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Speaker 1: Yeah, Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane.

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Speaker 1: Daily we bring you insight from the best in economics, finance, investment,

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Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud,

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Speaker 1: Bloomberg dot Com, and of course on the Bloomberg. We're

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Speaker 1: on a Dave Richard Clarata with us Michael McKee, of

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Speaker 1: course doing Yoman's duty today on our economic coverage of

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Speaker 1: Chairman Paul Richard Clarida. Should that should Governor Paul is

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Speaker 1: nominee be quote unquote concerned about a flat yield curve?

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Speaker 1: I mean, is that even in the orbit of monkey

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Speaker 1: MUCKs like you, I would not be concerned about a

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Speaker 1: flat yel curve. Right now, through the wonders of the Bloomberg,

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Speaker 1: I have on my screen that tend to is curve.

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Speaker 1: So the difference between the ten ure yield and the

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Speaker 1: two year yield. And I've looked at the two prior

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Speaker 1: rate hike cycles in the nineties and the two thousands.

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Speaker 1: The curve right now is a slope of sixty basis points.

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Speaker 1: That means tenure yields are sixty bits above two year yields. Uh,

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Speaker 1: that is pretty flat. But that the curve was as

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Speaker 1: flat as this back in two thousand and five, about

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Speaker 1: a year after that cycle began, And it was about

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Speaker 1: like this in two thousand and six, about two years

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Speaker 1: after that cycle began. So this is exactly what you'd

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Speaker 1: expect for a yield curve in about the middle point

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Speaker 1: of a rate hike cycle. Now where I would get

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Speaker 1: quite concerned about a yeld curve, uh is if it inverts,

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Speaker 1: So if the tenure yield falls below the two year yield. Historically,

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Speaker 1: inverted yiel curves are rare, and when they happen, almost

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Speaker 1: always within twelve to fifteen months, you have a recession.

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Speaker 1: So I would distinguish between a flat curve in the

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Speaker 1: middle of a rate hike cycle from an absolutely inverted curve.

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Speaker 1: I think they're two different beasts. That's one thing where

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Speaker 1: zero is really important. Right now, the curve is flat,

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Speaker 1: but it's about as flat as I think you'd expect

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Speaker 1: given where we are in the FED cycle. This is

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Speaker 1: uh uh, something that has captured the attention of Wall Street.

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Speaker 1: I'm getting so many notes on the yield curve. Everybody's

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Speaker 1: talking about it flattening. There does seem to be a

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Speaker 1: general view that UM, and I know that you teach

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Speaker 1: your students never to say these words this time is different,

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Speaker 1: but that there is a little bit of something different

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Speaker 1: going on this time because you've you've got a change

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Speaker 1: in the way UM people are looking at inflation, UH,

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Speaker 1: and a change in the whole idea of UM what

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Speaker 1: the neutral rate will be. I mean you lower the

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Speaker 1: neutral rate. That obviously you're not going to bid up

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Speaker 1: the long end as much. And that wasn't factored in before.

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Speaker 1: I I as you know, because I've spent a lot

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Speaker 1: of time and bloom, we're talking about it there. I'm

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Speaker 1: definitely in the camp and have been for three years

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Speaker 1: of a new neutral that's what we've called it in

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Speaker 1: our writings that at PIMCO. SO and the FAT now

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Speaker 1: embraces this idea of a new neutral. So what so So, Mike,

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Speaker 1: what the new neutral tells me is that the overall

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Speaker 1: level of rates is lower. That means short rate the

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Speaker 1: FED will end up at a lower destination. That means

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Speaker 1: bond yields will be lower than they were in the

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Speaker 1: prior decades. But it doesn't have as much to say

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Speaker 1: I think about the slope of the curve. So average

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Speaker 1: rates are lowered in new neutral world, but the curve

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Speaker 1: I think, on average will have a positive slope because

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Speaker 1: of the term premium that on average investors need to

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Speaker 1: earn to take on that interest rate of duration. So

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Speaker 1: I repeat, I'm not I don't think this time is different.

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Speaker 1: I think if we get an inverted curve, and obviously

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Speaker 1: I'm not predicting that, but eventually, if we get an

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Speaker 1: inverted curve, that is a warning sign I'd pay attention to.

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Speaker 1: We We saw Richard Clarative Dr Olarrion vetted his vice chairman.

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Speaker 1: I don't know ten days ago. I guess it's Richard

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Speaker 1: Clarat will be vetteded his vice chairman. Do we need

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Speaker 1: a monetary PhD as vice chairman? If we enjoyed Chairman Powell, well,

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Speaker 1: thank you. I I do think. Uh. First of all,

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Speaker 1: I think Jerome Pal's an excellent appointment. I don't think

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Speaker 1: you need to have a PhD to be a FED

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Speaker 1: FED chairman, so let me get that out of the way.

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Speaker 1: I do do. I do think the modern monetary policy,

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Speaker 1: for better or worse, has a substantial analytic and model

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Speaker 1: based component. So I think it will be important for

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Speaker 1: the FED to have some members of the Board of

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Speaker 1: governors who have that expertise UH and and and experience.

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Speaker 1: Whether or not it needs to be the vice chair

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Speaker 1: obviously the other factors UH at at work. I don't

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Speaker 1: think you need seven PhD s on the border governors

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Speaker 1: to do monetary policy, but you probably don't want zero either,

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Speaker 1: which is where we will be after Janet Yellen leaves.

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Speaker 1: Actually I think lele has a PhD, but she has

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Speaker 1: spent her entire career pretty much in politics rather than

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Speaker 1: practicing economics. Is a very good economist, but uh, would

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Speaker 1: you expect would it be better? Because I guess you

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Speaker 1: can't say the word expect with Donald Trump in the

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Speaker 1: White House, But would it be better to have someone

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Speaker 1: with a uh broad background who is not though John Taylor,

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Speaker 1: who wants to do things completely different? Uh? For a J.

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Speaker 1: Powell who is not a PhD economist In other words,

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Speaker 1: with their real real tension with somebody who wants to

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Speaker 1: change the FED when they talk about a wars or

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Speaker 1: a tailor as vice chair. I do think that the

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Speaker 1: FED and other central banks, because communication and guides and

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Speaker 1: so so important, do need a framework that both that

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Speaker 1: they understand it, that they can communicate. So I think

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Speaker 1: having a governor, having a vice chair who embraces that

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Speaker 1: framework and can also see its shortcomings is essential. I'm

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Speaker 1: not going to get into particular names of particular folks.

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Speaker 1: Are both I think, uh, you know, I've learned a

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Speaker 1: lot from both of them. But but I do think,

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Speaker 1: as I mentioned a moment ago, uh, that you don't

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Speaker 1: need all seven governors to have that background. But I

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Speaker 1: think you need more than zero. I think Clarida l

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Speaker 1: Arian on the board and we move this radio to

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Speaker 1: the FED. We just do it from there, joining his

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Speaker 1: life from the Ecles building. You know, we we we

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Speaker 1: know we could have windows, we could have a studio

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Speaker 1: the windows on the outside and watch grass grow Constitution

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Speaker 1: Avenue which someone say me excited and what's in the hallways, Richard, Clarida,

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Speaker 1: thank you so much, grank you for having me with PIMPCO.

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Speaker 1: Tuesday is not a waste of a day. When the

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Speaker 1: O E c D comes out with their outlook in

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Speaker 1: Paris is the wonderful Katherine Man Catherine. They always see

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Speaker 1: Michael McKee's here as well, smart smarter questions than me, Catherine.

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Speaker 1: When you look at a twenty five or forty page

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Speaker 1: power point, what's the single message. It stands out for

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Speaker 1: the O e c. D. Seen is not going to

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Speaker 1: be as good as seventeen, And what are you gonna

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Speaker 1: do about it? Wait minute, you about Well, will sort

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Speaker 1: of be like a little bit different from twenty seventeen.

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Speaker 1: But the point is, you know, seventeen is where we are.

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Speaker 1: This is a really good year. Take the time when

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Speaker 1: you got win under your wings to do the kinds

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Speaker 1: of reforms that are necessary to uh to be good

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Speaker 1: in and by the way, business has to do the

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Speaker 1: same thing. This is a good year for them. They

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Speaker 1: should be putting into place something that will make them

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Speaker 1: a leader in anybody around the world doing that. Um, well,

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Speaker 1: I think everybody's doing a little bit, but they're not

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Speaker 1: doing very much. There's an awful lot of reform fatigue

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Speaker 1: uh and arguments that we don't need to do anything anymore. Look,

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Speaker 1: seventeen is great, so we you know, we can close

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Speaker 1: up shop at that policy reform shop and go home.

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Speaker 1: And the answer is is that we're in an environment

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Speaker 1: where where this much greater demand for structural reforms. I mean,

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Speaker 1: we've got all this digital stuff happen. We still have

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Speaker 1: a lot of trade, globalization and changes in consumer preferences

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Speaker 1: are really important, and we need to do the reforms

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Speaker 1: to either take advantage of it, which is, you know, businesses,

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Speaker 1: or to avoid UH and mitigate the consequences of adjustment,

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Speaker 1: which is what policy makers should be doing. Well. Then

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Speaker 1: the question, obviously for people in this country I know

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Speaker 1: you're across the fond looking back, is does do the

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Speaker 1: tax bills since there isn't one, but do the tax

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Speaker 1: bills that are being worked on move us in the

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Speaker 1: direction that the O E c D thinks we should go. Well,

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Speaker 1: So the O c D has always argued, um consistently,

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Speaker 1: that the corporate tax rate is too high and inconsistent

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Speaker 1: with sort of UH prospects for growth. But on the

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Speaker 1: other hand, um, the effective tax rate in the United

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Speaker 1: States is quite a bit lower than the statutory So

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Speaker 1: that's the first thing. And then secondly, when we talk

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Speaker 1: about corporate taxes, we talk about corporate tax reform um

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Speaker 1: and it's not clear how much reform areas in these

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Speaker 1: detailed packages. Of course, we haven't seen the details, so

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Speaker 1: we don't know relative to tax cut. And I think

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Speaker 1: that that's a balance that's a very important thing to

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Speaker 1: consider within that is it Mike mentions a tax reform

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Speaker 1: and that are we heavily indebted? I mean, I mean

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Speaker 1: if we look at things are great now, I guess

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Speaker 1: they're supposed to like get control of our debt. Is

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Speaker 1: it isn't always see these statement. Is there a lot

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Speaker 1: of some public debt out there? Well, we've decided to

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Speaker 1: focus on private debt in this report because you know,

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Speaker 1: people have focused on the public debt a lot. Uh,

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Speaker 1: and so we're looking at the private debt and everybody's

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Speaker 1: pretty much got more debt now than they did in

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Speaker 1: two thousand and five. That doesn't even account what happened

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Speaker 1: before the bubble. And you know, when you've got a

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Speaker 1: lot of debt, you're you're exposed to potential shocks, and

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Speaker 1: you're also you're potentially misallocating and so you have productivity

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Speaker 1: consequences in the medium term. So so that's why we

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Speaker 1: wanted to focus on on private debt this time around,

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Speaker 1: because there's a lot more of that actually than there

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Speaker 1: is of the public debt. Um Well, be switched continents

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Speaker 1: and ask about Europe at this point, about Europe and

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Speaker 1: the UK. You have a gloomy forecast for the UK.

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Speaker 1: The general feeling that one gets from the e c

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Speaker 1: B is that things are pretty darn good on the continent.

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Speaker 1: How do you see it? No, I think they're right.

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Speaker 1: I mean the growth rate that we have for seventeen

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Speaker 1: for the euro areas two point four and that's in

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Speaker 1: comparison to one point eight in so so we think

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Speaker 1: Europe is in good shape in teen. But it is

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Speaker 1: also the place that shows the most deterioration through the

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Speaker 1: forecast projection period. And it's because Europe has running off

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Speaker 1: of monetary policy now and running off the fiscal expansion,

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Speaker 1: something that they haven't done for quite a while. So

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Speaker 1: it's doubly important or tripically important for Europe to put

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Speaker 1: into place the reforms that will complete the single market

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Speaker 1: and do something on advantageous on digit digital, create a

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Speaker 1: single market and digital, and of course um handle the

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Speaker 1: banking reforms that are necessary to get rid of the

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Speaker 1: non performing loans and the and the zombie firms. Well,

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Speaker 1: everybody's been worried about Italy. How do you see them

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Speaker 1: going forward? Because they're gonna have an election next year

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Speaker 1: and they've been the country that's been saddled with the

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Speaker 1: worst banking system, the most non performing loans. Are they

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Speaker 1: getting better? Are they getting worse. Are they treading water?

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Speaker 1: So again Italy from comparing which of courses data and

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Speaker 1: seen which is actually mostly data again going from one

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Speaker 1: point one to one point six. So Italy looks pretty

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Speaker 1: good in SV but again it's got things that it

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Speaker 1: needs to do in order to cement that. Um, it's

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Speaker 1: making progress on the it's making progress on the banks

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Speaker 1: banking situation. UM, a little bit faster progress would be

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Speaker 1: a good idea. Well then, and I want to get

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Speaker 1: to this as we look at our next section with

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Speaker 1: your doctor man at the China, the O E c

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Speaker 1: D has to look at Asia. Two. We're seeing dollar differentials,

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Speaker 1: different dollar dynamics between Europe and the US in China, Asia,

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Speaker 1: in the the US. What about the greater Asian sphere?

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Speaker 1: Did they slow down into two thousand nineteen as well?

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Speaker 1: So the issue about that is there too sort of

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Speaker 1: competing UH tensions there. One is the role of Asia

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Speaker 1: as part of the global value chain, where China is

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Speaker 1: at one end, but then the advanced economies in Europe

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Speaker 1: and the United States are at the other end, and

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Speaker 1: so so Asia on the one hand gets the benefit

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Speaker 1: of China and but and and then sales ultimately to

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Speaker 1: um the advanced economies and we have we see that

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Speaker 1: there are a couple of things. UM. One is the

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Speaker 1: probability that there might be a little bit of a

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Speaker 1: bumpy ride as as China addresses its its corporate debt situation.

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Speaker 1: You know, that's that's potentially a little bit bumpy. UM.

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Speaker 1: It has consequences channeling through the real economy through the

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Speaker 1: trade uh. And that will affect Asia UM in a

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Speaker 1: will affect Asia first before it affects anybody else. And

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Speaker 1: then there's also the potential for a little bit of

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Speaker 1: a bogginess in financial market relationships. In that case, they're

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Speaker 1: probably going to jump over Asia and not affect Asia

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Speaker 1: very much. Uh. And it might hit um more financial

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Speaker 1: institutions in the United States and Europe. When you talk

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Speaker 1: about Asia, are you when you look at Asia, are

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Speaker 1: you factoring in um any kind of trade issues with

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Speaker 1: the United States, Because there's a lot of talk about

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Speaker 1: what the president may do after the first after tax

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Speaker 1: reform gets out of the way. He's got this steel

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Speaker 1: tariff thing pending, etcetera. So uh, we don't make judgments

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Speaker 1: about policies that haven't yet been at least uh, you know,

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Speaker 1: kind of put on the table, so that we have

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Speaker 1: at least some idea of what's going on. Um. The

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Speaker 1: I think, you know, to one extent, what what the

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Speaker 1: president might want to do is to focus on China

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Speaker 1: and not have anybody else get affected by it. But um,

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Speaker 1: you know there's a lot of rhetoric, uh, and then

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Speaker 1: the policies um seem to be different. So you know,

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Speaker 1: we really have to see, wait and see something actually

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Speaker 1: being put on the table. From your perspective, quickly at O. E. C. D.

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Speaker 1: Is this a neo mercantilist President of the United States,

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Speaker 1: neo mercantilist. So well, I think that there's um, you know,

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Speaker 1: trade is very complex these days with global value chains.

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Speaker 1: It's not just guns for butter or oil, you know,

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Speaker 1: wheat and wine kind of back in the old Riccardian

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Speaker 1: days and that complexity, and not to mention which you know,

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Speaker 1: the United States is a big producer of services, very

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Speaker 1: important ingredient, a service sector in effect producing a current

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Speaker 1: account surplus or trade surplus. So you know, it's a complex,

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Speaker 1: very complex set of issues that that hopefully all of

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Speaker 1: those issues are going to be incorporated in any kind

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Speaker 1: of trade policy as it is put into place. Katherman,

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Speaker 1: thank you so much, greatly appreciate it. She's chief Economists

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Speaker 1: for the O E. C. D. And we say good

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Speaker 1: morning in Boston and brandeis I want to get this

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Speaker 1: question with Diane Swunk of Chicago and before Michael McKee

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Speaker 1: dies in with more sane questions. Diane off of historic

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Speaker 1: US sixty six near the Argo National Laboratory where Enrico

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Speaker 1: Fermi held court, is I fifty five in the worst

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Speaker 1: bridge in Illinois. It is an IF in Lamont Road.

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Speaker 1: I've got that from good engineering sources. Within all this

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Speaker 1: Washington policy. Why can't we once and for all fix

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Speaker 1: the other one thousand I fifty five and Lamot Road

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Speaker 1: bridges that we desperately need to fix. Well, this is

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Speaker 1: you've asked the million dollar question or trillion dollar questions.

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Speaker 1: When you trillion trillions, I mean robots aren't going to

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Speaker 1: build the bridge. People build bring and we don't have

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Speaker 1: enough people to build the bridge either. But we need

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Speaker 1: to fix them. And you know that we're one bridge

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Speaker 1: catastrophe away from having to deal with this problem. And

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Speaker 1: that's really serious. The other issues we know that actually

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Speaker 1: infrastructure spending had the payback over a long period of

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Speaker 1: time where boost productivity, and it's undermining our productivity today.

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Speaker 1: So it seems to have gotten lost in translation. The

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Speaker 1: infrastructure spending an investment we need in this country, just

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Speaker 1: in our basic infrastructure, and I mean basic infrastructure, roads

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Speaker 1: and bridges. The problem that well, there's two problems. One

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Speaker 1: there is no infrastructure plan, there is none. And the

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Speaker 1: other problem is um, if you're going to cut taxes

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Speaker 1: massively and revenue, you don't have any money for infrastructure,

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Speaker 1: right even though you're adding over two trillion according to

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Speaker 1: some scoring of the tax plans, depending on which tax

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Speaker 1: plans you look at and which they're moving all the time.

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Speaker 1: It's a moving target. But we're well over a trillion

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Speaker 1: to two trillion, maybe even two point two trillion adding

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Speaker 1: to the deficit over the next ten years, and we're

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Speaker 1: not doing a single set for infrastructure. The other issue

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Speaker 1: in this tax bills it cuts back on private activity

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Speaker 1: bonds and the whole talk well UM basically to oversimplify

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Speaker 1: cities or localities. Anybody who's issuing unibonds can guarantee UM

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Speaker 1: a part of a bond issued by a private authority

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Speaker 1: UH to to build something. It used this a lot

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Speaker 1: for things like football stadiums and stuff like that. But

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Speaker 1: a lot of what they were talking about DAN for

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Speaker 1: infrastructure was public private partnerships, right, and there's eliminates set ability.

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Speaker 1: I mean, it's it makes it more expensive. And this

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Speaker 1: is this is you know, the issues that we're dealing with.

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Speaker 1: The US economy is doing better. It's not perfect. It's

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Speaker 1: still very uneven. We know that UM wages are very uneven.

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Speaker 1: Income inequalities are still varying even but we're improving. That's

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Speaker 1: the good news. We've got a tail in going into

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Speaker 1: the holiday season. We're going to see the best year

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Speaker 1: of a year game since which is off the very

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Speaker 1: soft year. We've got people actually spending discretionary spending again,

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Speaker 1: actually able to afford to travel too and away from

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Speaker 1: their loved ones, which you know, depending on where you

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Speaker 1: are in your family, that is a nice option to have.

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Speaker 1: These are all very important things that are happening in

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Speaker 1: the economy. We're spending more on upgrading our homes. We're

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Speaker 1: not buying as many homes as we could be buying.

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Speaker 1: Home sales um although new home sales popped a bit

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Speaker 1: yesterday and are elevated, they're still low relative to the past.

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Speaker 1: People are adding on their buying furniture, they're remodeling. That's

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Speaker 1: all good news, um, but you add on top of

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Speaker 1: this this complex tax cut stuff, and you do want

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Speaker 1: to improve our compere activeness globally, but we're really just

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Speaker 1: not thinking about these things in a long term horizon

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Speaker 1: that is more than getting a win for one party

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Speaker 1: or another. Let's let's talk about this in terms of

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Speaker 1: the overall account. I get your views on the economy now.

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Speaker 1: Bill Dudley said last night that we need tax reform,

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Speaker 1: we need to fix the tax but we don't need

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Speaker 1: additional stimulus right now. Do you agree that exactly? And

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Speaker 1: that's I mean, that's the key point. So the economy

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Speaker 1: is in good shape, is what you're saying. The economy

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Speaker 1: is in good shape. You want to save some dry powder,

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Speaker 1: and certainly Bill Dudley would be one of the people

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Speaker 1: most concerned about this is dry powder form when the

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Speaker 1: economy stumbles again, and we don't have a lot of

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Speaker 1: extra dry powder in expanding our deficits when the economy

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Speaker 1: is bad. But that's when tax cuts without offsetting um

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Speaker 1: cuts elsewhere in the budget or revenue neutral kinds of

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Speaker 1: tax reforms come into play. So what we're seeing is

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Speaker 1: we need reform to increase efficiency in the US economy.

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Speaker 1: We don't need to add to the death. Can I

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Speaker 1: ask a question of Mike McKee, is that my real year? Mike?

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Speaker 1: Mike helped me and Diane and all of our listeners,

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Speaker 1: including tax Tucker, John's changing his name to tax Tucker.

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Speaker 1: Legislation goes through. But but Mike, every interview, people say

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Speaker 1: this bill is challenged. Explain again the urgency of Republican

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Speaker 1: leadership to cram this thing down US roads by Tuesday, today, Thursday,

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Speaker 1: and then whenever the committee is after that. I can't

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Speaker 1: explain the urgency to get this done. They set an

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Speaker 1: end of the year deadline or a Christmas deadline. It

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Speaker 1: makes no sense because this is so complicated. The only

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Speaker 1: thing that people figure is that they're trying to get

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Speaker 1: this through before people know what's in it, before any

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Speaker 1: political opposition builds to it, and ahead of the Alabama

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Speaker 1: Senate election, which could complicate things. So uh, that seems

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Speaker 1: to be the the urgency. They could do it this

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Speaker 1: Republicans still going to control the Senate in two thousand eighteen.

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Speaker 1: They could do it next year. But this is a

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Speaker 1: political imperative more than an economic one is. And that's

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Speaker 1: the real issue is that, you know, we need to

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Speaker 1: think of what is what is happening in our economy today,

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Speaker 1: what do we need today, and anticipate what we need

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Speaker 1: going forward. Why do we need tax reform because our

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Speaker 1: tax code is a mess. We need to reform it,

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Speaker 1: make it simpler, broaden the base. These are all like

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Speaker 1: sort of almost cliche words, but it seems that they've

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Speaker 1: been lost on Washington. We also need to think about infrastructure.

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Speaker 1: That would mean we'd have to raise revenue somewhere else

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Speaker 1: to pay for it. That may be doable because it

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Speaker 1: does have a payback to it, but no one is

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Speaker 1: talking in those terms. And I think really might hit

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Speaker 1: the nail on the head when he said they're rushing

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Speaker 1: this through before anyone can find out all the intended

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Speaker 1: and unintended consequences, and that's not how legislation should be done.

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Speaker 1: I'm going to get this out on Twitter as well.

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Speaker 1: Michael McKee Robert posing the hugely respected Robert posing his

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Speaker 1: work in the mutual funded for years in writing the

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Speaker 1: f teach Trump tax bills would push US jobs and

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Speaker 1: factories abroad. That from Bobos the interesting I have to

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Speaker 1: read that. Um, I want to. I want to shift

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Speaker 1: gears because we don't have a few minutes left here

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Speaker 1: with Diane and and talk about the holiday season and

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Speaker 1: retail sales, etcetera. Because you're an expert on that. You've

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Speaker 1: done forecasts for years about this. Unfortunately more years than

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Speaker 1: I like to admit. We're not we're not talking about

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Speaker 1: that because I've been around the same way. I've been

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Speaker 1: reading those for a long time. Um, everybody likes to

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Speaker 1: make a big deal out of Black Friday and Cyber Monday,

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Speaker 1: but they don't really tell us anything about what the

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Speaker 1: holiday may become. I mean, it's interesting Thanksgivings become a

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Speaker 1: day Black Friday sales start the week before Black Friday.

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Speaker 1: It's kind of nonsense. And consumers have grown very savvy.

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Speaker 1: I mean, what we've done is in too you know,

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Speaker 1: the chagrin of retailers. Retailers reduced their inventories a bit,

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Speaker 1: and they said they were able to keep margins up.

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Speaker 1: Of course they didn't sell as much because not as

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Speaker 1: much as on sale during Black Friday sales. I think

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Speaker 1: the important issue here as consumers have gotten incredibly savvy

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Speaker 1: and they will wait and play chicken with retailers as

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Speaker 1: long as it takes. And now with the Internet, it

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Speaker 1: used to be if we had a bad snow storm

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Speaker 1: right before that Christmas holiday, it would ruin the Christmas holiday. Well,

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Speaker 1: people can now order from home during the Christmas holiday,

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Speaker 1: but they can also game out online where the best

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Speaker 1: deals are. And I think that's one of the interesting

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Speaker 1: issues is that we've seen that shift in the ability

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Speaker 1: and how savvy consumers are and they've continued to get

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Speaker 1: This has been going on for decades, daytime vehicle sales

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Speaker 1: to when there's the best deals in vehicle sales. They've

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Speaker 1: learned how to, you know, play chicken with the retailers.

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Speaker 1: I think the other important issue is the shift that

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Speaker 1: we're seeing into discretionary spending. I can emphasize that enough

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Speaker 1: because it's been absent for so long. The ability to travel,

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Speaker 1: ability to go on vacations, the ability to drive to

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Speaker 1: a destination, to book a hotel. In fact, the weekend

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Speaker 1: rates in some of the most popular cities places like

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Speaker 1: New York are now exceeding the weekday rates, which means

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Speaker 1: the senior citizens that are traveling and people can afford

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Speaker 1: to travel on a weekend you're not getting the discount

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Speaker 1: you want to do because it's as much a premium

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Speaker 1: as a weekday travel as a business traveler. That's good

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Speaker 1: news for the economy. Thank you so much, wide Ranging

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