WEBVTT - Single Best Idea: Michael Darda & Ian Bremmer

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news.

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<v Speaker 2>Single best idea very quickly here today. What a wonderful set,

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<v Speaker 2>A lot of fun with the Yankees, Red Sox Yankee

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<v Speaker 2>Stadium tonight, Lisa Mateo, thank you so much for that.

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<v Speaker 2>Ann Marie Horden a cameo appearance. She is Surveillance Yankees correspondent.

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<v Speaker 2>But also we looked at the moment of international relations

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<v Speaker 2>buttressed into this strange stock market in modern technology. Michael

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<v Speaker 2>Darta with us with rough capital. Michael Darta on the

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<v Speaker 2>moment at hand and a constructive nominal g that would

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<v Speaker 2>be four to five percent and not overheated.

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<v Speaker 1>Nominal wages and real wages are growing, so that's consistent

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<v Speaker 1>with the real economy expanding. Inflation is still above the

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<v Speaker 1>FEDS target, but I think, you know, in an environment

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<v Speaker 1>where inflation is trending at around three you know, so

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<v Speaker 1>that can still be a very strong environment for corporate

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<v Speaker 1>profits if the economy is you know, staying out of recession,

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<v Speaker 1>and that's you know, I think that is likely with

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<v Speaker 1>the FED easing monetary policy. They've already taken rates down

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<v Speaker 1>one hundred and twenty five basis points, and with inflation

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<v Speaker 1>expectations moving up forty to sixty basis points. Over that period,

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<v Speaker 1>real rates have fallen about two hundred basis points. So

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<v Speaker 1>the FED is definitely removed quite a bit of restraint

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<v Speaker 1>from its policy, so the top line should hang in there.

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<v Speaker 1>I do think, you know, I do worry about the

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<v Speaker 1>FED getting back to two percent inflation on a reasonable timeline.

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<v Speaker 1>If we're still stuck at three percent inflation over the

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<v Speaker 1>course of the next two years, and that's part of

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<v Speaker 1>the FEDS forecasts, boy, that's a long overshoot seven years,

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<v Speaker 1>So I worry a little bit that that leeds into credibility.

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<v Speaker 1>You know, the administration really wants FED to ease because

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<v Speaker 1>they want lower market interest rates. But you know you're

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<v Speaker 1>not going to get lower market interest rates inflation expectations

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<v Speaker 1>continue moving on, So the FED needs to stay credible here.

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<v Speaker 1>I think, you know, four to five percent nominal, that's

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<v Speaker 1>the sweet spot. You'll have corporate pricing power, Inflation won't

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<v Speaker 1>be too high long rates will be at reasonable levels.

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<v Speaker 2>Michael Darta nominal GDP. I can't tell you how important

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<v Speaker 2>I think that is through all the years I've really

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<v Speaker 2>you know, real GDP has huge value. Don't get me wrong.

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<v Speaker 2>But the idea of combining the real GDP growth and

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<v Speaker 2>then overlaying it with inflation to give you the animal

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<v Speaker 2>spirit of the system is I think just a critical

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<v Speaker 2>and useful analysis, particularly full to go over into revenues

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<v Speaker 2>and then what it means for the stock market and

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<v Speaker 2>American corporations as well. A wonderful conversation with Ian Bremer

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<v Speaker 2>of Eurasia Group today. Too many themes to speak of,

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<v Speaker 2>but one of them was the ending of US programs

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<v Speaker 2>to Africa.

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<v Speaker 3>The United States is the most powerful country in the world.

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<v Speaker 3>It's the strongest economy by far, and the US has

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<v Speaker 3>historically been doing the most in terms of providing aid

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<v Speaker 3>to other countries and to the people in those countries

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<v Speaker 3>that need it, whether they're suffering from malaria, whether they're

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<v Speaker 3>vulnerable to HIV AIDS, whether they're starving, whether they're facing

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<v Speaker 3>forced migration. The US has done that directly. It's also

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<v Speaker 3>led the charge in doing that indirectly through American support

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<v Speaker 3>for the United Nations and the organizations that it stands up,

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<v Speaker 3>like the World Food Program, for example. The United States

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<v Speaker 3>has decided that those things should no longer be priorities.

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<v Speaker 3>That America first means that these other countries should have

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<v Speaker 3>to make their own way, they should have to pay

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<v Speaker 3>for themselves. Now, the Chinese see this is a great opportunity.

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<v Speaker 3>In the same way that when the Americans cut back

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<v Speaker 3>on visas, the Chinese immediately say we're going to make

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<v Speaker 3>it easier for talented people to come. They won't be

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<v Speaker 3>as attractive in terms of their aid. But if they

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<v Speaker 3>are the lead power, I mean, they made up their dues,

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<v Speaker 3>many of which were in ear years at the UN

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<v Speaker 3>the Americans aren't paying. The Chinese said, okay, we'll pay

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<v Speaker 3>some of ours now, so that they can put forward

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<v Speaker 3>that they're the ones that are more accountable. Look, if

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<v Speaker 3>you think that only American hard power.

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<v Speaker 4>Matters, and maybe in the short term that's true, then

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<v Speaker 4>and you don't care very much about non Americans and

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<v Speaker 4>don't think that they are as deserving or that we

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<v Speaker 4>should take care of any of them, we don't have accountability, then.

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<v Speaker 3>It doesn't matter. But that's never been my view, and

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<v Speaker 3>I think it's a mistake long term.

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<v Speaker 2>Ian Bremmer of Eurrasia Group can't say enough about his

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<v Speaker 2>note Look for that from eur Rasia Group on podcasts

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<v Speaker 2>on Apple and Spotify and YouTube podcasts is single best

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<v Speaker 2>idea