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Speaker 2: Bremercam Patison here for a good conversation to start the
Speaker 2: morning off, and of course we devolve that to a
Speaker 2: dollar discussion. And on premiere she's focused on crypto. We'll
Speaker 2: get to that in a moment. Her effort at the
Speaker 2: Council on Foreign Relations is noticed. I can't say enough
Speaker 2: about the new edition of Foreign Affairs magazine. You'll see
Speaker 2: it in the next couple days or so. It's just
Speaker 2: absolutely extraordinary. I've got to go to dollar here right now.
Speaker 2: It's dollar had your money? Is it threatened by all
Speaker 2: that's going on in Washington?
Speaker 3: Longer term, yes, I think there is a threat to
Speaker 3: the dollar from some of these policies. You know, the
Speaker 3: US relies on demand for treasuries and the idea that
Speaker 3: the Treasury is going to be the biggest bond mark
Speaker 3: in the world. Liquid safe, always transactional, and if you're
Speaker 3: putting tariffs on allies, as well as adversaries. Over time,
Speaker 3: they may want to diversify away from those assets. Now,
Speaker 3: there aren't a lot of places for them to go,
Speaker 3: but one place we've seen clearly over the last couple
Speaker 3: of years is gold. And you are seeing data showing
Speaker 3: China reducing its treasury holdings. Obviously we know Russia did
Speaker 3: over the last several years. So the policies we're putting
Speaker 3: forward today, I think do create some risk. Now there's
Speaker 3: new sources of demand that we can talk about when
Speaker 3: we get to crypto, but when we think about foreign
Speaker 3: holdings of US bonds, I think that is a source
Speaker 3: of risk that could push yields higher and weigh on growth.
Speaker 4: You know, does it do you get a sense that
Speaker 4: this White House, this economic team at the White House,
Speaker 4: that they have a sense that, generally speaking, markets do
Speaker 4: not like uns certainty, whether it's uncertainty a policy, uncertainly,
Speaker 4: uncertainty of rhetoric. Is that something that has an audience,
Speaker 4: do you think down there in DC? Or is it
Speaker 4: just kind of overshadowed by this is a president that
Speaker 4: wants to do what he wants to do.
Speaker 3: President Trump has said in the last few weeks that
Speaker 3: he knows there might be some short term pain to
Speaker 3: get to these long term goals. I think there's probably
Speaker 3: a degree of pain reflected in the markets that would
Speaker 3: get his and his team's attention and maybe cause them
Speaker 3: to take a step back, at least temporarily. But I
Speaker 3: don't honestly know if today, looking at the sell off
Speaker 3: we saw in the stock market last week and the
Speaker 3: continued softness we're seeing this week registers.
Speaker 2: I look at the file through of all this, and
Speaker 2: I guess I go back, like a lot of people,
Speaker 2: to real GDP. The fact is Atlanta GDP now a
Speaker 2: snapshot of where we are right now, is coming in
Speaker 2: with a vengeance. Do you sense a momentum to to,
Speaker 2: you know, to make some news here on a What's today? Tuesday?
Speaker 4: Tuesday, Tuesday morning? Both?
Speaker 2: Yes, I'm worrying about both. I got the stitches out
Speaker 2: from where the damn dog bit me just as simple
Speaker 2: as I can. Are we heading towards two point five
Speaker 2: percent or lower real GDP?
Speaker 3: Well, here's what's so interesting, Tom. You know, last year
Speaker 3: GDP was much stronger than expected. We've gone into this
Speaker 3: year strong. We've seen that in the most recent earning season.
Speaker 3: But that's all backward looking. What drives the economy is
Speaker 3: confidence and incomes. So people still have incomes, the job
Speaker 3: markets still strong outside of certain DC agencies. I don't
Speaker 3: mean to be snarky about that, but confidence is where
Speaker 3: we're seeing some question marks. The other piece that's changing
Speaker 3: is economic surprises. A lot of economists revised up their
Speaker 3: expectations immediately after the election. What we've seen over the
Speaker 3: last several weeks now is data coming in below expectations, disappointing,
Speaker 3: and that indicator coming down.
Speaker 5: Now.
Speaker 3: I want to be careful on causation, but it's correlating
Speaker 3: beautifully with the ten year yield. So the market's pricing
Speaker 3: in two FED cuts again, the ten year yield is
Speaker 3: getting lower. All of that is coming hand in hand
Speaker 3: with both worries about the forward looking economic outlook and disappointments.
Speaker 2: To four digits. Paul Patterson's in the room, so we
Speaker 2: got to, you know, go to four decimal points absolutely
Speaker 2: one point eight nine four and the ten year real yield.
Speaker 2: That's an ian linga number top go.
Speaker 4: These are the top stories on the Bloomberg criminal Tom
Speaker 4: guess what's number one?
Speaker 2: Here?
Speaker 4: Your favorite bitcoin? Bitcoin slides below ninety thousand is crypto
Speaker 4: sell off gathers steam To me, I know you're recently
Speaker 4: at with a piece and CFR on the crypto. I
Speaker 4: kind of just view bitcoin is just a sense of
Speaker 4: risk appetite out there in the marketplace. That's it is.
Speaker 4: Are we saying risk off a little bit here?
Speaker 3: Yeah, I mean it's Bitcoin correlates very well tech stocks,
Speaker 3: which is not surprising. At the end of the day.
Speaker 3: Cryptocurrencies are a form of fintech. So when you see,
Speaker 3: you know, the mag seven come down, it's not shocking
Speaker 3: to me to see Bitcoin come down. If that sell off,
Speaker 3: if Navidia disappoints tomorrow, I think you see bitcoin going
Speaker 3: down further. But it gets me back to our Treasury
Speaker 3: point earlier. President Trump, in one of his executive orders,
Speaker 3: is very explicitly supporting the development of digital assets and
Speaker 3: crypto and specifically stable coin. And I want to highlight
Speaker 3: this because to the degree stable coins gather momentum, gather assets,
Speaker 3: they're backed by the dollar, ones are backed by treasuries
Speaker 3: and other cash like assets. This is a source of
Speaker 3: demand for treasuries that I think Treasury Secretary Bessent is
Speaker 3: keeping a close eye on tether. Just that one has
Speaker 3: something like one hundred and thirteen billion dollars worth of
Speaker 3: treasury and treasury like securities.
Speaker 2: Today Rebecca Patterson with this of course on your morning
Speaker 2: commute and also YouTube subscribe to Bloomberg podcast growing each
Speaker 2: and every day. Can't say enough about YouTube premium. I'm
Speaker 2: reading the book Mark Richard's book on YouTube and YouTube premium. Sure,
Speaker 2: I'm glad I did. It's sort of slick, you know,
Speaker 2: and all that. Let's go back to JP Morgan investmers trust.
Speaker 2: Is there an underlying to bitcoin? Please inform me where's
Speaker 2: where's the underlying to support a theory of bitcoin?
Speaker 3: I mean bitcoin itself to me anyway, remains a speculative asset.
Speaker 3: And I'm not saying that lightly. The Bank for International
Speaker 3: Settlements did a really detailed report about a year and
Speaker 3: a half ago, it's worth reading, talking about the development
Speaker 3: of crypto, and it highlights, based on a global survey,
Speaker 3: a very detailed global survey, that the bulk of owners
Speaker 3: of bitcoin today are young men under the age of
Speaker 3: thirty five, retail investors and it's a momentum trade.
Speaker 2: Yeah, I should say worldwide foe. So do you see
Speaker 2: me say this on social The leadership here is Raphael
Speaker 2: our au Er at the Bank of International Settlements. He
Speaker 2: has the best Whatever your belief on bitcoin, I mean,
Speaker 2: you know Matt Miller should read it. Yes, if you
Speaker 2: can find his past code to cash show is Rebecca.
Speaker 4: Is this administration? I mean I think President trumpets some point,
Speaker 4: whether it's campaign or where, describe yourself as a crypto president.
Speaker 4: It's just a crypto presidency. Is this something where the
Speaker 4: next four years we can see the US regulatory framework
Speaker 4: support crypto in this country.
Speaker 3: I one hundred percent. I think over the next six
Speaker 3: twelve months we will see regulatory clarity which is going
Speaker 3: to allow more integration between crypto assets and the traditional
Speaker 3: banking system. And I think it probably will get more
Speaker 3: broad adoption, so it won't just be the young men.
Speaker 3: It will be more types of investors. And that's good
Speaker 3: for crypto in that it'll reduce volatility by having more liquidity.
Speaker 3: The risk one needs to watch is that as it
Speaker 3: gets bigger and more integrated, it becomes a source of
Speaker 3: systemic risk. You know, if you have a hack like
Speaker 3: we did this past week in by bit right one
Speaker 3: hundred or sorry, one point five billion dollar hack of
Speaker 3: a cold wallet, which is supposed to be saved. Right,
Speaker 3: cold wallet is off fine, But that happened in the
Speaker 3: United States, we would have contagion and and that. You know,
Speaker 3: it's not just going to be Silicon Valley Bank, it
Speaker 3: would be broader. So that's the thing one needs to
Speaker 3: watch out for. You can have regulation to give them
Speaker 3: the ability to grow and innovate, you still have to
Speaker 3: have a few consumer guardrails there.
Speaker 2: Our listeners and viewers know where I am on this,
Speaker 2: and I think Ms Patterson knows where I am on this.
Speaker 2: So let's cut to the chase. First thing I did
Speaker 2: this morning is from peak to where we are now,
Speaker 2: bit dog is down twenty percent. That's not a currency.
Speaker 2: We've got all sorts of IRA E, TF, Eric Beltchunas,
Speaker 2: black Rock, this, that, and the other. They're doing it.
Speaker 2: What should we say to those people if we pop
Speaker 2: down another ten percent, I mean, horrific bear markets in
Speaker 2: the equity market are negative thirty five percent. If we
Speaker 2: get that in bitcoin and we're not letting everybody have bitcoin,
Speaker 2: what's going to be the outcome?
Speaker 3: Well, again my concern, I think to the degree digital
Speaker 3: assets encourage more financial innovation in the United States, that's great, right,
Speaker 3: Our financial system is creative and broad and deep, and
Speaker 3: that helps the US economy. What we need to be
Speaker 3: mindful of is that the pool of people today, not
Speaker 3: in the future, but today who are trading bitcoin and
Speaker 3: these currencies aren't necessarily aware of how to save for
Speaker 3: retirement in a safe, methodical way. This is not an
Speaker 3: easy path to retirement riches. And if they lose their money,
Speaker 3: they have less ability to buy a home to invest
Speaker 3: for the longer term understanding the volatility of what they're buying.
Speaker 2: You know.
Speaker 3: That's I hope that these cryptocurrent companies do a lot
Speaker 3: more education going forward to help these people invest in
Speaker 3: these assets wisely. Right now, I don't see a lot
Speaker 3: of evidence of that.
Speaker 2: Paul Out on YouTube live chat, Thank you. The live
Speaker 2: chat can be very smart. Subscribe to Bloomberg Podcasts. This
Speaker 2: guy one word tulips.
Speaker 4: One of the things that is the regulatory environment. Like
Speaker 4: in the last administration, the bad administration, Gary Ginster. I
Speaker 4: expected him, and I think a lot of people did that.
Speaker 4: A he understood crypto and B he was going to
Speaker 4: take a forceful hand and kind of pushing the regulatory
Speaker 4: framework forward, which most participants are asking for. Yes, Yes,
Speaker 4: he did not, really what do we know about this administration,
Speaker 4: the Trump administration.
Speaker 3: Well, there's In the last administration there was some debate,
Speaker 3: fight whatever word you want to use, between the different
Speaker 3: regulatory agencies on who would be the lead on digital assets.
Speaker 3: I think in this administration we're likely to see a
Speaker 3: lighter touch, probably led by the CFTC rather than the SEC.
Speaker 3: I think we'll get some legislation from Congress through probably
Speaker 3: in the next few months, which will also create a
Speaker 3: clear path. And these companies need it, They deserve it right.
Speaker 3: They need to know the rules of the road, and
Speaker 3: the banks and other asset managers need to know the
Speaker 3: rules of the road. So I do think this administration
Speaker 3: is going to be incredibly helpful on that front. Again,
Speaker 3: my hope and my ask if I could, if I
Speaker 3: could be there in the White House today, would be,
Speaker 3: please don't forget some consumer protection, some consumer guardrails.
Speaker 2: Do you have in your head a price of bitcoin
Speaker 2: south where everybody starts wringing their hands. I mean, we're
Speaker 2: eighty nine thousand, is it eighty? Is it fifty? I
Speaker 2: mean I have no idea.
Speaker 3: So my worst case scenario, a realistic worst case scenario,
Speaker 3: would be that we get some disappointment out of one
Speaker 3: of the big tech companies in the video, whoever it is,
Speaker 3: it doesn't matter, and we get more of a concerted
Speaker 3: sell off, maybe in response to tariffs China puts some
Speaker 3: holds on US tech companies acting in China. Those sorts
Speaker 3: of maneuvers, you get a bigger sell off in tech,
Speaker 3: which is not impossible given valuations, given ownership, and that
Speaker 3: contagion pulls down cryptocurrencies in a meaningful way because these
Speaker 3: investors own crypto and they own meme stocks, and they
Speaker 3: own a lot of tech, and so they get hit
Speaker 3: on both fronts. That could get some momentum and pull
Speaker 3: down the broader market. I don't know if anyone buys
Speaker 3: that dip, because they just need to be covering their
Speaker 3: losses at that point.
Speaker 2: Well again, and the retailization of this is where I
Speaker 2: have my radar. Rebecca. Thank you so much, Rebecca Patterson,
Speaker 2: way too early. Thank you so much for coming in.
Speaker 2: Were the consol and foreign relations and all of her
Speaker 2: work on Wall Street, particular comments and the dollar. I'll
Speaker 2: try to get out the Bank of International Settiment essays
Speaker 2: from Raphael Hour and Company. They're absolutely brilliant very sobering
Speaker 2: and is mss Patterson mentioned the depth of their research.
Speaker 1: You're listening to the Bloomberg Surveillance Podcast. Catch US Live
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Speaker 2: Joining us now here with the markets lifting a little bit?
Speaker 2: Is with our question our conversation of the day. There
Speaker 2: are mysteries out there, including mysteries of what is going
Speaker 2: on in the Kremlin. I have forever and ever been
Speaker 2: humbled by me getting the yeltsin call so wrong. Angela's
Speaker 2: stent is definitive on this senior fellow at Brookings and
Speaker 2: at Georgetown as well in her book Putin's World is
Speaker 2: my book of the year, A long three years ago,
Speaker 2: Angela Stent, with great respect for your decades of work.
Speaker 2: I saw the headline, I believe, in the Washington Post
Speaker 2: that said, basically, the United States sides with Russia within
Speaker 2: the United Nations. I'm making a generalization there, folks. What
Speaker 2: did you think when you saw that? What do you
Speaker 2: observe to your work? Marshall Goldman's work all the way
Speaker 2: back through the decades to see a headline America sides
Speaker 2: with Russia.
Speaker 6: Well, Tom, this was truly shocking. I mean, who did
Speaker 6: we veto the resolution condemning Russia with our good friends
Speaker 6: North Korea, Russia, Yelorus, Syria, the Central African Republic, Nicaragua.
Speaker 6: I won't go on. Even China and Iran abstained from
Speaker 6: that vote. So Ronald Reagan would be turning in his grave,
Speaker 6: as would many others. It's really quite remarkable. And if
Speaker 6: you think of what the US has stood for, you know,
Speaker 6: for the past eighty years, since the end of World
Speaker 6: War Two, through the Cold War, through the post Soviets
Speaker 6: Soviet era, it's quite remarkable that we veto a resolution
Speaker 6: that condemns the Russian invasion of Ukraine.
Speaker 2: What should Marco Rubio do?
Speaker 6: I think he's in a very difficult position. We know
Speaker 6: what he has said before he became Secretary of State
Speaker 6: about Russia, but right now all of the officials in
Speaker 6: the Trump administration are repeating the same line. It's complicated
Speaker 6: Russia was provoked, so you know, if he wants to
Speaker 6: sustain his job, he presumably has to repeat those lines too.
Speaker 4: Angelus, should you mentioned eighty years of precedent? US policy
Speaker 4: visa VI the former Soviet Union in Russia. Should we
Speaker 4: be surprised that this has changed literally on a dime,
Speaker 4: and we've had no real, I guess, opposition from anywhere
Speaker 4: in the US government to this policy. Should we be
Speaker 4: surprised that it changed so quick?
Speaker 6: I think we should be surprised by the rapidity. I mean,
Speaker 6: we knew from President Trump's first term that he admires
Speaker 6: Putin that he wanted to do a deal with Russia.
Speaker 6: But to have this happen so quickly, within a month
Speaker 6: of him coming to power and with everyone, the top
Speaker 6: officials and his administration repeating this line, we should be Now,
Speaker 6: there are Republicans in Congress who have pushed back against this,
Speaker 6: but they're not that many of them, and I think,
Speaker 6: you know, we have to wait and see whether there's
Speaker 6: going to be more position to this line. The Krumlin
Speaker 6: is delighted. I was just reading the remarks of the
Speaker 6: Press Secretary Dmitri Peskov. You know, finally the United States
Speaker 6: has seen since and has understood, you know, what the
Speaker 6: real situation is.
Speaker 2: I think of at dawn we slept the failure of
Speaker 2: our intelligence of Pearl Harbor in nineteen forty one, Angelus stent,
Speaker 2: we were sobered by the failure of our intelligence with
Speaker 2: the collapse of the Soviet Union. Would you suggest that
Speaker 2: we have any clue what's going on at the Kremlin
Speaker 2: or within mister Putin's orbit?
Speaker 6: I mean, I think we have some clue. We know
Speaker 6: that they are absolutely delighted about what's happened recently. They're
Speaker 6: even talking about that publicly. We have a pretty good
Speaker 6: idea that they're not interested in a peace settlement in Ukraine,
Speaker 6: but they're certainly interested in improved ties to the US.
Speaker 6: Let's restore relations, Let's have a summit. Let's have President
Speaker 6: Trump visit for Victory Day May nineteen eighty years since
Speaker 6: the end of World War Two, visit so that we know.
Speaker 6: Do we know what goes on in the very inner circles?
Speaker 6: Of course not, but we can get some things by
Speaker 6: what they've said.
Speaker 2: This. You know, this is why we love having doctor
Speaker 2: stenn On. Folks. Could you imagine the President of the
Speaker 2: United States in Moscow for those celebrations of Russian might
Speaker 2: in May? Yep, I've never once framed that that miss
Speaker 2: Angela's stun only can.
Speaker 4: Do angel what do you I can?
Speaker 2: Yep?
Speaker 4: I can Angel, What do you think the response will
Speaker 4: be should be from rest of the world. I'll just
Speaker 4: leave it there. Rest of the world as it relates
Speaker 4: to this changing US position visa Vive Russia.
Speaker 6: Well, we've just had President Macron here, we have Prime
Speaker 6: Minister Starma coming tomorrow. The Europeans are really trying to
Speaker 6: push back. President Macron did a good job, a valiant
Speaker 6: job of trying to persuade President Trump that you know,
Speaker 6: we have to work together and that you know, the
Speaker 6: US isn't getting stiffed by Ukraine. He in fact corrected
Speaker 6: Trump about loans versus money given to Ukraine. I mean,
Speaker 6: the Europeans are trying their best, and they've come to
Speaker 6: realize that they're going to be alone in this. If
Speaker 6: they want to support Ukraine going forward, they're going to
Speaker 6: have to do without the United States. Now, for those
Speaker 6: countries that have stayed, which is a large number yesterday
Speaker 6: in the General Assembly, you know they're just going to
Speaker 6: shrug and say this is a European conflict and it
Speaker 6: really doesn't touch us that much. But certainly the Europeans,
Speaker 6: and I would say our Asian allies are very concerned.
Speaker 2: To extend Angel extent the list of US in Russia,
Speaker 2: is well, Israel, Haiti, Hungary, Palau, Marshall Islands, Burkina, Fasso,
Speaker 2: African nations that can't pronounce Belarus, North Korea, Syria, Mali
Speaker 2: and Nicaragua. What is the ramification of our diplomacy? To
Speaker 2: Paul's good question moments ago, how do we diploma how
Speaker 2: do we do diploma Kissinger diplomacy around the world? Given
Speaker 2: that beauty.
Speaker 6: List, Well, I think that the Trump administration is still believing,
Speaker 6: for instance, that if we have this thro aproshmao with Russia,
Speaker 6: Russia will decide to distance itself from China and will
Speaker 6: reverse course. I think that's highly unlikely, but I think
Speaker 6: that's one thing that's going on here. And I think
Speaker 6: it's also the US trying to show to those countries
Speaker 6: that supported US, and I guess those who have stained
Speaker 6: that you know, we're not necessarily taking sides in this.
Speaker 6: We recognize that Russia is a great power and we're
Speaker 6: going to try and do something different.
Speaker 2: Yeah, my findest hope as a Secretary of State or
Speaker 2: rite Angelus stents Putin's world next, thank you so much
Speaker 2: for your commitment to Bloomberg surveillance. She is with the
Speaker 2: Brookings Institution.
Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday
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Speaker 2: Joining us now, and this is really important. Calvincy joins
Speaker 2: us right now with BMP PERI by the BNP PERI
Speaker 2: by Heritage is a carefully constructed, cautious view on the
Speaker 2: economy back to Juliet Cardnido, back at least fifteen years
Speaker 2: or so in the sum total of your work there,
Speaker 2: do you see a dampening of GDP off of all
Speaker 2: the events going on right now?
Speaker 7: Thanks so much for having me, Tom. This is the
Speaker 7: question that every client is asking us. We're getting so
Speaker 7: many different policies from President Trump. The aggregate of these policies,
Speaker 7: when we think about immigration policy, especially trade policy, should
Speaker 7: we think begin to slow growth down in the second
Speaker 7: half of the year. But even more importantly than that,
Speaker 7: where we're very out of consensus is that we think
Speaker 7: that these policies are going to be generating significant amounts
Speaker 7: of inflation. So despite that slower growth in the second
Speaker 7: half of the year, it may be a tough spot
Speaker 7: for the FED and the FED we think, so keep
Speaker 7: rates on holds for all of this year.
Speaker 2: Is we haven't done this recently? I mean, this is
Speaker 2: a whole new world after all. Is what you just
Speaker 2: laid out good for business? Is it good for Brian
Speaker 2: moynan at Bank of America.
Speaker 7: We think that this is a really interesting environment in
Speaker 7: that Trump one point zero differed from Trump two point
Speaker 7: zero in one really major way, and that is Trump
Speaker 7: one point zero was very combative with the FED, trying
Speaker 7: to get the Fed to lower rates at every single
Speaker 7: point that they could. This time, the administration is really
Speaker 7: focusing on trying to control the part of the yield
Speaker 7: curve that they can exert more control over the back
Speaker 7: end of the curve. And with that, we think that
Speaker 7: we should be seeing lower ten year yields relative to
Speaker 7: two yearields this year, which should be good for the
Speaker 7: everyday American. Is that's the part of the US yield
Speaker 7: curve or most people are borrowing at I'll.
Speaker 2: Just say inverted yield curve.
Speaker 4: I know somebody and talks about it. Verted yield curvemic
Speaker 4: cam Harvey. So, what you were talking about in the economy,
Speaker 4: slow in growth, higher inflation. That's stagflation. Is that what
Speaker 4: the economist calls stagflation.
Speaker 7: We're not necessarily going to call it stagflation, but we
Speaker 7: could call it slow flation. We think that growth will
Speaker 7: slow to slightly below trendler this year. We're not going
Speaker 7: to see a recession, we don't think, but we think
Speaker 7: mostly it's going to be the inflation side. We're very
Speaker 7: out of consensus inflation, and we think that tariffs are
Speaker 7: going to generate significantly more inflation than people think, and
Speaker 7: that we think is going to put the FED in
Speaker 7: a pretty tough bind.
Speaker 4: That's not a good political move from what I remember.
Speaker 4: So what does that mean for this Federal Reserve? Should
Speaker 4: we pay attention to what these folks are doing?
Speaker 7: So we be in pre paraba, we're very early and
Speaker 7: very out of consensus in the beginning of December when
Speaker 7: we had a no FED cut view for all of
Speaker 7: twenty twenty five. Interesting, I'll take a step further from there,
Speaker 7: and I'll say most of our competitors, I think, think
Speaker 7: that the asymmetry is still toward cuts. In other words,
Speaker 7: it's more likely to see cuts this year than hikes.
Speaker 7: Our view is different where we think because of these
Speaker 7: inflationary pressures that are to come, we think that there's
Speaker 7: probably an equal chance that the next move from the
Speaker 7: Fed could be a cut or even a hike.
Speaker 2: We'll frame out your GDP call into your you know,
Speaker 2: the remit that you have there, which is in basic
Speaker 2: strategy of the America is in the larger, bigger picture.
Speaker 2: Are we so up real GDP at some point out
Speaker 2: this year?
Speaker 7: That's a great question, Tom. We think that twenty twenty
Speaker 7: five is going to.
Speaker 4: Be a tale of two halves.
Speaker 7: The first half of the year should be above two
Speaker 7: percent growth, and this is largely because of animal spirits
Speaker 7: that have come out after the election, strong momentum. The
Speaker 7: second half of the year still.
Speaker 2: Later day, and the world's falling apart. This is really
Speaker 2: important with your heritage. Do you have do you have
Speaker 2: a belief that Washington and particularly the administration will adapt
Speaker 2: and adjust to a sub two percent statistic somewhere where
Speaker 2: the Red Sox decided if it's playoff baseball.
Speaker 7: Our questions are our clients are asking us these exact
Speaker 7: same questions. We think that the administration really does not
Speaker 7: believe that their policies are going to weigh on growth.
Speaker 7: So we think that Trump, if we think about what
Speaker 7: he really campaigned on, it was really two major issues,
Speaker 7: and that is to be hard on trade, it's to
Speaker 7: be hard on the border. Both of these are going
Speaker 7: to weigh on growth. We think that President Trump is
Speaker 7: going to push very hard on them. And if our
Speaker 7: forecast come true and growth does weaken, then perhaps at
Speaker 7: that point the administration could pull back, but we think
Speaker 7: that they're certainly going to deliver first and maybe pull
Speaker 7: back later.
Speaker 4: So, as a macro strategy for the Americas, what are
Speaker 4: you telling your clients where did allocate capital these days?
Speaker 7: Given that background, this is a conversation we have every
Speaker 7: single day, and to us, what we think is one
Speaker 7: of the more attractive investments for clients right now is
Speaker 7: to own long term bonds in the United States. And
Speaker 7: the reason I say that is because, very interestingly, something
Speaker 7: that we've been writing about quite a lot is this
Speaker 7: theme that's emerging where we think that we're now seeing
Speaker 7: a more bond vigilant administration which is now thwarting off
Speaker 7: the bond vigilantes. And that's really evidenced over the last
Speaker 7: few weeks by Treasury Secretary Beston, who's basically telling you
Speaker 7: he's in no rush to increase supply in the United States,
Speaker 7: and this is opening a window of opportunity, we think
Speaker 7: to invest in long term bonds in the United States.
Speaker 2: Well, cut to the chase, So you load the boat
Speaker 2: in a ten years right now.
Speaker 7: We like the ten year, but we like it even
Speaker 7: better in inflation protected form as much as before. We're
Speaker 7: very worried about inflation, so we like tip.
Speaker 2: Yeah, Paul, I don't care. The reason we had you
Speaker 2: here is Alex Steele said, can you find someone who
Speaker 2: can figure out hotel rooms in Paris? You run BMP
Speaker 2: Perry Bot. How do we get a hotel room somewhere
Speaker 2: in the vicinity of you know, the first there on
Speaker 2: de Swall in Paris. It's impossible for us.
Speaker 7: From a macro perspective. What we're certainly going to see
Speaker 7: this year with a very strong dollar, which is what
Speaker 7: we're forecasting, is more tourism. Here you go from from
Speaker 7: the United States towards the rest of the world. That
Speaker 7: all else equal. Unfortunately for you, Tom is probably going
Speaker 7: to be putting upward prices on a lot of hotel rooms.
Speaker 2: It's outrageous. I mean I was there a couple months ago.
Speaker 2: Long story showed it. I have an offspring there and
Speaker 2: it was I was literally foaming over what has doubled
Speaker 2: in price. I mean it's a boom cutcaus with Trumpe,
Speaker 2: me and a their b figure that one out. Mccrime
Speaker 2: and Trump are sitting there. Does anybody have a clue
Speaker 2: the boom economy in Paris?
Speaker 7: When we speak to clients, what clients are really concerned
Speaker 7: about right now? Are really I think largely as you say,
Speaker 7: what's going to happen with inflation? And this is what
Speaker 7: you're feeling every single day. Inflation affects all of us,
Speaker 7: right and that's why we've been quite concerned. What we're
Speaker 7: worried about is that inflation expectations today are less stable
Speaker 7: than they've been at any point over the last forty years,
Speaker 7: exactly as you're saying, you can feel it everywhere, and
Speaker 7: with inflation expectations less anger than they used to be.
Speaker 7: What we think is going to happen is that as
Speaker 7: big tariffs occur, this is lar likely going to result
Speaker 7: in more second round impacts on inflation, continuing to push
Speaker 7: inflation higher which is why we think the Fed's going
Speaker 7: to be more hot.
Speaker 2: You get out at NYU as you start talking second
Speaker 2: order's second round. That's how you impressed your Calvin. Thank
Speaker 2: you so much, Calvin, see with this, that would be
Speaker 2: MP pre brilliant. Are you based in New York?
Speaker 7: I am now, yeah you are?
Speaker 2: Now okay, yeah he was on the air France shuttle
Speaker 2: and that end. Okay, Calvin, thank you so much. Don't
Speaker 2: be a stranger with B and B Perry by ahead
Speaker 2: of Macro Strategy Americas.
Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday
Speaker 1: starting at seven am Eastern on Applecarplay and Android Auto
Speaker 1: with the Bloomberg Business app. You can also watch us
Speaker 1: live every weekday on YouTube and always on the Bloomberg terminal.
Speaker 2: The front page was Lisa Mateo, Lisa Moteo hour, Let's
Speaker 2: get right to it.
Speaker 5: What do you have, Lisa, Well, yesterday we're talking about
Speaker 5: Apple's plans right for more jobs, US jobs, US investment,
Speaker 5: but experts are saying that they're just sugar coating their investments.
Speaker 5: This was a Wall Street Journal analysis and said that
Speaker 5: Apple's new job promises they're just slightly ahead of their
Speaker 5: recent four year pace. They also said that the spending
Speaker 5: pledge is roughly on track with its recent investments. So
Speaker 5: the Journal spoke with these experts and they said that
Speaker 5: a lot of companies who do this, they cater to
Speaker 5: the administration's needs, right, They just sugarcoat repurpose existing investments.
Speaker 5: They said about eighty percent of those announcements in spending
Speaker 5: that was already already in the works.
Speaker 6: So it's nothing.
Speaker 5: Yeah, they're saying it's nothing new.
Speaker 2: Yeah.
Speaker 4: Mark Hemer from Bloomberg News was in on Bloomberg Intelligence
Speaker 4: yesterday and he has a great peace out on the
Speaker 4: Bloomer terminal yesterday. He kind of laying out all the numbers.
Speaker 4: So it's good stuff. I mean, they're spending money in
Speaker 4: the US, is all good. Apple can claim a victory,
Speaker 4: President Trump can claim a victory, but the reality is
Speaker 4: it wasn't that much incremental.
Speaker 2: For our listeners and viewers worldwide. Do the three of
Speaker 2: us have news fatigue right now? Which is start?
Speaker 4: That was like its tried to look.
Speaker 2: At the cell phone. It's like every minute of the day.
Speaker 4: You get another alert.
Speaker 2: What's the next red sticky or red banner?
Speaker 6: Goodness, next it is this one?
Speaker 5: You probably got to stick in this. Door Dash paying
Speaker 5: about seventeen million dollars to drivers in New York State.
Speaker 5: Here's the reason why. So the drivers are saying that
Speaker 5: the delivery service cheated them out of the tip money
Speaker 5: because they applied it to their base salary. So basically
Speaker 5: it would go the money would go into this fund.
Speaker 5: About sixty thousand or so drivers are eligible, so they
Speaker 5: could get up to about fourteen thousand dollars each. But
Speaker 5: what I didn't realize is that the delivery worker they
Speaker 5: were guaranteed let's say ten dollars, right, you make a delivery,
Speaker 5: and then the customer tips the worker three dollars, but
Speaker 5: door Dash would only pay the worker seven dollars and
Speaker 5: they would keep it because you couldn't see the breakdown.
Speaker 4: When I click on it. If you're going to tip
Speaker 4: somebody for an uber or whatever like that, you don't
Speaker 4: know where that's going. I supposed to putting a couple
Speaker 4: bucks in a jar sitting in front of bartenders.
Speaker 5: This is a huge because they don't show the break
Speaker 5: they're not transparent about it.
Speaker 4: Huge And this goes to the whole tipping environment out there.
Speaker 4: It's changed in the last ten years, so here's the
Speaker 4: rule of thumb I use. If I'm standing, I don't tip.
Speaker 4: If I sit, I'll tip it. So you go up
Speaker 4: to a counter and you buy something on the turner
Speaker 4: screen around for you to tip zero. Do you feel
Speaker 4: the pressure though? I feel not anymore. I used to,
Speaker 4: but now I've got my new strategy and i feel
Speaker 4: very comfortable with my stress.
Speaker 2: So if you're in Odds basement at that club down
Speaker 2: and seagirt yep, and you're having a skyll up standing up,
Speaker 2: you don't.
Speaker 4: Tip correct exactly right, exactly right. Although I've tipped really
Speaker 4: well Department O God's Basement at the past forty five years,
Speaker 4: I've tipped very well at the partner mister last one.
Speaker 5: This was in the New York Times. Lawyers for Paramount
Speaker 5: and President Trump have actually agreed to appoint a mediator
Speaker 5: in that twenty billion dollars lawsuit that he had against CBS.
Speaker 5: So mediator could actually help them reach a settlement. Well,
Speaker 5: whether they will, it's uncertain, but it's complicating a few things,
Speaker 5: like the merger Paramount's merger with Skuidance. It's complicating that
Speaker 5: media lawyers are saying that this could open up the
Speaker 5: door to more lawsuits against other news outlets. It could
Speaker 5: also lead to shareholder lawsuits, especially if he wins a
Speaker 5: big judgment, and they're saying that. Paramounts also concerned that
Speaker 5: it could lead to legal liabilities because it may not
Speaker 5: be covered by corporate insurance policies on top of it.
Speaker 5: So there's a lot behind it that goes on with that.
Speaker 4: Exactly. Good luck with that. And again they're trying to
Speaker 4: get that deal done with bit Dance.
Speaker 2: So Paramounts sold.
Speaker 4: I mean, it hasn't closed it and it gives wonderful
Speaker 4: leverage to President Trump and his legal team because one
Speaker 4: of the issues kind of slowing down the closing of
Speaker 4: this deal is this litigation out there. So it could
Speaker 4: be a good time for President Trump and his team. Okay, yeah,
Speaker 4: egg criceis just real quickly, how long is it take
Speaker 4: for like more chickens to make more chickens so we
Speaker 4: have more eggs? Work easy?
Speaker 6: I mean, it's crazy.
Speaker 5: Yeah, it's funny because the data shows that their flock
Speaker 5: of egg laying hens it dropped to a nine year
Speaker 5: low in January, so they're laying the eggs, they're not
Speaker 5: laying it.
Speaker 2: There's enough chicken for the first time I ordered groceries
Speaker 2: and there were no.
Speaker 6: Eggs, none, none.
Speaker 2: Must have been fifteen different choicest I'm gonna tall you.
Speaker 2: Thank you so much, newspapers, and I greatly appreciate that.
Speaker 1: This is the Bloomberg Surveillance podcast, available on Apple, Spotify,
Speaker 1: and anywhere else you get your podcasts. Listen live each weekday,
Speaker 1: seven to ten am Eastern on Bloomberg dot com, the
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Speaker 1: can also watch us live every weekday on YouTube and
Speaker 1: always on the Bloomberg terminal