WEBVTT - Bloomberg Surveillance TV: October 31, 2024 0:00:00.120 --> 0:00:06.800 Bloomberg Audio Studios, Podcasts, radio News. 0:00:11.680 --> 0:00:15.480 This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along 0:00:15.480 --> 0:00:18.440 with Lisa Bromwitz and Amrie hort Ern. Join us each 0:00:18.520 --> 0:00:21.440 day for insight from the best in markets, economics, and 0:00:21.480 --> 0:00:24.759 geopolitics from our global headquarters in New York City. We 0:00:24.800 --> 0:00:27.479 are live on Bloomberg Television weekday mornings from six to 0:00:27.560 --> 0:00:31.040 nine am Eastern. Subscribe to the podcast on Apple, Spotify 0:00:31.240 --> 0:00:33.519 or anywhere else you listen, and as always on the 0:00:33.520 --> 0:00:37.640 Bloomberg Terminal and the Bloomberg Business app. Haidi Creeper, redictor 0:00:37.640 --> 0:00:40.280 of the Council of Foreign Relations, writing final days come 0:00:40.320 --> 0:00:43.080 down to turn out? Does the floating garland of garbage 0:00:43.120 --> 0:00:45.479 in soult reminded where the recon voters in swing states 0:00:45.479 --> 0:00:48.600 of Trump's poor treatment of the island after Hurricane Maria, 0:00:48.720 --> 0:00:51.680 seeing massive backlash, But will they vote on it? This 0:00:51.760 --> 0:00:53.600 could make or break the election? 0:00:53.960 --> 0:00:54.200 Heid? 0:00:54.240 --> 0:00:56.680 He joined us now for more, Hidy, just elaborate on 0:00:56.720 --> 0:00:58.760 that your thoughts on the last few days, this word 0:00:58.880 --> 0:01:01.240 garbage and how it may shake up this election. 0:01:01.400 --> 0:01:05.440 Rice. So I actually I'm paying a lot less attention 0:01:05.640 --> 0:01:11.680 to the Trump comments on garbage than what happened at 0:01:11.800 --> 0:01:15.840 Madison Square Garden on the floating island of garbage comments. 0:01:15.840 --> 0:01:18.080 And I think the reason that I'm thinking that is 0:01:18.120 --> 0:01:21.479 because right now it really does come down to turn out. 0:01:21.520 --> 0:01:25.800 The polls are razorsin in the states that matter, in 0:01:25.840 --> 0:01:29.480 the communities that matter. And so if you're undecided and 0:01:29.520 --> 0:01:32.400 you haven't voted yet, what's going to make you decide? 0:01:32.440 --> 0:01:35.440 If you're ambivalent, and you are, you know, you need 0:01:35.480 --> 0:01:39.920 an actual reason to vote. Is what Trump's talking about, 0:01:40.080 --> 0:01:42.800 going to actually, you know, turn the dial for you. 0:01:42.840 --> 0:01:45.520 Because I think his I think his supporters are pretty 0:01:45.720 --> 0:01:48.280 you know, they're they're pretty committed, and if they haven't 0:01:48.360 --> 0:01:51.200 voted already, they're probably going to vote for him regardless 0:01:51.240 --> 0:01:54.600 of the garbage comment. For the Puerto Rican community, I 0:01:54.640 --> 0:01:56.120 think it's really a wild card. 0:01:56.160 --> 0:01:58.000 That's That's what I'm paying attention to. 0:01:58.160 --> 0:02:05.040 Because the comment at the event at Madison Square Garden, 0:02:05.160 --> 0:02:08.240 even though Trump did not make it himself, he never 0:02:08.360 --> 0:02:11.639 apologized for it, and it insulted and reminded Puerto Rican 0:02:11.760 --> 0:02:16.080 voters in swing states of Trump's poor treatment of the 0:02:16.120 --> 0:02:19.800 island after Hurricane Maria, about the way he delayed aid 0:02:20.040 --> 0:02:22.320 and then when he got there two weeks after a 0:02:22.560 --> 0:02:24.160 devastating hurricane. 0:02:24.240 --> 0:02:26.359 He threw a bunch of paper towels at the crowd. 0:02:26.440 --> 0:02:29.040 And so, you know, it's a question of whether or 0:02:29.120 --> 0:02:35.360 not these very large Puerto Rican specifically populations in these 0:02:35.400 --> 0:02:38.640 swing states. And Marius talking about Pennsylvania. Half a million 0:02:38.680 --> 0:02:41.320 Puerto Ricans live in Pennsylvania, in a state that Joe 0:02:41.320 --> 0:02:43.799 Biden when he won last time, it was on eight 0:02:44.520 --> 0:02:48.040 eighty thousand votes. So you know, we're talking about very 0:02:48.160 --> 0:02:53.320 large numbers who could decide they're really not very happy 0:02:53.320 --> 0:02:56.040 about what they saw four years more than four years 0:02:56.040 --> 0:02:58.919 ago in the treatment of Puerto Ricans. 0:02:58.919 --> 0:03:01.640 It was insulting and it could move the dial Heidi. 0:03:01.680 --> 0:03:03.880 Of course, the flip side of this is a large 0:03:03.919 --> 0:03:06.560 part of Individuals can also be turned off on the 0:03:06.560 --> 0:03:09.359 President of the United States comments that half of Trump's 0:03:09.360 --> 0:03:12.400 supporters are quote garbage and Kamala Harris is now having 0:03:12.440 --> 0:03:16.679 to clean up Joe Biden's comments. Is he doing more 0:03:16.800 --> 0:03:19.120 damage to her every time he goes out and speaks. 0:03:20.680 --> 0:03:23.560 So I think that it was unfortunate that he used 0:03:23.560 --> 0:03:28.120 that that that language, and it obviously harkened back to 0:03:28.120 --> 0:03:31.600 to uh to comments that were made during the campaign 0:03:31.760 --> 0:03:34.800 with with Trump and with with Hillary Clinton. 0:03:35.360 --> 0:03:36.320 So you know, but. 0:03:36.360 --> 0:03:40.520 Again, if you are going to it's really about a 0:03:40.640 --> 0:03:44.040 narrow swath of voters. 0:03:43.480 --> 0:03:45.800 And what can what can motivate them. 0:03:45.640 --> 0:03:49.640 To change their decision or if they are turned off 0:03:49.680 --> 0:03:52.040 of politics and just want to sit this election out, 0:03:52.040 --> 0:03:54.480 what can make them actually get up out of their 0:03:54.480 --> 0:03:57.800 house and actually cast that vote. And I don't I 0:03:57.800 --> 0:04:02.560 don't know if press in Biden's comments, which we're not reflected, 0:04:02.600 --> 0:04:06.360 we're not we're not re electing President Biden, if they 0:04:06.440 --> 0:04:08.800 actually are going to move the dial for that very 0:04:08.920 --> 0:04:12.600 important group of undecided or ambivalent voters. 0:04:12.880 --> 0:04:14.880 How do how do you think she sticks the landing 0:04:14.880 --> 0:04:16.960 when it comes to the economy the ft this morning 0:04:17.080 --> 0:04:21.880 calls Kamala Harris's other electoral foe inflation. This continuously shows 0:04:21.960 --> 0:04:24.840 up in polls. How does she distance herself in these 0:04:24.839 --> 0:04:28.720 final days in these swing states from the current administration 0:04:29.120 --> 0:04:30.360 when it comes to inflation. 0:04:31.600 --> 0:04:33.680 So it's really it's a hard it's a hard narrative. 0:04:33.680 --> 0:04:37.360 I mean, people are actually people are generally hurting from 0:04:37.520 --> 0:04:41.119 the fact that the goods, you know, the everyday goods, 0:04:41.160 --> 0:04:44.839 cost more than they than they did pre COVID. I 0:04:44.880 --> 0:04:49.360 guess what I would what I would suggest is that 0:04:49.880 --> 0:04:52.240 you know, looking it's not just looking back over the 0:04:52.640 --> 0:04:56.560 last four years, it's looking forward to what what a 0:04:56.640 --> 0:05:00.599 blanket teariff policy across all you know, the whole the 0:05:00.600 --> 0:05:03.119 whole world of ten to twenty percent and sixty percent 0:05:03.160 --> 0:05:05.640 on China, What that actually could mean for inflation? Well, 0:05:05.680 --> 0:05:08.520 it's probably they're you know, those kind of tariffs are 0:05:08.720 --> 0:05:10.599 inflationary tariffs. 0:05:10.640 --> 0:05:13.360 We you know, we've had for many years. 0:05:13.839 --> 0:05:17.520 We know what they do, what they're They're inflationary, and 0:05:17.560 --> 0:05:21.600 it depends if they are tactical and targeted versus across 0:05:21.640 --> 0:05:21.960 the board. 0:05:22.000 --> 0:05:24.680 I don't think I don't think that. 0:05:24.120 --> 0:05:29.400 That voters really understand that that that Trump, saying that 0:05:29.440 --> 0:05:32.480 he is tariff man, can get into the Oval Office 0:05:32.560 --> 0:05:36.839 day one and actually without any checks and balance, he 0:05:36.920 --> 0:05:42.320 can actually implement his across the board tariff policy. 0:05:41.920 --> 0:05:43.720 That would be inflationary. And what does that mean. 0:05:44.480 --> 0:05:49.240 It means that it's going to impact consumers intermediate inputs, 0:05:49.240 --> 0:05:51.919 like for every every business that's part of a supply chain. 0:05:52.640 --> 0:05:54.120 You can count on retaliation. 0:05:54.600 --> 0:05:58.920 You'll blow up all of our our FTAs with countries, 0:05:59.120 --> 0:06:03.039 and our allies will push back pretty pretty heartily against 0:06:03.160 --> 0:06:06.760 us in a world where we actually need our allies, 0:06:06.800 --> 0:06:09.320 we don't need to alienate our allies. So I think 0:06:09.360 --> 0:06:12.000 that there are you know, it's not only inflation, but 0:06:12.080 --> 0:06:17.720 you could have both, you know, commercial inflation and and 0:06:17.800 --> 0:06:22.360 geopolitical reactions that would be highly negative. What does the 0:06:22.400 --> 0:06:24.680 FED do, We're talking about the FED for next week. 0:06:25.600 --> 0:06:28.040 What does the FED do if they're facing you know, 0:06:28.360 --> 0:06:32.200 challenges to inflation on the on one side, and then 0:06:32.279 --> 0:06:38.720 spillovers that might impact credit markets, mortgages, company borrowing, You're 0:06:38.760 --> 0:06:42.040 going to be in a very different, a very different 0:06:42.279 --> 0:06:44.919 dynamic if we come January and. 0:06:44.760 --> 0:06:48.000 You have massive across the board tariffs. 0:06:47.560 --> 0:06:49.400 And post id or what are you watching in the 0:06:49.400 --> 0:06:51.200 final days of the election race. 0:06:52.400 --> 0:06:58.000 So you know, again it's the markets are are not 0:06:58.120 --> 0:07:01.840 a good predictor of of of who's going to be 0:07:01.880 --> 0:07:05.599 in this in this election, who's going to win this election. 0:07:05.920 --> 0:07:09.080 But I do think that the fact that you've had 0:07:09.080 --> 0:07:12.239 a lot of women show up in early voting, You've 0:07:12.280 --> 0:07:15.720 had and the gender divide plays very much into into 0:07:15.760 --> 0:07:18.360 Harris's into Harris's camp. 0:07:19.040 --> 0:07:19.920 The fact that. 0:07:19.880 --> 0:07:25.000 You do have these narrow, these narrow populations, who can 0:07:25.040 --> 0:07:28.560 actually you really determine the election one way or the other, 0:07:28.840 --> 0:07:30.720 and we just don't know. Anyone who tells you they 0:07:30.760 --> 0:07:33.840 know who's gonna win doesn't know what they're talking about. 0:07:33.880 --> 0:07:35.920 We are neck and neck right now, and we're not 0:07:35.960 --> 0:07:39.400 going to know until until the votes are finally counted, 0:07:39.400 --> 0:07:42.720 and that might not be next next Tuesday, might not 0:07:42.720 --> 0:07:43.400 be next week. 0:07:43.760 --> 0:07:46.520 Don't say that, Heidi, hoping it's so low by THENI 0:07:46.560 --> 0:07:49.000 do you appreciate your time as always, Hidi cree by 0:07:49.040 --> 0:08:02.440 Redik of the Council on Farm Relations. Seth Carpenter, the 0:08:02.520 --> 0:08:04.960 chief Global economist that Mark and Stanley is with us 0:08:05.000 --> 0:08:08.160 around the table, Seth to sixteen. Should I ignore the 0:08:08.240 --> 0:08:11.200 random number generator tomorrow morning at eight thirty Eastern if 0:08:11.200 --> 0:08:13.320 it's weak based on the fact the jobless claims are 0:08:13.440 --> 0:08:13.920 this slow? 0:08:14.480 --> 0:08:16.960 Absolutely. I think if it's weak, even if today hadn't 0:08:16.960 --> 0:08:19.119 been two sixteen, you would have still ignored the random 0:08:19.160 --> 0:08:22.119 number generator. The bottom line is the labor market's actually 0:08:22.120 --> 0:08:24.880 pretty healthy. I think the two sixteen is consistent with that. 0:08:25.400 --> 0:08:27.200 I think the fact that you're getting a little bit 0:08:27.240 --> 0:08:29.880 of a drift up in the continuing claim says, boy, 0:08:30.280 --> 0:08:32.959 you know, maybe people aren't getting rehired as quickly, but 0:08:33.000 --> 0:08:35.280 there's not a wave of layoffs, and that, for me 0:08:35.360 --> 0:08:36.199 is what's fundamental. 0:08:36.400 --> 0:08:39.000 The hurricane impact doesn't seem to be there. Last week 0:08:39.040 --> 0:08:42.600 already predated. Those numbers were actually below the hurricane impact 0:08:42.640 --> 0:08:45.120 the pre hurricane hit. And then you've got the strikes. 0:08:45.120 --> 0:08:47.320 So we're not seeing any real mushrooming into the economy 0:08:47.360 --> 0:08:49.320 off the back of these strikes either. How do you 0:08:49.320 --> 0:08:51.600 frame a downside surprise like this. I'm still scratching my head. 0:08:51.600 --> 0:08:53.360 What are we doing here down at two sixteen? 0:08:53.520 --> 0:08:55.720 I mean, this is the question we keep asking ourselves. 0:08:55.760 --> 0:08:58.280 So this whole expansion, we've been on the constructive side 0:08:58.320 --> 0:09:00.640 of things. When it was hard landing versus soft landing, 0:09:00.640 --> 0:09:02.800 we said soft landing. When it was late summer and 0:09:02.840 --> 0:09:04.680 we got a week jobs report, we said, don't worry 0:09:04.679 --> 0:09:07.520 about the economy as strong and people through rotten garbage 0:09:07.520 --> 0:09:11.079 ass Untilda said, we were ugly and stupid. If we've 0:09:11.080 --> 0:09:14.200 been wrong, it's because we've been insufficiently optimistic. And I 0:09:14.200 --> 0:09:16.760 think these numbers are really consistent with a super healthy 0:09:16.840 --> 0:09:17.360 job market. 0:09:17.480 --> 0:09:19.240 So then why should the FED cut rates next week? 0:09:20.040 --> 0:09:22.120 I think the Fed's view on this is going to be. 0:09:23.120 --> 0:09:26.800 Inflation's coming down, it's clearly off its peaks, it's trending down. 0:09:27.400 --> 0:09:29.200 The number we got today it is a little bit 0:09:29.240 --> 0:09:31.120 of sort of wobbling around in it, but I think 0:09:31.160 --> 0:09:33.439 the trend is still pretty clearly down, and so from 0:09:33.480 --> 0:09:36.800 their perspective, you can still lower rates from where we are, 0:09:37.400 --> 0:09:40.319 be restrictive, try to take a little bit more steam 0:09:40.320 --> 0:09:44.680 out of the economy without jeopardizing the prospect of growth. 0:09:44.720 --> 0:09:46.600 So I think they're trying to walk this very fine 0:09:46.640 --> 0:09:49.199 balance of being tight but not too tight. 0:09:49.679 --> 0:09:52.679 I'm looking right now at the PCEE data. Within all 0:09:52.720 --> 0:09:55.720 of this, you see a strong labor market and see 0:09:55.760 --> 0:10:00.200 pce inflation data that came in slightly above expectations. At 0:10:00.240 --> 0:10:02.400 what point does that get people's attention? At what point 0:10:02.720 --> 0:10:05.680 do central bankers start caring about the inflation rate again? 0:10:05.960 --> 0:10:08.679 Well, I think we saw, for example, in Q one 0:10:08.720 --> 0:10:10.880 of this year, they really cared a lot. Everyone was 0:10:10.920 --> 0:10:12.760 gearing up for them to start cutting in the beginning 0:10:12.800 --> 0:10:14.760 of the year, and then Q one data were strong 0:10:14.880 --> 0:10:16.959 surprise to the upside, and they pushed off the rate 0:10:17.000 --> 0:10:22.320 cuts obviously until September. So I think it needs two things. One, 0:10:22.480 --> 0:10:24.800 a couple more months of upside surprises, because we really 0:10:24.840 --> 0:10:27.720 have had things come down. You'll remember Chris Waller from 0:10:27.760 --> 0:10:30.079 the FED. So the reason he went for fifty basis 0:10:30.120 --> 0:10:33.120 points instead of twenty five was because inflation data had 0:10:33.160 --> 0:10:35.120 surprised them to the upside. So a month or two 0:10:35.160 --> 0:10:38.400 to the upside isn't going to change the fundamentals. And 0:10:38.440 --> 0:10:41.360 then he needed to be compositionally. The stuff that we 0:10:41.400 --> 0:10:44.320 know has a lot of inertia, like housing inflation that 0:10:44.480 --> 0:10:46.520 sort of wobbled for a little while, it wasn't clear, 0:10:46.520 --> 0:10:48.319 and then it came down again. And I think as 0:10:48.440 --> 0:10:51.720 long as those really core pieces no pun intended on inflation, 0:10:51.800 --> 0:10:54.520 as long as there's really central parts of inflation keep 0:10:54.600 --> 0:10:56.880 trending down, then I think they're going to feel comfortable. 0:10:57.360 --> 0:10:59.280 Most voices on the FMC said they didn't want to 0:10:59.280 --> 0:11:01.040 see to cherry in the labor market. 0:11:01.160 --> 0:11:02.040 That was part of their reasons. 0:11:02.120 --> 0:11:02.959 Mission accomplished. 0:11:03.080 --> 0:11:06.760 Right, Seriously, what do they come out and say in 0:11:06.840 --> 0:11:09.439 terms of the assessment of the labor market on Thursday. 0:11:09.720 --> 0:11:12.080 I think you're going to see words along the lines 0:11:12.120 --> 0:11:17.520 of solid, robust, healthy. The unemployment rate is four point 0:11:17.559 --> 0:11:19.800 two percent, so it's up off of the lows we 0:11:19.880 --> 0:11:21.760 had had an unemployment rate that was around three and 0:11:21.760 --> 0:11:23.840 a half percent. So I think you have to be 0:11:23.880 --> 0:11:25.679 able to say that there's been some cooling. If you 0:11:25.720 --> 0:11:28.240 look at the job openings data from where it was 0:11:28.240 --> 0:11:31.120 when the labor mark was tight tightest, you have to 0:11:31.120 --> 0:11:33.240 say there's been some cooling. So I think in that regard, 0:11:34.200 --> 0:11:37.080 you know they're fine. The pendulum had swung a bit 0:11:37.120 --> 0:11:39.719 too far. People got a little bit too breathless over 0:11:39.760 --> 0:11:44.080 a couple of week months of jobs data. We're not deteriorating. 0:11:44.200 --> 0:11:46.480 Let's talk about the other big event next week, and 0:11:46.520 --> 0:11:48.600 that's the election. You're spending a lot of time talking 0:11:48.600 --> 0:11:50.560 to clients and something that was interesting in your notes 0:11:50.600 --> 0:11:52.640 is there seems to be differential for clients that are 0:11:52.720 --> 0:11:55.680 in the United States and those abroad, and what is 0:11:55.720 --> 0:11:56.600 that centering around. 0:11:57.040 --> 0:11:59.560 So I think one of the key parts is tariffs. Right, 0:11:59.800 --> 0:12:03.040 the elections going to have, from a top down macro perspective, 0:12:03.080 --> 0:12:08.160 three key policy implications tariffs, immigration, and fiscal policy. And 0:12:08.480 --> 0:12:13.199 to a person, when I'm oversees all investors are convinced 0:12:13.640 --> 0:12:16.280 former President Trump, if re elected, will go back to 0:12:16.520 --> 0:12:19.320 putting in tariffs. And there's just no doubt in their mind. 0:12:19.360 --> 0:12:22.480 I think there's a bit more debate and difference of 0:12:22.520 --> 0:12:25.840 opinion on this side of the Atlantic, people who think 0:12:25.960 --> 0:12:28.480 either oh, well, it's going to be a negotiating tactic, 0:12:28.720 --> 0:12:31.640 or if in fact he announces it and it ends 0:12:31.679 --> 0:12:34.280 up being bad for the market, for the economy, then 0:12:34.360 --> 0:12:37.400 it won't come through. So I think that's an interesting 0:12:37.440 --> 0:12:38.480 dichotomy of views. 0:12:38.640 --> 0:12:40.599 You've got to work out who wins. You've got to 0:12:40.600 --> 0:12:42.440 work out the make up the division of government, if 0:12:42.480 --> 0:12:44.480 the risk one, if there's a sweep. If it's not 0:12:44.520 --> 0:12:46.600 a sweep, then you've got to work out whether the 0:12:46.600 --> 0:12:49.880 promise becomes reality once you've got there. Okay, let's just 0:12:49.920 --> 0:12:53.280 deal with this. If you take everything that's been said 0:12:53.280 --> 0:12:57.000 on the campaign trail, a stagflation reproposal from the Trump side, 0:12:57.040 --> 0:12:59.280 is that how you see things at more con Stanley. 0:12:59.360 --> 0:13:02.240 Absolutely, we were to literally take everything that's been said. 0:13:02.320 --> 0:13:04.520 Let's just deal with tariffs that we were talking about before. 0:13:04.520 --> 0:13:08.280 If you had in January sixty percent tariffs on everything 0:13:08.280 --> 0:13:11.880 imported from China, ten percent tariffs imported from everything around 0:13:11.880 --> 0:13:14.480 the world, I think that pushes up inflation, and that 0:13:14.559 --> 0:13:17.240 probably happens first the numbers we've calculated are in the 0:13:17.760 --> 0:13:20.560 nine tenths of a percentage point kind of boost, but 0:13:20.640 --> 0:13:22.400 the dragged to growth could be as much as one 0:13:22.440 --> 0:13:24.319 and a half percent. I mean, I think it really 0:13:24.440 --> 0:13:28.240 is important, and that ignores the immigration side of things. 0:13:28.320 --> 0:13:31.439 The reason we had three plus percent growth for a 0:13:31.520 --> 0:13:34.400 year year and a half and inflation continuing to fall 0:13:34.520 --> 0:13:36.800 is because we've had this big ad to the labor force. 0:13:36.800 --> 0:13:39.360 How different is the Harris proposal as things stand when 0:13:39.400 --> 0:13:41.640 you go through that big eighty two page document on 0:13:41.679 --> 0:13:43.920 the website, eighty two pages long, when you go through that, 0:13:43.960 --> 0:13:45.160 how different is the proposal? 0:13:45.360 --> 0:13:47.840 Well, I mean, I think again, going back to teriffs 0:13:47.880 --> 0:13:50.119 as an example, I look at what the Biden administration 0:13:50.160 --> 0:13:52.400 has done. They put tariffs on electric vehicles coming in 0:13:52.400 --> 0:13:56.000 from China. Boy, that's almost entirely rhetorical, right. There aren't 0:13:56.040 --> 0:13:58.360 that many electric vehicles that have been imported in the 0:13:58.440 --> 0:14:00.800 United States from China, so it's not have anywhere near 0:14:00.920 --> 0:14:03.840 the same effect. We can look back to twenty eighteen 0:14:03.920 --> 0:14:07.680 twenty nineteen and see the hit to industrial production industrial 0:14:07.720 --> 0:14:09.679 output from that wave of tariffs. I think there's a 0:14:09.720 --> 0:14:10.760 pretty meaningful difference. 0:14:10.800 --> 0:14:13.200 Markt anticipants a running around saying not a big deal, 0:14:13.200 --> 0:14:15.559 We'll work through this. Stocks go up up into the right. 0:14:15.640 --> 0:14:17.800 That's what the chat always looks like for a long time. 0:14:18.080 --> 0:14:19.960 Do you think this does have the potential to really 0:14:20.000 --> 0:14:22.560 redefine things years out this election? Do you think it's 0:14:22.600 --> 0:14:23.200 not important? 0:14:23.280 --> 0:14:25.720 I do think so. I do think so. The rejiggering 0:14:25.880 --> 0:14:29.920 of the global supply chain, the rejiggering of global economic interactions, 0:14:29.960 --> 0:14:32.000 that's real. That's been going on for some time. It 0:14:32.080 --> 0:14:36.560 got accelerated with tariffs. I think this another round of tariffs, 0:14:36.600 --> 0:14:40.000 another trade war, could in fact accelerate the rejiggering in 0:14:40.080 --> 0:14:42.400 ways that maybe we can't fully anticipate. 0:14:42.520 --> 0:14:44.720 Seth, it's got to see you as always, Thank you, sir. 0:14:44.720 --> 0:14:46.800 Good luck over the next week. Seth campens there of 0:14:46.920 --> 0:14:58.880 more ca and Stantley going into payrolls tomorrow, jumping in 0:14:58.920 --> 0:15:01.880 the seat. Lindsay Rose, I've goma sex asset management. Let's 0:15:01.960 --> 0:15:02.440 good to see you. 0:15:02.480 --> 0:15:03.000 Good to see you. 0:15:03.080 --> 0:15:05.080 Got to start with this economic data. Is there anything 0:15:05.120 --> 0:15:07.760 not to like? Jobis claims GDP looks pretty. 0:15:07.480 --> 0:15:10.480 Good, looks good, looks fine, looks quiet. I think that's 0:15:10.520 --> 0:15:12.920 something that's a big relief right now. There is a 0:15:12.960 --> 0:15:15.440 lot of volatility priced into the market. If you look 0:15:15.440 --> 0:15:18.040 at the move index, which is looking at radevall over October, 0:15:18.360 --> 0:15:20.160 it's gone, like you were saying, top to the right. 0:15:20.360 --> 0:15:23.680 For equities, it has made a move for sure in October. 0:15:24.200 --> 0:15:26.680 This is a good day of quiet. I think the 0:15:26.680 --> 0:15:28.920 event will actually be month end at the end of 0:15:28.920 --> 0:15:31.600 the day, not the data this morning wet me through. 0:15:31.640 --> 0:15:35.360 Why so, there's actually going to be a pretty decent rebalancing. 0:15:35.400 --> 0:15:37.240 So if you think about how bonds have performed in 0:15:37.280 --> 0:15:40.080 October versus what's gone on with equities, you want to 0:15:40.120 --> 0:15:43.520 shift your portfolio given the outperformance and equities you have 0:15:43.600 --> 0:15:46.560 the normal month end extension, which happens always with indices 0:15:46.600 --> 0:15:48.640 in the bond market, so there has to be kind 0:15:48.680 --> 0:15:51.200 of this natural buying of duration. But there's going to 0:15:51.200 --> 0:15:54.680 be this additional, much bigger thing of asset allocation at 0:15:54.720 --> 0:15:55.720 equities into bonds. 0:15:55.880 --> 0:15:58.880 So are you saying that essentially this is noise and 0:15:58.920 --> 0:16:02.480 it's the technical unders that really will drive yields lower 0:16:02.680 --> 0:16:05.400 regardless of what happens with all of these different events 0:16:05.440 --> 0:16:06.360 next week. 0:16:06.280 --> 0:16:09.240 Well, today's story is going to be the month end story. 0:16:09.320 --> 0:16:11.520 The things that happen over the next week are actually 0:16:11.520 --> 0:16:14.880 big beside from the data prints, we've got auctions, we've 0:16:14.880 --> 0:16:19.480 got threes, we've got the bond, we have obviously the election, 0:16:19.640 --> 0:16:21.600 and then we lead up to f OMC. So not 0:16:21.640 --> 0:16:23.400 necessarily that yields are going to go lower for the 0:16:23.440 --> 0:16:25.280 rest of the week. I think we're in a moment 0:16:25.320 --> 0:16:27.160 of a lot of volatility between now and then. But 0:16:27.200 --> 0:16:29.080 today's movement, I think is really month end. 0:16:29.240 --> 0:16:31.600 Do you see a shift in the narrative though right now? 0:16:31.880 --> 0:16:35.080 Or people have just been underestimating how strong this economy is, 0:16:35.120 --> 0:16:37.200 and that has been the theme again and again and 0:16:37.240 --> 0:16:40.480 yet again here as we wait for potentially weakness that 0:16:40.600 --> 0:16:43.640 may not show up tomorrow in the jobs report. Is 0:16:43.680 --> 0:16:47.640 there a sense that there could be a reacceleration in 0:16:47.760 --> 0:16:49.960 inflation in a more meaningful way? Is that starting to 0:16:49.960 --> 0:16:52.280 come back to the table and the discussions that you're having. 0:16:52.760 --> 0:16:55.440 Yeah, and that's been a big explanation for what's happened 0:16:55.440 --> 0:16:57.720 with yields. I mean, the amazing thing is the FED 0:16:57.720 --> 0:17:00.640 cut fifty basis points and we're now six d basis 0:17:00.640 --> 0:17:03.400 for one's higher across the curve. That is pretty tremendous, 0:17:03.400 --> 0:17:05.719 And a big part of that is a concern about 0:17:05.880 --> 0:17:10.040 inflation because growth just is that good. But I think 0:17:10.080 --> 0:17:12.359 on a going forward, we've got a lot of noise 0:17:12.359 --> 0:17:14.400 that's going to happen in the next week, but things 0:17:14.440 --> 0:17:16.040 are going to calm down and I think we'll have 0:17:16.080 --> 0:17:18.720 a lot more certainty. And the way we actually are 0:17:18.720 --> 0:17:20.600 talking with clients right now is that you've got a 0:17:20.680 --> 0:17:23.800 huge opportunity with this move up in yields. The economy 0:17:23.880 --> 0:17:25.359 is good. The FED has the power to do what 0:17:25.359 --> 0:17:28.440 it needs to do. And where we were a month 0:17:28.440 --> 0:17:32.000 ago was much lower yielts or a little bit past that, 0:17:32.119 --> 0:17:35.840 earlier than September eighteenth, earlier than the cut was. You're 0:17:35.840 --> 0:17:37.359 waiting on the FED to see if they are going 0:17:37.440 --> 0:17:39.040 to go and how much they're going to go. Well, 0:17:39.040 --> 0:17:41.120 now you actually have an entry point of higher yields 0:17:41.160 --> 0:17:43.160 and you know that the Fed's going that's a home 0:17:43.240 --> 0:17:45.000 run and this is a great opportunity to be in 0:17:45.040 --> 0:17:45.600 fixed income. 0:17:45.720 --> 0:17:47.480 Is there a chance they skip though and push this 0:17:47.560 --> 0:17:49.200 decision to November December. 0:17:49.440 --> 0:17:52.439 There's always some probability around skip, but we think the 0:17:52.480 --> 0:17:55.320 conversation around skip is really something of twenty twenty five. 0:17:55.640 --> 0:17:57.399 We feel pretty good that the Fed's going to go 0:17:57.440 --> 0:18:00.000 twenty five next week. They're going to go twenty five 0:18:00.000 --> 0:18:02.800 again in December. That puts them in a really good spot. 0:18:02.840 --> 0:18:05.480 They've done some hard work at chopping some wood there 0:18:05.480 --> 0:18:08.119 of one hundred basis points. Then they can pause and 0:18:08.160 --> 0:18:09.160 survey what's going on. 0:18:09.320 --> 0:18:12.080 They have to pause, right because policy in twent twenty five. 0:18:12.119 --> 0:18:14.080 Does anyone have any idea what that's going to look like? 0:18:14.640 --> 0:18:15.760 We do not know right now. 0:18:16.080 --> 0:18:18.359 I think you're absolutely right, but they will start to 0:18:18.400 --> 0:18:20.879 have an inclination. We'll obviously know a lot more. We 0:18:20.920 --> 0:18:23.119 may not know an election day who's actually one and 0:18:23.119 --> 0:18:25.280 how everything else shakes out, but we'll know pretty soon 0:18:25.320 --> 0:18:27.480 and what those policies do look like. It's going to 0:18:27.520 --> 0:18:29.719 take time, though, to your point, to implement them. And 0:18:29.760 --> 0:18:31.560 so for us right now, I think a lot of 0:18:31.560 --> 0:18:33.679 people want to talk about how do you trade the election? 0:18:34.000 --> 0:18:36.720 It's not about trading the election, right It's about where 0:18:36.760 --> 0:18:39.200 do you want to be from a long term portfolio allocation. 0:18:39.680 --> 0:18:42.520 For us, we think it's really important from a strategic 0:18:42.600 --> 0:18:45.520 value perspective to get bonds into your portfolio, and we 0:18:45.560 --> 0:18:46.960 think there's no time like the present. 0:18:47.119 --> 0:18:48.679 So treasury is a big pace of that. Given the 0:18:48.720 --> 0:18:50.840 rise we've seen in yodes across the curve by about 0:18:50.880 --> 0:18:53.639 fifty basis points. How YOD spreads a super time on 0:18:53.680 --> 0:18:56.359 a historical basis two seventy six. Right now, how do 0:18:56.400 --> 0:18:57.840 you frame that for clients at the moment? What's the 0:18:57.880 --> 0:18:59.800 opportunity look like? In coporate credit and. 0:18:59.760 --> 0:19:02.080 A corporate credit is tight. 0:19:02.160 --> 0:19:04.840 But I think what's so amazing right now is that 0:19:05.080 --> 0:19:07.080 you've got a ton of volatility in the rates market. 0:19:07.080 --> 0:19:09.560 We've had no volatility in the credit market. So what's 0:19:09.600 --> 0:19:11.760 behind that? So we start to unpack it. What's behind 0:19:11.840 --> 0:19:14.760 that is there's not a recession. Balance sheets are strong. 0:19:14.800 --> 0:19:17.080 Management companies are doing the right thing. But when you 0:19:17.119 --> 0:19:18.760