1 00:00:02,400 --> 00:00:06,760 Speaker 1: Bloomberg Audio Studios, Podcasts, radio News. 2 00:00:11,680 --> 00:00:15,480 Speaker 2: This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along 3 00:00:15,520 --> 00:00:18,720 Speaker 2: with Lisa Bromwitz and Amerie 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 --> 00:00:35,880 Speaker 2: Terminal and the Bloomberg Business app. 10 00:00:36,400 --> 00:00:40,520 Speaker 3: Stocks hovering at fresh records as investors await the first 11 00:00:40,600 --> 00:00:43,760 Speaker 3: policy decision under a new regime. Victoria Fernandez of Cross 12 00:00:44,040 --> 00:00:47,640 Speaker 3: Global Investments writing, we believe there is still room to 13 00:00:47,720 --> 00:00:50,000 Speaker 3: run even if we get higher rates. As long as 14 00:00:50,000 --> 00:00:53,519 Speaker 3: earnings and margins remain strong, the market can digest a 15 00:00:53,600 --> 00:00:55,080 Speaker 3: rotation of leadership. 16 00:00:55,280 --> 00:00:56,440 Speaker 4: Victoria joins us. 17 00:00:56,480 --> 00:00:59,640 Speaker 3: Now, Victoria, where else do you see this market having 18 00:00:59,640 --> 00:01:00,480 Speaker 3: more room to run? 19 00:01:01,680 --> 00:01:01,880 Speaker 5: Yeah? 20 00:01:01,920 --> 00:01:04,000 Speaker 6: Well, I think when you look at the rotation that 21 00:01:04,040 --> 00:01:06,679 Speaker 6: we've seen, we saw those high momentum, those high beta 22 00:01:06,760 --> 00:01:09,920 Speaker 6: names really come back over the last week, and so 23 00:01:10,200 --> 00:01:12,480 Speaker 6: other areas have started to pick up a little bit. 24 00:01:12,520 --> 00:01:15,280 Speaker 6: You saw it in some transportation, you saw it in healthcare, 25 00:01:15,680 --> 00:01:17,960 Speaker 6: you saw it in some energy names. Obviously we've seen 26 00:01:18,080 --> 00:01:20,880 Speaker 6: energy names come back a little bit based on the 27 00:01:21,160 --> 00:01:24,000 Speaker 6: information of the last few days, but it's still not 28 00:01:24,080 --> 00:01:26,800 Speaker 6: in an over sold position. I think at this point 29 00:01:26,880 --> 00:01:29,560 Speaker 6: in time, what you're looking for is maybe. 30 00:01:29,200 --> 00:01:31,600 Speaker 7: Not necessarily specific sectors. 31 00:01:31,680 --> 00:01:33,880 Speaker 6: The names that are going to be able to run 32 00:01:34,240 --> 00:01:37,759 Speaker 6: are those that have those positive factors like good free 33 00:01:37,800 --> 00:01:41,959 Speaker 6: cash flow, good profitability, like return on equity, looking at 34 00:01:42,000 --> 00:01:45,479 Speaker 6: strong earnings yield right, not just earnings growth, those high 35 00:01:46,200 --> 00:01:49,360 Speaker 6: growth names, but relating that to pe So, I do 36 00:01:49,400 --> 00:01:52,240 Speaker 6: think there's some opportunities within all of the sectors. But 37 00:01:52,320 --> 00:01:54,840 Speaker 6: on a broad base, you are seeing some of those 38 00:01:54,880 --> 00:01:57,200 Speaker 6: that have been hardest hit that are now in up 39 00:01:57,240 --> 00:01:59,840 Speaker 6: trends starting to make a comeback here, and I think 40 00:01:59,880 --> 00:02:01,960 Speaker 6: that's important when we look at the breadth of this 41 00:02:02,080 --> 00:02:04,960 Speaker 6: market and how far this bull market can actually go. 42 00:02:05,160 --> 00:02:07,200 Speaker 8: Well, Victoria, one of the things that you point out 43 00:02:07,200 --> 00:02:10,600 Speaker 8: that one should be cautious on. It's clearly not outright 44 00:02:10,960 --> 00:02:14,000 Speaker 8: bearish by any means, but is the consumer. What are 45 00:02:14,000 --> 00:02:15,960 Speaker 8: you seeing that's leading you just to be a little 46 00:02:16,000 --> 00:02:18,760 Speaker 8: bit more tepid about the state of the American consumer. 47 00:02:19,720 --> 00:02:22,440 Speaker 6: Yeah, so, you know, Danny, it's really amazing when you 48 00:02:22,480 --> 00:02:25,520 Speaker 6: think of how well the consumer has held up over 49 00:02:25,560 --> 00:02:28,200 Speaker 6: the last months. As we've been very concerned about things 50 00:02:28,240 --> 00:02:31,240 Speaker 6: that are happening, and you're looking at wages that are 51 00:02:31,240 --> 00:02:35,639 Speaker 6: really stagnating, You're looking at the difference between real wage 52 00:02:35,680 --> 00:02:40,040 Speaker 6: growth and real consumption that continues to widen as savings 53 00:02:40,120 --> 00:02:42,800 Speaker 6: continues to come down. We had a little bit of 54 00:02:42,800 --> 00:02:45,880 Speaker 6: improvement in consumer confidence, but it's still very low. 55 00:02:45,919 --> 00:02:47,520 Speaker 7: We're back below levels that. 56 00:02:47,480 --> 00:02:50,440 Speaker 6: We saw in COVID on some of those things and 57 00:02:50,639 --> 00:02:51,880 Speaker 6: small businesses. 58 00:02:52,000 --> 00:02:54,480 Speaker 7: That's to me a big yellow flag. 59 00:02:54,800 --> 00:02:57,600 Speaker 6: You've got the NFIB report that came out last week 60 00:02:57,800 --> 00:03:00,639 Speaker 6: that really is not showing tremendous signs of improvement there. 61 00:03:00,680 --> 00:03:04,040 Speaker 6: They are still struggling and still concerned. So as we 62 00:03:04,120 --> 00:03:07,760 Speaker 6: get you know, additional signs of layoffs. We had more 63 00:03:07,840 --> 00:03:11,120 Speaker 6: layoff reports reported this morning. I think that tells us 64 00:03:11,160 --> 00:03:13,880 Speaker 6: the consumer is going to continue to be a little 65 00:03:13,960 --> 00:03:17,520 Speaker 6: bit cautious in what they're doing, especially with some of 66 00:03:17,560 --> 00:03:20,360 Speaker 6: the liquidity efforts we've seen earlier in this year start 67 00:03:20,400 --> 00:03:23,679 Speaker 6: to pull back. Like I said, wages stagnating and savings 68 00:03:23,720 --> 00:03:24,440 Speaker 6: being depleted. 69 00:03:24,720 --> 00:03:27,000 Speaker 8: I mean, we heard the news overnight that Blackrock is 70 00:03:27,000 --> 00:03:29,760 Speaker 8: going to cut about two hundred roles worldwide. I think 71 00:03:29,800 --> 00:03:33,200 Speaker 8: maybe perhaps what you're talking about, But Victoria, what do 72 00:03:33,240 --> 00:03:36,080 Speaker 8: you do with that? I mean, AI is still hot. 73 00:03:36,200 --> 00:03:38,640 Speaker 8: These companies are still spending a lot, even if there 74 00:03:38,680 --> 00:03:42,120 Speaker 8: is some softness in hiring. How do you factor that 75 00:03:42,240 --> 00:03:43,560 Speaker 8: into your trades at the moment. 76 00:03:44,280 --> 00:03:46,720 Speaker 6: Yeah, I think when you're looking at these companies, obviously 77 00:03:46,800 --> 00:03:50,320 Speaker 6: Capex is really driving the productivity that we're seeing, and 78 00:03:50,360 --> 00:03:53,640 Speaker 6: we're hoping productivity is going to be supportive of earnings. 79 00:03:53,840 --> 00:03:55,600 Speaker 6: So I think you go back to some of those 80 00:03:55,640 --> 00:03:58,080 Speaker 6: elements we were talking about a minute ago. I think 81 00:03:58,120 --> 00:04:00,760 Speaker 6: you look at what are the companies that give us 82 00:04:00,800 --> 00:04:03,480 Speaker 6: those high earnings yield. I mean, look at a company 83 00:04:03,520 --> 00:04:06,320 Speaker 6: like a video you can still add to your tech 84 00:04:06,400 --> 00:04:08,800 Speaker 6: positions and videos doing well Fortinet. 85 00:04:09,000 --> 00:04:11,000 Speaker 7: Look at Cybersecurity again. 86 00:04:10,880 --> 00:04:14,200 Speaker 6: High earnings yield, so good earnings growth, but a lower 87 00:04:14,200 --> 00:04:17,960 Speaker 6: pe relative to other companies within its sector and within 88 00:04:18,000 --> 00:04:22,080 Speaker 6: the market. Even Adobe is fitting within that category and 89 00:04:22,120 --> 00:04:25,559 Speaker 6: profitability as well. So I do think there's some things 90 00:04:25,600 --> 00:04:28,039 Speaker 6: you can do within these sectors, and that's how we're 91 00:04:28,040 --> 00:04:30,640 Speaker 6: looking at where to invest for our clients along with 92 00:04:30,720 --> 00:04:33,760 Speaker 6: adding a little bit of that defensive component because of 93 00:04:33,800 --> 00:04:35,920 Speaker 6: our concerns, you can add a little bit to fixed 94 00:04:35,920 --> 00:04:38,600 Speaker 6: income here, because I do think when you look at 95 00:04:38,600 --> 00:04:40,240 Speaker 6: the short end of the curve you guys were talking 96 00:04:40,279 --> 00:04:43,120 Speaker 6: about a minute ago, two years are still over fifty 97 00:04:43,160 --> 00:04:45,719 Speaker 6: basis points above the low end of FED funds, So 98 00:04:46,120 --> 00:04:48,279 Speaker 6: as some of that starts to get priced out, the 99 00:04:48,320 --> 00:04:49,320 Speaker 6: short end of the curve. 100 00:04:49,160 --> 00:04:50,640 Speaker 7: Could be advantageous as well. 101 00:04:50,720 --> 00:04:51,120 Speaker 4: Victoria. 102 00:04:51,120 --> 00:04:54,920 Speaker 3: Of course, we have Kevin Walsh's first meeting as FED chair. 103 00:04:55,000 --> 00:04:57,520 Speaker 3: We just heard from Betsy do former FED governor, says 104 00:04:57,600 --> 00:04:59,120 Speaker 3: Kevin Warsh is going to be a hall and she's 105 00:04:59,240 --> 00:05:01,960 Speaker 3: expecting a complete rewrite of the statement. 106 00:05:02,040 --> 00:05:03,719 Speaker 4: What are you expecting from him? 107 00:05:04,240 --> 00:05:07,200 Speaker 6: Yeah, I was surprised to hear say that she expects 108 00:05:07,200 --> 00:05:08,320 Speaker 6: a complete rewrite. 109 00:05:08,400 --> 00:05:10,440 Speaker 7: I do think we'll see some changes. 110 00:05:10,440 --> 00:05:13,320 Speaker 6: Obviously, everyone's looking to have that easing bias removed, and 111 00:05:13,360 --> 00:05:16,240 Speaker 6: I think that's somewhat given at this point. What I'm 112 00:05:16,279 --> 00:05:18,720 Speaker 6: going to be looking at is what is being told 113 00:05:18,880 --> 00:05:21,640 Speaker 6: around how communication is going to happen in the future. 114 00:05:21,720 --> 00:05:23,800 Speaker 6: I think that is going to be the key point 115 00:05:23,839 --> 00:05:26,320 Speaker 6: that we're looking at here. Does Walsh even give us 116 00:05:26,320 --> 00:05:29,320 Speaker 6: a dot on the SEP. I'll be very curious to 117 00:05:29,320 --> 00:05:30,920 Speaker 6: see if that happens. I don't think he's going to 118 00:05:31,000 --> 00:05:33,640 Speaker 6: replace Myron's dot. Where is he going to land on 119 00:05:33,720 --> 00:05:35,800 Speaker 6: there or does he give us one? And what is 120 00:05:35,839 --> 00:05:38,960 Speaker 6: he going to say around press conferences going forward? How 121 00:05:39,040 --> 00:05:41,279 Speaker 6: much FED governors are going to be able to go 122 00:05:41,360 --> 00:05:44,040 Speaker 6: out and talk about things. To me, it's some of 123 00:05:44,080 --> 00:05:48,039 Speaker 6: those changes, along with potential balance sheet changes that we're 124 00:05:48,040 --> 00:05:48,920 Speaker 6: going to be watching. 125 00:05:49,480 --> 00:05:51,480 Speaker 3: How do you expect the market maybe to test him 126 00:05:51,480 --> 00:05:54,360 Speaker 3: when we see the market test new FED chairs, but 127 00:05:54,560 --> 00:05:58,279 Speaker 3: this is a known figure, he's been around his establishment 128 00:05:58,320 --> 00:05:59,240 Speaker 3: figure for years. 129 00:05:59,279 --> 00:06:01,200 Speaker 4: Do you think the market's going to test him? 130 00:06:02,000 --> 00:06:04,120 Speaker 6: You know they say they're always tested, and we've seen 131 00:06:04,120 --> 00:06:07,400 Speaker 6: it historically. Maybe the test is going to be sitting 132 00:06:07,440 --> 00:06:10,520 Speaker 6: here where we are right now, where labor market is 133 00:06:10,600 --> 00:06:14,120 Speaker 6: actually holding its own somewhat right now, so it's not 134 00:06:14,200 --> 00:06:17,080 Speaker 6: giving you really a case to ease, which we assume 135 00:06:17,120 --> 00:06:19,559 Speaker 6: he's coming in with maybe a little bias towards wanting 136 00:06:19,600 --> 00:06:22,679 Speaker 6: to ease, but at the same time having this sticky inflation. 137 00:06:22,880 --> 00:06:25,159 Speaker 6: I don't think inflation is going to come down just 138 00:06:25,240 --> 00:06:28,520 Speaker 6: because we get a deal signed with Iran potentially over 139 00:06:28,520 --> 00:06:31,040 Speaker 6: the next few weeks. I think some of that inflation 140 00:06:31,200 --> 00:06:33,600 Speaker 6: is really built in there. We saw it even before 141 00:06:33,960 --> 00:06:36,920 Speaker 6: the Iran war started, and I think it will continue. 142 00:06:37,440 --> 00:06:40,160 Speaker 6: I mean, you look at super core CPI over the 143 00:06:40,240 --> 00:06:42,240 Speaker 6: last three months, you're running at a five and a 144 00:06:42,279 --> 00:06:44,800 Speaker 6: half percent rate on an annual basis. 145 00:06:45,040 --> 00:06:46,880 Speaker 7: So I think there's that may be his test. 146 00:06:47,000 --> 00:06:51,120 Speaker 6: We've got that sticky inflation, you know, labor somewhat holding steady. 147 00:06:51,200 --> 00:06:54,120 Speaker 6: So with his easing bias, will he actually be more 148 00:06:54,160 --> 00:06:55,560 Speaker 6: of a hawk. I think that's what we have to 149 00:06:55,560 --> 00:06:56,039 Speaker 6: wait and see. 150 00:06:56,200 --> 00:06:58,560 Speaker 8: Or maybe he already got the test with just a 151 00:06:58,640 --> 00:07:02,599 Speaker 8: market that started to remove from it Victoria. I mean, 152 00:07:02,640 --> 00:07:05,520 Speaker 8: maybe that's a help for him at this moment. I 153 00:07:05,560 --> 00:07:07,640 Speaker 8: was home to Amory about this idea before that. There 154 00:07:07,680 --> 00:07:09,760 Speaker 8: does seem to be sort of a disconnective with the 155 00:07:09,760 --> 00:07:11,440 Speaker 8: bond market and the stock. 156 00:07:11,200 --> 00:07:12,680 Speaker 4: Market has been doing in the recent week. 157 00:07:12,760 --> 00:07:15,640 Speaker 8: Both of them clearly are pricing in something of a 158 00:07:15,680 --> 00:07:18,800 Speaker 8: piece premium, but the equity market seems to have gone further, 159 00:07:19,160 --> 00:07:22,520 Speaker 8: almost at a high when we haven't quitely removed any 160 00:07:22,840 --> 00:07:26,600 Speaker 8: we haven't totally removed the hiking bias from what the 161 00:07:26,600 --> 00:07:29,400 Speaker 8: future's probability you're pricing in from this FED. What do 162 00:07:29,440 --> 00:07:31,800 Speaker 8: you make of that slight disconnect between the two markets. 163 00:07:32,680 --> 00:07:33,600 Speaker 7: Yeah, it's interesting. 164 00:07:33,640 --> 00:07:36,800 Speaker 6: So I actually manage fixed income strategies. I mean, I 165 00:07:36,800 --> 00:07:38,680 Speaker 6: grew up in the fixed income world, and we tend 166 00:07:38,680 --> 00:07:41,120 Speaker 6: to be a little more cautious and the things that 167 00:07:41,120 --> 00:07:42,800 Speaker 6: we do. And I think that's what the bond market 168 00:07:42,840 --> 00:07:45,760 Speaker 6: is doing here. They're saying, look, we're not blowing out, 169 00:07:45,840 --> 00:07:48,480 Speaker 6: you know, anything on credit spreads. We're not saying there's 170 00:07:48,520 --> 00:07:51,200 Speaker 6: this tremendous issue that we have to look at, no 171 00:07:51,360 --> 00:07:55,040 Speaker 6: credit concerns right now. But we also are not so 172 00:07:55,080 --> 00:07:57,840 Speaker 6: sure that inflation is going to come down very quickly. 173 00:07:58,040 --> 00:08:00,200 Speaker 7: We're not so sure that this deal. 174 00:08:00,720 --> 00:08:03,680 Speaker 6: Or memorandum of understanding is going to flow through and 175 00:08:03,760 --> 00:08:07,000 Speaker 6: help earnings. Like the equity market is tending to just 176 00:08:07,120 --> 00:08:10,040 Speaker 6: be all in on that thought process. So I just 177 00:08:10,080 --> 00:08:11,960 Speaker 6: think the bond market is being a little bit more 178 00:08:11,960 --> 00:08:15,119 Speaker 6: cautious to say, wait and show me market right now. 179 00:08:15,640 --> 00:08:17,520 Speaker 7: And that's what the numbers are showing. 180 00:08:17,600 --> 00:08:19,640 Speaker 6: I think as we go over the next couple of weeks, 181 00:08:19,920 --> 00:08:22,400 Speaker 6: if we get more concrete answers, you might see the 182 00:08:22,400 --> 00:08:24,360 Speaker 6: bond market respond a little bit more. 183 00:08:25,080 --> 00:08:28,480 Speaker 2: Stay with us multile impeg, Savannah's coming up off. 184 00:08:28,320 --> 00:08:28,680 Speaker 5: To this. 185 00:08:37,559 --> 00:08:41,240 Speaker 3: Investors awaiting Kevin Walsh's first meeting as Federal Reserve chair 186 00:08:41,600 --> 00:08:44,760 Speaker 3: as warring inflation adds to uncertainty over the direction of 187 00:08:44,840 --> 00:08:48,120 Speaker 3: rates of Torsten's Slock of Apollo writing with geopolitical risk 188 00:08:48,200 --> 00:08:51,080 Speaker 3: easing and FED shair, Kevin Warsh focus on simplifying FED 189 00:08:51,120 --> 00:08:55,320 Speaker 3: communication the number of words and the FOMC statement could 190 00:08:55,360 --> 00:09:00,240 Speaker 3: move down to levels seen under Alan Greenspan. Torsen joins us, Now, okay, 191 00:09:00,240 --> 00:09:01,920 Speaker 3: so a statement comes out, do you need to read 192 00:09:01,960 --> 00:09:03,520 Speaker 3: it first or just do a quick word count? 193 00:09:04,760 --> 00:09:06,640 Speaker 9: We certainly need to read it first because the key 194 00:09:06,640 --> 00:09:09,360 Speaker 9: issue here is, of course what style of communication we're 195 00:09:09,400 --> 00:09:12,520 Speaker 9: going to get, and in particular, what is the forward guidance? 196 00:09:12,559 --> 00:09:14,880 Speaker 9: Is that any forward guidance? Is he going to say 197 00:09:14,880 --> 00:09:17,720 Speaker 9: that we do not like forward guidance. This is still 198 00:09:17,880 --> 00:09:20,440 Speaker 9: a very very unclear area in terms of what is 199 00:09:20,440 --> 00:09:23,280 Speaker 9: the communications style and what is Kevin what was going 200 00:09:23,280 --> 00:09:24,959 Speaker 9: to do in terms of what is he going to say. 201 00:09:24,960 --> 00:09:25,600 Speaker 4: At the press. 202 00:09:25,360 --> 00:09:28,720 Speaker 3: Conference, former Fed Governor Betsy Duke was just on with 203 00:09:28,800 --> 00:09:30,880 Speaker 3: us and she was talking about how there could be 204 00:09:30,920 --> 00:09:33,600 Speaker 3: a complete rewrite of the statement not just a little 205 00:09:33,600 --> 00:09:36,240 Speaker 3: tweak of the easing bias, is that what you're expecting 206 00:09:36,280 --> 00:09:36,720 Speaker 3: as well? 207 00:09:36,840 --> 00:09:39,040 Speaker 9: I think that is something that we should expect. That's 208 00:09:39,080 --> 00:09:41,480 Speaker 9: one of the outcomes we just don't know. So that's 209 00:09:41,520 --> 00:09:43,640 Speaker 9: the reason why the market, of course, has been used 210 00:09:43,679 --> 00:09:47,160 Speaker 9: to having very well anchored expectations around the dot plot. 211 00:09:47,360 --> 00:09:49,800 Speaker 9: The dot plot has been around now for fifteen years. 212 00:09:49,840 --> 00:09:52,559 Speaker 9: Almost the ACP meaning the forecast, been around for almost 213 00:09:52,600 --> 00:09:55,440 Speaker 9: twenty years, so most people in financial markets have grown 214 00:09:55,520 --> 00:09:58,880 Speaker 9: up with very anchored expectations about the economic outlook and 215 00:09:59,000 --> 00:10:01,320 Speaker 9: very anchored expectations about what the fab will do. And 216 00:10:01,400 --> 00:10:04,160 Speaker 9: this discussion about is there an anchor is there not 217 00:10:04,200 --> 00:10:04,720 Speaker 9: an anchor? 218 00:10:05,000 --> 00:10:07,040 Speaker 5: Of course, it's good to have an anchor in the sense. 219 00:10:06,840 --> 00:10:09,120 Speaker 9: That that's clear then where everyone knows where we're going. 220 00:10:09,240 --> 00:10:11,480 Speaker 9: But at the same time, if the world changes, then 221 00:10:11,520 --> 00:10:13,120 Speaker 9: it's not good to have an anchor. And this is 222 00:10:13,120 --> 00:10:15,439 Speaker 9: the debate up on the scale, namely, do we want 223 00:10:15,440 --> 00:10:16,640 Speaker 9: to have an anchor or do we not want to 224 00:10:16,640 --> 00:10:18,640 Speaker 9: have an anchor that will give more flexibility to their 225 00:10:18,720 --> 00:10:19,400 Speaker 9: fund sheet in. 226 00:10:19,440 --> 00:10:20,120 Speaker 4: This very moment. 227 00:10:20,200 --> 00:10:22,120 Speaker 8: If we remove some of that and we remove some 228 00:10:22,200 --> 00:10:25,000 Speaker 8: of the forward guidance, does that not all things considered 229 00:10:25,440 --> 00:10:27,520 Speaker 8: make us a little bit more hawkish because we don't 230 00:10:27,640 --> 00:10:30,319 Speaker 8: have that residual easing bias that had been there before. 231 00:10:31,120 --> 00:10:31,800 Speaker 5: Yes, and next with. 232 00:10:32,240 --> 00:10:34,720 Speaker 9: Particularly important if we begin to think about the discussion 233 00:10:34,760 --> 00:10:37,559 Speaker 9: around rates, because Kevin Wiss has also been focusing on 234 00:10:37,679 --> 00:10:41,160 Speaker 9: shrinking the balance sheet, and a compromise could potentially be that, well, 235 00:10:41,200 --> 00:10:43,400 Speaker 9: we're not going to change much communication on rates, but 236 00:10:43,640 --> 00:10:46,679 Speaker 9: maybe saying that the balancey will be smaller is simplicitly 237 00:10:46,720 --> 00:10:49,280 Speaker 9: also going to be a tightening opposition. So it all 238 00:10:49,360 --> 00:10:52,439 Speaker 9: depends on where the committee stands at where they discuss 239 00:10:52,520 --> 00:10:54,800 Speaker 9: today and what their outcome stations in terms of how 240 00:10:54,840 --> 00:10:57,199 Speaker 9: should they communicate, how are they going to signal to 241 00:10:57,280 --> 00:10:59,360 Speaker 9: your point, Danny, that there is still some problems with 242 00:10:59,440 --> 00:11:01,480 Speaker 9: inflation being too high. We still have a strong label 243 00:11:01,520 --> 00:11:03,240 Speaker 9: market which all argues that the. 244 00:11:03,280 --> 00:11:06,040 Speaker 5: Fed should be tightening financial positions. Do you think this 245 00:11:06,200 --> 00:11:06,400 Speaker 5: is a. 246 00:11:06,440 --> 00:11:09,319 Speaker 8: Chair warsh who will want to sort of galvanize a 247 00:11:09,360 --> 00:11:12,760 Speaker 8: consensus as Powell had, And how challenging will that be? 248 00:11:12,920 --> 00:11:15,760 Speaker 8: If so, if he does want to implement something in 249 00:11:15,880 --> 00:11:17,319 Speaker 8: his words of a regime. 250 00:11:17,160 --> 00:11:20,200 Speaker 5: Change for the Fed, well, Kevin was knows what he's doing. 251 00:11:20,360 --> 00:11:22,160 Speaker 9: But I think what is a very important challenge of 252 00:11:22,200 --> 00:11:25,400 Speaker 9: course for him is that he wants any changes, Basically 253 00:11:25,480 --> 00:11:28,320 Speaker 9: he needs to have the other eleven members on their firm, 254 00:11:28,360 --> 00:11:30,960 Speaker 9: see the voting members on board with whatever he wants 255 00:11:31,000 --> 00:11:33,240 Speaker 9: to change. So that's why it must be clear also 256 00:11:33,320 --> 00:11:35,880 Speaker 9: for him he needs to get them on his side 257 00:11:36,120 --> 00:11:39,160 Speaker 9: in terms of any decision made, because always decisions about 258 00:11:39,200 --> 00:11:42,679 Speaker 9: not only rates, also about qe QT whatever needs to 259 00:11:42,720 --> 00:11:45,040 Speaker 9: be changed in terms of policy, there are twelve voting 260 00:11:45,080 --> 00:11:47,440 Speaker 9: members and they vote about what do they want to change, 261 00:11:47,480 --> 00:11:50,600 Speaker 9: And therefore the number of descents also potentially becomes important. 262 00:11:50,720 --> 00:11:51,839 Speaker 5: When we get the statement. 263 00:11:51,600 --> 00:11:53,959 Speaker 4: Tomorrow, do you think we get less FED speak then? 264 00:11:54,080 --> 00:11:55,640 Speaker 4: With Kevin Warsh as the. 265 00:11:55,640 --> 00:11:59,200 Speaker 9: FED chair, Well, that's really challenging because telling the regional 266 00:11:59,240 --> 00:12:01,600 Speaker 9: FED presidents that they're not allowed to talk more, even 267 00:12:01,640 --> 00:12:03,439 Speaker 9: the governors that they're not to talk more, that's just 268 00:12:03,559 --> 00:12:06,000 Speaker 9: not possible. And given we have had a history now 269 00:12:06,160 --> 00:12:08,680 Speaker 9: of a lot of communication. That means also the market 270 00:12:08,720 --> 00:12:10,839 Speaker 9: has been putting more weight on the fit chair, and 271 00:12:10,920 --> 00:12:12,800 Speaker 9: I think the Markel continues to put most weight on 272 00:12:12,840 --> 00:12:13,319 Speaker 9: the fit chair. 273 00:12:13,400 --> 00:12:15,760 Speaker 3: And don't you think we've seen more of this robust 274 00:12:15,840 --> 00:12:18,880 Speaker 3: debate and communication because of Steve Myron, who was a 275 00:12:18,960 --> 00:12:22,160 Speaker 3: Trump appointee. So it would be pretty odd if Kevin 276 00:12:22,200 --> 00:12:24,679 Speaker 3: moorsh came in and said, actually stopped talking as much. 277 00:12:24,920 --> 00:12:27,280 Speaker 9: Yeah, because we've also had some of course, to your 278 00:12:27,320 --> 00:12:30,000 Speaker 9: point here, we have some quite diverting views in terms 279 00:12:30,040 --> 00:12:31,760 Speaker 9: of the dot plot. And this is of course also 280 00:12:31,800 --> 00:12:34,960 Speaker 9: why the dot plot creates sometimes a bit more confusion. Yes, 281 00:12:35,000 --> 00:12:37,560 Speaker 9: it may be anchoring expectations, but the stain of deviation 282 00:12:37,679 --> 00:12:39,880 Speaker 9: of those expectations also get a lot of attention. In 283 00:12:39,960 --> 00:12:42,480 Speaker 9: other words, how divergent are the views in terms of 284 00:12:42,520 --> 00:12:44,400 Speaker 9: what's going to happen in the future, And we don't 285 00:12:44,440 --> 00:12:46,480 Speaker 9: know which dot is the fit chair dot. So that 286 00:12:46,640 --> 00:12:49,679 Speaker 9: also makes it more complicated in terms of the dots 287 00:12:49,720 --> 00:12:52,080 Speaker 9: coming out actually going to be helpful in the sense 288 00:12:52,080 --> 00:12:54,760 Speaker 9: of anchoring expectations or do they raise more questions about 289 00:12:54,800 --> 00:12:57,280 Speaker 9: the uncertainty of what is a disagreement on the committee. 290 00:12:57,280 --> 00:12:59,640 Speaker 3: There's also debate right now whether or not Kevin Moosh 291 00:12:59,720 --> 00:13:00,839 Speaker 3: put a dot on the plot. 292 00:13:01,480 --> 00:13:03,559 Speaker 9: Yeah, because he could also decide to This would be 293 00:13:03,640 --> 00:13:04,240 Speaker 9: highly unusual. 294 00:13:04,280 --> 00:13:05,480 Speaker 5: Of course, that will of course. 295 00:13:05,360 --> 00:13:06,800 Speaker 9: Decide he could decide to say I'm not going to 296 00:13:06,840 --> 00:13:08,680 Speaker 9: put in a dot. He could also decide to say 297 00:13:08,720 --> 00:13:11,199 Speaker 9: I'm not going to submit my CP forecast, meaning his 298 00:13:11,280 --> 00:13:12,760 Speaker 9: forecast for he thinks the economy is going. 299 00:13:12,800 --> 00:13:14,160 Speaker 5: That would be pretty dramatic. 300 00:13:14,400 --> 00:13:16,079 Speaker 9: So if the goal here for him, remember the most 301 00:13:16,080 --> 00:13:18,320 Speaker 9: important job for the FT chair is really to create 302 00:13:18,400 --> 00:13:22,360 Speaker 9: consensus about a decision. All books written by previous Fetchair 303 00:13:22,360 --> 00:13:24,280 Speaker 9: as they all emphasize that a key part of the 304 00:13:24,400 --> 00:13:27,400 Speaker 9: job is to basically call around to all the voting 305 00:13:27,400 --> 00:13:29,440 Speaker 9: here from C members and also the non voting members 306 00:13:29,559 --> 00:13:32,040 Speaker 9: and say, what do you think should be the outcome 307 00:13:32,080 --> 00:13:34,360 Speaker 9: of this meeting? What is your view and try to 308 00:13:34,440 --> 00:13:36,520 Speaker 9: come up with some solution and try to come up 309 00:13:36,559 --> 00:13:38,719 Speaker 9: with some path where he can get a majority and 310 00:13:38,880 --> 00:13:41,200 Speaker 9: ideally a big majority for the decision that they're going 311 00:13:41,240 --> 00:13:41,520 Speaker 9: to take. 312 00:13:41,640 --> 00:13:44,120 Speaker 8: It's complicated, but does this week's news on Iran a 313 00:13:44,200 --> 00:13:47,000 Speaker 8: deal with memorandum of understanding being designed on fighting make 314 00:13:47,040 --> 00:13:50,040 Speaker 8: things less complicated for Fetchhair. 315 00:13:49,640 --> 00:13:52,839 Speaker 9: Worsh absolutely, because one key issue was that inflation is 316 00:13:52,880 --> 00:13:56,719 Speaker 9: still roughly three percent in COPCE and COCPI, And the 317 00:13:56,760 --> 00:13:58,839 Speaker 9: problem is when inflation is three and the FEDS target 318 00:13:58,960 --> 00:14:01,520 Speaker 9: is two, then we have at least one good news 319 00:14:01,720 --> 00:14:03,640 Speaker 9: is of course that we have energy prices coming down, 320 00:14:03,920 --> 00:14:06,240 Speaker 9: but we still have a fairly strong economy getting tailwins 321 00:14:06,240 --> 00:14:08,200 Speaker 9: from the AI boom, getting tailwins from the one big 322 00:14:08,240 --> 00:14:09,800 Speaker 9: bit of a bill. And we also at the same 323 00:14:09,840 --> 00:14:12,160 Speaker 9: time have up with pressure and inflation from tariff still 324 00:14:12,440 --> 00:14:15,160 Speaker 9: hanging over and putting up with pressure, as several fit 325 00:14:15,240 --> 00:14:16,240 Speaker 9: posts have been suggesting. 326 00:14:16,480 --> 00:14:18,960 Speaker 5: So the key answer to your question is he absolutely 327 00:14:19,080 --> 00:14:21,040 Speaker 5: is absolutely a help. He's helped by the fact that 328 00:14:21,200 --> 00:14:22,760 Speaker 5: enterprise is how moving low. He is help. 329 00:14:22,800 --> 00:14:24,640 Speaker 8: But again to your point to us, and there's inflation 330 00:14:24,800 --> 00:14:28,080 Speaker 8: coming from other parts of this economy. So if he 331 00:14:28,200 --> 00:14:30,320 Speaker 8: wants to lean more dubbish, if he wants to kind 332 00:14:30,320 --> 00:14:32,240 Speaker 8: of like fulfill the promise that he had been talking 333 00:14:32,280 --> 00:14:34,440 Speaker 8: to you from Trump, what points to the parts of 334 00:14:34,480 --> 00:14:36,120 Speaker 8: this economy can he point to you to say we 335 00:14:36,200 --> 00:14:36,760 Speaker 8: can still. 336 00:14:36,600 --> 00:14:37,400 Speaker 4: Get a cut this year. 337 00:14:37,520 --> 00:14:39,360 Speaker 9: Yeah, And the double saute is, of course that when 338 00:14:39,480 --> 00:14:41,800 Speaker 9: energy prices go down, then we spend less money and 339 00:14:41,880 --> 00:14:44,000 Speaker 9: energy and we spend more money on something else. And 340 00:14:44,080 --> 00:14:46,920 Speaker 9: given that literally all high frequency indicators are still very strong, 341 00:14:47,160 --> 00:14:49,280 Speaker 9: still very strong data from the TSA, how many people 342 00:14:49,320 --> 00:14:51,720 Speaker 9: travel on airplanes, still very strong data on the weekly 343 00:14:51,800 --> 00:14:54,280 Speaker 9: data from Redbook on how many people are consuming stuff 344 00:14:54,360 --> 00:14:56,800 Speaker 9: at Walmart and Target and Tjmax. And we also have 345 00:14:56,840 --> 00:14:58,960 Speaker 9: still very strong data when it comes to Hotel Demain 346 00:14:59,120 --> 00:15:01,800 Speaker 9: on a weekly basis. So just it's very built science 347 00:15:01,800 --> 00:15:04,080 Speaker 9: that no signs essentially at this point of the economies 348 00:15:04,120 --> 00:15:07,520 Speaker 9: slowing down, so too high inflation, strong labor market that argues, 349 00:15:07,560 --> 00:15:08,920 Speaker 9: of course for the fit needs to move. 350 00:15:08,880 --> 00:15:10,640 Speaker 5: Towards a more hawkish stands. 351 00:15:11,920 --> 00:15:15,320 Speaker 2: Stay with us, multiple impex Savannah's coming up after this. 352 00:15:24,400 --> 00:15:27,360 Speaker 3: Ariana Salvator, the head of US public policy strategy at 353 00:15:27,360 --> 00:15:29,480 Speaker 3: Morgan Stanley, joins us now for more. Thank you so 354 00:15:29,600 --> 00:15:31,920 Speaker 3: much for joining us. How important do you think it 355 00:15:32,120 --> 00:15:34,560 Speaker 3: was for the president to get this done now before 356 00:15:34,600 --> 00:15:36,760 Speaker 3: we go into peak driving season in the summer, before 357 00:15:36,800 --> 00:15:38,280 Speaker 3: everyone starts traveling for July. 358 00:15:38,320 --> 00:15:40,200 Speaker 4: Fourth, and then of course the midterms. 359 00:15:40,680 --> 00:15:40,840 Speaker 5: Yeah. 360 00:15:40,880 --> 00:15:41,360 Speaker 4: Absolutely. 361 00:15:41,400 --> 00:15:45,120 Speaker 1: When we think about Trump's incentive structure, you can't discount 362 00:15:45,160 --> 00:15:48,120 Speaker 1: the importance of gasoline prices, right, But when we think 363 00:15:48,120 --> 00:15:49,920 Speaker 1: about this in the election, we think about this in 364 00:15:49,960 --> 00:15:53,120 Speaker 1: the context of affordability. Cost of living is the number 365 00:15:53,160 --> 00:15:56,040 Speaker 1: one issue for voters, right aside from foreign policy, even 366 00:15:56,080 --> 00:15:58,920 Speaker 1: the Iran war, you know, being largely net unfavorable for voters. 367 00:15:59,360 --> 00:16:01,360 Speaker 1: And on that front, we think what matters more than 368 00:16:01,400 --> 00:16:03,560 Speaker 1: the actual gas line price in the absolute level is 369 00:16:03,600 --> 00:16:06,560 Speaker 1: the rate of change. So heading into peak driving season, 370 00:16:06,640 --> 00:16:09,360 Speaker 1: you know, coming into the fall, if you're seeing gas 371 00:16:09,440 --> 00:16:11,800 Speaker 1: prices actually on the decline, that might set up a 372 00:16:11,800 --> 00:16:14,320 Speaker 1: different environment for Republicans come November than you would have 373 00:16:14,400 --> 00:16:16,400 Speaker 1: if the election were today. Right, So that's what we 374 00:16:16,440 --> 00:16:18,480 Speaker 1: think about, But again it's one piece of the puzzle. 375 00:16:18,520 --> 00:16:21,120 Speaker 1: We also think about things like consumer sentiment. We look 376 00:16:21,120 --> 00:16:23,760 Speaker 1: at the generic ballot, we look at prediction markets. All 377 00:16:23,840 --> 00:16:25,520 Speaker 1: these are kind of painting the mosaic of. 378 00:16:25,560 --> 00:16:26,120 Speaker 5: What to expect. 379 00:16:26,200 --> 00:16:28,000 Speaker 3: When you look at pulling and you look at surveys, 380 00:16:28,440 --> 00:16:31,800 Speaker 3: you see a consumer that's frustrated. At the same time, 381 00:16:32,080 --> 00:16:34,800 Speaker 3: the data shows they've been relatively resilient. 382 00:16:35,240 --> 00:16:37,720 Speaker 4: Right, How do you know square that circle? 383 00:16:38,040 --> 00:16:39,840 Speaker 1: Yeah, So when we think about the consumer and the 384 00:16:39,880 --> 00:16:42,920 Speaker 1: outlook there, our economists are forecasting a step down on 385 00:16:42,960 --> 00:16:45,080 Speaker 1: a relative basis to last year, right, so just about 386 00:16:45,120 --> 00:16:46,040 Speaker 1: one point eight percent. 387 00:16:46,640 --> 00:16:48,720 Speaker 5: That's still you know, okay levels. 388 00:16:48,760 --> 00:16:50,880 Speaker 1: It's not as healthy as it was last year, per se, 389 00:16:51,240 --> 00:16:52,680 Speaker 1: but things aren't falling off a cliff. 390 00:16:52,680 --> 00:16:53,840 Speaker 4: And I think that's from a. 391 00:16:53,880 --> 00:16:57,040 Speaker 1: Political perspective, the most important point to underscore, right, So 392 00:16:57,160 --> 00:16:59,240 Speaker 1: this is not the type of environment that's going to 393 00:16:59,280 --> 00:17:04,080 Speaker 1: necessitate another reconciliation package, some sort of direct relief to consumers, 394 00:17:04,160 --> 00:17:06,760 Speaker 1: something like that. That's not really entering the conversations in 395 00:17:06,840 --> 00:17:09,080 Speaker 1: Congress as far as we can tell for now, what 396 00:17:09,160 --> 00:17:10,879 Speaker 1: we tend to look at is, like I said, aside 397 00:17:10,880 --> 00:17:13,760 Speaker 1: from consumer sentiment, things like the generic ballot and how 398 00:17:13,840 --> 00:17:17,280 Speaker 1: consumers are feeling about the incumbent party in Congress, and 399 00:17:17,359 --> 00:17:19,320 Speaker 1: there what we see is that Democrats are still up 400 00:17:19,359 --> 00:17:23,000 Speaker 1: about seven points. Notably, that's actually pretty similar to how 401 00:17:23,040 --> 00:17:25,320 Speaker 1: they were doing at this time in Trump's first term. 402 00:17:25,640 --> 00:17:27,919 Speaker 1: The key difference, of course, is that President Trump's approval 403 00:17:28,000 --> 00:17:30,639 Speaker 1: rating is almost ten points lower now than it was 404 00:17:30,760 --> 00:17:32,840 Speaker 1: back then. So when I look a little bit deeper 405 00:17:32,880 --> 00:17:35,080 Speaker 1: into that data, what you see is that there has 406 00:17:35,119 --> 00:17:37,480 Speaker 1: been a big swing away from Democrats in terms of 407 00:17:37,480 --> 00:17:40,840 Speaker 1: their favorability, so not just the approval rating of sitting lawmakers, 408 00:17:40,920 --> 00:17:43,159 Speaker 1: but also the favorability of the party brand as a 409 00:17:43,240 --> 00:17:45,880 Speaker 1: whole right relative to twenty eighteen. So that's an important 410 00:17:45,880 --> 00:17:48,479 Speaker 1: consideration too, and we think about the outcome here. Obviously, 411 00:17:48,600 --> 00:17:51,520 Speaker 1: historical precedent is strong, suggests that the president's party is 412 00:17:51,600 --> 00:17:54,200 Speaker 1: likely to lose seats. But I think that the outcomes 413 00:17:54,200 --> 00:17:56,080 Speaker 1: here are still kind of uncertain. We think about it 414 00:17:56,119 --> 00:17:56,719 Speaker 1: in that context. 415 00:17:56,840 --> 00:17:58,480 Speaker 8: I was going to say, and this is something you've 416 00:17:58,520 --> 00:18:01,639 Speaker 8: noted as well, that prediction market, specifically Polymarket has an 417 00:18:01,680 --> 00:18:04,720 Speaker 8: eighty three percent odds that the Democrats take the House. 418 00:18:05,000 --> 00:18:06,160 Speaker 4: How off sides is that then? 419 00:18:06,520 --> 00:18:08,040 Speaker 1: So, I mean, look, the House and the Senate are 420 00:18:08,160 --> 00:18:10,600 Speaker 1: completely different animals, and we think about this. So if 421 00:18:10,640 --> 00:18:12,479 Speaker 1: we look at the House, like I said, historical precedent 422 00:18:12,560 --> 00:18:15,800 Speaker 1: is strong, the president's party almost always loses seats, I'd 423 00:18:15,800 --> 00:18:18,240 Speaker 1: say the bar is pretty low, right, So Speaker Johnson 424 00:18:18,280 --> 00:18:20,920 Speaker 1: there is working with a very thin majority. So I 425 00:18:20,960 --> 00:18:23,960 Speaker 1: think House odds being greater than fifty percent certainly makes 426 00:18:24,000 --> 00:18:26,639 Speaker 1: sense when we think about the Senate very different. Obviously, 427 00:18:26,720 --> 00:18:28,720 Speaker 1: not all the seats are up the map there is 428 00:18:28,800 --> 00:18:32,359 Speaker 1: just extremely challenging for Democrats. They have to win races 429 00:18:32,440 --> 00:18:34,560 Speaker 1: that are in states that Trump won in the past election. 430 00:18:35,080 --> 00:18:36,760 Speaker 4: You know, it's not necessarily a kind of. 431 00:18:36,720 --> 00:18:37,240 Speaker 5: A done deal. 432 00:18:37,280 --> 00:18:39,159 Speaker 1: Of Republicans are also coming into that which with a 433 00:18:39,200 --> 00:18:42,679 Speaker 1: bigger majority than they've had in previous elections too. 434 00:18:43,480 --> 00:18:45,760 Speaker 8: Again, something you point out, which I feel like is 435 00:18:45,800 --> 00:18:48,000 Speaker 8: app to not discuss enough that a lot of the 436 00:18:48,040 --> 00:18:50,080 Speaker 8: things that have mattered for this market, things like tariffs, 437 00:18:50,440 --> 00:18:53,760 Speaker 8: are within the president's purview. So how should investors think 438 00:18:53,800 --> 00:18:55,440 Speaker 8: if there is any sort of change bit in the 439 00:18:55,480 --> 00:18:57,879 Speaker 8: House or the Senate, how much it matters for markets? 440 00:18:58,320 --> 00:19:00,840 Speaker 1: So look, if you're a macro investor and equity investor, 441 00:19:00,920 --> 00:19:02,680 Speaker 1: the answer to that question is going to be different. 442 00:19:02,760 --> 00:19:04,840 Speaker 1: So when I think about this from a macro perspective, 443 00:19:04,880 --> 00:19:10,600 Speaker 1: to your point, tariffs, deregulation, immigration controls, foreign policy, to 444 00:19:10,680 --> 00:19:12,840 Speaker 1: a politics, all that is in the president's control, and 445 00:19:12,880 --> 00:19:15,359 Speaker 1: I think that kind of policy risk is likely to 446 00:19:15,720 --> 00:19:16,920 Speaker 1: stay elevated. 447 00:19:16,800 --> 00:19:18,160 Speaker 4: Throughout the next couple of years. 448 00:19:18,200 --> 00:19:18,320 Speaker 5: Too. 449 00:19:18,800 --> 00:19:21,399 Speaker 1: When I think about this from a legislative perspective, what 450 00:19:21,560 --> 00:19:24,359 Speaker 1: really matters here? I think there is some nuance, And 451 00:19:24,400 --> 00:19:25,960 Speaker 1: I think in particular, if you look at things like 452 00:19:26,040 --> 00:19:29,359 Speaker 1: healthcare and consumer sectors, that's where the difference comes in. 453 00:19:29,600 --> 00:19:31,120 Speaker 4: Because we had the one. 454 00:19:31,040 --> 00:19:34,560 Speaker 1: Big, Beautiful Bill Act legislated last summer that included some 455 00:19:34,920 --> 00:19:36,840 Speaker 1: spending cuts right that are going to take effect twenty 456 00:19:36,880 --> 00:19:38,920 Speaker 1: seven and twenty eight. Now, I'm of the view that 457 00:19:39,000 --> 00:19:41,760 Speaker 1: if you see Democrats win both the House and the Senate, 458 00:19:41,800 --> 00:19:43,800 Speaker 1: and they have what I call a cohesive majority, so 459 00:19:43,840 --> 00:19:46,600 Speaker 1: they're able to unify and coalesce around some of the 460 00:19:46,680 --> 00:19:49,200 Speaker 1: key policy asks. They may be able to work with 461 00:19:49,280 --> 00:19:52,600 Speaker 1: the President on delaying, softening, or extending those cuts. Now 462 00:19:52,720 --> 00:19:55,879 Speaker 1: that limits the downside for some stocks in consumer and 463 00:19:55,960 --> 00:19:59,320 Speaker 1: healthcare spaces that are anticipating a falloff in participation in 464 00:19:59,359 --> 00:20:01,040 Speaker 1: programs like and Medicaid. 465 00:20:00,920 --> 00:20:02,560 Speaker 4: Ariana when it comes to affordability. 466 00:20:02,640 --> 00:20:04,920 Speaker 3: The President, when he was asked about negotiating Ron, says 467 00:20:04,920 --> 00:20:07,920 Speaker 3: he doesn't think of American's financial situation. The context was, 468 00:20:07,960 --> 00:20:09,280 Speaker 3: I don't think of them when I'm thinking of a 469 00:20:09,359 --> 00:20:11,760 Speaker 3: nuclear ron. But that's going to be clipped and played. 470 00:20:12,119 --> 00:20:13,840 Speaker 3: I was recently with the President and I asked him 471 00:20:13,880 --> 00:20:16,480 Speaker 3: about getting into a knixt game. The game he went to, 472 00:20:16,600 --> 00:20:19,560 Speaker 3: the getting in price was eight thousand dollars for nosebleed tickets, 473 00:20:19,800 --> 00:20:22,320 Speaker 3: and he said, basically, that's life and it's semi free 474 00:20:22,440 --> 00:20:22,960 Speaker 3: on TV. 475 00:20:23,640 --> 00:20:26,159 Speaker 4: Are these messages going to land with consumers? 476 00:20:26,760 --> 00:20:29,560 Speaker 1: What we're seeing across the board is exactly that point, right. 477 00:20:29,600 --> 00:20:32,120 Speaker 1: I think that's reflected in the President's approval rating. Kind 478 00:20:32,119 --> 00:20:33,520 Speaker 1: of taking a bit of a dip over the past 479 00:20:33,560 --> 00:20:36,480 Speaker 1: few months, but affordability policy has really been top of 480 00:20:36,520 --> 00:20:38,920 Speaker 1: mine since I would say January of this year. The 481 00:20:39,040 --> 00:20:40,840 Speaker 1: reality is, there's a lot that can be said about 482 00:20:40,840 --> 00:20:43,120 Speaker 1: affordability policy, is very little that can be done. 483 00:20:43,119 --> 00:20:45,480 Speaker 4: When we think about the total universe. 484 00:20:45,160 --> 00:20:47,600 Speaker 1: Of what's available and then what's kind of quick to implement, 485 00:20:47,720 --> 00:20:50,240 Speaker 1: what can impact voters ahead of November, there's not that 486 00:20:50,359 --> 00:20:52,680 Speaker 1: much out there. So we think about something like housing policy. 487 00:20:53,080 --> 00:20:54,600 Speaker 1: You know, we have the Road to Housing Act getting 488 00:20:54,720 --> 00:20:56,440 Speaker 1: kind of pingpong back and forth between the House and 489 00:20:56,480 --> 00:20:58,960 Speaker 1: Senate right now. That's not something that's going to really 490 00:20:59,720 --> 00:21:02,320 Speaker 1: you know, implement and matter for voters ahead of November. 491 00:21:02,440 --> 00:21:05,080 Speaker 1: The easiest lever the President has to pull is on tariffs, 492 00:21:05,119 --> 00:21:06,960 Speaker 1: and I think you could maybe see something on that 493 00:21:07,400 --> 00:21:07,800 Speaker 1: come July. 494 00:21:09,200 --> 00:21:12,720 Speaker 2: This is the Bloomberg Surveillance Podcast, bringing you the best 495 00:21:12,800 --> 00:21:15,840 Speaker 2: in markets, economics, an gient politics. You can watch the 496 00:21:15,880 --> 00:21:18,840 Speaker 2: show live on Bloomberg TV weekday mornings from six am 497 00:21:19,040 --> 00:21:22,159 Speaker 2: to nine am Eastern. Subscribe to the podcast on Apple, 498 00:21:22,480 --> 00:21:25,280 Speaker 2: Spotify or anywhere else you listen, and as always on 499 00:21:25,320 --> 00:21:27,800 Speaker 2: the Bloomberg Terminal and the Bloomberg Business app.