1 00:00:02,400 --> 00:00:06,760 Speaker 1: Bloomberg Audio Studios, Podcasts, radio news. 2 00:00:11,680 --> 00:00:15,480 Speaker 2: This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along 3 00:00:15,520 --> 00:00:18,720 Speaker 2: with Lisa Bromwitz and Amerie Hordernt. Join us each day 4 00:00:18,760 --> 00:00:22,280 Speaker 2: for insight from the best in markets, economics, and geopolitics 5 00:00:22,440 --> 00:00:24,880 Speaker 2: from our global headquarters in New York City. We are 6 00:00:24,960 --> 00:00:27,680 Speaker 2: live on Bloomberg Television weekday mornings from six to nine 7 00:00:27,720 --> 00:00:31,319 Speaker 2: am Eastern. Subscribe to the podcast on Apple, Spotify or 8 00:00:31,320 --> 00:00:33,960 Speaker 2: anywhere else you listen, and as always on the Bloomberg 9 00:00:34,040 --> 00:00:37,000 Speaker 2: Terminal and the Bloomberg Business app. What a run we've 10 00:00:37,040 --> 00:00:39,560 Speaker 2: had for the equity market twenty eight, all time highs 11 00:00:39,560 --> 00:00:41,560 Speaker 2: on the S and P five hundred and the rally 12 00:00:42,040 --> 00:00:45,280 Speaker 2: just keep on climbing. Rick Worster, the president and CEO 13 00:00:45,400 --> 00:00:48,159 Speaker 2: of Charles Swap, joins us now to discuss Welcome to 14 00:00:48,159 --> 00:00:50,040 Speaker 2: the program sir, it's going to see you most of you. 15 00:00:50,159 --> 00:00:52,120 Speaker 2: Welcome back. Rick, It's always good to see you. What 16 00:00:52,200 --> 00:00:54,240 Speaker 2: a year has been already for twenty five, still got 17 00:00:54,280 --> 00:00:56,080 Speaker 2: three or four months left. Can you frame for us 18 00:00:56,120 --> 00:00:58,640 Speaker 2: how engage your clients have been over the last year. 19 00:00:58,840 --> 00:01:01,360 Speaker 3: Our clients are very much gage so our trading activity 20 00:01:01,400 --> 00:01:03,800 Speaker 3: this year has generally been about thirty percent higher than 21 00:01:03,880 --> 00:01:06,040 Speaker 3: last year. So clients are in the market, they're invested. 22 00:01:06,800 --> 00:01:10,039 Speaker 3: I've been in about fifteen of our retail branches in 23 00:01:10,040 --> 00:01:11,720 Speaker 3: the last couple of weeks, and I was in Princeton, 24 00:01:11,720 --> 00:01:13,600 Speaker 3: New Jersey yesterday and I asked the client how they 25 00:01:13,600 --> 00:01:17,160 Speaker 3: were feeling, and I think they synthesize what our investors 26 00:01:17,200 --> 00:01:20,399 Speaker 3: are feeling really well. They said, I'm happy, but I'm nervous, 27 00:01:20,800 --> 00:01:22,759 Speaker 3: and they're happy because markets are at all time high. 28 00:01:22,840 --> 00:01:25,280 Speaker 3: Their balances have never been higher, but they're looking at 29 00:01:25,360 --> 00:01:27,959 Speaker 3: valuations and wondering, you know, am I. 30 00:01:27,920 --> 00:01:28,560 Speaker 2: Going to be okay? 31 00:01:28,640 --> 00:01:31,240 Speaker 3: So it's a great time because they're looking to us 32 00:01:31,280 --> 00:01:33,440 Speaker 3: for advice and they're coming in and they're talking to 33 00:01:33,520 --> 00:01:38,160 Speaker 3: us and they're hearing from our experts. But it's you know, overall, 34 00:01:38,160 --> 00:01:39,520 Speaker 3: are happy because markets are up. 35 00:01:39,760 --> 00:01:42,160 Speaker 2: What do you think the dominant anxiety is at the moment. 36 00:01:42,319 --> 00:01:44,280 Speaker 2: We've been trying to ask this question. Is it the 37 00:01:44,280 --> 00:01:46,280 Speaker 2: anxiety to get out? Do you have to do some 38 00:01:46,319 --> 00:01:48,600 Speaker 2: hand holding or is it the fear of missing out? 39 00:01:48,760 --> 00:01:50,960 Speaker 2: Are they looking to lean in a little bit more aggressively. 40 00:01:51,400 --> 00:01:53,880 Speaker 3: I think our clients are generally engaged and invested so 41 00:01:53,920 --> 00:01:57,120 Speaker 3: I think it's more I have more wealth now than 42 00:01:57,120 --> 00:02:00,960 Speaker 3: I anticipated. Markets have done better than I thought. Do 43 00:02:01,000 --> 00:02:03,080 Speaker 3: I need to be worried about valuations and should I 44 00:02:03,160 --> 00:02:05,880 Speaker 3: be getting out? I think interestingly, as it relates to 45 00:02:05,920 --> 00:02:08,840 Speaker 3: the bond market, we're seeing a lot more interest in 46 00:02:08,960 --> 00:02:12,640 Speaker 3: bonds now because with rates coming down, investors are wondering, 47 00:02:12,840 --> 00:02:14,520 Speaker 3: do I need to go out the curve. I've been 48 00:02:14,560 --> 00:02:17,640 Speaker 3: living off my purchase money fund, but the yields on 49 00:02:17,639 --> 00:02:18,960 Speaker 3: that are coming down. Do I need to go out 50 00:02:19,000 --> 00:02:21,799 Speaker 3: the curve and lock in higher yields? So that's been 51 00:02:21,800 --> 00:02:24,480 Speaker 3: a topic of hot debate among our clients as well. 52 00:02:24,280 --> 00:02:26,960 Speaker 4: The sort of elusive money on the sidelines that we 53 00:02:27,000 --> 00:02:29,679 Speaker 4: talk about that's supposed to rush back into everything else, 54 00:02:29,680 --> 00:02:31,119 Speaker 4: particularly the long end of the yield curve. 55 00:02:31,160 --> 00:02:32,440 Speaker 1: Is that actually happening well? 56 00:02:32,639 --> 00:02:35,240 Speaker 3: I think if you look at our clients, the percentage 57 00:02:35,280 --> 00:02:38,000 Speaker 3: that they keep in either cash or purchase money funds 58 00:02:38,360 --> 00:02:42,520 Speaker 3: has stayed relatively stable. Now the dollar amount has grown 59 00:02:42,560 --> 00:02:45,440 Speaker 3: because their wealth has grown so significantly with the market 60 00:02:45,440 --> 00:02:47,440 Speaker 3: increase in the last couple of years. So from a 61 00:02:47,440 --> 00:02:49,400 Speaker 3: dollar standpoint, there is a lot of cast sitting on 62 00:02:49,440 --> 00:02:51,800 Speaker 3: the sideline. But at the same time, it's roughly the 63 00:02:51,840 --> 00:02:54,120 Speaker 3: same percentage that they've always kept because they want it 64 00:02:54,120 --> 00:02:58,760 Speaker 3: for safety needs, or they wanted to they're purchasing a house, 65 00:02:58,800 --> 00:03:01,760 Speaker 3: whatever it may be. I want's see a big story 66 00:03:01,800 --> 00:03:03,840 Speaker 3: around cast sitting on the sidelines at the moment. 67 00:03:03,960 --> 00:03:06,240 Speaker 4: Do you notice a really big difference in how your 68 00:03:06,280 --> 00:03:09,519 Speaker 4: clients trade depending on their age, depending on their generation. 69 00:03:09,720 --> 00:03:14,680 Speaker 4: For example, older individuals tend to go to megacaps, younger 70 00:03:14,720 --> 00:03:16,440 Speaker 4: individuals just straight bitcoin. 71 00:03:17,600 --> 00:03:21,120 Speaker 3: Well, we spend a lot of time talking with our 72 00:03:21,160 --> 00:03:23,839 Speaker 3: younger investors, and we have thirty five hours a week 73 00:03:23,840 --> 00:03:26,720 Speaker 3: of live education and training to try to get investors 74 00:03:26,720 --> 00:03:29,360 Speaker 3: to think about the difference between an equity and a 75 00:03:29,400 --> 00:03:31,880 Speaker 3: coin and to make sure they're making the right investment 76 00:03:31,880 --> 00:03:37,040 Speaker 3: decision for them. You know, I do worry about younger investors, 77 00:03:37,480 --> 00:03:41,240 Speaker 3: and crypto has been something that's done exceptionally well, but 78 00:03:41,280 --> 00:03:42,960 Speaker 3: I want to make sure we want to make sure 79 00:03:43,000 --> 00:03:45,640 Speaker 3: that young investors also know about the power of equities 80 00:03:45,640 --> 00:03:48,240 Speaker 3: over the long term. And then investing generally is something 81 00:03:48,280 --> 00:03:50,200 Speaker 3: that you want to do for the long term. Certainly 82 00:03:50,240 --> 00:03:52,600 Speaker 3: you want to you can trade and take on positions, 83 00:03:53,120 --> 00:03:55,880 Speaker 3: but you shouldn't expect quick hits all the time. And 84 00:03:55,920 --> 00:03:58,440 Speaker 3: I think we want to make sure that young investors 85 00:03:58,800 --> 00:03:59,480 Speaker 3: are aware of that. 86 00:03:59,560 --> 00:04:02,080 Speaker 2: But I've read you appreciate in this country the buys 87 00:04:02,120 --> 00:04:05,000 Speaker 2: to invest, the bus to act, the bus to take 88 00:04:05,000 --> 00:04:07,640 Speaker 2: a bet. In the UK has so some numbers recently 89 00:04:07,680 --> 00:04:10,120 Speaker 2: about how much consumers were investing, but how much of 90 00:04:10,160 --> 00:04:13,160 Speaker 2: it was just going to really really low yield stuff 91 00:04:13,760 --> 00:04:16,320 Speaker 2: like cash funds, stuff like that. There isn't the same 92 00:04:16,400 --> 00:04:19,479 Speaker 2: bias to invest in equities and risk that I've seen 93 00:04:19,520 --> 00:04:21,280 Speaker 2: growing up in the UK that exists here. What do 94 00:04:21,320 --> 00:04:23,279 Speaker 2: you think that comes from in America? And how do 95 00:04:23,320 --> 00:04:24,400 Speaker 2: we continue to nurture it? 96 00:04:24,560 --> 00:04:24,680 Speaker 5: Well? 97 00:04:24,720 --> 00:04:26,880 Speaker 3: I think it's great, and not only has it been great, 98 00:04:27,000 --> 00:04:30,040 Speaker 3: it's getting even better. If you look at millennials, they're 99 00:04:30,080 --> 00:04:32,440 Speaker 3: forty percent more likely to be invested by the age 100 00:04:32,440 --> 00:04:36,360 Speaker 3: of twenty one than gen zers. So it's happening with 101 00:04:36,560 --> 00:04:40,599 Speaker 3: younger investors as well, and we're trying to engage them 102 00:04:40,880 --> 00:04:45,560 Speaker 3: where they are. We go to the YouTube TikTok Instagram 103 00:04:45,760 --> 00:04:48,040 Speaker 3: and we put out videos about the power of compounding 104 00:04:48,240 --> 00:04:50,840 Speaker 3: and we try to get them interested in investing because 105 00:04:50,880 --> 00:04:53,920 Speaker 3: if you start young and become an investor, hopefully you'll 106 00:04:53,960 --> 00:04:56,200 Speaker 3: stick with it and you'll build wealth. It's the single 107 00:04:56,240 --> 00:04:58,040 Speaker 3: best way to build wealth in our country is to 108 00:04:58,080 --> 00:05:01,400 Speaker 3: be an investor, and young people are embracing it far 109 00:05:01,440 --> 00:05:04,119 Speaker 3: more than prior generations, which is outstanding to see. 110 00:05:04,279 --> 00:05:06,960 Speaker 2: It used to be that all those opportunities were in 111 00:05:07,000 --> 00:05:10,080 Speaker 2: public markets, that you'd get that blockbuster IPO that you'd 112 00:05:10,120 --> 00:05:12,240 Speaker 2: want to get exposed to. Now a lot of is 113 00:05:12,279 --> 00:05:15,520 Speaker 2: staying private. How are you thinking about offering opportunities in 114 00:05:15,560 --> 00:05:17,720 Speaker 2: private markets for customers coming forward from here? 115 00:05:17,800 --> 00:05:20,640 Speaker 3: What kind of things are they looking to do. Yeah, 116 00:05:20,839 --> 00:05:24,919 Speaker 3: it's an interesting question. There's a lot more private companies 117 00:05:25,200 --> 00:05:28,560 Speaker 3: than there used to be and fewer public companies, and 118 00:05:28,640 --> 00:05:31,279 Speaker 3: so I do think it makes sense to think about 119 00:05:31,279 --> 00:05:34,760 Speaker 3: providing direct access to retail investors to private companies, and 120 00:05:34,800 --> 00:05:37,480 Speaker 3: that's something that we're looking at and thinking about how 121 00:05:37,520 --> 00:05:40,760 Speaker 3: we participate in. But some of these companies are huge. 122 00:05:40,760 --> 00:05:44,520 Speaker 3: You look at the stripes, open Ai, find a Bidio. Yeah, 123 00:05:44,720 --> 00:05:47,719 Speaker 3: they're billion dollar companies, and so I do think retail 124 00:05:47,760 --> 00:05:50,360 Speaker 3: investors ought to be able to are to be able 125 00:05:50,400 --> 00:05:52,680 Speaker 3: to invest in them. And at the same time, there's 126 00:05:52,720 --> 00:05:55,599 Speaker 3: probably people sitting at that company that would love liquidity 127 00:05:55,640 --> 00:05:58,080 Speaker 3: for their stock positions. So I think there's a market 128 00:05:58,080 --> 00:05:58,760 Speaker 3: to be made there. 129 00:05:58,960 --> 00:06:01,159 Speaker 4: How much do you think that it's isolated in companies 130 00:06:01,440 --> 00:06:02,520 Speaker 4: versus real assets? 131 00:06:02,520 --> 00:06:03,400 Speaker 1: And I say that at. 132 00:06:03,320 --> 00:06:06,320 Speaker 4: A time when we're talking about the reindustrialization of the 133 00:06:06,400 --> 00:06:09,320 Speaker 4: United States and the idea that there could be actually 134 00:06:09,360 --> 00:06:10,680 Speaker 4: some move behind it for the. 135 00:06:10,600 --> 00:06:11,680 Speaker 1: First time in a long time. 136 00:06:11,720 --> 00:06:13,880 Speaker 4: I mean, how much is that part of what you're 137 00:06:13,920 --> 00:06:15,120 Speaker 4: looking to give access to. 138 00:06:15,080 --> 00:06:17,240 Speaker 2: Clients real assets? 139 00:06:17,360 --> 00:06:18,560 Speaker 1: Yes, well, I think. 140 00:06:20,520 --> 00:06:22,680 Speaker 3: Real assets have been a great way to invest in 141 00:06:22,680 --> 00:06:27,200 Speaker 3: our country. And the main thing we focus on is 142 00:06:28,120 --> 00:06:32,160 Speaker 3: differentiating between productive assets and speculative assets, and I think 143 00:06:32,360 --> 00:06:37,360 Speaker 3: real assets are productive assets, and so it's a great 144 00:06:37,400 --> 00:06:38,920 Speaker 3: way for a client to get invested. 145 00:06:39,320 --> 00:06:41,640 Speaker 4: Are you concerned about You keep talking about the coin 146 00:06:41,800 --> 00:06:44,839 Speaker 4: and you're concerned about it and actually the productive versus unproductive. 147 00:06:45,120 --> 00:06:46,760 Speaker 1: Do you think that that's actually. 148 00:06:46,560 --> 00:06:49,080 Speaker 4: A point of concern right now in markets? The amount 149 00:06:49,160 --> 00:06:50,880 Speaker 4: of involvement in the crypto space. 150 00:06:50,920 --> 00:06:53,240 Speaker 3: Well, I think I think crypto could end up being very, 151 00:06:53,360 --> 00:06:55,479 Speaker 3: very valuable, and there's a role for it to play, 152 00:06:55,760 --> 00:06:59,599 Speaker 3: and there's a role for tokenization and the blockchain. What's 153 00:06:59,640 --> 00:07:03,320 Speaker 3: important to us is that investors, particularly young investors, know 154 00:07:03,400 --> 00:07:06,360 Speaker 3: what they're investing in and know why it makes sense 155 00:07:06,400 --> 00:07:08,840 Speaker 3: for them to be invested in it and understand the 156 00:07:08,880 --> 00:07:11,120 Speaker 3: difference between say an equity in a bond, which have 157 00:07:11,760 --> 00:07:16,040 Speaker 3: some positive expected return and they're a productive asset, and 158 00:07:16,160 --> 00:07:18,560 Speaker 3: just understanding the difference between that and a more speculative 159 00:07:18,600 --> 00:07:22,320 Speaker 3: asset like art or baseball cards or crypto, where you 160 00:07:22,400 --> 00:07:25,360 Speaker 3: don't know what the future return is going to be. 161 00:07:26,040 --> 00:07:28,360 Speaker 3: It's not that we don't judge people's investments, and we 162 00:07:28,400 --> 00:07:30,720 Speaker 3: can see a world where crypto is very, very valuable, 163 00:07:31,000 --> 00:07:34,360 Speaker 3: but we want clients to understand the difference between those investments. 164 00:07:34,800 --> 00:07:37,200 Speaker 6: Do you think next year's you're going to have more 165 00:07:37,520 --> 00:07:41,520 Speaker 6: opportunities for either hiring or strategic opportunities because you think 166 00:07:41,560 --> 00:07:43,920 Speaker 6: policy is clearer now out of Washington. 167 00:07:44,640 --> 00:07:46,840 Speaker 3: You know what's driving our hiring is the growth of 168 00:07:46,880 --> 00:07:50,000 Speaker 3: our business. We're growing at a really strong rate. We're 169 00:07:50,000 --> 00:07:53,840 Speaker 3: seeing a lot of engagement from clients. Increasingly they want 170 00:07:53,880 --> 00:07:57,240 Speaker 3: advice from us, they want our help in their financial life, 171 00:07:58,040 --> 00:08:01,040 Speaker 3: and because of that, that's what's driving our growth. It's 172 00:08:01,080 --> 00:08:02,680 Speaker 3: not about what's happening with policy. 173 00:08:03,120 --> 00:08:05,200 Speaker 2: Can I just finish on the potential for partnership on 174 00:08:05,240 --> 00:08:07,760 Speaker 2: private markets? I wanted to watch you that is that 175 00:08:07,840 --> 00:08:10,960 Speaker 2: something you consider a partnership with another firm to offer 176 00:08:11,000 --> 00:08:11,800 Speaker 2: that kind of access. 177 00:08:12,120 --> 00:08:15,040 Speaker 3: I think we would love to see retail investors be 178 00:08:15,080 --> 00:08:17,400 Speaker 3: able to participate in the growth of private companies in 179 00:08:17,440 --> 00:08:17,880 Speaker 3: our country. 180 00:08:17,960 --> 00:08:19,960 Speaker 2: So I would apollo. I've had the same thing from them. 181 00:08:20,320 --> 00:08:21,640 Speaker 2: I'm trying to make a market. 182 00:08:21,360 --> 00:08:25,400 Speaker 3: And and we we and we have KKR, you know, 183 00:08:25,920 --> 00:08:29,920 Speaker 3: fir UH firms like KKR on our platform and that 184 00:08:30,400 --> 00:08:32,760 Speaker 3: our retail investors can invest in. And that's a great 185 00:08:32,800 --> 00:08:36,600 Speaker 3: way to get access to private markets. They're experts state, 186 00:08:36,679 --> 00:08:39,120 Speaker 3: they started the market, they've been in forever. That's a 187 00:08:39,280 --> 00:08:42,000 Speaker 3: very thoughtful way for investors to go be a part 188 00:08:42,000 --> 00:08:42,800 Speaker 3: of private markets. 189 00:08:46,080 --> 00:08:59,240 Speaker 2: Stay with us mulblindex. Savanna's coming up after this as 190 00:08:59,240 --> 00:09:02,520 Speaker 2: the record stock hits some skepticism following some big AI 191 00:09:02,640 --> 00:09:06,880 Speaker 2: investment plans. Barbara rehinhat Our Voya Investment Management remains optimistic, writing, 192 00:09:06,920 --> 00:09:10,480 Speaker 2: we remain overweight equities have been all year. We remain 193 00:09:10,559 --> 00:09:13,120 Speaker 2: overweight the US. Barbara john is now for more. Barbara 194 00:09:13,120 --> 00:09:15,360 Speaker 2: gam moniic, good morning. Let's start with that overweight. Let's 195 00:09:15,400 --> 00:09:16,959 Speaker 2: start with why. What underpins that view? 196 00:09:17,120 --> 00:09:19,360 Speaker 5: Well, I think it's all been about earnings, right, So 197 00:09:19,840 --> 00:09:22,480 Speaker 5: everything that you think about In terms of the equity market, yes, 198 00:09:22,520 --> 00:09:25,160 Speaker 5: has had a massive bounce off of the bottom, but 199 00:09:25,280 --> 00:09:27,600 Speaker 5: more than fifty five percent a bit has been driven 200 00:09:27,679 --> 00:09:31,040 Speaker 5: by earnings, only forty five percent has been driven by multiples. 201 00:09:31,520 --> 00:09:34,560 Speaker 5: As long as companies are delivering on their earnings, the 202 00:09:34,600 --> 00:09:38,400 Speaker 5: equity market seems to be poised to continue to go higher. 203 00:09:38,520 --> 00:09:40,280 Speaker 2: The early story for a handful of tech names has 204 00:09:40,320 --> 00:09:43,920 Speaker 2: been absolutely phenomenal. The capex intentions spending plans have been 205 00:09:43,960 --> 00:09:46,319 Speaker 2: phenomenal as well, and at least was talking about just 206 00:09:46,400 --> 00:09:49,880 Speaker 2: moments ago. This market keeps rewarding those spending plans. Are 207 00:09:49,880 --> 00:09:52,160 Speaker 2: we anywhere near the limit of investor tolerance? 208 00:09:52,280 --> 00:09:53,960 Speaker 1: Well, I think you have to put it in context. 209 00:09:54,280 --> 00:09:56,200 Speaker 5: A lot of people are starting to think about, is 210 00:09:56,200 --> 00:09:59,080 Speaker 5: this like the late nineteen nineties bubble where we'd spent 211 00:09:59,120 --> 00:10:02,160 Speaker 5: a lot of money on over investment in fiber, and 212 00:10:02,640 --> 00:10:04,720 Speaker 5: fiber was being light and there was dark fiber still 213 00:10:04,760 --> 00:10:06,800 Speaker 5: to go. But you have to remember many of the 214 00:10:06,840 --> 00:10:10,080 Speaker 5: tech companies that were just propelling the market forward on 215 00:10:10,120 --> 00:10:12,959 Speaker 5: the Nasdaq in the late nineteen nineties didn't have the 216 00:10:13,080 --> 00:10:16,000 Speaker 5: earnings power, didn't have the free cash flow power that 217 00:10:16,040 --> 00:10:19,320 Speaker 5: the companies today have. The AI investment I think is 218 00:10:19,360 --> 00:10:21,520 Speaker 5: just starting to scratch the surface. We see it on 219 00:10:21,559 --> 00:10:23,920 Speaker 5: our teams that we are using AI to help us 220 00:10:23,960 --> 00:10:27,360 Speaker 5: with repetitive tasks, to help us with quarterly commentaries, to 221 00:10:27,400 --> 00:10:30,600 Speaker 5: help us with earnings calls. So we're seeing it lift 222 00:10:31,000 --> 00:10:33,880 Speaker 5: our business in terms of efficiency and in terms of 223 00:10:33,920 --> 00:10:37,240 Speaker 5: productivities per workers. It may take a while for that 224 00:10:37,400 --> 00:10:40,480 Speaker 5: to flow through the economic data. We may see the 225 00:10:40,480 --> 00:10:44,120 Speaker 5: productivity boom five years from now on AI, but we 226 00:10:44,200 --> 00:10:45,680 Speaker 5: do believe it is indeed coming. 227 00:10:45,840 --> 00:10:49,240 Speaker 4: Do you believe it enough to sort of wager on 228 00:10:49,280 --> 00:10:52,520 Speaker 4: the broadening out trend? The idea that the tech advancements 229 00:10:52,600 --> 00:10:54,840 Speaker 4: are not going to be isolated to a handful of 230 00:10:54,920 --> 00:10:57,480 Speaker 4: large companies, but that there is going to be this 231 00:10:57,559 --> 00:10:59,840 Speaker 4: ground sweit of support for the equal weight. 232 00:11:00,440 --> 00:11:02,400 Speaker 5: Lisa, that's a great point, and I think you have 233 00:11:02,440 --> 00:11:04,480 Speaker 5: to look outside of the US to talk about that. 234 00:11:04,640 --> 00:11:08,079 Speaker 5: So this entire year, the emerging markets had been lagging 235 00:11:08,120 --> 00:11:11,440 Speaker 5: behind the US, and even coming off of the April bottom, 236 00:11:11,600 --> 00:11:14,280 Speaker 5: a lot of global markets had come off the bottom, 237 00:11:14,280 --> 00:11:16,600 Speaker 5: but the US was leading the way. Just in the 238 00:11:16,640 --> 00:11:19,959 Speaker 5: past five to six weeks, you've seen this big trend 239 00:11:19,960 --> 00:11:22,400 Speaker 5: that the emerging markets are starting to outperform the US, 240 00:11:22,720 --> 00:11:26,280 Speaker 5: but if you look under the hood, it's really emerging 241 00:11:26,280 --> 00:11:30,120 Speaker 5: market technology stocks are outpacing US technology stocks. It doesn't 242 00:11:30,120 --> 00:11:33,160 Speaker 5: mean that they're not all going up together, but emerging 243 00:11:33,160 --> 00:11:35,640 Speaker 5: markets seem to be taking the lead. I think in 244 00:11:35,720 --> 00:11:38,840 Speaker 5: order to believe in a broadening out of the market, 245 00:11:39,080 --> 00:11:41,920 Speaker 5: you need to see the FED continuing to ease. You 246 00:11:41,960 --> 00:11:44,720 Speaker 5: need to get past this inflation spurt, but you also 247 00:11:44,840 --> 00:11:48,720 Speaker 5: need to get past this low firing, low hiring phase 248 00:11:48,760 --> 00:11:50,760 Speaker 5: that the US is in. There is a little bit 249 00:11:50,800 --> 00:11:54,600 Speaker 5: of nervousness underneath the surface in terms of how long. 250 00:11:54,400 --> 00:11:56,000 Speaker 1: This can continue to go. 251 00:11:56,679 --> 00:11:58,960 Speaker 5: We think that once you get to the beginning of 252 00:11:59,000 --> 00:12:02,480 Speaker 5: next year, got the fiscal stimulus boost from the big 253 00:12:02,520 --> 00:12:07,079 Speaker 5: beautiful bill, you'll have the depreciation right down for companies, 254 00:12:07,320 --> 00:12:11,400 Speaker 5: So you're going to have a much bigger fiscal stimulus 255 00:12:11,440 --> 00:12:13,720 Speaker 5: push once you start to get to the first quarter 256 00:12:13,760 --> 00:12:14,720 Speaker 5: of twenty twenty six. 257 00:12:14,880 --> 00:12:17,200 Speaker 4: This might be a difficult question to answer, And this 258 00:12:17,280 --> 00:12:19,760 Speaker 4: was something I was thinking about yesterday. Is it feasible 259 00:12:20,200 --> 00:12:23,400 Speaker 4: to see a broadening out in terms of which stocks 260 00:12:23,400 --> 00:12:27,199 Speaker 4: are doing better and inflation coming down? And I asked 261 00:12:27,200 --> 00:12:29,920 Speaker 4: this because yesterday and the PMI data showed that actually 262 00:12:30,000 --> 00:12:32,640 Speaker 4: companies were having a harder time passing along the cost 263 00:12:32,720 --> 00:12:36,359 Speaker 4: to their consumers. That means shrinking margins, That means less profitability, 264 00:12:36,400 --> 00:12:39,120 Speaker 4: That means something for investors that's not very positive. 265 00:12:39,160 --> 00:12:41,960 Speaker 1: So are these stories kind of in conflict, Lisa. 266 00:12:42,000 --> 00:12:43,760 Speaker 5: It's a great question, But I think you have to 267 00:12:43,800 --> 00:12:45,120 Speaker 5: take a look not only at. 268 00:12:45,040 --> 00:12:48,960 Speaker 1: Margins, but the level of margins. Margins are extremely. 269 00:12:48,480 --> 00:12:52,319 Speaker 5: High in the US, and yes, companies have not been 270 00:12:52,360 --> 00:12:55,040 Speaker 5: passing on all the price increases from tariffs, but. 271 00:12:55,040 --> 00:12:56,840 Speaker 1: I would say there's always room. 272 00:12:56,640 --> 00:12:59,440 Speaker 5: For negotiation for those to continue to go lower, and 273 00:12:59,480 --> 00:13:02,319 Speaker 5: that would be very well received by the markets. So 274 00:13:02,400 --> 00:13:04,000 Speaker 5: I think I have to take these things in terms 275 00:13:04,000 --> 00:13:06,720 Speaker 5: of context. In terms of it's margins come down from 276 00:13:06,720 --> 00:13:08,760 Speaker 5: twenty seven percent down to twenty five percent. 277 00:13:09,760 --> 00:13:11,480 Speaker 1: Is it really that big of a deal. But it's 278 00:13:11,520 --> 00:13:12,640 Speaker 1: a great question. Barber. 279 00:13:12,760 --> 00:13:16,880 Speaker 6: You said you see productivity with AI actually being an enhancement. 280 00:13:17,160 --> 00:13:19,480 Speaker 6: At the same time you say we're in this low hiring, 281 00:13:19,600 --> 00:13:21,920 Speaker 6: low firing regime when it comes to labor market. Do 282 00:13:21,920 --> 00:13:24,800 Speaker 6: you see companies not hiring because specifically AI. 283 00:13:25,360 --> 00:13:27,760 Speaker 5: No, I think it's more companies are not hiring because 284 00:13:27,760 --> 00:13:30,520 Speaker 5: of a lot of uncertainty, right You've had a lot 285 00:13:30,559 --> 00:13:32,800 Speaker 5: of potential shocks to the economy over the course of 286 00:13:32,840 --> 00:13:35,880 Speaker 5: this year. You had the tariff induced downturn in April, 287 00:13:35,920 --> 00:13:39,200 Speaker 5: which was really significant and very severe. I mean, you 288 00:13:39,240 --> 00:13:43,520 Speaker 5: had very deeply over sold conditions within financial markets. There 289 00:13:43,520 --> 00:13:45,440 Speaker 5: were a lot of crawls that the world was coming 290 00:13:45,480 --> 00:13:48,000 Speaker 5: to an end, you know, big rally off of the bottom. 291 00:13:48,240 --> 00:13:50,680 Speaker 5: But I think that this low hiring, low firing is 292 00:13:50,760 --> 00:13:53,160 Speaker 5: just a matter of companies saying we need to get 293 00:13:53,160 --> 00:13:54,880 Speaker 5: through to the end of the year to get some 294 00:13:54,920 --> 00:13:58,960 Speaker 5: more visibility on earnings. But companies are holding onto workers. 295 00:13:59,000 --> 00:14:01,760 Speaker 5: If they're holding onto work workers, you know it's because 296 00:14:01,960 --> 00:14:04,400 Speaker 5: their sales are in good shape, their earnings in good shape, 297 00:14:04,440 --> 00:14:07,160 Speaker 5: their profit margins are in good shape. So, as far 298 00:14:07,200 --> 00:14:09,679 Speaker 5: as we see it, the low hiring is a lot 299 00:14:09,679 --> 00:14:14,200 Speaker 5: of uncertainty regarding the TIFF's, uncertainty regarding where the FED 300 00:14:14,280 --> 00:14:17,200 Speaker 5: finally settles. But in the end of it, we don't 301 00:14:17,200 --> 00:14:19,480 Speaker 5: see that this is necessarily the beginning of a labor 302 00:14:19,520 --> 00:14:20,560 Speaker 5: market unwind. 303 00:14:21,000 --> 00:14:23,560 Speaker 6: But don't we already have certainty for the most part, 304 00:14:23,680 --> 00:14:26,040 Speaker 6: the tariff levels are set. We know the direction of travel, 305 00:14:26,120 --> 00:14:27,560 Speaker 6: We know the direction of travel of FED. 306 00:14:27,960 --> 00:14:30,160 Speaker 1: What is so uncertain about this environment right now. 307 00:14:30,360 --> 00:14:32,560 Speaker 5: I think that when you're thinking about the tariff levels, 308 00:14:32,800 --> 00:14:35,040 Speaker 5: there's been a lot of negotiating on them. They were 309 00:14:35,040 --> 00:14:38,000 Speaker 5: set at very high levels, then they got negotiated down. 310 00:14:38,240 --> 00:14:40,920 Speaker 5: There's always room when there's negotiations. You've got to think 311 00:14:40,960 --> 00:14:43,240 Speaker 5: that is their potential that they're going to go lower. 312 00:14:43,600 --> 00:14:46,120 Speaker 5: If the US hits much of a soft patch. Let's 313 00:14:46,120 --> 00:14:48,880 Speaker 5: just say this low hiring, low firing, starts to go 314 00:14:48,960 --> 00:14:52,120 Speaker 5: into either an inflationary surge or if you get into 315 00:14:52,120 --> 00:14:55,880 Speaker 5: this environment where you have maybe the low hiring and 316 00:14:55,920 --> 00:14:57,200 Speaker 5: the firing starts. 317 00:14:56,920 --> 00:14:57,440 Speaker 1: To go up. 318 00:14:58,080 --> 00:15:00,600 Speaker 5: I think that the FED and I think the administration 319 00:15:00,640 --> 00:15:03,360 Speaker 5: would likely respond to that. They have a midterm election 320 00:15:03,480 --> 00:15:06,400 Speaker 5: coming up in twenty twenty six. The clock starts actually 321 00:15:06,480 --> 00:15:10,880 Speaker 5: this November, and they want an economy that is briskly 322 00:15:10,920 --> 00:15:13,000 Speaker 5: growing for the midterm elections. 323 00:15:13,120 --> 00:15:15,160 Speaker 2: I think it's already started to be fair. I was 324 00:15:15,160 --> 00:15:17,880 Speaker 2: looking at the PMIS yesterday. Imagery level is not great, 325 00:15:17,920 --> 00:15:20,480 Speaker 2: new orders not great. I was hoping things would pick up. 326 00:15:20,520 --> 00:15:22,480 Speaker 2: Don't see many signs of it. The ability to pass 327 00:15:22,480 --> 00:15:24,920 Speaker 2: through high prices to consumers, but to push back there too. 328 00:15:26,080 --> 00:15:28,480 Speaker 1: But consumer spending has been relatively strong speed. 329 00:15:28,720 --> 00:15:30,720 Speaker 2: I'm just looking at the PMS yesterday. I think it 330 00:15:30,760 --> 00:15:33,280 Speaker 2: was a hope that in September things would pick up 331 00:15:33,280 --> 00:15:35,840 Speaker 2: and reaccelerate. I just haven't seen that yet. I hope 332 00:15:35,840 --> 00:15:37,600 Speaker 2: that it's backed up by other data points, just don't 333 00:15:37,640 --> 00:15:38,160 Speaker 2: see it yet. 334 00:15:38,200 --> 00:15:40,080 Speaker 5: Well, I think the consumer has been acting like this. 335 00:15:40,200 --> 00:15:42,640 Speaker 5: They kind of go through these spurts. They spend for 336 00:15:42,880 --> 00:15:45,080 Speaker 5: back to school, then they kind of go into hibernation, 337 00:15:45,280 --> 00:15:47,560 Speaker 5: then they spend for the holidays. Right, so the consumer 338 00:15:47,600 --> 00:15:49,200 Speaker 5: has been looking for a lot of deals for a 339 00:15:49,240 --> 00:15:52,040 Speaker 5: long time. This has to of course, you know, think 340 00:15:52,080 --> 00:15:54,360 Speaker 5: through this. You know, this period of where you've got 341 00:15:54,360 --> 00:15:58,520 Speaker 5: some uncertainty around inflation and higher prices do scare consumers, right, 342 00:15:58,560 --> 00:16:00,600 Speaker 5: they start to look for better bargains. They go for 343 00:16:00,920 --> 00:16:03,680 Speaker 5: you know, off label brands. But I would say once 344 00:16:03,720 --> 00:16:06,120 Speaker 5: you start to go go through for the holiday shopping, 345 00:16:06,160 --> 00:16:09,360 Speaker 5: you may have a lull for October and November, but 346 00:16:09,720 --> 00:16:12,480 Speaker 5: let's start looking at those kind of after Thanksgiving sales. 347 00:16:16,360 --> 00:16:19,840 Speaker 2: Stay with us. More Bloomberg surveillance coming up after this 348 00:16:29,160 --> 00:16:31,840 Speaker 2: stops wrising as Ali Baba becomes the latest tech firm 349 00:16:31,880 --> 00:16:35,000 Speaker 2: to ramp up AI spending. Peter Chief Academy Writing AI 350 00:16:35,480 --> 00:16:39,040 Speaker 2: is only the second or third inc maybe even the 351 00:16:39,080 --> 00:16:42,600 Speaker 2: top of the first. The issue is whether valuations are 352 00:16:42,600 --> 00:16:44,760 Speaker 2: in the eighth inech pechoin just now for more peak 353 00:16:44,760 --> 00:16:46,960 Speaker 2: of morning, good morning, good to see it. Let's just 354 00:16:46,960 --> 00:16:49,640 Speaker 2: talk about the spending plants. What's your reaction been to 355 00:16:49,680 --> 00:16:51,840 Speaker 2: the news that's come from Oracle in the last week, 356 00:16:51,880 --> 00:16:54,720 Speaker 2: from Nvidia in the past few days, from Ali Baba 357 00:16:54,800 --> 00:16:55,520 Speaker 2: from this morning. 358 00:16:55,680 --> 00:16:58,000 Speaker 7: You know, it's all queer. That spending is still going away, 359 00:16:58,720 --> 00:17:00,760 Speaker 7: you know it's coming in. Reminds me a little bit 360 00:17:00,800 --> 00:17:02,960 Speaker 7: though too. At some point, remember when you had to 361 00:17:03,000 --> 00:17:04,960 Speaker 7: have a Chinese plan, and if you had a China plan, 362 00:17:04,960 --> 00:17:07,399 Speaker 7: you announced your China plan, your stock's fight ten percent. 363 00:17:07,680 --> 00:17:09,960 Speaker 7: So we're in that sort of moment where everyone who 364 00:17:09,960 --> 00:17:12,639 Speaker 7: announces plans to spend is rewarded. And if you announce 365 00:17:12,640 --> 00:17:14,080 Speaker 7: that you're going to spend ten billion, your stock goes 366 00:17:14,160 --> 00:17:16,560 Speaker 7: up twenty billion. Why wouldn't it you? So I haven't 367 00:17:16,720 --> 00:17:18,959 Speaker 7: yet seen that change. I think at some point we're 368 00:17:18,960 --> 00:17:21,119 Speaker 7: getting closer. People are starting to poke more holes in this. 369 00:17:21,359 --> 00:17:23,320 Speaker 7: And separately from that, though, I am watching what Bob 370 00:17:23,440 --> 00:17:25,640 Speaker 7: is doing separately, because when I look at everything that's 371 00:17:25,640 --> 00:17:28,520 Speaker 7: going on in the world trade tariffs, etc. China has 372 00:17:28,560 --> 00:17:31,400 Speaker 7: control over the rarest critical minerals. We have control over 373 00:17:31,400 --> 00:17:34,399 Speaker 7: the AI chips and data. China is trying to work 374 00:17:34,440 --> 00:17:36,480 Speaker 7: their way, and it's encouraging that they're using in video chips. 375 00:17:36,480 --> 00:17:37,840 Speaker 8: But I think that's going to be a real battle 376 00:17:37,840 --> 00:17:38,400 Speaker 8: line to be drawn. 377 00:17:38,480 --> 00:17:39,800 Speaker 2: What I s builed on that. Do you think the 378 00:17:39,880 --> 00:17:42,040 Speaker 2: US is at a disadvantage. 379 00:17:42,760 --> 00:17:44,640 Speaker 7: I think the US has a huge advantage right now 380 00:17:44,640 --> 00:17:46,840 Speaker 7: in terms of chips. I think China has this big 381 00:17:46,880 --> 00:17:49,439 Speaker 7: advantage in terms of the processing and refining of rare 382 00:17:49,520 --> 00:17:51,960 Speaker 7: erst and critical minerals. We're taking some steps, whether it's 383 00:17:51,960 --> 00:17:55,440 Speaker 7: investments in ticker symbol MP, there's noise about more investments 384 00:17:55,480 --> 00:17:58,480 Speaker 7: of those sorts, whether it's antimomy lithium. I'm sure there's 385 00:17:58,480 --> 00:18:01,679 Speaker 7: going to be ensure, you know, enrich new clear, enriched 386 00:18:01,800 --> 00:18:04,200 Speaker 7: uranium investments. Those are things that we're doing to try 387 00:18:04,200 --> 00:18:07,199 Speaker 7: and defeat that. But that's a multi year product. And 388 00:18:07,240 --> 00:18:09,040 Speaker 7: then at the same time, it felt like China was 389 00:18:09,119 --> 00:18:11,800 Speaker 7: going to be very easy to work with in terms 390 00:18:11,840 --> 00:18:14,159 Speaker 7: of dealing with Nvidia. They seem to be setting a 391 00:18:14,200 --> 00:18:16,240 Speaker 7: line in the sand where they're going to be we 392 00:18:16,280 --> 00:18:17,640 Speaker 7: want to use Huawei more and more. 393 00:18:17,680 --> 00:18:19,160 Speaker 8: So that's what I'm watching most carefully. 394 00:18:19,200 --> 00:18:21,640 Speaker 4: There's a lot to impact there. You mentioned that, yes, 395 00:18:21,680 --> 00:18:24,320 Speaker 4: the Chinese government has been pushing their tech giants to 396 00:18:24,440 --> 00:18:28,280 Speaker 4: invest in domestic companies and domestic chips, and yet well 397 00:18:28,280 --> 00:18:31,200 Speaker 4: you just mentioned was Ali Baba. They're using Nvidia supplies 398 00:18:31,280 --> 00:18:34,159 Speaker 4: and they actually have a new project with robotics that 399 00:18:34,200 --> 00:18:39,280 Speaker 4: they're also really relying on in Vidia for their supplies. 400 00:18:39,400 --> 00:18:42,200 Speaker 4: So how feasible is what the Chinese government asking. 401 00:18:41,920 --> 00:18:44,160 Speaker 7: For that I don't know, And I think maybe part 402 00:18:44,160 --> 00:18:46,280 Speaker 7: of it's just a negotiating ploy because again everyone's not 403 00:18:46,320 --> 00:18:48,399 Speaker 7: figured out maximum levery. So you say these things and 404 00:18:48,440 --> 00:18:50,200 Speaker 7: then you walk into a room with President Trump and 405 00:18:50,240 --> 00:18:53,320 Speaker 7: try and get what you can. Having said that, you know, 406 00:18:53,440 --> 00:18:56,040 Speaker 7: China plays a long game, right, and they were nowhere 407 00:18:56,040 --> 00:18:58,199 Speaker 7: in AI a few years ago. They are working their 408 00:18:58,240 --> 00:19:00,879 Speaker 7: way towards that, whether it's a deep seek hype technology, 409 00:19:01,119 --> 00:19:03,160 Speaker 7: whether it's what the luaweight chips that are going on. 410 00:19:03,400 --> 00:19:05,480 Speaker 7: So I would not completely dismiss them, right. They are 411 00:19:05,480 --> 00:19:08,439 Speaker 7: starting this kind of steamroller effect. They're currently losing, but 412 00:19:08,480 --> 00:19:10,360 Speaker 7: I think they plan to catch up, and we've got 413 00:19:10,359 --> 00:19:11,840 Speaker 7: to be very cautious of that. I do think this 414 00:19:11,880 --> 00:19:13,480 Speaker 7: is a big win for video. I think it's awesome 415 00:19:13,480 --> 00:19:16,840 Speaker 7: for us, But you know, this is not given. I 416 00:19:16,840 --> 00:19:18,240 Speaker 7: think if we take it for granted that it's going 417 00:19:18,280 --> 00:19:19,720 Speaker 7: to keep occurring, that's the risk. 418 00:19:19,960 --> 00:19:21,840 Speaker 4: Going back to your initial point, the idea that we're 419 00:19:21,840 --> 00:19:23,240 Speaker 4: in the eighth inning, even though we're just in the 420 00:19:23,280 --> 00:19:25,160 Speaker 4: first or second inning. When it comes to the actual 421 00:19:25,200 --> 00:19:28,119 Speaker 4: production eighth inning of valuation, at what point does it 422 00:19:28,119 --> 00:19:29,399 Speaker 4: get too far ahead of its skis? 423 00:19:29,880 --> 00:19:30,040 Speaker 8: You know? 424 00:19:30,160 --> 00:19:32,080 Speaker 7: I think it's when you start seeing these announcements and 425 00:19:32,119 --> 00:19:34,280 Speaker 7: the stocks don't pop right, when someone announced a twenty 426 00:19:34,320 --> 00:19:37,040 Speaker 7: billion spend and their stock goes down by thirty forty billion, 427 00:19:37,119 --> 00:19:39,239 Speaker 7: Then you're like, okay, people are now tired of this. 428 00:19:39,320 --> 00:19:42,320 Speaker 7: People have kind of sense the valuation. You know, I 429 00:19:42,320 --> 00:19:43,240 Speaker 7: think one nothing. 430 00:19:42,960 --> 00:19:44,840 Speaker 4: Because we had that for a hot second and then 431 00:19:44,880 --> 00:19:45,720 Speaker 4: that reversed again. 432 00:19:45,760 --> 00:19:46,280 Speaker 2: But carry on. 433 00:19:46,520 --> 00:19:48,199 Speaker 7: And you know the other strategy that has worked so 434 00:19:48,200 --> 00:19:50,399 Speaker 7: well is momentum. Right, Momentum tends to work. These have 435 00:19:50,440 --> 00:19:53,359 Speaker 7: been big drivers of momentum. If momentum starts turning around 436 00:19:53,400 --> 00:19:55,239 Speaker 7: and you see the CTAs and people get forced out 437 00:19:55,280 --> 00:19:55,679 Speaker 7: of trades. 438 00:19:55,760 --> 00:19:56,840 Speaker 8: But we're nowhere close to that. 439 00:19:56,920 --> 00:19:59,600 Speaker 7: Right, every dip gets bought right now, I'm not seeing 440 00:19:59,600 --> 00:20:01,320 Speaker 7: what's changed that. The one thing that I found both 441 00:20:01,400 --> 00:20:03,480 Speaker 7: encouraging and may be worrisome for big tech is the 442 00:20:03,560 --> 00:20:05,760 Speaker 7: Russell two thousands finally up performing. I think, you know, 443 00:20:05,800 --> 00:20:07,320 Speaker 7: not by much. I think it's up three percent of 444 00:20:07,359 --> 00:20:09,960 Speaker 7: the past five days. Nasdaq one hundreds up one percent. 445 00:20:10,119 --> 00:20:12,560 Speaker 7: But that's where I'd like to see the shift is 446 00:20:12,560 --> 00:20:15,600 Speaker 7: to a broader expansion to more stocks performing well. 447 00:20:15,840 --> 00:20:18,040 Speaker 6: Peter, I'm glad you brought the rare earth's issue because 448 00:20:18,080 --> 00:20:20,840 Speaker 6: Representative Adam Smith was in Beijing yesterday saying I don't 449 00:20:20,880 --> 00:20:24,480 Speaker 6: think we resolve that is the US potentially willing in 450 00:20:24,520 --> 00:20:27,120 Speaker 6: these trade negotiations to give up other issues they care 451 00:20:27,160 --> 00:20:29,520 Speaker 6: about because they are so desperate for these rare earths. 452 00:20:29,800 --> 00:20:31,720 Speaker 7: I think we might have to at this point. And again, 453 00:20:31,800 --> 00:20:33,600 Speaker 7: I think we've got to be really careful. It's not 454 00:20:33,640 --> 00:20:36,240 Speaker 7: the rarest and critical minerals themselves, it's the process and 455 00:20:36,320 --> 00:20:39,000 Speaker 7: refined versions. Right, we could go and buy rarest critical 456 00:20:39,000 --> 00:20:41,000 Speaker 7: minerals on the open market, where are we going to 457 00:20:41,000 --> 00:20:43,480 Speaker 7: get the process and refined versions. China controls about ninety 458 00:20:43,480 --> 00:20:45,800 Speaker 7: percent of that, and so I think that is very true. 459 00:20:45,920 --> 00:20:48,200 Speaker 7: And I always go back now to COVID and I 460 00:20:48,240 --> 00:20:50,560 Speaker 7: think it was the Whirlpool CEO said, a washing machine 461 00:20:50,600 --> 00:20:53,320 Speaker 7: that's ninety nine percent done is not done. And I 462 00:20:53,359 --> 00:20:55,359 Speaker 7: think that's the problem with these rarest and critical minerals. 463 00:20:55,400 --> 00:20:57,920 Speaker 7: They may only be a small component of each product, 464 00:20:58,280 --> 00:21:01,560 Speaker 7: but they are literally critical the pun intended, and that's 465 00:21:01,600 --> 00:21:02,960 Speaker 7: the issue. So we are going to have to give 466 00:21:02,960 --> 00:21:04,600 Speaker 7: in until we build out our own industry. 467 00:21:04,720 --> 00:21:06,840 Speaker 6: What do you think it is that the Chinese desperately 468 00:21:06,840 --> 00:21:08,240 Speaker 6: want that we're going to have to be willing to 469 00:21:08,240 --> 00:21:08,680 Speaker 6: give in. 470 00:21:08,800 --> 00:21:10,240 Speaker 8: You know, I think it's probably going to be chips 471 00:21:10,240 --> 00:21:10,520 Speaker 8: for now. 472 00:21:10,560 --> 00:21:12,200 Speaker 7: I think they as much as they say they want 473 00:21:12,200 --> 00:21:13,560 Speaker 7: their own business, they are going to try and get 474 00:21:13,560 --> 00:21:15,440 Speaker 7: as many chips in the door they can while they 475 00:21:15,480 --> 00:21:15,840 Speaker 7: want it. 476 00:21:16,200 --> 00:21:17,720 Speaker 8: And I think they're also just buying time. 477 00:21:17,760 --> 00:21:20,240 Speaker 7: They're playing this while they try and solidify their trading 478 00:21:20,280 --> 00:21:22,760 Speaker 7: relationships with other countries. Right while we're trying to sell 479 00:21:22,840 --> 00:21:24,760 Speaker 7: chips into the Middle East. I'm sure Huawei right now 480 00:21:24,800 --> 00:21:26,520 Speaker 7: is trying to sell chips in the Middle East. So 481 00:21:26,560 --> 00:21:28,680 Speaker 7: some of this may be just a delay game by 482 00:21:28,760 --> 00:21:32,280 Speaker 7: China until they get I think time is on China side. 483 00:21:32,280 --> 00:21:35,159 Speaker 7: If you're China, because they watched the US, We're very distracted. 484 00:21:35,200 --> 00:21:37,719 Speaker 7: We have so many things going on internally that they 485 00:21:37,760 --> 00:21:39,719 Speaker 7: can just keep the machine moving, and if they can 486 00:21:39,760 --> 00:21:41,400 Speaker 7: distract us, that's fine by them. 487 00:21:41,520 --> 00:21:43,919 Speaker 2: The White House is making a move and pay Materials 488 00:21:43,960 --> 00:21:46,080 Speaker 2: being the blockbuster one of the last year or so, 489 00:21:46,440 --> 00:21:48,440 Speaker 2: and then you've got the potential for an equery stank 490 00:21:48,440 --> 00:21:51,680 Speaker 2: in lithium Americas that cross in the Bloomberg this morning, 491 00:21:51,720 --> 00:21:53,760 Speaker 2: the team has been reporting on there. How are you 492 00:21:53,840 --> 00:21:57,600 Speaker 2: thinking about the prospect of increased intervention, an increase between 493 00:21:57,680 --> 00:21:59,680 Speaker 2: public private partnership going forward from here? 494 00:22:00,240 --> 00:22:02,399 Speaker 7: Well, my starting point would be, I think I mentioned 495 00:22:02,440 --> 00:22:04,639 Speaker 7: in this weekend, it's you may or may not like 496 00:22:04,680 --> 00:22:06,359 Speaker 7: what's going on, but you certainly have to trade it. 497 00:22:06,400 --> 00:22:09,280 Speaker 7: So if you're investing in this market, whether we like 498 00:22:09,359 --> 00:22:12,800 Speaker 7: this intervention, whether we like this ability to play king maker, 499 00:22:13,200 --> 00:22:15,800 Speaker 7: I'm not sure that that's the right direction. Having said that, 500 00:22:15,960 --> 00:22:18,399 Speaker 7: you know, in the old days, right, the CHIP sacked, right, 501 00:22:18,440 --> 00:22:20,919 Speaker 7: it just gave grants, but the grants were tied with 502 00:22:20,960 --> 00:22:24,000 Speaker 7: policy strings. So I don't know, Maybe we're better off investing. 503 00:22:24,520 --> 00:22:26,600 Speaker 7: It's tricky, but I do think right now you're supposed 504 00:22:26,600 --> 00:22:29,040 Speaker 7: to be scouring the universe for five to ten billion 505 00:22:29,040 --> 00:22:31,880 Speaker 7: dollar companies are smaller that do things. So I've been 506 00:22:32,000 --> 00:22:34,880 Speaker 7: involved myself directly enriched uranium. 507 00:22:35,119 --> 00:22:37,320 Speaker 8: I think there are other products like that. 508 00:22:37,359 --> 00:22:39,480 Speaker 7: They're going to take off because this government needs to 509 00:22:39,560 --> 00:22:41,439 Speaker 7: jumpstart it. And again, if you go back to what 510 00:22:41,440 --> 00:22:43,880 Speaker 7: they did with MP it was a relatively small pet investment. 511 00:22:44,200 --> 00:22:45,719 Speaker 7: I think it's kind of the tip of the iceberg 512 00:22:45,800 --> 00:22:46,800 Speaker 7: what we might be able to do out of a 513 00:22:46,840 --> 00:22:49,600 Speaker 7: sovereign wealth fund. But they also help provide one point 514 00:22:49,640 --> 00:22:51,720 Speaker 7: one billion of loan guarantees, right, and that to me, 515 00:22:52,080 --> 00:22:54,439 Speaker 7: that's how we spur this growth. So if we go 516 00:22:54,520 --> 00:22:56,399 Speaker 7: down that path, that's how we have a chance. But 517 00:22:56,440 --> 00:22:58,280 Speaker 7: it's still a three to eight year process. 518 00:22:58,440 --> 00:23:00,280 Speaker 2: This is the challenge pay if you are out of 519 00:23:00,359 --> 00:23:02,679 Speaker 2: regul know THATCHET you've got a pocketr failings about this 520 00:23:02,720 --> 00:23:05,720 Speaker 2: and let it go. This administration wants to pick winners. 521 00:23:06,000 --> 00:23:07,760 Speaker 2: Are you saying that when they pick winners, you want 522 00:23:07,760 --> 00:23:08,600 Speaker 2: to get along for the rint? 523 00:23:09,000 --> 00:23:11,200 Speaker 8: I think so. I think you know. To me, in hindsight, 524 00:23:11,240 --> 00:23:13,080 Speaker 8: it wasn't surprising at all. And I owned Intel. 525 00:23:13,119 --> 00:23:15,560 Speaker 7: I think I talked about owning Intel and not a 526 00:23:15,600 --> 00:23:17,920 Speaker 7: shock that Trump would maybe ask in Nvidia to get 527 00:23:18,000 --> 00:23:21,080 Speaker 7: involved because Trump wants Intel to do well. Like Trump 528 00:23:21,480 --> 00:23:23,159 Speaker 7: likes winners, right, that's all he's ever done. He's going 529 00:23:23,200 --> 00:23:25,800 Speaker 7: to back winners. He's in a strong position to push 530 00:23:25,800 --> 00:23:28,119 Speaker 7: these things. So whether you like it or not, I 531 00:23:28,160 --> 00:23:29,879 Speaker 7: think you have to accept that this is the current 532 00:23:30,200 --> 00:23:33,439 Speaker 7: administration's view. These things are going to get support, so 533 00:23:33,480 --> 00:23:34,879 Speaker 7: you want to look for those. And you've seen so 534 00:23:34,880 --> 00:23:37,680 Speaker 7: many stocks take off, but I think we're still early stages. 535 00:23:37,720 --> 00:23:39,800 Speaker 7: And this is all without an official sovereign wealth fund, 536 00:23:39,920 --> 00:23:41,880 Speaker 7: which I think something that is coming down the pipe 537 00:23:41,880 --> 00:23:42,879 Speaker 7: for that before the year end. 538 00:23:42,960 --> 00:23:45,439 Speaker 4: This is something that David Rubinstein yesterday of Carlisle was 539 00:23:45,480 --> 00:23:47,480 Speaker 4: talking about that essentially that is the model that we 540 00:23:47,560 --> 00:23:49,520 Speaker 4: seem to be following with the stakes that we're taking 541 00:23:49,520 --> 00:23:51,159 Speaker 4: in a number of companies. And it seems like the 542 00:23:51,280 --> 00:23:54,639 Speaker 4: United States is moving from fiscal dominance sort of the 543 00:23:54,640 --> 00:23:58,160 Speaker 4: backbone of the US economy, to something that looks more 544 00:23:58,160 --> 00:24:01,040 Speaker 4: like a sovereign wealth fund, and exactly what that looks 545 00:24:01,080 --> 00:24:03,400 Speaker 4: like still remains to be seen. I just wonder how 546 00:24:03,400 --> 00:24:05,720 Speaker 4: that change is investing, whether that shifts some of the 547 00:24:05,800 --> 00:24:09,800 Speaker 4: macro investing landscape. And shifts it over into deep value, 548 00:24:09,920 --> 00:24:13,399 Speaker 4: looking for these specific sectors, looking for exactly strategically what 549 00:24:13,440 --> 00:24:16,240 Speaker 4: makes sense. It's a very different framework of investing. 550 00:24:16,359 --> 00:24:17,440 Speaker 7: Yeah, and you know, one of the things we're trying 551 00:24:17,440 --> 00:24:18,959 Speaker 7: to do is look at AI and look for companies 552 00:24:18,960 --> 00:24:21,679 Speaker 7: that have been most impacted by regulation and say, okay, 553 00:24:21,800 --> 00:24:24,359 Speaker 7: if you've been heavily impacted by regulation, is that an 554 00:24:24,400 --> 00:24:26,639 Speaker 7: area we can get deregulation. I think finance companies are 555 00:24:26,640 --> 00:24:28,480 Speaker 7: doing very well right. I think people are looking forward 556 00:24:28,520 --> 00:24:30,680 Speaker 7: to what can be done on this. And then I 557 00:24:30,720 --> 00:24:32,919 Speaker 7: would say this is global too. I know, you know, 558 00:24:33,080 --> 00:24:35,760 Speaker 7: the UK Prime Minister didn't completely agree with Trump, but 559 00:24:35,880 --> 00:24:39,280 Speaker 7: I think this whole concept of production for security is 560 00:24:39,320 --> 00:24:41,760 Speaker 7: global and every country has to be thinking what can 561 00:24:41,800 --> 00:24:43,879 Speaker 7: you produce at a minimum level. It doesn't have to 562 00:24:43,920 --> 00:24:46,359 Speaker 7: be fully You need to make sure that you have energy, 563 00:24:46,400 --> 00:24:48,080 Speaker 7: You need make sure you have a chip industry. Right, 564 00:24:48,280 --> 00:24:50,200 Speaker 7: England wants to be a data center capital of the world, 565 00:24:50,240 --> 00:24:52,200 Speaker 7: but they don't produce any energy and electricity. 566 00:24:52,200 --> 00:24:53,040 Speaker 8: How are you going to do that? 567 00:24:53,240 --> 00:24:55,320 Speaker 2: Not exactly the traditional way of building a suffer and 568 00:24:55,320 --> 00:24:57,760 Speaker 2: well fund, is it? No, It's justn't typically how you 569 00:24:57,800 --> 00:24:59,120 Speaker 2: go about doing things well. 570 00:24:59,040 --> 00:25:01,359 Speaker 4: Not especially if through a backdoor where people don't understand 571 00:25:01,400 --> 00:25:03,399 Speaker 4: what the parameters are, exactly what's going to go in, 572 00:25:03,520 --> 00:25:06,000 Speaker 4: or exactly how big it's going to be, or exactly 573 00:25:06,040 --> 00:25:08,360 Speaker 4: how the revenues are going to get distributed afterwards. Look, 574 00:25:08,359 --> 00:25:11,560 Speaker 4: there's a lot of question marks around this, but fundamentally, 575 00:25:11,640 --> 00:25:15,440 Speaker 4: from a philosophical perspective, it seems like maybe the limits 576 00:25:15,440 --> 00:25:18,919 Speaker 4: of fiscal dominance have been reached and people are asking 577 00:25:18,960 --> 00:25:23,080 Speaker 4: for something else as a tool of national security, and 578 00:25:23,119 --> 00:25:25,400 Speaker 4: the idea of taking stakes seems to be it, whether 579 00:25:25,400 --> 00:25:26,800 Speaker 4: you agree with it or not. And I think that 580 00:25:26,800 --> 00:25:30,120 Speaker 4: that's a really interesting change in the investing landscape. 581 00:25:30,480 --> 00:25:32,840 Speaker 6: They haven't outwardly stated they want to do this sovereign 582 00:25:32,840 --> 00:25:35,800 Speaker 6: wealth fund, but it's obvious everything is about national security 583 00:25:35,880 --> 00:25:38,879 Speaker 6: MP materials when it comes to Lithium America's when it 584 00:25:38,920 --> 00:25:42,240 Speaker 6: comes to INTEL. This administration doesn't like grants, they don't 585 00:25:42,280 --> 00:25:45,400 Speaker 6: like loans. They want outright equity and a company. 586 00:25:45,119 --> 00:25:45,760 Speaker 2: Big fund of what. 587 00:25:46,000 --> 00:25:47,880 Speaker 7: Yeah, And I would just add that, you know, we're 588 00:25:47,920 --> 00:25:51,639 Speaker 7: looking at these companies that we need to jumpstart, and 589 00:25:51,680 --> 00:25:54,920 Speaker 7: people are worried about if everything's just done via executive order, 590 00:25:55,160 --> 00:25:57,640 Speaker 7: does it get overturned with some new administration. I think 591 00:25:57,720 --> 00:26:00,000 Speaker 7: these stakes change that it makes it harder to over 592 00:26:00,080 --> 00:26:01,960 Speaker 7: turns some of the progress that gets made. So I 593 00:26:01,960 --> 00:26:04,280 Speaker 7: think that might be kind of the secret Saucier is 594 00:26:04,440 --> 00:26:08,480 Speaker 7: by investing, owning, giving the American people, this lets people 595 00:26:08,520 --> 00:26:11,200 Speaker 7: push forward on deregulation and assume it's going to stay 596 00:26:11,200 --> 00:26:13,320 Speaker 7: further longer than might otherwise. 597 00:26:16,280 --> 00:26:19,760 Speaker 2: Stay with us mul Bloomberg surveillance coming up. After this, 598 00:26:28,920 --> 00:26:31,240 Speaker 2: I turned to Ninth and Sheets Chief Global Economists the 599 00:26:31,240 --> 00:26:33,399 Speaker 2: City Rights in the following, US firms appear to be 600 00:26:33,480 --> 00:26:37,000 Speaker 2: absorbing sixty to seventy percent of tariff cost today. However, 601 00:26:37,359 --> 00:26:39,680 Speaker 2: we doubt that this will prove sustainable as a longer 602 00:26:39,760 --> 00:26:42,000 Speaker 2: term strategy, and Nathan joined us now for more. And 603 00:26:42,000 --> 00:26:44,240 Speaker 2: I think, good morning, good morning, good to see you, sir. 604 00:26:44,280 --> 00:26:46,199 Speaker 2: Which way do you think it breaks if it's not 605 00:26:46,240 --> 00:26:47,240 Speaker 2: a long term strategy. 606 00:26:47,800 --> 00:26:50,760 Speaker 9: Well, I think that the firms have been able to 607 00:26:50,840 --> 00:26:54,280 Speaker 9: absorb as large a share of the tariffs as they have, 608 00:26:55,080 --> 00:26:59,800 Speaker 9: largely because they've fullloaded inventories and they're drawing down those inventories. 609 00:27:00,160 --> 00:27:02,840 Speaker 9: But I think over time they're going to have to 610 00:27:02,880 --> 00:27:07,000 Speaker 9: pass it to pass it through to consumers and I 611 00:27:07,000 --> 00:27:09,479 Speaker 9: think we're going to see it in the CPI. To 612 00:27:09,520 --> 00:27:13,120 Speaker 9: the extent that that doesn't happen, then firms margins are 613 00:27:13,119 --> 00:27:14,720 Speaker 9: going to be compressed and they're going to be thinking 614 00:27:14,760 --> 00:27:17,040 Speaker 9: about how do I cut costs? And then that's bad 615 00:27:17,119 --> 00:27:18,280 Speaker 9: news for the labor market. 616 00:27:18,480 --> 00:27:20,840 Speaker 2: So the question again, wish White, is it breaking which 617 00:27:21,920 --> 00:27:25,400 Speaker 2: story in or a labor story? Well, a kind of cust. 618 00:27:25,680 --> 00:27:28,879 Speaker 9: The FED is casting vote on that one. This is 619 00:27:29,760 --> 00:27:33,520 Speaker 9: a tough period. The economy is absorbing as stagflationary shock. 620 00:27:33,920 --> 00:27:36,920 Speaker 9: The Fed's got to choose between its mandates and Jay 621 00:27:36,960 --> 00:27:40,679 Speaker 9: Pal's telling us, well, it's painful, it's complex, it's difficult, 622 00:27:41,080 --> 00:27:45,040 Speaker 9: but on balance, they're signaling greater concern about the labor market. 623 00:27:45,280 --> 00:27:46,440 Speaker 1: The market agrees with them. 624 00:27:46,640 --> 00:27:49,760 Speaker 4: The market agrees is the prudent route to take because 625 00:27:49,840 --> 00:27:53,880 Speaker 4: essentially people are not pricing in a real reacceleration of inflation. 626 00:27:54,119 --> 00:27:55,160 Speaker 1: Do you think that's correct. 627 00:27:55,880 --> 00:27:59,040 Speaker 9: I was very concerned about how the long end of 628 00:27:59,080 --> 00:28:04,160 Speaker 9: the curve was going to respond to signals of FED cuts, 629 00:28:04,760 --> 00:28:07,879 Speaker 9: and as you say, the long end of the curve 630 00:28:07,920 --> 00:28:12,200 Speaker 9: has responded very well. As the FED is shifted more 631 00:28:12,240 --> 00:28:15,840 Speaker 9: in the direction of any easier monetary policy, and of 632 00:28:15,880 --> 00:28:21,960 Speaker 9: course the equity market is thrilled about an easier FED. 633 00:28:22,359 --> 00:28:25,679 Speaker 9: So at least so far and very much seems that 634 00:28:25,760 --> 00:28:30,000 Speaker 9: the markets are with the FED. And they also, at 635 00:28:30,119 --> 00:28:33,840 Speaker 9: least the preponderance of investors are more worried about the 636 00:28:33,920 --> 00:28:37,359 Speaker 9: labor market. One other angle on this that's helpful is 637 00:28:37,520 --> 00:28:41,080 Speaker 9: in the Fed's view, and I'm persuaded their right. They 638 00:28:41,360 --> 00:28:45,000 Speaker 9: see at the stamps of policy as still being restrictive, 639 00:28:45,400 --> 00:28:48,960 Speaker 9: and so what they're doing is not providing outright stimulus, 640 00:28:49,240 --> 00:28:53,240 Speaker 9: but they're just reducing the constraints on the economy as 641 00:28:53,280 --> 00:28:55,280 Speaker 9: associated with monetary policy. 642 00:28:55,400 --> 00:28:58,320 Speaker 4: As an economist who's task was trying to put together 643 00:28:58,440 --> 00:29:01,680 Speaker 4: all of these disparate trends and themes, how do you 644 00:29:01,760 --> 00:29:02,840 Speaker 4: understand the moment we're in. 645 00:29:02,960 --> 00:29:05,560 Speaker 1: Is it disinflationary? Is it reinflationary? 646 00:29:05,640 --> 00:29:07,320 Speaker 4: I mean, I've heard an argument on all sides, and 647 00:29:07,360 --> 00:29:09,680 Speaker 4: every time anyone makes an argument, I'm like, yes, you're right, 648 00:29:09,720 --> 00:29:11,480 Speaker 4: and they're always the opposite sides. 649 00:29:11,680 --> 00:29:17,479 Speaker 9: Well, for the United States, I think it's stagflationary, and 650 00:29:17,560 --> 00:29:20,320 Speaker 9: that's the reality of these tariffs. They're putting upward pressure 651 00:29:20,360 --> 00:29:24,960 Speaker 9: on prices, they're putting downward pressure on real incomes. And 652 00:29:25,000 --> 00:29:31,320 Speaker 9: spending in the economy and the FEDS trying to react 653 00:29:31,520 --> 00:29:34,360 Speaker 9: to that. Now, for the rest of the world, the 654 00:29:34,480 --> 00:29:37,880 Speaker 9: tariffs have a different implication. For the rest of the world, 655 00:29:38,360 --> 00:29:43,280 Speaker 9: they are an adverse demand shock, reducing demand for exports, 656 00:29:43,280 --> 00:29:46,400 Speaker 9: putting downward pressure on wages and prices. So I would 657 00:29:46,440 --> 00:29:51,840 Speaker 9: say disinflationary for the rest of the world, stagflationary for 658 00:29:51,920 --> 00:29:52,920 Speaker 9: the United States. 659 00:29:53,160 --> 00:29:55,560 Speaker 6: But in your global Economic outlook you talk about how 660 00:29:55,560 --> 00:29:58,920 Speaker 6: consumers and companies are actually able to absorb it pretty well. 661 00:29:59,200 --> 00:30:02,800 Speaker 1: Do you think that's to is going to change So far? 662 00:30:02,920 --> 00:30:07,480 Speaker 9: Absolutely, particularly here in the United States, we've seen we've 663 00:30:07,520 --> 00:30:10,760 Speaker 9: seen resilience. Now part of that, I do think is 664 00:30:10,800 --> 00:30:17,440 Speaker 9: a transitionary phase. And specifically what's happened is the tariffs 665 00:30:17,480 --> 00:30:21,040 Speaker 9: have come on gradually. And as we've seen the tariffs 666 00:30:21,120 --> 00:30:23,040 Speaker 9: coming on, we say, well, prices are going to be 667 00:30:23,120 --> 00:30:25,560 Speaker 9: higher tomorrow. What do you do if you think prices 668 00:30:25,600 --> 00:30:27,320 Speaker 9: are going to be hired tomorrow, you buy more today. 669 00:30:27,760 --> 00:30:30,880 Speaker 9: And so the economy has been supported through the first 670 00:30:30,880 --> 00:30:33,440 Speaker 9: six eight months of the year through a front loading 671 00:30:33,560 --> 00:30:37,120 Speaker 9: cycle that's now gradually abating. And when you get to 672 00:30:37,160 --> 00:30:39,480 Speaker 9: the other side, all that stuff that we bought during 673 00:30:39,520 --> 00:30:41,800 Speaker 9: the first half to get ahead of the tariffs. We 674 00:30:41,840 --> 00:30:44,240 Speaker 9: won't be buying during the second half of the year, 675 00:30:44,560 --> 00:30:48,040 Speaker 9: and that's where the payback comes in. We'll see the 676 00:30:48,160 --> 00:30:51,040 Speaker 9: higher prices and I think at that point we are 677 00:30:51,240 --> 00:30:53,480 Speaker 9: likely to say I don't think we're going to see recession. 678 00:30:53,880 --> 00:30:55,520 Speaker 9: I don't think we're going to see a collapse in 679 00:30:55,520 --> 00:30:58,960 Speaker 9: the economic activity, but a further slowing in the pace 680 00:30:59,000 --> 00:31:00,080 Speaker 9: of growth is our ex. 681 00:31:00,000 --> 00:31:02,720 Speaker 6: Big take inflation, though, is a concern pushed down the road. 682 00:31:02,760 --> 00:31:04,800 Speaker 6: Then in twenty twenty six, what does that mean when 683 00:31:04,800 --> 00:31:08,160 Speaker 6: we have a new FED chair. That is going to 684 00:31:08,200 --> 00:31:10,400 Speaker 6: be very different than how Jpal views the world. 685 00:31:10,880 --> 00:31:15,400 Speaker 9: This is we are learning about how tariffs affect economies 686 00:31:15,440 --> 00:31:18,360 Speaker 9: in real time, and for me, one of the big 687 00:31:18,480 --> 00:31:22,920 Speaker 9: surprises has been that the pass through of the tariffs 688 00:31:22,960 --> 00:31:26,560 Speaker 9: into inflation has just been a lot slower than what 689 00:31:26,640 --> 00:31:30,000 Speaker 9: I'd expected. The corollary to that is, yeah, we'll probably 690 00:31:30,040 --> 00:31:33,640 Speaker 9: still be talking about tariff paths through into inflation during 691 00:31:33,680 --> 00:31:36,120 Speaker 9: the first part of next year, and it may be 692 00:31:36,200 --> 00:31:39,120 Speaker 9: an issue even in the spring when we get a 693 00:31:39,160 --> 00:31:42,720 Speaker 9: new FED chair. Now, there's a lot of issues surrounding 694 00:31:42,720 --> 00:31:48,240 Speaker 9: where a FED chair appointed by President Trump may ultimately go, 695 00:31:48,800 --> 00:31:53,240 Speaker 9: but managing the fallout of the tariffs is likely to 696 00:31:53,240 --> 00:31:55,720 Speaker 9: be one important issue that they're struggling with. 697 00:31:55,760 --> 00:31:57,640 Speaker 2: And once you begin to ignore Shaman Pale. 698 00:32:00,080 --> 00:32:02,280 Speaker 9: Think he's got is you know, he's got his hands 699 00:32:02,320 --> 00:32:04,959 Speaker 9: on the steering wheel for how much longer you know, 700 00:32:05,120 --> 00:32:10,800 Speaker 9: I'm going to argue until he leaves the DEFINI. I 701 00:32:10,800 --> 00:32:13,080 Speaker 9: think he's still going to be the one who is 702 00:32:13,240 --> 00:32:17,040 Speaker 9: largely going to be dictating the direction of policy as 703 00:32:17,120 --> 00:32:20,680 Speaker 9: long as he's a chairman of the FAD And I 704 00:32:20,680 --> 00:32:24,240 Speaker 9: think part of that is he's got credibility with the 705 00:32:24,240 --> 00:32:27,000 Speaker 9: other members of the committee, and I think that gives 706 00:32:27,120 --> 00:32:30,840 Speaker 9: him influence in the capacity to shape policy. 707 00:32:30,920 --> 00:32:34,840 Speaker 2: Can he shape markets to the kind at the moment, 708 00:32:34,840 --> 00:32:36,960 Speaker 2: of course, yes, But once we gets closer to me 709 00:32:37,240 --> 00:32:39,840 Speaker 2: the reason this, as you know, the policy is not 710 00:32:39,880 --> 00:32:42,400 Speaker 2: the interest rate. It's what happens in the market. That 711 00:32:42,480 --> 00:32:45,000 Speaker 2: we all understand that. And at some point later this year, 712 00:32:45,040 --> 00:32:46,600 Speaker 2: there's going to be someone else who gets to say, 713 00:32:46,640 --> 00:32:49,360 Speaker 2: you know what I'm next and his views or hers, 714 00:32:49,400 --> 00:32:52,360 Speaker 2: who knows might carry more way than shaman Pass. 715 00:32:52,600 --> 00:32:56,160 Speaker 9: To the extent that policy is influencing the economy today 716 00:32:56,520 --> 00:33:00,360 Speaker 9: and over the near term, and as you say, the 717 00:33:00,400 --> 00:33:04,120 Speaker 9: horizon where his policy will be relevant is shortening and 718 00:33:04,160 --> 00:33:08,920 Speaker 9: will continue to shorten as we approach May. There were 719 00:33:09,000 --> 00:33:12,560 Speaker 9: left to speculate on what a next FED chair may do, 720 00:33:13,800 --> 00:33:17,000 Speaker 9: but I think in terms of setting the table and 721 00:33:17,120 --> 00:33:22,480 Speaker 9: determining where rates are, I think the palsing control until May. 722 00:33:24,000 --> 00:33:27,320 Speaker 2: This is the Bloomberg S Evans Podcast, bringing you the 723 00:33:27,320 --> 00:33:30,920 Speaker 2: best in markets, economics, anngiopolitics. You can watch the show 724 00:33:30,960 --> 00:33:33,920 Speaker 2: live on bloombag TV weekday mornings from six am to 725 00:33:34,040 --> 00:33:37,800 Speaker 2: nine am Eastern. Subscribe to the podcast on Apple, Spotify 726 00:33:37,960 --> 00:33:40,160 Speaker 2: or anywhere else you listen, and as always, on the 727 00:33:40,200 --> 00:33:42,600 Speaker 2: Bloomberg Terminal and the Bloomberg Business app