WEBVTT - Lots More on a Massive, Historical, Stagflationary Shock 0:00:02.480 --> 0:00:08.520 Bloomberg Audio Studios, podcasts, radio news. What a day, Haunty, 0:00:09.000 --> 0:00:09.600 what a day? 0:00:10.240 --> 0:00:13.800 Another day, another crazy day. I don't know. I'm I'm 0:00:14.360 --> 0:00:17.200 I'm getting a little tired. Is tired of the words? 0:00:17.239 --> 0:00:21.000 I'm not, I'm exhilarated. I am not getting tired. I 0:00:21.040 --> 0:00:22.640 think this is why we get up in the morning. 0:00:22.640 --> 0:00:26.400 But as we are talking right now, which is April third, 0:00:26.880 --> 0:00:28.480 nas X down four point eight percent. 0:00:29.040 --> 0:00:32.960 Yeah, obviously this is all because of Liberation Day and 0:00:33.360 --> 0:00:37.400 Donald Trump announcing his new reciprocal tariffs, which turned out 0:00:37.400 --> 0:00:39.880 to be a lot worse than a lot of professional 0:00:39.920 --> 0:00:42.440 analysts and economists had been expecting. 0:00:43.080 --> 0:00:46.440 Yeah, I'm sure the market's just totally taken aback, Tom Orleck. 0:00:46.680 --> 0:00:48.440 How surprised were you by yesterday? 0:00:49.320 --> 0:00:52.479 We took him seriously, but not seriously. 0:00:56.800 --> 0:00:57.760 I did a dead lest. 0:00:57.760 --> 0:01:02.160 I'm both the most popular trader, most successful trader at Citadel. 0:01:02.360 --> 0:01:03.400 That is going viral. 0:01:03.640 --> 0:01:04.480 Uh barges. 0:01:04.600 --> 0:01:06.759 This isn't after school special, except. 0:01:06.360 --> 0:01:08.920 I've decided I'm going to base my entire personality going 0:01:08.920 --> 0:01:12.160 forward on campaigning for a strategic pork reserve in the US. 0:01:12.400 --> 0:01:13.000 Black goal. 0:01:13.240 --> 0:01:15.840 These are the important question. Is it robots taking over 0:01:15.880 --> 0:01:16.440 the world? No. 0:01:16.520 --> 0:01:19.399 I think that like in a couple of years, the 0:01:19.480 --> 0:01:21.680 AI will do a really good job of making the 0:01:21.720 --> 0:01:24.760 Odd Lots podcast. One day that person will have the 0:01:24.800 --> 0:01:25.680 mandate of heaven. 0:01:25.880 --> 0:01:28.160 How do I get more popular and successful? 0:01:28.400 --> 0:01:29.600 We do have the. 0:01:31.600 --> 0:01:33.959 You're listening to lots More where we catch up with 0:01:34.000 --> 0:01:36.760 friends about what's going on right now, because. 0:01:36.480 --> 0:01:39.400 Even when the Odd Lots is over, there's always lots. 0:01:39.160 --> 0:01:41.959 More And we really do have the perfect guest. 0:01:45.840 --> 0:01:49.279 So on the campaign trail, Trump was talking about sixty 0:01:49.320 --> 0:01:53.160 percent tariffs on China, twenty percent tariffs on everybody else, 0:01:53.480 --> 0:01:56.440 and I think the reaction from wool Street and the 0:01:56.480 --> 0:02:01.120 reaction from most in the economics profession will this is 0:02:01.240 --> 0:02:04.000 red meat for the campaign trail. This is not a 0:02:04.120 --> 0:02:08.680 serious proposal. The US economy, the global economy, the global 0:02:08.720 --> 0:02:12.240 trade system wouldn't be able to survive tariffs at this level. 0:02:12.520 --> 0:02:15.919 And now here we are on April third, one day 0:02:15.960 --> 0:02:19.480 after Liberation Day, and we've got tariffs at that level 0:02:19.760 --> 0:02:22.839 for China. If you add it up, tariffs may even 0:02:22.960 --> 0:02:25.520 be a bit higher than sixty percent. So it's a 0:02:25.600 --> 0:02:28.080 huge shock. And I think the question people are going 0:02:28.160 --> 0:02:31.680 to be asking is what's being liberated from what is 0:02:31.720 --> 0:02:36.680 the US being liberated from unfair trade practices from China 0:02:36.919 --> 0:02:40.400 and Europe? Or are US workers about to be liberated 0:02:40.440 --> 0:02:44.280 from their jobs and US investors liberated from their returns? 0:02:44.639 --> 0:02:48.760 Yeah, kind of two different outcomes there, Tom, you were 0:02:48.800 --> 0:02:50.960 at our Washington, DC event. 0:02:50.720 --> 0:02:52.320 You think, by the way, thank you. 0:02:52.320 --> 0:02:55.760 You gave this great presentation showing some of your favorite 0:02:55.840 --> 0:02:58.120 charts at the moment, and you kind of made the 0:02:58.160 --> 0:03:02.040 point that when it comes to trade, the US has 0:03:02.080 --> 0:03:06.600 some legitimate grievances. Can you kind of walk us through that, 0:03:06.919 --> 0:03:10.000 especially in relation to China? And then also if you 0:03:10.280 --> 0:03:14.600 think these tariffs are actually going to start alleviating some 0:03:14.639 --> 0:03:15.560 of those grievances. 0:03:17.200 --> 0:03:20.000 So I think it's interesting, Tracy, if we go back 0:03:20.040 --> 0:03:24.480 to the nineteen nineties, it was the kind of unipolar 0:03:24.520 --> 0:03:28.440 moment for the United States. Right the Soviet Union had collapsed, 0:03:28.919 --> 0:03:32.880 China was still an early stage of its development. Its 0:03:32.919 --> 0:03:35.880 GDP was a kind of tiny fraction of that of 0:03:35.880 --> 0:03:40.680 the United States, and so the argument for free markets 0:03:41.040 --> 0:03:44.600 really made a lot of sense. Let's have low tariff barriers. 0:03:45.480 --> 0:03:48.440 US firms are the most competitive firms in the world. 0:03:48.680 --> 0:03:52.000 They're going to be the biggest winners from low trade barriers, 0:03:52.320 --> 0:03:55.800 and guess what additional bonus if we trade with China. 0:03:56.200 --> 0:03:58.920 That's going to be a force for market reform in China, 0:03:59.240 --> 0:04:03.000 and maybe the whisper it quietly a force for democratic 0:04:03.080 --> 0:04:07.280 reform in China. That's not how things played out. Over 0:04:07.320 --> 0:04:11.200 the years that followed. China developed really quickly up to 0:04:11.280 --> 0:04:14.600 the point where it became a rival to the United 0:04:14.600 --> 0:04:18.360 States for that biggest economy in the world, biggest geopolitical 0:04:18.400 --> 0:04:21.680 power spot. And China didn't reform its economy, it didn't 0:04:21.680 --> 0:04:24.880 become more market based, and it certainly didn't reform its 0:04:24.880 --> 0:04:30.040 political system. And the US had a huge trade deficit, 0:04:30.360 --> 0:04:33.360 and a lot of that trade deficit was with China. 0:04:33.720 --> 0:04:36.919 So jobs were being lost, opportunities teas were being lost, 0:04:36.960 --> 0:04:39.839 and even worse, they were being lost to America's biggest 0:04:39.880 --> 0:04:42.599 geopolitical rival. And that just doesn't make a huge amount 0:04:42.600 --> 0:04:45.080 of sense. And I think the Trump team and Trump 0:04:45.120 --> 0:04:48.160 himself deserve a bunch of credit for calling that out 0:04:48.560 --> 0:04:52.240 back in twenty sixteen and saying, this isn't the deal 0:04:52.279 --> 0:04:54.839 we signed up for in the nineteen nineties, This isn't 0:04:54.880 --> 0:04:56.800 the deal we signed up for when we invited China 0:04:56.839 --> 0:05:01.400 into the wto something has to change. Question is, well, 0:05:01.640 --> 0:05:05.200 now we've got these sweeping tariffs, is this going to 0:05:05.360 --> 0:05:10.599 deliver the realignment which Trump wants or could there be 0:05:11.680 --> 0:05:14.599 a sort of significant adverse consequence for the United States. 0:05:14.880 --> 0:05:17.400 Could the United States end up just cutting itself off 0:05:17.640 --> 0:05:21.000 from the rest of the world and actually accelerating its 0:05:21.040 --> 0:05:24.719 own decline, its own fading as a global power, rather 0:05:24.800 --> 0:05:28.240 than restoring American greatness as President Trump intents. 0:05:28.560 --> 0:05:30.599 Well, right now, if you look at the market, it's 0:05:30.640 --> 0:05:33.640 clearly the latter and the tariffs are not just on China. 0:05:33.680 --> 0:05:37.760 They're on countries that many people would say are friends 0:05:37.880 --> 0:05:42.000 or allies, or countries that have not risen an industrial 0:05:42.080 --> 0:05:44.279 might at the expense of the United States. 0:05:44.200 --> 0:05:47.719 Narrow New Yeah Island in the South. 0:05:48.520 --> 0:05:51.720 You know, you started your answer by saying, when this 0:05:51.880 --> 0:05:54.440 was thrown out on the campaign trail, it was perceived 0:05:54.440 --> 0:05:57.200 that the global trading system could never survive something like this. 0:05:57.760 --> 0:06:00.200 We don't know. Maybe there will be renegotiations. So the 0:06:00.279 --> 0:06:02.839 White House is not giving that indication as of the 0:06:02.880 --> 0:06:05.000 time we're talking about this. They're not indicating that they're 0:06:05.040 --> 0:06:07.119 going to back trackers of the market. They're not saying 0:06:07.160 --> 0:06:09.680 this is the start of deal talks. Can the global 0:06:09.839 --> 0:06:14.120 trading system survive the level of tariffs that we see, 0:06:14.320 --> 0:06:15.760 assuming this is what's said. 0:06:17.240 --> 0:06:20.760 So it's a difficult question to answer because we just 0:06:20.839 --> 0:06:26.080 haven't seen such big tariffs introduced in recent history, so 0:06:26.600 --> 0:06:29.680 we don't have much data we can use to estimate 0:06:29.720 --> 0:06:34.040 the impact. That said, we're making best efforts. What we've 0:06:34.080 --> 0:06:37.320 done is we've taken a computable general equilibrium model of 0:06:37.360 --> 0:06:40.160 the global economy. Is the same model which some of 0:06:40.200 --> 0:06:43.760 the economists that the World Trade Organization use, and we've 0:06:43.839 --> 0:06:47.080 used it to estimate the impact of this tariff shock. 0:06:47.320 --> 0:06:49.559 And if we focus for a moment on the China 0:06:49.600 --> 0:06:53.800 piece of it, well, if you put sixty percent China 0:06:53.880 --> 0:06:57.480 tariffs into the model, it tells you that that pretty 0:06:57.560 --> 0:07:02.160 much wipes out US China trade. And that's pretty consequential, right, 0:07:02.480 --> 0:07:07.240 the world's two biggest economies, a Chinese economy, which is 0:07:07.480 --> 0:07:11.880 the home to major US supply chains for Apple and others. 0:07:12.080 --> 0:07:15.040 If those two economies just stop trading with each other, 0:07:15.600 --> 0:07:18.800 that's a huge, huge shock to the system. Thinking about 0:07:18.840 --> 0:07:21.680 the rest of the world, well, most places haven't been 0:07:21.760 --> 0:07:26.360 hit by such high tariffs, but still a pretty significant shock. Europe, 0:07:26.440 --> 0:07:30.200 for example, now facing twenty percent tariffs when they sell 0:07:30.240 --> 0:07:33.080 to the United States. If you plug that into the 0:07:33.440 --> 0:07:36.720 big model, well that tells you europe exports to the 0:07:36.840 --> 0:07:40.680 United States dropped by around fifty percent. So these are 0:07:40.920 --> 0:07:46.520 huge consequential negative shocks to the global trade system. 0:07:46.640 --> 0:07:49.840 When it comes to inflation, I mean, lots of economists 0:07:49.880 --> 0:07:53.280 right now are ratcheting up their inflation forecasts and ratcheting 0:07:53.360 --> 0:07:57.880 down their GDP forecast. To your point on inflation, how 0:07:57.960 --> 0:08:02.160 much of the ultimate results the increase in prices of 0:08:02.600 --> 0:08:06.760 imports into America. How much does that depend on companies 0:08:07.280 --> 0:08:10.640 absorbing the costs? And how do you go about trying 0:08:10.680 --> 0:08:13.080 to analyze that because it seems kind of, you know, 0:08:13.280 --> 0:08:14.360 a bit of a wild card. 0:08:15.360 --> 0:08:17.560 Yeah, I think it's a huge uncertainty. So if we 0:08:17.600 --> 0:08:21.080 think about Trump one and the trade war with China, 0:08:21.160 --> 0:08:25.120 back then, a couple of things happened. So firstly, we 0:08:25.360 --> 0:08:29.560 had dollar appreciation and that offset some of the impact 0:08:29.720 --> 0:08:35.840 of the tariffs. Secondly, we had transshipment, so China carried 0:08:35.880 --> 0:08:38.360 on selling to the United States, but the goods went 0:08:38.400 --> 0:08:40.960 through Vietnam or they went through Mexico, and that meant 0:08:40.960 --> 0:08:46.520 they dodged the tariffs. And thirdly, we had retailers absorbing 0:08:46.920 --> 0:08:49.800 some of the shock in lower margins rather than passing 0:08:49.800 --> 0:08:52.760 them on to consumers. So all of these things meant 0:08:53.280 --> 0:08:56.480 tariffs on China went up twenty five percent, but the 0:08:56.600 --> 0:08:59.840 US consumer didn't really feel the shock, and I think 0:08:59.840 --> 0:09:02.520 that maybe how the Trump administration are thinking about it 0:09:02.559 --> 0:09:05.480 this time around. This time around, though, I think there's 0:09:05.520 --> 0:09:09.560 going to be some pretty significant differences. So the first 0:09:09.600 --> 0:09:13.720 difference is, well, the economic textbooks tell us when you 0:09:13.760 --> 0:09:17.520 apply tariffs, the dollar should appreciate, but guess what, this 0:09:17.600 --> 0:09:21.120 time round, it is depreciating. So that isn't gonna offset 0:09:21.240 --> 0:09:24.480 tariffs shock on inflation. It's going to amplify the tariff 0:09:24.520 --> 0:09:28.840 shock on inflation. Secondly, this time round is not just China, 0:09:29.240 --> 0:09:31.800 it's everybody. Everybody's being hit with the shock at the 0:09:31.840 --> 0:09:36.679 same time. And that means that that transhipment strategy, sending 0:09:36.720 --> 0:09:39.760 goods via Mexico or Vietnam, that's not going to work. 0:09:39.800 --> 0:09:43.079 You're still going to get hit with tariffs. And then thirdly, well, 0:09:43.080 --> 0:09:46.080 if you're hitting everybody at the same time, can a 0:09:46.120 --> 0:09:50.280 Walmart or a target really absorb all of that in 0:09:50.400 --> 0:09:52.480 narrower margins or is it just going to have to 0:09:52.520 --> 0:09:55.280 start passing it on to the consumer. So the experience 0:09:55.320 --> 0:09:59.600 in the Trump term. Trump's first term was tariff shock, 0:10:00.080 --> 0:10:03.520 no impact on consumer prices in the United States. This 0:10:03.679 --> 0:10:06.719 time round, well, it's difficult to say. There's a lot 0:10:06.720 --> 0:10:08.960 of variables at work, but I think this is going 0:10:09.040 --> 0:10:13.040 to be a stagflationary shock, pretty significant hit to US growth, 0:10:13.320 --> 0:10:16.920 pretty significant boost to US inflation. And that's why we're 0:10:16.920 --> 0:10:20.200 seeing this fierce stock market sell off today and the 0:10:20.320 --> 0:10:23.000 US coming out worse than pretty much anybody else. 0:10:23.600 --> 0:10:25.959 So crazy, Yeah, especially when you look at US versus 0:10:25.960 --> 0:10:28.760 every other stock market and how much everyone how much 0:10:28.760 --> 0:10:31.160 more optimistic people are about the rest of the world. 0:10:31.360 --> 0:10:33.520 You know, there's this vision right that on the other 0:10:33.640 --> 0:10:36.840 side that there's pain now that we get to the 0:10:36.840 --> 0:10:39.720 other side, that there's this reindustrialization, and Trump talked about 0:10:39.760 --> 0:10:42.600 it yesterday. We're going to make great cars with us 0:10:42.640 --> 0:10:44.400 this state of the art manufacturer, We're going to build 0:10:44.480 --> 0:10:45.240 chips again, all this. 0:10:45.520 --> 0:10:48.160 The sunlit uplands manufacturing. 0:10:48.800 --> 0:10:52.320 What would have to happen for these tariffs to actually 0:10:52.400 --> 0:10:55.560 translate into or because like I'm fine with taking some 0:10:55.600 --> 0:10:58.200 short term pain to be like one of the most advanced, 0:10:58.200 --> 0:11:01.760 technologically prosperous countries on the I see all those propaganda 0:11:01.840 --> 0:11:04.000 videos out of China with the drones and the cars. 0:11:04.040 --> 0:11:06.680 I'm like, yeah, I want that here. I'm susceptible to 0:11:06.760 --> 0:11:09.000 that too. I want like all that stuff produced here. 0:11:09.400 --> 0:11:12.040 What would have to happen to go from today to 0:11:12.440 --> 0:11:13.000 that vision. 0:11:14.600 --> 0:11:17.120 Well, it's a tough one, Joe. So I think Trump 0:11:17.160 --> 0:11:22.000 will point to the pledges from Apple and TSMC and 0:11:22.240 --> 0:11:25.880 Nvidia and Hyundai and others to make massive investments in 0:11:25.920 --> 0:11:29.120 the United States and say, look, it's working. I made 0:11:29.160 --> 0:11:32.719 the tariff threat. Everyone's bringing their jobs and their factories 0:11:32.720 --> 0:11:35.120 back to the United States. I think it's probably a 0:11:35.160 --> 0:11:38.600 bit more complicated than that. Wages in the US are 0:11:38.679 --> 0:11:43.120 much higher than wages in China or Vietnam or Mexico. 0:11:43.800 --> 0:11:47.440 Infrastructure in the United States, well, there's not been a 0:11:47.480 --> 0:11:52.120 lot of investment in manufacturing infrastructure here over recent decades. 0:11:52.640 --> 0:11:56.520 Supply chains stretch across borders. If you're going to impose 0:11:56.600 --> 0:12:00.080 massive tariffs, actually makes it harder to manufacture in the 0:12:00.160 --> 0:12:02.720 United States because factories are going to have to pay 0:12:02.760 --> 0:12:07.200 that tariff to get crucial inputs and of course the 0:12:07.360 --> 0:12:11.480 uncertainty which Trump has introduced into the system, and which 0:12:11.520 --> 0:12:14.520 he sees is crucial to get deals done well. That 0:12:14.640 --> 0:12:18.320 uncertainty makes it harder to plan, makes it harder to 0:12:18.400 --> 0:12:21.400 make long term investment decisions, and that makes it harder 0:12:21.400 --> 0:12:24.880 to reshore manufacturing as well. So it's striking to me 0:12:25.280 --> 0:12:28.320 if you look at all of those companies which said 0:12:28.320 --> 0:12:32.320 we're making massive investments in the United States, Apple five 0:12:32.400 --> 0:12:36.440 hundred billion dollars, TSMC one hundred billion dollars. If you 0:12:36.440 --> 0:12:38.480 look at what happened to the share price of those 0:12:38.480 --> 0:12:42.760 companies on the day after the announcement, basically didn't move right, 0:12:42.840 --> 0:12:45.480 basically didn't move. And I think what that tells us 0:12:45.800 --> 0:12:50.200 is that markets investors are pretty skeptical. They see those announcements, 0:12:50.400 --> 0:12:53.960 perhaps as good government relations by those companies currying favor 0:12:54.000 --> 0:12:57.120 with the White House, rather than the big change in 0:12:57.200 --> 0:13:01.520 corporate strategy that we'd have to see if manufacturing was 0:13:01.600 --> 0:13:03.280 really going to come back to the US. 0:13:03.559 --> 0:13:06.160 Yeah, and on the topic of investment, there's no physical 0:13:06.200 --> 0:13:11.080 offset either. I mean, the administration is extending the tax cuts, 0:13:11.160 --> 0:13:14.360 that's basically the existing status quo. So it's not like 0:13:14.440 --> 0:13:17.040 the government is going to be funding a sudden roll 0:13:17.080 --> 0:13:20.800 out of investment to try to boost these industries. You 0:13:20.920 --> 0:13:25.680 mentioned stagflation earlier, Tom, what does the FED do in 0:13:25.800 --> 0:13:27.199 response to stagflation? 0:13:29.320 --> 0:13:30.880 So it's a tough one. 0:13:30.920 --> 0:13:36.200 Tracy keep saying that, how do we get it's going 0:13:36.240 --> 0:13:37.840 to be tough to keep going? 0:13:38.520 --> 0:13:40.520 A lot of tough ones in our future. You know, 0:13:40.840 --> 0:13:43.679 this is the biggest tariff hike that we've seen in 0:13:43.720 --> 0:13:46.400 the United States going back over the course of one 0:13:46.440 --> 0:13:51.280 hundred years, and it takes tariff to their highest level 0:13:51.600 --> 0:13:54.760 in one hundred years. So this is an absolutely enormous 0:13:54.760 --> 0:13:57.800 shock to the system. So I feel like somewhat justified. 0:13:58.360 --> 0:14:03.160 Are you are? So it's a tough one. And so 0:14:03.200 --> 0:14:06.120 if you're the FED, you see growth coming down, you 0:14:06.120 --> 0:14:09.120 see unemployment going up, you want to cut interest rates. 0:14:09.520 --> 0:14:13.960 But you see inflation rising because import prices are going up, 0:14:14.520 --> 0:14:16.720 and so you want to raise interest rates. So what's 0:14:16.760 --> 0:14:19.680 the impulse? What's the kind of the major impulse? Which 0:14:19.680 --> 0:14:23.240 one do you follow? Well, some of the messaging which 0:14:23.240 --> 0:14:26.760 we've been hearing from Chair Powell is that the tariff 0:14:27.040 --> 0:14:30.760 impact on inflation, well it could be transitory. If I 0:14:30.800 --> 0:14:32.840 was Chair Powell personally, I wouldn't be using the terb 0:14:32.880 --> 0:14:35.480 transitory anymore. I think you kind of use that one 0:14:35.520 --> 0:14:37.800 up in the post COVID shock. But there we are. 0:14:37.960 --> 0:14:41.200 There's the idea that the tariff impact on inflation is 0:14:41.240 --> 0:14:43.480 going to be transitory, and so what you have to 0:14:43.520 --> 0:14:46.520 respond to is the impact on growth, and so that 0:14:46.560 --> 0:14:49.840 would suggest the impulse for the FED is going to 0:14:49.840 --> 0:14:53.480 be more rate cuts. That said, there's a bunch of 0:14:53.560 --> 0:14:56.200 uncertainty out there. We don't know how big the growth 0:14:56.280 --> 0:14:58.280 shock's going to be, we don't know how big the 0:14:58.280 --> 0:15:01.560 inflation shock's going to be, don't know if inflation expectations 0:15:01.560 --> 0:15:05.520 are going to move. If we see inflation expectations staying high, 0:15:05.920 --> 0:15:08.960 well that will be a sign that the tariffshock and 0:15:09.040 --> 0:15:11.760 inflation isn't going to be transitory. And the FED is 0:15:11.800 --> 0:15:14.160 going to be tracking all of these things and weighing 0:15:14.160 --> 0:15:14.880 them in the balance. 0:15:28.640 --> 0:15:33.240 So we've established that it's tough. At a minimum, what 0:15:33.320 --> 0:15:37.640 are you looking out for in terms of economic indicators 0:15:37.960 --> 0:15:41.040 or I don't know, even corporate anecdotes to see which 0:15:41.080 --> 0:15:42.360 way things are going to go? 0:15:43.840 --> 0:15:45.280 So I think there's a few things we're going to 0:15:45.280 --> 0:15:47.400 be looking for in the days ahead. So the first 0:15:47.440 --> 0:15:52.520 one is going to be the retaliate or kaw tao 0:15:52.760 --> 0:15:56.920 choice for other countries. Right, do we see China and 0:15:57.040 --> 0:16:01.480 Europe and Japan saying, Okay, we don't want these tariffs. 0:16:01.760 --> 0:16:03.080 Tell us what you want and we'll give it to 0:16:03.120 --> 0:16:05.640 you and you can take the tariffs away. Or do 0:16:05.720 --> 0:16:08.800 we see them saying you give us tariffs, We're going 0:16:08.840 --> 0:16:11.160 to give you tariffs right back. And if it's that 0:16:11.240 --> 0:16:15.840 retaliation path, that's going to amplify the impact. Second thing 0:16:15.880 --> 0:16:18.480 I think we'll be looking for is whether the Trump 0:16:18.560 --> 0:16:22.560 administration just pivots because of the markets. Right, we've got 0:16:22.560 --> 0:16:26.480 the Nasdaq down more than four percent today. If that 0:16:26.600 --> 0:16:29.720 slide continues into the end of the week into next week, 0:16:29.880 --> 0:16:32.480 if we see a very significant and sustained market fall, 0:16:33.000 --> 0:16:36.640 it's possible, then we'll see that Trump put come into play. 0:16:37.160 --> 0:16:39.480 And then in terms of indicators we're going to be 0:16:39.520 --> 0:16:41.720 looking at well, of course, we're going to be tracking 0:16:41.920 --> 0:16:45.560 the important export numbers. Another important one to look at 0:16:45.880 --> 0:16:48.560 is going to be the import price data. That's going 0:16:48.600 --> 0:16:50.920 to tell us how much of this cost is being 0:16:50.960 --> 0:16:54.440 absorbed by foreign factories and how much of it is 0:16:54.480 --> 0:16:59.200 being passed through to US retailers. And potentially the US consumer. 0:16:59.720 --> 0:17:04.080 By the way, is also the US voter. And mid terms, 0:17:04.359 --> 0:17:08.840 well twenty twenty six not that far away, Tracy. 0:17:08.840 --> 0:17:11.960 Can I just say two things that yesterday. One is 0:17:12.240 --> 0:17:14.000 they knew this was gonna slam the market. 0:17:14.080 --> 0:17:15.000 Oh yeah, and they did it. 0:17:15.040 --> 0:17:17.280 Anyway, this is a really big deal to me because 0:17:17.320 --> 0:17:20.280 this is not usual on his American politics. Some might 0:17:20.320 --> 0:17:22.840 even look at that say I'm impressed, right, because you're like, well, 0:17:22.880 --> 0:17:25.199 for once we have a president who is not so 0:17:25.600 --> 0:17:27.800 obsessed with the market. I don't know, I'm just saying. 0:17:28.680 --> 0:17:31.240 In his speech he also talked about how much stock 0:17:31.280 --> 0:17:34.960 price is in his first term, which is you can't 0:17:35.000 --> 0:17:35.840 have it both ways. 0:17:36.200 --> 0:17:38.480 I thought that too, and then I just think it's man, 0:17:38.680 --> 0:17:42.320 we had this multiple years of really high inflation, and 0:17:42.400 --> 0:17:44.920 the first thing that the new president does is push 0:17:45.000 --> 0:17:46.840 up the price of anything. It's really funny. 0:17:47.240 --> 0:17:49.720 Tom. I have one more question for you. This is 0:17:49.760 --> 0:17:52.600 a very important one. It's a bit of a loaded question, 0:17:52.720 --> 0:17:55.719 but here goes. How much fun did you have at 0:17:55.720 --> 0:17:57.119 our Washington, DC event? 0:17:58.480 --> 0:18:02.320 Just an absolutely enormous of fun, Tracy. And my message 0:18:02.320 --> 0:18:05.159 to od Loots listeners is, if Joe and Tracy come 0:18:05.200 --> 0:18:08.080 to your time, snap up a ticket immediately. We didn't 0:18:08.119 --> 0:18:08.840 plan that. 0:18:08.840 --> 0:18:16.360 That was amazing. That was a perfect answer. Lots More 0:18:16.440 --> 0:18:19.040 is produced by Carmen Rodriguez and dash Ol Bennett, with 0:18:19.040 --> 0:18:21.080 help from Moses Ondam and kil Brooks. 0:18:21.480 --> 0:18:24.639 Our sound engineer is Blake Maples. Sage Bauman is the 0:18:24.640 --> 0:18:26.080 head of Bloomberg Podcasts. 0:18:26.520 --> 0:18:29.840 Please rate, review, and subscribe to Odd, Lots and lots 0:18:29.880 --> 0:18:32.760 More on your favorite podcast platforms. 0:18:32.520 --> 0:18:35.280 And remember that Bloomberg subscribers can listen to all our 0:18:35.320 --> 0:18:39.959 podcasts ad free by connecting through Apple Podcasts. Thanks for listening.