Speaker 1: Bloomberg Audio Studios, Podcasts, radio news.
Speaker 2: This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along
Speaker 2: with Lisa Bromwitz and Amrie Hordern. Join us each day
Speaker 2: for insight from the best in markets, economics, and geopolitics
Speaker 2: from our global headquarters in New York City. We are
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Speaker 2: Terminal and the Bloomberg Business app. Andrew Holmholds the city
Speaker 2: is alongside us. Now for more, Andrew, good morning to you.
Speaker 2: We'll start with job as claims and then we can
Speaker 2: get to all the.
Speaker 3: Rest of it.
Speaker 2: Claims are really really low, and you've been looking for
Speaker 2: a much weaker labor market into your end. Why doesn't
Speaker 2: that back up that theory.
Speaker 4: It's a strange labor market. It's a different labor market
Speaker 4: than something that we've ever seen before, where we have
Speaker 4: really low hiring rates. We see the jold stato see
Speaker 4: the percentage of people who are getting hired into new jobs,
Speaker 4: and that number is low, so it is hard to
Speaker 4: get hired into a job.
Speaker 5: That's the bad news.
Speaker 4: The good news is what we're seeing in jobless claims
Speaker 4: and the initial claims at least that is showing us that.
Speaker 5: The layoff rate is still low.
Speaker 4: So we have a strange labor market where it seems
Speaker 4: like people are hanging on to the workers that they have,
Speaker 4: but they're not necessarily wanting to hire more workers.
Speaker 2: So you think twenty five today, and you think fifty
Speaker 2: in December, and everyone else is thinking about twenty twenty
Speaker 2: five in the prospect of right hikes and not RT cuts.
Speaker 3: How useful is the price section of.
Speaker 2: The last twenty four hours to project out what twenty
Speaker 2: twenty five might break.
Speaker 5: Yeah, I think not useful at all.
Speaker 4: I really don't think that you're supposed to take a
Speaker 4: macro narrative away or a fed narrative away from what's
Speaker 4: going on in interest rate markets right now. If you
Speaker 4: look at what's happening in the macro fundamentals, we do
Speaker 4: have a softening of the labor market. I think that's
Speaker 4: clear after the last jobs report, where even if you
Speaker 4: adjust that job's report for hurricanes and for strikes, and
Speaker 4: I think that's part of why the market can't react
Speaker 4: to it. We also had the election coming up at
Speaker 4: the time. But with all the distortion, it's hard to see.
Speaker 4: But if you draw a through line through it, what
Speaker 4: you see is the pace of job growth is slowing.
Speaker 4: You see the unemployment rate has risen from its lows,
Speaker 4: and it looks like, if anything, it's still trending higher,
Speaker 4: and that's going to make the FED think there's some
Speaker 4: downside risk to employment. And then you move to the
Speaker 4: inflation side. We just got numbers for the third quarter
Speaker 4: two point one six percent quarterly annualized core PC inflation.
Speaker 4: That's essentially at target inflation. So if you're the FED,
Speaker 4: you're looking at inflation that's close to target.
Speaker 5: You're looking at an unemployment.
Speaker 4: Rate that's still low but maybe rising. The path is
Speaker 4: going to be towards lower rates. So I really don't
Speaker 4: understand the move in the market or the new narrative
Speaker 4: that this is a FED that might need to hike. No,
Speaker 4: this is a FED that's cutting.
Speaker 6: I think a lot of people would agree that this
Speaker 6: FED probably isn't going to hike, though there was this
Speaker 6: one person out there who did put out the prospect
Speaker 6: of potential rate.
Speaker 5: Highest number of people. Actually there is.
Speaker 6: A feeling though, that they can't cut nearly as much,
Speaker 6: especially at a time where the death is it's probably
Speaker 6: going to expand, and at a time where even if
Speaker 6: if it's not accelerating, this is an economy that's pretty solid.
Speaker 5: How do you push back against that?
Speaker 4: Well, first of all, I'm not sure that it's an
Speaker 4: economy that's pretty solid. I know that we're seeing GDP
Speaker 4: growth that's running close to three percent. On the activity numbers,
Speaker 4: those look fine. Again, if you look at the labor market,
Speaker 4: it doesn't look as strong. And I think we just
Speaker 4: had a referendum in this country in some ways on
Speaker 4: the state of the economy, and the results were not
Speaker 4: positive for how people are experiencing this economy. And you
Speaker 4: see that in some of the survey data. You see
Speaker 4: you ask people, our jobs plentiful, Our job's hard to get.
Speaker 4: You see that hard to get number that's been coming up.
Speaker 4: You see hard to get jobs number that's elevated.
Speaker 5: Right now.
Speaker 4: If you're the Fed, the mandatea is employment and the
Speaker 4: mandate is inflation. Inflation is close to target. You have
Speaker 4: a labor market that's softening. And remember back in August
Speaker 4: Jera Powell said we would not seek or welcome any
Speaker 4: further softening of the labor market. That means you need
Speaker 4: to get policy rates down towards neutral.
Speaker 6: But this really highlights how messy the data is and
Speaker 6: how I can't really understand it because at the same
Speaker 6: time that you're saying that the election was a referendum
Speaker 6: of and that we've seen this in sentiment, at the
Speaker 6: same time, we're seeing the US City Surprise Economic Index
Speaker 6: rise to the clients level going back to April. At
Speaker 6: the same time ISM service as the employment component actually
Speaker 6: increased more than expected. So how much are you looking at,
Speaker 6: say the rising inflation expectations as data to pay attention
Speaker 6: to or not pay attention two for the Federal Reserve, No,
Speaker 6: I think.
Speaker 4: It's a fair point, and I think the signal to
Speaker 4: noise ratio in the data is just lower than it
Speaker 4: used to be. And in some ways we know why
Speaker 4: that's happening. If you look at the jobs report, the
Speaker 4: payrolls report, for instance, the response rate is much lower
Speaker 4: than it used to be, and that just means that
Speaker 4: that data is going to be noisier, and we see
Speaker 4: that in some of the revisions we've had just consistent
Speaker 4: downward revisions to those jobs figures. So we get a
Speaker 4: jobs figure, you look at the city Economic Surprise Index
Speaker 4: as a positive surprise.
Speaker 5: The market reacts to that.
Speaker 4: Well, then I'm not sure if people are paying as
Speaker 4: much attention when a month later, two months later, sometimes
Speaker 4: a year later. Right with those preliminary benchmark provisions to
Speaker 4: the payrolls numbers that turned out to be eight hundred
Speaker 4: and eighteen thousand lower in terms of the level of jobs,
Speaker 4: and we thought it was those revisions have been to
Speaker 4: the downside, and that means we're actually looking at a
Speaker 4: weaker labor market than we thought. But the market's already reacted,
Speaker 4: the narrative has already shifted. So what we're trying to
Speaker 4: do is look at the data as best we can
Speaker 4: draw those through lines in terms of where things are headed. Yes,
Speaker 4: I would agree right now we're running, you.
Speaker 5: Know, good GDP growth.
Speaker 4: We have an unemployment rate that's low four percents. That's
Speaker 4: not a bad thing either, not a bad place to be.
Speaker 4: But the question is where are we going from here?
Speaker 7: I want to pick up your point about a referendum,
Speaker 7: was that because of jobs or price pressure and inflation?
Speaker 4: I think it's a combination of the two, right, And
Speaker 4: that's why there is this idea that you're supposed to be,
Speaker 4: you know, maybe adding the unemployment rate.
Speaker 5: To the inflation rate.
Speaker 4: But when you look at the consumer sentiment surveys, for instance,
Speaker 4: you're absolutely right.
Speaker 5: People are saying prices are high.
Speaker 4: That's one of the reasons that they're unhappy with where
Speaker 4: the economy is.
Speaker 5: The other thing that I think matters.
Speaker 4: And maybe we don't pick it up as well in
Speaker 4: some of the survey data is look where interest rates are.
Speaker 4: And it goes back to the discussion that we're having
Speaker 4: with Lisa that you with fiscal concern. It means that
Speaker 4: longer term interest rates have risen again. It means mortgage
Speaker 4: rates are going to be close to their highs again.
Speaker 5: Right.
Speaker 4: We thought they were going lower because the Fed was
Speaker 4: cutting interest rates. Now they're higher again. Those are actually
Speaker 4: reasons that the Fed might end up being more dubvish.
Speaker 4: I understand it's a complicated scenario when you have loose
Speaker 4: fiscal policy that's raising interest rates and.
Speaker 3: I can't jump in down.
Speaker 2: Don't you think that that fifty basis point cut contributed
Speaker 2: to higher long end yields? Because before we're even talking
Speaker 2: about a Trump presidency or a Trump suite in a
Speaker 2: material way. Ever since they cut interest rates, yields bottomed
Speaker 2: within twenty four rounds at that period. They've been up
Speaker 2: by sixty seventy. I haven't twenty di since, but we're
Speaker 2: at three sixty last time around, So it's called eighty.
Speaker 2: Had an eighty basis point move on a tenure. Don't
Speaker 2: you think the FED easing has had something to do
Speaker 2: with that?
Speaker 4: Well, all else equal, if the FED is more dubbish,
Speaker 4: you're going to get a steeper yield curve. The level
Speaker 4: of short term interest rates is going to be lower
Speaker 4: relative to the level of long term interest rates. If
Speaker 4: you have a more dubbish FED, then you should be
Speaker 4: more concerned about medium term risks to inflation, about upside
Speaker 4: risks to growth in the longer run, and that's where
Speaker 4: you're going to have longer.
Speaker 5: Higher yields further out the curve.
Speaker 4: I think what happened here, though, was we were coming
Speaker 4: into that FOMC meeting. The data looked pretty bad, right,
Speaker 4: We had that jobs report that look pretty scary, the
Speaker 4: unemployment rate accelerating, and so the FED cut fifty basis points,
Speaker 4: and I think they were thinking maybe they should have
Speaker 4: cut twenty five basis points at the previous meetings to
Speaker 4: kind of roll those together, and you cut fifty the movie.
Speaker 5: We've had higher in yields.
Speaker 4: I would really go back to what Lisa is saying,
Speaker 4: we've had these consistent upside surprises in the data, and
Speaker 4: yields just track that higher. On the election, I think
Speaker 4: also playing into that move higher that you have in yields.
Speaker 4: But the longer discussion around that, I think is where
Speaker 4: is monetary policy going.
Speaker 5: To be relative to fiscal policy.
Speaker 4: We still have large deficits and that is going to
Speaker 4: be in the longer term.
Speaker 5: Yields are higher.
Speaker 2: So my opinion on this doesn't matter, But I have
Speaker 2: to respect the price section of the last twenty four hours.
Speaker 2: They aren't going to be service workers in the matter
Speaker 2: that don't have to pay taxes on tips anymore.
Speaker 3: We're a few house seats away from this reality.
Speaker 2: We're going to have corporate tax rates coming down from
Speaker 2: twenty one to fifteen conditions. I know these are big
Speaker 2: changes for the US economy, which should stimulate demand. You're
Speaker 2: already seeing that kind of confidence level being baked into
Speaker 2: bank stocks. That's the market screaming, and later on this afternoon.
Speaker 2: We can have a Federal Reserve with an easing bias
Speaker 2: talking about an economy and the way that you do.
Speaker 3: I just feel like we're on.
Speaker 2: Two completely different planets right now. Financial markets are going
Speaker 2: to be right over here, and SHAREM and pound is
Speaker 2: going to be right over there for how long when
Speaker 2: they put out projections for December? How much weight is
Speaker 2: a market participant? Can I put on their dob plot?
Speaker 3: He's going to be doing a news.
Speaker 2: Conference today based on a dot plot from September eighteenth,
Speaker 2: Andrew this Federal Reserve news conference today is absolutely ridiculous,
Speaker 2: And I just wonder how different the conversation is behind
Speaker 2: closed doors.
Speaker 3: Can we at least acknowledge.
Speaker 2: That that the conversation we hear in the news conference
Speaker 2: today is going to be radically different to the conversation
Speaker 2: behind closed doors. These guys have got to consider now
Speaker 2: a very, very very real different scenario for twenty twenty
Speaker 2: five than they had to a few months ago.
Speaker 5: I think that's guaranteed.
Speaker 4: I think that there will be a very interesting discussion
Speaker 4: that's going on at this FOMC meeting, and we'll see
Speaker 4: that in a number of years. In the transcript, we're
Speaker 4: going to hear today in the press conference is going
Speaker 4: to be as little guidance as possible, right, because they
Speaker 4: don't know, and really we don't know in general, because
Speaker 4: we didn't have a very robust policy discussion going into
Speaker 4: this election. Right, we talked a lot about politics, not
Speaker 4: a lot about.
Speaker 2: You know that they're in the risk management business. So
Speaker 2: if I'm in the risk management business, and I face
Speaker 2: two very different scenarios in twenty twenty five, which is
Speaker 2: the polar opposite of each other. Your world recession and
Speaker 2: higher unemployment and Donald Trump's objectives low unemployment and a
Speaker 2: domestic boom. If you're the risk management business, why are
Speaker 2: you coming fifty in December?
Speaker 4: I come back to inflation, right, because that's the other mandate.
Speaker 4: That's the other thing that I worry about. Is this
Speaker 4: potential stronger growth outcome in the economy going to drive inflation.
Speaker 4: Everything we're seeing is going in the opposite direction.
Speaker 5: Right.
Speaker 4: We have demand that is running below supply. Now, we
Speaker 4: have goods inflation that's come down. We have housing and
Speaker 4: inflat again. We're talking about mortgage rates that are back
Speaker 4: up towards their highs. We have the housing sector that's
Speaker 4: in contraction, So that's why the FED is in a
Speaker 4: very different position than the market here, because the Fed
Speaker 4: is looking at this and saying inflation looks under control.
Speaker 4: That's what they're saying behind closed sorts. They're not going
Speaker 4: to say that to it in the press conference. Inflation
Speaker 4: looks under control. And I have this risk downside risk
Speaker 4: of the employment man did Now, if I'm wrong and
Speaker 4: we get stronger job growth and stronger GDP group, that's great.
Speaker 4: But I'm not going to be wrong at cutting rates now.
Speaker 4: That's why they're going to cut today.
Speaker 2: It's going to be a very interesting few months ahead
Speaker 2: of us. Andrew, appreciate your time. So I was going
Speaker 2: to see it, buddy. Thank you, sir, Andrew Hanholst f
Speaker 2: citys Tonal. Trump pledging to boost the US economy when
Speaker 2: he returns to the presidency and deliver sweeping new tariff policies.
Speaker 2: Heidi Kruber Reddika of the Council and Form Relations saying
Speaker 2: Trump is clear, promise is made, promises kept his top
Speaker 2: two promises on tarifs and deportations.
Speaker 3: He can move on unilaterally. Believe what he says. Heid.
Speaker 2: He joined this now for more heardy, welcome to the program.
Speaker 2: I just want to reflect on twenty sixteen, just for
Speaker 2: a moment. In twenty sixteen, when he came into Pawer
Speaker 2: the year afterwards, the focus was on taxes. It took
Speaker 2: a couple of years to really start to shift towards tariffs.
Speaker 2: How quickly do you think you'll start with tariffs this
Speaker 2: time around?
Speaker 3: And why so?
Speaker 8: I think you know it's all going to be about tariffs,
Speaker 8: tariffs and more tariffs here because he can move very quickly.
Speaker 8: I'm thinking like day one, week one quickly, and the
Speaker 8: taxes are going to be in negotiation with Congress, so
Speaker 8: he doesn't have the unilateral authority to actually move on taxes.
Speaker 8: So be prepared for big time tariffs that he promised,
Speaker 8: you know, ten to twenty percent across the board and
Speaker 8: sixty percent on China, and that's that's those are big numbers.
Speaker 8: So other countries are preparing to retaliate, and that will
Speaker 8: hit our exports. You will have supply chain disruptions. And
Speaker 8: so I think one of the debates right now is
Speaker 8: just how much of a shock we're looking at is
Speaker 8: a one time shock on the three plus three plus
Speaker 8: trillion that we have that we import, and how do
Speaker 8: we calculate in factor in retaliation. Right now, Trump is
Speaker 8: actually not going to have his agencies staff to actually
Speaker 8: look at how you remedy or negotiate out of these
Speaker 8: the unilateral across the board, we trade with about two hundred,
Speaker 8: you know, two hundred countries and territories. So this is
Speaker 8: this is be long, and it's going to be messy,
Speaker 8: and it's going to be inflationary. It's going to be
Speaker 8: targeted at China, but Mexico is going to take the
Speaker 8: BNT of it, EU big trading partners. It's where you
Speaker 8: saw a lot of the FX movement in Japan UH
Speaker 8: yesterday and UH and in the in the Yuan so
Speaker 8: and the PASA. So I think you're going to have
Speaker 8: a lot that's going to come and hit that first
Speaker 8: week that he's in office, because he knows what he
Speaker 8: wants to do.
Speaker 7: Did you already think we're seeing the fallout of Trump's
Speaker 7: promises in the sense that basically we'll have the collapse
Speaker 7: of German government?
Speaker 8: So I think that we I mean, Germany has its
Speaker 8: own dynamics. So it's a very good it's a very
Speaker 8: good question. But I think you know what what I
Speaker 8: what I would focus on more is what the direct
Speaker 8: impact will be on the on the US economy. You
Speaker 8: have a lot of reshuffling in various countries trying to
Speaker 8: figure out, you know, how they're going to manage uh,
Speaker 8: this transition to a Trump presidency in terms of UH.
Speaker 8: You know, I think you talk about the changes happening
Speaker 8: in Germany, Well, the whole dynamic with Europe is about
Speaker 8: to change in a very big way.
Speaker 5: You are going to have.
Speaker 8: On the back of a very different policy towards Russia
Speaker 8: and Ukraine and and dealing with NATO. You're going to
Speaker 8: have a lot of deep conversations about what Europe and
Speaker 8: security is.
Speaker 5: Going to look like moving forward.
Speaker 7: Heidi, you think that Trump's going to come in and
Speaker 7: put his promises directly in focus. You have some individuals
Speaker 7: that are close to FOREGM presidents that say this is
Speaker 7: a negotiating tool. If he was to put sixty percent
Speaker 7: tariffs on Chinese imports, we could see a meltdown in
Speaker 7: financial markets. And what we learned from Trump from Trump
Speaker 7: one point zero is that he keeps an eye on
Speaker 7: what stocks are doing. Is that going to be basically
Speaker 7: a regulating force on Trump and his administration, So.
Speaker 8: He does focus very much on the stock market. I think,
Speaker 8: you know, at some point he will have to focus on.
Speaker 5: What's happening in.
Speaker 8: Rates as well, because this is going to, you know,
Speaker 8: significantly complicate you know, we have FMC later today, and
Speaker 8: it complicates the Fed's job next year because you will
Speaker 8: have this combination of inflation growth and tax cuts on
Speaker 8: the table, so you're going to have a slower pace
Speaker 8: of easing. I can see some very difficult public conversations
Speaker 8: between j Powell and Trump that we didn't there's a
Speaker 8: lack of them last time. But I think he's also
Speaker 8: Trump has also made it clear he wants a lot
Speaker 8: more influence on the FED.
Speaker 5: But there are a lot of spillovers.
Speaker 8: So if you're talking about fewer you know, lesser easing
Speaker 8: or a real potential of of rate hikes, which I
Speaker 8: think is plausible. The spillovers are to hire mortgage costs
Speaker 8: and corporate borrowing and huge spillovers. Not that I'm not
Speaker 8: sure Trump would care about emerging markets, but from from
Speaker 8: market perspective, emerging.
Speaker 5: Markets will take the hit as well.
Speaker 3: So you have a whole new, a whole new.
Speaker 8: Risk set of risks on the table for for next year.
Speaker 6: Heidi, you went through a lot there, and I want
Speaker 6: to pick out one aspect of it, the stock market performance,
Speaker 6: particularly of financials. There is this expectation that they'll be
Speaker 6: a mass wave of do you regulate that will really
Speaker 6: help the banking stocks.
Speaker 5: You actually orchestrated.
Speaker 6: Bank regulation, bank legislation heading into twenty eleven, and I'm
Speaker 6: just wondering how difficult will it be for Donald Trump's
Speaker 6: unilaterally deregulate the banking sector.
Speaker 8: So I think anything that involves, you know, anything that
Speaker 8: involves any other parties and negotiating with any other parties
Speaker 8: is challenging. So deregulation on a whole host of issues
Speaker 8: banking or anything having to do with wanting to cut
Speaker 8: red tape in all of the and all of the
Speaker 8: permitting that he's that he's looking to do it, It's
Speaker 8: more complicated than I think anybody knows when they're going
Speaker 8: into government. So I do think that it is going
Speaker 8: going to continue to be I mean, deregulation is going
Speaker 8: to be positive for certain industries and you know that
Speaker 8: is I think that is going to continue to be,
Speaker 8: you know, a longer term play in terms of what
Speaker 8: to watch for the Again, I'm going to go back
Speaker 8: to where I started. The real the real risk that
Speaker 8: I see near term is the impact on that that
Speaker 8: is tariff policy will have.
Speaker 6: So it seems like just in terms of sequencing tariff's first,
Speaker 6: the deregulation will take a lot longer, and that'll be
Speaker 6: a more protracted type of implementation. You said something else,
Speaker 6: and I thought it was really interesting that you don't
Speaker 6: see some of these offices that are going to be
Speaker 6: negotiating with different countries and different agencies fully staffed. Why
Speaker 6: do you think so?
Speaker 8: So, I mean, it takes a lot of time to
Speaker 8: get the right people in place and up to speed
Speaker 8: on the agenda.
Speaker 5: Whether you have, you know, no.
Speaker 8: Matter how talented your people are or how prepared your
Speaker 8: transition is you can have, it still takes a long
Speaker 8: time time to get up to speed and actually meet
Speaker 8: your counterparts.
Speaker 5: So we do have and I think.
Speaker 8: That you know, there are there are certain countries where
Speaker 8: I think Trump himself will want to have the direct
Speaker 8: bilateral negotiation, but there are only so many countries that
Speaker 8: he can that he can do that with, and they're
Speaker 8: they're going to that that is going to be as
Speaker 8: we've seen in the past, personality driven with the leaders
Speaker 8: of those countries. It's also it's going to uh, it's
Speaker 8: going to mean that you have any decision making on
Speaker 8: and on tariff relief, probably more on a on a
Speaker 8: case by case, even company by company basis. So friends
Speaker 8: of Trump are probably are probably going to benefit from
Speaker 8: from from anything that would be relief on any on
Speaker 8: any tariffs.
Speaker 2: Heney was great to get your perspective on things on
Speaker 2: tariff and what it could mean for the global economy,
Speaker 2: Heidi Cribarnica of the Council on Foreign Relations. So here's
Speaker 2: the lays. It's the Democratic Party searching for answers. After
Speaker 2: Donald Trump's decisive victory over Kamala Harris, Democrats are losing
Speaker 2: the majority in the Senate after dropping three seats to Republicans,
Speaker 2: with the House for the race for the House still
Speaker 2: in the balance. Tobin Marcus of Wolf Research writing, Dems
Speaker 2: now find themselves in the wilderness, with big debates ahead
Speaker 2: about how to rebuild and on the GOP side, presumptive
Speaker 2: VP elect Vance instantly becomes the front runner for the
Speaker 2: twenty twenty eight nomination. It'll be an interesting few years
Speaker 2: in Washington, Tobin. It will be an interesting few years worldwide.
Speaker 2: It's good to have you backsair and thank you for
Speaker 2: your coverage on election night with US. I want to
Speaker 2: start with the Democrats and this line from Vice President
Speaker 2: Krmala Harris, Whilst I can see this election, I do
Speaker 2: not concede the fight that fueled this campaign, Tobin. I
Speaker 2: can think of very few demographics that would like her
Speaker 2: to continue this given the shift in support that we
Speaker 2: saw towards Donald Trump. Do you think the Democrats will
Speaker 2: learn the right lesson from this basic.
Speaker 9: I think that.
Speaker 1: So. I mean, look, this is going to be a
Speaker 1: vigorously flought question about which direction the Democratic Party should go,
Speaker 1: and I think that the next primary campaign is going
Speaker 1: to be the forum for that fight. But the comparison
Speaker 1: that keeps coming to mind for me is nineteen ninety two,
Speaker 1: where at that point you were coming off of twelve
Speaker 1: years of Republican governance. Reagan had engineered a broad realignment
Speaker 1: of the electorate, and what ended up happening was you
Speaker 1: had Clinton coming in not just running against Washington, but
Speaker 1: really running against the Democratic Party and trying to brand
Speaker 1: him is a new kind of Democrat. So I think
Speaker 1: that is the move for a governor or somebody to know,
Speaker 1: to articulate kind of a critique of the direction that
Speaker 1: the party's been going for a while now, and to
Speaker 1: have that become the new banner for the party, so
Speaker 1: you know what that is and who that is I
Speaker 1: think remains to be determined, but that I think is
Speaker 1: the clear template for how the party should move forward,
Speaker 1: and I think there's momentum.
Speaker 7: Tobin for me yesterday was the quote from Senator Bernie Sanders.
Speaker 7: It should come as no surprise at a Democratic Party
Speaker 7: which has abandoned working class people would find that the
Speaker 7: working class has abandoned them. He goes on, first it
Speaker 7: was the white working class, now it's Latino and black
Speaker 7: workers as well. While the Democratic leadership defends the status quo,
Speaker 7: the American people are angry and want change, and they're right.
Speaker 7: Do you see this Democratic Party becoming more right because
Speaker 7: of this win trifecta nearly by the Republican Party, or
Speaker 7: do they go more progressive?
Speaker 9: So again, I think that is going to be litigated.
Speaker 1: I think certainly the progressive wing of the party, although
Speaker 1: it's not clear who their standard bearer will be, I
Speaker 1: think is going to attempt to make the case that
Speaker 1: they really made in both sixteen and twenty that the
Speaker 1: way for the party to move forward is to sort
Speaker 1: of move against ute unquote neoliberalism and sort of take
Speaker 1: up this very thoroughgoingly progressive lefty stands. It's not surprising
Speaker 1: that that Sanders is take I don't think that's going
Speaker 1: to be the consensus across the party, and I don't
Speaker 1: really think that the that the broad wave against the
Speaker 1: Democratic Party that we saw on Tuesday was economic and
Speaker 1: nature in that way. Obviously, there's a huge amount of
Speaker 1: disatisfaction about the economy around the world. We've been seeing
Speaker 1: incumbent parties get just absolutely destroyed in the way of
Speaker 1: the inflationary out versus the past few years. But I
Speaker 1: think it's hard to look at the pattern of results
Speaker 1: and see that as people kind of crying out for
Speaker 1: a progressive vision. I think that that there's a broad
Speaker 1: sense that the Democratic Party's values are out of touch
Speaker 1: with normal people, and I think that that's at least
Speaker 1: as cultural as it is economic.
Speaker 7: You mentioned this question of who the standard bear is.
Speaker 7: I mean, even in this moment, Kamala Harris gave a
Speaker 7: speech and didn't really thank President Biden the way most
Speaker 7: people would expect. At the same time, President Biden is
Speaker 7: calling President Trump and organizing a meeting with him. It's
Speaker 7: very difficult to understand what exactly is even going on
Speaker 7: in the White House where this relationship is right now,
Speaker 7: do you have any understanding?
Speaker 1: I mean, look, there's a huge amounts of continuity between
Speaker 1: the Biden and Harris camps.
Speaker 9: I mean, just look at the campaign.
Speaker 1: That being said, Harris does have kind of her own people,
Speaker 1: so it makes sense that we're seeing different messages from
Speaker 1: each of them.
Speaker 9: At this point.
Speaker 1: The kind of Harris campaign apparatus is not particularly relevant.
Speaker 1: You know, the Biden White House needs to actually do
Speaker 1: the transition. There are concrete things that need to happen
Speaker 1: to hand power over to Trump, and I think that'll happen.
Speaker 9: In a basically normal way.
Speaker 1: But in terms of the political future of the party,
Speaker 1: you know, I think that the different people who have
Speaker 1: their eye on twenty twenty eight are going to start
Speaker 1: setting up their own apparatus and carving out their own
Speaker 1: kind of power centers rather than I mean, we've really
Speaker 1: had a lot of kind of party elites trying to
Speaker 1: guide the party through.
Speaker 9: Something from twenty twenty onwards.
Speaker 1: You know, the coalescence around Biden during the twenty twenty
Speaker 1: primary was some sort of unusual degree of sort of
Speaker 1: centralized steering relative to what we normally see, which is
Speaker 1: kind of political entrepreneurism with you know again, sort of
Speaker 1: charismatic outsiders coming in trying to shake things up and
Speaker 1: taking over the party for themselves.
Speaker 6: Jobin there was an incredible statistic from Jim read Over
Speaker 6: at Deutsche Bank that really crystallized how unique this moment is.
Speaker 6: He said that it is a first time since the
Speaker 6: late eighteen hundreds that the incumbent party of the White
Speaker 6: House has lost three consecutive presidential elections. So, yes, this
Speaker 6: is a Democrat versus Republican issue. This is a question
Speaker 6: about the identity, But there's something else afoot.
Speaker 5: Can you give.
Speaker 6: Us some color onto why we're seeing this type of trend.
Speaker 1: Yeah, absolutely, And I think that the explanation for that
Speaker 1: is that we are on a multi decade secular decline.
Speaker 9: Who share of people who say that the country is
Speaker 9: going in the right direction rather than on the wrong track.
Speaker 9: So incumbency traditionally has been an advantage.
Speaker 1: The more that there is a persistent feeling that America
Speaker 1: is going in the wrong direction, that transcends who particularly
Speaker 1: is in control the more incumbency becomes a burden, and
Speaker 1: the more that you should expect sort of faster move
Speaker 1: of the metronome back and forth between parties. You know,
Speaker 1: that's not to guarantee that we're going to have another,
Speaker 1: you know, one term of partisan control, but Democrats winning back.
Speaker 9: In twenty twenty eight.
Speaker 1: But you know, we are going into another very unusual
Speaker 1: period where the president who just got elected it is
Speaker 1: a lame duck.
Speaker 9: So Trump is not going to be up in twenty eight.
Speaker 1: You know, as you sort of quote that you ran
Speaker 1: at the top from my last note, I fully expect
Speaker 1: advance it's going to be the most likely but not
Speaker 1: you know, not guaranteed, but most likely nominee for Republicans
Speaker 1: in twenty eight. We'll see who's running against him on
Speaker 1: the Democratic side. But I think that will be another
Speaker 1: opportunity for both parties to try and tap into the
Speaker 1: discontent of American voters and you know, argue that they're
Speaker 1: the ones to lead us in a new.
Speaker 6: Direction as all the exit holes come together. As we
Speaker 6: do have the results, what's your sense of what the
Speaker 6: main issues really were that fed into that discontent, that
Speaker 6: sort of secular decline that people feel across the United States.
Speaker 9: I think you have to look at inflation.
Speaker 1: I think you look around the world and see you
Speaker 1: parties really of every ideological orientation getting really having it
Speaker 1: handage to them by voters around the world. You know,
Speaker 1: generally there's some you know, sort of rising strengths on
Speaker 1: the far right. But I think in many cases that's
Speaker 1: because the coumbments happened to be on the center of
Speaker 1: the center left.
Speaker 9: In places where we did.
Speaker 1: See or writing parties in power, whether that's the UK
Speaker 1: or Poland, we saw backlash against them also. So I
Speaker 1: think that, you know, it seems to me that whoever
Speaker 1: is presiding over first and foremost this period of high inflation,
Speaker 1: to some extent discontent about immigration, which also is kind
Speaker 1: of trying to you know, span national lines across the
Speaker 1: Western world. You know, those I think are the most
Speaker 1: salient elements of people's satisfaction about the status quo. The
Speaker 1: voters are rebelling against.
Speaker 2: Hey, Tobin goods cantsch up Tobin markets there of war
Speaker 2: for research. I appreciate your time. This is the Bloomberg
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