1 00:00:00,120 --> 00:00:06,800 Speaker 1: Bloomberg Audio Studios, Podcasts, radio news. 2 00:00:11,640 --> 00:00:15,440 Speaker 2: This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along 3 00:00:15,480 --> 00:00:18,680 Speaker 2: with Lisa Bromwitz and Amrie Hordern. Join us each day 4 00:00:18,720 --> 00:00:22,280 Speaker 2: for insight from the best in markets, economics, and geopolitics 5 00:00:22,400 --> 00:00:24,920 Speaker 2: from our global headquarters in New York City. We are 6 00:00:24,920 --> 00:00:27,680 Speaker 2: live on Bloomberg Television weekday mornings from six to nine 7 00:00:27,720 --> 00:00:31,280 Speaker 2: am Eastern. Subscribe to the podcast on Apple, Spotify, or 8 00:00:31,320 --> 00:00:33,960 Speaker 2: anywhere else you listen, and as always on the Bloomberg 9 00:00:34,040 --> 00:00:37,480 Speaker 2: Terminal and the Bloomberg Business app. Andrew Holmholds the city 10 00:00:37,560 --> 00:00:39,879 Speaker 2: is alongside us. Now for more, Andrew, good morning to you. 11 00:00:40,479 --> 00:00:42,319 Speaker 2: We'll start with job as claims and then we can 12 00:00:42,320 --> 00:00:43,239 Speaker 2: get to all the. 13 00:00:43,200 --> 00:00:43,680 Speaker 3: Rest of it. 14 00:00:44,120 --> 00:00:46,559 Speaker 2: Claims are really really low, and you've been looking for 15 00:00:46,600 --> 00:00:50,080 Speaker 2: a much weaker labor market into your end. Why doesn't 16 00:00:50,120 --> 00:00:51,520 Speaker 2: that back up that theory. 17 00:00:51,880 --> 00:00:54,080 Speaker 4: It's a strange labor market. It's a different labor market 18 00:00:54,120 --> 00:00:56,480 Speaker 4: than something that we've ever seen before, where we have 19 00:00:56,760 --> 00:01:00,240 Speaker 4: really low hiring rates. We see the jold stato see 20 00:01:00,320 --> 00:01:02,720 Speaker 4: the percentage of people who are getting hired into new jobs, 21 00:01:02,880 --> 00:01:05,039 Speaker 4: and that number is low, so it is hard to 22 00:01:05,040 --> 00:01:06,240 Speaker 4: get hired into a job. 23 00:01:06,640 --> 00:01:07,440 Speaker 5: That's the bad news. 24 00:01:07,480 --> 00:01:09,240 Speaker 4: The good news is what we're seeing in jobless claims 25 00:01:09,240 --> 00:01:11,200 Speaker 4: and the initial claims at least that is showing us that. 26 00:01:11,160 --> 00:01:12,960 Speaker 5: The layoff rate is still low. 27 00:01:13,240 --> 00:01:15,839 Speaker 4: So we have a strange labor market where it seems 28 00:01:15,920 --> 00:01:17,880 Speaker 4: like people are hanging on to the workers that they have, 29 00:01:18,280 --> 00:01:20,320 Speaker 4: but they're not necessarily wanting to hire more workers. 30 00:01:20,400 --> 00:01:23,080 Speaker 2: So you think twenty five today, and you think fifty 31 00:01:23,280 --> 00:01:25,839 Speaker 2: in December, and everyone else is thinking about twenty twenty 32 00:01:25,840 --> 00:01:27,880 Speaker 2: five in the prospect of right hikes and not RT cuts. 33 00:01:28,400 --> 00:01:31,000 Speaker 3: How useful is the price section of. 34 00:01:31,000 --> 00:01:33,240 Speaker 2: The last twenty four hours to project out what twenty 35 00:01:33,240 --> 00:01:34,160 Speaker 2: twenty five might break. 36 00:01:34,360 --> 00:01:35,560 Speaker 5: Yeah, I think not useful at all. 37 00:01:35,600 --> 00:01:37,480 Speaker 4: I really don't think that you're supposed to take a 38 00:01:37,760 --> 00:01:41,039 Speaker 4: macro narrative away or a fed narrative away from what's 39 00:01:41,120 --> 00:01:44,000 Speaker 4: going on in interest rate markets right now. If you 40 00:01:44,080 --> 00:01:47,160 Speaker 4: look at what's happening in the macro fundamentals, we do 41 00:01:47,240 --> 00:01:49,520 Speaker 4: have a softening of the labor market. I think that's 42 00:01:49,600 --> 00:01:52,240 Speaker 4: clear after the last jobs report, where even if you 43 00:01:52,280 --> 00:01:54,800 Speaker 4: adjust that job's report for hurricanes and for strikes, and 44 00:01:54,840 --> 00:01:56,760 Speaker 4: I think that's part of why the market can't react 45 00:01:56,800 --> 00:01:58,680 Speaker 4: to it. We also had the election coming up at 46 00:01:58,720 --> 00:02:01,880 Speaker 4: the time. But with all the distortion, it's hard to see. 47 00:02:02,000 --> 00:02:03,840 Speaker 4: But if you draw a through line through it, what 48 00:02:03,920 --> 00:02:06,440 Speaker 4: you see is the pace of job growth is slowing. 49 00:02:06,640 --> 00:02:09,440 Speaker 4: You see the unemployment rate has risen from its lows, 50 00:02:09,480 --> 00:02:12,160 Speaker 4: and it looks like, if anything, it's still trending higher, 51 00:02:12,560 --> 00:02:14,480 Speaker 4: and that's going to make the FED think there's some 52 00:02:14,520 --> 00:02:16,760 Speaker 4: downside risk to employment. And then you move to the 53 00:02:16,760 --> 00:02:19,840 Speaker 4: inflation side. We just got numbers for the third quarter 54 00:02:20,080 --> 00:02:24,280 Speaker 4: two point one six percent quarterly annualized core PC inflation. 55 00:02:24,360 --> 00:02:27,480 Speaker 4: That's essentially at target inflation. So if you're the FED, 56 00:02:27,560 --> 00:02:29,560 Speaker 4: you're looking at inflation that's close to target. 57 00:02:29,600 --> 00:02:31,480 Speaker 5: You're looking at an unemployment. 58 00:02:31,000 --> 00:02:33,919 Speaker 4: Rate that's still low but maybe rising. The path is 59 00:02:33,960 --> 00:02:36,160 Speaker 4: going to be towards lower rates. So I really don't 60 00:02:36,240 --> 00:02:39,760 Speaker 4: understand the move in the market or the new narrative 61 00:02:39,760 --> 00:02:41,400 Speaker 4: that this is a FED that might need to hike. No, 62 00:02:41,520 --> 00:02:42,520 Speaker 4: this is a FED that's cutting. 63 00:02:42,600 --> 00:02:44,320 Speaker 6: I think a lot of people would agree that this 64 00:02:44,320 --> 00:02:46,240 Speaker 6: FED probably isn't going to hike, though there was this 65 00:02:46,280 --> 00:02:49,280 Speaker 6: one person out there who did put out the prospect 66 00:02:49,360 --> 00:02:50,120 Speaker 6: of potential rate. 67 00:02:50,400 --> 00:02:53,000 Speaker 5: Highest number of people. Actually there is. 68 00:02:52,960 --> 00:02:55,280 Speaker 6: A feeling though, that they can't cut nearly as much, 69 00:02:55,480 --> 00:02:57,360 Speaker 6: especially at a time where the death is it's probably 70 00:02:57,400 --> 00:02:59,960 Speaker 6: going to expand, and at a time where even if 71 00:03:00,000 --> 00:03:02,800 Speaker 6: if it's not accelerating, this is an economy that's pretty solid. 72 00:03:03,240 --> 00:03:04,600 Speaker 5: How do you push back against that? 73 00:03:05,000 --> 00:03:06,640 Speaker 4: Well, first of all, I'm not sure that it's an 74 00:03:06,639 --> 00:03:09,680 Speaker 4: economy that's pretty solid. I know that we're seeing GDP 75 00:03:09,800 --> 00:03:12,600 Speaker 4: growth that's running close to three percent. On the activity numbers, 76 00:03:12,639 --> 00:03:15,040 Speaker 4: those look fine. Again, if you look at the labor market, 77 00:03:15,120 --> 00:03:18,680 Speaker 4: it doesn't look as strong. And I think we just 78 00:03:18,720 --> 00:03:20,920 Speaker 4: had a referendum in this country in some ways on 79 00:03:21,080 --> 00:03:24,200 Speaker 4: the state of the economy, and the results were not 80 00:03:24,320 --> 00:03:27,240 Speaker 4: positive for how people are experiencing this economy. And you 81 00:03:27,280 --> 00:03:28,919 Speaker 4: see that in some of the survey data. You see 82 00:03:29,000 --> 00:03:31,720 Speaker 4: you ask people, our jobs plentiful, Our job's hard to get. 83 00:03:31,919 --> 00:03:34,240 Speaker 4: You see that hard to get number that's been coming up. 84 00:03:34,280 --> 00:03:36,440 Speaker 4: You see hard to get jobs number that's elevated. 85 00:03:36,520 --> 00:03:36,960 Speaker 5: Right now. 86 00:03:37,360 --> 00:03:40,080 Speaker 4: If you're the Fed, the mandatea is employment and the 87 00:03:40,120 --> 00:03:43,440 Speaker 4: mandate is inflation. Inflation is close to target. You have 88 00:03:43,440 --> 00:03:45,840 Speaker 4: a labor market that's softening. And remember back in August 89 00:03:45,920 --> 00:03:48,560 Speaker 4: Jera Powell said we would not seek or welcome any 90 00:03:48,600 --> 00:03:50,920 Speaker 4: further softening of the labor market. That means you need 91 00:03:50,960 --> 00:03:52,560 Speaker 4: to get policy rates down towards neutral. 92 00:03:52,600 --> 00:03:54,760 Speaker 6: But this really highlights how messy the data is and 93 00:03:54,760 --> 00:03:56,680 Speaker 6: how I can't really understand it because at the same 94 00:03:56,720 --> 00:03:59,800 Speaker 6: time that you're saying that the election was a referendum 95 00:03:59,800 --> 00:04:02,040 Speaker 6: of and that we've seen this in sentiment, at the 96 00:04:02,040 --> 00:04:05,680 Speaker 6: same time, we're seeing the US City Surprise Economic Index 97 00:04:06,360 --> 00:04:08,640 Speaker 6: rise to the clients level going back to April. At 98 00:04:08,640 --> 00:04:11,520 Speaker 6: the same time ISM service as the employment component actually 99 00:04:11,560 --> 00:04:16,520 Speaker 6: increased more than expected. So how much are you looking at, 100 00:04:16,520 --> 00:04:20,920 Speaker 6: say the rising inflation expectations as data to pay attention 101 00:04:21,000 --> 00:04:23,360 Speaker 6: to or not pay attention two for the Federal Reserve, No, 102 00:04:23,480 --> 00:04:23,760 Speaker 6: I think. 103 00:04:23,640 --> 00:04:25,520 Speaker 4: It's a fair point, and I think the signal to 104 00:04:25,600 --> 00:04:27,960 Speaker 4: noise ratio in the data is just lower than it 105 00:04:28,040 --> 00:04:29,960 Speaker 4: used to be. And in some ways we know why 106 00:04:30,000 --> 00:04:32,120 Speaker 4: that's happening. If you look at the jobs report, the 107 00:04:32,120 --> 00:04:35,040 Speaker 4: payrolls report, for instance, the response rate is much lower 108 00:04:35,040 --> 00:04:36,840 Speaker 4: than it used to be, and that just means that 109 00:04:36,839 --> 00:04:39,400 Speaker 4: that data is going to be noisier, and we see 110 00:04:39,400 --> 00:04:41,640 Speaker 4: that in some of the revisions we've had just consistent 111 00:04:41,680 --> 00:04:43,880 Speaker 4: downward revisions to those jobs figures. So we get a 112 00:04:43,920 --> 00:04:46,240 Speaker 4: jobs figure, you look at the city Economic Surprise Index 113 00:04:46,320 --> 00:04:47,200 Speaker 4: as a positive surprise. 114 00:04:47,240 --> 00:04:48,240 Speaker 5: The market reacts to that. 115 00:04:48,560 --> 00:04:50,240 Speaker 4: Well, then I'm not sure if people are paying as 116 00:04:50,320 --> 00:04:53,320 Speaker 4: much attention when a month later, two months later, sometimes 117 00:04:53,320 --> 00:04:56,120 Speaker 4: a year later. Right with those preliminary benchmark provisions to 118 00:04:56,200 --> 00:04:58,760 Speaker 4: the payrolls numbers that turned out to be eight hundred 119 00:04:58,760 --> 00:05:01,280 Speaker 4: and eighteen thousand lower in terms of the level of jobs, 120 00:05:01,320 --> 00:05:04,120 Speaker 4: and we thought it was those revisions have been to 121 00:05:04,200 --> 00:05:06,400 Speaker 4: the downside, and that means we're actually looking at a 122 00:05:06,440 --> 00:05:08,960 Speaker 4: weaker labor market than we thought. But the market's already reacted, 123 00:05:09,000 --> 00:05:11,359 Speaker 4: the narrative has already shifted. So what we're trying to 124 00:05:11,360 --> 00:05:13,120 Speaker 4: do is look at the data as best we can 125 00:05:13,360 --> 00:05:16,200 Speaker 4: draw those through lines in terms of where things are headed. Yes, 126 00:05:16,240 --> 00:05:18,599 Speaker 4: I would agree right now we're running, you. 127 00:05:18,600 --> 00:05:19,960 Speaker 5: Know, good GDP growth. 128 00:05:20,200 --> 00:05:23,400 Speaker 4: We have an unemployment rate that's low four percents. That's 129 00:05:23,440 --> 00:05:25,320 Speaker 4: not a bad thing either, not a bad place to be. 130 00:05:25,360 --> 00:05:26,840 Speaker 4: But the question is where are we going from here? 131 00:05:26,960 --> 00:05:29,480 Speaker 7: I want to pick up your point about a referendum, 132 00:05:29,720 --> 00:05:32,720 Speaker 7: was that because of jobs or price pressure and inflation? 133 00:05:33,279 --> 00:05:35,280 Speaker 4: I think it's a combination of the two, right, And 134 00:05:35,279 --> 00:05:37,080 Speaker 4: that's why there is this idea that you're supposed to be, 135 00:05:37,160 --> 00:05:39,159 Speaker 4: you know, maybe adding the unemployment rate. 136 00:05:39,040 --> 00:05:40,039 Speaker 5: To the inflation rate. 137 00:05:40,560 --> 00:05:43,599 Speaker 4: But when you look at the consumer sentiment surveys, for instance, 138 00:05:43,720 --> 00:05:44,560 Speaker 4: you're absolutely right. 139 00:05:44,600 --> 00:05:46,320 Speaker 5: People are saying prices are high. 140 00:05:46,440 --> 00:05:48,599 Speaker 4: That's one of the reasons that they're unhappy with where 141 00:05:48,600 --> 00:05:49,360 Speaker 4: the economy is. 142 00:05:49,880 --> 00:05:52,400 Speaker 5: The other thing that I think matters. 143 00:05:52,000 --> 00:05:53,200 Speaker 4: And maybe we don't pick it up as well in 144 00:05:53,200 --> 00:05:55,120 Speaker 4: some of the survey data is look where interest rates are. 145 00:05:55,160 --> 00:05:56,840 Speaker 4: And it goes back to the discussion that we're having 146 00:05:56,880 --> 00:06:00,640 Speaker 4: with Lisa that you with fiscal concern. It means that 147 00:06:00,720 --> 00:06:03,560 Speaker 4: longer term interest rates have risen again. It means mortgage 148 00:06:03,600 --> 00:06:05,680 Speaker 4: rates are going to be close to their highs again. 149 00:06:05,760 --> 00:06:05,920 Speaker 5: Right. 150 00:06:05,920 --> 00:06:07,520 Speaker 4: We thought they were going lower because the Fed was 151 00:06:07,560 --> 00:06:10,480 Speaker 4: cutting interest rates. Now they're higher again. Those are actually 152 00:06:10,480 --> 00:06:13,040 Speaker 4: reasons that the Fed might end up being more dubvish. 153 00:06:13,160 --> 00:06:16,600 Speaker 4: I understand it's a complicated scenario when you have loose 154 00:06:16,600 --> 00:06:18,800 Speaker 4: fiscal policy that's raising interest rates and. 155 00:06:18,760 --> 00:06:19,600 Speaker 3: I can't jump in down. 156 00:06:19,640 --> 00:06:22,120 Speaker 2: Don't you think that that fifty basis point cut contributed 157 00:06:22,160 --> 00:06:25,279 Speaker 2: to higher long end yields? Because before we're even talking 158 00:06:25,320 --> 00:06:27,880 Speaker 2: about a Trump presidency or a Trump suite in a 159 00:06:27,960 --> 00:06:32,000 Speaker 2: material way. Ever since they cut interest rates, yields bottomed 160 00:06:32,040 --> 00:06:35,000 Speaker 2: within twenty four rounds at that period. They've been up 161 00:06:35,040 --> 00:06:37,920 Speaker 2: by sixty seventy. I haven't twenty di since, but we're 162 00:06:37,960 --> 00:06:41,240 Speaker 2: at three sixty last time around, So it's called eighty. 163 00:06:41,520 --> 00:06:43,800 Speaker 2: Had an eighty basis point move on a tenure. Don't 164 00:06:43,800 --> 00:06:46,200 Speaker 2: you think the FED easing has had something to do 165 00:06:46,279 --> 00:06:46,600 Speaker 2: with that? 166 00:06:47,000 --> 00:06:49,680 Speaker 4: Well, all else equal, if the FED is more dubbish, 167 00:06:49,720 --> 00:06:52,200 Speaker 4: you're going to get a steeper yield curve. The level 168 00:06:52,240 --> 00:06:54,440 Speaker 4: of short term interest rates is going to be lower 169 00:06:54,600 --> 00:06:56,800 Speaker 4: relative to the level of long term interest rates. If 170 00:06:56,839 --> 00:06:59,159 Speaker 4: you have a more dubbish FED, then you should be 171 00:06:59,200 --> 00:07:02,880 Speaker 4: more concerned about medium term risks to inflation, about upside 172 00:07:02,960 --> 00:07:04,800 Speaker 4: risks to growth in the longer run, and that's where 173 00:07:04,800 --> 00:07:05,880 Speaker 4: you're going to have longer. 174 00:07:05,680 --> 00:07:07,040 Speaker 5: Higher yields further out the curve. 175 00:07:07,240 --> 00:07:09,160 Speaker 4: I think what happened here, though, was we were coming 176 00:07:09,160 --> 00:07:11,880 Speaker 4: into that FOMC meeting. The data looked pretty bad, right, 177 00:07:11,920 --> 00:07:14,080 Speaker 4: We had that jobs report that look pretty scary, the 178 00:07:14,120 --> 00:07:17,280 Speaker 4: unemployment rate accelerating, and so the FED cut fifty basis points, 179 00:07:17,280 --> 00:07:19,000 Speaker 4: and I think they were thinking maybe they should have 180 00:07:19,000 --> 00:07:20,960 Speaker 4: cut twenty five basis points at the previous meetings to 181 00:07:21,040 --> 00:07:23,680 Speaker 4: kind of roll those together, and you cut fifty the movie. 182 00:07:23,720 --> 00:07:24,760 Speaker 5: We've had higher in yields. 183 00:07:24,880 --> 00:07:26,520 Speaker 4: I would really go back to what Lisa is saying, 184 00:07:26,680 --> 00:07:30,120 Speaker 4: we've had these consistent upside surprises in the data, and 185 00:07:30,200 --> 00:07:32,880 Speaker 4: yields just track that higher. On the election, I think 186 00:07:32,920 --> 00:07:35,040 Speaker 4: also playing into that move higher that you have in yields. 187 00:07:35,040 --> 00:07:37,680 Speaker 4: But the longer discussion around that, I think is where 188 00:07:37,720 --> 00:07:39,000 Speaker 4: is monetary policy going. 189 00:07:38,880 --> 00:07:40,560 Speaker 5: To be relative to fiscal policy. 190 00:07:40,760 --> 00:07:43,880 Speaker 4: We still have large deficits and that is going to 191 00:07:43,920 --> 00:07:44,640 Speaker 4: be in the longer term. 192 00:07:44,720 --> 00:07:45,440 Speaker 5: Yields are higher. 193 00:07:45,560 --> 00:07:47,640 Speaker 2: So my opinion on this doesn't matter, But I have 194 00:07:47,680 --> 00:07:50,160 Speaker 2: to respect the price section of the last twenty four hours. 195 00:07:50,520 --> 00:07:52,440 Speaker 2: They aren't going to be service workers in the matter 196 00:07:52,480 --> 00:07:54,320 Speaker 2: that don't have to pay taxes on tips anymore. 197 00:07:54,400 --> 00:07:56,400 Speaker 3: We're a few house seats away from this reality. 198 00:07:56,840 --> 00:07:58,880 Speaker 2: We're going to have corporate tax rates coming down from 199 00:07:58,920 --> 00:08:01,480 Speaker 2: twenty one to fifteen conditions. I know these are big 200 00:08:01,560 --> 00:08:05,800 Speaker 2: changes for the US economy, which should stimulate demand. You're 201 00:08:05,800 --> 00:08:08,520 Speaker 2: already seeing that kind of confidence level being baked into 202 00:08:08,520 --> 00:08:13,680 Speaker 2: bank stocks. That's the market screaming, and later on this afternoon. 203 00:08:13,720 --> 00:08:15,679 Speaker 2: We can have a Federal Reserve with an easing bias 204 00:08:15,720 --> 00:08:17,400 Speaker 2: talking about an economy and the way that you do. 205 00:08:18,040 --> 00:08:18,920 Speaker 3: I just feel like we're on. 206 00:08:18,920 --> 00:08:21,560 Speaker 2: Two completely different planets right now. Financial markets are going 207 00:08:21,560 --> 00:08:23,440 Speaker 2: to be right over here, and SHAREM and pound is 208 00:08:23,440 --> 00:08:25,760 Speaker 2: going to be right over there for how long when 209 00:08:25,760 --> 00:08:28,760 Speaker 2: they put out projections for December? How much weight is 210 00:08:28,760 --> 00:08:31,000 Speaker 2: a market participant? Can I put on their dob plot? 211 00:08:31,320 --> 00:08:32,480 Speaker 3: He's going to be doing a news. 212 00:08:32,280 --> 00:08:35,160 Speaker 2: Conference today based on a dot plot from September eighteenth, 213 00:08:35,280 --> 00:08:38,760 Speaker 2: Andrew this Federal Reserve news conference today is absolutely ridiculous, 214 00:08:39,120 --> 00:08:42,120 Speaker 2: And I just wonder how different the conversation is behind 215 00:08:42,160 --> 00:08:42,840 Speaker 2: closed doors. 216 00:08:43,280 --> 00:08:45,040 Speaker 3: Can we at least acknowledge. 217 00:08:44,559 --> 00:08:47,079 Speaker 2: That that the conversation we hear in the news conference 218 00:08:47,080 --> 00:08:50,440 Speaker 2: today is going to be radically different to the conversation 219 00:08:50,559 --> 00:08:53,080 Speaker 2: behind closed doors. These guys have got to consider now 220 00:08:53,559 --> 00:08:57,920 Speaker 2: a very, very very real different scenario for twenty twenty 221 00:08:57,920 --> 00:08:59,360 Speaker 2: five than they had to a few months ago. 222 00:08:59,640 --> 00:09:00,559 Speaker 5: I think that's guaranteed. 223 00:09:00,640 --> 00:09:02,720 Speaker 4: I think that there will be a very interesting discussion 224 00:09:02,760 --> 00:09:05,240 Speaker 4: that's going on at this FOMC meeting, and we'll see 225 00:09:05,240 --> 00:09:07,559 Speaker 4: that in a number of years. In the transcript, we're 226 00:09:07,559 --> 00:09:09,480 Speaker 4: going to hear today in the press conference is going 227 00:09:09,520 --> 00:09:11,800 Speaker 4: to be as little guidance as possible, right, because they 228 00:09:11,800 --> 00:09:15,200 Speaker 4: don't know, and really we don't know in general, because 229 00:09:15,400 --> 00:09:18,400 Speaker 4: we didn't have a very robust policy discussion going into 230 00:09:18,400 --> 00:09:20,880 Speaker 4: this election. Right, we talked a lot about politics, not 231 00:09:20,960 --> 00:09:21,640 Speaker 4: a lot about. 232 00:09:21,800 --> 00:09:24,000 Speaker 2: You know that they're in the risk management business. So 233 00:09:24,040 --> 00:09:26,040 Speaker 2: if I'm in the risk management business, and I face 234 00:09:26,080 --> 00:09:29,199 Speaker 2: two very different scenarios in twenty twenty five, which is 235 00:09:29,320 --> 00:09:32,720 Speaker 2: the polar opposite of each other. Your world recession and 236 00:09:32,760 --> 00:09:37,080 Speaker 2: higher unemployment and Donald Trump's objectives low unemployment and a 237 00:09:37,120 --> 00:09:39,680 Speaker 2: domestic boom. If you're the risk management business, why are 238 00:09:39,720 --> 00:09:40,920 Speaker 2: you coming fifty in December? 239 00:09:41,080 --> 00:09:44,240 Speaker 4: I come back to inflation, right, because that's the other mandate. 240 00:09:44,280 --> 00:09:46,520 Speaker 4: That's the other thing that I worry about. Is this 241 00:09:46,800 --> 00:09:50,640 Speaker 4: potential stronger growth outcome in the economy going to drive inflation. 242 00:09:51,080 --> 00:09:53,120 Speaker 4: Everything we're seeing is going in the opposite direction. 243 00:09:53,360 --> 00:09:53,600 Speaker 5: Right. 244 00:09:53,960 --> 00:09:56,920 Speaker 4: We have demand that is running below supply. Now, we 245 00:09:57,000 --> 00:09:59,719 Speaker 4: have goods inflation that's come down. We have housing and 246 00:09:59,720 --> 00:10:01,920 Speaker 4: inflat again. We're talking about mortgage rates that are back 247 00:10:02,000 --> 00:10:04,400 Speaker 4: up towards their highs. We have the housing sector that's 248 00:10:04,440 --> 00:10:06,480 Speaker 4: in contraction, So that's why the FED is in a 249 00:10:06,600 --> 00:10:08,640 Speaker 4: very different position than the market here, because the Fed 250 00:10:08,720 --> 00:10:11,559 Speaker 4: is looking at this and saying inflation looks under control. 251 00:10:11,840 --> 00:10:13,439 Speaker 4: That's what they're saying behind closed sorts. They're not going 252 00:10:13,440 --> 00:10:14,880 Speaker 4: to say that to it in the press conference. Inflation 253 00:10:14,920 --> 00:10:18,640 Speaker 4: looks under control. And I have this risk downside risk 254 00:10:18,720 --> 00:10:22,000 Speaker 4: of the employment man did Now, if I'm wrong and 255 00:10:22,040 --> 00:10:25,120 Speaker 4: we get stronger job growth and stronger GDP group, that's great. 256 00:10:25,679 --> 00:10:27,440 Speaker 4: But I'm not going to be wrong at cutting rates now. 257 00:10:27,440 --> 00:10:28,520 Speaker 4: That's why they're going to cut today. 258 00:10:28,600 --> 00:10:30,400 Speaker 2: It's going to be a very interesting few months ahead 259 00:10:30,400 --> 00:10:32,040 Speaker 2: of us. Andrew, appreciate your time. So I was going 260 00:10:32,080 --> 00:10:34,360 Speaker 2: to see it, buddy. Thank you, sir, Andrew Hanholst f 261 00:10:34,400 --> 00:10:47,280 Speaker 2: citys Tonal. Trump pledging to boost the US economy when 262 00:10:47,280 --> 00:10:51,160 Speaker 2: he returns to the presidency and deliver sweeping new tariff policies. 263 00:10:51,360 --> 00:10:53,960 Speaker 2: Heidi Kruber Reddika of the Council and Form Relations saying 264 00:10:54,200 --> 00:10:57,760 Speaker 2: Trump is clear, promise is made, promises kept his top 265 00:10:57,800 --> 00:10:59,800 Speaker 2: two promises on tarifs and deportations. 266 00:10:59,840 --> 00:11:03,360 Speaker 3: He can move on unilaterally. Believe what he says. Heid. 267 00:11:03,400 --> 00:11:05,720 Speaker 2: He joined this now for more heardy, welcome to the program. 268 00:11:05,800 --> 00:11:07,679 Speaker 2: I just want to reflect on twenty sixteen, just for 269 00:11:07,720 --> 00:11:10,160 Speaker 2: a moment. In twenty sixteen, when he came into Pawer 270 00:11:10,280 --> 00:11:13,080 Speaker 2: the year afterwards, the focus was on taxes. It took 271 00:11:13,080 --> 00:11:16,000 Speaker 2: a couple of years to really start to shift towards tariffs. 272 00:11:16,120 --> 00:11:18,360 Speaker 2: How quickly do you think you'll start with tariffs this 273 00:11:18,480 --> 00:11:19,080 Speaker 2: time around? 274 00:11:19,160 --> 00:11:20,840 Speaker 3: And why so? 275 00:11:20,960 --> 00:11:24,040 Speaker 8: I think you know it's all going to be about tariffs, 276 00:11:24,120 --> 00:11:27,760 Speaker 8: tariffs and more tariffs here because he can move very quickly. 277 00:11:28,200 --> 00:11:32,000 Speaker 8: I'm thinking like day one, week one quickly, and the 278 00:11:32,040 --> 00:11:34,520 Speaker 8: taxes are going to be in negotiation with Congress, so 279 00:11:34,960 --> 00:11:39,520 Speaker 8: he doesn't have the unilateral authority to actually move on taxes. 280 00:11:39,600 --> 00:11:44,400 Speaker 8: So be prepared for big time tariffs that he promised, 281 00:11:44,920 --> 00:11:47,520 Speaker 8: you know, ten to twenty percent across the board and 282 00:11:48,480 --> 00:11:51,679 Speaker 8: sixty percent on China, and that's that's those are big numbers. 283 00:11:51,720 --> 00:11:56,640 Speaker 8: So other countries are preparing to retaliate, and that will 284 00:11:56,720 --> 00:12:01,080 Speaker 8: hit our exports. You will have supply chain disruptions. And 285 00:12:01,120 --> 00:12:02,800 Speaker 8: so I think one of the debates right now is 286 00:12:03,280 --> 00:12:05,640 Speaker 8: just how much of a shock we're looking at is 287 00:12:05,679 --> 00:12:08,880 Speaker 8: a one time shock on the three plus three plus 288 00:12:08,920 --> 00:12:12,520 Speaker 8: trillion that we have that we import, and how do 289 00:12:12,520 --> 00:12:17,000 Speaker 8: we calculate in factor in retaliation. Right now, Trump is 290 00:12:17,520 --> 00:12:21,040 Speaker 8: actually not going to have his agencies staff to actually 291 00:12:21,360 --> 00:12:25,040 Speaker 8: look at how you remedy or negotiate out of these 292 00:12:25,800 --> 00:12:29,160 Speaker 8: the unilateral across the board, we trade with about two hundred, 293 00:12:29,360 --> 00:12:33,080 Speaker 8: you know, two hundred countries and territories. So this is 294 00:12:33,559 --> 00:12:35,280 Speaker 8: this is be long, and it's going to be messy, 295 00:12:35,480 --> 00:12:37,840 Speaker 8: and it's going to be inflationary. It's going to be 296 00:12:37,840 --> 00:12:40,480 Speaker 8: targeted at China, but Mexico is going to take the 297 00:12:40,520 --> 00:12:44,040 Speaker 8: BNT of it, EU big trading partners. It's where you 298 00:12:44,080 --> 00:12:48,360 Speaker 8: saw a lot of the FX movement in Japan UH 299 00:12:48,679 --> 00:12:52,840 Speaker 8: yesterday and UH and in the in the Yuan so 300 00:12:53,000 --> 00:12:55,000 Speaker 8: and the PASA. So I think you're going to have 301 00:12:55,080 --> 00:12:57,679 Speaker 8: a lot that's going to come and hit that first 302 00:12:57,679 --> 00:12:59,319 Speaker 8: week that he's in office, because he knows what he 303 00:12:59,360 --> 00:12:59,839 Speaker 8: wants to do. 304 00:13:00,120 --> 00:13:02,920 Speaker 7: Did you already think we're seeing the fallout of Trump's 305 00:13:02,920 --> 00:13:05,560 Speaker 7: promises in the sense that basically we'll have the collapse 306 00:13:05,600 --> 00:13:06,439 Speaker 7: of German government? 307 00:13:08,880 --> 00:13:12,000 Speaker 8: So I think that we I mean, Germany has its 308 00:13:12,040 --> 00:13:15,199 Speaker 8: own dynamics. So it's a very good it's a very 309 00:13:15,200 --> 00:13:17,880 Speaker 8: good question. But I think you know what what I 310 00:13:18,040 --> 00:13:21,920 Speaker 8: what I would focus on more is what the direct 311 00:13:22,840 --> 00:13:25,880 Speaker 8: impact will be on the on the US economy. You 312 00:13:25,960 --> 00:13:30,080 Speaker 8: have a lot of reshuffling in various countries trying to 313 00:13:30,080 --> 00:13:32,320 Speaker 8: figure out, you know, how they're going to manage uh, 314 00:13:32,720 --> 00:13:36,960 Speaker 8: this transition to a Trump presidency in terms of UH. 315 00:13:37,120 --> 00:13:40,760 Speaker 8: You know, I think you talk about the changes happening 316 00:13:40,800 --> 00:13:44,000 Speaker 8: in Germany, Well, the whole dynamic with Europe is about 317 00:13:44,000 --> 00:13:45,360 Speaker 8: to change in a very big way. 318 00:13:46,000 --> 00:13:47,080 Speaker 5: You are going to have. 319 00:13:48,800 --> 00:13:52,480 Speaker 8: On the back of a very different policy towards Russia 320 00:13:52,600 --> 00:13:56,480 Speaker 8: and Ukraine and and dealing with NATO. You're going to 321 00:13:56,520 --> 00:14:00,120 Speaker 8: have a lot of deep conversations about what Europe and 322 00:14:00,200 --> 00:14:00,840 Speaker 8: security is. 323 00:14:00,840 --> 00:14:02,240 Speaker 5: Going to look like moving forward. 324 00:14:02,679 --> 00:14:04,760 Speaker 7: Heidi, you think that Trump's going to come in and 325 00:14:04,760 --> 00:14:08,800 Speaker 7: put his promises directly in focus. You have some individuals 326 00:14:08,800 --> 00:14:10,400 Speaker 7: that are close to FOREGM presidents that say this is 327 00:14:10,440 --> 00:14:13,640 Speaker 7: a negotiating tool. If he was to put sixty percent 328 00:14:13,760 --> 00:14:16,720 Speaker 7: tariffs on Chinese imports, we could see a meltdown in 329 00:14:16,800 --> 00:14:19,600 Speaker 7: financial markets. And what we learned from Trump from Trump 330 00:14:19,720 --> 00:14:23,120 Speaker 7: one point zero is that he keeps an eye on 331 00:14:23,120 --> 00:14:26,920 Speaker 7: what stocks are doing. Is that going to be basically 332 00:14:26,920 --> 00:14:30,960 Speaker 7: a regulating force on Trump and his administration, So. 333 00:14:30,920 --> 00:14:35,320 Speaker 8: He does focus very much on the stock market. I think, 334 00:14:36,360 --> 00:14:39,680 Speaker 8: you know, at some point he will have to focus on. 335 00:14:41,320 --> 00:14:42,080 Speaker 5: What's happening in. 336 00:14:42,080 --> 00:14:45,720 Speaker 8: Rates as well, because this is going to, you know, 337 00:14:45,800 --> 00:14:50,760 Speaker 8: significantly complicate you know, we have FMC later today, and 338 00:14:50,800 --> 00:14:54,400 Speaker 8: it complicates the Fed's job next year because you will 339 00:14:54,400 --> 00:14:58,440 Speaker 8: have this combination of inflation growth and tax cuts on 340 00:14:58,520 --> 00:15:01,400 Speaker 8: the table, so you're going to have a slower pace 341 00:15:01,440 --> 00:15:06,840 Speaker 8: of easing. I can see some very difficult public conversations 342 00:15:07,160 --> 00:15:10,080 Speaker 8: between j Powell and Trump that we didn't there's a 343 00:15:10,160 --> 00:15:13,280 Speaker 8: lack of them last time. But I think he's also 344 00:15:13,400 --> 00:15:15,160 Speaker 8: Trump has also made it clear he wants a lot 345 00:15:15,200 --> 00:15:16,840 Speaker 8: more influence on the FED. 346 00:15:17,240 --> 00:15:18,760 Speaker 5: But there are a lot of spillovers. 347 00:15:18,800 --> 00:15:22,440 Speaker 8: So if you're talking about fewer you know, lesser easing 348 00:15:22,760 --> 00:15:25,520 Speaker 8: or a real potential of of rate hikes, which I 349 00:15:25,600 --> 00:15:30,840 Speaker 8: think is plausible. The spillovers are to hire mortgage costs 350 00:15:30,840 --> 00:15:34,080 Speaker 8: and corporate borrowing and huge spillovers. Not that I'm not 351 00:15:34,120 --> 00:15:36,600 Speaker 8: sure Trump would care about emerging markets, but from from 352 00:15:36,640 --> 00:15:38,920 Speaker 8: market perspective, emerging. 353 00:15:38,520 --> 00:15:40,240 Speaker 5: Markets will take the hit as well. 354 00:15:40,320 --> 00:15:43,160 Speaker 3: So you have a whole new, a whole new. 355 00:15:45,360 --> 00:15:49,400 Speaker 8: Risk set of risks on the table for for next year. 356 00:15:49,880 --> 00:15:52,360 Speaker 6: Heidi, you went through a lot there, and I want 357 00:15:52,400 --> 00:15:55,600 Speaker 6: to pick out one aspect of it, the stock market performance, 358 00:15:55,600 --> 00:15:58,480 Speaker 6: particularly of financials. There is this expectation that they'll be 359 00:15:58,640 --> 00:16:00,800 Speaker 6: a mass wave of do you regulate that will really 360 00:16:00,840 --> 00:16:02,120 Speaker 6: help the banking stocks. 361 00:16:02,400 --> 00:16:04,200 Speaker 5: You actually orchestrated. 362 00:16:04,200 --> 00:16:09,080 Speaker 6: Bank regulation, bank legislation heading into twenty eleven, and I'm 363 00:16:09,160 --> 00:16:13,320 Speaker 6: just wondering how difficult will it be for Donald Trump's 364 00:16:13,360 --> 00:16:16,120 Speaker 6: unilaterally deregulate the banking sector. 365 00:16:17,960 --> 00:16:23,280 Speaker 8: So I think anything that involves, you know, anything that 366 00:16:23,360 --> 00:16:27,920 Speaker 8: involves any other parties and negotiating with any other parties 367 00:16:28,520 --> 00:16:33,200 Speaker 8: is challenging. So deregulation on a whole host of issues 368 00:16:33,240 --> 00:16:39,160 Speaker 8: banking or anything having to do with wanting to cut 369 00:16:39,200 --> 00:16:41,200 Speaker 8: red tape in all of the and all of the 370 00:16:41,240 --> 00:16:45,960 Speaker 8: permitting that he's that he's looking to do it, It's 371 00:16:46,000 --> 00:16:48,840 Speaker 8: more complicated than I think anybody knows when they're going 372 00:16:48,880 --> 00:16:52,800 Speaker 8: into government. So I do think that it is going 373 00:16:53,320 --> 00:16:56,600 Speaker 8: going to continue to be I mean, deregulation is going 374 00:16:56,640 --> 00:17:01,640 Speaker 8: to be positive for certain industries and you know that 375 00:17:01,800 --> 00:17:04,680 Speaker 8: is I think that is going to continue to be, 376 00:17:04,840 --> 00:17:09,520 Speaker 8: you know, a longer term play in terms of what 377 00:17:09,600 --> 00:17:13,960 Speaker 8: to watch for the Again, I'm going to go back 378 00:17:13,960 --> 00:17:17,919 Speaker 8: to where I started. The real the real risk that 379 00:17:17,960 --> 00:17:20,760 Speaker 8: I see near term is the impact on that that 380 00:17:20,880 --> 00:17:22,160 Speaker 8: is tariff policy will have. 381 00:17:22,359 --> 00:17:25,000 Speaker 6: So it seems like just in terms of sequencing tariff's first, 382 00:17:25,080 --> 00:17:27,320 Speaker 6: the deregulation will take a lot longer, and that'll be 383 00:17:27,320 --> 00:17:30,520 Speaker 6: a more protracted type of implementation. You said something else, 384 00:17:30,560 --> 00:17:32,680 Speaker 6: and I thought it was really interesting that you don't 385 00:17:32,720 --> 00:17:35,919 Speaker 6: see some of these offices that are going to be 386 00:17:36,040 --> 00:17:41,080 Speaker 6: negotiating with different countries and different agencies fully staffed. Why 387 00:17:41,160 --> 00:17:43,720 Speaker 6: do you think so? 388 00:17:43,720 --> 00:17:46,080 Speaker 8: So, I mean, it takes a lot of time to 389 00:17:46,080 --> 00:17:48,840 Speaker 8: get the right people in place and up to speed 390 00:17:49,040 --> 00:17:50,600 Speaker 8: on the agenda. 391 00:17:50,640 --> 00:17:52,280 Speaker 5: Whether you have, you know, no. 392 00:17:52,160 --> 00:17:57,040 Speaker 8: Matter how talented your people are or how prepared your 393 00:17:57,040 --> 00:17:59,840 Speaker 8: transition is you can have, it still takes a long 394 00:17:59,840 --> 00:18:01,840 Speaker 8: time time to get up to speed and actually meet 395 00:18:01,880 --> 00:18:02,800 Speaker 8: your counterparts. 396 00:18:03,680 --> 00:18:05,800 Speaker 5: So we do have and I think. 397 00:18:05,720 --> 00:18:09,760 Speaker 8: That you know, there are there are certain countries where 398 00:18:09,800 --> 00:18:12,840 Speaker 8: I think Trump himself will want to have the direct 399 00:18:13,640 --> 00:18:18,040 Speaker 8: bilateral negotiation, but there are only so many countries that 400 00:18:18,080 --> 00:18:19,920 Speaker 8: he can that he can do that with, and they're 401 00:18:19,960 --> 00:18:22,520 Speaker 8: they're going to that that is going to be as 402 00:18:22,560 --> 00:18:25,760 Speaker 8: we've seen in the past, personality driven with the leaders 403 00:18:25,800 --> 00:18:31,600 Speaker 8: of those countries. It's also it's going to uh, it's 404 00:18:31,680 --> 00:18:35,520 Speaker 8: going to mean that you have any decision making on 405 00:18:36,520 --> 00:18:40,199 Speaker 8: and on tariff relief, probably more on a on a 406 00:18:40,240 --> 00:18:44,879 Speaker 8: case by case, even company by company basis. So friends 407 00:18:44,880 --> 00:18:48,920 Speaker 8: of Trump are probably are probably going to benefit from 408 00:18:49,280 --> 00:18:53,240 Speaker 8: from from anything that would be relief on any on 409 00:18:53,280 --> 00:18:54,639 Speaker 8: any tariffs. 410 00:18:55,160 --> 00:18:57,239 Speaker 2: Heney was great to get your perspective on things on 411 00:18:57,320 --> 00:18:59,000 Speaker 2: tariff and what it could mean for the global economy, 412 00:18:59,080 --> 00:19:11,720 Speaker 2: Heidi Cribarnica of the Council on Foreign Relations. So here's 413 00:19:11,720 --> 00:19:14,400 Speaker 2: the lays. It's the Democratic Party searching for answers. After 414 00:19:14,400 --> 00:19:17,880 Speaker 2: Donald Trump's decisive victory over Kamala Harris, Democrats are losing 415 00:19:17,960 --> 00:19:21,159 Speaker 2: the majority in the Senate after dropping three seats to Republicans, 416 00:19:21,160 --> 00:19:23,879 Speaker 2: with the House for the race for the House still 417 00:19:24,080 --> 00:19:27,119 Speaker 2: in the balance. Tobin Marcus of Wolf Research writing, Dems 418 00:19:27,119 --> 00:19:29,960 Speaker 2: now find themselves in the wilderness, with big debates ahead 419 00:19:29,960 --> 00:19:32,760 Speaker 2: about how to rebuild and on the GOP side, presumptive 420 00:19:32,840 --> 00:19:35,960 Speaker 2: VP elect Vance instantly becomes the front runner for the 421 00:19:36,000 --> 00:19:39,080 Speaker 2: twenty twenty eight nomination. It'll be an interesting few years 422 00:19:39,320 --> 00:19:43,000 Speaker 2: in Washington, Tobin. It will be an interesting few years worldwide. 423 00:19:43,119 --> 00:19:44,720 Speaker 2: It's good to have you backsair and thank you for 424 00:19:44,760 --> 00:19:46,720 Speaker 2: your coverage on election night with US. I want to 425 00:19:46,720 --> 00:19:50,040 Speaker 2: start with the Democrats and this line from Vice President 426 00:19:50,080 --> 00:19:52,840 Speaker 2: Krmala Harris, Whilst I can see this election, I do 427 00:19:52,920 --> 00:19:56,639 Speaker 2: not concede the fight that fueled this campaign, Tobin. I 428 00:19:56,680 --> 00:19:59,040 Speaker 2: can think of very few demographics that would like her 429 00:19:59,200 --> 00:20:01,560 Speaker 2: to continue this given the shift in support that we 430 00:20:01,640 --> 00:20:04,119 Speaker 2: saw towards Donald Trump. Do you think the Democrats will 431 00:20:04,200 --> 00:20:06,560 Speaker 2: learn the right lesson from this basic. 432 00:20:08,080 --> 00:20:08,920 Speaker 9: I think that. 433 00:20:09,600 --> 00:20:11,000 Speaker 1: So. I mean, look, this is going to be a 434 00:20:11,359 --> 00:20:15,479 Speaker 1: vigorously flought question about which direction the Democratic Party should go, 435 00:20:15,600 --> 00:20:18,000 Speaker 1: and I think that the next primary campaign is going 436 00:20:18,040 --> 00:20:20,240 Speaker 1: to be the forum for that fight. But the comparison 437 00:20:20,280 --> 00:20:22,320 Speaker 1: that keeps coming to mind for me is nineteen ninety two, 438 00:20:22,440 --> 00:20:24,359 Speaker 1: where at that point you were coming off of twelve 439 00:20:24,440 --> 00:20:28,720 Speaker 1: years of Republican governance. Reagan had engineered a broad realignment 440 00:20:28,760 --> 00:20:32,240 Speaker 1: of the electorate, and what ended up happening was you 441 00:20:32,280 --> 00:20:34,960 Speaker 1: had Clinton coming in not just running against Washington, but 442 00:20:35,000 --> 00:20:37,440 Speaker 1: really running against the Democratic Party and trying to brand 443 00:20:37,520 --> 00:20:39,360 Speaker 1: him is a new kind of Democrat. So I think 444 00:20:39,400 --> 00:20:42,960 Speaker 1: that is the move for a governor or somebody to know, 445 00:20:43,040 --> 00:20:45,399 Speaker 1: to articulate kind of a critique of the direction that 446 00:20:45,400 --> 00:20:47,720 Speaker 1: the party's been going for a while now, and to 447 00:20:47,800 --> 00:20:49,800 Speaker 1: have that become the new banner for the party, so 448 00:20:50,119 --> 00:20:51,960 Speaker 1: you know what that is and who that is I 449 00:20:51,960 --> 00:20:53,760 Speaker 1: think remains to be determined, but that I think is 450 00:20:53,800 --> 00:20:56,280 Speaker 1: the clear template for how the party should move forward, 451 00:20:56,280 --> 00:20:57,320 Speaker 1: and I think there's momentum. 452 00:20:57,520 --> 00:21:00,560 Speaker 7: Tobin for me yesterday was the quote from Senator Bernie Sanders. 453 00:21:00,560 --> 00:21:02,760 Speaker 7: It should come as no surprise at a Democratic Party 454 00:21:02,760 --> 00:21:05,280 Speaker 7: which has abandoned working class people would find that the 455 00:21:05,320 --> 00:21:08,600 Speaker 7: working class has abandoned them. He goes on, first it 456 00:21:08,680 --> 00:21:11,600 Speaker 7: was the white working class, now it's Latino and black 457 00:21:11,640 --> 00:21:15,720 Speaker 7: workers as well. While the Democratic leadership defends the status quo, 458 00:21:15,840 --> 00:21:18,840 Speaker 7: the American people are angry and want change, and they're right. 459 00:21:19,200 --> 00:21:22,639 Speaker 7: Do you see this Democratic Party becoming more right because 460 00:21:22,640 --> 00:21:27,119 Speaker 7: of this win trifecta nearly by the Republican Party, or 461 00:21:27,160 --> 00:21:29,240 Speaker 7: do they go more progressive? 462 00:21:30,760 --> 00:21:34,040 Speaker 9: So again, I think that is going to be litigated. 463 00:21:34,320 --> 00:21:36,840 Speaker 1: I think certainly the progressive wing of the party, although 464 00:21:36,880 --> 00:21:38,560 Speaker 1: it's not clear who their standard bearer will be, I 465 00:21:38,560 --> 00:21:40,200 Speaker 1: think is going to attempt to make the case that 466 00:21:40,240 --> 00:21:42,560 Speaker 1: they really made in both sixteen and twenty that the 467 00:21:42,560 --> 00:21:45,000 Speaker 1: way for the party to move forward is to sort 468 00:21:45,040 --> 00:21:47,480 Speaker 1: of move against ute unquote neoliberalism and sort of take 469 00:21:47,560 --> 00:21:52,520 Speaker 1: up this very thoroughgoingly progressive lefty stands. It's not surprising 470 00:21:52,520 --> 00:21:54,520 Speaker 1: that that Sanders is take I don't think that's going 471 00:21:54,560 --> 00:21:57,880 Speaker 1: to be the consensus across the party, and I don't 472 00:21:57,920 --> 00:22:01,920 Speaker 1: really think that the that the broad wave against the 473 00:22:01,960 --> 00:22:05,919 Speaker 1: Democratic Party that we saw on Tuesday was economic and 474 00:22:06,000 --> 00:22:08,119 Speaker 1: nature in that way. Obviously, there's a huge amount of 475 00:22:08,160 --> 00:22:10,760 Speaker 1: disatisfaction about the economy around the world. We've been seeing 476 00:22:10,800 --> 00:22:13,760 Speaker 1: incumbent parties get just absolutely destroyed in the way of 477 00:22:13,840 --> 00:22:15,840 Speaker 1: the inflationary out versus the past few years. But I 478 00:22:15,840 --> 00:22:17,639 Speaker 1: think it's hard to look at the pattern of results 479 00:22:17,640 --> 00:22:19,680 Speaker 1: and see that as people kind of crying out for 480 00:22:20,160 --> 00:22:22,600 Speaker 1: a progressive vision. I think that that there's a broad 481 00:22:22,640 --> 00:22:24,680 Speaker 1: sense that the Democratic Party's values are out of touch 482 00:22:24,720 --> 00:22:26,640 Speaker 1: with normal people, and I think that that's at least 483 00:22:26,680 --> 00:22:28,000 Speaker 1: as cultural as it is economic. 484 00:22:28,160 --> 00:22:30,159 Speaker 7: You mentioned this question of who the standard bear is. 485 00:22:30,240 --> 00:22:33,040 Speaker 7: I mean, even in this moment, Kamala Harris gave a 486 00:22:33,119 --> 00:22:36,800 Speaker 7: speech and didn't really thank President Biden the way most 487 00:22:36,880 --> 00:22:40,639 Speaker 7: people would expect. At the same time, President Biden is 488 00:22:40,760 --> 00:22:45,280 Speaker 7: calling President Trump and organizing a meeting with him. It's 489 00:22:45,400 --> 00:22:48,119 Speaker 7: very difficult to understand what exactly is even going on 490 00:22:48,400 --> 00:22:51,399 Speaker 7: in the White House where this relationship is right now, 491 00:22:51,600 --> 00:22:52,919 Speaker 7: do you have any understanding? 492 00:22:54,680 --> 00:22:56,880 Speaker 1: I mean, look, there's a huge amounts of continuity between 493 00:22:56,880 --> 00:22:57,840 Speaker 1: the Biden and Harris camps. 494 00:22:57,840 --> 00:22:58,960 Speaker 9: I mean, just look at the campaign. 495 00:22:59,040 --> 00:23:01,000 Speaker 1: That being said, Harris does have kind of her own people, 496 00:23:01,119 --> 00:23:03,000 Speaker 1: so it makes sense that we're seeing different messages from 497 00:23:03,000 --> 00:23:03,480 Speaker 1: each of them. 498 00:23:03,840 --> 00:23:04,280 Speaker 9: At this point. 499 00:23:04,320 --> 00:23:06,800 Speaker 1: The kind of Harris campaign apparatus is not particularly relevant. 500 00:23:07,359 --> 00:23:09,720 Speaker 1: You know, the Biden White House needs to actually do 501 00:23:09,760 --> 00:23:12,639 Speaker 1: the transition. There are concrete things that need to happen 502 00:23:12,960 --> 00:23:15,080 Speaker 1: to hand power over to Trump, and I think that'll happen. 503 00:23:14,920 --> 00:23:16,040 Speaker 9: In a basically normal way. 504 00:23:16,280 --> 00:23:18,119 Speaker 1: But in terms of the political future of the party, 505 00:23:19,440 --> 00:23:21,480 Speaker 1: you know, I think that the different people who have 506 00:23:21,520 --> 00:23:23,320 Speaker 1: their eye on twenty twenty eight are going to start 507 00:23:23,320 --> 00:23:26,000 Speaker 1: setting up their own apparatus and carving out their own 508 00:23:26,040 --> 00:23:28,960 Speaker 1: kind of power centers rather than I mean, we've really 509 00:23:28,960 --> 00:23:31,320 Speaker 1: had a lot of kind of party elites trying to 510 00:23:31,720 --> 00:23:33,120 Speaker 1: guide the party through. 511 00:23:32,880 --> 00:23:35,280 Speaker 9: Something from twenty twenty onwards. 512 00:23:35,280 --> 00:23:37,680 Speaker 1: You know, the coalescence around Biden during the twenty twenty 513 00:23:37,680 --> 00:23:42,080 Speaker 1: primary was some sort of unusual degree of sort of 514 00:23:42,400 --> 00:23:45,280 Speaker 1: centralized steering relative to what we normally see, which is 515 00:23:45,359 --> 00:23:47,960 Speaker 1: kind of political entrepreneurism with you know again, sort of 516 00:23:48,000 --> 00:23:51,000 Speaker 1: charismatic outsiders coming in trying to shake things up and 517 00:23:51,640 --> 00:23:52,960 Speaker 1: taking over the party for themselves. 518 00:23:53,320 --> 00:23:55,840 Speaker 6: Jobin there was an incredible statistic from Jim read Over 519 00:23:55,880 --> 00:23:58,840 Speaker 6: at Deutsche Bank that really crystallized how unique this moment is. 520 00:23:59,240 --> 00:24:00,920 Speaker 6: He said that it is a first time since the 521 00:24:01,000 --> 00:24:03,680 Speaker 6: late eighteen hundreds that the incumbent party of the White 522 00:24:03,720 --> 00:24:08,240 Speaker 6: House has lost three consecutive presidential elections. So, yes, this 523 00:24:08,359 --> 00:24:11,480 Speaker 6: is a Democrat versus Republican issue. This is a question 524 00:24:11,560 --> 00:24:14,080 Speaker 6: about the identity, But there's something else afoot. 525 00:24:14,400 --> 00:24:15,360 Speaker 5: Can you give. 526 00:24:15,240 --> 00:24:18,480 Speaker 6: Us some color onto why we're seeing this type of trend. 527 00:24:19,600 --> 00:24:21,840 Speaker 1: Yeah, absolutely, And I think that the explanation for that 528 00:24:21,960 --> 00:24:24,360 Speaker 1: is that we are on a multi decade secular decline. 529 00:24:24,440 --> 00:24:26,680 Speaker 9: Who share of people who say that the country is 530 00:24:26,720 --> 00:24:29,240 Speaker 9: going in the right direction rather than on the wrong track. 531 00:24:29,560 --> 00:24:31,600 Speaker 9: So incumbency traditionally has been an advantage. 532 00:24:31,920 --> 00:24:35,719 Speaker 1: The more that there is a persistent feeling that America 533 00:24:35,800 --> 00:24:38,960 Speaker 1: is going in the wrong direction, that transcends who particularly 534 00:24:38,960 --> 00:24:41,560 Speaker 1: is in control the more incumbency becomes a burden, and 535 00:24:41,600 --> 00:24:44,080 Speaker 1: the more that you should expect sort of faster move 536 00:24:44,119 --> 00:24:47,320 Speaker 1: of the metronome back and forth between parties. You know, 537 00:24:47,400 --> 00:24:50,200 Speaker 1: that's not to guarantee that we're going to have another, 538 00:24:50,320 --> 00:24:54,040 Speaker 1: you know, one term of partisan control, but Democrats winning back. 539 00:24:53,920 --> 00:24:54,720 Speaker 9: In twenty twenty eight. 540 00:24:54,920 --> 00:24:57,560 Speaker 1: But you know, we are going into another very unusual 541 00:24:57,560 --> 00:25:00,159 Speaker 1: period where the president who just got elected it is 542 00:25:00,200 --> 00:25:00,720 Speaker 1: a lame duck. 543 00:25:00,920 --> 00:25:02,600 Speaker 9: So Trump is not going to be up in twenty eight. 544 00:25:02,760 --> 00:25:04,760 Speaker 1: You know, as you sort of quote that you ran 545 00:25:04,800 --> 00:25:07,040 Speaker 1: at the top from my last note, I fully expect 546 00:25:07,080 --> 00:25:08,920 Speaker 1: advance it's going to be the most likely but not 547 00:25:08,960 --> 00:25:12,760 Speaker 1: you know, not guaranteed, but most likely nominee for Republicans 548 00:25:12,800 --> 00:25:15,520 Speaker 1: in twenty eight. We'll see who's running against him on 549 00:25:15,560 --> 00:25:17,639 Speaker 1: the Democratic side. But I think that will be another 550 00:25:17,680 --> 00:25:20,399 Speaker 1: opportunity for both parties to try and tap into the 551 00:25:20,400 --> 00:25:23,360 Speaker 1: discontent of American voters and you know, argue that they're 552 00:25:23,359 --> 00:25:24,360 Speaker 1: the ones to lead us in a new. 553 00:25:24,359 --> 00:25:27,159 Speaker 6: Direction as all the exit holes come together. As we 554 00:25:27,200 --> 00:25:29,879 Speaker 6: do have the results, what's your sense of what the 555 00:25:29,920 --> 00:25:33,679 Speaker 6: main issues really were that fed into that discontent, that 556 00:25:33,760 --> 00:25:36,959 Speaker 6: sort of secular decline that people feel across the United States. 557 00:25:38,200 --> 00:25:39,600 Speaker 9: I think you have to look at inflation. 558 00:25:39,760 --> 00:25:41,879 Speaker 1: I think you look around the world and see you 559 00:25:42,040 --> 00:25:47,600 Speaker 1: parties really of every ideological orientation getting really having it 560 00:25:47,640 --> 00:25:50,159 Speaker 1: handage to them by voters around the world. You know, 561 00:25:50,280 --> 00:25:53,240 Speaker 1: generally there's some you know, sort of rising strengths on 562 00:25:53,280 --> 00:25:55,280 Speaker 1: the far right. But I think in many cases that's 563 00:25:55,320 --> 00:25:57,320 Speaker 1: because the coumbments happened to be on the center of 564 00:25:57,359 --> 00:25:58,000 Speaker 1: the center left. 565 00:25:58,119 --> 00:25:59,160 Speaker 9: In places where we did. 566 00:25:59,119 --> 00:26:01,960 Speaker 1: See or writing parties in power, whether that's the UK 567 00:26:02,119 --> 00:26:05,040 Speaker 1: or Poland, we saw backlash against them also. So I 568 00:26:05,040 --> 00:26:07,679 Speaker 1: think that, you know, it seems to me that whoever 569 00:26:07,840 --> 00:26:11,000 Speaker 1: is presiding over first and foremost this period of high inflation, 570 00:26:11,320 --> 00:26:14,199 Speaker 1: to some extent discontent about immigration, which also is kind 571 00:26:14,200 --> 00:26:16,240 Speaker 1: of trying to you know, span national lines across the 572 00:26:16,240 --> 00:26:18,320 Speaker 1: Western world. You know, those I think are the most 573 00:26:18,320 --> 00:26:21,359 Speaker 1: salient elements of people's satisfaction about the status quo. The 574 00:26:21,520 --> 00:26:22,879 Speaker 1: voters are rebelling against. 575 00:26:22,960 --> 00:26:25,199 Speaker 2: Hey, Tobin goods cantsch up Tobin markets there of war 576 00:26:25,240 --> 00:26:28,440 Speaker 2: for research. I appreciate your time. This is the Bloomberg 577 00:26:28,480 --> 00:26:32,320 Speaker 2: Surveillance podcast, bringing you the best in markets, economics, an 578 00:26:32,359 --> 00:26:35,120 Speaker 2: gio politics. You can watch the show live on Bloomberg 579 00:26:35,200 --> 00:26:38,360 Speaker 2: TV weekday mornings from six am to nine am Eastern. 580 00:26:38,640 --> 00:26:41,960 Speaker 2: Subscribe to the podcast on Apple, Spotify, or anywhere else 581 00:26:42,040 --> 00:26:44,679 Speaker 2: you listen, and, as always, on the Bloomberg Terminal and 582 00:26:44,760 --> 00:26:45,960 Speaker 2: the Bloomberg Business Amp.