1 00:00:00,160 --> 00:00:06,800 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 00:00:15,480 --> 00:00:18,720 Speaker 2: with Lisa Bromwitz and Amrie Hordern. 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 --> 00:00:37,560 Speaker 2: Terminal and the Bloomberg Business App. Premisserer of JP Morgan 10 00:00:37,600 --> 00:00:40,159 Speaker 2: writing a print of one fifty or higher and the 11 00:00:40,200 --> 00:00:43,800 Speaker 2: federal likely cut twenty five in November. Payrolls around one 12 00:00:43,880 --> 00:00:47,199 Speaker 2: hundred k or below means fifty basis points, bad news 13 00:00:47,280 --> 00:00:50,080 Speaker 2: on jobs, bad news for risk assets, and the curve 14 00:00:50,320 --> 00:00:52,680 Speaker 2: should ball steepen. Pre it's with us around the table, Prey, 15 00:00:52,680 --> 00:00:55,120 Speaker 2: good morning, going to see you. I've got one question 16 00:00:55,160 --> 00:00:56,760 Speaker 2: in the bomb market, and then we can go broad 17 00:00:56,760 --> 00:00:59,160 Speaker 2: and we can talk about payrolls. Why is so much money, 18 00:00:59,440 --> 00:01:02,160 Speaker 2: so much going into money market funds right now? 19 00:01:02,840 --> 00:01:06,560 Speaker 3: Great question as we hit another record yesterday, I would 20 00:01:06,600 --> 00:01:09,479 Speaker 3: say one word valuations. You know the fact that you're 21 00:01:09,520 --> 00:01:11,959 Speaker 3: still getting four and a half to five percent on 22 00:01:12,080 --> 00:01:15,800 Speaker 3: money funds. The Eiger is still inverted. Every asset class 23 00:01:15,840 --> 00:01:17,959 Speaker 3: is priced for a soft landing. So I think people 24 00:01:18,040 --> 00:01:21,039 Speaker 3: are staying in cash, waiting for better levels and bonds, 25 00:01:21,040 --> 00:01:23,880 Speaker 3: better levels. On stocks, I will say we're seeing significant 26 00:01:23,880 --> 00:01:26,440 Speaker 3: inflows into bond funds, but people who are waiting for 27 00:01:26,440 --> 00:01:28,480 Speaker 3: a while, I'll buy. When the tenure treasury is at 28 00:01:28,480 --> 00:01:31,520 Speaker 3: five percent, you're not getting that. You know, inflation's coming down. 29 00:01:31,520 --> 00:01:33,800 Speaker 3: The Fed's telling you they're going to cut. We don't 30 00:01:33,800 --> 00:01:35,600 Speaker 3: have to read between the lines on the Fed put 31 00:01:35,640 --> 00:01:38,320 Speaker 3: they're telling you it's there. If things weaken, they're going 32 00:01:38,360 --> 00:01:41,160 Speaker 3: to cut much faster. And I think people who've been 33 00:01:41,280 --> 00:01:43,200 Speaker 3: sort of you know, there might be a melt up 34 00:01:43,280 --> 00:01:46,480 Speaker 3: move because if you get a short period of volatility, 35 00:01:46,600 --> 00:01:49,160 Speaker 3: we are absolutely going to be in there buying if 36 00:01:49,400 --> 00:01:51,600 Speaker 3: if there is a risk off. But I think, you know, 37 00:01:51,640 --> 00:01:54,760 Speaker 3: there's a sense of everything is so well priced, everything's 38 00:01:54,800 --> 00:01:56,600 Speaker 3: done well, let me just stay in cash. It's still 39 00:01:56,640 --> 00:01:58,720 Speaker 3: giving me four and a half. Well, within a year 40 00:01:58,760 --> 00:02:01,280 Speaker 3: it's going to give you two andough half or three percent, 41 00:02:01,400 --> 00:02:02,960 Speaker 3: And you know that's when I think a lot of 42 00:02:02,960 --> 00:02:04,320 Speaker 3: that money is going to start to move. 43 00:02:04,200 --> 00:02:06,040 Speaker 4: Out, although it comes at a time when people are 44 00:02:06,040 --> 00:02:08,040 Speaker 4: taking a look at what's going on with the oil prices, 45 00:02:08,040 --> 00:02:09,720 Speaker 4: They're taking a look at what's going on with the 46 00:02:09,720 --> 00:02:12,720 Speaker 4: resilience and a number of different indicators. Yesterday we had 47 00:02:12,760 --> 00:02:16,359 Speaker 4: ism services data that came in better than anyone expected 48 00:02:16,520 --> 00:02:19,440 Speaker 4: who is surveyed by Bloombird. And you have to wonder 49 00:02:19,560 --> 00:02:22,120 Speaker 4: whether people are questioning this idea that the Fed is 50 00:02:22,280 --> 00:02:24,280 Speaker 4: willing to go fifty basis points so quickly you hurt 51 00:02:24,320 --> 00:02:26,400 Speaker 4: a sew of people lining up twenty five, twenty five, 52 00:02:26,480 --> 00:02:28,440 Speaker 4: twenty five, and then Nil Tata saying no, why I 53 00:02:28,480 --> 00:02:30,520 Speaker 4: stop it? Guys? How much do you see this as 54 00:02:30,560 --> 00:02:32,720 Speaker 4: sort of a given? Even though you are seeing signs 55 00:02:32,720 --> 00:02:33,960 Speaker 4: of strength in so many places. 56 00:02:34,400 --> 00:02:36,440 Speaker 3: So I think the data has really mixed. You can 57 00:02:36,480 --> 00:02:38,720 Speaker 3: see signs of strength, then you can see signs of weakening. 58 00:02:38,760 --> 00:02:41,600 Speaker 3: Look at that unemployment rate increase, look at labor differential 59 00:02:41,880 --> 00:02:44,920 Speaker 3: in consumer confidence. I think this is where the earnings report, 60 00:02:45,040 --> 00:02:47,359 Speaker 3: details of the job report. You've been talking about revisions. 61 00:02:47,520 --> 00:02:50,040 Speaker 3: I think revisions look at dispersion within jobs. Is it 62 00:02:50,120 --> 00:02:53,560 Speaker 3: really only two or three sectors that is creating all 63 00:02:53,600 --> 00:02:56,480 Speaker 3: the job growth, what happens with margins? So I think 64 00:02:56,880 --> 00:02:59,360 Speaker 3: there is you know, a lot of uncertainty. The data 65 00:02:59,400 --> 00:03:02,200 Speaker 3: is not giving a it's a clear picture, and every 66 00:03:02,240 --> 00:03:04,800 Speaker 3: market's price for soft landing. So I think this is 67 00:03:04,840 --> 00:03:08,320 Speaker 3: where I would push back. The reacceleration risk seems to 68 00:03:08,360 --> 00:03:10,400 Speaker 3: be off the table. I think we've got really a 69 00:03:10,400 --> 00:03:12,960 Speaker 3: bimodal world. You've got these binary risks, and there's a 70 00:03:13,000 --> 00:03:17,200 Speaker 3: lot between the election, between geopolitical risks, between payrolls frankly, 71 00:03:17,280 --> 00:03:20,480 Speaker 3: or the entire jobs report, where either stay in soft landing, 72 00:03:20,840 --> 00:03:23,480 Speaker 3: everything is priced in, but can rates fall some marshal 73 00:03:23,680 --> 00:03:26,520 Speaker 3: can spread titan absolutely if we stay in soft lining, 74 00:03:26,880 --> 00:03:29,040 Speaker 3: or we go much worse. And I think that's the 75 00:03:29,080 --> 00:03:30,640 Speaker 3: world that we're sort of grappling with. 76 00:03:30,760 --> 00:03:32,160 Speaker 4: And that's the reason why I think good news is 77 00:03:32,200 --> 00:03:34,800 Speaker 4: good news for risk assets, because ultimately you do think 78 00:03:34,800 --> 00:03:36,720 Speaker 4: that that reacceleration is off the table. I want to 79 00:03:36,720 --> 00:03:38,800 Speaker 4: pick up on that. Are you're basically saying that this 80 00:03:38,920 --> 00:03:41,360 Speaker 4: headfake that we're saying in oil prices is a headfake 81 00:03:41,640 --> 00:03:43,360 Speaker 4: and that any kind of take up in yields is 82 00:03:43,400 --> 00:03:46,920 Speaker 4: a buying opportunity right now, because ultimately inflation is dead, 83 00:03:47,720 --> 00:03:48,200 Speaker 4: I think so. 84 00:03:48,240 --> 00:03:52,240 Speaker 3: I mean oil price increased through supply related issues, which 85 00:03:52,280 --> 00:03:54,880 Speaker 3: is what this is. That's actually at taxed on consumers. 86 00:03:54,960 --> 00:03:57,480 Speaker 3: So I think if it's geopolitical related, I would not 87 00:03:57,560 --> 00:04:00,280 Speaker 3: buy it. If there's massive fiscal easing in China or 88 00:04:00,280 --> 00:04:03,680 Speaker 3: significant fiscal easing in the US which actually creates growth, 89 00:04:03,680 --> 00:04:06,120 Speaker 3: then it's a different question. But I think oil prices 90 00:04:06,160 --> 00:04:09,640 Speaker 3: is negative. Bonds are a diversifier for risk asses. We 91 00:04:09,680 --> 00:04:12,120 Speaker 3: saw it the last two payroll reports. We had slightly 92 00:04:12,160 --> 00:04:14,960 Speaker 3: weaker numbers. You've got, you know, the market pricing in 93 00:04:15,000 --> 00:04:18,279 Speaker 3: this higher chance of fifty rates fell and that's why 94 00:04:18,320 --> 00:04:21,120 Speaker 3: I think, you know, if you get weak numbers, we're 95 00:04:21,160 --> 00:04:23,600 Speaker 3: going to price in fifty. And the whole idea of 96 00:04:23,920 --> 00:04:26,520 Speaker 3: why did the FED go fifty, all those reasons are 97 00:04:26,560 --> 00:04:30,800 Speaker 3: still present today. Monetary policy is restrictive. What's one to 98 00:04:30,839 --> 00:04:34,320 Speaker 3: fifty basis points really going to do? I think, well, exactly. 99 00:04:34,480 --> 00:04:37,360 Speaker 3: I think for the housing market, you need mortgage rates 100 00:04:37,480 --> 00:04:40,279 Speaker 3: much lower. We're talking four percent, four and a half. 101 00:04:40,320 --> 00:04:42,160 Speaker 3: We're not you know, at six percent, you're not going 102 00:04:42,200 --> 00:04:44,200 Speaker 3: to have that happen. You're not going to create a 103 00:04:44,200 --> 00:04:46,360 Speaker 3: big positive on the housing market. So when I think 104 00:04:46,360 --> 00:04:49,159 Speaker 3: about reacceleration, I look at where are the drivers. It's 105 00:04:49,200 --> 00:04:52,599 Speaker 3: not rates, you need much lower rates. It's not really 106 00:04:52,640 --> 00:04:54,919 Speaker 3: fiscal so far. This is where the election, This is 107 00:04:54,920 --> 00:04:57,560 Speaker 3: where China becomes important. So right now, I would say 108 00:04:57,560 --> 00:05:00,920 Speaker 3: oil prices and that's resulted in this and rates. It's 109 00:05:00,960 --> 00:05:03,640 Speaker 3: absolutely a buying opportunity. If you've got risk on your 110 00:05:03,640 --> 00:05:06,640 Speaker 3: portfolio anyway, and we do, we get a little nervous 111 00:05:06,680 --> 00:05:10,160 Speaker 3: about all these binary risks. I think owning some hedges, 112 00:05:10,279 --> 00:05:13,640 Speaker 3: be it steepeners, owning some duration, especially given this backup, 113 00:05:13,720 --> 00:05:16,200 Speaker 3: it's an opportunity. Rayo. Let's talk about the election. 114 00:05:16,279 --> 00:05:18,120 Speaker 5: You went there. You say after the job's report, the 115 00:05:18,160 --> 00:05:20,240 Speaker 5: market's going to be solely focused on the US election, 116 00:05:20,360 --> 00:05:22,239 Speaker 5: And you say the market will move in any scenario, 117 00:05:22,360 --> 00:05:25,080 Speaker 5: since it is not priced for any scenario. But if 118 00:05:25,120 --> 00:05:27,400 Speaker 5: you have conviction that you think Harris is going to 119 00:05:27,400 --> 00:05:29,000 Speaker 5: win with a sweep or Trump is going to win 120 00:05:29,040 --> 00:05:31,120 Speaker 5: with a sweep, how should you be pricing that? 121 00:05:31,960 --> 00:05:34,680 Speaker 3: It's very hard. I mean, I would say your key 122 00:05:34,720 --> 00:05:37,479 Speaker 3: point was the sweep. I think what happens if it's 123 00:05:37,520 --> 00:05:39,600 Speaker 3: not a sweep. But I love that you bring up 124 00:05:39,600 --> 00:05:41,960 Speaker 3: sweep because I think everyone focuses on the White House, 125 00:05:42,000 --> 00:05:44,640 Speaker 3: not you all. I know y'all have talked about Congress. 126 00:05:45,160 --> 00:05:48,680 Speaker 3: Congress is very very important. So what happens with the House, 127 00:05:48,680 --> 00:05:50,599 Speaker 3: and this is where the House is at a knife edge, 128 00:05:50,640 --> 00:05:53,279 Speaker 3: the presidency. Look at Poles. I mean, I'm not even 129 00:05:53,320 --> 00:05:55,080 Speaker 3: sure we can trust Poles a whole lot, but the 130 00:05:55,080 --> 00:05:57,719 Speaker 3: Poles are very close. So and then look at all 131 00:05:57,720 --> 00:06:01,119 Speaker 3: the policies we're talking about right from which actually doesn't 132 00:06:01,120 --> 00:06:06,160 Speaker 3: need Congress as much. Fiscal policy absolutely needs Congress, immigration regulation. 133 00:06:06,720 --> 00:06:08,640 Speaker 3: There is so much out there that we're going to 134 00:06:08,720 --> 00:06:10,760 Speaker 3: have to see, you know, what's the maker? Will we 135 00:06:10,839 --> 00:06:13,200 Speaker 3: know the result on election night? I hope for all 136 00:06:13,200 --> 00:06:14,880 Speaker 3: our sakes that we do. But what if we don't 137 00:06:14,880 --> 00:06:18,200 Speaker 3: know that, what if it's a divided government. Then we 138 00:06:18,240 --> 00:06:21,760 Speaker 3: have to see what is priority number one? And there's 139 00:06:21,800 --> 00:06:24,120 Speaker 3: something on the campaign trail, and then there's actually what 140 00:06:24,240 --> 00:06:26,960 Speaker 3: they talk about. So I think for the market pricing, 141 00:06:27,279 --> 00:06:29,360 Speaker 3: we're going to move in either direction because there's so 142 00:06:29,480 --> 00:06:33,479 Speaker 3: many unknowns around the makeup of Congress, around the presidency, 143 00:06:33,560 --> 00:06:35,599 Speaker 3: and then what policies are their number one priority? 144 00:06:35,720 --> 00:06:38,559 Speaker 5: And what happens when the FOMC NEETs and we don't 145 00:06:38,560 --> 00:06:41,000 Speaker 5: potentially have an election result. 146 00:06:41,600 --> 00:06:45,000 Speaker 3: I think they look at financial conditions and the economy. Clearly, 147 00:06:45,520 --> 00:06:48,640 Speaker 3: if monetary policy is still restrictive, which is likely to be, 148 00:06:48,760 --> 00:06:50,520 Speaker 3: we're going to be in the four handle. We can 149 00:06:50,560 --> 00:06:53,039 Speaker 3: debate our star and say maybe neutral rate is not 150 00:06:53,080 --> 00:06:55,240 Speaker 3: two and a half but three and a half. It's 151 00:06:55,279 --> 00:06:57,960 Speaker 3: not four and a half or five. So I think 152 00:06:58,000 --> 00:06:59,800 Speaker 3: they continue to cut. They're going to try and be 153 00:06:59,800 --> 00:07:02,599 Speaker 3: as a political as they can. Look at the data, 154 00:07:02,640 --> 00:07:05,159 Speaker 3: the entirety of the data, inflation and growth. I think 155 00:07:05,360 --> 00:07:07,880 Speaker 3: Governor Walla tells us inflation is also important, so we 156 00:07:07,920 --> 00:07:11,120 Speaker 3: have to look at both and then look at financial conditions. 157 00:07:11,320 --> 00:07:13,760 Speaker 3: In the scenario where we don't have an election result, 158 00:07:13,840 --> 00:07:17,080 Speaker 3: financial conditions will tighten because markets don't like uncertainty. You 159 00:07:17,160 --> 00:07:19,480 Speaker 3: don't want binary outcomes which you don't know how to price. 160 00:07:19,920 --> 00:07:22,280 Speaker 3: In that scenario, I think they cut, and they tell us, well, 161 00:07:22,280 --> 00:07:25,040 Speaker 3: if financial conditions continue to tighten, we'll cut more. I 162 00:07:25,040 --> 00:07:26,480 Speaker 3: think that's the message we'll want to hear. 163 00:07:26,640 --> 00:07:28,960 Speaker 2: So final message from you, I'm saying, in cash, like 164 00:07:29,040 --> 00:07:31,000 Speaker 2: so many other people, what do I do? Where do 165 00:07:31,040 --> 00:07:31,320 Speaker 2: I go? 166 00:07:32,400 --> 00:07:34,720 Speaker 3: I think you buy bonds? Okay, I mean I don't 167 00:07:34,720 --> 00:07:36,560 Speaker 3: want to talk my book, but I think what I. 168 00:07:36,440 --> 00:07:38,240 Speaker 2: Had to say that you might turn around and say 169 00:07:38,360 --> 00:07:40,080 Speaker 2: it might be the coll plus bond. 170 00:07:39,880 --> 00:07:45,280 Speaker 3: Bts if you're getting you know, investment rates, securitize, you know, 171 00:07:45,480 --> 00:07:48,760 Speaker 3: high yield bonds, high quality height. I think high quality 172 00:07:48,800 --> 00:07:51,440 Speaker 3: fixed income is sort of the best place to be 173 00:07:51,480 --> 00:07:53,840 Speaker 3: in right now. Spreads are tied, but look at all 174 00:07:53,840 --> 00:07:55,440 Speaker 3: in needs. You're getting five to five and a half 175 00:07:55,560 --> 00:07:58,000 Speaker 3: percent higher than money market rates. So if you're in 176 00:07:58,000 --> 00:08:00,160 Speaker 3: money funds, you're getting four and a half or you 177 00:08:00,200 --> 00:08:02,320 Speaker 3: get five and a half, and it's going to be 178 00:08:02,360 --> 00:08:05,720 Speaker 3: a diversify, especially if one of these events. When we 179 00:08:05,760 --> 00:08:08,680 Speaker 3: talk about October Surprise, we have multiple contenders for the 180 00:08:08,680 --> 00:08:13,080 Speaker 3: October Surprise, any of them ban out, You've got that 181 00:08:13,160 --> 00:08:14,239 Speaker 3: yield and you've. 182 00:08:14,040 --> 00:08:16,080 Speaker 2: Got that hedge, so massive month ahead prayer is going 183 00:08:16,120 --> 00:08:18,480 Speaker 2: to say, as always, thank you prayers for of JP 184 00:08:18,640 --> 00:08:30,240 Speaker 2: mort Let's get to the market view. Jeff Rosenberg of 185 00:08:30,280 --> 00:08:32,559 Speaker 2: black Rock with us, Mohammed al Aaron of Queens College, 186 00:08:32,559 --> 00:08:34,360 Speaker 2: Cambridge with us as well. Jeff, I want to come 187 00:08:34,360 --> 00:08:36,000 Speaker 2: to you first, your thoughts on this and as a 188 00:08:36,000 --> 00:08:37,920 Speaker 2: market participant, what do I do with this? 189 00:08:39,640 --> 00:08:42,400 Speaker 6: Yeah, I mean clearly it was just described, this is, 190 00:08:42,600 --> 00:08:44,880 Speaker 6: you know, across the board, a very strong report. You know, 191 00:08:44,880 --> 00:08:50,840 Speaker 6: if you look in the under components retail, professional services, 192 00:08:50,960 --> 00:08:54,320 Speaker 6: education and health services, you know all significantly beat above 193 00:08:54,360 --> 00:08:58,160 Speaker 6: their three month running average, and you know across the 194 00:08:58,920 --> 00:09:02,679 Speaker 6: earnings and the household survey, you know, this is this 195 00:09:02,720 --> 00:09:05,560 Speaker 6: is a very strong report. As was mentioned before, the 196 00:09:05,600 --> 00:09:09,160 Speaker 6: revisions in terms of August was kind of expected. The 197 00:09:09,200 --> 00:09:11,560 Speaker 6: home based data and the alternative data. You had some 198 00:09:11,600 --> 00:09:14,880 Speaker 6: people looking at that as well, maybe not to the 199 00:09:14,960 --> 00:09:18,760 Speaker 6: extent you know Bloomberg and Analong did and emphasizing it, 200 00:09:18,800 --> 00:09:21,440 Speaker 6: but you certainly saw, you know, some data points that 201 00:09:21,480 --> 00:09:24,560 Speaker 6: were pointing towards you know, the potential here for a 202 00:09:24,559 --> 00:09:28,680 Speaker 6: stronger report. But this is stronger than anyone expected. And 203 00:09:28,720 --> 00:09:30,680 Speaker 6: as Lisa said, and I think this will be the 204 00:09:30,760 --> 00:09:33,520 Speaker 6: longer run debate, and it's something we've talked about on 205 00:09:33,559 --> 00:09:36,200 Speaker 6: this on this program a lot that the debate about 206 00:09:36,280 --> 00:09:40,200 Speaker 6: not only where kind of policy is, how restrictive it 207 00:09:40,240 --> 00:09:43,400 Speaker 6: really is where you know, our star and neutral stands, 208 00:09:43,440 --> 00:09:46,160 Speaker 6: but but something else that that has really been missing 209 00:09:46,160 --> 00:09:50,120 Speaker 6: from this fed's conversation that was present in past cycles. 210 00:09:50,160 --> 00:09:54,280 Speaker 6: They've abandoned it, and that is the impact of financial conditions. 211 00:09:54,320 --> 00:09:59,000 Speaker 6: Financial conditions say that this is a much easier monetary policy, 212 00:09:59,400 --> 00:10:01,520 Speaker 6: and you look at where growth is and it's it's 213 00:10:01,600 --> 00:10:05,400 Speaker 6: kind of a it's a concurrent signal. But growth is 214 00:10:05,480 --> 00:10:10,360 Speaker 6: running well above potential, and that really tells you that 215 00:10:10,440 --> 00:10:13,320 Speaker 6: this is not as tight of a Fed as the market, 216 00:10:13,400 --> 00:10:15,680 Speaker 6: or really as the FED thinks it is. But today 217 00:10:15,760 --> 00:10:18,400 Speaker 6: is maybe another data point kind of in support of 218 00:10:18,440 --> 00:10:18,920 Speaker 6: that view. 219 00:10:19,160 --> 00:10:22,600 Speaker 2: Mark Rowan Apollo earlier this week. Financing is available, real 220 00:10:22,679 --> 00:10:24,679 Speaker 2: estate prices are going up. It's not clear we need 221 00:10:24,720 --> 00:10:26,920 Speaker 2: more right cuts to the extent we accelerate the economy 222 00:10:26,920 --> 00:10:29,000 Speaker 2: and have to come in the other direction. That would 223 00:10:29,000 --> 00:10:31,480 Speaker 2: not be a good day. Muhammed, I want your early 224 00:10:31,600 --> 00:10:33,600 Speaker 2: views on this job's report and what on earth does 225 00:10:33,600 --> 00:10:35,080 Speaker 2: the FED do with this one? 226 00:10:36,720 --> 00:10:39,960 Speaker 1: So thanks John. Four takeaways, including for the Fed. One 227 00:10:40,360 --> 00:10:42,520 Speaker 1: on the labor market. This is not just a solid 228 00:10:42,600 --> 00:10:45,160 Speaker 1: labor market, but if you take these numbers at face value, 229 00:10:45,360 --> 00:10:48,600 Speaker 1: it's a strong labor market late in the cycle. Two 230 00:10:49,000 --> 00:10:53,760 Speaker 1: for the economy, it speaks to US economic exceptionalism, something 231 00:10:53,800 --> 00:10:57,559 Speaker 1: we've seen and something that's continuing. Three for the Fed, 232 00:10:57,800 --> 00:11:02,040 Speaker 1: it means pushback much harder against pressure from the markets 233 00:11:02,400 --> 00:11:06,280 Speaker 1: to put you in the single mandate box. Enough talk 234 00:11:06,440 --> 00:11:11,200 Speaker 1: about inflation is dead, inflation is not dead. Enough talk 235 00:11:11,240 --> 00:11:15,040 Speaker 1: about the Fed should only be concerned about maximum employment. 236 00:11:15,240 --> 00:11:18,800 Speaker 1: It should still be concerned about this dual mandate. And finally, 237 00:11:18,840 --> 00:11:22,360 Speaker 1: for the markets, I think this is pushing back against 238 00:11:22,360 --> 00:11:24,440 Speaker 1: what has been, in my view, and you've heard me 239 00:11:24,440 --> 00:11:27,960 Speaker 1: say it over and over again, an overly aggressive expectation 240 00:11:28,400 --> 00:11:31,240 Speaker 1: of weight cuts by the FED. I think this will 241 00:11:31,320 --> 00:11:34,400 Speaker 1: will get the market closer to what's likely, and then 242 00:11:34,440 --> 00:11:37,360 Speaker 1: we're going to have a debate on two things. One 243 00:11:37,559 --> 00:11:41,920 Speaker 1: is where's the neutral rate? And two is how do 244 00:11:41,960 --> 00:11:45,400 Speaker 1: you think about this economy in terms of growth and 245 00:11:45,480 --> 00:11:48,680 Speaker 1: employment and how are these two things coming together. So 246 00:11:49,280 --> 00:11:53,360 Speaker 1: you know, at face value, this is a report that 247 00:11:53,400 --> 00:11:56,839 Speaker 1: will cause a lot of both revision both in analysis 248 00:11:57,080 --> 00:12:01,800 Speaker 1: and in market pricing. But I stress it is part 249 00:12:01,840 --> 00:12:04,720 Speaker 1: of a much bigger picture of mixed data and that's 250 00:12:04,760 --> 00:12:06,160 Speaker 1: where the complications arise. 251 00:12:06,280 --> 00:12:08,920 Speaker 4: John. As you know, Mohammad Emory nailed it when she 252 00:12:08,960 --> 00:12:10,640 Speaker 4: started saying how much does this have to do with 253 00:12:10,679 --> 00:12:13,080 Speaker 4: a fifty basis point rate cut? And it's somewhat tongue 254 00:12:13,120 --> 00:12:15,520 Speaker 4: in cheek, of course, but at the same time, there 255 00:12:15,600 --> 00:12:18,760 Speaker 4: is a real question how much have the easier financial 256 00:12:18,800 --> 00:12:22,240 Speaker 4: conditions that have basically been manufactured by this Federal Reserve 257 00:12:22,679 --> 00:12:26,520 Speaker 4: helped boost a market that wasn't maybe in need of 258 00:12:26,760 --> 00:12:27,600 Speaker 4: such a big boost. 259 00:12:29,200 --> 00:12:31,679 Speaker 1: Look, you know my view. We've been living in a 260 00:12:31,720 --> 00:12:35,040 Speaker 1: world of liquidity dominance. It has been all about liquidity. 261 00:12:36,480 --> 00:12:40,880 Speaker 1: That world was reinforced by fifty basis points scut Let's 262 00:12:40,920 --> 00:12:44,480 Speaker 1: also remember that the market didn't expect the fifty basis 263 00:12:44,520 --> 00:12:47,720 Speaker 1: point cut based on data. It expected it based on 264 00:12:48,040 --> 00:12:53,360 Speaker 1: a reporting on the Thursday before the FED Board meeting, 265 00:12:53,559 --> 00:12:57,600 Speaker 1: So there was no economic conditions that would justify fifty 266 00:12:57,600 --> 00:13:01,360 Speaker 1: basis points, but there was a leak to newspaper that 267 00:13:01,720 --> 00:13:06,559 Speaker 1: moved market expectations. I worry that we continue to feed this, 268 00:13:06,880 --> 00:13:12,040 Speaker 1: this monster of liquidity dominance, and at some point we 269 00:13:12,080 --> 00:13:15,400 Speaker 1: may regret it, either because inflation will not settle two 270 00:13:15,400 --> 00:13:20,640 Speaker 1: percent and or because financial stability will result from excessive 271 00:13:20,720 --> 00:13:21,240 Speaker 1: risk taking. 272 00:13:21,600 --> 00:13:23,400 Speaker 5: Muhammad, is there a chance that we can have a 273 00:13:23,480 --> 00:13:24,800 Speaker 5: no landing scenario? 274 00:13:27,559 --> 00:13:30,440 Speaker 1: Sure, there's a chance that we can have a world 275 00:13:30,559 --> 00:13:34,000 Speaker 1: in which we there are positive things happening on the 276 00:13:34,040 --> 00:13:38,600 Speaker 1: supply side, and we can be quote bigger but not hotter. Yes, 277 00:13:38,880 --> 00:13:41,520 Speaker 1: that is part of the distribution of potential outcome. I 278 00:13:41,559 --> 00:13:45,160 Speaker 1: think a soft landing is still the fifty five percent probability. 279 00:13:45,840 --> 00:13:49,520 Speaker 1: Bigger but not hotter is fifteen percent. So add them 280 00:13:49,559 --> 00:13:51,920 Speaker 1: to to up, you get seventy and then you have 281 00:13:51,960 --> 00:13:57,080 Speaker 1: a thirty percent probability that either becomes up or because 282 00:13:57,080 --> 00:14:00,280 Speaker 1: of weakness in low income households or because of FED 283 00:14:00,320 --> 00:14:02,319 Speaker 1: policy mistake, we end up in a recession. 284 00:14:02,880 --> 00:14:04,960 Speaker 2: Looking at these numbers and Mohammad, thanks for being with us. 285 00:14:04,960 --> 00:14:06,240 Speaker 2: You're going to stick with us. If you are just 286 00:14:06,320 --> 00:14:08,840 Speaker 2: joining us, Welcome. It's about eight forty five Eastern time 287 00:14:09,040 --> 00:14:11,080 Speaker 2: this morning here in New York, and about fifteen minutes 288 00:14:11,080 --> 00:14:13,200 Speaker 2: ago we got to blum out Jobs Report two hundred 289 00:14:13,240 --> 00:14:15,600 Speaker 2: and fifty four thousand. The median estimate our survey was 290 00:14:15,600 --> 00:14:18,880 Speaker 2: one fifty. Lisa's talked about the revisions repeatedly. The revisions 291 00:14:18,880 --> 00:14:20,440 Speaker 2: were good, they were positive. If a look at the 292 00:14:20,480 --> 00:14:22,760 Speaker 2: unemployment rate, we've dropped back to four point one percent 293 00:14:22,960 --> 00:14:25,680 Speaker 2: from four point two, Mike McKee suggesting we came very 294 00:14:25,760 --> 00:14:28,520 Speaker 2: very close to drop into four point zero. Wage growth 295 00:14:28,600 --> 00:14:30,920 Speaker 2: was hot as well. A lot of this was very unexpected. 296 00:14:30,920 --> 00:14:33,360 Speaker 2: We've said it repeatedly through this morning, the range of 297 00:14:33,440 --> 00:14:36,560 Speaker 2: estimates stretching from anywhere between seventy at the low side 298 00:14:36,600 --> 00:14:48,920 Speaker 2: and two twenty at the high end. Nowhere near this one. 299 00:14:49,520 --> 00:14:51,280 Speaker 2: I want to throw this one at you. There will 300 00:14:51,280 --> 00:14:52,720 Speaker 2: be a lot of people in this country that don't 301 00:14:52,720 --> 00:14:54,800 Speaker 2: believe these numbers. They will look at them, and some 302 00:14:54,960 --> 00:14:57,240 Speaker 2: will say sarcastically, snarkily, they will say, if you're the 303 00:14:57,240 --> 00:14:59,960 Speaker 2: Harris campaign, you can have written this Job's report any better, 304 00:15:00,040 --> 00:15:02,400 Speaker 2: even if you wanted to. There are others who look 305 00:15:02,400 --> 00:15:04,880 Speaker 2: at this, perhaps a little bit more sophisticatedly, and say 306 00:15:04,920 --> 00:15:08,240 Speaker 2: that even the chairman himself is mentally marking these numbers 307 00:15:08,280 --> 00:15:11,000 Speaker 2: down by let's say fifty or sixty thousand, should we 308 00:15:11,040 --> 00:15:12,600 Speaker 2: be doing the same thing this morning. 309 00:15:12,840 --> 00:15:14,640 Speaker 7: I think that's fair. And if it was a week report, 310 00:15:14,680 --> 00:15:16,360 Speaker 7: that would have been the initial thing of okay, well, 311 00:15:16,360 --> 00:15:18,280 Speaker 7: now if you subtract out the sixty eight thousand that 312 00:15:18,280 --> 00:15:21,320 Speaker 7: we got from annual revisions last year, now we're in trouble. 313 00:15:21,400 --> 00:15:24,440 Speaker 7: The initial reaction to this Job's print isn't necessarily that, 314 00:15:24,640 --> 00:15:27,680 Speaker 7: but it should be. So perhaps the conclusion shouldn't be 315 00:15:27,680 --> 00:15:30,360 Speaker 7: the economy's on fire or there's no landing. It's probably 316 00:15:30,400 --> 00:15:33,240 Speaker 7: that we're actually hitting the soft landing. If you take 317 00:15:33,280 --> 00:15:35,760 Speaker 7: a straight three month average, you're a little above one 318 00:15:35,840 --> 00:15:39,200 Speaker 7: hundred eighty six thousand. Then if you subtract the QCUW, 319 00:15:39,240 --> 00:15:40,840 Speaker 7: then you're at a trend that's kind of normal. So 320 00:15:41,080 --> 00:15:43,320 Speaker 7: I think the market reaction is probably going to be 321 00:15:43,360 --> 00:15:45,320 Speaker 7: a bit extreme on the back of this. We should 322 00:15:45,320 --> 00:15:48,760 Speaker 7: probably look through it a couple Last night, the concern 323 00:15:48,880 --> 00:15:51,040 Speaker 7: was we're headed for a recession. Now the concern is 324 00:15:51,360 --> 00:15:53,440 Speaker 7: no landing. It's probably somewhere in between. 325 00:15:53,600 --> 00:15:55,760 Speaker 2: Jeff Rosenberg, is good news good news. 326 00:15:57,320 --> 00:15:59,840 Speaker 6: Good news is good news here, and I think that 327 00:16:00,120 --> 00:16:03,720 Speaker 6: key going back to what Mohammad said is the market 328 00:16:03,760 --> 00:16:07,000 Speaker 6: had been very aggressive in terms of its pricing for 329 00:16:07,080 --> 00:16:09,800 Speaker 6: the FED. You know, partly maybe that pushed them into 330 00:16:09,840 --> 00:16:13,040 Speaker 6: the fifty. You had more than two twenty fives for 331 00:16:13,120 --> 00:16:16,760 Speaker 6: the November and December priced in. That's obviously pricing out here. 332 00:16:17,120 --> 00:16:19,680 Speaker 6: And you know, next week when we get the CPI number, 333 00:16:19,880 --> 00:16:24,440 Speaker 6: you know you may have As Muhammad was suggesting more 334 00:16:24,480 --> 00:16:27,000 Speaker 6: of a debate as opposed to a one sided debate 335 00:16:27,040 --> 00:16:30,120 Speaker 6: where we shifted completely away from inflation as the focus 336 00:16:30,240 --> 00:16:33,400 Speaker 6: back to growth. Having a little bit more balance here 337 00:16:33,440 --> 00:16:35,880 Speaker 6: is going to make the outlook a little bit more challenging, 338 00:16:36,080 --> 00:16:38,280 Speaker 6: and I think for the bond market, it's going to 339 00:16:38,360 --> 00:16:41,920 Speaker 6: have to reassess its pricing in terms of how aggressive 340 00:16:41,920 --> 00:16:45,680 Speaker 6: it has been pricing, as Muhammad pointed out, very aggressive 341 00:16:45,720 --> 00:16:48,480 Speaker 6: from the get go here in terms of expecting, you know, 342 00:16:48,520 --> 00:16:51,120 Speaker 6: the most extreme in terms of in terms of what 343 00:16:51,160 --> 00:16:54,520 Speaker 6: the Fed was going to be able to deliver. Hard 344 00:16:54,520 --> 00:16:57,240 Speaker 6: to say whether next week you get that surprise. I 345 00:16:57,280 --> 00:17:00,840 Speaker 6: don't think we're talking about here inflation going back up 346 00:17:00,880 --> 00:17:02,000 Speaker 6: and an inflation scare. 347 00:17:02,040 --> 00:17:02,760 Speaker 4: That's not the point. 348 00:17:02,760 --> 00:17:05,600 Speaker 6: The point about no landing is that the last mile 349 00:17:06,000 --> 00:17:08,840 Speaker 6: from two point six percent inflation down to two percent 350 00:17:08,960 --> 00:17:11,679 Speaker 6: may be harder to achieve. And why it's harder to 351 00:17:11,760 --> 00:17:15,040 Speaker 6: achieve is because growth and financial conditions are not as 352 00:17:15,119 --> 00:17:18,920 Speaker 6: tight as the nominal rate suggests, and so you don't 353 00:17:19,000 --> 00:17:23,320 Speaker 6: have to necessarily be as aggressive on securing the soft 354 00:17:23,400 --> 00:17:26,240 Speaker 6: landing because the inflation side is pushing back. That's what 355 00:17:26,280 --> 00:17:28,679 Speaker 6: you're seeing here this morning in terms of pricing. It 356 00:17:28,680 --> 00:17:31,800 Speaker 6: makes the front end here a bit more rational in 357 00:17:31,880 --> 00:17:35,679 Speaker 6: terms of pricing in less than two fifties to the 358 00:17:35,760 --> 00:17:37,560 Speaker 6: end of the year, and I think that's starting to 359 00:17:37,600 --> 00:17:40,040 Speaker 6: be more of the story pricing out of the bond market. 360 00:17:40,160 --> 00:17:42,400 Speaker 4: Jeff, how off sides is this market? And we saw 361 00:17:42,400 --> 00:17:44,879 Speaker 4: this being sort of sniffed out earlier this week, this 362 00:17:44,960 --> 00:17:47,520 Speaker 4: idea that people were thinking, wait a second, maybe we 363 00:17:47,640 --> 00:17:50,040 Speaker 4: overplayed just how many rate cuts there would be, just 364 00:17:50,080 --> 00:17:51,760 Speaker 4: what kind of dollar weakness there would be. 365 00:17:52,160 --> 00:17:54,200 Speaker 3: How much does that trade. 366 00:17:53,840 --> 00:17:57,400 Speaker 4: The steepening curve all have to unwind as people reassess 367 00:17:57,480 --> 00:17:58,119 Speaker 4: with this data. 368 00:17:59,480 --> 00:18:02,679 Speaker 6: Yeah, as you pointed out, it started earlier this week, 369 00:18:02,960 --> 00:18:06,720 Speaker 6: you've had some better data. The labor market data hasn't 370 00:18:06,760 --> 00:18:09,720 Speaker 6: been as one sided in terms of the fears. In 371 00:18:09,800 --> 00:18:13,400 Speaker 6: terms of negativity, there's still a preponderance of the steepener 372 00:18:13,520 --> 00:18:16,560 Speaker 6: view because when you're in a FED cutting cycle, and 373 00:18:16,640 --> 00:18:19,160 Speaker 6: we're in the beginning of the FED cutting cycle, it's 374 00:18:19,200 --> 00:18:22,159 Speaker 6: about how fast and how frontloaded it's going to be. 375 00:18:22,240 --> 00:18:25,280 Speaker 6: It's also about the terminal rate and where it ends up. 376 00:18:25,840 --> 00:18:28,840 Speaker 6: But generally, when you're in that time period, the steepener 377 00:18:29,280 --> 00:18:31,760 Speaker 6: market reaction is what you're going to get, and you're 378 00:18:31,840 --> 00:18:34,199 Speaker 6: starting from a very flat point of the curve. The 379 00:18:34,240 --> 00:18:37,240 Speaker 6: problem for the steepener trade is timing. You need the 380 00:18:37,280 --> 00:18:40,280 Speaker 6: pace of steepening to overcome the negative cost of carry, 381 00:18:41,040 --> 00:18:44,640 Speaker 6: and fast levered players don't have a lot of patience 382 00:18:44,680 --> 00:18:46,720 Speaker 6: for that negative carry, and so that can, as we're 383 00:18:46,840 --> 00:18:50,480 Speaker 6: potentially seeing this morning, kind of exacerbate the moves on 384 00:18:50,600 --> 00:18:52,920 Speaker 6: the headline, you know, going back to the birth death 385 00:18:53,000 --> 00:18:56,159 Speaker 6: model and what Bloomberg Economics has been highlighting. Yes, this 386 00:18:56,240 --> 00:18:59,520 Speaker 6: may be overstated in terms of the headline impact, and 387 00:18:59,560 --> 00:19:02,399 Speaker 6: therefore may be overstated in terms of the impact of 388 00:19:02,440 --> 00:19:05,760 Speaker 6: the market move, But the overall message here is that 389 00:19:05,800 --> 00:19:10,160 Speaker 6: this is still a normalizing labor market, but not necessarily 390 00:19:10,160 --> 00:19:12,439 Speaker 6: normalizing to the point where the FED has to deliver 391 00:19:12,560 --> 00:19:14,680 Speaker 6: consistent fifties to secure that. 392 00:19:14,640 --> 00:19:15,880 Speaker 3: Soft landing Muhammaded. 393 00:19:15,880 --> 00:19:18,040 Speaker 4: One thing that you've talked about is that this is 394 00:19:18,080 --> 00:19:22,040 Speaker 4: an overly data dependent and data point dependent federal reserve. 395 00:19:22,119 --> 00:19:24,760 Speaker 4: It seems like everyone expects this FED to still cut 396 00:19:24,800 --> 00:19:27,040 Speaker 4: at least twenty five basis points. Do you think that 397 00:19:27,080 --> 00:19:30,280 Speaker 4: they have moved to a framework that is less data 398 00:19:30,320 --> 00:19:33,600 Speaker 4: dependent if the data actually suggests that the labor market 399 00:19:33,720 --> 00:19:35,520 Speaker 4: is doing just fine. 400 00:19:36,480 --> 00:19:38,760 Speaker 1: Yes, I think that moving that way. It started with 401 00:19:39,000 --> 00:19:44,240 Speaker 1: Chairman pals jackson whole speech, it continued in his press conference, 402 00:19:44,560 --> 00:19:47,280 Speaker 1: and I think they are moving away from being overly 403 00:19:47,359 --> 00:19:51,280 Speaker 1: data dependent to also trying to have a forward looking 404 00:19:51,359 --> 00:19:53,800 Speaker 1: view of where the economy is going to settle. 405 00:19:54,960 --> 00:19:57,600 Speaker 5: Muhammad, does next week's CPI report matter to you at all? 406 00:19:57,640 --> 00:19:57,880 Speaker 4: Now? 407 00:20:00,280 --> 00:20:02,439 Speaker 1: It matters me to me and Marie and the one 408 00:20:02,440 --> 00:20:04,480 Speaker 1: that's going to matter even more to one after that. Yes, 409 00:20:04,600 --> 00:20:07,320 Speaker 1: it does matter to me. I think Jeff is absolutely right. 410 00:20:07,400 --> 00:20:11,200 Speaker 1: This notion that the last mile was going to be easy, 411 00:20:11,280 --> 00:20:14,159 Speaker 1: this notion that inflation is dead, this notion that we 412 00:20:14,280 --> 00:20:19,160 Speaker 1: are mission accomplished, came way too early, and I think 413 00:20:19,160 --> 00:20:23,840 Speaker 1: we're going to see from core inflation why certain parts 414 00:20:23,880 --> 00:20:27,680 Speaker 1: we made sticky. Meanwhile, headline inflation is going to start 415 00:20:27,760 --> 00:20:31,960 Speaker 1: moving up after a after not this month, but the 416 00:20:32,000 --> 00:20:36,040 Speaker 1: next month. So yes, these CPI points still matter, and 417 00:20:36,119 --> 00:20:38,320 Speaker 1: of course they matter a great deal to the American people. 418 00:20:38,800 --> 00:20:40,520 Speaker 2: Mohammi talked to me about what kind of numbers do 419 00:20:40,520 --> 00:20:42,840 Speaker 2: you think we have to get accustomed with. Are we 420 00:20:42,920 --> 00:20:46,080 Speaker 2: talking about stabilizing at these levels for inflation or are 421 00:20:46,080 --> 00:20:48,560 Speaker 2: we talking about the real risk of reacceleration given what's 422 00:20:48,560 --> 00:20:51,000 Speaker 2: happening in the commodity market, what we've seen out of 423 00:20:51,080 --> 00:20:53,760 Speaker 2: China and the easing has come from the Federal Reserve. 424 00:20:53,840 --> 00:20:55,960 Speaker 2: But after a jobs report like this, some people are 425 00:20:55,960 --> 00:20:59,200 Speaker 2: think it has come prematurely. How real is that reacceleration 426 00:20:59,280 --> 00:20:59,919 Speaker 2: risk for inflation? 427 00:21:01,520 --> 00:21:04,119 Speaker 1: So to the extent we have an equilibrium rate of 428 00:21:04,160 --> 00:21:07,359 Speaker 1: inflation for today's economy, it would be two and a 429 00:21:07,440 --> 00:21:10,920 Speaker 1: half to three percent if the FED had the option, 430 00:21:11,040 --> 00:21:13,399 Speaker 1: which it does not. If the FED had the option 431 00:21:13,520 --> 00:21:16,600 Speaker 1: to set a new inflation target, that is where it 432 00:21:16,640 --> 00:21:22,200 Speaker 1: would make sense. We will settle, I suspect somewhere towards 433 00:21:22,240 --> 00:21:26,159 Speaker 1: the upper end of that, because, as Jeff said, financial 434 00:21:26,200 --> 00:21:31,080 Speaker 1: conditions are extremely loose. There are two factories of credit, 435 00:21:31,200 --> 00:21:34,120 Speaker 1: two factories of liquidity. You heard it in the interview 436 00:21:34,119 --> 00:21:37,879 Speaker 1: with Mark Rowan. There is not just the official factory 437 00:21:38,200 --> 00:21:41,199 Speaker 1: which has produced a ton of this, but there's the 438 00:21:41,280 --> 00:21:44,760 Speaker 1: private factory that's getting more and more efficient and producing 439 00:21:44,960 --> 00:21:51,359 Speaker 1: more and more credit and leverage and looser conditions. And 440 00:21:51,520 --> 00:21:54,159 Speaker 1: we are living in a world where these two factories 441 00:21:54,240 --> 00:21:57,840 Speaker 1: are still operating at quite a high level. So there 442 00:21:57,920 --> 00:21:59,920 Speaker 1: is a risk, John, that we will settle towards the 443 00:22:00,119 --> 00:22:02,000 Speaker 1: higher end of that two and a half to three percent. 444 00:22:02,640 --> 00:22:05,720 Speaker 4: Stephanie, I'm struck by the fact that given this report, 445 00:22:06,000 --> 00:22:08,720 Speaker 4: we've all been thinking about organized labor working on the 446 00:22:08,760 --> 00:22:12,000 Speaker 4: dock workers straw strike with the Boeing strike as being 447 00:22:12,040 --> 00:22:16,160 Speaker 4: sort of at the end of labor having the leverage. 448 00:22:16,640 --> 00:22:18,840 Speaker 4: Is that a wrong way to look at this, especially 449 00:22:18,840 --> 00:22:21,280 Speaker 4: given the fact that wages went up. Is it actually 450 00:22:21,359 --> 00:22:25,679 Speaker 4: that employees have still the upper hand when it comes 451 00:22:25,720 --> 00:22:28,760 Speaker 4: to demanding work and demanding to be paid. 452 00:22:29,280 --> 00:22:31,000 Speaker 7: I don't think that's an entirely fair way to look 453 00:22:31,040 --> 00:22:32,359 Speaker 7: at it, in the sense that if you look at 454 00:22:32,440 --> 00:22:35,159 Speaker 7: ECI for union versus non union workers, there's a clear 455 00:22:35,240 --> 00:22:39,760 Speaker 7: lag from union to from non union to union, in 456 00:22:39,800 --> 00:22:43,119 Speaker 7: that you get a big acceleration in non union wages 457 00:22:43,160 --> 00:22:44,960 Speaker 7: and then unions tend to follow. I think this is 458 00:22:45,000 --> 00:22:47,680 Speaker 7: really just a catchup, but a catchup from a really 459 00:22:47,720 --> 00:22:50,560 Speaker 7: big acceleration in wages. So this is kind of a 460 00:22:50,600 --> 00:22:53,160 Speaker 7: lagging indicator. The wage number, yes, it was point four, 461 00:22:53,200 --> 00:22:55,520 Speaker 7: but it was if you look at the three digits, 462 00:22:55,520 --> 00:22:57,720 Speaker 7: it was point three sixty nine. So yeah, it was strong, 463 00:22:57,760 --> 00:23:00,000 Speaker 7: but it you know, if you look at an average page, 464 00:23:00,080 --> 00:23:01,840 Speaker 7: you're still running a little bit below four percent, in 465 00:23:01,880 --> 00:23:04,000 Speaker 7: which case it's not really concerning. 466 00:23:04,560 --> 00:23:06,359 Speaker 2: Final question for you all, and I'm going to say 467 00:23:06,359 --> 00:23:07,480 Speaker 2: it up front, So you all don't have to, and 468 00:23:07,520 --> 00:23:09,320 Speaker 2: you can answer with just one word. 469 00:23:09,480 --> 00:23:10,120 Speaker 3: There's a lot that. 470 00:23:10,080 --> 00:23:12,880 Speaker 2: Can still change in the next month, but as things stand, 471 00:23:13,320 --> 00:23:15,680 Speaker 2: your best guest for November seventh, for this federal Reserve, 472 00:23:15,680 --> 00:23:18,359 Speaker 2: and these are the choices, fifty twenty five or no 473 00:23:18,480 --> 00:23:21,840 Speaker 2: cut at all. First to you, Jeff Rosenberg. 474 00:23:22,400 --> 00:23:23,520 Speaker 6: I'm gonna go with twenty five. 475 00:23:23,600 --> 00:23:28,520 Speaker 2: Gentlemen, Mohammad twenty five, Stephanie twenty five. Let's see how 476 00:23:28,560 --> 00:23:31,320 Speaker 2: much changes in the next month or so. This is 477 00:23:31,359 --> 00:23:35,719 Speaker 2: the Bloomberg Surveillance podcast, bringing you the best in markets, economics, 478 00:23:35,760 --> 00:23:38,680 Speaker 2: angiot politics. You can watch the show live on Bloomberg 479 00:23:38,720 --> 00:23:41,879 Speaker 2: TV weekday mornings from six am to nine am Eastern. 480 00:23:42,200 --> 00:23:45,560 Speaker 2: Subscribe to the podcast on Apple, Spotify or anywhere else 481 00:23:45,560 --> 00:23:48,240 Speaker 2: you listen, and as always, on the Bloomberg Terminal and 482 00:23:48,280 --> 00:23:49,520 Speaker 2: the Bloomberg Business app.