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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 car Play or Android Auto with the Bloomberg

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Speaker 1: Business App. Listen on demand wherever you get your podcasts,

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Speaker 1: or watch us live on YouTube.

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Speaker 2: Joining us now, body, we look out. He was previously scheduled,

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Speaker 2: but thank god he's here. Terry Weisman is with Macquarie,

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Speaker 2: and I just can't say enough about his perspective or

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Speaker 2: in economics, with parchment off the Charles River in Boston

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Speaker 2: and decades of following this. I demand Terry that we

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Speaker 2: have some historical perspective. Everybody's in an uproar. Bill POLTI

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Speaker 2: here in twenty minutes, and that I want to get

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Speaker 2: to that with you in a bit. Alexis has Alexis,

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Speaker 2: you're not Scarlett food. You have forty two questions ready.

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Speaker 2: We're not going to have time for him. Nineteen fifty one,

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Speaker 2: Thomas McCabe tells Harry Truman to go to hell. That's

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Speaker 2: where this started, and they dragged off Korea War and

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Speaker 2: sky high nineteen forty seven inflation frankly into a fifty

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Speaker 2: two deflation. The independence of the Fed. Why is that

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Speaker 2: so sacri saying? What is it about nineteen fifty one

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Speaker 2: ish William McChesney martin independence that's important?

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Speaker 3: Well, I think the board of question here is why

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Speaker 3: is in the penance important? Not why it is in

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Speaker 3: the penan's important at a particular point in time. They're talking

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Speaker 3: about structural independence of the FED, not independance based on

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Speaker 3: a time and place. And I think in the penance

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Speaker 3: of the Fed is important because we believe, or at

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Speaker 3: least and certainly academics have shown through their research implicitly

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Speaker 3: that the White House and the Executive Branch have a

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Speaker 3: different reaction.

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Speaker 4: Function than the Federal Reserve.

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Speaker 3: In other words, the White House tends to put more

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Speaker 3: emphasis on what the electorate wants to see in the

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Speaker 3: short term, especially in key election years, let's say. And

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Speaker 3: the premise here is that the White House's reaction function,

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Speaker 3: if it's driven by what the electorate want, is going

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Speaker 3: to put more weight on driving growth, on reducing unemployment,

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Speaker 3: and on keeping mortgage yields low more so than it

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Speaker 3: would worry about inflation. The FED, on the other hand,

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Speaker 3: has a dual mandate, which is much more balance, which

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Speaker 3: is much more symmetric. In fact, that's encoded in the

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Speaker 3: law that it should pertain to looking unemployment inflation without

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Speaker 3: a bias the way that the White House might have.

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Speaker 3: That's the key behind the need to preserve independence, because

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Speaker 3: if you believe that inflation should be a weight matter

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Speaker 3: for policy makers, then let's keep the White House away

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Speaker 3: from policy it.

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Speaker 2: Alecxis dragging it from nineteen fifty one to twenty twenty six.

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Speaker 2: So much of this is still about coming off the

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Speaker 2: pandemic and where are we coming off of COVID?

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Speaker 5: Yeah, I mean, I think that's a great question. And

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Speaker 5: now we're looking at a new year with a new

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Speaker 5: FED chairman going to take over, whoever that might be

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Speaker 5: come May fifteenth. I'm wondering if Powell will be inclined

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Speaker 5: to want to stay on it in any capacity after

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Speaker 5: what's happened now, because he's able to write legally stay

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Speaker 5: on not as chairman but as a board.

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Speaker 4: Member, that's absolutely right.

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Speaker 5: Do you think it may behoove him to do so?

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Speaker 4: I think I think it might.

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Speaker 3: I think that would simply open him up a little

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Speaker 3: bit more to to legal recriminations from from from the

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Speaker 3: White House. So that's a decision he's going to have

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Speaker 3: to take whether he wants to take that that that risk.

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Speaker 3: I would say that simply going on the public record

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Speaker 3: over the weekend with the comments he made, displays a

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Speaker 3: huge amount of courageousness.

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Speaker 4: Because it to effectively what he's doing is.

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Speaker 3: Tempting this White House and that that takes that that

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Speaker 3: takes some some memority. That takes some courage. So let's

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Speaker 3: hand it to him. He's not backing down right now.

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Speaker 4: To the extent that you should respect someone who has

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Speaker 4: that kind of courageousness. This is a good thing.

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Speaker 5: Yeah, what about what this all means for the bond market,

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Speaker 5: for the dollar. I mean, we are seeing some reaction,

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Speaker 5: I argue, not as much as I would have imagined

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Speaker 5: when I saw this is come over my Bloomberg over

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Speaker 5: the weekend.

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Speaker 3: Well, one reason we're not seeing that much of a

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Speaker 3: reaction is because this is just the latest step in

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Speaker 3: an arc of events. We kind of knew already that

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Speaker 3: President Trump wanted to get rid of Jay Powell. We

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Speaker 3: kind of knew that he wanted to exert his influence

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Speaker 3: on this on the Federal Reserve structurally. So this is

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Speaker 3: just another tool that's come out of the tool chests,

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Speaker 3: But it's not a different approach effectively, or a different goal.

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Speaker 3: I think in that respect, the market was already starting

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Speaker 3: to acclimate the prospect. Remember also, this doesn't necessarily change

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Speaker 3: who's going to be the Federal Reserve chairman going forward. Right,

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Speaker 3: We kind of knew as you mentioned that that Jay

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Speaker 3: Powell was on the way out, So that respect, things

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Speaker 3: haven't changed. But at least the direction of the market

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Speaker 3: makes sense. Right for bond eels at the back end

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Speaker 3: of the curve to move higher makes a lot of

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Speaker 3: sense if you in a world that's going to be

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Speaker 3: structurally more inflationary.

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Speaker 2: Good running your crastination on YouTube, subscribe to Bloomberg Podcast.

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Speaker 2: Can't say enough about that experiment, Really humbled by the

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Speaker 2: continue growth we see on YouTube. To give you the

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Speaker 2: feel to play here in about twenty minutes, John Farrow

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Speaker 2: in conversation with Bill Poultity. This is the grandson of

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Speaker 2: the Poulty Housing founder. He's chairman the Federal Housing Finance Committee.

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Speaker 6: He'll be front and center.

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Speaker 2: We're gonna talk more about that interview with Michael McKee

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Speaker 2: and Terry Weisman.

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Speaker 6: With us here in a bit.

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Speaker 2: Kelsey Barrow on the bond market coming up as well

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Speaker 2: with JP Morgan, doctor Weisman, what kind of economy right

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Speaker 2: now does President Trump enjoy? Over the weekend, I was

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Speaker 2: flabbergasted by the twelvemonth twenty twenty five sum of a

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Speaker 2: dearth of job formation. I mean, is this basically in

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Speaker 2: foreign events as well a distraction from a really ugly economy.

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Speaker 3: I don't think the premise of your question. I think

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Speaker 3: Tom is a bit off. I don't think this is

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Speaker 3: an abjectly poor economy. There are certain things in the

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Speaker 3: economy are actually going quite well, and I would point

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Speaker 3: a proactivity growth as one of those things that's going

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Speaker 3: fantastically well, as judged by the numbers that have come out,

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Speaker 3: and growth itself on the back of that has been strong,

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Speaker 3: despite the fact that we are not seeing much job growth.

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Speaker 4: On a matter of job growth.

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Speaker 3: Itself, there are a few reasons why we can ascertain

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Speaker 3: that this is not about a demand deficiency. This slowdown

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Speaker 3: in hiring is not about a demand deficiency. It could

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Speaker 3: be simply because some college, some new entrances into laborforce

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Speaker 3: collegehs are simply not being hired enough. It could be

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Speaker 3: the result of some policy uncertainty, but it doesn't seem

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Speaker 3: to be as grave as to warrant to worry about

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Speaker 3: a recession coming up.

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Speaker 5: What about the biggest headwind that you see for this

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Speaker 5: economy in this new year.

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Speaker 3: Well, it's the same headwind that I perceived last year,

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Speaker 3: and I think it's still a valid headwind. But whether

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Speaker 3: it's going to be enough to offset the good things

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Speaker 3: is hard to say. At this point. We suspect it

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Speaker 3: won't be. But that issue, that pessimism, if there should

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Speaker 3: be any, derives from what's happening with the low income consumer.

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Speaker 3: The low income household, is he sufficiently burdened, or he

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Speaker 3: or she sufficiently burdened by debt and by a wage

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Speaker 3: It has not been growing to really start to suppress the.

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Speaker 4: Amount of spending that that household does.

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Speaker 3: We suspect that they could, but not enough to offset again,

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Speaker 3: the other components of spending that we expect to be

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Speaker 3: strong again.

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Speaker 5: That K shaped economy.

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Speaker 4: Yeah, if you want to put it that way.

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Speaker 3: I don't particularly like that expression, but it's important to

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Speaker 3: keep in mind that the high income household has been

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Speaker 3: responsible for an ever growing share of consumption in the economy,

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Speaker 3: and the economy as a result depends more on what

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Speaker 3: the high income household is doing.

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Speaker 2: It's fourteen minutes after the hor it's forty four minutes

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Speaker 2: after the hour. We note to our audience worldwide that

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Speaker 2: I have the plague.

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Speaker 5: Which is fine. We're in this small room together.

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Speaker 6: It's really it's hermetically sealed. Curious.

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Speaker 2: On the other side of the ConA silence here. I

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Speaker 2: got what everybody else has. Folks, good luck with it.

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Speaker 2: Get a flu shot, talk to your doctors, and don't

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Speaker 2: have a fever, and don't show up for work if

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Speaker 2: you think you're contagious.

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Speaker 5: It's tough out there. And now there's a nurse's strike

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Speaker 5: on top of it all here in this series.

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Speaker 2: This is the first big chill for the mayor.

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Speaker 6: Yeah, let's vamp on that to Terry Weisman. We can

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Speaker 6: do that, Terry, let's do an audible mcke's.

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Speaker 2: Going to sit down wearing his Denver Broncos tie today,

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Speaker 2: doctor Weisman.

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Speaker 6: Just as simple as I can. The wage angst that's

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Speaker 6: out there is tangible.

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Speaker 2: Is a nursing strike something to look forward to for

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Speaker 2: all of this year labor unrest?

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Speaker 3: Look, I would I would suggest or submit that it's

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Speaker 3: more important than say, the workers at Starbucks going on strike.

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Speaker 3: I think this is a question of degree. Nurses and

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Speaker 3: what they do are critical not just to patience, but

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Speaker 3: to the economy overall. I think, Tom, you just mentioned

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Speaker 3: exactly why if people get sick, they don't show up

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Speaker 3: to work. If people don't show up to work, nothing

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Speaker 3: gets done. So that's why the nurses strike is pertinent. Now,

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Speaker 3: of course, this is a localized one. It only is

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Speaker 3: going to happen in New York City, But more generally speaking,

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Speaker 3: you don't want to see healthcare workers unable to do

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Speaker 3: their job.

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Speaker 4: We know what happened during COVID. It was a disaster

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Speaker 4: in that respect.

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Speaker 2: YEA, thank you. This is what do folks. This is

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Speaker 2: the way we roll together. Michael McKee driving all of

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Speaker 2: our economics, and Terry Weisman and McCrary.

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Speaker 6: With us today.

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Speaker 2: Mike Glenn's rush and Colby Smith in the New York

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Speaker 2: Times say there's a legal thing with mister Pulty here

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Speaker 2: of pushing these things and then the courts just push

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Speaker 2: it aside. Do you anticipate with your reading this morning

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Speaker 2: that the courts will push aside this criminal threat to

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Speaker 2: the chairman.

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Speaker 7: I am not going to hazard a guess on that,

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Speaker 7: but we can point to the track record of the administration,

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Speaker 7: and that is trying to indict James, call me, trying

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Speaker 7: to indict Letitia James and failing in both cases multiple times.

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Speaker 7: So I don't know if they will go ahead with this.

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Speaker 7: If you are to believe the President he didn't know

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Speaker 7: anything about it, which is what he said last night,

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Speaker 7: then you could imagine him telling Janine Piro to back

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Speaker 7: off and drop this investigation because it's not going to

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Speaker 7: go well for the administration here, and it isn't.

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Speaker 6: It makes no sense.

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Speaker 7: I don't see what the endgame, what the president gets

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Speaker 7: out of this.

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Speaker 2: The number one interview for Bloomberg last year was John

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Speaker 2: Farrow with Scott Besson. It was viral in the zeitgeist

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Speaker 2: for three weeks. This morning, I have bess in silence.

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Speaker 2: Are people like Besson and even Secretary of Latnick saying

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Speaker 2: to the President, you gotta be kidding me. Yield not

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Speaker 2: price down, Mike? Is that what's going to happen?

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Speaker 7: Well, we are hearing that a number of administration officials,

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Speaker 7: and I don't know if Scott bessont is among them,

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Speaker 7: were caught off sides by this, did not know that

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Speaker 7: this was happening, and it certainly could be a case

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Speaker 7: of Pero going rogue on her own, a little bit

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Speaker 7: of the old will no one rid me of this

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Speaker 7: meddlesome priest kind of thing, taking the President's anger at

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Speaker 7: Powell and running with it. But you're right, it doesn't

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Speaker 7: do him any good because at this point the markets

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Speaker 7: are reacting negatively. Now, there's so many other things that

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Speaker 7: can go wrong in the next hour, let alone the

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Speaker 7: next week. But it is it is not something that

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Speaker 7: is going to play out well for them, particularly with

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Speaker 7: Tom Tillis saying he won't vote for anybody because he's

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Speaker 7: a Republican on the Banking Committee split thirteen eleven between

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Speaker 7: Republicans and Democrats, you lose one Republican and you can't

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Speaker 7: get a nomination through for chair. So this isn't probably

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Speaker 7: isn't playing out the way you would have drawn it

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Speaker 7: up if you were trying to do a conspiracy theory.

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Speaker 5: So is this really an essence a criminal investigation about

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Speaker 5: how taxpayer money is being spent? Is that what the

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Speaker 5: DOJ is looking into here?

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Speaker 7: Well, what we've been told is yes, it's a criminal investigation.

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Speaker 7: It is into whether Powell lied to Congress about these renovations.

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Speaker 7: It is not a lawsuit that Trump was threatening. Nobody

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Speaker 7: knows how he would do it for malfeasance or for

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Speaker 7: not managing the project. Well, but Pole's going to be

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Speaker 7: out of office as chair in four months, and this

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Speaker 7: might just stiffen his spine and lead him to stay

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Speaker 7: on as governor, which he can do until twenty twenty eight.

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Speaker 2: Do we need more discent, doctor Weisman, I mean, I

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Speaker 2: know you staid, I'm so sorry. I can't remember who

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Speaker 2: you took your PhD with at Harvard, but if it's

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Speaker 2: if it's Benjamin Friedman or Kenneth Rugoff, the late Marty Feldstein,

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Speaker 2: I mean, there was a collegiality to this. Do we

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Speaker 2: need more descent at the FED?

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Speaker 3: I think we do, but I don't want to I

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Speaker 3: don't want to express it in terms of dissent. A

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Speaker 3: range of opinions is always healthy. I think that's the

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Speaker 3: way I would put it, having opinions from other business

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Speaker 3: leaders from other regions. I mean, the reason the Federal

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Speaker 3: Reserve was structured as it was with this, with this

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Speaker 3: emphasis on a broad regional basis for decision making, speaks

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Speaker 3: to the need to have a diverse view of opinions.

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Speaker 3: So I think that's good descent in and of itself,

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Speaker 3: to the extent that it's missile.

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Speaker 4: You know.

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Speaker 3: Taking the economy in the wrong direction, of course is

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Speaker 3: not good, but a multiple of views, it is a

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Speaker 3: good thing.

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Speaker 6: Terry, thank you so much for joining us this morning.

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Speaker 6: Really really appreciated. Dutor Weisman is the Maccari driving all

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Speaker 6: of their coverage. We greatly appreciated. Stay with us.

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Speaker 2: More from Bloomberg Surveillance coming up after this.

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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: This is a really important interview. It's way too short.

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Speaker 2: Alicia Levine brings shockingly prodigious math skills to the art

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Speaker 2: of the old cell and what do you do with cash?

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Speaker 2: Head of investment strategy at being my wealth? Is the

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Speaker 2: math out of kilter right now? I think the headline

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Speaker 2: story for me is a math is almost what I

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Speaker 2: call normative. It's almost the dynamics, the pumping, the Newtonian

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Speaker 2: churn of the market is actually normal and healthy. Earnings up,

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Speaker 2: everything up, even if it's a little bit every day.

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Speaker 4: Yeah.

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Speaker 8: So by wrapping of twenty twenty five was the noise

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Speaker 8: is noisy.

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Speaker 5: Yeah, and stick to what you know.

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Speaker 8: Moves markets really in the long term, not on a

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Speaker 8: daily basis, not when you come in in the futures market.

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Speaker 5: The noise is noisy.

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Speaker 8: For twenty twenty six, I think the noise continues to

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Speaker 8: be noisy, and maybe we push the envelope, but ultimately

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Speaker 8: a lot of this is going to be seen as noise.

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Speaker 9: Right.

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Speaker 5: There is some risk of long term.

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Speaker 8: Degradation here as you get something of a bull market

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Speaker 8: in populism on for both parties, that the policies themselves

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Speaker 8: that have brought.

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Speaker 5: Us here may not be here.

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Speaker 8: But I don't see that, Like I still see a

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Speaker 8: very strong year. I see fourteen percent earnings. What I

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Speaker 8: see in markets this morning, which is fascinating, is you know,

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Speaker 8: we thought that tech would not be the leader this year,

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Speaker 8: it would be the more cyclical centers, and you're actually

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Speaker 8: seeing it this morning. What's getting hit the most, it's Nasdaq,

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Speaker 8: and it's not the sp it's not the death I

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Speaker 8: get into.

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Speaker 2: The math and Cudlow and m o or Larry McDonald's

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Speaker 2: great comments on the wall of money out there. Bny

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Speaker 2: Mellon is expert at this. The overwhelming keel to this

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Speaker 2: market is billions of dollars. It's got to find a

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Speaker 2: warm spot to go.

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Speaker 8: It has to find a warm spot. And by the way,

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Speaker 8: it's been coming to the US. And so all this

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Speaker 8: talk about sell America back in April turned out not

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Speaker 8: to be true.

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Speaker 5: And so when we're going to continue to see the shift,

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Speaker 5: you say out of the match seven, broaden out this rally,

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Speaker 5: that would be nice in twenty twenty six, where do

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Speaker 5: you see the leadership coming from though?

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Speaker 8: So the leadership I think here, even with the financial

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Speaker 8: selling off this morning because of some of the policy

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Speaker 8: proposals that we've seen, and you know, of course the

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Speaker 8: news this morning about the FED, I still think it's

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Speaker 8: financials because we still see a c or yeal curve.

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Speaker 8: And we also think it's industrials. And we also like

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Speaker 8: we like down cap as well, particularly in the financial sector,

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Speaker 8: because you call it industrials down down.

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Speaker 5: Cap, downcap, down cap.

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Speaker 8: So in other words, mid and small cap company. Okay, okay,

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Speaker 8: so downcap from your four trillion dollar company, you've got

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Speaker 8: a lot of industrials and.

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Speaker 5: We're going to go with it though. Okay, downcap, right.

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Speaker 8: So we're not talking about the back seven anymore, but

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Speaker 8: we're talking about if we're in an M and A world,

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Speaker 8: if we are in a deregulatory world, which is by

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Speaker 8: the way, pushing the multiples on the financials as well

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Speaker 8: and price to book, then where are you going shopping.

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Speaker 8: You're going shopping in mid cap so you know, you're

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Speaker 8: not having two giant companies merchant, you're having more M

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Speaker 8: and A in the mid cap section. So we like

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Speaker 8: that as well. It's just a more interesting market than

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Speaker 8: we've had. Right And in the end, if you think

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Speaker 8: about what happened last year the mag seven which I

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Speaker 8: don't know if we shouldn't even call it that anymore,

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Speaker 8: only two outperform, the sm P and the SMP Sutillus

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Speaker 8: you know, you know, total return the S and P

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Speaker 8: was up about eighteen percent including you know, including income.

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Speaker 8: So that's a pretty decent fabulous here. And so we

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Speaker 8: can live in a world where companies are earning better

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Speaker 8: than they did two or three years ago. Rates are

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Speaker 8: coming down, we're getting deregulation in the energy and financials

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Speaker 8: and industrial sector.

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Speaker 5: What don't I love o case, so the po I love.

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Speaker 2: The Bombshow this weekends for early over at JP Morgens

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Speaker 2: is maybe we won't see any rate cuts. Other people

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Speaker 2: to three rate cuts. Mister Meyron at the FED is

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Speaker 2: looking for six rate cuts. Do you just assume money

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Speaker 2: market yields are coming down?

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Speaker 5: Yes?

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Speaker 2: And then the question is for B and Y for

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Speaker 2: the people who enjoyed five and a half and now

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Speaker 2: the joining three point x, what do they do with

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Speaker 2: that capital?

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Speaker 8: Look, we've been saying this for two years here right

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Speaker 8: that you've needed to you have to think about the

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Speaker 8: reinvest mint risk and the T bills and on the

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Speaker 8: cash side, and like we've been telling clients to move

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Speaker 8: out in duration into the belly of the curve because

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Speaker 8: that's where we see the most value here and you'll

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Speaker 8: get you'll get the benefit of.

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Speaker 5: The FED cutting as well.

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Speaker 8: So that that's where we that's what we've been telling

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Speaker 8: clients to do with the cash.

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Speaker 5: So you talked about down cap mid caps. Small caps

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Speaker 5: had a really nice year, didn't they, right, Russell two thousand.

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Speaker 5: I think last check was up about thirteen percent.

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Speaker 10: Right last year it closed in with the S and

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Speaker 10: P by the exactly exactly.

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Speaker 5: So is the SMP going to have a little competition

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Speaker 5: in the way of small caps this year?

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Speaker 8: So I think it could like we just see a

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Speaker 8: much broader market you're going to you know, to talk

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Speaker 8: about concentration is also about what starts out performing. And

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Speaker 8: I think if you just have a pause right in

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Speaker 8: the multiple expansion in the in the top ten socks,

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Speaker 8: let's say, and the capital goes elsewhere, you have a

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Speaker 8: world where international does well, emerging markets that does well,

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Speaker 8: small and well as well, and you can still make

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Speaker 8: a lot of money. But we have fully allocated portfolios,

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Speaker 8: like in the in the end, we fully allocate, and

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Speaker 8: so this is a world where all those allocations can

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Speaker 8: do well.

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Speaker 2: If we lost perspective, I look at the Wei screen

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Speaker 2: em the Damien says a world like a fifty percent,

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Speaker 2: thirty percent or that. Can we remind everyone that we're

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Speaker 2: trying to make nominal GD people's two hundred beeps and

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00:19:23,160 --> 00:19:27,720
Speaker 2: like eight percent per year nine percent tops is your

398
00:19:27,760 --> 00:19:32,439
Speaker 2: normal equity return? I hasn't been, no, but we've lost

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Speaker 2: perspective on the theory.

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Speaker 5: We've totally lost perspective.

401
00:19:37,160 --> 00:19:40,879
Speaker 8: The average annualized return in the S and P since

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00:19:40,960 --> 00:19:44,720
Speaker 8: twenty ten has been twelve and a half percent. Okay,

403
00:19:45,160 --> 00:19:48,000
Speaker 8: that is so far beyond what asset allocators are looking

404
00:19:48,000 --> 00:19:49,800
Speaker 8: at for their capital markets assumptions.

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Speaker 5: It's just okay.

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Speaker 8: And the question is, are we going back to a

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Speaker 8: world where rates are higher, where realials are higher?

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Speaker 7: Right?

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Speaker 5: Can you?

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Speaker 8: Can you still assume you're going to get twelve and

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Speaker 8: a half percent average annualized retarch?

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Speaker 2: Do you buy the gold you're gonna love this? Do

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00:20:04,600 --> 00:20:08,679
Speaker 2: you buy the Goldman Sachs linear extrapolation of a y

414
00:20:08,800 --> 00:20:12,680
Speaker 2: intercept that gets you way out to a single digit

415
00:20:12,880 --> 00:20:17,520
Speaker 2: return for SMP five hundred, like low single digit return

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Speaker 2: because we've done so well recently.

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Speaker 5: No, No, why no?

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Speaker 8: Because I just think we're in a different market. We're

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Speaker 8: in a market where we've got a fourteen percent operating

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Speaker 8: margin for the five hundred stocks on average for the

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Speaker 8: SMP versus the nine percent twenty years ago.

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Speaker 5: Are you just in a different.

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Speaker 6: See how she changes?

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Speaker 2: You should have seen her.

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Speaker 5: With a slide rule so very smoothly.

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Speaker 8: We think you're in a structurally different market. Productivity four

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Speaker 8: point nine percent last quarter. We're in a world where

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Speaker 8: this productivity everywhere, it's showing up in Corporate America showing

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00:20:49,640 --> 00:20:52,280
Speaker 8: up in the data. Of course, you're not going to

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Speaker 8: get two percent returns over the SHA pencil.

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Speaker 6: She had a Dixon type right now, she knows I'm

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Speaker 6: setting because she knows I agree with her, even though

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Speaker 6: I'm not allowed to say that here. Alicia Levan, don't

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Speaker 6: be a stranger. I can't say enough about her work.

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Speaker 6: BNY Well, she's head of investment. Stay with us.

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Speaker 2: More from Bloomberg Surveillance coming up after this.

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

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00:21:25,680 --> 00:21:28,840
Speaker 1: weekday afternoons from seven to ten am Eastern Listen on

439
00:21:28,920 --> 00:21:32,320
Speaker 1: Apple Karplay and Android Otto with the Bloomberg Business app,

440
00:21:32,520 --> 00:21:34,240
Speaker 1: or watch us live on YouTube.

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00:21:34,560 --> 00:21:37,720
Speaker 2: Joining us in short notice on Henrietta Trey's with Veda

442
00:21:37,760 --> 00:21:41,199
Speaker 2: Partners her interpretation of the Beltway, Henrietta, I'm not going

443
00:21:41,240 --> 00:21:44,480
Speaker 2: to mince words. And then Glenn Rush and Colby Smith

444
00:21:44,520 --> 00:21:46,920
Speaker 2: have it in the New York Times this morning, Bloomberg

445
00:21:47,000 --> 00:21:51,560
Speaker 2: has it as well. The fact is the Trump administration

446
00:21:51,720 --> 00:21:56,920
Speaker 2: and mister Poulty in whatever reform love to go after people. Okay, fine,

447
00:21:57,359 --> 00:21:59,840
Speaker 2: and then it gets to court and the courts go

448
00:22:00,080 --> 00:22:03,280
Speaker 2: you know, so it's a guild or random process never mind.

449
00:22:03,960 --> 00:22:05,960
Speaker 6: And so you've got you've.

450
00:22:05,840 --> 00:22:10,280
Speaker 2: Got James, Les, James and Comy and the rest of them.

451
00:22:10,280 --> 00:22:11,280
Speaker 6: We're going to go after them.

452
00:22:11,320 --> 00:22:15,000
Speaker 2: We're going to get the lots of you know, blather

453
00:22:15,200 --> 00:22:17,560
Speaker 2: if you will, and then the judges just go, no,

454
00:22:18,119 --> 00:22:20,320
Speaker 2: do you assume that's what's going to happen with the

455
00:22:20,359 --> 00:22:22,800
Speaker 2: criminal Jerown Powell.

456
00:22:23,240 --> 00:22:25,240
Speaker 11: I think that's what will happen with jer Own Powell

457
00:22:25,240 --> 00:22:27,520
Speaker 11: and also with Lisa Cook. That's sort of the chatter

458
00:22:27,600 --> 00:22:32,119
Speaker 11: around financial regulator circles, my friends in that general Federal

459
00:22:32,160 --> 00:22:36,120
Speaker 11: Reserve space and monitoring exactly who those people are on

460
00:22:36,160 --> 00:22:37,240
Speaker 11: the FED board.

461
00:22:37,600 --> 00:22:39,280
Speaker 9: Across the country and in DC.

462
00:22:39,720 --> 00:22:42,040
Speaker 11: And one of the basis for this is that the

463
00:22:42,080 --> 00:22:45,280
Speaker 11: courts are judging the FED to continue to have a

464
00:22:45,359 --> 00:22:50,200
Speaker 11: special and you know, special relationship with the executive branch,

465
00:22:50,240 --> 00:22:53,560
Speaker 11: and the expectation, the hope, certainly on Wall Street, is

466
00:22:53,600 --> 00:22:56,520
Speaker 11: that that's going to hold into January twenty first, when

467
00:22:56,520 --> 00:22:59,000
Speaker 11: Lisa Cook has for a hearing, So we'll probably hear

468
00:22:59,040 --> 00:23:02,240
Speaker 11: about the next number need for j Powell going into

469
00:23:02,240 --> 00:23:02,640
Speaker 11: that event.

470
00:23:02,720 --> 00:23:03,639
Speaker 9: That's my base case.

471
00:23:03,840 --> 00:23:06,000
Speaker 2: Oh thank you so much for joining us this morning

472
00:23:06,160 --> 00:23:09,439
Speaker 2: with Henrietta Tre's Alexis Christophers, you.

473
00:23:09,440 --> 00:23:11,720
Speaker 5: Know, getting lost in the sauce. Henriette is, we could

474
00:23:11,760 --> 00:23:13,720
Speaker 5: be looking at another government shutdown at the end of

475
00:23:13,720 --> 00:23:16,479
Speaker 5: this month. How possible do you think that might be?

476
00:23:16,520 --> 00:23:19,080
Speaker 5: In boil boy? What does that do to an already

477
00:23:19,119 --> 00:23:21,240
Speaker 5: messy twenty start to twenty twenty six?

478
00:23:22,040 --> 00:23:24,159
Speaker 11: Yeah, a bunch twenty six is a hot mess.

479
00:23:24,480 --> 00:23:25,880
Speaker 9: I love to look at the calendar.

480
00:23:25,920 --> 00:23:28,720
Speaker 11: It's very instructive, and if you're an investor, follow the

481
00:23:28,760 --> 00:23:31,679
Speaker 11: legislative schedule. It gives you a lot of data sets

482
00:23:31,880 --> 00:23:34,000
Speaker 11: that you would otherwise, you know, have to parse votes

483
00:23:34,040 --> 00:23:35,679
Speaker 11: and things like that for But just look at what

484
00:23:35,720 --> 00:23:37,480
Speaker 11: we're going to do in the Senate this week. We

485
00:23:37,600 --> 00:23:40,760
Speaker 11: got to debate the Warpowers Resolution literally all week. The

486
00:23:40,800 --> 00:23:43,480
Speaker 11: President lost five Republicans last week and as a result,

487
00:23:43,480 --> 00:23:44,800
Speaker 11: we're going to be on the floor doing.

488
00:23:44,640 --> 00:23:45,639
Speaker 9: That the entire time.

489
00:23:45,760 --> 00:23:47,720
Speaker 11: Then the Senate goes on recess and boom, we're a

490
00:23:47,840 --> 00:23:51,280
Speaker 11: January thirtieth and a government shutdown. Meanwhile, you have contentions

491
00:23:51,359 --> 00:23:55,160
Speaker 11: rising over ice, the President requesting a fifty percent increase

492
00:23:55,200 --> 00:23:59,960
Speaker 11: to the Defense Department, threatening Greenland. There are actions across

493
00:24:00,160 --> 00:24:03,040
Speaker 11: the board and losing Todd Tillis, who by the Way

494
00:24:03,040 --> 00:24:05,879
Speaker 11: did not vote against the war powered resolution, but like

495
00:24:05,960 --> 00:24:08,919
Speaker 11: some of the other members, is a real problem for

496
00:24:08,960 --> 00:24:11,919
Speaker 11: the president. It risks jamming out not just the federal

497
00:24:11,960 --> 00:24:16,560
Speaker 11: nominations process, but the entire legislative agenda that Trump has.

498
00:24:16,920 --> 00:24:20,320
Speaker 11: So going into the prospects of a shutdown January thirtieth

499
00:24:20,600 --> 00:24:23,760
Speaker 11: is it's a twenty five percent odd scenario and rising.

500
00:24:23,760 --> 00:24:25,520
Speaker 11: And that's high for me. Usually I'm at, you know,

501
00:24:25,560 --> 00:24:27,600
Speaker 11: five percent. I don't believe them when they say they're

502
00:24:27,600 --> 00:24:28,400
Speaker 11: going to shut it down.

503
00:24:28,920 --> 00:24:30,199
Speaker 9: But this time there's a.

504
00:24:30,240 --> 00:24:32,320
Speaker 11: Lot on the table, and it's an election year, so

505
00:24:32,560 --> 00:24:34,120
Speaker 11: there's a lot of reasons to be wary of that.

506
00:24:34,359 --> 00:24:38,280
Speaker 5: Twenty five percent is a big number. And in terms

507
00:24:38,359 --> 00:24:41,639
Speaker 5: of the FED and what the Fed's going to do,

508
00:24:41,680 --> 00:24:43,280
Speaker 5: and now we're going to get new leadership come May.

509
00:24:43,320 --> 00:24:46,440
Speaker 5: But where are your odds for interest rate cuts this year?

510
00:24:46,480 --> 00:24:48,640
Speaker 5: And how many? Because we know that JP Morgan recently

511
00:24:48,640 --> 00:24:51,199
Speaker 5: shifted their stance right now they're calling for no cuts

512
00:24:51,520 --> 00:24:51,960
Speaker 5: this year.

513
00:24:52,720 --> 00:24:54,560
Speaker 9: Well, look at what's about to happen with the tariffs.

514
00:24:54,560 --> 00:24:57,800
Speaker 11: The companies have squeezed all the margins they can out

515
00:24:57,800 --> 00:25:00,480
Speaker 11: of productivity, out of labor, they've stopped hiring they're not

516
00:25:00,520 --> 00:25:04,000
Speaker 11: increasing wages. Now you really have the continuation of tariffs.

517
00:25:04,040 --> 00:25:06,480
Speaker 11: And by the way, there are tons still to come

518
00:25:06,560 --> 00:25:11,240
Speaker 11: across pharmaceuticals, semiconductors, critical minerals. There are no deals reached

519
00:25:11,240 --> 00:25:14,320
Speaker 11: with the EU, with India, with Japan, South Korea.

520
00:25:14,560 --> 00:25:16,040
Speaker 9: There's a lot of work still to do.

521
00:25:16,480 --> 00:25:19,240
Speaker 11: And so to have the tariffs continue to eat away

522
00:25:19,760 --> 00:25:23,480
Speaker 11: the number one thing that voters are concerned about is

523
00:25:23,520 --> 00:25:24,440
Speaker 11: the biggest headwind.

524
00:25:24,480 --> 00:25:25,360
Speaker 9: And so for inflation.

525
00:25:25,880 --> 00:25:28,760
Speaker 11: You know, Trump is playing a threatening Powell, which serves him,

526
00:25:28,920 --> 00:25:31,639
Speaker 11: but it's because of the risk of not cutting interest

527
00:25:31,720 --> 00:25:32,920
Speaker 11: rates because of the tariffs.

528
00:25:33,000 --> 00:25:35,840
Speaker 6: Henriat I it'll be quicker. You're just so happy this morning.

529
00:25:35,840 --> 00:25:39,879
Speaker 2: It's just so much joyous news from Henrietta Trace Henriette

530
00:25:39,880 --> 00:25:42,840
Speaker 2: of the job gloom over the weekend job formation in

531
00:25:42,880 --> 00:25:45,920
Speaker 2: twenty twenty five, jobs formation since.

532
00:25:45,680 --> 00:25:50,119
Speaker 6: The Rose Garden moment in April. It's terrible. How is

533
00:25:50,160 --> 00:25:51,560
Speaker 6: that treated in Washington?

534
00:25:51,800 --> 00:25:54,919
Speaker 2: How do our elected officials look at those tweets of

535
00:25:55,080 --> 00:25:56,280
Speaker 2: non job formation.

536
00:25:57,280 --> 00:25:59,879
Speaker 9: It's it's just so strikingly obvious.

537
00:26:00,240 --> 00:26:03,200
Speaker 11: You can see it every single data set you look at,

538
00:26:03,200 --> 00:26:06,679
Speaker 11: from jobs to the approval rating of the president to

539
00:26:06,840 --> 00:26:11,760
Speaker 11: Republican prospects in the midterm elections. Every single chart goes

540
00:26:11,840 --> 00:26:14,000
Speaker 11: straight down and it starts on Liberation Day.

541
00:26:14,280 --> 00:26:16,480
Speaker 9: There's one thing and one thing only, and it's the tyres.

542
00:26:17,280 --> 00:26:21,080
Speaker 2: Well. So okay, so quickly here, what's the reaction of

543
00:26:21,119 --> 00:26:23,960
Speaker 2: the White House. The President's you know, whatever anybody thinks

544
00:26:23,960 --> 00:26:26,560
Speaker 2: about him, he's a very astude politician.

545
00:26:28,200 --> 00:26:30,399
Speaker 9: I'm just going to say what my thesis is.

546
00:26:30,400 --> 00:26:32,239
Speaker 11: I don't think the president can put tires on if

547
00:26:32,240 --> 00:26:33,480
Speaker 11: the Supreme Court takes him off.

548
00:26:33,680 --> 00:26:34,719
Speaker 9: I am out a consensus.

549
00:26:34,760 --> 00:26:37,919
Speaker 11: I know it's controversial, but we're looking at liberation Day

550
00:26:37,960 --> 00:26:41,000
Speaker 11: two point zero. If the Supreme Court strikes down AIPA,

551
00:26:41,160 --> 00:26:44,560
Speaker 11: the confusion of migrating to Section one twenty two, Section

552
00:26:44,640 --> 00:26:50,040
Speaker 11: three three, it's not a plausible midterm election cycle inflation

553
00:26:50,240 --> 00:26:52,760
Speaker 11: narrative for the President to pursue. So I think if

554
00:26:52,760 --> 00:26:55,040
Speaker 11: the Supreme Court strikes these tires down, he's got to

555
00:26:55,080 --> 00:26:55,440
Speaker 11: come off.

556
00:26:55,480 --> 00:26:57,200
Speaker 2: We got to get you back in later this week

557
00:26:57,240 --> 00:27:01,879
Speaker 2: for more extended comments on post Supreme Henrietta Trece with

558
00:27:01,960 --> 00:27:06,200
Speaker 2: Beta Partners. Stay with us more from Bloomberg Surveillance coming

559
00:27:06,280 --> 00:27:07,280
Speaker 2: up after this.

560
00:27:14,520 --> 00:27:18,080
Speaker 1: You're listening to the Bloomberg Surveillance Podcast. Catch us live

561
00:27:18,160 --> 00:27:21,320
Speaker 1: weekday afternoons from seven to ten am Eastern. Listen on

562
00:27:21,400 --> 00:27:25,040
Speaker 1: Applecarplay and Android Auto with the Bloomberg Business app, or

563
00:27:25,200 --> 00:27:26,840
Speaker 1: watch us live on YouTube.

564
00:27:27,040 --> 00:27:31,720
Speaker 2: No one supports newspapers because it's just breathlessly brilliant.

565
00:27:31,960 --> 00:27:35,200
Speaker 6: Lisa Letto with the newspapers on Monday.

566
00:27:35,600 --> 00:27:37,880
Speaker 5: I gotta live up to that. Okay, here we go.

567
00:27:38,600 --> 00:27:40,520
Speaker 10: This one is in the Wall Street Journal's interesting one.

568
00:27:40,560 --> 00:27:43,120
Speaker 10: It's talking about job seekers how they're finding this new

569
00:27:43,200 --> 00:27:46,200
Speaker 10: source of income. They are basically being hired to train

570
00:27:46,440 --> 00:27:49,880
Speaker 10: AI to take their job someday. Okay, So the Wall

571
00:27:49,920 --> 00:27:52,639
Speaker 10: Street Journal is saying, it's like the next gig economy.

572
00:27:52,680 --> 00:27:56,680
Speaker 10: There's a company called mercoor it's an AI startup. It's

573
00:27:56,840 --> 00:28:00,560
Speaker 10: hiring contractors to train AI to do different jobs.

574
00:28:00,560 --> 00:28:03,600
Speaker 5: But it's not just everyday people. They're looking for, you heard,

575
00:28:03,640 --> 00:28:04,920
Speaker 5: just like astronomers.

576
00:28:05,000 --> 00:28:09,600
Speaker 10: Yeah, they're looking for these smart folks, psychologists, dermatologists, industrial engineers.

577
00:28:09,720 --> 00:28:13,879
Speaker 10: They want poets, writers to do what to drain, these models,

578
00:28:13,600 --> 00:28:15,480
Speaker 10: to say the right things.

579
00:28:15,520 --> 00:28:17,560
Speaker 5: Basically, if you break it isn't like it. If you

580
00:28:17,600 --> 00:28:19,400
Speaker 5: can't beat them, join them kind of situation.

581
00:28:19,520 --> 00:28:21,919
Speaker 10: I guess you can, Yes, I guess you could say

582
00:28:21,920 --> 00:28:24,119
Speaker 10: they're getting paid about two hundred and fifty.

583
00:28:23,920 --> 00:28:24,520
Speaker 5: Dollars an hour.

584
00:28:24,600 --> 00:28:27,800
Speaker 10: Some of them they get a referral bonus if they

585
00:28:27,840 --> 00:28:29,880
Speaker 10: refer someone else, you know, to do it. But it's

586
00:28:29,960 --> 00:28:33,000
Speaker 10: kind of like this new thing that's being set up and.

587
00:28:33,040 --> 00:28:34,240
Speaker 5: It feels sticky. I don't know.

588
00:28:34,520 --> 00:28:37,600
Speaker 10: Yes, it is a little bit is because it's taking

589
00:28:37,640 --> 00:28:38,280
Speaker 10: their job away.

590
00:28:38,400 --> 00:28:39,000
Speaker 6: I must submit.

591
00:28:39,080 --> 00:28:41,840
Speaker 2: There's a lot of different opinions out there. Yes, I

592
00:28:41,880 --> 00:28:44,440
Speaker 2: don't have a strong opinion. What I know is the

593
00:28:44,520 --> 00:28:49,080
Speaker 2: AI I use often is glaringly wrong. Ah Like there'll

594
00:28:49,120 --> 00:28:51,240
Speaker 2: be a single sentence where I'm like, Okay, I don't

595
00:28:51,240 --> 00:28:51,880
Speaker 2: think that's act.

596
00:28:52,000 --> 00:28:55,320
Speaker 10: So hence that's why they're hiring these professionals to proving it.

597
00:28:55,640 --> 00:28:59,240
Speaker 5: Yeah, that's this is healthy skepticism AI. That's smart.

598
00:28:59,600 --> 00:29:00,480
Speaker 2: That was very nerd.

599
00:29:00,520 --> 00:29:03,160
Speaker 6: Newspapers do something more accessible.

600
00:29:02,600 --> 00:29:03,000
Speaker 5: I do.

601
00:29:03,320 --> 00:29:06,440
Speaker 10: Okay, GLP ones have a new celebrity face behind them.

602
00:29:06,480 --> 00:29:07,520
Speaker 10: Are you ready for it?

603
00:29:07,120 --> 00:29:10,040
Speaker 5: It is Tom Brady right now.

604
00:29:10,120 --> 00:29:12,560
Speaker 10: He hasn't said he's used GLP ones. I just want

605
00:29:12,560 --> 00:29:15,120
Speaker 10: to put it out there. He's basically the new chief

606
00:29:15,120 --> 00:29:16,800
Speaker 10: wellness officer for Emed.

607
00:29:17,280 --> 00:29:19,280
Speaker 5: It's a company. It's a digital health startup.

608
00:29:19,360 --> 00:29:22,200
Speaker 10: It basically helps companies kind of manage the high cost

609
00:29:22,240 --> 00:29:23,040
Speaker 10: of covering weight.

610
00:29:22,880 --> 00:29:24,240
Speaker 5: Loss drugs for their employees.

611
00:29:24,280 --> 00:29:26,880
Speaker 10: Okay they so he didn't say if he used it,

612
00:29:26,920 --> 00:29:28,560
Speaker 10: but he did say he wants to be part of

613
00:29:28,560 --> 00:29:30,760
Speaker 10: something that helps people, because you say, this company is

614
00:29:30,800 --> 00:29:33,440
Speaker 10: helping people, it's making it more affordable.

615
00:29:34,080 --> 00:29:36,080
Speaker 5: He serve on the board of directors too.

616
00:29:36,600 --> 00:29:44,160
Speaker 2: But we got a surveillance We go to Surveillance Wellness Correspondent,

617
00:29:44,240 --> 00:29:44,880
Speaker 2: John Tucker.

618
00:29:47,760 --> 00:29:50,680
Speaker 6: Tell you thank you for that.

619
00:29:51,120 --> 00:29:56,040
Speaker 2: John Tucker Surveillance Wellness correspond at least a safe title.

620
00:29:56,120 --> 00:29:59,000
Speaker 10: Okay, this one, Okay, Tom, I know you always talk

621
00:29:59,040 --> 00:30:02,000
Speaker 10: about LinkedIn, but this this article from Business Insider says

622
00:30:02,160 --> 00:30:05,920
Speaker 10: that your ex could be stalking you on LinkedIn. Okay,

623
00:30:06,280 --> 00:30:09,760
Speaker 10: it's John talker.

624
00:30:10,520 --> 00:30:12,360
Speaker 5: It's different, Like, well, you hear about these things.

625
00:30:12,440 --> 00:30:14,640
Speaker 10: I'm like, you know, Facebook or Instagram, but you don't

626
00:30:14,640 --> 00:30:18,240
Speaker 10: hear about it happening on LinkedIn. But apparently it's happening

627
00:30:18,240 --> 00:30:21,040
Speaker 10: because at the unpaid level, if you have the unpaid level,

628
00:30:21,080 --> 00:30:24,280
Speaker 10: that's key, Lisa, this is the difference. Okay, at the

629
00:30:24,360 --> 00:30:26,840
Speaker 10: unpaid level, you have people who could look at the profile,

630
00:30:26,920 --> 00:30:29,880
Speaker 10: but only if they allow others to see. You know,

631
00:30:29,920 --> 00:30:31,440
Speaker 10: when they've done the same, so you have to be

632
00:30:31,520 --> 00:30:34,640
Speaker 10: an equal thing. But if you pay for the extra service,

633
00:30:35,000 --> 00:30:37,760
Speaker 10: you can be kind of incognito and you can kind

634
00:30:37,800 --> 00:30:40,960
Speaker 10: of stroll and you know, check out who's ever's paid

635
00:30:41,000 --> 00:30:42,720
Speaker 10: you want and that load folks.

636
00:30:42,800 --> 00:30:45,440
Speaker 2: I can't say enough about YouTube Premium. You have to

637
00:30:45,440 --> 00:30:48,880
Speaker 2: pay for it. I asked read, keep your themex you'd

638
00:30:48,880 --> 00:30:51,080
Speaker 2: pick it up. He said, no, I pay for it.

639
00:30:51,480 --> 00:30:54,400
Speaker 6: And the answer is it's really it's like LinkedIn. Hey,

640
00:30:54,440 --> 00:30:56,560
Speaker 6: it's like a whole different features.

641
00:30:56,680 --> 00:30:58,400
Speaker 5: Yeah, you get you get a lot more freature.

642
00:30:58,480 --> 00:31:01,320
Speaker 2: Well, that was sort of a problematic newspapers today was

643
00:31:03,320 --> 00:31:06,840
Speaker 2: Lisa Moteto, thank you so much. It is the newspapers.

644
00:31:07,360 --> 00:31:12,200
Speaker 1: This is the Bloomberg Surveillance podcast, available on Apple, Spotify,

645
00:31:12,320 --> 00:31:16,080
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646
00:31:16,120 --> 00:31:19,920
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647
00:31:20,080 --> 00:31:23,920
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648
00:31:24,200 --> 00:31:27,320
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649
00:31:27,600 --> 00:31:29,640
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