1 00:00:05,120 --> 00:00:09,200 Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane. Along 2 00:00:09,240 --> 00:00:13,200 Speaker 1: with Jonathan Ferrell and Lisa Brownwitz Jailey. We bring you 3 00:00:13,320 --> 00:00:18,600 Speaker 1: insight from the best and economics, finance, investment, and international relations. 4 00:00:18,960 --> 00:00:23,840 Speaker 1: Find Bloomberg Surveillance on Apple Podcast, Suncloud, Bloomberg dot Com, 5 00:00:23,920 --> 00:00:31,159 Speaker 1: and of course on the Bloomberg Termament. Michael McKee, what 6 00:00:31,200 --> 00:00:33,200 Speaker 1: a joy. I loved what you did with Neil cash 7 00:00:33,280 --> 00:00:36,280 Speaker 1: Curry here in the last number of days. And now 8 00:00:36,320 --> 00:00:41,000 Speaker 1: you've got the wonderful mathematician from Cleveland, Loretta Mester. Yes, 9 00:00:41,080 --> 00:00:43,919 Speaker 1: time we do. We'd like to welcome the Cleveland Fed 10 00:00:43,960 --> 00:00:47,480 Speaker 1: Bank President Lorettamester to Bloomberg Television and Radio worldwide. Thank 11 00:00:47,520 --> 00:00:50,000 Speaker 1: you for joining us on this beautiful morning, at least 12 00:00:50,040 --> 00:00:56,280 Speaker 1: here in Boston. Uh looks like the narrative, President Mester, 13 00:00:56,440 --> 00:00:59,000 Speaker 1: that the American people are going to be recovering more 14 00:00:59,080 --> 00:01:03,200 Speaker 1: quickly and everybody anticipated might not be correct. I mean, 15 00:01:03,280 --> 00:01:07,640 Speaker 1: they're still spending money, but not at an increasing pace. Yeah, 16 00:01:07,720 --> 00:01:11,119 Speaker 1: I mean I think this is probably what we should expect. Right. 17 00:01:11,200 --> 00:01:14,200 Speaker 1: We have pent up demand coming back as the vaccinations 18 00:01:14,240 --> 00:01:18,520 Speaker 1: have been distributed more widely, and that's a strong demand. 19 00:01:18,880 --> 00:01:22,120 Speaker 1: We also have supply issues affecting the economy, and this 20 00:01:22,240 --> 00:01:25,480 Speaker 1: interplay between demand and supply is what we're seeing in 21 00:01:25,520 --> 00:01:27,960 Speaker 1: some of the data coming out, whether it be today's 22 00:01:28,000 --> 00:01:31,440 Speaker 1: retail sales report or the labor market reports. So the 23 00:01:31,520 --> 00:01:35,440 Speaker 1: volatility month to month, I think is something we should expect. 24 00:01:35,880 --> 00:01:38,160 Speaker 1: I think that what's happening, though, is that we do 25 00:01:38,240 --> 00:01:41,240 Speaker 1: see the recovery continuing. It's just that we're going to 26 00:01:41,360 --> 00:01:45,000 Speaker 1: have these months to month changes depending on which factors 27 00:01:45,640 --> 00:01:48,520 Speaker 1: are more dominant. Is at the supply side or is 28 00:01:48,560 --> 00:01:51,280 Speaker 1: it demand side? And I think the bottom line is 29 00:01:51,320 --> 00:01:53,520 Speaker 1: it just you know, we're really at the beginning of 30 00:01:53,520 --> 00:01:58,960 Speaker 1: this vaccinations widely distributed part of the recovery, and I 31 00:01:59,000 --> 00:02:01,160 Speaker 1: think we just have to, you know, wait and be 32 00:02:01,200 --> 00:02:05,760 Speaker 1: a little bit patient and let the recovery continue. Well, 33 00:02:05,760 --> 00:02:08,120 Speaker 1: we just got the CDC advice that people don't have 34 00:02:08,160 --> 00:02:10,080 Speaker 1: to wear masks anymore. I can tell you people in 35 00:02:10,120 --> 00:02:13,480 Speaker 1: Boston are still wearing masks as they are in New York. 36 00:02:14,280 --> 00:02:17,800 Speaker 1: Do you think that reluctance to go out and spend 37 00:02:18,120 --> 00:02:21,519 Speaker 1: is going to fade rapidly now, Well, it's hard to 38 00:02:21,560 --> 00:02:25,120 Speaker 1: see how rapidly. I mean myself, you know, I'm still 39 00:02:25,120 --> 00:02:27,440 Speaker 1: you know, wearing masks when I go outside. I think 40 00:02:27,520 --> 00:02:30,200 Speaker 1: it all is a good sign though, that we are 41 00:02:30,320 --> 00:02:33,360 Speaker 1: getting to the other side of this. And I think 42 00:02:33,400 --> 00:02:37,240 Speaker 1: that the vaccinations still have some further way to go. 43 00:02:37,400 --> 00:02:40,480 Speaker 1: I think we need to distribute them more evenly across 44 00:02:41,240 --> 00:02:46,160 Speaker 1: the country. But as a that continues, as we can 45 00:02:46,200 --> 00:02:49,119 Speaker 1: relax mask wearing for those who have been vaccinated, all 46 00:02:49,160 --> 00:02:50,960 Speaker 1: of that is on a good path to get us 47 00:02:51,000 --> 00:02:53,480 Speaker 1: back to some semblance of normal. And I do think 48 00:02:53,480 --> 00:02:55,919 Speaker 1: people are going to feel more comfortable re engaging. I 49 00:02:56,560 --> 00:02:59,399 Speaker 1: am feeling more comfortable re engaging, and I think I'm 50 00:02:59,400 --> 00:03:02,280 Speaker 1: representing of others that you know, we have a reluctance. 51 00:03:02,320 --> 00:03:05,119 Speaker 1: But now as things continue on, and you know, we've 52 00:03:05,200 --> 00:03:08,400 Speaker 1: intellectualized the fact that we have gotten vaccinated and we 53 00:03:08,440 --> 00:03:11,440 Speaker 1: are protected, we're going to be more able and willing 54 00:03:11,480 --> 00:03:13,240 Speaker 1: to go out and re engage. And I think we're 55 00:03:13,240 --> 00:03:15,320 Speaker 1: going to see that, you know, over the rest of 56 00:03:15,360 --> 00:03:18,000 Speaker 1: the year. This is where I put in my plug 57 00:03:18,040 --> 00:03:20,000 Speaker 1: to come visit you in Cleveland and do the next 58 00:03:20,080 --> 00:03:23,360 Speaker 1: interview there. Uh, neither you or I have had a 59 00:03:23,360 --> 00:03:26,080 Speaker 1: real chance to dig into these retail sales numbers. But 60 00:03:26,120 --> 00:03:28,640 Speaker 1: the interesting thing about retail sales is they're reported in 61 00:03:28,760 --> 00:03:31,639 Speaker 1: dollar terms, and so one would have thought that there 62 00:03:31,680 --> 00:03:35,720 Speaker 1: would be a big impact from the April CPI numbers. Uh, 63 00:03:35,960 --> 00:03:38,720 Speaker 1: what was your reaction to that and the idea that 64 00:03:39,000 --> 00:03:45,240 Speaker 1: maybe inflation is accelerating more quickly than the Fed anticipated. Well, again, 65 00:03:45,320 --> 00:03:49,320 Speaker 1: I think we're seeing the clash between you know, kentup demand, 66 00:03:49,360 --> 00:03:53,320 Speaker 1: the surgeon demand, and some of the supply issues that 67 00:03:53,360 --> 00:03:56,760 Speaker 1: we're seeing. And coupled on, you know, with that also 68 00:03:56,840 --> 00:03:59,240 Speaker 1: is the fact that the month you know, year over 69 00:03:59,360 --> 00:04:03,760 Speaker 1: year number are really incorporating those very low inflation readings 70 00:04:03,760 --> 00:04:07,760 Speaker 1: we had um last year. As those you know, come 71 00:04:07,760 --> 00:04:10,600 Speaker 1: out of the numbers, we're gonna just seem mathematically inflation 72 00:04:10,640 --> 00:04:13,280 Speaker 1: going up. But no doubt, you know, we're seeing some 73 00:04:13,520 --> 00:04:17,760 Speaker 1: real supply constraints in particular areas. I think you were 74 00:04:17,800 --> 00:04:22,600 Speaker 1: mentioning lumber earlier. There's commodity prices, there's energy prices now 75 00:04:22,640 --> 00:04:25,719 Speaker 1: with the pipeline issue, so you're we're seeing those in 76 00:04:25,760 --> 00:04:29,440 Speaker 1: the inflation data. I think the real question for monetary 77 00:04:29,520 --> 00:04:32,880 Speaker 1: policy is is that gonna you know, abate over the 78 00:04:32,920 --> 00:04:36,039 Speaker 1: rest of the year as supply comes back on, as 79 00:04:36,080 --> 00:04:40,320 Speaker 1: some of the stimulus checks that people have um are 80 00:04:40,520 --> 00:04:42,720 Speaker 1: used up, and so I think we're gonna see that 81 00:04:42,800 --> 00:04:46,479 Speaker 1: play out. And my baseline scenario for inflation is that 82 00:04:46,520 --> 00:04:50,120 Speaker 1: we're gonna have high higher inflation this year above two percent. 83 00:04:50,680 --> 00:04:54,760 Speaker 1: But then as some of those constraints on supply ease UM, 84 00:04:54,800 --> 00:04:57,160 Speaker 1: I think we're gonna see inflation go back down and 85 00:04:57,200 --> 00:04:59,920 Speaker 1: we'll have to you know, monitor that as we go forward. 86 00:05:00,640 --> 00:05:04,800 Speaker 1: I'm really focused on inflation expectations because I think that 87 00:05:04,960 --> 00:05:07,880 Speaker 1: is really where you know, you'll begin to see if 88 00:05:07,920 --> 00:05:11,280 Speaker 1: those go up UM, and they're going up a little 89 00:05:11,279 --> 00:05:13,600 Speaker 1: bit now, we'll have to look to see whether longer 90 00:05:13,720 --> 00:05:16,640 Speaker 1: run expectations are going up, and that's really a key 91 00:05:16,680 --> 00:05:19,560 Speaker 1: to me in terms of you know, where inflation is 92 00:05:19,600 --> 00:05:24,720 Speaker 1: likely to go um over the longer run. Wall Street's 93 00:05:24,720 --> 00:05:27,760 Speaker 1: favorite drinking game is the word transitory with BEETE officials, 94 00:05:28,200 --> 00:05:31,440 Speaker 1: how do you define transitory? How long is it? When 95 00:05:31,440 --> 00:05:33,840 Speaker 1: would you know whether you're right or wrong about your 96 00:05:33,839 --> 00:05:38,000 Speaker 1: inflation forecast? Right? So again, I think transitory is a 97 00:05:38,120 --> 00:05:42,360 Speaker 1: word that was meant to convey whether those are supply 98 00:05:42,520 --> 00:05:45,919 Speaker 1: issues that will abate over time and that's what push 99 00:05:46,000 --> 00:05:49,000 Speaker 1: pushing up prices, or whether it really is in these 100 00:05:49,080 --> 00:05:53,760 Speaker 1: underlying inflation measures. So far, we don't see right much 101 00:05:53,839 --> 00:05:57,560 Speaker 1: impact on measures like the Cleveland Fits Median cp I 102 00:05:58,080 --> 00:06:00,719 Speaker 1: and other measures that really try to look at what 103 00:06:00,839 --> 00:06:03,680 Speaker 1: the trend in inflation is. And the key to that 104 00:06:03,839 --> 00:06:06,960 Speaker 1: is this real inflation expectations. So it really is going 105 00:06:07,000 --> 00:06:10,160 Speaker 1: to depend on how long it takes her supply conditions 106 00:06:10,200 --> 00:06:12,839 Speaker 1: to to ease and get back to normal, and that 107 00:06:12,880 --> 00:06:14,760 Speaker 1: could take some time. It's going to depend on what 108 00:06:14,880 --> 00:06:17,560 Speaker 1: commodity we're looking at. It's going to depend on what 109 00:06:17,720 --> 00:06:20,200 Speaker 1: part of the economy we're looking at. You know, we 110 00:06:20,320 --> 00:06:23,520 Speaker 1: all have talked about the chip you know shortage, that's 111 00:06:23,520 --> 00:06:25,440 Speaker 1: going to take some time. When we talk to our 112 00:06:26,120 --> 00:06:29,160 Speaker 1: um contacts in the auto industries, many of them are 113 00:06:29,200 --> 00:06:32,440 Speaker 1: saying it's gonna be six months to even nine months 114 00:06:32,520 --> 00:06:34,400 Speaker 1: for that to get back to normal. So some of 115 00:06:34,400 --> 00:06:38,960 Speaker 1: those transitory gives the impression of over and done very quickly. 116 00:06:39,080 --> 00:06:41,600 Speaker 1: I don't think that's what we'll see. I think some 117 00:06:41,680 --> 00:06:44,719 Speaker 1: of those are gonna last longer. But whether that gets 118 00:06:44,720 --> 00:06:48,799 Speaker 1: embedded in underlying inflation rates, which is what the FED 119 00:06:48,920 --> 00:06:52,320 Speaker 1: looks at, that's a different story. And that in that sense, 120 00:06:52,360 --> 00:06:55,400 Speaker 1: I think a lot of the supply conditions that are 121 00:06:55,400 --> 00:07:00,320 Speaker 1: pushing up inflation now will abate over time. Well, there's 122 00:07:00,320 --> 00:07:03,120 Speaker 1: definitely gonna be a staring contest between the Federal Reserve 123 00:07:03,240 --> 00:07:05,720 Speaker 1: and the people on trading guests on Wall Street over 124 00:07:05,720 --> 00:07:08,240 Speaker 1: the next couple of months we get this economic data. 125 00:07:08,839 --> 00:07:11,760 Speaker 1: Are you gonna be able to resist pressure from the 126 00:07:11,800 --> 00:07:16,320 Speaker 1: markets if they see concern about inflation and start raising rates. 127 00:07:16,600 --> 00:07:19,320 Speaker 1: I'm sure you'll tell me yes, you can. But traders 128 00:07:19,360 --> 00:07:23,240 Speaker 1: also remember December of two thousand eighteen. You know, we 129 00:07:23,400 --> 00:07:28,080 Speaker 1: have been very clear, I hope in UM telling everyone 130 00:07:28,200 --> 00:07:31,240 Speaker 1: sort of our strategy and the fact that we want 131 00:07:31,240 --> 00:07:34,680 Speaker 1: to see right it in the data. We want to 132 00:07:35,040 --> 00:07:38,600 Speaker 1: not just based our our policy actions on what we 133 00:07:38,720 --> 00:07:41,600 Speaker 1: project is going to be happening, but also seeing it 134 00:07:43,360 --> 00:07:46,240 Speaker 1: really in the data. And I think that's a really 135 00:07:46,240 --> 00:07:49,440 Speaker 1: good strategy for times like this where you have demand 136 00:07:49,560 --> 00:07:54,000 Speaker 1: and supply factors clashing and coming together and the outcomes 137 00:07:54,000 --> 00:07:56,000 Speaker 1: and the data. So again, you know, I think we're 138 00:07:56,000 --> 00:08:00,640 Speaker 1: gonna be looking at outcomes are forward GUIDs tells us, 139 00:08:00,840 --> 00:08:04,520 Speaker 1: you know, tells the markets and the public where what 140 00:08:04,560 --> 00:08:07,600 Speaker 1: we're looking at we want to see inflation go up, 141 00:08:08,000 --> 00:08:10,040 Speaker 1: and we want to see it be on track to 142 00:08:10,120 --> 00:08:13,600 Speaker 1: go above two percent um and that's you know, what 143 00:08:13,600 --> 00:08:16,280 Speaker 1: we're going to be looking at and basing our inflation 144 00:08:16,360 --> 00:08:18,280 Speaker 1: on the inflation side, and we want to get back 145 00:08:18,320 --> 00:08:22,440 Speaker 1: to maximum employment. You know, we still are in spite 146 00:08:22,480 --> 00:08:25,400 Speaker 1: of the pretty good labor market data we've gotten over 147 00:08:25,440 --> 00:08:28,640 Speaker 1: the past several months. Despite last month's a little bit 148 00:08:28,720 --> 00:08:33,120 Speaker 1: disappointment in that report, we're still making progress on the 149 00:08:33,200 --> 00:08:37,960 Speaker 1: labor market side. But right again, supply issues are affecting 150 00:08:37,960 --> 00:08:41,320 Speaker 1: those numbers too, and you know, we have to sort 151 00:08:41,360 --> 00:08:44,280 Speaker 1: of continue on the path we're on until we get 152 00:08:44,280 --> 00:08:47,800 Speaker 1: more people back into the labor market um and more 153 00:08:47,800 --> 00:08:51,160 Speaker 1: progress towards our goals. So again, I think we're seeing 154 00:08:51,200 --> 00:08:55,040 Speaker 1: this play out in both labor markets and product markets, 155 00:08:55,440 --> 00:08:57,440 Speaker 1: and the FED is just going to be focused on 156 00:08:57,480 --> 00:09:00,520 Speaker 1: outcomes to see that, you know, and Greek calibrate our 157 00:09:00,960 --> 00:09:04,680 Speaker 1: policy appropriately to the outcomes. What you're saying about the 158 00:09:04,679 --> 00:09:08,200 Speaker 1: employment report, um, do you have a read on what 159 00:09:08,360 --> 00:09:11,360 Speaker 1: happened there? Do you think that, uh, the enhanced unemployment 160 00:09:11,360 --> 00:09:14,880 Speaker 1: benefits play a major role, is a lot of least 161 00:09:14,920 --> 00:09:19,360 Speaker 1: politicians thing. So I think a lot of things that 162 00:09:19,360 --> 00:09:21,840 Speaker 1: are going on in the labor markets still reflects some 163 00:09:22,040 --> 00:09:24,720 Speaker 1: moneys that we were talking about earlier in terms of 164 00:09:24,760 --> 00:09:27,720 Speaker 1: re engaging. And I also believe that the and we 165 00:09:27,800 --> 00:09:30,320 Speaker 1: hear this from our context all the time, the childcare 166 00:09:31,000 --> 00:09:35,600 Speaker 1: school reopening that is affecting the labor markets. I think 167 00:09:36,160 --> 00:09:38,800 Speaker 1: people are making decisions based on those things, but the 168 00:09:38,840 --> 00:09:42,400 Speaker 1: fact that they have the unemployment benefits gives them the 169 00:09:42,440 --> 00:09:46,120 Speaker 1: financial wherewithal to actually be making those decisions, whereas in 170 00:09:46,120 --> 00:09:48,959 Speaker 1: the past they may not have been able to make 171 00:09:49,040 --> 00:09:52,000 Speaker 1: the decision they would like to meet be able to 172 00:09:52,080 --> 00:09:54,760 Speaker 1: meet make because they didn't have the wherewithals. So in 173 00:09:54,760 --> 00:09:58,120 Speaker 1: that sense, it's interacting. But I think the main drivers 174 00:09:58,200 --> 00:10:02,920 Speaker 1: are these other considerations in terms of the virus and schools, 175 00:10:02,960 --> 00:10:04,840 Speaker 1: and that's why I think we're going to see some 176 00:10:04,960 --> 00:10:08,880 Speaker 1: of that downward pressure on labor supply abate too over time, 177 00:10:08,880 --> 00:10:11,640 Speaker 1: because I think as schools reopened, as people get more 178 00:10:11,679 --> 00:10:16,400 Speaker 1: comfortable with the vaccinations being widely distributed, I think people 179 00:10:16,400 --> 00:10:19,160 Speaker 1: will feel more comfortable coming back into the labor market, 180 00:10:19,520 --> 00:10:21,720 Speaker 1: and we're gonna be watching for that. I certainly will 181 00:10:21,760 --> 00:10:24,080 Speaker 1: be watching for that. Um as we go through the 182 00:10:24,080 --> 00:10:27,719 Speaker 1: rest of the year. Let me ask you this, A 183 00:10:27,840 --> 00:10:30,720 Speaker 1: number of people, including your former colleague Bill Dadley, the 184 00:10:30,760 --> 00:10:34,199 Speaker 1: former President of the New York Fed have been speculating 185 00:10:34,280 --> 00:10:38,480 Speaker 1: lately that the economy could rebound more quickly and more 186 00:10:38,520 --> 00:10:41,840 Speaker 1: strongly than people anticipated, and that by the time you 187 00:10:41,880 --> 00:10:45,200 Speaker 1: get around to looking at actual realized data, you will 188 00:10:45,240 --> 00:10:49,280 Speaker 1: have passed maximum employment and the inflation danger will rise, 189 00:10:49,400 --> 00:10:51,760 Speaker 1: and then you're gonna have to raise rates farther and 190 00:10:51,880 --> 00:10:56,320 Speaker 1: faster than you thought. What's your view on that? So, 191 00:10:56,360 --> 00:10:58,440 Speaker 1: I think, you know, we are going to be watching 192 00:10:58,600 --> 00:11:02,920 Speaker 1: very closely how the economy and the recovery evolves over 193 00:11:02,960 --> 00:11:05,760 Speaker 1: the year UM as we get more data in so 194 00:11:06,360 --> 00:11:11,400 Speaker 1: and we're guided by our our dual mandate goals progress 195 00:11:11,440 --> 00:11:15,040 Speaker 1: towards there's goals. So yes, there's you know, uncertainty around 196 00:11:15,040 --> 00:11:17,760 Speaker 1: the outlook, there's risks around the outlook. Things could you know, 197 00:11:17,800 --> 00:11:21,080 Speaker 1: pick up faster than we anticipate, Things could go slower 198 00:11:21,120 --> 00:11:24,439 Speaker 1: than we anticipate, and we're prepared for that. I think 199 00:11:24,440 --> 00:11:26,960 Speaker 1: we're in a good place right now with our policy, 200 00:11:27,040 --> 00:11:29,720 Speaker 1: and we're going to adjust it as appropriate depending on 201 00:11:29,800 --> 00:11:34,400 Speaker 1: how the actual recovery um progressive. So that's why this is, 202 00:11:34,480 --> 00:11:36,840 Speaker 1: you know, not the time to really be adjusting anything 203 00:11:36,840 --> 00:11:39,680 Speaker 1: on policy. It really is a time for watchful waiting 204 00:11:40,120 --> 00:11:42,959 Speaker 1: seeing how the recovery evolved, seeing how some of this 205 00:11:43,120 --> 00:11:47,480 Speaker 1: apply constraints dissipate or not seeing what happens on the 206 00:11:47,559 --> 00:11:51,320 Speaker 1: labor side, um and keeping focused on our dual mandate goals. 207 00:11:51,320 --> 00:11:54,760 Speaker 1: So you know, I understand where bills coming from. I 208 00:11:54,800 --> 00:11:57,000 Speaker 1: think the way I would what would I would say 209 00:11:57,000 --> 00:12:01,920 Speaker 1: in responses. We're well positioned now for upside and downside risks, 210 00:12:01,960 --> 00:12:03,960 Speaker 1: and we're just gonna have to be patient where we 211 00:12:04,000 --> 00:12:06,880 Speaker 1: are now and wait a little bit a little bit 212 00:12:06,960 --> 00:12:10,040 Speaker 1: longer looking at the data to see where this recovery 213 00:12:10,120 --> 00:12:13,400 Speaker 1: is going. But I'm very I have a positive outlook. 214 00:12:13,440 --> 00:12:15,760 Speaker 1: I think the outlook is bright. I just think that 215 00:12:15,880 --> 00:12:20,160 Speaker 1: we need to let it continue on a little bit longer, because, 216 00:12:20,200 --> 00:12:22,720 Speaker 1: you know, opening up the economy after such a deep, 217 00:12:22,840 --> 00:12:28,040 Speaker 1: deep UH shocked downward right is proving to be you know, 218 00:12:28,120 --> 00:12:30,640 Speaker 1: there's some some stumbles along the way, and I think 219 00:12:30,679 --> 00:12:33,920 Speaker 1: we should have expected that, and I think that's what 220 00:12:33,960 --> 00:12:36,880 Speaker 1: we're seeing in the data right now. Well, let me 221 00:12:36,880 --> 00:12:38,880 Speaker 1: ask you one last quick question. Do you think it's 222 00:12:38,880 --> 00:12:42,160 Speaker 1: a foregone conclusion that when you finally talk about or 223 00:12:42,320 --> 00:12:45,439 Speaker 1: talk about talk about UH tapering, that you're going to 224 00:12:45,520 --> 00:12:47,319 Speaker 1: get a taper tantrum that the markets are going to 225 00:12:47,360 --> 00:12:49,800 Speaker 1: try to reprice immediately and we're going to have a 226 00:12:49,840 --> 00:12:54,440 Speaker 1: market disruption. Well, I mean, obviously that would not be 227 00:12:54,480 --> 00:12:57,559 Speaker 1: a good outcome. I think we've been very clear and 228 00:12:57,640 --> 00:13:00,320 Speaker 1: Share Palace been very clear that we are going to 229 00:13:00,400 --> 00:13:06,400 Speaker 1: be communicating well in advance UM what our policy stance 230 00:13:06,600 --> 00:13:09,760 Speaker 1: is and where it's going. And my hope is that 231 00:13:10,360 --> 00:13:14,000 Speaker 1: UM will be articulate enough UM and explain enough our 232 00:13:14,120 --> 00:13:18,720 Speaker 1: rationales and and our UM expectations that we will avoid 233 00:13:18,960 --> 00:13:23,000 Speaker 1: the worst UM in terms of the financial markets. I mean, 234 00:13:23,080 --> 00:13:27,360 Speaker 1: bolatil and financial markets is what financial markets are. UM. 235 00:13:27,440 --> 00:13:29,720 Speaker 1: We just want to make sure that you know, we're 236 00:13:29,720 --> 00:13:33,439 Speaker 1: communicating as best we can our rationales and our approach 237 00:13:33,520 --> 00:13:36,280 Speaker 1: to policy. And you know, we'll just have to wait 238 00:13:36,320 --> 00:13:40,160 Speaker 1: and see how how well we do that. Laura Best, 239 00:13:40,360 --> 00:13:42,760 Speaker 1: the President of the Federal Reserve Bank of Cleveland, thank 240 00:13:42,800 --> 00:13:45,360 Speaker 1: you very much for joining us this morning here on 241 00:13:45,400 --> 00:13:51,200 Speaker 1: Bloomberg Radio and television worldwide. Fantastic Marchael McKay that with 242 00:13:51,240 --> 00:13:54,280 Speaker 1: President Mesta, always right to hit from President Mesta as well. 243 00:14:01,360 --> 00:14:03,200 Speaker 1: Let me get onto our next guest, because she is 244 00:14:03,320 --> 00:14:06,240 Speaker 1: very valuable. There are economists to come on here and 245 00:14:06,240 --> 00:14:09,840 Speaker 1: they warble gaily. And there are very few, I think 246 00:14:09,920 --> 00:14:15,400 Speaker 1: John Taylor of Stanford University who actually have a Bloomberg function. 247 00:14:15,880 --> 00:14:18,760 Speaker 1: Claudius Sam is one of our great thinkers, and she 248 00:14:18,960 --> 00:14:22,240 Speaker 1: nailed the recession mathematics a number of years ago at 249 00:14:22,240 --> 00:14:24,760 Speaker 1: the FED. And there is the some rule which you 250 00:14:24,760 --> 00:14:28,560 Speaker 1: could find on the Bloomberg which shows a horrific recession 251 00:14:28,960 --> 00:14:31,920 Speaker 1: of this instant pandemic. And then out we came to 252 00:14:32,080 --> 00:14:36,000 Speaker 1: a better America. Except Claudia Sam and said, wait a minute. 253 00:14:36,160 --> 00:14:39,600 Speaker 1: The inequality that out there is tangible. Claudia, I want 254 00:14:39,600 --> 00:14:42,120 Speaker 1: to get to the inequalities right now, and I want 255 00:14:42,120 --> 00:14:44,520 Speaker 1: to get to what all case say from John Edwards 256 00:14:44,720 --> 00:14:48,480 Speaker 1: is three America's you got an elite boom. You've got 257 00:14:48,560 --> 00:14:51,440 Speaker 1: McDonald's and the rest of them telling us Amazon they're 258 00:14:51,440 --> 00:14:54,480 Speaker 1: gonna hire low wage at a higher wage. And then 259 00:14:54,480 --> 00:14:57,080 Speaker 1: there's the rest of America. How do we pull them 260 00:14:57,120 --> 00:15:02,760 Speaker 1: into the dialogue? Right This is absolutely the right question 261 00:15:02,800 --> 00:15:06,080 Speaker 1: to be asking right now, because we have not in 262 00:15:06,120 --> 00:15:10,680 Speaker 1: the past any good job policymakers getting a recovery for everyone. 263 00:15:11,320 --> 00:15:13,280 Speaker 1: Up to this point. We've seen a lot of messaging, 264 00:15:13,320 --> 00:15:15,440 Speaker 1: We've seen a lot of actions by Congress with the 265 00:15:15,480 --> 00:15:18,320 Speaker 1: Rescue Plan, the FED with their new framework to say, 266 00:15:18,320 --> 00:15:21,680 Speaker 1: we're going to fight for those people, to get everybody back, 267 00:15:21,760 --> 00:15:25,520 Speaker 1: particularly those from minoritized groups. But we got to see it, 268 00:15:25,680 --> 00:15:28,720 Speaker 1: and what you see right now are the other two groups, 269 00:15:29,120 --> 00:15:33,320 Speaker 1: the elite, the wealthy and the large corporations, making a 270 00:15:33,360 --> 00:15:35,960 Speaker 1: lot of noise that they need to be taken care of, 271 00:15:36,000 --> 00:15:39,760 Speaker 1: and not those at the bottom, Claudia. Within the three Americas, 272 00:15:39,840 --> 00:15:42,480 Speaker 1: there's the idea of yeah, we get back, We're gonna 273 00:15:42,480 --> 00:15:46,000 Speaker 1: be fully employed, fully employed, four percent unemployment rate, whatever 274 00:15:46,040 --> 00:15:50,000 Speaker 1: the number is. That math doesn't compute. If we have 275 00:15:50,120 --> 00:15:53,960 Speaker 1: so many people left aside because of technology, because of 276 00:15:54,080 --> 00:15:58,200 Speaker 1: education in the last twenty or thirty years, what's the 277 00:15:58,360 --> 00:16:02,520 Speaker 1: program to actually pull them from a modern welfare state, 278 00:16:02,600 --> 00:16:06,240 Speaker 1: however you want to call it into an actual productivity 279 00:16:06,280 --> 00:16:12,640 Speaker 1: for America? Right? Well, are people are our most valuable asset, 280 00:16:12,680 --> 00:16:15,000 Speaker 1: the thing that we should be investing in, and that's 281 00:16:15,040 --> 00:16:19,000 Speaker 1: where and our infrastructure, right so physical infrastructure, invest in 282 00:16:19,000 --> 00:16:22,240 Speaker 1: our people. We have two proposals going to Congress in 283 00:16:22,600 --> 00:16:25,120 Speaker 1: varying forms, like there's so much we can do in 284 00:16:25,200 --> 00:16:27,520 Speaker 1: terms of investing in people and families in the next 285 00:16:27,560 --> 00:16:31,200 Speaker 1: generation and our physical infrastructure. Those are the kind of 286 00:16:31,240 --> 00:16:33,400 Speaker 1: things we need to do now, like we have to 287 00:16:33,440 --> 00:16:36,200 Speaker 1: fight this recession. But it is not good enough to 288 00:16:36,240 --> 00:16:38,760 Speaker 1: get back to pre COVID because pre COVID there were 289 00:16:38,760 --> 00:16:41,640 Speaker 1: a lot of problems and frankly, our productivity as a 290 00:16:41,720 --> 00:16:44,280 Speaker 1: country had slowed down. I mean we were all suffering, 291 00:16:44,920 --> 00:16:47,880 Speaker 1: and some were suffering even more. And we can fix 292 00:16:47,960 --> 00:16:51,120 Speaker 1: that with good policy and a lot of push from 293 00:16:51,320 --> 00:16:53,520 Speaker 1: markets too. I mean, the private sector has a big 294 00:16:53,600 --> 00:16:57,560 Speaker 1: role to play. Also, Claudia, the complexity of productivity. And 295 00:16:57,640 --> 00:16:59,960 Speaker 1: I really try, Claudia on a Friday not to talk 296 00:17:00,040 --> 00:17:03,120 Speaker 1: about productivity. But I'll dive off the deep end here 297 00:17:03,680 --> 00:17:07,240 Speaker 1: on productivity. It is about this strange m I t 298 00:17:07,520 --> 00:17:13,280 Speaker 1: solo word technology. Are we less productive because we're overwhelmed 299 00:17:13,760 --> 00:17:17,400 Speaker 1: by not the negative but just the realities of our 300 00:17:17,440 --> 00:17:22,320 Speaker 1: modern technology. So I don't want to point paint that 301 00:17:22,520 --> 00:17:26,960 Speaker 1: dark of a picture. I will say, you know, productivity 302 00:17:27,000 --> 00:17:29,000 Speaker 1: is the sum of what we do not know. Right 303 00:17:29,160 --> 00:17:32,560 Speaker 1: is very hard to measure. It's very hard to really 304 00:17:32,600 --> 00:17:35,080 Speaker 1: say where we're at and why it's slowed down. But 305 00:17:35,200 --> 00:17:41,320 Speaker 1: we do know that education helping workers have stable lives, 306 00:17:41,359 --> 00:17:45,439 Speaker 1: economic security, job ladders, right, Like, it's not even if 307 00:17:45,480 --> 00:17:48,840 Speaker 1: we can't see it in the GDP data, Like, that's real, 308 00:17:48,920 --> 00:17:51,480 Speaker 1: that matters to people. So I don't want to like 309 00:17:51,560 --> 00:17:54,160 Speaker 1: technology has always been with us, Automation has always been 310 00:17:54,200 --> 00:17:56,679 Speaker 1: with us. That's not an excuse to throw in the 311 00:17:56,760 --> 00:18:00,560 Speaker 1: towel here, Claudia, you're every Republican leaders worst nightmare. They 312 00:18:00,560 --> 00:18:02,760 Speaker 1: won't they won't talk to you, They hang up the phone. 313 00:18:02,800 --> 00:18:05,360 Speaker 1: They call hello, the Jane Family Institute. But we don't 314 00:18:05,400 --> 00:18:09,040 Speaker 1: want to talk to that wacko economists. Okay, but are 315 00:18:09,080 --> 00:18:13,080 Speaker 1: the people of the Republican Party in sync with their 316 00:18:13,200 --> 00:18:16,879 Speaker 1: leaders or do you buy what's percolating in Washington that 317 00:18:17,000 --> 00:18:22,160 Speaker 1: President Biden can get societal support of Republicans even if 318 00:18:22,200 --> 00:18:26,240 Speaker 1: he doesn't get the leadership support. Yeah, well, I will 319 00:18:26,280 --> 00:18:29,640 Speaker 1: say I talked to Republican voters every day. That being parently, 320 00:18:30,920 --> 00:18:33,479 Speaker 1: I grew up in Indiana. I'm not a political person. 321 00:18:33,840 --> 00:18:36,639 Speaker 1: I do think we need to have policy in an 322 00:18:36,640 --> 00:18:39,400 Speaker 1: economy that works for everyone, but frankly, that is not 323 00:18:39,560 --> 00:18:42,359 Speaker 1: like that's what everybody wants in the United States. There 324 00:18:42,359 --> 00:18:44,200 Speaker 1: are big debates about how to do it best and 325 00:18:44,280 --> 00:18:47,400 Speaker 1: what the role of government versus an old individuals are. 326 00:18:47,520 --> 00:18:51,000 Speaker 1: But I think this is one where we the politics 327 00:18:51,080 --> 00:18:55,040 Speaker 1: that are just crushing work in Congress, in the administration 328 00:18:55,080 --> 00:18:58,480 Speaker 1: and have for decades. This is a real disservice to 329 00:18:58,560 --> 00:19:00,600 Speaker 1: the American people. And I try and am I Lane 330 00:19:00,640 --> 00:19:03,480 Speaker 1: on the economics and not the politics. But it's it's 331 00:19:03,560 --> 00:19:05,919 Speaker 1: it's hard to watch. It's a Brea exclusive, folks, it's 332 00:19:05,920 --> 00:19:10,280 Speaker 1: a surveillance break exclusive here this morning, Claudius Um speaks 333 00:19:10,320 --> 00:19:14,640 Speaker 1: to members of the GOP. It's an extraordinary mom mclaude. 334 00:19:14,680 --> 00:19:16,880 Speaker 1: I want to go back to University of Michigan where 335 00:19:16,880 --> 00:19:19,080 Speaker 1: you took your PhD. It's really been one of our 336 00:19:19,119 --> 00:19:23,840 Speaker 1: hotbeds of inflation and research. What is your observation on 337 00:19:23,920 --> 00:19:29,280 Speaker 1: the fear, the worry, the angst, the pendulum of inflation. Yes, 338 00:19:29,440 --> 00:19:31,280 Speaker 1: I feel like we all just got a step back 339 00:19:31,280 --> 00:19:34,280 Speaker 1: and take a deep breath. Right, there's been a way 340 00:19:34,400 --> 00:19:36,919 Speaker 1: too much attention to the last set of data points, 341 00:19:36,960 --> 00:19:40,560 Speaker 1: whether it's jobs or inflation or today retail sales. Right, 342 00:19:40,600 --> 00:19:43,600 Speaker 1: we have a twenty one trillion dollar economy. We have 343 00:19:43,920 --> 00:19:47,160 Speaker 1: really tried to push it intentionally to get people back 344 00:19:47,240 --> 00:19:49,840 Speaker 1: to work and back on track. This is exactly what 345 00:19:49,880 --> 00:19:53,280 Speaker 1: we said was going to happen, right, Like, you can't 346 00:19:53,600 --> 00:19:57,840 Speaker 1: get all excited about a historic forecast myths or like 347 00:19:58,000 --> 00:20:01,040 Speaker 1: numbers are coming bigger than we thought because this world, 348 00:20:01,160 --> 00:20:03,560 Speaker 1: like the entire last year. I mean, remember last year, 349 00:20:03,560 --> 00:20:06,560 Speaker 1: they were all way worse than we expected. Right, So 350 00:20:06,600 --> 00:20:09,520 Speaker 1: I think there's just we're losing context. And I get it. 351 00:20:09,520 --> 00:20:13,400 Speaker 1: It's scary, it's uncertain. But if you look at especially 352 00:20:13,440 --> 00:20:17,560 Speaker 1: I look at the consumer expectations numbers, I mean, people 353 00:20:18,040 --> 00:20:20,720 Speaker 1: they don't like inflation, this is true, but they will 354 00:20:20,760 --> 00:20:24,560 Speaker 1: tolerated to a moderate level like three. This is not 355 00:20:24,680 --> 00:20:27,640 Speaker 1: as long as wages are rising. But what is really 356 00:20:27,840 --> 00:20:30,640 Speaker 1: really hard is not to have a job very great, 357 00:20:30,720 --> 00:20:32,960 Speaker 1: So we have to keep it in balance. I'm running 358 00:20:33,000 --> 00:20:35,800 Speaker 1: out of time, Claudia, but very quickly. Here is the 359 00:20:35,920 --> 00:20:39,280 Speaker 1: argument of corporations that they've got to pay sixteen seventeen 360 00:20:39,320 --> 00:20:42,639 Speaker 1: dollars an hour going to overwhelm the Deep South that 361 00:20:42,720 --> 00:20:47,560 Speaker 1: wants to pay seven dollars an hour. So there's gonna 362 00:20:47,600 --> 00:20:50,200 Speaker 1: be a lot of adjustments in the labor market coming 363 00:20:50,200 --> 00:20:53,280 Speaker 1: out of this. Again, we're a dynamic economy and it's 364 00:20:53,359 --> 00:20:56,040 Speaker 1: so different across the country. But right now there's a 365 00:20:56,080 --> 00:20:57,920 Speaker 1: lot of talk and we just have to. I mean, 366 00:20:57,960 --> 00:21:00,640 Speaker 1: these are business decisions. This is not something we can 367 00:21:00,680 --> 00:21:03,560 Speaker 1: fine tune from Washington, d C. We've got to leave 368 00:21:03,560 --> 00:21:05,600 Speaker 1: it there. Clodius, I'm thank you so much with the 369 00:21:05,720 --> 00:21:15,399 Speaker 1: Jane Family Institute and their senior fellow today let's go 370 00:21:15,440 --> 00:21:17,280 Speaker 1: to this right now. We are thrilled to bring you 371 00:21:17,320 --> 00:21:20,439 Speaker 1: a Craig Moffatt, Michael Nathanson. Moffatt Nathanson. Of course for 372 00:21:20,520 --> 00:21:23,960 Speaker 1: decades at Sanford at Bernstein, they are definitive on what 373 00:21:24,040 --> 00:21:26,919 Speaker 1: we do in our houses and what we watch and 374 00:21:26,960 --> 00:21:29,240 Speaker 1: when we watch it. Michael Nathan said, let me go 375 00:21:29,280 --> 00:21:31,080 Speaker 1: to you first. On Disney. I know, John's got a 376 00:21:31,080 --> 00:21:33,919 Speaker 1: bunch of questions to to me, it was just simply 377 00:21:33,960 --> 00:21:37,399 Speaker 1: they didn't have Mandalorian too. How much did Disney and 378 00:21:37,480 --> 00:21:43,240 Speaker 1: Mr Chpeck miss Baby Grow Goo? They missed by about 379 00:21:43,320 --> 00:21:46,880 Speaker 1: five to six million subs, and in the New Disney 380 00:21:47,480 --> 00:21:50,960 Speaker 1: that really matters. So it's you know, it's perverse, but 381 00:21:51,119 --> 00:21:55,000 Speaker 1: they crushed every other number but Disney plus subs, And 382 00:21:55,160 --> 00:21:57,600 Speaker 1: unfortunately that's what happens on the stock trades. The way 383 00:21:57,640 --> 00:21:59,040 Speaker 1: it does. I mean, it's the way it is, and 384 00:21:59,119 --> 00:22:01,240 Speaker 1: it's a battle out there. Craig Moffatt you've been doing 385 00:22:01,240 --> 00:22:04,200 Speaker 1: this year is particularly the cabling of it, the routing 386 00:22:04,240 --> 00:22:06,359 Speaker 1: of it, and what we do with our checks. What's 387 00:22:06,400 --> 00:22:09,719 Speaker 1: the theme for you, Craig Moffitt right now into the 388 00:22:09,760 --> 00:22:13,280 Speaker 1: summer in the streaming wars. Well, you know, as much 389 00:22:13,320 --> 00:22:18,000 Speaker 1: as the streaming wars dominate the video side of it. 390 00:22:19,040 --> 00:22:21,159 Speaker 1: The companies that I cover, especially A T and T 391 00:22:21,520 --> 00:22:24,159 Speaker 1: and Verizon, you can talk about media for them if 392 00:22:24,200 --> 00:22:27,040 Speaker 1: you want, but fundamentally it's about It's about the wireless 393 00:22:27,080 --> 00:22:30,880 Speaker 1: business and UM while streaming is sort of a benefit 394 00:22:30,960 --> 00:22:33,720 Speaker 1: that they give away for free, the real battle is 395 00:22:33,720 --> 00:22:36,960 Speaker 1: going to be on networks, capital investment. In five G 396 00:22:37,840 --> 00:22:40,359 Speaker 1: you mentioned capital investment. I don't need to know. We 397 00:22:40,359 --> 00:22:43,679 Speaker 1: don't have time now for a treatment on Verizon. But 398 00:22:43,880 --> 00:22:47,960 Speaker 1: are the traditional companies Craig Moffat, that you follow done 399 00:22:48,119 --> 00:22:51,520 Speaker 1: pretending that they can be the companies that Michael Nathanson follows. 400 00:22:52,440 --> 00:22:55,200 Speaker 1: Not entirely. A T and T is making a good 401 00:22:55,359 --> 00:22:58,840 Speaker 1: go of it for for HBO Max for example. You know, 402 00:22:58,880 --> 00:23:02,080 Speaker 1: the problem is all of HBO combined is less than 403 00:23:02,080 --> 00:23:04,440 Speaker 1: four percent of A T and T. So well, it's 404 00:23:04,440 --> 00:23:06,919 Speaker 1: a good story. Fundamentally, it's it's it's got to be 405 00:23:06,920 --> 00:23:09,480 Speaker 1: about other businesses for them, because I'm just trying to 406 00:23:09,520 --> 00:23:12,720 Speaker 1: work out Disney Company has done nothing. Oh yeah, the 407 00:23:12,760 --> 00:23:15,840 Speaker 1: stock has done absolutely nothing after a huge move into 408 00:23:15,960 --> 00:23:20,080 Speaker 1: year end. Well, John, we had those two huge moves 409 00:23:20,160 --> 00:23:22,119 Speaker 1: and it went to a level that you had to 410 00:23:22,160 --> 00:23:25,320 Speaker 1: do all this fancy math. Some of the parts priced 411 00:23:25,359 --> 00:23:28,879 Speaker 1: to sells multiples to justify where it was, and everyone 412 00:23:28,880 --> 00:23:30,720 Speaker 1: who had a chance to buy it after the investor 413 00:23:30,800 --> 00:23:33,439 Speaker 1: day they did and there was not you know, they 414 00:23:33,480 --> 00:23:35,760 Speaker 1: were not buyers at that level. And you're right, you know, 415 00:23:35,880 --> 00:23:38,080 Speaker 1: we were neutral on the stock. We thought it had 416 00:23:38,240 --> 00:23:41,800 Speaker 1: overshot valuation, and now we think it's gonna grownd lower 417 00:23:41,800 --> 00:23:43,880 Speaker 1: and there'll be at some point we've become constructive on it. 418 00:23:44,440 --> 00:23:46,840 Speaker 1: But we had a hard time looking at thinks some 419 00:23:46,920 --> 00:23:49,879 Speaker 1: of the parts. Right, we're earnings and cashul analysts, and 420 00:23:49,920 --> 00:23:52,120 Speaker 1: we thought, look, let's just wait for a better entry point, 421 00:23:52,160 --> 00:23:54,280 Speaker 1: which I think is gonna happen. Well, let's talk about 422 00:23:54,280 --> 00:23:56,679 Speaker 1: what drives that better entry point. Michael, what do you 423 00:23:56,680 --> 00:23:58,360 Speaker 1: think it is? What's the cantalyst for a move live 424 00:23:58,440 --> 00:24:02,200 Speaker 1: from here? Well, I think it's some of the air 425 00:24:02,240 --> 00:24:05,919 Speaker 1: coming out of the evaluation on on Disney Plus. Right. 426 00:24:06,000 --> 00:24:10,720 Speaker 1: The people were using ten times revenues on to get 427 00:24:10,760 --> 00:24:14,040 Speaker 1: to a Disney Plus number. Right. So I think Disney 428 00:24:14,080 --> 00:24:16,159 Speaker 1: Plus has been a great story, but one third the 429 00:24:16,160 --> 00:24:18,760 Speaker 1: subscriber base has come from India with an are proved 430 00:24:18,800 --> 00:24:21,359 Speaker 1: less than a dollar, right, So you need to you 431 00:24:21,359 --> 00:24:24,159 Speaker 1: need to be cautious on how quickly you want to 432 00:24:24,200 --> 00:24:26,800 Speaker 1: give it a Netflix status on evaluation, and that's been 433 00:24:26,800 --> 00:24:30,120 Speaker 1: our point. So I think it's just more focus on, 434 00:24:30,440 --> 00:24:32,439 Speaker 1: you know, what's the dination Disney Plus. It's been a 435 00:24:32,440 --> 00:24:35,840 Speaker 1: great story, but it's probably not worth two llion dollars today. 436 00:24:36,280 --> 00:24:38,120 Speaker 1: The problem with you guys, as we spend all our 437 00:24:38,119 --> 00:24:40,520 Speaker 1: time our love with Michael natesans is because it's romantic 438 00:24:40,560 --> 00:24:42,640 Speaker 1: to talk about Disney and all that. Craig, you get 439 00:24:42,680 --> 00:24:45,320 Speaker 1: no love. I'm going to Craig Moffitt right now, folks 440 00:24:45,520 --> 00:24:48,439 Speaker 1: on the boredom of my cell phone bill, T Mobile 441 00:24:48,560 --> 00:24:52,000 Speaker 1: and all that. The biggest unseid success Craig Moffitt in 442 00:24:52,040 --> 00:24:55,479 Speaker 1: decades has been Legare and T Mobile. Does T Mobile 443 00:24:55,560 --> 00:25:02,680 Speaker 1: continue to crush American cell phone competitors? Yeah, flat answer, guests, Um, 444 00:25:02,880 --> 00:25:05,400 Speaker 1: you know, we think about it. This is a company 445 00:25:05,440 --> 00:25:09,720 Speaker 1: that has been priced six percent below A T and 446 00:25:09,760 --> 00:25:12,560 Speaker 1: T and Verizon in their consumer prices for for cell 447 00:25:12,560 --> 00:25:15,920 Speaker 1: phone service for years, in large part because their network 448 00:25:16,080 --> 00:25:18,840 Speaker 1: wasn't as good. Now we're going into the five G 449 00:25:19,040 --> 00:25:21,480 Speaker 1: cycle where not only are they cheaper, but they're gonna 450 00:25:21,480 --> 00:25:23,440 Speaker 1: have the best network of any of the three of them, 451 00:25:23,560 --> 00:25:26,840 Speaker 1: and it's kind of worse to first. Stories are very 452 00:25:26,960 --> 00:25:29,400 Speaker 1: rare in American business, and when you find them, they're 453 00:25:29,480 --> 00:25:32,600 Speaker 1: really exciting. Did they sustain that? Can they stay first? 454 00:25:32,600 --> 00:25:34,560 Speaker 1: I mean you look at T Mobile as a premium 455 00:25:34,600 --> 00:25:38,880 Speaker 1: and sustainable cash flow, Yeah, because I mean, telecom cycles 456 00:25:38,920 --> 00:25:41,160 Speaker 1: are not one and two years long. You don't build 457 00:25:41,160 --> 00:25:43,280 Speaker 1: a network in a couple of years and then somebody 458 00:25:43,280 --> 00:25:46,320 Speaker 1: passes you a year or so later. These are ten 459 00:25:46,400 --> 00:25:48,760 Speaker 1: and twenty year cycles. And so we're going into the 460 00:25:48,800 --> 00:25:51,240 Speaker 1: five G cycle. It's coming to last well more than 461 00:25:51,280 --> 00:25:55,480 Speaker 1: a decade um where T Mobile takes a a sustainable 462 00:25:55,560 --> 00:25:58,480 Speaker 1: early advantage and likely holds it for a decade. So 463 00:25:59,560 --> 00:26:02,040 Speaker 1: they're in years into this cycle already, and they've got 464 00:26:02,040 --> 00:26:04,399 Speaker 1: another ten years in front of them, you know, Michael Nasans, 465 00:26:04,440 --> 00:26:06,000 Speaker 1: and I gotta bring it back to you. I guess 466 00:26:06,040 --> 00:26:10,200 Speaker 1: everybody's still changing. Netflix. They had the huge success MAK 467 00:26:10,359 --> 00:26:13,720 Speaker 1: the Oscars, and they had Queen's Gambit and the rest 468 00:26:13,720 --> 00:26:16,680 Speaker 1: of it. What's their pipeline look like, and they still 469 00:26:16,800 --> 00:26:20,720 Speaker 1: wedded to the pipeline to keep Paramount Plus and Disney 470 00:26:20,720 --> 00:26:24,200 Speaker 1: and the rest of them away. Yeah, you know, it's interesting. 471 00:26:24,320 --> 00:26:27,840 Speaker 1: They've hitted dry patches everyone has just because of the pandemic. 472 00:26:28,680 --> 00:26:31,520 Speaker 1: But they're gonna come back with a ton of content 473 00:26:31,680 --> 00:26:34,200 Speaker 1: in the second half of this year, and they put 474 00:26:34,200 --> 00:26:36,560 Speaker 1: a lot of emphasis on big movies, so you're gonna 475 00:26:36,600 --> 00:26:39,240 Speaker 1: see some major block buses coming from them that you 476 00:26:39,320 --> 00:26:43,000 Speaker 1: have thought were you know, theatrial releases will be on Netflix. 477 00:26:43,000 --> 00:26:45,840 Speaker 1: So there's a bit of a temporary pause. Um, we 478 00:26:45,920 --> 00:26:48,560 Speaker 1: think towards you get to the fall, you start saying that, 479 00:26:48,720 --> 00:26:51,720 Speaker 1: you know, what you described as those previous hips coming back, 480 00:26:52,160 --> 00:26:54,840 Speaker 1: But you have a period now where HBO Max is 481 00:26:54,840 --> 00:26:58,000 Speaker 1: probably gonna take a lot more share just because they 482 00:26:58,040 --> 00:27:00,560 Speaker 1: have theatrial release movies that are going on from Max 483 00:27:01,119 --> 00:27:02,919 Speaker 1: day and day. So we have a bit of a 484 00:27:02,960 --> 00:27:05,359 Speaker 1: slow period before I think it keeps up again. You 485 00:27:05,400 --> 00:27:08,000 Speaker 1: know in the fourth quarter, Michael, I wonder whether we're 486 00:27:08,000 --> 00:27:11,600 Speaker 1: reaching that point where people look around at the cost 487 00:27:11,600 --> 00:27:14,040 Speaker 1: of all these streaming business and just say I'm not 488 00:27:14,119 --> 00:27:19,119 Speaker 1: doing this anymore. Pants here there, ten pants here, ten dollars, 489 00:27:19,119 --> 00:27:21,959 Speaker 1: fifteen dollars wherever you might live, Michael, and they just 490 00:27:22,000 --> 00:27:25,160 Speaker 1: say no more. I'm done. Because we've been talking about competition, 491 00:27:25,160 --> 00:27:27,840 Speaker 1: and I noticed the Netflix miss big miss, the Walt 492 00:27:27,880 --> 00:27:33,280 Speaker 1: Disney subscribers, miss big miss. Is something brewing here, yes, John, 493 00:27:33,280 --> 00:27:36,080 Speaker 1: And we think this is what's brewing here is you 494 00:27:36,200 --> 00:27:38,520 Speaker 1: had a year of a major pull forward right when 495 00:27:38,520 --> 00:27:40,359 Speaker 1: we've been doing this. We're doing this from zoom past 496 00:27:40,359 --> 00:27:43,480 Speaker 1: two months. If you're stuck at home, you're streaming, you're 497 00:27:43,520 --> 00:27:46,840 Speaker 1: not doing anything else but streaming. Thank god, we're getting 498 00:27:46,840 --> 00:27:48,920 Speaker 1: out of our house. When when the world opens up, 499 00:27:49,000 --> 00:27:51,879 Speaker 1: I think people will look at their bills and reassess. 500 00:27:51,880 --> 00:27:53,760 Speaker 1: So we have a thesis that you know, we think 501 00:27:53,800 --> 00:27:57,920 Speaker 1: streaming wars will pick up, but also streaming consumer adoption 502 00:27:57,960 --> 00:28:00,960 Speaker 1: will slow the next couple of quarters. So you know, 503 00:28:01,040 --> 00:28:04,480 Speaker 1: we've not recommended Netflix and Disney. Those are great trades 504 00:28:04,600 --> 00:28:07,600 Speaker 1: last year. So we're more we're most we're more secrecal, 505 00:28:07,760 --> 00:28:11,360 Speaker 1: you know, averagising based names as economic strengthened. And that's 506 00:28:11,480 --> 00:28:13,800 Speaker 1: that's been the call. We think it's the right call. 507 00:28:13,880 --> 00:28:17,080 Speaker 1: But your your point is right. As consumers change their 508 00:28:17,359 --> 00:28:20,639 Speaker 1: their spending behavior, some of those streaming services will see 509 00:28:21,000 --> 00:28:23,520 Speaker 1: either hired churn or less adoption. Se it's taking me 510 00:28:23,560 --> 00:28:28,640 Speaker 1: to Facebook essentially, those kind of niks Facebook Google, those 511 00:28:28,640 --> 00:28:31,919 Speaker 1: are the names snap Um. Although you say, hey, you know, 512 00:28:32,040 --> 00:28:35,399 Speaker 1: doesn't everyone to recommend them, they're still really attractive stocks 513 00:28:35,400 --> 00:28:38,760 Speaker 1: given the growth that look both of you jump in here. Unfortunately, 514 00:28:38,800 --> 00:28:41,000 Speaker 1: think this goes to Michael Craig. I'm sorry for that, 515 00:28:41,040 --> 00:28:46,400 Speaker 1: but the Super League English Football uproar. What's it mean 516 00:28:46,480 --> 00:28:50,840 Speaker 1: for the jillions of dollars that's negotiated for this strange 517 00:28:50,920 --> 00:28:56,240 Speaker 1: game called socker? Well, you know that's a questions, that's 518 00:28:56,280 --> 00:29:00,160 Speaker 1: a Greig question. Yeah, I was gonna you know, the 519 00:29:00,160 --> 00:29:05,320 Speaker 1: the Premier League just renewed UM with a flat contract. 520 00:29:06,120 --> 00:29:08,920 Speaker 1: In fact, they didn't even open it up to two 521 00:29:08,920 --> 00:29:12,040 Speaker 1: bidding in the UK. So they've renewed with Sky so 522 00:29:12,080 --> 00:29:17,719 Speaker 1: it stays on and I think probably that as it 523 00:29:17,760 --> 00:29:19,880 Speaker 1: turns out, works out well because I don't know that 524 00:29:19,920 --> 00:29:22,720 Speaker 1: they needed the extra publicity. There's a lot of animus 525 00:29:23,000 --> 00:29:27,880 Speaker 1: over the whole the whole Super League debacle, and it's 526 00:29:27,920 --> 00:29:29,880 Speaker 1: a lot of unhappy fans that still have a bad 527 00:29:29,880 --> 00:29:35,880 Speaker 1: taste in their mouth, Craig, go on, Michael, Yeah. Ironically, 528 00:29:35,960 --> 00:29:39,840 Speaker 1: although football prices in Europe were flattening, in America, the 529 00:29:39,840 --> 00:29:43,160 Speaker 1: prices keep going up. Right. Our markets really tied the 530 00:29:43,240 --> 00:29:45,479 Speaker 1: multi sport in a way that Europe isn't, so we 531 00:29:45,560 --> 00:29:48,680 Speaker 1: keep seeing steady increases in sports cost here, Craig, we 532 00:29:48,760 --> 00:29:55,040 Speaker 1: never get too told much. I'm sorry, let's talk. He's 533 00:29:55,040 --> 00:29:57,320 Speaker 1: always taking your ad time, Craig. We've gotta leave it there. 534 00:29:57,360 --> 00:30:00,640 Speaker 1: Craig Muffett and Michael Nisenson of Muffin Nights and Nipois 535 00:30:00,960 --> 00:30:11,680 Speaker 1: at Senia Research as well analyst. This is barn On 536 00:30:11,720 --> 00:30:14,720 Speaker 1: an important conversation, and ever more important from what we 537 00:30:14,840 --> 00:30:18,320 Speaker 1: heard from CDC yesterday. GJ. Gronville is a real deal 538 00:30:18,360 --> 00:30:22,400 Speaker 1: with a PhD from Johns Hopkins and T cell receptor work. 539 00:30:22,480 --> 00:30:26,320 Speaker 1: Think Catherine Zada Jones. It's about zeta proteins and something 540 00:30:26,360 --> 00:30:28,880 Speaker 1: called c D three zeta change and the rest of it. 541 00:30:29,280 --> 00:30:31,920 Speaker 1: Look at the Wikipedia on T cell receptors and you'll 542 00:30:31,960 --> 00:30:35,440 Speaker 1: go oh. She joins us now from the Center for 543 00:30:35,480 --> 00:30:39,560 Speaker 1: Health Security at Johns Hopkins, Dr Gronville, I want to 544 00:30:39,600 --> 00:30:42,040 Speaker 1: cut to the Chase, I'm gonna be in a restaurant. 545 00:30:42,120 --> 00:30:45,880 Speaker 1: My mask is off. The places again packed as we're 546 00:30:45,920 --> 00:30:48,920 Speaker 1: all getting back to, how do I know that somebody's 547 00:30:48,960 --> 00:30:53,480 Speaker 1: not vaccinated and what does it mean within the immunalogy 548 00:30:53,520 --> 00:30:57,600 Speaker 1: in that restaurant? Right? Yeah, you don't know that everybody 549 00:30:57,680 --> 00:31:01,640 Speaker 1: is vaccinated, and by fully vaccinated mean two weeks after 550 00:31:01,680 --> 00:31:05,200 Speaker 1: your final dose um and you will You could be 551 00:31:05,240 --> 00:31:08,760 Speaker 1: exposed if community transmission is high. It's just that with 552 00:31:08,920 --> 00:31:13,000 Speaker 1: your vaccine, you're able to fight that off. Okay, you're 553 00:31:13,040 --> 00:31:15,640 Speaker 1: able to fight it off. But the whole family doesn't 554 00:31:15,640 --> 00:31:19,080 Speaker 1: have vaccines. Somebody under twelve, maybe an infant? Are you 555 00:31:19,240 --> 00:31:23,200 Speaker 1: kidding me on a game theory basis, with all of 556 00:31:23,240 --> 00:31:28,320 Speaker 1: your expertise and T cell receptors, your work at Sloan Kettering, great, 557 00:31:28,800 --> 00:31:32,680 Speaker 1: is this actually gonna work? I am not going to 558 00:31:32,720 --> 00:31:36,720 Speaker 1: take my unvaccinated eleven year old too inside a restaurant 559 00:31:37,000 --> 00:31:40,200 Speaker 1: at this time. That is absolutely the case. But I 560 00:31:40,320 --> 00:31:43,800 Speaker 1: have less concerns about myself and my thirteen year old, 561 00:31:43,920 --> 00:31:47,520 Speaker 1: who I took to get vaccinated yesterday, once he's fully vaccinated. 562 00:31:47,640 --> 00:31:50,560 Speaker 1: So yeah, I mean, people have to make decisions based 563 00:31:50,560 --> 00:31:54,120 Speaker 1: on their own circumstances. It's just that it'll be safer 564 00:31:54,160 --> 00:31:56,520 Speaker 1: for the people who are in the restaurant or working 565 00:31:56,560 --> 00:32:00,080 Speaker 1: the restaurant if you're vaccinated, for sure, and it'll be 566 00:32:00,360 --> 00:32:03,120 Speaker 1: safer for everyone who gets who gets a vaccine. And 567 00:32:03,160 --> 00:32:05,320 Speaker 1: this is a really difficult decision for parents right now. 568 00:32:05,400 --> 00:32:08,400 Speaker 1: Doctor they're trying to work out to what degree that 569 00:32:08,600 --> 00:32:11,040 Speaker 1: children are at risk from this virus. Do we have 570 00:32:11,160 --> 00:32:15,520 Speaker 1: better answers now? Well, I mean, children do get sick 571 00:32:15,720 --> 00:32:18,240 Speaker 1: and and people have I mean just not in comparison 572 00:32:18,280 --> 00:32:21,160 Speaker 1: to adults. Adults have had much worse outcomes when it 573 00:32:21,160 --> 00:32:23,680 Speaker 1: comes to COVID than kids. But um, if you look 574 00:32:23,720 --> 00:32:27,479 Speaker 1: at the numbers, about twenty two million children have gotten 575 00:32:27,480 --> 00:32:30,800 Speaker 1: sick from COVID, and um, if you look at the 576 00:32:30,960 --> 00:32:35,200 Speaker 1: rates of hospitalization, it's worse than aged one and one 577 00:32:35,240 --> 00:32:38,560 Speaker 1: flew in two thousand nine for kids. So it's by 578 00:32:38,560 --> 00:32:41,120 Speaker 1: comparison it's not as bad as adults. But kids do 579 00:32:41,280 --> 00:32:44,520 Speaker 1: get sick, so, um, they still need to take precautions 580 00:32:44,760 --> 00:32:47,720 Speaker 1: and if they're twelve are over they really should be vaccinated. 581 00:32:48,640 --> 00:32:51,240 Speaker 1: If they're twelve or under, How long does this go 582 00:32:51,320 --> 00:32:53,560 Speaker 1: on for for the children of this country or the 583 00:32:53,600 --> 00:32:57,120 Speaker 1: children around the world, believe me, I'm I'm waiting to 584 00:32:57,560 --> 00:33:01,360 Speaker 1: I think the everyone thinks that maybe August September that 585 00:33:01,400 --> 00:33:04,960 Speaker 1: we'll start opening up to being able to vaccinate younger, 586 00:33:05,040 --> 00:33:09,280 Speaker 1: younger kids. I mean, I look, Axios just published moments 587 00:33:09,320 --> 00:33:11,960 Speaker 1: ago Mike Allen doing a great job over there, and 588 00:33:12,080 --> 00:33:14,200 Speaker 1: Dr Gronville, you know, they take the spin of what 589 00:33:14,240 --> 00:33:17,800 Speaker 1: we're doing with c d C and call it liberation Day, 590 00:33:18,040 --> 00:33:23,000 Speaker 1: is it. I I didn't find wearing a mask to 591 00:33:23,040 --> 00:33:26,480 Speaker 1: be all that inconvenient, and um I I saw it 592 00:33:26,520 --> 00:33:29,520 Speaker 1: as a way of being courteous to other people. But 593 00:33:29,920 --> 00:33:35,080 Speaker 1: um it has become obviously a very polarizing issue. So okay, 594 00:33:35,200 --> 00:33:37,360 Speaker 1: let's let's go to the realities here, what we see 595 00:33:37,400 --> 00:33:39,720 Speaker 1: in the hospitals as well. How will this change for 596 00:33:39,760 --> 00:33:45,280 Speaker 1: the essential workers you know, still courageous in the hospitals. Yeah, 597 00:33:45,320 --> 00:33:48,480 Speaker 1: so so, I mean, I think it'll hopefully the community 598 00:33:48,480 --> 00:33:51,120 Speaker 1: transmission will go down, so hopefully they will have more, 599 00:33:51,760 --> 00:33:56,120 Speaker 1: you know, more resources to attend to the patients they have. UM. 600 00:33:56,160 --> 00:33:59,280 Speaker 1: I think that that we need to still do more 601 00:33:59,360 --> 00:34:02,800 Speaker 1: to bring vaccine two people. There are a lot of 602 00:34:02,880 --> 00:34:05,320 Speaker 1: essential workers not in the hospital but in other places 603 00:34:05,320 --> 00:34:07,520 Speaker 1: who can't afford to take the time off to be 604 00:34:07,600 --> 00:34:10,400 Speaker 1: able to get vaccinated, so we still have access issues 605 00:34:10,440 --> 00:34:13,120 Speaker 1: in this country that we need to address. Don't appreciate 606 00:34:13,160 --> 00:34:15,359 Speaker 1: it's on this morning. Thank you. It's gonna say dot 607 00:34:15,440 --> 00:34:18,279 Speaker 1: G Grounville. We really appreciate your perspective. Jones, help Kins, 608 00:34:18,480 --> 00:34:22,040 Speaker 1: censer for the Health Security Sadia Scarla. This is the 609 00:34:22,080 --> 00:34:26,719 Speaker 1: Bloomberg Surveillance Podcast. Thanks for listening. Join us live weekdays 610 00:34:26,800 --> 00:34:30,239 Speaker 1: from seven to ten am Eastern on Bloomberg Radio and 611 00:34:30,360 --> 00:34:34,640 Speaker 1: on Bloomberg Television each day from six to nine am 612 00:34:34,680 --> 00:34:38,440 Speaker 1: for insight from the best in economics, finance, investment, and 613 00:34:38,560 --> 00:34:45,080 Speaker 1: international relations. And subscribe to the Surveillance podcast on Apple podcast, SoundCloud, 614 00:34:45,239 --> 00:34:48,839 Speaker 1: Bloomberg dot com, and of course on the terminal. I'm 615 00:34:48,880 --> 00:34:51,520 Speaker 1: Tom Keene and this is Bloomberg