 --> 00:05:07,960 Speaker 3: Cryptocurrencies are a form of fintech. So when you see, 95 00:05:08,200 --> 00:05:10,960 Speaker 3: you know, the mag seven come down, it's not shocking 96 00:05:11,000 --> 00:05:14,720 Speaker 3: to me to see Bitcoin come down. If that sell off, 97 00:05:14,760 --> 00:05:18,279 Speaker 3: if Navidia disappoints tomorrow, I think you see bitcoin going 98 00:05:18,320 --> 00:05:20,760 Speaker 3: down further. But it gets me back to our Treasury 99 00:05:20,800 --> 00:05:24,719 Speaker 3: point earlier. President Trump, in one of his executive orders, 100 00:05:25,080 --> 00:05:28,400 Speaker 3: is very explicitly supporting the development of digital assets and 101 00:05:28,480 --> 00:05:32,479 Speaker 3: crypto and specifically stable coin. And I want to highlight 102 00:05:32,520 --> 00:05:37,719 Speaker 3: this because to the degree stable coins gather momentum, gather assets, 103 00:05:37,880 --> 00:05:40,960 Speaker 3: they're backed by the dollar, ones are backed by treasuries 104 00:05:41,000 --> 00:05:43,640 Speaker 3: and other cash like assets. This is a source of 105 00:05:43,680 --> 00:05:47,599 Speaker 3: demand for treasuries that I think Treasury Secretary Bessent is 106 00:05:47,680 --> 00:05:50,520 Speaker 3: keeping a close eye on tether. Just that one has 107 00:05:50,520 --> 00:05:53,279 Speaker 3: something like one hundred and thirteen billion dollars worth of 108 00:05:53,440 --> 00:05:55,240 Speaker 3: treasury and treasury like securities. 109 00:05:55,240 --> 00:05:58,560 Speaker 2: Today Rebecca Patterson with this of course on your morning 110 00:05:58,640 --> 00:06:02,720 Speaker 2: commute and also YouTube subscribe to Bloomberg podcast growing each 111 00:06:03,320 --> 00:06:05,800 Speaker 2: and every day. Can't say enough about YouTube premium. I'm 112 00:06:05,839 --> 00:06:09,680 Speaker 2: reading the book Mark Richard's book on YouTube and YouTube premium. Sure, 113 00:06:09,839 --> 00:06:11,719 Speaker 2: I'm glad I did. It's sort of slick, you know, 114 00:06:12,440 --> 00:06:16,000 Speaker 2: and all that. Let's go back to JP Morgan investmers trust. 115 00:06:16,400 --> 00:06:20,039 Speaker 2: Is there an underlying to bitcoin? Please inform me where's 116 00:06:20,600 --> 00:06:25,440 Speaker 2: where's the underlying to support a theory of bitcoin? 117 00:06:26,200 --> 00:06:30,560 Speaker 3: I mean bitcoin itself to me anyway, remains a speculative asset. 118 00:06:30,839 --> 00:06:34,400 Speaker 3: And I'm not saying that lightly. The Bank for International 119 00:06:34,440 --> 00:06:38,680 Speaker 3: Settlements did a really detailed report about a year and 120 00:06:38,680 --> 00:06:42,599 Speaker 3: a half ago, it's worth reading, talking about the development 121 00:06:42,600 --> 00:06:46,239 Speaker 3: of crypto, and it highlights, based on a global survey, 122 00:06:46,279 --> 00:06:50,200 Speaker 3: a very detailed global survey, that the bulk of owners 123 00:06:50,200 --> 00:06:53,880 Speaker 3: of bitcoin today are young men under the age of 124 00:06:53,920 --> 00:06:57,960 Speaker 3: thirty five, retail investors and it's a momentum trade. 125 00:06:58,279 --> 00:07:00,719 Speaker 2: Yeah, I should say worldwide foe. So do you see 126 00:07:00,760 --> 00:07:04,320 Speaker 2: me say this on social The leadership here is Raphael 127 00:07:04,440 --> 00:07:08,359 Speaker 2: our au Er at the Bank of International Settlements. He 128 00:07:08,440 --> 00:07:11,560 Speaker 2: has the best Whatever your belief on bitcoin, I mean, 129 00:07:11,600 --> 00:07:14,240 Speaker 2: you know Matt Miller should read it. Yes, if you 130 00:07:14,280 --> 00:07:17,480 Speaker 2: can find his past code to cash show is Rebecca. 131 00:07:17,600 --> 00:07:21,720 Speaker 4: Is this administration? I mean I think President trumpets some point, 132 00:07:22,000 --> 00:07:26,520 Speaker 4: whether it's campaign or where, describe yourself as a crypto president. 133 00:07:26,760 --> 00:07:29,440 Speaker 4: It's just a crypto presidency. Is this something where the 134 00:07:29,480 --> 00:07:33,320 Speaker 4: next four years we can see the US regulatory framework 135 00:07:33,960 --> 00:07:35,680 Speaker 4: support crypto in this country. 136 00:07:35,760 --> 00:07:38,920 Speaker 3: I one hundred percent. I think over the next six 137 00:07:39,080 --> 00:07:43,040 Speaker 3: twelve months we will see regulatory clarity which is going 138 00:07:43,120 --> 00:07:48,360 Speaker 3: to allow more integration between crypto assets and the traditional 139 00:07:48,360 --> 00:07:51,880 Speaker 3: banking system. And I think it probably will get more 140 00:07:52,240 --> 00:07:55,200 Speaker 3: broad adoption, so it won't just be the young men. 141 00:07:55,400 --> 00:07:58,000 Speaker 3: It will be more types of investors. And that's good 142 00:07:58,040 --> 00:08:02,040 Speaker 3: for crypto in that it'll reduce volatility by having more liquidity. 143 00:08:02,360 --> 00:08:04,680 Speaker 3: The risk one needs to watch is that as it 144 00:08:04,680 --> 00:08:07,520 Speaker 3: gets bigger and more integrated, it becomes a source of 145 00:08:07,560 --> 00:08:10,240 Speaker 3: systemic risk. You know, if you have a hack like 146 00:08:10,280 --> 00:08:13,680 Speaker 3: we did this past week in by bit right one 147 00:08:13,760 --> 00:08:16,720 Speaker 3: hundred or sorry, one point five billion dollar hack of 148 00:08:16,760 --> 00:08:19,480 Speaker 3: a cold wallet, which is supposed to be saved. Right, 149 00:08:19,680 --> 00:08:25,160 Speaker 3: cold wallet is off fine, But that happened in the 150 00:08:25,280 --> 00:08:28,840 Speaker 3: United States, we would have contagion and and that. You know, 151 00:08:28,920 --> 00:08:30,920 Speaker 3: it's not just going to be Silicon Valley Bank, it 152 00:08:30,920 --> 00:08:33,319 Speaker 3: would be broader. So that's the thing one needs to 153 00:08:33,360 --> 00:08:36,080 Speaker 3: watch out for. You can have regulation to give them 154 00:08:36,120 --> 00:08:38,560 Speaker 3: the ability to grow and innovate, you still have to 155 00:08:38,600 --> 00:08:40,320 Speaker 3: have a few consumer guardrails there. 156 00:08:40,440 --> 00:08:42,280 Speaker 2: Our listeners and viewers know where I am on this, 157 00:08:42,360 --> 00:08:44,920 Speaker 2: and I think Ms Patterson knows where I am on this. 158 00:08:45,400 --> 00:08:47,360 Speaker 2: So let's cut to the chase. First thing I did 159 00:08:47,360 --> 00:08:49,720 Speaker 2: this morning is from peak to where we are now, 160 00:08:49,800 --> 00:08:53,120 Speaker 2: bit dog is down twenty percent. That's not a currency. 161 00:08:53,920 --> 00:08:58,080 Speaker 2: We've got all sorts of IRA E, TF, Eric Beltchunas, 162 00:08:58,200 --> 00:09:01,439 Speaker 2: black Rock, this, that, and the other. They're doing it. 163 00:09:02,080 --> 00:09:05,120 Speaker 2: What should we say to those people if we pop 164 00:09:05,200 --> 00:09:08,599 Speaker 2: down another ten percent, I mean, horrific bear markets in 165 00:09:08,640 --> 00:09:11,880 Speaker 2: the equity market are negative thirty five percent. If we 166 00:09:11,960 --> 00:09:17,920 Speaker 2: get that in bitcoin and we're not letting everybody have bitcoin, 167 00:09:18,000 --> 00:09:19,400 Speaker 2: what's going to be the outcome? 168 00:09:19,960 --> 00:09:24,400 Speaker 3: Well, again my concern, I think to the degree digital 169 00:09:24,440 --> 00:09:29,040 Speaker 3: assets encourage more financial innovation in the United States, that's great, right, 170 00:09:29,120 --> 00:09:32,840 Speaker 3: Our financial system is creative and broad and deep, and 171 00:09:32,880 --> 00:09:35,360 Speaker 3: that helps the US economy. What we need to be 172 00:09:35,440 --> 00:09:38,640 Speaker 3: mindful of is that the pool of people today, not 173 00:09:38,679 --> 00:09:41,360 Speaker 3: in the future, but today who are trading bitcoin and 174 00:09:41,400 --> 00:09:46,160 Speaker 3: these currencies aren't necessarily aware of how to save for 175 00:09:46,400 --> 00:09:50,320 Speaker 3: retirement in a safe, methodical way. This is not an 176 00:09:50,679 --> 00:09:55,200 Speaker 3: easy path to retirement riches. And if they lose their money, 177 00:09:55,200 --> 00:09:58,199 Speaker 3: they have less ability to buy a home to invest 178 00:09:58,240 --> 00:10:02,440 Speaker 3: for the longer term understanding the volatility of what they're buying. 179 00:10:03,040 --> 00:10:03,280 Speaker 2: You know. 180 00:10:03,440 --> 00:10:07,400 Speaker 3: That's I hope that these cryptocurrent companies do a lot 181 00:10:07,440 --> 00:10:11,480 Speaker 3: more education going forward to help these people invest in 182 00:10:11,520 --> 00:10:14,440 Speaker 3: these assets wisely. Right now, I don't see a lot 183 00:10:14,480 --> 00:10:15,360 Speaker 3: of evidence of that. 184 00:10:16,240 --> 00:10:18,880 Speaker 2: Paul Out on YouTube live chat, Thank you. The live 185 00:10:18,960 --> 00:10:23,120 Speaker 2: chat can be very smart. Subscribe to Bloomberg Podcasts. This 186 00:10:23,160 --> 00:10:24,920 Speaker 2: guy one word tulips. 187 00:10:27,040 --> 00:10:30,320 Speaker 4: One of the things that is the regulatory environment. Like 188 00:10:30,520 --> 00:10:33,480 Speaker 4: in the last administration, the bad administration, Gary Ginster. I 189 00:10:33,559 --> 00:10:36,440 Speaker 4: expected him, and I think a lot of people did that. 190 00:10:36,559 --> 00:10:39,240 Speaker 4: A he understood crypto and B he was going to 191 00:10:39,240 --> 00:10:42,320 Speaker 4: take a forceful hand and kind of pushing the regulatory 192 00:10:42,360 --> 00:10:46,240 Speaker 4: framework forward, which most participants are asking for. Yes, Yes, 193 00:10:46,320 --> 00:10:49,600 Speaker 4: he did not, really what do we know about this administration, 194 00:10:49,640 --> 00:10:51,000 Speaker 4: the Trump administration. 195 00:10:50,559 --> 00:10:55,400 Speaker 3: Well, there's In the last administration there was some debate, 196 00:10:55,520 --> 00:10:57,920 Speaker 3: fight whatever word you want to use, between the different 197 00:10:57,960 --> 00:11:02,120 Speaker 3: regulatory agencies on who would be the lead on digital assets. 198 00:11:02,480 --> 00:11:05,360 Speaker 3: I think in this administration we're likely to see a 199 00:11:05,440 --> 00:11:09,880 Speaker 3: lighter touch, probably led by the CFTC rather than the SEC. 200 00:11:10,960 --> 00:11:14,319 Speaker 3: I think we'll get some legislation from Congress through probably 201 00:11:14,360 --> 00:11:17,640 Speaker 3: in the next few months, which will also create a 202 00:11:17,720 --> 00:11:21,840 Speaker 3: clear path. And these companies need it, They deserve it right. 203 00:11:22,000 --> 00:11:23,800 Speaker 3: They need to know the rules of the road, and 204 00:11:23,840 --> 00:11:26,280 Speaker 3: the banks and other asset managers need to know the 205 00:11:26,360 --> 00:11:29,040 Speaker 3: rules of the road. So I do think this administration 206 00:11:29,120 --> 00:11:31,760 Speaker 3: is going to be incredibly helpful on that front. Again, 207 00:11:32,200 --> 00:11:34,360 Speaker 3: my hope and my ask if I could, if I 208 00:11:34,400 --> 00:11:36,480 Speaker 3: could be there in the White House today, would be, 209 00:11:36,720 --> 00:11:40,440 Speaker 3: please don't forget some consumer protection, some consumer guardrails. 210 00:11:40,600 --> 00:11:42,880 Speaker 2: Do you have in your head a price of bitcoin 211 00:11:43,080 --> 00:11:47,880 Speaker 2: south where everybody starts wringing their hands. I mean, we're 212 00:11:48,040 --> 00:11:51,439 Speaker 2: eighty nine thousand, is it eighty? Is it fifty? I 213 00:11:51,480 --> 00:11:52,679 Speaker 2: mean I have no idea. 214 00:11:52,760 --> 00:11:57,640 Speaker 3: So my worst case scenario, a realistic worst case scenario, 215 00:11:57,720 --> 00:12:01,480 Speaker 3: would be that we get some disappointment out of one 216 00:12:01,480 --> 00:12:04,040 Speaker 3: of the big tech companies in the video, whoever it is, 217 00:12:04,080 --> 00:12:08,199 Speaker 3: it doesn't matter, and we get more of a concerted 218 00:12:08,280 --> 00:12:12,560 Speaker 3: sell off, maybe in response to tariffs China puts some 219 00:12:12,720 --> 00:12:16,480 Speaker 3: holds on US tech companies acting in China. Those sorts 220 00:12:16,480 --> 00:12:19,240 Speaker 3: of maneuvers, you get a bigger sell off in tech, 221 00:12:19,280 --> 00:12:23,400 Speaker 3: which is not impossible given valuations, given ownership, and that 222 00:12:23,520 --> 00:12:27,720 Speaker 3: contagion pulls down cryptocurrencies in a meaningful way because these 223 00:12:27,720 --> 00:12:30,800 Speaker 3: investors own crypto and they own meme stocks, and they 224 00:12:30,800 --> 00:12:32,600 Speaker 3: own a lot of tech, and so they get hit 225 00:12:32,640 --> 00:12:35,360 Speaker 3: on both fronts. That could get some momentum and pull 226 00:12:35,400 --> 00:12:38,760 Speaker 3: down the broader market. I don't know if anyone buys 227 00:12:38,800 --> 00:12:40,800 Speaker 3: that dip, because they just need to be covering their 228 00:12:40,840 --> 00:12:41,800 Speaker 3: losses at that point. 229 00:12:42,080 --> 00:12:45,120 Speaker 2: Well again, and the retailization of this is where I 230 00:12:45,120 --> 00:12:48,080 Speaker 2: have my radar. Rebecca. Thank you so much, Rebecca Patterson, 231 00:12:48,400 --> 00:12:50,360 Speaker 2: way too early. Thank you so much for coming in. 232 00:12:51,120 --> 00:12:53,280 Speaker 2: Were the consol and foreign relations and all of her 233 00:12:53,320 --> 00:12:56,280 Speaker 2: work on Wall Street, particular comments and the dollar. I'll 234 00:12:56,280 --> 00:13:00,640 Speaker 2: try to get out the Bank of International Settiment essays 235 00:13:00,679 --> 00:13:05,359 Speaker 2: from Raphael Hour and Company. They're absolutely brilliant very sobering 236 00:13:05,760 --> 00:13:09,960 Speaker 2: and is mss Patterson mentioned the depth of their research. 237 00:13:15,400 --> 00:13:19,000 Speaker 1: You're listening to the Bloomberg Surveillance Podcast. Catch US Live 238 00:13:19,040 --> 00:13:22,240 Speaker 1: weekday afternoons from seven to ten am Eastern Listen on 239 00:13:22,280 --> 00:13:25,960 Speaker 1: Applecarplay and Android Otto with the Bloomberg Business app, or 240 00:13:26,120 --> 00:13:27,679 Speaker 1: watch US live on YouTube. 241 00:13:27,800 --> 00:13:30,760 Speaker 2: Joining us now here with the markets lifting a little bit? 242 00:13:31,440 --> 00:13:34,480 Speaker 2: Is with our question our conversation of the day. There 243 00:13:34,520 --> 00:13:38,080 Speaker 2: are mysteries out there, including mysteries of what is going 244 00:13:38,080 --> 00:13:40,640 Speaker 2: on in the Kremlin. I have forever and ever been 245 00:13:40,720 --> 00:13:45,840 Speaker 2: humbled by me getting the yeltsin call so wrong. Angela's 246 00:13:45,880 --> 00:13:49,520 Speaker 2: stent is definitive on this senior fellow at Brookings and 247 00:13:49,559 --> 00:13:52,559 Speaker 2: at Georgetown as well in her book Putin's World is 248 00:13:52,600 --> 00:13:55,800 Speaker 2: my book of the year, A long three years ago, 249 00:13:56,360 --> 00:13:59,680 Speaker 2: Angela Stent, with great respect for your decades of work. 250 00:13:59,720 --> 00:14:02,200 Speaker 2: I saw the headline, I believe, in the Washington Post 251 00:14:02,960 --> 00:14:06,800 Speaker 2: that said, basically, the United States sides with Russia within 252 00:14:06,840 --> 00:14:10,600 Speaker 2: the United Nations. I'm making a generalization there, folks. What 253 00:14:10,679 --> 00:14:12,360 Speaker 2: did you think when you saw that? What do you 254 00:14:12,400 --> 00:14:15,960 Speaker 2: observe to your work? Marshall Goldman's work all the way 255 00:14:16,000 --> 00:14:20,120 Speaker 2: back through the decades to see a headline America sides 256 00:14:20,320 --> 00:14:20,960 Speaker 2: with Russia. 257 00:14:22,400 --> 00:14:25,600 Speaker 6: Well, Tom, this was truly shocking. I mean, who did 258 00:14:25,640 --> 00:14:29,840 Speaker 6: we veto the resolution condemning Russia with our good friends 259 00:14:30,200 --> 00:14:37,080 Speaker 6: North Korea, Russia, Yelorus, Syria, the Central African Republic, Nicaragua. 260 00:14:37,200 --> 00:14:41,640 Speaker 6: I won't go on. Even China and Iran abstained from 261 00:14:41,680 --> 00:14:45,480 Speaker 6: that vote. So Ronald Reagan would be turning in his grave, 262 00:14:45,600 --> 00:14:50,560 Speaker 6: as would many others. It's really quite remarkable. And if 263 00:14:50,600 --> 00:14:53,160 Speaker 6: you think of what the US has stood for, you know, 264 00:14:53,200 --> 00:14:55,480 Speaker 6: for the past eighty years, since the end of World 265 00:14:55,520 --> 00:15:00,000 Speaker 6: War Two, through the Cold War, through the post Soviets 266 00:15:00,080 --> 00:15:05,200 Speaker 6: Soviet era, it's quite remarkable that we veto a resolution 267 00:15:05,600 --> 00:15:07,840 Speaker 6: that condemns the Russian invasion of Ukraine. 268 00:15:08,080 --> 00:15:09,760 Speaker 2: What should Marco Rubio do? 269 00:15:12,200 --> 00:15:15,160 Speaker 6: I think he's in a very difficult position. We know 270 00:15:15,400 --> 00:15:18,720 Speaker 6: what he has said before he became Secretary of State 271 00:15:18,760 --> 00:15:22,280 Speaker 6: about Russia, but right now all of the officials in 272 00:15:22,320 --> 00:15:27,040 Speaker 6: the Trump administration are repeating the same line. It's complicated 273 00:15:27,120 --> 00:15:31,000 Speaker 6: Russia was provoked, so you know, if he wants to 274 00:15:31,000 --> 00:15:36,000 Speaker 6: sustain his job, he presumably has to repeat those lines too. 275 00:15:37,000 --> 00:15:40,760 Speaker 4: Angelus, should you mentioned eighty years of precedent? US policy 276 00:15:40,840 --> 00:15:44,400 Speaker 4: visa VI the former Soviet Union in Russia. Should we 277 00:15:44,480 --> 00:15:49,320 Speaker 4: be surprised that this has changed literally on a dime, 278 00:15:49,960 --> 00:15:55,280 Speaker 4: and we've had no real, I guess, opposition from anywhere 279 00:15:55,320 --> 00:15:58,360 Speaker 4: in the US government to this policy. Should we be 280 00:15:58,400 --> 00:15:59,960 Speaker 4: surprised that it changed so quick? 281 00:16:01,520 --> 00:16:04,600 Speaker 6: I think we should be surprised by the rapidity. I mean, 282 00:16:04,640 --> 00:16:07,640 Speaker 6: we knew from President Trump's first term that he admires 283 00:16:07,680 --> 00:16:10,520 Speaker 6: Putin that he wanted to do a deal with Russia. 284 00:16:10,560 --> 00:16:13,040 Speaker 6: But to have this happen so quickly, within a month 285 00:16:13,320 --> 00:16:16,360 Speaker 6: of him coming to power and with everyone, the top 286 00:16:16,400 --> 00:16:20,920 Speaker 6: officials and his administration repeating this line, we should be Now, 287 00:16:20,960 --> 00:16:25,640 Speaker 6: there are Republicans in Congress who have pushed back against this, 288 00:16:25,960 --> 00:16:28,560 Speaker 6: but they're not that many of them, and I think, 289 00:16:28,680 --> 00:16:31,240 Speaker 6: you know, we have to wait and see whether there's 290 00:16:31,280 --> 00:16:34,080 Speaker 6: going to be more position to this line. The Krumlin 291 00:16:34,160 --> 00:16:37,080 Speaker 6: is delighted. I was just reading the remarks of the 292 00:16:37,080 --> 00:16:41,200 Speaker 6: Press Secretary Dmitri Peskov. You know, finally the United States 293 00:16:41,600 --> 00:16:45,080 Speaker 6: has seen since and has understood, you know, what the 294 00:16:45,120 --> 00:16:46,200 Speaker 6: real situation is. 295 00:16:47,000 --> 00:16:50,080 Speaker 2: I think of at dawn we slept the failure of 296 00:16:50,120 --> 00:16:55,000 Speaker 2: our intelligence of Pearl Harbor in nineteen forty one, Angelus stent, 297 00:16:55,080 --> 00:16:58,040 Speaker 2: we were sobered by the failure of our intelligence with 298 00:16:58,160 --> 00:17:01,680 Speaker 2: the collapse of the Soviet Union. Would you suggest that 299 00:17:01,720 --> 00:17:05,120 Speaker 2: we have any clue what's going on at the Kremlin 300 00:17:05,600 --> 00:17:07,280 Speaker 2: or within mister Putin's orbit? 301 00:17:08,880 --> 00:17:11,919 Speaker 6: I mean, I think we have some clue. We know 302 00:17:12,359 --> 00:17:16,040 Speaker 6: that they are absolutely delighted about what's happened recently. They're 303 00:17:16,080 --> 00:17:20,120 Speaker 6: even talking about that publicly. We have a pretty good 304 00:17:20,119 --> 00:17:24,719 Speaker 6: idea that they're not interested in a peace settlement in Ukraine, 305 00:17:25,000 --> 00:17:28,480 Speaker 6: but they're certainly interested in improved ties to the US. 306 00:17:28,680 --> 00:17:32,240 Speaker 6: Let's restore relations, Let's have a summit. Let's have President 307 00:17:32,240 --> 00:17:36,520 Speaker 6: Trump visit for Victory Day May nineteen eighty years since 308 00:17:36,520 --> 00:17:40,879 Speaker 6: the end of World War Two, visit so that we know. 309 00:17:42,040 --> 00:17:44,760 Speaker 6: Do we know what goes on in the very inner circles? 310 00:17:45,000 --> 00:17:48,200 Speaker 6: Of course not, but we can get some things by 311 00:17:48,200 --> 00:17:48,880 Speaker 6: what they've said. 312 00:17:49,200 --> 00:17:51,800 Speaker 2: This. You know, this is why we love having doctor 313 00:17:51,840 --> 00:17:55,080 Speaker 2: stenn On. Folks. Could you imagine the President of the 314 00:17:55,200 --> 00:18:00,720 Speaker 2: United States in Moscow for those celebrations of Russian might 315 00:18:01,600 --> 00:18:05,760 Speaker 2: in May? Yep, I've never once framed that that miss 316 00:18:05,880 --> 00:18:07,359 Speaker 2: Angela's stun only can. 317 00:18:07,240 --> 00:18:09,080 Speaker 4: Do angel what do you I can? 318 00:18:09,600 --> 00:18:09,800 Speaker 2: Yep? 319 00:18:10,080 --> 00:18:13,040 Speaker 4: I can Angel, What do you think the response will 320 00:18:13,080 --> 00:18:16,440 Speaker 4: be should be from rest of the world. I'll just 321 00:18:16,520 --> 00:18:18,320 Speaker 4: leave it there. Rest of the world as it relates 322 00:18:18,359 --> 00:18:21,240 Speaker 4: to this changing US position visa Vive Russia. 323 00:18:22,240 --> 00:18:24,880 Speaker 6: Well, we've just had President Macron here, we have Prime 324 00:18:24,880 --> 00:18:28,399 Speaker 6: Minister Starma coming tomorrow. The Europeans are really trying to 325 00:18:28,400 --> 00:18:32,680 Speaker 6: push back. President Macron did a good job, a valiant 326 00:18:32,720 --> 00:18:35,320 Speaker 6: job of trying to persuade President Trump that you know, 327 00:18:35,400 --> 00:18:38,840 Speaker 6: we have to work together and that you know, the 328 00:18:39,440 --> 00:18:43,840 Speaker 6: US isn't getting stiffed by Ukraine. He in fact corrected 329 00:18:44,080 --> 00:18:48,080 Speaker 6: Trump about loans versus money given to Ukraine. I mean, 330 00:18:48,119 --> 00:18:50,719 Speaker 6: the Europeans are trying their best, and they've come to 331 00:18:50,760 --> 00:18:53,000 Speaker 6: realize that they're going to be alone in this. If 332 00:18:53,000 --> 00:18:55,960 Speaker 6: they want to support Ukraine going forward, they're going to 333 00:18:56,040 --> 00:18:58,880 Speaker 6: have to do without the United States. Now, for those 334 00:18:58,920 --> 00:19:02,119 Speaker 6: countries that have stayed, which is a large number yesterday 335 00:19:02,760 --> 00:19:05,159 Speaker 6: in the General Assembly, you know they're just going to 336 00:19:05,200 --> 00:19:08,480 Speaker 6: shrug and say this is a European conflict and it 337 00:19:08,520 --> 00:19:12,000 Speaker 6: really doesn't touch us that much. But certainly the Europeans, 338 00:19:12,280 --> 00:19:15,800 Speaker 6: and I would say our Asian allies are very concerned. 339 00:19:15,440 --> 00:19:20,359 Speaker 2: To extend Angel extent the list of US in Russia, 340 00:19:20,520 --> 00:19:26,400 Speaker 2: is well, Israel, Haiti, Hungary, Palau, Marshall Islands, Burkina, Fasso, 341 00:19:27,480 --> 00:19:32,359 Speaker 2: African nations that can't pronounce Belarus, North Korea, Syria, Mali 342 00:19:32,600 --> 00:19:37,399 Speaker 2: and Nicaragua. What is the ramification of our diplomacy? To 343 00:19:37,440 --> 00:19:41,960 Speaker 2: Paul's good question moments ago, how do we diploma how 344 00:19:42,000 --> 00:19:46,520 Speaker 2: do we do diploma Kissinger diplomacy around the world? Given 345 00:19:46,560 --> 00:19:47,520 Speaker 2: that beauty. 346 00:19:47,200 --> 00:19:53,160 Speaker 6: List, Well, I think that the Trump administration is still believing, 347 00:19:53,240 --> 00:19:56,399 Speaker 6: for instance, that if we have this thro aproshmao with Russia, 348 00:19:56,760 --> 00:20:00,680 Speaker 6: Russia will decide to distance itself from China and will 349 00:20:00,720 --> 00:20:04,320 Speaker 6: reverse course. I think that's highly unlikely, but I think 350 00:20:04,359 --> 00:20:06,960 Speaker 6: that's one thing that's going on here. And I think 351 00:20:06,960 --> 00:20:10,520 Speaker 6: it's also the US trying to show to those countries 352 00:20:10,560 --> 00:20:13,360 Speaker 6: that supported US, and I guess those who have stained 353 00:20:14,080 --> 00:20:17,159 Speaker 6: that you know, we're not necessarily taking sides in this. 354 00:20:17,560 --> 00:20:20,360 Speaker 6: We recognize that Russia is a great power and we're 355 00:20:20,400 --> 00:20:21,879 Speaker 6: going to try and do something different. 356 00:20:22,400 --> 00:20:24,920 Speaker 2: Yeah, my findest hope as a Secretary of State or 357 00:20:25,000 --> 00:20:29,080 Speaker 2: rite Angelus stents Putin's world next, thank you so much 358 00:20:29,119 --> 00:20:32,760 Speaker 2: for your commitment to Bloomberg surveillance. She is with the 359 00:20:32,800 --> 00:20:33,840 Speaker 2: Brookings Institution. 360 00:20:34,320 --> 00:20:38,199 Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday 361 00:20:38,280 --> 00:20:41,560 Speaker 1: starting at seven am Eastern on Applecarplay and Android Auto 362 00:20:41,720 --> 00:20:44,680 Speaker 1: with the Bloomberg Business App. You can also listen live 363 00:20:44,720 --> 00:20:48,320 Speaker 1: on Amazon Alexa from our flagship New York station. Just 364 00:20:48,359 --> 00:20:50,840 Speaker 1: say Alexa play Bloomberg eleven thirty. 365 00:20:51,000 --> 00:20:53,600 Speaker 2: Joining us now, and this is really important. Calvincy joins 366 00:20:53,640 --> 00:20:57,760 Speaker 2: us right now with BMP PERI by the BNP PERI 367 00:20:57,840 --> 00:21:02,399 Speaker 2: by Heritage is a carefully constructed, cautious view on the 368 00:21:02,440 --> 00:21:06,000 Speaker 2: economy back to Juliet Cardnido, back at least fifteen years 369 00:21:06,080 --> 00:21:09,840 Speaker 2: or so in the sum total of your work there, 370 00:21:10,160 --> 00:21:13,480 Speaker 2: do you see a dampening of GDP off of all 371 00:21:13,480 --> 00:21:15,120 Speaker 2: the events going on right now? 372 00:21:15,520 --> 00:21:17,159 Speaker 7: Thanks so much for having me, Tom. This is the 373 00:21:17,240 --> 00:21:19,320 Speaker 7: question that every client is asking us. We're getting so 374 00:21:19,400 --> 00:21:23,560 Speaker 7: many different policies from President Trump. The aggregate of these policies, 375 00:21:23,600 --> 00:21:27,880 Speaker 7: when we think about immigration policy, especially trade policy, should 376 00:21:27,920 --> 00:21:30,200 Speaker 7: we think begin to slow growth down in the second 377 00:21:30,240 --> 00:21:32,640 Speaker 7: half of the year. But even more importantly than that, 378 00:21:33,040 --> 00:21:35,240 Speaker 7: where we're very out of consensus is that we think 379 00:21:35,240 --> 00:21:38,879 Speaker 7: that these policies are going to be generating significant amounts 380 00:21:38,920 --> 00:21:41,640 Speaker 7: of inflation. So despite that slower growth in the second 381 00:21:41,680 --> 00:21:43,680 Speaker 7: half of the year, it may be a tough spot 382 00:21:43,720 --> 00:21:45,840 Speaker 7: for the FED and the FED we think, so keep 383 00:21:45,920 --> 00:21:47,200 Speaker 7: rates on holds for all of this year. 384 00:21:48,119 --> 00:21:50,359 Speaker 2: Is we haven't done this recently? I mean, this is 385 00:21:50,400 --> 00:21:53,879 Speaker 2: a whole new world after all. Is what you just 386 00:21:54,000 --> 00:21:56,480 Speaker 2: laid out good for business? Is it good for Brian 387 00:21:56,560 --> 00:21:59,280 Speaker 2: moynan at Bank of America. 388 00:21:59,440 --> 00:22:02,359 Speaker 7: We think that this is a really interesting environment in 389 00:22:02,359 --> 00:22:05,800 Speaker 7: that Trump one point zero differed from Trump two point 390 00:22:05,880 --> 00:22:08,920 Speaker 7: zero in one really major way, and that is Trump 391 00:22:08,960 --> 00:22:11,280 Speaker 7: one point zero was very combative with the FED, trying 392 00:22:11,320 --> 00:22:13,479 Speaker 7: to get the Fed to lower rates at every single 393 00:22:13,880 --> 00:22:17,040 Speaker 7: point that they could. This time, the administration is really 394 00:22:17,040 --> 00:22:19,119 Speaker 7: focusing on trying to control the part of the yield 395 00:22:19,160 --> 00:22:22,000 Speaker 7: curve that they can exert more control over the back 396 00:22:22,119 --> 00:22:24,439 Speaker 7: end of the curve. And with that, we think that 397 00:22:24,480 --> 00:22:26,879 Speaker 7: we should be seeing lower ten year yields relative to 398 00:22:26,920 --> 00:22:29,320 Speaker 7: two yearields this year, which should be good for the 399 00:22:29,359 --> 00:22:31,560 Speaker 7: everyday American. Is that's the part of the US yield 400 00:22:31,600 --> 00:22:33,560 Speaker 7: curve or most people are borrowing at I'll. 401 00:22:33,440 --> 00:22:34,720 Speaker 2: Just say inverted yield curve. 402 00:22:34,880 --> 00:22:37,560 Speaker 4: I know somebody and talks about it. Verted yield curvemic 403 00:22:37,680 --> 00:22:42,000 Speaker 4: cam Harvey. So, what you were talking about in the economy, 404 00:22:42,080 --> 00:22:45,080 Speaker 4: slow in growth, higher inflation. That's stagflation. Is that what 405 00:22:45,119 --> 00:22:46,880 Speaker 4: the economist calls stagflation. 406 00:22:47,040 --> 00:22:49,199 Speaker 7: We're not necessarily going to call it stagflation, but we 407 00:22:49,240 --> 00:22:51,560 Speaker 7: could call it slow flation. We think that growth will 408 00:22:51,720 --> 00:22:54,560 Speaker 7: slow to slightly below trendler this year. We're not going 409 00:22:54,600 --> 00:22:56,680 Speaker 7: to see a recession, we don't think, but we think 410 00:22:56,720 --> 00:22:59,280 Speaker 7: mostly it's going to be the inflation side. We're very 411 00:22:59,280 --> 00:23:02,280 Speaker 7: out of consensus inflation, and we think that tariffs are 412 00:23:02,280 --> 00:23:05,080 Speaker 7: going to generate significantly more inflation than people think, and 413 00:23:05,119 --> 00:23:06,359 Speaker 7: that we think is going to put the FED in 414 00:23:06,400 --> 00:23:07,200 Speaker 7: a pretty tough bind. 415 00:23:07,280 --> 00:23:10,120 Speaker 4: That's not a good political move from what I remember. 416 00:23:11,040 --> 00:23:14,160 Speaker 4: So what does that mean for this Federal Reserve? Should 417 00:23:14,200 --> 00:23:16,480 Speaker 4: we pay attention to what these folks are doing? 418 00:23:17,440 --> 00:23:20,399 Speaker 7: So we be in pre paraba, we're very early and 419 00:23:20,480 --> 00:23:22,480 Speaker 7: very out of consensus in the beginning of December when 420 00:23:22,520 --> 00:23:25,320 Speaker 7: we had a no FED cut view for all of 421 00:23:25,400 --> 00:23:28,720 Speaker 7: twenty twenty five. Interesting, I'll take a step further from there, 422 00:23:28,760 --> 00:23:31,080 Speaker 7: and I'll say most of our competitors, I think, think 423 00:23:31,359 --> 00:23:34,679 Speaker 7: that the asymmetry is still toward cuts. In other words, 424 00:23:34,800 --> 00:23:37,119 Speaker 7: it's more likely to see cuts this year than hikes. 425 00:23:37,840 --> 00:23:40,159 Speaker 7: Our view is different where we think because of these 426 00:23:40,200 --> 00:23:42,920 Speaker 7: inflationary pressures that are to come, we think that there's 427 00:23:42,960 --> 00:23:45,040 Speaker 7: probably an equal chance that the next move from the 428 00:23:45,040 --> 00:23:47,400 Speaker 7: Fed could be a cut or even a hike. 429 00:23:47,640 --> 00:23:51,439 Speaker 2: We'll frame out your GDP call into your you know, 430 00:23:51,920 --> 00:23:56,000 Speaker 2: the remit that you have there, which is in basic 431 00:23:56,080 --> 00:23:58,880 Speaker 2: strategy of the America is in the larger, bigger picture. 432 00:23:59,480 --> 00:24:03,920 Speaker 2: Are we so up real GDP at some point out 433 00:24:03,920 --> 00:24:04,359 Speaker 2: this year? 434 00:24:05,480 --> 00:24:08,440 Speaker 7: That's a great question, Tom. We think that twenty twenty 435 00:24:08,440 --> 00:24:09,119 Speaker 7: five is going to. 436 00:24:09,080 --> 00:24:10,200 Speaker 4: Be a tale of two halves. 437 00:24:10,440 --> 00:24:12,280 Speaker 7: The first half of the year should be above two 438 00:24:12,320 --> 00:24:15,080 Speaker 7: percent growth, and this is largely because of animal spirits 439 00:24:15,080 --> 00:24:18,040 Speaker 7: that have come out after the election, strong momentum. The 440 00:24:18,040 --> 00:24:20,440 Speaker 7: second half of the year still. 441 00:24:20,280 --> 00:24:22,760 Speaker 2: Later day, and the world's falling apart. This is really 442 00:24:22,840 --> 00:24:27,240 Speaker 2: important with your heritage. Do you have do you have 443 00:24:27,320 --> 00:24:32,399 Speaker 2: a belief that Washington and particularly the administration will adapt 444 00:24:32,440 --> 00:24:36,960 Speaker 2: and adjust to a sub two percent statistic somewhere where 445 00:24:36,960 --> 00:24:39,240 Speaker 2: the Red Sox decided if it's playoff baseball. 446 00:24:40,080 --> 00:24:42,440 Speaker 7: Our questions are our clients are asking us these exact 447 00:24:42,440 --> 00:24:45,399 Speaker 7: same questions. We think that the administration really does not 448 00:24:45,560 --> 00:24:48,040 Speaker 7: believe that their policies are going to weigh on growth. 449 00:24:48,520 --> 00:24:50,960 Speaker 7: So we think that Trump, if we think about what 450 00:24:51,040 --> 00:24:54,240 Speaker 7: he really campaigned on, it was really two major issues, 451 00:24:54,280 --> 00:24:56,600 Speaker 7: and that is to be hard on trade, it's to 452 00:24:56,640 --> 00:24:59,120 Speaker 7: be hard on the border. Both of these are going 453 00:24:59,119 --> 00:25:01,879 Speaker 7: to weigh on growth. We think that President Trump is 454 00:25:01,920 --> 00:25:04,440 Speaker 7: going to push very hard on them. And if our 455 00:25:04,520 --> 00:25:07,679 Speaker 7: forecast come true and growth does weaken, then perhaps at 456 00:25:07,680 --> 00:25:09,800 Speaker 7: that point the administration could pull back, but we think 457 00:25:09,840 --> 00:25:12,520 Speaker 7: that they're certainly going to deliver first and maybe pull 458 00:25:12,600 --> 00:25:12,960 Speaker 7: back later. 459 00:25:13,880 --> 00:25:18,040 Speaker 4: So, as a macro strategy for the Americas, what are 460 00:25:18,080 --> 00:25:20,600 Speaker 4: you telling your clients where did allocate capital these days? 461 00:25:20,600 --> 00:25:23,840 Speaker 7: Given that background, this is a conversation we have every 462 00:25:23,840 --> 00:25:26,159 Speaker 7: single day, and to us, what we think is one 463 00:25:26,200 --> 00:25:28,960 Speaker 7: of the more attractive investments for clients right now is 464 00:25:29,000 --> 00:25:31,800 Speaker 7: to own long term bonds in the United States. And 465 00:25:31,840 --> 00:25:34,240 Speaker 7: the reason I say that is because, very interestingly, something 466 00:25:34,240 --> 00:25:36,320 Speaker 7: that we've been writing about quite a lot is this 467 00:25:36,680 --> 00:25:38,960 Speaker 7: theme that's emerging where we think that we're now seeing 468 00:25:38,960 --> 00:25:43,240 Speaker 7: a more bond vigilant administration which is now thwarting off 469 00:25:43,280 --> 00:25:47,000 Speaker 7: the bond vigilantes. And that's really evidenced over the last 470 00:25:47,000 --> 00:25:49,760 Speaker 7: few weeks by Treasury Secretary Beston, who's basically telling you 471 00:25:49,800 --> 00:25:52,840 Speaker 7: he's in no rush to increase supply in the United States, 472 00:25:53,000 --> 00:25:55,280 Speaker 7: and this is opening a window of opportunity, we think 473 00:25:55,440 --> 00:25:57,399 Speaker 7: to invest in long term bonds in the United States. 474 00:25:57,760 --> 00:25:59,440 Speaker 2: Well, cut to the chase, So you load the boat 475 00:25:59,440 --> 00:26:00,720 Speaker 2: in a ten years right now. 476 00:26:01,640 --> 00:26:04,000 Speaker 7: We like the ten year, but we like it even 477 00:26:04,040 --> 00:26:06,960 Speaker 7: better in inflation protected form as much as before. We're 478 00:26:07,040 --> 00:26:08,680 Speaker 7: very worried about inflation, so we like tip. 479 00:26:08,800 --> 00:26:10,720 Speaker 2: Yeah, Paul, I don't care. The reason we had you 480 00:26:10,760 --> 00:26:13,440 Speaker 2: here is Alex Steele said, can you find someone who 481 00:26:13,480 --> 00:26:17,159 Speaker 2: can figure out hotel rooms in Paris? You run BMP 482 00:26:17,359 --> 00:26:20,479 Speaker 2: Perry Bot. How do we get a hotel room somewhere 483 00:26:20,520 --> 00:26:23,280 Speaker 2: in the vicinity of you know, the first there on 484 00:26:23,400 --> 00:26:27,120 Speaker 2: de Swall in Paris. It's impossible for us. 485 00:26:27,200 --> 00:26:30,320 Speaker 7: From a macro perspective. What we're certainly going to see 486 00:26:30,400 --> 00:26:32,439 Speaker 7: this year with a very strong dollar, which is what 487 00:26:32,440 --> 00:26:35,480 Speaker 7: we're forecasting, is more tourism. Here you go from from 488 00:26:35,560 --> 00:26:37,960 Speaker 7: the United States towards the rest of the world. That 489 00:26:38,400 --> 00:26:41,479 Speaker 7: all else equal. Unfortunately for you, Tom is probably going 490 00:26:41,520 --> 00:26:43,640 Speaker 7: to be putting upward prices on a lot of hotel rooms. 491 00:26:43,720 --> 00:26:46,480 Speaker 2: It's outrageous. I mean I was there a couple months ago. 492 00:26:46,760 --> 00:26:49,240 Speaker 2: Long story showed it. I have an offspring there and 493 00:26:50,600 --> 00:26:54,720 Speaker 2: it was I was literally foaming over what has doubled 494 00:26:54,840 --> 00:27:00,400 Speaker 2: in price. I mean it's a boom cutcaus with Trumpe, 495 00:27:00,640 --> 00:27:03,840 Speaker 2: me and a their b figure that one out. Mccrime 496 00:27:03,880 --> 00:27:06,080 Speaker 2: and Trump are sitting there. Does anybody have a clue 497 00:27:06,440 --> 00:27:08,320 Speaker 2: the boom economy in Paris? 498 00:27:10,119 --> 00:27:12,600 Speaker 7: When we speak to clients, what clients are really concerned 499 00:27:12,600 --> 00:27:16,040 Speaker 7: about right now? Are really I think largely as you say, 500 00:27:16,200 --> 00:27:18,159 Speaker 7: what's going to happen with inflation? And this is what 501 00:27:18,200 --> 00:27:20,679 Speaker 7: you're feeling every single day. Inflation affects all of us, 502 00:27:20,880 --> 00:27:23,240 Speaker 7: right and that's why we've been quite concerned. What we're 503 00:27:23,280 --> 00:27:27,800 Speaker 7: worried about is that inflation expectations today are less stable 504 00:27:27,840 --> 00:27:29,800 Speaker 7: than they've been at any point over the last forty years, 505 00:27:29,880 --> 00:27:32,119 Speaker 7: exactly as you're saying, you can feel it everywhere, and 506 00:27:32,119 --> 00:27:35,280 Speaker 7: with inflation expectations less anger than they used to be. 507 00:27:35,640 --> 00:27:37,240 Speaker 7: What we think is going to happen is that as 508 00:27:37,240 --> 00:27:40,359 Speaker 7: big tariffs occur, this is lar likely going to result 509 00:27:40,440 --> 00:27:43,480 Speaker 7: in more second round impacts on inflation, continuing to push 510 00:27:43,480 --> 00:27:45,480 Speaker 7: inflation higher which is why we think the Fed's going 511 00:27:45,520 --> 00:27:46,000 Speaker 7: to be more hot. 512 00:27:46,280 --> 00:27:48,560 Speaker 2: You get out at NYU as you start talking second 513 00:27:48,680 --> 00:27:52,680 Speaker 2: order's second round. That's how you impressed your Calvin. Thank 514 00:27:52,720 --> 00:27:54,800 Speaker 2: you so much, Calvin, see with this, that would be 515 00:27:54,880 --> 00:27:57,120 Speaker 2: MP pre brilliant. Are you based in New York? 516 00:27:57,760 --> 00:27:59,159 Speaker 7: I am now, yeah you are? 517 00:27:59,240 --> 00:28:01,840 Speaker 2: Now okay, yeah he was on the air France shuttle 518 00:28:01,880 --> 00:28:04,480 Speaker 2: and that end. Okay, Calvin, thank you so much. Don't 519 00:28:04,520 --> 00:28:06,640 Speaker 2: be a stranger with B and B Perry by ahead 520 00:28:06,640 --> 00:28:08,639 Speaker 2: of Macro Strategy Americas. 521 00:28:14,560 --> 00:28:18,480 Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday 522 00:28:18,520 --> 00:28:21,919 Speaker 1: starting at seven am Eastern on Applecarplay and Android Auto 523 00:28:21,960 --> 00:28:24,800 Speaker 1: with the Bloomberg Business app. You can also watch us 524 00:28:24,800 --> 00:28:28,600 Speaker 1: live every weekday on YouTube and always on the Bloomberg terminal. 525 00:28:28,680 --> 00:28:31,640 Speaker 2: The front page was Lisa Mateo, Lisa Moteo hour, Let's 526 00:28:31,640 --> 00:28:32,280 Speaker 2: get right to it. 527 00:28:32,320 --> 00:28:34,160 Speaker 5: What do you have, Lisa, Well, yesterday we're talking about 528 00:28:34,160 --> 00:28:37,040 Speaker 5: Apple's plans right for more jobs, US jobs, US investment, 529 00:28:37,440 --> 00:28:40,640 Speaker 5: but experts are saying that they're just sugar coating their investments. 530 00:28:40,680 --> 00:28:42,640 Speaker 5: This was a Wall Street Journal analysis and said that 531 00:28:42,720 --> 00:28:46,000 Speaker 5: Apple's new job promises they're just slightly ahead of their 532 00:28:46,000 --> 00:28:48,880 Speaker 5: recent four year pace. They also said that the spending 533 00:28:48,920 --> 00:28:51,880 Speaker 5: pledge is roughly on track with its recent investments. So 534 00:28:51,920 --> 00:28:53,800 Speaker 5: the Journal spoke with these experts and they said that 535 00:28:53,840 --> 00:28:55,600 Speaker 5: a lot of companies who do this, they cater to 536 00:28:55,800 --> 00:29:00,120 Speaker 5: the administration's needs, right, They just sugarcoat repurpose existing investments. 537 00:29:00,600 --> 00:29:03,080 Speaker 5: They said about eighty percent of those announcements in spending 538 00:29:03,080 --> 00:29:05,080 Speaker 5: that was already already in the works. 539 00:29:05,560 --> 00:29:06,880 Speaker 6: So it's nothing. 540 00:29:07,520 --> 00:29:09,080 Speaker 5: Yeah, they're saying it's nothing new. 541 00:29:09,160 --> 00:29:09,320 Speaker 2: Yeah. 542 00:29:09,360 --> 00:29:12,040 Speaker 4: Mark Hemer from Bloomberg News was in on Bloomberg Intelligence 543 00:29:12,120 --> 00:29:13,440 Speaker 4: yesterday and he has a great peace out on the 544 00:29:13,440 --> 00:29:16,000 Speaker 4: Bloomer terminal yesterday. He kind of laying out all the numbers. 545 00:29:16,000 --> 00:29:17,680 Speaker 4: So it's good stuff. I mean, they're spending money in 546 00:29:17,680 --> 00:29:20,560 Speaker 4: the US, is all good. Apple can claim a victory, 547 00:29:20,560 --> 00:29:23,520 Speaker 4: President Trump can claim a victory, but the reality is 548 00:29:23,560 --> 00:29:26,400 Speaker 4: it wasn't that much incremental. 549 00:29:26,360 --> 00:29:29,080 Speaker 2: For our listeners and viewers worldwide. Do the three of 550 00:29:29,160 --> 00:29:32,320 Speaker 2: us have news fatigue right now? Which is start? 551 00:29:33,440 --> 00:29:34,880 Speaker 4: That was like its tried to look. 552 00:29:34,680 --> 00:29:37,560 Speaker 2: At the cell phone. It's like every minute of the day. 553 00:29:37,880 --> 00:29:38,840 Speaker 4: You get another alert. 554 00:29:39,080 --> 00:29:41,080 Speaker 2: What's the next red sticky or red banner? 555 00:29:41,320 --> 00:29:44,120 Speaker 6: Goodness, next it is this one? 556 00:29:44,320 --> 00:29:46,440 Speaker 5: You probably got to stick in this. Door Dash paying 557 00:29:46,480 --> 00:29:49,520 Speaker 5: about seventeen million dollars to drivers in New York State. 558 00:29:49,800 --> 00:29:51,720 Speaker 5: Here's the reason why. So the drivers are saying that 559 00:29:51,760 --> 00:29:54,320 Speaker 5: the delivery service cheated them out of the tip money 560 00:29:54,320 --> 00:29:57,600 Speaker 5: because they applied it to their base salary. So basically 561 00:29:57,760 --> 00:29:59,600 Speaker 5: it would go the money would go into this fund. 562 00:29:59,640 --> 00:30:02,160 Speaker 5: About sixty thousand or so drivers are eligible, so they 563 00:30:02,160 --> 00:30:05,440 Speaker 5: could get up to about fourteen thousand dollars each. But 564 00:30:05,520 --> 00:30:08,200 Speaker 5: what I didn't realize is that the delivery worker they 565 00:30:08,200 --> 00:30:11,000 Speaker 5: were guaranteed let's say ten dollars, right, you make a delivery, 566 00:30:11,000 --> 00:30:13,600 Speaker 5: and then the customer tips the worker three dollars, but 567 00:30:13,720 --> 00:30:16,840 Speaker 5: door Dash would only pay the worker seven dollars and 568 00:30:16,880 --> 00:30:21,080 Speaker 5: they would keep it because you couldn't see the breakdown. 569 00:30:20,200 --> 00:30:21,640 Speaker 4: When I click on it. If you're going to tip 570 00:30:21,680 --> 00:30:24,080 Speaker 4: somebody for an uber or whatever like that, you don't 571 00:30:24,120 --> 00:30:25,760 Speaker 4: know where that's going. I supposed to putting a couple 572 00:30:25,800 --> 00:30:28,480 Speaker 4: bucks in a jar sitting in front of bartenders. 573 00:30:28,640 --> 00:30:34,040 Speaker 5: This is a huge because they don't show the break 574 00:30:34,040 --> 00:30:35,720 Speaker 5: they're not transparent about it. 575 00:30:36,200 --> 00:30:38,960 Speaker 4: Huge And this goes to the whole tipping environment out there. 576 00:30:39,000 --> 00:30:41,640 Speaker 4: It's changed in the last ten years, so here's the 577 00:30:41,720 --> 00:30:45,040 Speaker 4: rule of thumb I use. If I'm standing, I don't tip. 578 00:30:45,320 --> 00:30:47,920 Speaker 4: If I sit, I'll tip it. So you go up 579 00:30:47,920 --> 00:30:50,200 Speaker 4: to a counter and you buy something on the turner 580 00:30:50,240 --> 00:30:53,440 Speaker 4: screen around for you to tip zero. Do you feel 581 00:30:53,440 --> 00:30:56,080 Speaker 4: the pressure though? I feel not anymore. I used to, 582 00:30:56,120 --> 00:30:58,320 Speaker 4: but now I've got my new strategy and i feel 583 00:30:58,400 --> 00:30:59,360 Speaker 4: very comfortable with my stress. 584 00:30:59,440 --> 00:31:01,800 Speaker 2: So if you're in Odds basement at that club down 585 00:31:01,840 --> 00:31:04,680 Speaker 2: and seagirt yep, and you're having a skyll up standing up, 586 00:31:04,720 --> 00:31:05,240 Speaker 2: you don't. 587 00:31:05,080 --> 00:31:09,480 Speaker 4: Tip correct exactly right, exactly right. Although I've tipped really 588 00:31:09,480 --> 00:31:15,760 Speaker 4: well Department O God's Basement at the past forty five years, 589 00:31:15,800 --> 00:31:26,360 Speaker 4: I've tipped very well at the partner mister last one. 590 00:31:26,400 --> 00:31:28,880 Speaker 5: This was in the New York Times. Lawyers for Paramount 591 00:31:28,920 --> 00:31:31,560 Speaker 5: and President Trump have actually agreed to appoint a mediator 592 00:31:31,880 --> 00:31:34,560 Speaker 5: in that twenty billion dollars lawsuit that he had against CBS. 593 00:31:35,280 --> 00:31:37,960 Speaker 5: So mediator could actually help them reach a settlement. Well, 594 00:31:38,200 --> 00:31:41,520 Speaker 5: whether they will, it's uncertain, but it's complicating a few things, 595 00:31:41,720 --> 00:31:45,440 Speaker 5: like the merger Paramount's merger with Skuidance. It's complicating that 596 00:31:45,600 --> 00:31:47,920 Speaker 5: media lawyers are saying that this could open up the 597 00:31:47,960 --> 00:31:51,880 Speaker 5: door to more lawsuits against other news outlets. It could 598 00:31:51,880 --> 00:31:54,840 Speaker 5: also lead to shareholder lawsuits, especially if he wins a 599 00:31:54,840 --> 00:31:58,280 Speaker 5: big judgment, and they're saying that. Paramounts also concerned that 600 00:31:58,320 --> 00:32:00,440 Speaker 5: it could lead to legal liabilities because it may not 601 00:32:00,520 --> 00:32:03,440 Speaker 5: be covered by corporate insurance policies on top of it. 602 00:32:03,720 --> 00:32:06,600 Speaker 5: So there's a lot behind it that goes on with that. 603 00:32:06,880 --> 00:32:08,720 Speaker 4: Exactly. Good luck with that. And again they're trying to 604 00:32:08,720 --> 00:32:10,400 Speaker 4: get that deal done with bit Dance. 605 00:32:10,360 --> 00:32:11,840 Speaker 2: So Paramounts sold. 606 00:32:11,960 --> 00:32:15,520 Speaker 4: I mean, it hasn't closed it and it gives wonderful 607 00:32:15,600 --> 00:32:18,360 Speaker 4: leverage to President Trump and his legal team because one 608 00:32:18,360 --> 00:32:20,800 Speaker 4: of the issues kind of slowing down the closing of 609 00:32:20,840 --> 00:32:23,800 Speaker 4: this deal is this litigation out there. So it could 610 00:32:23,840 --> 00:32:26,720 Speaker 4: be a good time for President Trump and his team. Okay, yeah, 611 00:32:26,960 --> 00:32:30,040 Speaker 4: egg criceis just real quickly, how long is it take 612 00:32:30,080 --> 00:32:32,080 Speaker 4: for like more chickens to make more chickens so we 613 00:32:32,160 --> 00:32:34,520 Speaker 4: have more eggs? Work easy? 614 00:32:34,760 --> 00:32:36,120 Speaker 6: I mean, it's crazy. 615 00:32:36,280 --> 00:32:39,680 Speaker 5: Yeah, it's funny because the data shows that their flock 616 00:32:39,720 --> 00:32:41,920 Speaker 5: of egg laying hens it dropped to a nine year 617 00:32:42,080 --> 00:32:46,080 Speaker 5: low in January, so they're laying the eggs, they're not 618 00:32:46,160 --> 00:32:46,440 Speaker 5: laying it. 619 00:32:46,680 --> 00:32:51,560 Speaker 2: There's enough chicken for the first time I ordered groceries 620 00:32:51,760 --> 00:32:52,680 Speaker 2: and there were no. 621 00:32:52,680 --> 00:32:54,520 Speaker 6: Eggs, none, none. 622 00:32:54,680 --> 00:32:58,640 Speaker 2: Must have been fifteen different choicest I'm gonna tall you. 623 00:32:58,800 --> 00:33:02,040 Speaker 2: Thank you so much, newspapers, and I greatly appreciate that. 624 00:33:02,480 --> 00:33:07,280 Speaker 1: This is the Bloomberg Surveillance podcast, available on Apple, Spotify, 625 00:33:07,400 --> 00:33:11,720 Speaker 1: and anywhere else you get your podcasts. Listen live each weekday, 626 00:33:11,840 --> 00:33:15,280 Speaker 1: seven to ten am Eastern on Bloomberg dot com, the 627 00:33:15,360 --> 00:33:19,400 Speaker 1: iHeartRadio app, tune In, and the Bloomberg Business app. You 628 00:33:19,440 --> 00:33:22,800 Speaker 1: can also watch us live every weekday on YouTube and 629 00:33:23,000 --> 00:33:24,720 Speaker 1: always on the Bloomberg terminal