WEBVTT - The GOP and Hunter Biden and Roe One Year Later 0:00:01.280 --> 0:00:05.119 You're listening to the Bloomberg Opinion podcast. Catch us Saturdays 0:00:05.120 --> 0:00:08.280 at one and seven pm Eastern on Bloomberg dot Com, 0:00:08.320 --> 0:00:11.479 the iHeartRadio app and the Bloomberg Business App, or listen 0:00:11.520 --> 0:00:13.760 on demand wherever you get your podcasts. 0:00:15.960 --> 0:00:19.840 Welcome to Bloomberg Opinion I Amy Morris. This week we 0:00:19.880 --> 0:00:23.119 look at the economy and the unique market dynamics that 0:00:23.200 --> 0:00:26.520 are making it so hard to pin down trends. And 0:00:26.640 --> 0:00:28.280 we're going to take a look back at the end 0:00:28.280 --> 0:00:31.800 of Roe v. Wade and how that's impacted women's health 0:00:31.840 --> 0:00:35.400 since then. Plus we are seeing a drop in productivity. 0:00:35.800 --> 0:00:38.880 Output per hour in the US is lower than last quarter. 0:00:38.960 --> 0:00:41.360 But it's not time to panic, at least not yet. 0:00:41.920 --> 0:00:46.200 But first, Republicans were angry about President Biden's son, Hunter 0:00:46.280 --> 0:00:49.880 Biden's plea deal on tax and gun charges, with some 0:00:49.960 --> 0:00:53.680 alleging that the Department of Justice during the Biden administration 0:00:54.160 --> 0:00:58.960 has been politicized and weaponized. Attorney General Merrick Garland spoke 0:00:59.000 --> 0:01:01.360 out about those out delegations. 0:01:00.880 --> 0:01:04.360 This constitutes an attack on an institution that is essential 0:01:04.400 --> 0:01:07.840 to American democracy and essential to the safety of the 0:01:07.840 --> 0:01:08.639 American people. 0:01:08.720 --> 0:01:12.880 But Attorney General Merritt Garland statement did not appease Republicans much, 0:01:12.880 --> 0:01:16.320 who maintained that the Justice Department and FBI are biased 0:01:16.520 --> 0:01:20.759 against the GOP. Let's now bring in Bloomberg opinion columnist 0:01:20.840 --> 0:01:23.440 Jonathan Bernstein. He covers politics and policy. 0:01:23.840 --> 0:01:23.960 Now. 0:01:24.040 --> 0:01:26.640 Jonathan, in your column on the Bloomberg terminal, you call 0:01:26.720 --> 0:01:30.720 the Republican reaction to Hunter Biden's plea deal an example 0:01:30.840 --> 0:01:34.600 of the paranoia that script many in the party, paranoia 0:01:34.680 --> 0:01:36.080 about what walk us through that. 0:01:37.200 --> 0:01:41.559 Well, the story here is that Republicans have now decided 0:01:42.200 --> 0:01:46.440 that the entire criminal justice federal criminal justice system is 0:01:46.520 --> 0:01:51.160 biased against them, and their proof of that is basically that, well, 0:01:51.240 --> 0:01:56.040 sometimes Republicans getting dubted for things, and sometimes Democrats don't 0:01:56.040 --> 0:02:00.000 get indibted for things Republicans. And there's no evidence here, 0:02:00.000 --> 0:02:05.120 there's no case to be made. But you know, nobody 0:02:05.160 --> 0:02:08.120 who knows the FBI thinks the FBI is full of 0:02:08.880 --> 0:02:13.920 communist rangth yeah, or even full of Democrats. You know, 0:02:13.960 --> 0:02:18.400 there's a long history of the FBI going after liberal 0:02:18.520 --> 0:02:23.000 organizations and I don't think I think, yeah, in the 0:02:23.040 --> 0:02:26.040 past some liberals have been paranoid about the FBI. But 0:02:26.040 --> 0:02:30.760 but currently, you know, because they are committed to believing 0:02:30.960 --> 0:02:34.280 that Donald Trump is innocent of everything. You know, why 0:02:34.280 --> 0:02:38.320 would and people like Hillary Clinton or Joe Biden or 0:02:38.400 --> 0:02:41.440 Hunter Biden in this case must be guilty of everything. 0:02:42.480 --> 0:02:48.280 Evidence notwithstanding this must all be a bought by the 0:02:48.280 --> 0:02:50.200 deep state against Republicans. 0:02:50.600 --> 0:02:52.320 Okay, I'm going to pick this apart a little bit 0:02:52.440 --> 0:02:54.760 and kind of dig into it. First of all, is 0:02:54.840 --> 0:02:59.280 this about the Biden administration specifically, or would this apply 0:02:59.400 --> 0:03:02.480 to any administration that doesn't necessarily agree with the party 0:03:02.520 --> 0:03:06.800 line or anyone who doesn't agree with the Republican party line. 0:03:07.000 --> 0:03:07.800 Let's start there. 0:03:08.800 --> 0:03:11.240 Yeah, I think that's a great question, and I don't 0:03:11.240 --> 0:03:14.720 think it's specifically about the Biden administration. I think you know, 0:03:15.360 --> 0:03:19.320 what it seems like to me is that what you 0:03:19.480 --> 0:03:24.120 have over more than fifty years, but increasingly in the 0:03:24.200 --> 0:03:30.080 last say ten years, and especially with Trump, is the 0:03:31.880 --> 0:03:37.040 breakdown of the belief among publicans, among movement conservatives, in 0:03:37.120 --> 0:03:41.520 the whole notion of neutrality. And you see that with 0:03:42.880 --> 0:03:46.840 what they you know, originally with the idea that the 0:03:46.880 --> 0:03:50.200 liberal media was out to get them. And you know, 0:03:50.280 --> 0:03:55.280 there's a lot of academic studies of this, and it 0:03:55.360 --> 0:03:59.160 turns out that there's not really, you know that the 0:03:59.200 --> 0:04:04.800 mainstream media, that the New York Times, that Bloomberg, that 0:04:05.680 --> 0:04:12.000 CBS News are not particularly liberal. They do have biases, 0:04:12.560 --> 0:04:15.520 but they are generally biases that have to do with 0:04:15.640 --> 0:04:20.600 journalistic norms and self interest, not a plot to get conservatives. 0:04:21.040 --> 0:04:24.080 And what's happened over time is that they have extended 0:04:24.080 --> 0:04:26.480 this from well, the neutral media is out to get 0:04:26.520 --> 0:04:30.960 us too, now the bureaucracy is out to get us, 0:04:31.040 --> 0:04:33.880 and to the FBI is out to get us, and 0:04:33.920 --> 0:04:37.920 the Justice Department professionals are out to get us. So 0:04:38.360 --> 0:04:39.800 I don't think it has to do with the Biden 0:04:39.800 --> 0:04:42.960 administration or Hunter Biden in particular. It's that that's their 0:04:43.000 --> 0:04:46.479 way of understanding and explaining the world, and it's a 0:04:46.480 --> 0:04:48.320 real dangerous way of thinking about the world. 0:04:48.440 --> 0:04:50.720 I want to get into that danger, into that risk. 0:04:50.800 --> 0:04:53.039 But I want to ask also about the rhetoric that 0:04:53.120 --> 0:04:57.560 you were just explaining. It is becoming more standard rhetoric 0:04:57.880 --> 0:05:01.960 that justice isn't blind. It's oh yeah. 0:05:01.960 --> 0:05:05.240 I think both parties are susceptible to this, but Republicans 0:05:05.640 --> 0:05:10.160 by having the elite Republicans, by having highly visible Republicans 0:05:10.279 --> 0:05:13.200 repeat this over and over for fifty years, that it's 0:05:13.240 --> 0:05:18.960 a partisan bias. Have convinced themselves, convinced their rank and 0:05:18.960 --> 0:05:21.360 final voters, and convinced a lot of other people too, 0:05:21.480 --> 0:05:24.320 neutral people that oh, yeah, you know, the media, while 0:05:24.320 --> 0:05:24.880 they're liberal. 0:05:26.240 --> 0:05:28.840 Let's get into the risks. Now you mentioned how this 0:05:28.880 --> 0:05:31.880 could be very dangerous, is it? Did you mean for democracy, 0:05:31.920 --> 0:05:33.880 the country, the party? What did you mean? 0:05:35.240 --> 0:05:38.280 This goes to sort of back to James Madison and 0:05:38.320 --> 0:05:43.400 how he explained democracy, And if you go back to 0:05:43.440 --> 0:05:47.839 the seventeen hundreds, there was this assumption that democracy couldn't work, 0:05:47.920 --> 0:05:51.120 and that was because there had been a long history 0:05:51.320 --> 0:05:54.360 of you know, going back to Rome, but then especially 0:05:54.400 --> 0:06:00.160 since then, of you know, small republics were established and 0:06:00.200 --> 0:06:03.760 they would function for a while, and then the losers 0:06:04.080 --> 0:06:07.760 in that local democracy would say we're not willing to lose, 0:06:08.600 --> 0:06:12.599 and they would have a coup. They would even invite 0:06:12.680 --> 0:06:17.560 foreigners to invade and take them over. Because if you 0:06:17.680 --> 0:06:22.240 have a majority and a minority, and those seemed fairly 0:06:22.279 --> 0:06:25.960 permanent and you're in the minority, democracy is sort of 0:06:25.960 --> 0:06:29.200 a losing game for you. There's no reason to participate 0:06:29.240 --> 0:06:34.080 and to endorse the democracy. And so people thought democracy 0:06:34.080 --> 0:06:36.839 couldn't work and James Madison said, well, you know what, 0:06:38.640 --> 0:06:43.680 all these city states that tried democracy that were republics 0:06:44.040 --> 0:06:50.480 and failed, their problem was that they were too small. 0:06:50.680 --> 0:06:52.560 And everybody assumed you had to be small to be 0:06:52.600 --> 0:06:56.080 democracy because you had to meet in one place and 0:06:56.120 --> 0:06:59.039 you had you know, you have to be able to 0:06:59.080 --> 0:07:01.719 do things in person. And he says, no, we're going 0:07:01.800 --> 0:07:04.640 to have representation so we can have a large scale country, 0:07:05.160 --> 0:07:08.680 and we're going to have in a large country. We're 0:07:08.720 --> 0:07:11.600 not going to have a natural majority because people in 0:07:11.760 --> 0:07:13.480 you know, on the coast of Maine are going to 0:07:13.560 --> 0:07:16.560 be concerned with fishing, and people other people are going 0:07:16.600 --> 0:07:18.360 to be concerned with farming, and other people are going 0:07:18.440 --> 0:07:20.400 to care about religion, and other people are going to 0:07:20.480 --> 0:07:25.160 care about whatever abortion or civil rights or something else, 0:07:25.560 --> 0:07:29.640 and most people won't care about most issues. And that's 0:07:29.640 --> 0:07:31.680 sort of what we have so that you know, if 0:07:31.720 --> 0:07:35.520 you lose on one issue, you may have some other 0:07:35.560 --> 0:07:38.600 issue you care about that you can win anyway. So 0:07:38.800 --> 0:07:41.760 no natural majority. The problem is if natural majorities come 0:07:41.800 --> 0:07:46.280 to exist, and one way that can happen is if 0:07:46.320 --> 0:07:50.080 you have one issue that suddenly everybody cares about, and 0:07:50.080 --> 0:07:52.080 that's sort of the story of the Civil War, everybody 0:07:52.120 --> 0:07:54.360 cares about slavery. There has to be a winner, there 0:07:54.360 --> 0:07:58.120 has to be a loser. The losers in the South say, well, 0:07:58.120 --> 0:08:00.280 in that case, why should we be part of your country? 0:08:01.760 --> 0:08:04.960 And because they're geographically separate, they get to try to 0:08:05.000 --> 0:08:09.920 have a civil you know, right. But what we have 0:08:10.040 --> 0:08:14.160 now isn't like that, and it's not ideology. People aren't 0:08:14.240 --> 0:08:16.480 sort of liberal and conservative. I don't think that's all 0:08:16.520 --> 0:08:19.360 aboutic But what we do have is strong partisanship. And 0:08:19.400 --> 0:08:25.640 we have Republicans encouraging small strong partisanship by saying there's 0:08:25.680 --> 0:08:29.640 nothing else in the world. Everything is already partisanship. If 0:08:29.680 --> 0:08:35.480 you're losing, it's because the Democrats are winning, and that's 0:08:35.520 --> 0:08:40.080 not true. But if everybody believes it, it becomes it 0:08:40.120 --> 0:08:43.480 becomes its own truth. And then elections become super high 0:08:43.520 --> 0:08:48.120 stakes and you have a possibility of a permanent winner 0:08:48.120 --> 0:08:51.520 and a permanent loser, and democracy just doesn't work under 0:08:51.520 --> 0:08:52.439 those circumstances. 0:08:53.240 --> 0:08:55.640 One last question for you, and I don't know that 0:08:55.720 --> 0:08:57.600 you wouldn't have the answer to this, but how do 0:08:57.640 --> 0:09:00.440 we go back? How do we get here? How do 0:09:00.440 --> 0:09:01.000 we get back? 0:09:01.559 --> 0:09:05.000 It's a great question. The good news is that most 0:09:05.000 --> 0:09:08.320 of this is phony, right, It is true that most 0:09:08.320 --> 0:09:10.920 people in their worlds, like you know, one of the 0:09:11.120 --> 0:09:15.720 one of the you know, the media isn't or at 0:09:15.800 --> 0:09:19.240 least the neutral media there are. There are partisan media, right, 0:09:19.280 --> 0:09:23.600 There's a democratic aligned media, there's Republican aligned media. But 0:09:23.640 --> 0:09:26.760 there's a lot of media that's not that's real, and 0:09:26.800 --> 0:09:33.160 they really are neutral in the between the parties. Academic academia, 0:09:33.640 --> 0:09:37.800 most academics have strong biases, but they're not partisan. Months 0:09:37.840 --> 0:09:42.120 they care about things, you know, about their academic training 0:09:42.160 --> 0:09:45.840 and their the academic stuff that they care about. You know, 0:09:45.960 --> 0:09:49.960 most of the FBI, or in fact, as far as 0:09:50.000 --> 0:09:53.800 I know, all of the FBI, is not partisan. They 0:09:53.800 --> 0:09:59.640 do have strong biases because all bureaucrats have care about 0:10:00.200 --> 0:10:04.280 doing things their professional way, and so if you cross that, 0:10:04.480 --> 0:10:07.480 you may wind up getting prosecuted for something that somebody 0:10:07.559 --> 0:10:11.160 else did a similar thing, but it didn't hit the 0:10:11.240 --> 0:10:13.840 FBI that way, you know. And that's the same with 0:10:13.920 --> 0:10:18.640 local cops and sheriffs or what have you. They have biases, 0:10:18.679 --> 0:10:22.200 but they're mostly not partisan biases. So some of it 0:10:22.240 --> 0:10:25.120 is just sort of accepting that the world is more 0:10:25.160 --> 0:10:31.120 complicated than just democrats and Republicans. Unfortunately, the Republicans have 0:10:32.160 --> 0:10:36.600 find that this sells very well among their audience, and 0:10:36.640 --> 0:10:38.959 it's very hard to see how they stop doing that. 0:10:39.080 --> 0:10:43.040 But you know, well, they they're coming up against reality 0:10:43.080 --> 0:10:46.400 all the time and that may have some consequences for them. 0:10:46.600 --> 0:10:51.040 Jonathan Bernstein is a Bloomberg Opinion colonist covering politics and policy, 0:10:51.360 --> 0:10:54.720 and Bloomberg Opinion continues with a look at the Goldilocks 0:10:54.760 --> 0:10:58.600 economy and why these latest market trends are so hard 0:10:58.600 --> 0:11:00.880 to pin down. This is Bloomberg. 0:11:09.920 --> 0:11:13.760 You're listening to the Bloomberg Opinion podcast. Catch us Saturdays 0:11:13.800 --> 0:11:16.920 at one and seven pm Eastern on Bloomberg dot Com, 0:11:17.000 --> 0:11:20.120 the iHeartRadio app, and the Bloomberg Business App, or listen 0:11:20.200 --> 0:11:22.359 on demand wherever you get your podcasts. 0:11:24.320 --> 0:11:28.200 You're listening to Bloomberg Opinion. I'm Amy Morris. Last spring 0:11:28.440 --> 0:11:32.080 was hard on the US economy. Markets fell, inflation spiked, 0:11:32.200 --> 0:11:36.239 and stagflation was the word of the day. But investors 0:11:36.240 --> 0:11:40.040 who thought stagflation was here to stay were wrong, And 0:11:40.080 --> 0:11:42.840 now perhaps they shouldn't count on the Goldilocks economy to 0:11:42.840 --> 0:11:45.959 stick around either. Let's get more insight now. Bloomberg Opinion 0:11:46.000 --> 0:11:50.440 columnist Connorson is founder of Peachtree Creek Investments and joins 0:11:50.440 --> 0:11:53.559 me now. Connor, always a pleasure, Thank you for bringing 0:11:53.640 --> 0:11:56.280 us your insights. I want to ask you, first off, 0:11:56.280 --> 0:11:59.280 how short sighted we are when it comes to predicting 0:11:59.400 --> 0:12:00.680 end dates inflation. 0:12:01.200 --> 0:12:03.800 I think the challenge that everyone's having is that we're 0:12:03.800 --> 0:12:07.120 dealing with huge impacts still from the pandemic economy and 0:12:07.160 --> 0:12:09.680 the lags associated with the boom and the bust that 0:12:09.720 --> 0:12:12.360 we saw during that, and those lags are different for 0:12:12.400 --> 0:12:15.280 growth in inflation, and so right now we're just now 0:12:15.320 --> 0:12:18.960 finally getting the benefit of the sort of deflationary side 0:12:19.000 --> 0:12:21.640 of the pandemic bust. So auto inflation is likely to 0:12:21.640 --> 0:12:24.319 come down over the next six months. Rental and shelter 0:12:24.400 --> 0:12:26.720 inflation is finally going to show up in the CPI data, 0:12:27.200 --> 0:12:30.080 and that's great news, but it's also a little bit 0:12:30.080 --> 0:12:32.560 of a false comfort if growth remains as strong as 0:12:32.600 --> 0:12:33.679 it appears to be at the moment. 0:12:33.920 --> 0:12:36.280 So when you talk about false comfort, let's talk about 0:12:36.320 --> 0:12:38.520 that a little bit. Where do you see it going 0:12:38.760 --> 0:12:41.439 or is that the point you can't really It. 0:12:41.440 --> 0:12:43.800 Sort of gets to that stagflation every point from last spring, 0:12:43.960 --> 0:12:46.520 when at that time you had growth slowing from the 0:12:46.559 --> 0:12:49.240 other side of the pandemic, but inflation was ramping up 0:12:49.240 --> 0:12:52.320 because of the lags in shelter inflation and things like that, 0:12:52.840 --> 0:12:55.640 and so you know, everyone was thinking, well, the Feds 0:12:55.679 --> 0:12:58.240 raising rates, growth is slowing, inflation is spiking, and it's 0:12:58.240 --> 0:13:00.680 going to be a disaster. It's kind of the mirror 0:13:00.720 --> 0:13:03.679 image of that. Now where growth is resilient. We see 0:13:03.720 --> 0:13:05.840 the housing market picking back up. We see in tech 0:13:05.920 --> 0:13:08.360 that AI is leading to a new boom, and we're 0:13:08.360 --> 0:13:13.480 getting that deflationary benefit from autos and shelter. And the 0:13:13.520 --> 0:13:15.880 concern is that we could see growth be really strong 0:13:16.000 --> 0:13:18.760 over the next six months and people respond favorably to 0:13:18.800 --> 0:13:21.800 this decline in inflation, but it's really just the deflation 0:13:21.840 --> 0:13:23.920 we're getting is sort of baked into the cake, and 0:13:23.960 --> 0:13:26.280 we could see inflation pick up again on the other 0:13:26.320 --> 0:13:26.760 side of that. 0:13:27.240 --> 0:13:29.280 Can I pick that apart just a little bit? Because 0:13:29.280 --> 0:13:33.040 we've seen these unique market dynamics in the past few years. 0:13:33.440 --> 0:13:35.760 Why has it been so hard to get a handle 0:13:35.800 --> 0:13:36.120 on this? 0:13:36.920 --> 0:13:39.440 I think we just never in a modern era haven't 0:13:39.480 --> 0:13:42.880 seen an economy adjusted to a two to three year pandemic. 0:13:43.400 --> 0:13:45.319 And we had a huge amount of fiscal stimulus that 0:13:45.360 --> 0:13:47.080 went into the system as well. So it's things like 0:13:47.160 --> 0:13:51.319 last year how we saw manufacturing sentiment tick down, and 0:13:51.600 --> 0:13:53.960 in a lot of times that tick down has been 0:13:53.960 --> 0:13:56.679 a leading indicator recession, but it was really just that 0:13:56.760 --> 0:13:59.719 consumers were shifting their spending from goods to services, and 0:14:00.040 --> 0:14:02.040 our retailers didn't need as much stuff as they did 0:14:02.080 --> 0:14:05.640 in twenty one, and people sort of overreacted to that. 0:14:05.880 --> 0:14:08.040 And in the housing market, we saw the spike and 0:14:08.040 --> 0:14:10.040 mortgage rates make people think that we were going through 0:14:10.040 --> 0:14:12.439 another two thousand and eight, when instead people have owned 0:14:12.440 --> 0:14:15.120 mortgage rates just decided not to sell our homes. And 0:14:15.200 --> 0:14:18.280 so it's been tough to sort of use historical playbooks 0:14:18.320 --> 0:14:21.160 to figure out the economy rather than sort of looking 0:14:21.200 --> 0:14:22.880 at the very unique things we've been going through. 0:14:23.480 --> 0:14:25.960 Right, you actually have a column about this on the 0:14:25.960 --> 0:14:29.600 Bloomberg terminal, and you are able to use housing as 0:14:29.640 --> 0:14:32.600 an example as to why this seems so. I don't 0:14:32.600 --> 0:14:37.080 know if volatile is the word, but unpredictable is probably 0:14:37.400 --> 0:14:40.000 a better term to use for that. My question for 0:14:40.040 --> 0:14:42.520 you is a little more esoteric now, and it's about 0:14:42.960 --> 0:14:46.120 because of the pandemic, all of this happening is this 0:14:46.280 --> 0:14:49.520 just where it is now? Like have we just fundamentally 0:14:49.640 --> 0:14:52.280 changed the whole model and we're trying to figure out 0:14:52.320 --> 0:14:55.080 what that model is or is there a way for 0:14:55.120 --> 0:14:56.480 the pendulum to swing back. 0:14:56.880 --> 0:14:58.880 I think there will be a time when we finally 0:14:58.880 --> 0:15:02.080 aren't looking at pandemic comparisons anymore, and that time is 0:15:02.200 --> 0:15:06.360 probably middle of next year, perhaps when sort of the 0:15:06.400 --> 0:15:09.040 rental sort of shelter impact of the pandemic is really 0:15:09.040 --> 0:15:11.840 behind us in the inflation data and auto supply champion 0:15:11.960 --> 0:15:15.160 have normalized, the auto industry has normalized, and so maybe 0:15:15.160 --> 0:15:17.160 by the middle of twenty four we can finally just 0:15:17.160 --> 0:15:19.760 talk about the economy as it is without having to 0:15:19.760 --> 0:15:22.120 go back to twenty twenty or twenty twenty one. But 0:15:22.160 --> 0:15:24.880 we still have another year or so of these weird 0:15:25.200 --> 0:15:27.360 sort of abnormalities to flow through the data, flow through 0:15:27.360 --> 0:15:29.840 the system. And until we can get there, we have 0:15:29.920 --> 0:15:31.960 to just sort of look at what's going on and 0:15:32.000 --> 0:15:35.120 not rely too much on sort of the past three 0:15:35.160 --> 0:15:38.520 receptions or how things typically work in economic cycles. 0:15:38.920 --> 0:15:41.560 And we are talking with Bloomberg opinion columns Connor sent 0:15:41.680 --> 0:15:46.240 about the goldilocks US economy. Connor, that's your word that 0:15:46.320 --> 0:15:48.800 you used in your column on the Bloomberg terminal, when 0:15:48.800 --> 0:15:51.920 you refer to it as a Goldilocks economy, what do 0:15:51.960 --> 0:15:52.520 you mean by that. 0:15:53.040 --> 0:15:56.360 I'd say, historically, goldilocks term and economic speak has been 0:15:56.520 --> 0:15:59.400 sort of solid growth but not aver inflationary, And right 0:15:59.440 --> 0:16:03.840 now we have sort of pretty resilient economic growth. We 0:16:03.840 --> 0:16:06.760 continue to see great job growth, and we see inflation 0:16:06.840 --> 0:16:08.960 coming off. And I think we're going to see inflation 0:16:09.000 --> 0:16:10.680 come off really, really hard on the back half of 0:16:10.720 --> 0:16:14.320 this year because I expect autodflation and shelter inflation to 0:16:14.360 --> 0:16:17.560 really accelerate, and we could start getting some monthly inflation 0:16:17.680 --> 0:16:20.720 numbers that actually look consistent with two percent. But that's 0:16:20.800 --> 0:16:23.440 just because we have this auto and shelter inflation coming out, 0:16:23.480 --> 0:16:25.960 which we've been expecting for a while and it's finally 0:16:25.960 --> 0:16:27.960 going to be showing up in the data. But at 0:16:27.960 --> 0:16:29.920 the same time, if you see the stock market at 0:16:29.960 --> 0:16:32.240 all time highs again and the housing market picking up again, 0:16:32.800 --> 0:16:36.160 it's unlikely that that two percent inflation would be sustainable 0:16:36.200 --> 0:16:37.040 in the longer term. 0:16:37.440 --> 0:16:40.080 Let's insert the Fed in here for a moment. We 0:16:40.160 --> 0:16:44.440 have heard the FED chair talking about trying to get 0:16:44.480 --> 0:16:48.200 to that two percent number, and even saying that we're 0:16:48.240 --> 0:16:51.360 anticipating a couple of more hikes coming up in twenty 0:16:51.440 --> 0:16:55.400 twenty three. From where you stand, just the what do 0:16:55.480 --> 0:16:59.960 they call it, the hawkish pause that we've just experienced 0:17:00.240 --> 0:17:03.320 versus the hikes that maybe down the road. How does 0:17:03.360 --> 0:17:06.280 that play into this dynamic? 0:17:06.920 --> 0:17:08.399 Well, I do think we'll get at least one more 0:17:08.440 --> 0:17:10.639 hike in July. But I think a lot of what 0:17:10.680 --> 0:17:13.040 they're doing isn't so much what they're definitely going to 0:17:13.080 --> 0:17:15.880 do or what they definitely believe, but what their view 0:17:15.920 --> 0:17:19.840 is that inflation expectations can get unanchored and a lot 0:17:19.880 --> 0:17:22.080 of this is kind of unpredictable, and so they don't 0:17:22.080 --> 0:17:24.359 want to let everyone believe that thing's in our under 0:17:24.359 --> 0:17:27.760 control and start buying stocks and houses again. So they're 0:17:27.840 --> 0:17:30.000 using this language to try to hold people in check, 0:17:30.119 --> 0:17:34.240 keep people scared of recession, keep people worried, because they 0:17:34.240 --> 0:17:36.399 really want to see those good inflation prints before they 0:17:36.400 --> 0:17:39.320 feel comfortable with backing off. And I don't know about 0:17:39.320 --> 0:17:41.320 giving me all clear, but just sort of backing off 0:17:41.320 --> 0:17:42.280 as hawkish posture. 0:17:42.880 --> 0:17:45.400 Are we going to continue to see some passing phases 0:17:45.440 --> 0:17:48.000 as we claw our way out of the pandemic? Aftermath. 0:17:48.040 --> 0:17:50.800 I mean, you're predicting maybe middle of next year we'll 0:17:50.800 --> 0:17:54.200 get more of a sense of normalcy, but between now 0:17:54.240 --> 0:17:57.880 and then more waves of different phases that we haven't 0:17:57.920 --> 0:17:58.760 really seen before. 0:17:59.200 --> 0:18:01.560 I think so, because again, if you look at sort 0:18:01.560 --> 0:18:04.119 of the market rent data, market rents are now about 0:18:04.160 --> 0:18:06.560 flat year every year, and they continue to fall, So 0:18:06.560 --> 0:18:08.960 I think we're going to see negative rent growth. Sort 0:18:09.000 --> 0:18:11.320 of if you were buying or renting an apartment in 0:18:11.359 --> 0:18:12.639 the third uarter of this year, it's going to be 0:18:12.680 --> 0:18:14.959 cheaper than it would have been a year ago, and 0:18:15.240 --> 0:18:17.800 that's not going to show up into the CPI shelter 0:18:17.920 --> 0:18:20.320 data until early next year, middle of the next year, 0:18:20.840 --> 0:18:22.960 So we could see again some false comfort where if 0:18:23.040 --> 0:18:24.720 all of a sudden it looks like shelter inflation is 0:18:24.720 --> 0:18:28.160 two or three percent rather than sixty seven percent, you'll 0:18:28.160 --> 0:18:31.360 see overall core inflation be very low, and you could 0:18:31.400 --> 0:18:34.359 get again people thinking that we're getting solid growth with 0:18:34.680 --> 0:18:36.720 following inflation, and that's just not going to be the 0:18:36.720 --> 0:18:37.840 reality for the long term. 0:18:38.119 --> 0:18:40.800 So what is it that investors are getting wrong when 0:18:40.840 --> 0:18:43.240 they try to make their predictions. Is it because they're 0:18:43.240 --> 0:18:45.720 looking at the old model, the pre pandemic model, and 0:18:45.760 --> 0:18:48.159 this is how it usually is, so let's go this 0:18:48.240 --> 0:18:50.320 way and things are just too volatile. 0:18:50.359 --> 0:18:53.359 Now, Yeah, I think the mistake people have been making 0:18:53.440 --> 0:18:55.280 for a whiles they feel like the only way to 0:18:55.280 --> 0:18:58.360 get inflation down is by crushing growth, and that any 0:18:58.440 --> 0:19:01.520 decline in inflation would only happen if growth slows down. 0:19:01.960 --> 0:19:05.440 And I think we're just getting supply side deflation because 0:19:05.480 --> 0:19:09.120 of these pandemic impacts, and sort of steady or even 0:19:09.160 --> 0:19:12.840 accelerating growth with decelerating inflation is something we could get 0:19:12.880 --> 0:19:15.240 for two or three quarters. But it's just a quirk 0:19:15.280 --> 0:19:18.119 of the pandemic and it's not really any kind of 0:19:18.200 --> 0:19:21.080 new world where we've figured out sort of economic utopia. 0:19:21.160 --> 0:19:23.119 But we should just take the did as it is, 0:19:23.160 --> 0:19:24.200 but not get too comfortable. 0:19:24.280 --> 0:19:26.240 Okay, So how do we change that trajectory? 0:19:26.280 --> 0:19:26.399 Then? 0:19:26.440 --> 0:19:29.400 If we keep making the same stupid mistakes because of 0:19:29.480 --> 0:19:32.080 the new model that we're having to deal with, even 0:19:32.119 --> 0:19:34.400 if it is a temporary model, how do we get 0:19:34.440 --> 0:19:35.600 ourselves out of the rut? 0:19:36.280 --> 0:19:40.040 I would focus on sort of watch autos to see 0:19:40.080 --> 0:19:42.080 when the auto supply chain is fixed, and at that 0:19:42.119 --> 0:19:44.359 point we could have more confidence about where auto inflation 0:19:44.440 --> 0:19:46.040 is going to go, and the same thing goes with 0:19:46.080 --> 0:19:49.040 the rental market. I would focus more on what's happening 0:19:49.040 --> 0:19:52.320 with real time rents and vacancy rates, because that ultimately 0:19:52.400 --> 0:19:54.240 is where shelter inflation is going to go in the 0:19:54.240 --> 0:19:57.080 long run, and the shelter inflation data we're going to 0:19:57.080 --> 0:19:59.240 get over the next two to three quarters is already 0:19:59.240 --> 0:20:01.760 baked based on what's happened in the rental market early 0:20:01.920 --> 0:20:03.880 in the first half of this year, and so it's 0:20:03.920 --> 0:20:06.919 really just sort of thinking about growth sort of as 0:20:07.080 --> 0:20:09.760 as it's going to be, not just again this inflation data, 0:20:09.760 --> 0:20:11.760 which is really not telling the story of what's happened 0:20:11.760 --> 0:20:12.600 in the economy today. 0:20:12.920 --> 0:20:16.919 Connor, thank you. Bloomberg Opinion columnist. Connorson is founder of 0:20:17.000 --> 0:20:20.879 Peachtree Creek Investments. Coming up, it's been more than a 0:20:20.960 --> 0:20:24.000 year since the Supreme Court overturned Roe v. 0:20:24.160 --> 0:20:24.600 Wade. 0:20:25.000 --> 0:20:28.119 We'll take a look at the continuing fallout. This is 0:20:28.119 --> 0:20:29.080 Bloomberg Opinion. 0:20:38.800 --> 0:20:42.800 You're listening to the Bloomberg Opinion podcast Countess Saturdays at 0:20:42.800 --> 0:20:45.919 one and seven pm Eastern on Bloomberg dot Com, the 0:20:46.000 --> 0:20:49.119 iHeartRadio app, and the Bloomberg Business App, or listen on 0:20:49.200 --> 0:20:51.320 demand wherever you get your podcasts. 0:20:53.400 --> 0:20:56.919 This is Bloomberg Opinion. I'm Amy Morris. It's been a 0:20:57.000 --> 0:21:00.880 year since the US Supreme Court decided Dobbs v. Jackson, 0:21:01.040 --> 0:21:05.320 overturning Roe v. Wade, allowing states to ban abortion, and 0:21:05.400 --> 0:21:09.320 we continue to monitor the fallout. Vice President Kamala Harris 0:21:09.359 --> 0:21:12.680 marked the anniversary at a rally in Charlotte, North Carolina, 0:21:13.160 --> 0:21:17.240 condemning states that have implemented full abortion bans, prompting her 0:21:17.280 --> 0:21:19.000 to ask, how dare they? 0:21:19.160 --> 0:21:19.240 We? 0:21:19.600 --> 0:21:24.760 All of us are now called upon to advance the 0:21:24.800 --> 0:21:30.679 promise of freedom, including the freedom of every woman to 0:21:30.760 --> 0:21:35.840 make decisions about her own body, not the government telling 0:21:35.920 --> 0:21:37.520 her what to do. 0:21:38.000 --> 0:21:40.600 And beyond that, we are getting a better idea of 0:21:40.680 --> 0:21:45.159 how that decision is taking a toll on obgyns and 0:21:45.320 --> 0:21:48.959 other healthcare providers as well as women. And what's becoming 0:21:49.000 --> 0:21:53.120 more clear is that abortion access can't be excised from 0:21:53.160 --> 0:21:58.080