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Speaker 1: Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg

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Speaker 1: Surveillance Podcast. Catch us live weekdays at seven am Eastern

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Speaker 1: on Apple CarPlay or Android Auto with the Bloomberg Business app.

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Speaker 1: Listen on demand wherever you get your podcasts, or watch

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Speaker 1: us live on YouTube.

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Speaker 2: In the game of getting your message out, you wander

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Speaker 2: into late May and you have a meeting over some

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Speaker 2: Stille Sanka coffee and you go, this is what the

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Speaker 2: outlook looks like, and then you blow it up ten

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Speaker 2: times on the way to June thirty, two thousand whatever,

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Speaker 2: Jeffrey Rosenberg set a record. They had to rewrite there

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Speaker 2: bond quarterly here with the events going on something like

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Speaker 2: fourteen times. Are you on speaking terms for the Rick

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Speaker 2: reader or is it just forever broken?

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Speaker 3: Oh no, it's all good.

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Speaker 2: Yes, it's all good. In this report, how does different

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Speaker 2: from where it would have been thirty days ago?

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Speaker 4: Yeah, that's I mean, so much has happened between you

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Speaker 4: know where we were, you know sixty days ago, the

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Speaker 4: and the and the tariffs and the concerns and bonds.

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Speaker 4: You know, the outlook has had to change a lot,

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Speaker 4: and you've seen it in terms of you know what

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Speaker 4: you're talking about and in terms of the number of

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Speaker 4: contributors to that piece and trying to get the trying

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Speaker 4: to get the tone right.

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Speaker 5: But you know, the the.

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Speaker 4: Big issue there is is still that you know, it's

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Speaker 4: relatively sanguine in terms of the rate range bound in

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Speaker 4: terms of.

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Speaker 3: The biggest input impact.

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Speaker 4: And we talked about in fixed singcam out looked for

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Speaker 4: the ten years, you know, not not as much volatility

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Speaker 4: as what you've seen, say the equity market.

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Speaker 6: Paul's been great on this.

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Speaker 2: I mean, Paul's not the way on this, but but

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Speaker 2: the bottom line, Paul is it's bringing duration.

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Speaker 3: Right, Yep.

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Speaker 5: Absolutely, I'm just looking at some something coming off the

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Speaker 5: Bloomberg News desk.

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Speaker 7: The treasury market is wrapping up its best monthly return

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Speaker 7: since February and its biggest first half stretch in five years.

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Speaker 5: So you guys, aren't I mean, people want to talk

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Speaker 5: to you guys now right.

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Speaker 4: Yeah, you know, bonds have been, bounds have been okay.

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Speaker 4: And the big story, and Rick's talked so much about

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Speaker 4: this is the restoration of income. And you know part

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Speaker 4: of that is just where the Fed is and the

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Speaker 4: redsence to say even cut rates. But that you brought

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Speaker 4: interest rates back up above the level of inflation. And

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Speaker 4: for a very long time period you just didn't have that.

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Speaker 4: You had very negative real interest rates and that was

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Speaker 4: a penalty to fixed income because.

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Speaker 3: It propagated out the curve.

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Speaker 4: And so it's a very different environment and that you

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Speaker 4: know over all, you know, in terms of interest rate moves,

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Speaker 4: it's just the starting point. You know, fixed income is

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Speaker 4: about yield, and yield is the driver of returns.

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Speaker 3: It's a little bit different than equities.

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Speaker 4: It's a little bit simpler that you're starting yield is

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Speaker 4: your best predictor of your future return. And that's the

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Speaker 4: big story, is that we've returned.

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Speaker 7: Holders hold exactly right, and then that's what buy them

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Speaker 7: and hold them? How about credit risk here?

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Speaker 5: What are we doing on the credit side here?

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Speaker 4: So there's two sides of the credit risks story, which

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Speaker 4: it's been for a long time, and that is you've

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Speaker 4: got the pricing of credit risk, which is, you know,

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Speaker 4: not particularly attractive in terms of is there an entry

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Speaker 4: point here from timing, But again it comes back to

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Speaker 4: the difference between price return and income, and the income

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Speaker 4: piece is the bigger story from credit where yield plus

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Speaker 4: spread is attractive. Spread on its own is a little

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Speaker 4: bit less attractive in terms of like you're pricing in

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Speaker 4: you know, very very benign conditions. But newsflash, it is

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Speaker 4: a very benign outlook in terms of what's going on

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Speaker 4: in terms of fundamentals. Now that's what we've realized now

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Speaker 4: going forward that may change. Markets are pricing in a

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Speaker 4: very benign credit environment. So there's a little bit of

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Speaker 4: asymmetric downside.

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Speaker 3: You see that.

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Speaker 4: You know most of the time in credit, it's a

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Speaker 4: little bit exacerbated this time.

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Speaker 3: So you want to be kind.

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Speaker 4: Of more up in quality and a little bit more

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Speaker 4: up in defensiveness just given the where the asymmetry is.

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Speaker 3: But credit has been the dog here that has embarked.

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Speaker 2: There's all these manufacturers products. I'm gonna say, folks are

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Speaker 2: collared out and manipulated and maybe somebody makes a bigger

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Speaker 2: fee just cut to the you know, fabose chase, the

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Speaker 2: mark who it's chased does a sixty forty portfolio work

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Speaker 2: here that.

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Speaker 4: Is definitely cutting to the chase, And you know, I

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Speaker 4: think you have to rethink that idea and what made

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Speaker 4: sixty forty really work for a very long period of time,

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Speaker 4: very simple idea that we lived in an environment of

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Speaker 4: too little inflation, and when you live in an environment

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Speaker 4: of too little inflation, the FED has no constraint on

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Speaker 4: its ability to be accommodative when you need them to be.

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Speaker 3: That's really important.

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Speaker 4: That cascades down into a thing we call the divine

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Speaker 4: coincidence of monetary policy basically says when there isn't an

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Speaker 4: inflation risk, the only thing the FED has to focus on.

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Speaker 3: Is growth, and that means it's really good for your equition.

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Speaker 2: Drinking the kool aid here of Allen Meltzer and Marvin Short,

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Speaker 2: I mean, it's just so Carnegie Melon exactly.

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Speaker 7: I'm looking at the eye end. Go funk on the

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Speaker 7: Bloomberg terminal, Bloomberg Index browser. The best performance in US

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Speaker 7: fixing come has been US corporate high yield. I mean,

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Speaker 7: people don't mind taking the risk.

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Speaker 5: It seems like they don't.

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Speaker 4: And that again, that's because it's been a very benign

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Speaker 4: environment for what we've seen realized in terms of in

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Speaker 4: terms of corporations, of cash flows, default risk, and the

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Speaker 4: pricing there got a little bit concerned around the April ninth,

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Speaker 4: April second tariff piece, and so you had a big

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Speaker 4: recovery from credit spread wides in every environment so far,

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Speaker 4: it's been one where widening's have been you know, purchase

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Speaker 4: buying opportunities. Again, you got to take a little bit

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Speaker 4: of a bigger picture there to remember, this is a

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Speaker 4: credit cycle, and if all of these concerns around the

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Speaker 4: economics slow down eventually manifest themselves, then you're going to

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Speaker 4: see an uptick in defaults. But that's forward looking. I

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Speaker 4: haven't seen any of that so far. That's why I've

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Speaker 4: seen the really strong performance in corporate.

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Speaker 2: There's there forcing me, the media people are forcing me

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Speaker 2: to rewrite my bio. And it's torture, folks, I can

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Speaker 2: tell you. And it's about the conversation with Jeff Rosenberg

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Speaker 2: and others. The first name I mentioned in the bio

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Speaker 2: is Alan Meltzer, and one of yours in my heroes

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Speaker 2: at Carnegie Mellon and Professor Meltzer told me aggregate data

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Speaker 2: for America. Can we do that now? Jeff Rosenberg is

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Speaker 2: a template at Blackrock, a glass half full in this

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Speaker 2: wild Barbel America.

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Speaker 4: Yeah, yeah, yeah, your term is exactly right, you know,

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Speaker 4: Barbel America, k shaped America.

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Speaker 3: The aggregation of data is.

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Speaker 4: Very problematic in that it masks over a lot of

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Speaker 4: the really underlying issues inside the economy, and.

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Speaker 3: That's really important, especially.

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Speaker 4: When you're thinking about not kind of you know, the

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Speaker 4: direction you a macro variable like the ten year interest

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Speaker 4: rate really can kind of map to the aggregate. But

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Speaker 4: when you talk about the corporate bond market or you

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Speaker 4: talk about the equity market, where the cross section of

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Speaker 4: performance is much more important, taking into account things like

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Speaker 4: the distributional aspect underneath the economic data becomes much more important.

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Speaker 5: What's our feter reserve going to do here today this year?

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Speaker 7: I'm looking at the WRP function kind of pressing and

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Speaker 7: maybe two, maybe a little bit more than two rate

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Speaker 7: cuts this year. What do you think they should do?

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Speaker 4: So that's been where we've been for a while, around

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Speaker 4: around two cuts. You know, I think they should be

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Speaker 4: in a weight and see mode, as Powell has has discussed,

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Speaker 4: because we're in this interim period where we don't really

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Speaker 4: know what the impact to the macro data is going

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Speaker 4: to be of the policy and policy uncertainty.

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Speaker 3: So far, it's been better.

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Speaker 4: Than feared, and we've had four or five in a

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Speaker 4: row better than feared inflation reports.

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Speaker 3: This is the time, and you know, this is.

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Speaker 4: The week prior to payrolls, and so that becomes a

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Speaker 4: really important input because we're starting to see some slow down.

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Speaker 4: You can see in the Bloomberg that consensus for Friday,

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Speaker 4: you know, slowing. I think it's around one to ten.

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Speaker 4: You know, it's a significant slow down. But it's still

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Speaker 4: a pretty strong market. So they've got the room to wait,

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Speaker 4: and I think that's the right thing to do.

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Speaker 3: But wait for what?

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Speaker 4: Wait for whether or not you know, this inflation in

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Speaker 4: terms of the tariffs really shows up in a more

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Speaker 4: significant way. That's going to validate them holding off, or

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Speaker 4: this slow down in jobs accelerates, and then the waiting

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Speaker 4: will be proven wrong.

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Speaker 3: But they'll pivot, and I think that's.

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Speaker 4: The key, is that they'll pivot to the data.

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Speaker 2: Jeffrey, Thank you so much. Jeffrey Rosenberg. Now was a

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Speaker 2: six point thirty view for Blackrock. You can run, but

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Speaker 2: you can't hedge the bond markets. Warning shot. Get that

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Speaker 2: from Blackrock. Please you protect the copyright of all of

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Speaker 2: our guests.

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Speaker 1: You're listening to the Bloomberg Surveillance podcast. Catch us live

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Speaker 1: weekday afternoons from seven to ten am Eastern Listen on

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Speaker 1: Applecarplay and Android Auto with the Bloomberg Business app or

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Speaker 1: watch us live on YouTube.

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Speaker 2: Henrietta Trey's has been just fabulous at Veda Partners. Henrietta,

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Speaker 2: I just use Google Gemini because I'm hip and I

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Speaker 2: do a and I typed in what is the vhotama?

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Speaker 2: And it exploded.

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Speaker 6: The servers exploded at Google.

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Speaker 2: What in God's name, coach trace is voter rama?

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Speaker 8: Oh, it's so exciting. Gear up to watch. He's been

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Speaker 8: two all day long. It will be nothing short of riveting.

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Speaker 8: It's actually really cool. You know, the Senate is a

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Speaker 8: highly scripted, very regimented body, and voter rama is like

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Speaker 8: our free for all. So all amendments are germane. You

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Speaker 8: can throw anything at the.

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Speaker 9: Wall here and they will be voting all day, all night,

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Speaker 9: maybe even into tomorrow. So it's really exciting if you're

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Speaker 9: into that kind of thing.

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Speaker 6: Are any important, Yes.

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Speaker 9: They're critically important.

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Speaker 8: There are millions of individuals at risk of losing Medicaid

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Speaker 8: in this package. That will be a big amendment vote

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Speaker 8: from Rick Scott, Republican in Florida that will need to

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Speaker 8: pass otherwise it could risk as many as four Republican

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Speaker 8: senators defecting away from this bill. However, if it is passed,

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Speaker 8: it may fail in the House. So it's a very

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Speaker 8: delicate balance that Republicans need to walk here.

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Speaker 9: The most important one is going to be.

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Speaker 8: A procedural change that fundamentally undermines and effectively removes the

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Speaker 8: filibuster from the United States Senate for the rest of

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Speaker 8: all time. This is a massive deficit increasing provision, and

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Speaker 8: it authorizes the use of current policy baseline by overriding

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Speaker 8: the parliamentarian our referee, and it will pave the way

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Speaker 8: for increase in the deficit by four trillion dollars without

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Speaker 8: paying for it in this package. So a lot is

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Speaker 8: very heavy stuff on.

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Speaker 6: The line today.

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Speaker 7: Is there any political fallout for anybody, Henriette, for raising

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Speaker 7: these deficits by I don't know the fourth trillion you

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Speaker 7: just mentioned.

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Speaker 9: Yeah, I think that there are. You don't often see

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Speaker 9: this without an election happening.

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Speaker 8: But Tom Tillis, for example, Republican of North Carolina, has

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Speaker 8: decided this bill is so atrocious, who's quitting the entire it,

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Speaker 8: And so he's going to vote against the package and

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Speaker 8: he's moving on with his life, which is a shame.

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Speaker 8: He's an excellent senator with some incredible staff that we've

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Speaker 8: worked with and been lucky to work with now for years.

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Speaker 8: But this is real ramifications in real time. And the

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Speaker 8: next time you hear someone say, you know, Rome died

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Speaker 8: because of its deficits and debt, ask him how they

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Speaker 8: voted on this bill.

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Speaker 7: President Trump is on one heck of a winning streak here.

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Speaker 5: Do the Democrats recognize this?

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Speaker 7: Is there any pushback, any sense of we want to

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Speaker 7: get our message out?

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Speaker 9: What message?

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Speaker 2: I mean?

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Speaker 8: This bill is filled with literally trillions of dollars worth

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Speaker 8: of messages, and the Republican package is so massive that

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Speaker 8: they've sort of just been washed over by the flood

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Speaker 8: of it. So if you follow an individual member's statements,

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Speaker 8: you can catch you know where they stand on Medicaid

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Speaker 8: and things along those lines. But it's really hard to

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Speaker 8: get a message through. I was actually with a doctor

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Speaker 8: friend of mine this weekend, who you know, and I

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Speaker 8: cover this now for the entire year, and I just

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Speaker 8: learned that sixty five percent of births in Louisiana come

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Speaker 8: from Medicaid patients. And this is cutting millions of people

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Speaker 8: off of Medicaid nationwide, twelve million.

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Speaker 9: Though it's pretty substantial.

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Speaker 2: It's sixty thousand feet and I've got a nodding memory

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Speaker 2: of this is this the pullback of the great society

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Speaker 2: is what we're really talking here. I get into the

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Speaker 2: maths forty and twenty sixty years on. We're slamming ourselves

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Speaker 2: back to Pleasantville and Dwight David Eisenhower.

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Speaker 9: I mean, this is the end of caring about deficits.

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Speaker 8: This is the end of paying for legislation on a

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Speaker 8: go forward basis. So, for example, any tax provision that

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Speaker 8: you like right now that's on the books can be

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Speaker 8: extended into perpetuity without ever paying for it ever. Again,

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Speaker 8: So any short term provision you put in there, the

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Speaker 8: salt cap, the IRA tax credits, the child tax credit,

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Speaker 8: whatever it may be. These are hundreds of billions of

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Speaker 8: dollars on a line by line basis.

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Speaker 9: But perhaps the biggest comp into this bill is the

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Speaker 9: wealth transfer.

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Speaker 8: Think about the tariffs that have been put on by

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Speaker 8: this Trump administration. I don't think that's a win, but

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Speaker 8: the President has made it appear as though he's really,

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Speaker 8: you know, strong army.

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Speaker 9: But it's four hundred billion dollars entire for revenue collection.

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Speaker 9: The entirety of.

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Speaker 8: The president's campaign agenda, no taxes on tips, no taxes

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Speaker 8: on you know, retirement payments and things like that is

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Speaker 8: one hundred and sixty three hundred and sixty three billion

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Speaker 8: dollars worth of this package, and the tariffs are four

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Speaker 8: hundred billion dollars in revenue. So we are passing a

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Speaker 8: massively regressive tax bill that does not return what the

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Speaker 8: President is giving you on.

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Speaker 2: That at a time. How many pages will this legislation be?

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Speaker 5: I mean asking for John Tuckner.

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Speaker 6: He's going to read it at the beach.

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Speaker 9: It has already read aloud.

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Speaker 8: It took something like fifteen and a half hours and

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Speaker 8: it's nine hundred and forty pages.

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Speaker 6: Forty okay, Henritta Trace.

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Speaker 2: Thank you so much.

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Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday

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Speaker 1: starting at seven am Eastern on a Corplay and Android

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Speaker 1: otto with the Bloomberg Business App. You can also listen

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Speaker 1: live on Amazon Alexa from our flagship New York station,

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Speaker 1: Just say Alexa Play Bloomberg eleven thirty.

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Speaker 2: The patron out of Oxford University in Lbs, Ibrahim Abari

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Speaker 2: joins this iconic city group with Villimbauder, Catherine Mann and others.

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Speaker 2: Nathan Sheets and now with Absolute Strategy Research and working

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Speaker 2: with Tina Fordham Fordham Global Foresight for a terrific brief. Yeah. Iber,

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Speaker 2: First of all, your notes are way too long.

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Speaker 6: Can you cut it half?

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Speaker 2: I mean, just for starters.

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Speaker 6: The heritage of Rabari.

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Speaker 2: Economics and this plays off Villimbauder is an old world

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Speaker 2: respect for the balance sheet. It's very non American to me.

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Speaker 2: It's not foreign, it's just a different view across the water.

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Speaker 2: The state of the American balance sheet or the guests

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Speaker 2: on that balance sheet three or five years out.

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Speaker 10: Well, I think the state of the American balance sheet

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Speaker 10: is a tailor's two stories, and I think that's what's

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Speaker 10: allowed asset prices to continue to do so well as

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Speaker 10: they continue even as we enter this week. Private sector

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Speaker 10: balance heats are the best we've seen for decades, and

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Speaker 10: that's given the public sector a bit of an excuse

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Speaker 10: to maybe use.

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Speaker 6: That financial capital.

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Speaker 10: So our concerns, my concerns are predominantly about the health

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Speaker 10: of the public sector balance heat to some degree, how

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Speaker 10: we can keep the two together in a way that

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Speaker 10: keeps the economy running and pumping. But if I'm honest

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Speaker 10: with you, I am concerned. I do think we will

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Speaker 10: run into a major point of tension in the next

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Speaker 10: couple of years, and what we've heard from Congress over

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Speaker 10: the last week or so probably adds to these concerns

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Speaker 10: rather than reduce it them.

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Speaker 7: So given that backdrop here, at least in the near term,

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Speaker 7: it feels like the market is expecting this Fed to

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Speaker 7: cut rates, maybe not a lot, but on maybe a

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Speaker 7: couple of times this year.

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Speaker 5: Does that seem reasonable to you?

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Speaker 6: It does? It does seem reasonable.

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Speaker 8: Now.

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Speaker 10: I should say I came into the year thinking the

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Speaker 10: FED is going to cut a lot, and because it

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Speaker 10: was facing going to face the perfect storm from much

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Speaker 10: weaker growth than people expected, a very weak stock market,

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Speaker 10: which of course at the beginning of the year we had,

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Speaker 10: and one point that often comes up, the FED nominally

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Speaker 10: is still very restrictive, so it's starting at a very

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Speaker 10: high point.

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Speaker 5: Now.

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Speaker 10: Most of these things have played out, with one big exception,

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Speaker 10: of course, which is that the stock market rebounded with

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Speaker 10: a vengeance. As you're already remarked upon. Now, the reason

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Speaker 10: why I think the FED is probably wise to cut

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Speaker 10: at least from an insurance standpoint a little bit, is

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Speaker 10: because the economy has been showing signs of signs of

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Speaker 10: slowing more signs of slowing than we've seen for a

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Speaker 10: while in some areas pretty concerning signs of slowing and

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Speaker 10: the label market and the housing market. So again, if

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Speaker 10: you start from one one and a half points above neutral,

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Speaker 10: you're probably better off cutting a little bit and then

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Speaker 10: seeing where you are in a couple of months time.

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Speaker 7: So you know, I don't know the economy is slowing,

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Speaker 7: but I think we've taken recession off the table. I

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Speaker 7: haven't heard that discussed in the last four or five months. Inflation,

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Speaker 7: I think surprisingly to most people, we've not seen that

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Speaker 7: really create too much into the economy. So it seems

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Speaker 7: like maybe the Fed's kind of got this continued soft landing.

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Speaker 5: I guess.

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Speaker 10: I think there's a narrow path, and I think your

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Speaker 10: your remarks are very much on point that we're facing

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Speaker 10: a bimode outlook for the US economy. For financial markets,

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Speaker 10: what's maybe the single most interesting thing across financial markets

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Speaker 10: right now is how differently equity markets and the bond

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Speaker 10: market are looking at the economy.

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Speaker 6: And I don't just mean at.

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Speaker 10: The headline level, but the evolution of interest rates over

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Speaker 10: the last couple of weeks versus how cyclicals have.

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Speaker 6: Done within equities. It's one of the bigger divergences.

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Speaker 10: And one of the reasons I highlight, other than that

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Speaker 10: I think people haven't taken enough notice of it, is

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Speaker 10: that that diversion does sometimes show up at cyclical inflection points.

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Speaker 10: So it's not totally clear, but bonds on average or

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Speaker 10: a better predictor of what happens at these inflection points.

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Speaker 6: So when I.

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Speaker 10: Hear you speak, I in my head, I'm playing through

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Speaker 10: is this Goldilock scenario going to continue to play out?

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Speaker 10: Or are we facing a scenario? Actually, we're facing a

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Speaker 10: bit of a cliff not too far from now.

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Speaker 2: Extended conversation with Ibrahim Avari of Absolute Strategy Research. We

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Speaker 2: welcome all of you on your commute here last day,

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Speaker 2: the second quarter commute across America. Good morning, ninety nine

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Speaker 2: one FM in Washington. Was Nathan in today?

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Speaker 5: I don't know, I mean, you know, yes?

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Speaker 11: He?

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Speaker 2: Oh, he was in today?

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Speaker 5: Okay, he darkened the door.

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Speaker 2: Nathan Hager at ninety nine one FM in Washington. On

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Speaker 2: YouTube subscribe to Bloomberg Podcast. Absolutely humbled by the last

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Speaker 2: six months of the YouTube buildout. I'm learning every day

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Speaker 2: about this strange digital ballet. I want to go back

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Speaker 2: to the FED, which I usually don't want to do,

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Speaker 2: but I think it's so important, Ibraham. They are trapped

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Speaker 2: in this cycnical inflection point and maybe bimodal a ambiguous

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Speaker 2: outcome by having to justify a trend of rate cuts.

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Speaker 2: Why can't they just do one and done and the

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Speaker 2: chairman come out and say, we're cutting interest rates at

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Speaker 2: the next meeting. We're not sure where we're going, but

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Speaker 2: we're just bringing it in for one. Where did that

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Speaker 2: surgical view disappear to? Oh?

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Speaker 10: I think they should take your advice, to be quite frankly,

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Speaker 10: And if you go back to the last two press conference,

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Speaker 10: at least the perspective they had to defend and justify

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Speaker 10: was not considering cutting not easy.

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Speaker 6: And I think that's.

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Speaker 10: Both because the way they've been communicating over the last

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Speaker 10: six months is very different from how Chepaw used to communicate,

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Speaker 10: including of course a year ago where they suddenly started

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Speaker 10: cutting grades pretty pretty sharply. But I think the right

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Speaker 10: thing to do would be exactly as you say, take

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Speaker 10: restrict to rates and the slowing of the economy. Say

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Speaker 10: I'm cutting now, but if we see inflation pickup, we

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Speaker 10: can migrate again.

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Speaker 2: They where in our history do we blame John Taylor

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Speaker 2: out at Stanford'll be where who do we blame for

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Speaker 2: this idiocy that if we raise or cut we're establishing

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Speaker 2: a trend. I just don't get it.

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Speaker 10: I don't I don't have the answer. But I've had

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Speaker 10: that conversation with Central makers many times. I've had a

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Speaker 10: very similar conversation with the ECB.

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Speaker 2: Philip Blaine's say, working with the guarded ECB.

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Speaker 10: I think at some level they are They're open to

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Speaker 10: the idea of you can reverse when when the facts change,

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Speaker 10: they can change their mind.

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Speaker 6: In practice, that does tend to come.

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Speaker 10: With a loss of credibility that they all fear were

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Speaker 10: accused of flip flopping, of changing the narrative. I think

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Speaker 10: it's the other way around again, maybe because of my

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Speaker 10: tutor Lich with Villain, who was never shied to change

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Speaker 10: his mind when the facts change. So I think that's

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Speaker 10: what Chapwell would do. I think it would in fact

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Speaker 10: improve his credibility, which I think has suffered a little

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Speaker 10: bit because he has had difficulty to explain why the

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Speaker 10: FED has been somewhat slow.

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Speaker 7: Right Bloomberg Dollar Index, it's down almost ten percent from

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Speaker 7: its earlier earlier this year high, what's going on with

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Speaker 7: the dollar.

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Speaker 10: So we had a perfect storm for the dollar early

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Speaker 10: on the DA And again it's a similar story to

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Speaker 10: what I said about the US economy and rates. You've

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Speaker 10: started from a very high starting point, you had disruptive policy,

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Speaker 10: and then investors globally just had to diversify into some

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Speaker 10: degree re rate the riskiness of US investments. Now that's

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Speaker 10: gone a fair amount of the way, and FX hedging

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00:21:37,840 --> 00:21:39,200
Speaker 10: has played its part.

446
00:21:39,400 --> 00:21:41,359
Speaker 6: Where we are now is a lot more what I

447
00:21:41,400 --> 00:21:41,960
Speaker 6: would call.

448
00:21:41,840 --> 00:21:44,320
Speaker 10: Cross currents, because what you're actually see in the last

449
00:21:44,359 --> 00:21:46,960
Speaker 10: couple of weeks of dollar weakening that's.

450
00:21:46,760 --> 00:21:48,639
Speaker 6: Been alongside US rates.

451
00:21:48,400 --> 00:21:52,280
Speaker 10: It's the bond market pricing in weaker growth in the US.

452
00:21:52,320 --> 00:21:56,399
Speaker 10: It's no longer US equities underperforming global acuities. It's no

453
00:21:56,480 --> 00:21:59,320
Speaker 10: longer the riskiness of the US that stands out. It's

454
00:21:59,359 --> 00:22:03,359
Speaker 10: really the sick cyclical sole down And therefore again we're in.

455
00:22:03,280 --> 00:22:05,160
Speaker 6: A bimodel near term outlook.

456
00:22:05,480 --> 00:22:07,480
Speaker 10: I see dollar weakness, I would be a lot more

457
00:22:07,480 --> 00:22:10,919
Speaker 10: selective in how I would express it within markets, and

458
00:22:10,960 --> 00:22:12,600
Speaker 10: we'll learn a bit more this week, so I think

459
00:22:12,600 --> 00:22:13,679
Speaker 10: that'll have an impact.

460
00:22:13,480 --> 00:22:15,520
Speaker 2: On the driver. I mean, Abrahm, I'm looking at a

461
00:22:15,600 --> 00:22:18,159
Speaker 2: thirteen year dollar trend. Folks, you can do this on

462
00:22:18,200 --> 00:22:24,240
Speaker 2: the Bloomberg Professional Service BBDXY Index, GPL Space M Space

463
00:22:24,320 --> 00:22:26,879
Speaker 2: role than I say it too perfectly for those driving

464
00:22:27,640 --> 00:22:31,480
Speaker 2: the answer is I got a strong dollar trend. I'm

465
00:22:31,480 --> 00:22:35,400
Speaker 2: down one point five standard deviations off the trend back

466
00:22:35,480 --> 00:22:39,439
Speaker 2: thirteen years. Have we finally broken the strong dollar trend?

467
00:22:40,000 --> 00:22:44,000
Speaker 10: That's my view right now, and I think, quoting Chair Powell,

468
00:22:44,000 --> 00:22:45,640
Speaker 10: you have to be humble and nimble in a world

469
00:22:45,640 --> 00:22:49,000
Speaker 10: where we wake up to news, you know, pretty pretty comedy.

470
00:22:49,200 --> 00:22:52,120
Speaker 10: But my view is we have reached that inflection point

471
00:22:51,880 --> 00:22:54,199
Speaker 10: in the dollar, and actually, depending on the measure that

472
00:22:54,240 --> 00:22:56,440
Speaker 10: you use, we may have reached it in twenty twenty

473
00:22:56,480 --> 00:22:59,080
Speaker 10: two or we reached it earlier this year. So I

474
00:22:59,119 --> 00:23:02,320
Speaker 10: do think we're the big of a long term, significant downtrend.

475
00:23:02,359 --> 00:23:04,119
Speaker 10: We probably have another ten percent or so to go

476
00:23:04,240 --> 00:23:07,040
Speaker 10: at least. The question is is that going to continue

477
00:23:07,080 --> 00:23:09,879
Speaker 10: as consistently as it happened so far this year? I

478
00:23:09,920 --> 00:23:12,719
Speaker 10: have my doubts, but over a longer period of time,

479
00:23:12,760 --> 00:23:13,840
Speaker 10: I think there's a lot more to come.

480
00:23:14,200 --> 00:23:17,240
Speaker 2: How do you respond to stagflation or to a persistent

481
00:23:17,520 --> 00:23:18,960
Speaker 2: higher nominal GDP?

482
00:23:20,160 --> 00:23:25,200
Speaker 10: So I I see a near term threat.

483
00:23:25,320 --> 00:23:27,359
Speaker 6: It's even you have to talk on radio.

484
00:23:27,800 --> 00:23:28,520
Speaker 5: We're toasted.

485
00:23:28,520 --> 00:23:30,440
Speaker 2: If there's silence continue.

486
00:23:30,880 --> 00:23:34,080
Speaker 10: I would say I see a near term threat, including

487
00:23:34,160 --> 00:23:35,840
Speaker 10: what we may face in the US in the next

488
00:23:35,920 --> 00:23:39,320
Speaker 10: six months. Again, the real side week inflation is going

489
00:23:39,359 --> 00:23:42,040
Speaker 10: to pick up maybe half a percent, maybe a percent

490
00:23:42,119 --> 00:23:44,600
Speaker 10: over the next year. As a durable phenomenon, I don't

491
00:23:44,600 --> 00:23:48,719
Speaker 10: think it really it is likely to play out.

492
00:23:48,920 --> 00:23:52,080
Speaker 7: I think weaker growth will weigh on probus American exceptionalism.

493
00:23:52,359 --> 00:23:53,639
Speaker 7: Is that a thing in the past.

494
00:23:54,119 --> 00:23:56,320
Speaker 10: I think in some ways yes, and I think it's

495
00:23:56,320 --> 00:23:58,919
Speaker 10: for good reasons and for bad I think at this

496
00:23:59,040 --> 00:24:02,360
Speaker 10: moment we should acknowledge that the impact it has had

497
00:24:02,400 --> 00:24:04,520
Speaker 10: on the rest of the world. The administrations and the

498
00:24:04,520 --> 00:24:07,600
Speaker 10: policy impacts have been partly benign. My own country Germany

499
00:24:08,040 --> 00:24:10,680
Speaker 10: waking up to the need to upgrade its infrastructure to

500
00:24:10,720 --> 00:24:14,080
Speaker 10: spend more on defense. So the changing balance of fiscal

501
00:24:14,119 --> 00:24:18,080
Speaker 10: spending globally, I think that's an element of changing impacts

502
00:24:18,119 --> 00:24:19,240
Speaker 10: on US exceptionalism.

503
00:24:19,320 --> 00:24:21,200
Speaker 7: What's the biggest challenge for this federal Reserve?

504
00:24:21,240 --> 00:24:21,560
Speaker 5: Right here?

505
00:24:21,680 --> 00:24:24,919
Speaker 7: Where's the mistake you think they could make here?

506
00:24:26,000 --> 00:24:28,679
Speaker 10: So the biggest mistake, from my point of view, is

507
00:24:28,680 --> 00:24:31,480
Speaker 10: that they stay as data independent as they have been,

508
00:24:31,960 --> 00:24:35,119
Speaker 10: and that they don't communicate why they operate differently from

509
00:24:35,160 --> 00:24:39,200
Speaker 10: where they were in twenty twenty.

510
00:24:38,920 --> 00:24:40,760
Speaker 6: Four, and as a result, maybe act too late.

511
00:24:41,160 --> 00:24:44,399
Speaker 10: So Chapal's greatest fear throughout most of his tenure was

512
00:24:44,440 --> 00:24:46,600
Speaker 10: that the FED would be too late in acting. I

513
00:24:46,600 --> 00:24:49,439
Speaker 10: think they're at risk of that. Again, that's not to

514
00:24:49,520 --> 00:24:53,560
Speaker 10: dismiss that we have in a bubbling inflation problem, but

515
00:24:53,640 --> 00:24:57,440
Speaker 10: again they can address that by then reacting as they

516
00:24:57,480 --> 00:24:58,159
Speaker 10: face more of it.

517
00:24:58,240 --> 00:24:59,760
Speaker 5: You're mentioning your Germany.

518
00:25:00,280 --> 00:25:02,639
Speaker 7: Your Germany has stepped up in a big way in

519
00:25:02,720 --> 00:25:06,639
Speaker 7: terms of stated plans to invest in its military and

520
00:25:06,680 --> 00:25:11,919
Speaker 7: in its infrastructure. Do you think other European countries can

521
00:25:11,960 --> 00:25:14,400
Speaker 7: do the same. We have confidence that Germany can do it.

522
00:25:14,520 --> 00:25:16,320
Speaker 7: How about some of the other countries in Europe it

523
00:25:16,320 --> 00:25:17,720
Speaker 7: seems I don't know.

524
00:25:17,920 --> 00:25:20,400
Speaker 10: I think Germany, if I can use that word again,

525
00:25:20,520 --> 00:25:22,680
Speaker 10: is a little exceptional in that regard, and that that's

526
00:25:22,760 --> 00:25:24,560
Speaker 10: both because it faces a bigger.

527
00:25:24,280 --> 00:25:27,399
Speaker 6: Deficit, so it's underinvested in infrastructure.

528
00:25:26,800 --> 00:25:29,879
Speaker 10: And in defense, and it has a still healthier balance

529
00:25:29,880 --> 00:25:32,520
Speaker 10: sheet even though it's a little flattered by You know,

530
00:25:32,560 --> 00:25:36,040
Speaker 10: how we treat pension spending in Europe, so I think

531
00:25:36,080 --> 00:25:38,080
Speaker 10: it's much more of a German story. When it comes

532
00:25:38,119 --> 00:25:40,560
Speaker 10: to financial markets, it has its spillover so though it

533
00:25:40,600 --> 00:25:44,680
Speaker 10: does mean that spreads between German bombs and the rest

534
00:25:44,680 --> 00:25:47,600
Speaker 10: of the European bond market are going to continue to narrow,

535
00:25:47,640 --> 00:25:50,240
Speaker 10: and it is a sea change in the European bondmarkt.

536
00:25:49,880 --> 00:25:51,919
Speaker 2: Help me with the dollars, then, Paul's got us in

537
00:25:51,960 --> 00:25:54,959
Speaker 2: a trend of weaker dollars nine percent? Should we I mean,

538
00:25:55,080 --> 00:25:57,160
Speaker 2: is it a harmonic average? Now we go down four

539
00:25:57,200 --> 00:26:00,000
Speaker 2: point five percent? I mean, is is the trend in place?

540
00:26:00,720 --> 00:26:03,200
Speaker 6: I think the trend is in place in the short term.

541
00:26:03,320 --> 00:26:05,400
Speaker 10: I think we need to watch what happens with the

542
00:26:05,520 --> 00:26:08,880
Speaker 10: US data to reinforce it. But also I see more

543
00:26:08,880 --> 00:26:12,680
Speaker 10: opportunity in special places in the riskier part of the spectrum.

544
00:26:12,680 --> 00:26:14,560
Speaker 10: If the world is okay, the dollar will sell off

545
00:26:14,560 --> 00:26:15,800
Speaker 10: more against the Australian dollars.

546
00:26:17,000 --> 00:26:19,359
Speaker 2: We don't care what europe euro one twenty.

547
00:26:19,800 --> 00:26:21,920
Speaker 10: I think we'll see euro one twenty this year at

548
00:26:21,920 --> 00:26:25,040
Speaker 10: this at this very moment, I would not buy euros.

549
00:26:25,560 --> 00:26:25,959
Speaker 5: I don't know.

550
00:26:26,040 --> 00:26:29,760
Speaker 7: I mean, tom word one spot one seven already happen

551
00:26:29,800 --> 00:26:32,320
Speaker 7: to parody. I was looking for the Tom King parody

552
00:26:32,440 --> 00:26:34,439
Speaker 7: there on the earth are looking for that.

553
00:26:34,800 --> 00:26:35,800
Speaker 4: Those tastes are over.

554
00:26:36,040 --> 00:26:38,119
Speaker 2: I think it has really changed. I mean, folks to

555
00:26:38,160 --> 00:26:40,240
Speaker 2: look at the Bloomberg launch pad, the red and green

556
00:26:40,280 --> 00:26:43,320
Speaker 2: blinking it is. I can assure you I had no

557
00:26:43,480 --> 00:26:46,200
Speaker 2: concept the first week of January that we'll be looking

558
00:26:46,200 --> 00:26:50,359
Speaker 2: at this now. Particular levels on Future sixty two hundred,

559
00:26:50,640 --> 00:26:55,199
Speaker 2: YEP sixty two fifty on SPX forty four, three hundred

560
00:26:55,640 --> 00:26:59,240
Speaker 2: and down twenty two thousand, eight hundred of six tenths

561
00:26:59,640 --> 00:27:03,320
Speaker 2: of a ibrah Mravari, thank you so much. Just brilliant,

562
00:27:03,400 --> 00:27:09,439
Speaker 2: absolute strategy at Research Ashure working at Fordham Global Foresay.

563
00:27:11,920 --> 00:27:15,840
Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday

564
00:27:15,880 --> 00:27:19,160
Speaker 1: starting at seven am Eastern on Applecarplay and Android Auto

565
00:27:19,280 --> 00:27:22,119
Speaker 1: with the Bloomberg Business app. You can also watch us

566
00:27:22,160 --> 00:27:26,040
Speaker 1: live every weekday on YouTube and always on the Bloomberg terminal.

567
00:27:26,359 --> 00:27:30,639
Speaker 2: A really important conversation. We are focused on capitalism. We

568
00:27:30,680 --> 00:27:33,240
Speaker 2: are focused on all that we do in economics, finance

569
00:27:33,320 --> 00:27:37,239
Speaker 2: and investment, and to have someone with a pedigree of

570
00:27:37,359 --> 00:27:42,200
Speaker 2: Hampshire College in the New School in Lower Manhattan is important.

571
00:27:42,280 --> 00:27:47,439
Speaker 2: Heather Boushe showed public service with President Biden, among others.

572
00:27:47,800 --> 00:27:51,640
Speaker 2: She's president and CEO of the Washington Center for Equitable Growth.

573
00:27:52,119 --> 00:27:56,399
Speaker 2: I can't say enough right now about the mystery of

574
00:27:56,440 --> 00:28:00,439
Speaker 2: her Democratic Party on our website, how the econmic and

575
00:28:00,480 --> 00:28:04,760
Speaker 2: political geography of the United States fuels right wing populism

576
00:28:05,119 --> 00:28:08,119
Speaker 2: and what the Democratic Party can do about it. Heather,

577
00:28:08,440 --> 00:28:13,200
Speaker 2: why are the Democrats silent in this June of twenty

578
00:28:13,320 --> 00:28:13,960
Speaker 2: twenty five?

579
00:28:15,600 --> 00:28:19,159
Speaker 11: Democrats silent? Well, I hear a lot coming from Democrats

580
00:28:19,240 --> 00:28:22,080
Speaker 11: right now. I mean, certainly, the thing that we have

581
00:28:22,200 --> 00:28:24,840
Speaker 11: all been watching over the past week and of course

582
00:28:25,200 --> 00:28:28,480
Speaker 11: NonStop all weekend is what the Republicans have been doing

583
00:28:28,560 --> 00:28:32,000
Speaker 11: with their budget bill that is going to give massive

584
00:28:32,040 --> 00:28:35,240
Speaker 11: tax cuts at the top and you know, strip income

585
00:28:35,359 --> 00:28:38,000
Speaker 11: and benefits from folks you know, on the bottom half

586
00:28:38,040 --> 00:28:41,720
Speaker 11: of the income distribution. I know that, you know, for example,

587
00:28:41,800 --> 00:28:44,800
Speaker 11: Check Schumer made them actually read that bill out loud

588
00:28:44,880 --> 00:28:47,200
Speaker 11: and hopefully have to think about each and every action

589
00:28:47,280 --> 00:28:51,000
Speaker 11: that they're doing. But you know, this is a huge, huge,

590
00:28:51,280 --> 00:28:54,240
Speaker 11: huge moment for the country, huge moment for the US economy.

591
00:28:54,320 --> 00:28:56,640
Speaker 2: But Heather, what's so important to me here is does

592
00:28:56,640 --> 00:29:00,840
Speaker 2: the Democratic Party witness Schumer's comments this weekend. Does it

593
00:29:00,960 --> 00:29:05,440
Speaker 2: move to the left and liberal progressive or does it

594
00:29:05,640 --> 00:29:09,479
Speaker 2: try to move to a Democratic Party center of old.

595
00:29:11,160 --> 00:29:14,040
Speaker 11: So here's the thing. When I look at what this

596
00:29:14,640 --> 00:29:17,640
Speaker 11: legislation that the Republicans are jamming through the Senate right

597
00:29:17,680 --> 00:29:20,560
Speaker 11: now will do. Let's say that this passes, we're going

598
00:29:20,600 --> 00:29:23,520
Speaker 11: to be left with the world where not only have

599
00:29:23,720 --> 00:29:28,880
Speaker 11: you stripped the federal government of enormous human capital and

600
00:29:28,960 --> 00:29:32,360
Speaker 11: talent and capacity, but we will put the US economy

601
00:29:32,400 --> 00:29:36,440
Speaker 11: on a long term trajectory of lack of competitiveness where

602
00:29:36,440 --> 00:29:41,560
Speaker 11: we're going to see following and Democrats, Democrats, let me

603
00:29:41,560 --> 00:29:44,280
Speaker 11: just finish this point. Democrats are going to be faced

604
00:29:44,640 --> 00:29:47,760
Speaker 11: with an economy that will be in many ways in shambles.

605
00:29:48,080 --> 00:29:49,680
Speaker 11: And so I think that's where we need to start

606
00:29:49,720 --> 00:29:52,600
Speaker 11: our conversation. What do we need to do? What will

607
00:29:52,640 --> 00:29:54,720
Speaker 11: we need to do to get the economy back on track?

608
00:29:54,920 --> 00:29:57,680
Speaker 11: And that's going to require thinking about some fundamental things.

609
00:29:58,040 --> 00:30:00,640
Speaker 11: The crisis of climate change is not going going away.

610
00:30:00,720 --> 00:30:03,840
Speaker 2: I no, but Heather, you didn't answer my question. Should

611
00:30:03,840 --> 00:30:07,280
Speaker 2: the Democrats witness the election in New York City for

612
00:30:07,400 --> 00:30:11,440
Speaker 2: mayor should they move towards Mumdani in a liberal progressive

613
00:30:11,440 --> 00:30:14,719
Speaker 2: Democratic party or do they need to refine the center.

614
00:30:16,160 --> 00:30:19,000
Speaker 11: They need to find a place where they can obviously

615
00:30:19,000 --> 00:30:21,280
Speaker 11: get enough votes, but that is going to be going

616
00:30:21,560 --> 00:30:24,920
Speaker 11: back to economic basics, making sure that we have an

617
00:30:24,920 --> 00:30:28,080
Speaker 11: economy that thrives and delivers for the broad middle, which

618
00:30:28,120 --> 00:30:32,080
Speaker 11: is exactly what won't be happening. So when you think

619
00:30:32,120 --> 00:30:34,160
Speaker 11: about what they're going to need to do, We're going

620
00:30:34,240 --> 00:30:37,840
Speaker 11: to need to make in significant investments in clean energy

621
00:30:37,880 --> 00:30:40,480
Speaker 11: for example. We're going to be needing to make significant

622
00:30:40,480 --> 00:30:43,760
Speaker 11: investments in education and healthcare because right now we're about

623
00:30:43,800 --> 00:30:47,880
Speaker 11: to throw somewhere between twelve and upwards maybe seventeen million

624
00:30:47,880 --> 00:30:52,200
Speaker 11: people off of Medicaid. That's going to require significant public investment.

625
00:30:52,440 --> 00:30:55,000
Speaker 11: That's what Democrats are going to be facing is they

626
00:30:55,040 --> 00:30:58,280
Speaker 11: confront the midterms and the twenty twenty eight election. So

627
00:30:58,320 --> 00:31:01,480
Speaker 11: whether or not that is super ath inrist, that's where

628
00:31:01,520 --> 00:31:04,680
Speaker 11: the party is going to need to be because this

629
00:31:05,080 --> 00:31:08,880
Speaker 11: Republican budget bill puts the economy and the humans in

630
00:31:08,920 --> 00:31:12,640
Speaker 11: this country on a downward spirral right, and so how

631
00:31:12,680 --> 00:31:15,320
Speaker 11: we're going to reconfigure and come back from that that

632
00:31:15,560 --> 00:31:17,360
Speaker 11: has to be job number one.

633
00:31:17,680 --> 00:31:21,240
Speaker 7: Heather what did you And let me put another head

634
00:31:21,280 --> 00:31:26,920
Speaker 7: of the Democratic Party nationally in Washington, DC. View the

635
00:31:26,920 --> 00:31:29,960
Speaker 7: Democratic primary here in New York City with mister mom

636
00:31:30,000 --> 00:31:33,120
Speaker 7: Dominie having that surprising win over Governor Cuomo.

637
00:31:35,360 --> 00:31:38,400
Speaker 11: I mean, I wasn't following so much. I was really

638
00:31:38,440 --> 00:31:41,120
Speaker 11: following closely what was happening with the budget bill. But

639
00:31:41,280 --> 00:31:44,200
Speaker 11: I think that they see that as, or at least

640
00:31:44,200 --> 00:31:46,920
Speaker 11: what I have read, they see that as an indication that, oh,

641
00:31:47,240 --> 00:31:49,680
Speaker 11: you know, the Democrats are perhaps going too left. But

642
00:31:49,760 --> 00:31:52,239
Speaker 11: here's the thing New York City is, you know, it's

643
00:31:52,280 --> 00:31:55,360
Speaker 11: an important Democratic constituency. The people in New York. One

644
00:31:55,400 --> 00:31:57,520
Speaker 11: of the most exciting things that I saw coming out

645
00:31:57,560 --> 00:32:00,360
Speaker 11: of that election was how many young people got out

646
00:32:00,600 --> 00:32:03,040
Speaker 11: and voted, and how excited they were about a candidate

647
00:32:03,040 --> 00:32:06,320
Speaker 11: that they could believe in. And he was focusing Mondamin

648
00:32:06,400 --> 00:32:09,280
Speaker 11: was focusing on bread and butter, kitchen table issues, lowering

649
00:32:09,280 --> 00:32:12,120
Speaker 11: the cost of housing, making sure that groceries are affordable,

650
00:32:12,160 --> 00:32:15,240
Speaker 11: making sure that childcare is accessible. These are exactly the

651
00:32:15,320 --> 00:32:17,720
Speaker 11: kinds of things that we saw at the federal level

652
00:32:17,720 --> 00:32:20,640
Speaker 11: in the last election. Well, President Trump ran wait, let

653
00:32:20,680 --> 00:32:23,680
Speaker 11: me just finish. President Trump ran on a platform of

654
00:32:23,760 --> 00:32:27,280
Speaker 11: lowering costs for Americans. Instead, what he is doing is

655
00:32:27,320 --> 00:32:31,520
Speaker 11: making our healthcare mores more unaffordable. He's making it likely

656
00:32:31,560 --> 00:32:35,440
Speaker 11: inaccessible for rural Americans to access healthcare at all, making

657
00:32:35,480 --> 00:32:38,680
Speaker 11: our energy costs up. And so I think that what

658
00:32:38,720 --> 00:32:41,040
Speaker 11: you saw in New York City was those kitchen table

659
00:32:41,120 --> 00:32:43,720
Speaker 11: bread and butter economic issues coming to the fore with

660
00:32:43,800 --> 00:32:47,480
Speaker 11: an enthusiasm for a new candidate there.

661
00:32:47,560 --> 00:32:50,760
Speaker 2: Well, ha, there one final question. Quickly, will the rich

662
00:32:50,840 --> 00:32:53,880
Speaker 2: people leave in New York City as the rich people

663
00:32:53,920 --> 00:32:55,960
Speaker 2: are leaving the United Kingdom right now?

664
00:32:57,520 --> 00:32:59,680
Speaker 11: Well, it's uncleared me. Where those rich people are going

665
00:32:59,720 --> 00:33:04,040
Speaker 11: to go? Manhattan is amazing. Now, here's the thing. If

666
00:33:04,080 --> 00:33:07,960
Speaker 11: you are basically saying that people in a community need

667
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Speaker 11: to accept no healthcare, no nutrition assistance for the poor,

668
00:33:12,320 --> 00:33:14,440
Speaker 11: no good jobs, just so they can have some rich

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00:33:14,480 --> 00:33:16,800
Speaker 11: people in their community, what are those rich people doing

670
00:33:16,800 --> 00:33:18,920
Speaker 11: for them? That is the question that we are asking.

671
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Speaker 11: What are they giving back? Are they investing in good

672
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Speaker 11: jobs in their community? Are they making sure that that

673
00:33:24,640 --> 00:33:27,800
Speaker 11: community has access to the things they need? So that

674
00:33:27,960 --> 00:33:29,760
Speaker 11: is the question that I think all of us should

675
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Speaker 11: be asking of America's wealthiest. We live in one of

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Speaker 11: the richest countries of the world has ever seen. There

677
00:33:34,840 --> 00:33:38,040
Speaker 11: are all of these billionaires, but are they actually doing

678
00:33:38,080 --> 00:33:41,160
Speaker 11: anything that is good for the economy and improving middle

679
00:33:41,200 --> 00:33:41,960
Speaker 11: class incomes?

680
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Speaker 2: Heather, thank you so much, suld Doctor Bische, of course,

681
00:33:45,160 --> 00:33:48,280
Speaker 2: with the Washington Center for Equitable Growth through Public Service

682
00:33:48,280 --> 00:33:50,080
Speaker 2: to the Biden In administration.

683
00:33:50,400 --> 00:33:54,240
Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday

684
00:33:54,280 --> 00:33:57,280
Speaker 1: starting at seven am Eastern on Apple Coarclay, and Android

685
00:33:57,320 --> 00:34:00,400
Speaker 1: Auto with the Bloomberg Business App. You can also listen

686
00:34:00,440 --> 00:34:03,720
Speaker 1: live on Amazon Alexa from our flagship New York station.

687
00:34:04,240 --> 00:34:06,920
Speaker 1: Just say Alexa, play Bloomberg eleven thirty.

688
00:34:07,400 --> 00:34:10,279
Speaker 2: The newspapers only Lisa Mateo can do it.

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00:34:10,320 --> 00:34:11,600
Speaker 4: Lisa, good morning.

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00:34:11,640 --> 00:34:13,160
Speaker 12: All right, we'll start with the Wall Street Journal. So

691
00:34:13,160 --> 00:34:16,200
Speaker 12: they're talking about Halloween fans. They just can't wait till October.

692
00:34:16,480 --> 00:34:20,040
Speaker 12: So there's this new holiday tradition. It starts this month.

693
00:34:20,040 --> 00:34:23,480
Speaker 12: It's called Summer Ween. Okay, so it first started to

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00:34:23,520 --> 00:34:24,720
Speaker 12: catch on last summer.

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00:34:25,080 --> 00:34:26,680
Speaker 6: It's grown even bigger.

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00:34:26,920 --> 00:34:29,600
Speaker 12: But the thing is, retailers are really starting to cash

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00:34:29,600 --> 00:34:32,160
Speaker 12: in on this Summer Ween. So you have, for example,

698
00:34:32,239 --> 00:34:38,960
Speaker 12: TJ max As decorations. It's Frankenstein on a beach chair skeletons.

699
00:34:40,480 --> 00:34:44,400
Speaker 12: It's excuse to people to spend money in the retailers.

700
00:34:45,400 --> 00:34:49,320
Speaker 12: They have blankets with like skeletons and bikinis, and towns

701
00:34:49,360 --> 00:34:53,239
Speaker 12: are getting into it doing these summer ween Hola celebrations,

702
00:34:53,280 --> 00:34:57,640
Speaker 12: like they're carving watermelons like jack O'Lanterns, They're having parades

703
00:34:57,680 --> 00:35:01,040
Speaker 12: and people dressing up. So it's starting to become a thing.

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00:35:01,120 --> 00:35:03,520
Speaker 12: I don't know, I haven't I've seen it in the stores.

705
00:35:03,560 --> 00:35:06,239
Speaker 7: I haven't seen it in that that are just so

706
00:35:06,360 --> 00:35:07,360
Speaker 7: in the hot Halloween.

707
00:35:07,680 --> 00:35:11,320
Speaker 6: Yes, yes, they're fanatics. They're a huge following.

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00:35:11,560 --> 00:35:13,279
Speaker 12: So they're saying this is going to start, you know,

709
00:35:13,320 --> 00:35:16,080
Speaker 12: becoming something bigger. But they're also saying because of a

710
00:35:16,120 --> 00:35:19,359
Speaker 12: certainty around tariffs and pricing, people want to buy these

711
00:35:19,400 --> 00:35:21,520
Speaker 12: things earlier because they don't know how much the prices

712
00:35:21,600 --> 00:35:23,960
Speaker 12: on some of these hallowing items are going to increase.

713
00:35:24,520 --> 00:35:27,680
Speaker 12: That's another strategy they have, but it could be coming soon.

714
00:35:28,520 --> 00:35:30,960
Speaker 12: This one, Paul, is up your alley because I know

715
00:35:31,160 --> 00:35:34,400
Speaker 12: you're a fan of the Cracker barrel. Okay listens the

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00:35:34,480 --> 00:35:36,920
Speaker 12: Wall Street Journal, you know, right, it's known for the

717
00:35:36,960 --> 00:35:39,239
Speaker 12: old Country charm. People like it because they have the

718
00:35:39,360 --> 00:35:42,240
Speaker 12: decor like you feel like you're in grandma's house. It's

719
00:35:42,320 --> 00:35:45,520
Speaker 12: like the antiques and the bottles and the farming tools,

720
00:35:45,560 --> 00:35:49,040
Speaker 12: all the chatch keys everywhere. But Cracker Bower are saying,

721
00:35:49,040 --> 00:35:51,040
Speaker 12: you know what, we want to declutter and we want

722
00:35:51,040 --> 00:35:52,240
Speaker 12: to make things different.

723
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Speaker 5: Yeah.

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00:35:53,080 --> 00:35:56,160
Speaker 7: This photo they have there of the remodeled one in Tennessee,

725
00:35:56,360 --> 00:36:00,120
Speaker 7: Holy cow, that's different going for a new budy. I

726
00:36:00,200 --> 00:36:00,560
Speaker 7: don't know.

727
00:36:00,719 --> 00:36:03,160
Speaker 12: It's a good question. I mean, they're they're trying and

728
00:36:03,200 --> 00:36:05,480
Speaker 12: maybe they're trying to attract a younger audience. I don't

729
00:36:05,480 --> 00:36:10,160
Speaker 12: know if that's exactly exactly. Maybe that's what they're trying

730
00:36:10,200 --> 00:36:12,880
Speaker 12: to do, but they're just saying that. It's a debate

731
00:36:13,120 --> 00:36:16,560
Speaker 12: between workers and people go to the restaurant. They're saying

732
00:36:16,600 --> 00:36:18,759
Speaker 12: they don't want it summer people saying, well, you know what,

733
00:36:18,840 --> 00:36:21,120
Speaker 12: it cleans things up a bit, you know, makes things

734
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Speaker 12: less cluttered.

735
00:36:22,040 --> 00:36:24,279
Speaker 7: And it does. I mean it looks good, but boy

736
00:36:24,360 --> 00:36:24,880
Speaker 7: is it different.

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00:36:24,920 --> 00:36:27,279
Speaker 12: But it's completely because I mean you walk into a

738
00:36:27,280 --> 00:36:30,719
Speaker 12: Cracker barrel and you know, there's like clutter everywhere, like

739
00:36:31,719 --> 00:36:32,439
Speaker 12: that's their thing.

740
00:36:32,520 --> 00:36:36,360
Speaker 7: Though people love it, but I'm guessing this is an

741
00:36:36,400 --> 00:36:38,160
Speaker 7: audience that does not like change.

742
00:36:38,280 --> 00:36:39,560
Speaker 5: So see how this plays out.

743
00:36:39,600 --> 00:36:42,920
Speaker 12: Yes, exactly, exactly okay, and oh and they're getting rid

744
00:36:42,920 --> 00:36:46,960
Speaker 12: of the rocking chairs and they're pudding. I next, and

745
00:36:47,160 --> 00:36:49,880
Speaker 12: go there Squid Game. I don't know if either of

746
00:36:49,920 --> 00:36:50,680
Speaker 12: you want.

747
00:36:52,000 --> 00:36:53,560
Speaker 2: In the offspring watch it?

748
00:36:53,760 --> 00:36:54,160
Speaker 9: Really?

749
00:36:54,400 --> 00:36:54,800
Speaker 7: Okay?

750
00:36:54,840 --> 00:36:57,439
Speaker 12: Okay, see my kids watch it too, and for me, yes,

751
00:36:57,560 --> 00:36:59,360
Speaker 12: so I thought it was kind of violent.

752
00:36:59,400 --> 00:36:59,800
Speaker 7: But okay.

753
00:36:59,840 --> 00:37:03,160
Speaker 12: So this is the third season. So it premiered this

754
00:37:03,200 --> 00:37:06,640
Speaker 12: past Friday. It topped like you know, global rankings on

755
00:37:06,680 --> 00:37:09,040
Speaker 12: Netflix and all countries did great. But the thing is

756
00:37:09,040 --> 00:37:11,879
Speaker 12: is that they had rankings about how the audience liked it,

757
00:37:12,080 --> 00:37:14,720
Speaker 12: and the audience didn't like it as much for this season.

758
00:37:15,200 --> 00:37:18,280
Speaker 12: So that's why you have Squid Game stocks. They're starting

759
00:37:18,320 --> 00:37:22,120
Speaker 12: to sync, you know, like Artist Studio, South Korea based

760
00:37:22,200 --> 00:37:27,040
Speaker 12: firm Texter Dexter Studios. They're all sinking. But it's still

761
00:37:27,080 --> 00:37:29,960
Speaker 12: I mean, it's still the most watch show of all time.

762
00:37:29,760 --> 00:37:34,000
Speaker 2: For Netflix into the summer. Does streaming have momentum.

763
00:37:34,200 --> 00:37:37,480
Speaker 7: Yes, it's just it's secular momentum. It's not seasonal. It's

764
00:37:37,640 --> 00:37:42,719
Speaker 7: just secular change taking place, just like cable television, you know,

765
00:37:42,840 --> 00:37:46,560
Speaker 7: displaced broadcast television to some degree, it's even more pronounced

766
00:37:46,560 --> 00:37:50,200
Speaker 7: here with streaming versus kind of what most people grew

767
00:37:50,280 --> 00:37:52,799
Speaker 7: up with was a basic cable and broadcast and all

768
00:37:52,800 --> 00:37:53,400
Speaker 7: that kind of stuff.

769
00:37:53,400 --> 00:37:54,839
Speaker 5: So absolutely fast, yep.

770
00:37:55,640 --> 00:37:58,439
Speaker 2: I I have no idea where we are in five

771
00:37:58,520 --> 00:38:01,120
Speaker 2: years now. We're doing the digital thing here, folks, and

772
00:38:01,600 --> 00:38:05,040
Speaker 2: I've got an immense respect for people thinking as hard

773
00:38:05,080 --> 00:38:08,840
Speaker 2: as they can, Like, what is the impact of YouTube

774
00:38:08,880 --> 00:38:09,759
Speaker 2: about five years?

775
00:38:09,800 --> 00:38:10,040
Speaker 3: Yes?

776
00:38:10,200 --> 00:38:13,680
Speaker 7: Well, I mean podcast at least was saying squid games

777
00:38:13,920 --> 00:38:16,880
Speaker 7: the biggest thing in normal, wouldn't I don't know what

778
00:38:16,880 --> 00:38:17,200
Speaker 7: it is.

779
00:38:17,600 --> 00:38:19,480
Speaker 5: I mean generation you couldn't say that.

780
00:38:19,600 --> 00:38:21,560
Speaker 7: Ago a generation though, you couldn't say that whatever it

781
00:38:21,600 --> 00:38:26,120
Speaker 7: was you know that was. It's just so dispersedpers Listen

782
00:38:26,160 --> 00:38:27,680
Speaker 7: to Matato, Thank you so much.

783
00:38:28,280 --> 00:38:33,120
Speaker 1: This is the Bloomberg Surveillance podcast, available on Apple, Spotify,

784
00:38:33,239 --> 00:38:37,560
Speaker 1: and anywhere else you get your podcasts. Listen live each weekday,

785
00:38:37,680 --> 00:38:40,920
Speaker 1: seven to ten am Easter and on Bloomberg dot com,

786
00:38:41,040 --> 00:38:44,839
Speaker 1: the iHeartRadio app, tune In, and the Bloomberg Business app.

787
00:38:45,160 --> 00:38:48,280
Speaker 1: You can also watch us live every weekday on YouTube

788
00:38:48,560 --> 00:38:50,560
Speaker 1: and always on the Bloomberg terminal