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Speaker 2: This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along
Speaker 2: with Lisa Bromwitz and Amrie Hordern. Join us each day
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Speaker 3: All right, we're going to turn to tech now.
Speaker 1: Dan Ives of webbush raising his Apple price target from
Speaker 1: three hundred dollars to three hundred and twenty five, writing quote,
Speaker 1: we believe Apples heading into a multi year AI driven
Speaker 1: iPhone upgrade cycle that is still being underestimated by the street.
Speaker 1: Apple's on pace to reach the four trillion dollar market
Speaker 1: cap threshold and be the first member of this exclusive club.
Speaker 1: I'm so excited that Dan Ives joins us. Now, Dan,
Speaker 1: thank you so much for spending part of your holiday
Speaker 1: shortened week with us here at Bloomberg. So why now,
Speaker 1: why are rifting the price target now? This awkward week
Speaker 1: between Christmas and New Year's and you said, I have
Speaker 1: a call to make Google.
Speaker 4: Because the Bears they're in hibernation mood because they can't
Speaker 4: find AI in the spreadsheets.
Speaker 3: And look, we're doing the work.
Speaker 4: What we see across the age of supply chain. I mean,
Speaker 4: we're seeing strength, not just in the December. What I
Speaker 4: believe is going to be ultimately a record year for
Speaker 4: Apple two hundred and forty million iPhone units. And that's why, Look,
Speaker 4: this is going to be an AI driven supercycle that's
Speaker 4: multi year, and.
Speaker 3: That's why I look, the hater they hated.
Speaker 4: Two trillion, despised at three trillion, A four trillion can
Speaker 4: be yelling from the.
Speaker 3: Top of the mountains.
Speaker 1: You write your note that you estimate roughly three hundred
Speaker 1: million iPhones globally have not upgraded.
Speaker 5: Over four years.
Speaker 1: So do you think this upgrade cycle is going to
Speaker 1: be let out of necessity because people are just desperate
Speaker 1: for a new phone, or it is it that AI
Speaker 1: capability that Apple is starting to introduce.
Speaker 4: I think about sixty seventy percent of it is that
Speaker 4: is that you've gotten to the point now where that's
Speaker 4: a pin up upgrade cycle that's really unprescedent in for
Speaker 4: Apple prost Remember the install base that's increased two hundred
Speaker 4: million even over the last few years. So the install
Speaker 4: base continues to be the golden goose of Cupertino. But
Speaker 4: the AI driven piece, it's just starting. That's why it's
Speaker 4: to get out the popcorn moment because in our opinion,
Speaker 4: the consumer AI revolution gooz through Cooper Tino and I think, look,
Speaker 4: that's why the bears will talk about valuation like they
Speaker 4: have for years in Apple, it's about some of the
Speaker 4: parts about what AI adds to the story.
Speaker 3: We think it's thirty to four hours per share.
Speaker 1: How hard would it be though for the next upgrade cycle,
Speaker 1: especially if so much is driven now by software updates,
Speaker 1: the hardware hasn't really changed.
Speaker 4: Well, I think that's an iPhone seventeen again, that will
Speaker 4: be you know what we'll be seeing later this year,
Speaker 4: you know, into twenty twenty five, that's actually gonna be
Speaker 4: a hardware driven a new form factor that's really going
Speaker 4: to be AI driven. So that's why this is almost
Speaker 4: it's a one two punch. It's sixteen into seventeen, and
Speaker 4: that's why what makes this unique. It's it's about the
Speaker 4: increased services, and ultimately you have hundreds of apps right
Speaker 4: now in development that are going to be on top
Speaker 4: of Apple intelligence. And that's why the enterprise AI revolutions
Speaker 4: the godfather of AI Jensen, a vidiot.
Speaker 3: The consumer AI revolution goes to Coupertino.
Speaker 4: And I think that's why we could see four trillion
Speaker 4: potentially you know today or Monday.
Speaker 1: One potential difficult spot or is it potential? Is a
Speaker 1: difficult spot is China. How are you thinking about China,
Speaker 1: especially with the fact that Apple needs to partner with
Speaker 1: a local company to introduce.
Speaker 6: All of this.
Speaker 4: Look Cook ten percent politician, ninety percent CEO, right, and
Speaker 4: no one.
Speaker 1: Understand might actually have to be more of a diplomat
Speaker 1: in twenty twenty five ten percent and.
Speaker 3: Maybe thirty percent seventy percent.
Speaker 4: But the point is, look, it's what him and Mosk
Speaker 4: have had to navigate in terms of success in China.
Speaker 4: But what I love about the cycle that probably gets
Speaker 4: announced from the Chinese partner early in twenty twenty five,
Speaker 4: it gets rolled down in April. So the China upgrade
Speaker 4: cycle in terms of AI coming to China, that's when
Speaker 4: that happens in April. And this is just the beginning
Speaker 4: of a multi year AI cycle that plays out from Apple.
Speaker 1: You also talk about Pollenteer and salesforce in your note.
Speaker 1: I recently spoke to Mark Benioff about agent Force and
Speaker 1: this new iteration they introduced of agent force, and he
Speaker 1: said it's the most exciting thing he's worked on in
Speaker 1: his entire career. Is that why you're so excited as well?
Speaker 4: And for context, I mean Bennioff, mount Rush Moore of
Speaker 4: Tech right, but it speaks to our view. It's ten
Speaker 4: pm in this AI party that goes to four am,
Speaker 4: and behind the velvet roops, Bennioff want to see his
Speaker 4: names on the list. Now, all of a sudden he's
Speaker 4: on the dance force. Software is let in now already
Speaker 4: on the dance for From a use case perspective, is
Speaker 4: the messy of AI Pollenteer and look that's one As
Speaker 4: I say, the Bears can see AI in the spreadsheets.
Speaker 4: That's how you know they hated pound Teer as a
Speaker 4: teenager earlier this year. Despises a senior Cisten live in
Speaker 4: Derry Beach at eighty three. But it's just the beginning
Speaker 4: now of what I've viewsed the software age in AI. Salesforce,
Speaker 4: pound tier, and I think others like Mango.
Speaker 1: dB What name do you think we're gonna be talking
Speaker 1: about next year that we're very quiet during twenty twenty four.
Speaker 5: You know, twenty twenty.
Speaker 1: Four really was about Nvidia Tesla.
Speaker 3: What do you think will be the names of twenty
Speaker 3: twenty Yeah, I think there was continued to be.
Speaker 4: In terms of my view for large cap tech, I
Speaker 4: think up twenty five percent two that twenty five I
Speaker 4: think what hasn't been on the radar, it's gonna be
Speaker 4: M and A software cybersecurity because with con done at
Speaker 4: the FTC, that nightmare, whether it's Ninemare and albm Street
Speaker 4: five thirteen, that's done for tech Now, I think you
Speaker 4: can see a lot of accelerated M and A when
Speaker 4: it comes to software, when it comes to cybersecurity, and
Speaker 4: I think that that is is what's going to weed
Speaker 4: this AI cycle.
Speaker 3: And I think.
Speaker 4: Specifically cybersecurity is an area that I believe could ultimately
Speaker 4: be one of the biggest outperformers when it comes.
Speaker 1: To Another tech analyst joined me this week and said
Speaker 1: the same thing. Twenty twenty five is all going to
Speaker 1: be about cybersecurity. I want to end on Tesla overnight,
Speaker 1: Elon Musk was clashing with a far right activist who
Speaker 1: has been close to President elect Trump, Laura Lumer, and
Speaker 1: the crux of the argument was out h one b visus.
Speaker 1: But this individual is also saying that Musk really isn't
Speaker 1: maga and yet he's so close to President elect Trump.
Speaker 1: Do you think there's a risk there actually that he
Speaker 1: will lose that proximity to power, which you said was
Speaker 1: one of the best bets of the Ages.
Speaker 3: Look, it's a bet for the Ages.
Speaker 4: That's I think that bromance actually gets stronger between Musk
Speaker 4: and Trump because my view is that Trump needs Musk
Speaker 4: must needs Trump, and whether it's Ai, whether it's China,
Speaker 4: whether it's some of the policy in terms of Dage,
Speaker 4: we're going to have these continued dust up. So this
Speaker 4: is gonna be a soap opera I think from Musk
Speaker 4: and Trump that continues to play out. But that is
Speaker 4: going to actually strengthen and it continues to be from Musk.
Speaker 4: It's the best bet he ever made on Trump.
Speaker 1: Okay, So this is just a flare up in an episode,
Speaker 1: not the season finale exactly.
Speaker 4: This is just one episode in a ten to twelve
Speaker 4: partter on Netflix.
Speaker 5: All right, Dan, i'ves have webbush.
Speaker 1: Thank you so much for joining us this Friday. Thank
Speaker 1: you so much, Rob for joining us this Friday morning,
Speaker 1: alongside of course Dan Greenhouse. Okay, so you say this
Speaker 1: is going to be challenging, but that was already on display.
Speaker 1: I think last week we had basically three iterations of
Speaker 1: potentially how they could avoid a government shutdown, and they
Speaker 1: did in the end. But what did the whole saga
Speaker 1: tell you about how Trump is going to govern even
Speaker 1: with these majorities he has in the House in the Senate.
Speaker 5: Yeah, first of all, with you both, happy holidays. It
Speaker 5: showed us.
Speaker 7: I think that when you burn institutions down, when you're
Speaker 7: running on an anti institution campaign, then when you come
Speaker 7: into office you can't then rely on those institutions to
Speaker 7: do your bidding.
Speaker 5: Right.
Speaker 7: It's the Republican House majority is a slim majority, and
Speaker 7: it's a disunified majority. It's going to be really hard
Speaker 7: for Trump and especially for Speaker Mike Johnson if he
Speaker 7: gets the gavel on January third, to really ensure that
Speaker 7: they always have a majority vote. This isn't the days
Speaker 7: of Nancy Pelosi where every Democrat stayed in line all
Speaker 7: the time. It's going to be hard to wrangle these folks.
Speaker 3: Right.
Speaker 1: Thirty eight Republicans voted against what Donald Trump wanted to
Speaker 1: see actually enacted all that whole episode, though kind of
Speaker 1: got brushed under the rug. What it said to me
Speaker 1: was that Speaker Johnson didn't have Trump's buying when he
Speaker 1: went to the floor with that deal that was negotiated
Speaker 1: with Democrats. Do you think he's able to keep the gavel?
Speaker 7: I think he probably is, mostly because I'm not quite
Speaker 7: sure if there's anybody else who could win a majority
Speaker 7: vote on January third for Speaker, I would think that
Speaker 7: the next most obvious pick would be Jim Jordan, who
Speaker 7: is even further right than Speaker Johnson, even closer to
Speaker 7: Trump than Speaker Johnson is.
Speaker 5: But Speaker john Johnson has.
Speaker 7: Done a very good job, and by and large he
Speaker 7: really has had Donald Trump's support. Now you know Donald
Speaker 7: Trump is his agenda is going to be difficult to enact.
Speaker 7: He's certainly swinging for the fences. I think for Mike
Speaker 7: Johnson as Speaker, it really is it's about.
Speaker 5: The art of the possible right.
Speaker 7: It's not he can't get everything down that Trump wants
Speaker 7: to get done, or at least he can't get done
Speaker 7: as quickly as Trump would like. So what can he
Speaker 7: do and what can he have Trump's buy and for
Speaker 7: if he has negotiator or cooperate a little bit.
Speaker 8: I agree with a lot of what you're saying, and
Speaker 8: I think the average investor isn't aware. We know it's
Speaker 8: a raise within the majority right now, a couple of seats.
Speaker 8: Obviously some people are departing to leave to be in
Speaker 8: the administration, and obviously Matt Gates is leaving Congress in general.
Speaker 5: But I don't think people are.
Speaker 8: Aware when the TCGA passed, Republic's at two hundred and
Speaker 8: forty or so seats, much larger majority, and so forget
Speaker 8: even the ideological differences that the chip Roy group, if
Speaker 8: you will, exhibits, just mathematically, it's going to be really
Speaker 8: difficult when you can have one or two or three
Speaker 8: Republicans banding together to not pass no tax on tips
Speaker 8: or whatever it is that the administration wants to do.
Speaker 8: Has Republican leadership talked about how to overcome that hurdle?
Speaker 7: Well, I think first of all, they're writing on a
Speaker 7: few more seats to be filled. It's your point to
Speaker 7: have a slightly larger majority after some of these special
Speaker 7: elections are run and seats are filled. But you know,
Speaker 7: I really think it's going to be a question of
Speaker 7: muddling through, right, And this is kind of the issue
Speaker 7: generally speaking. Congress is not built for, you know, big
Speaker 7: fast change, and it's especially try definition, but by definition exactly,
Speaker 7: I mean, that's the whole point. And with Republicans having
Speaker 7: such a small majority not only in the House but
Speaker 7: also in the Senate, and certainly not having the sixty
Speaker 7: boat majority in the sense that they would need to
Speaker 7: unilaterally pass legislation, I mean, it's going to be really challenging.
Speaker 7: And I think that that's one of the reasons why
Speaker 7: we're not seeing TCJ extension talked about in Q one. Right,
Speaker 7: it's going to take a while conversation and negotiation within
Speaker 7: the Republican caucus to get that done.
Speaker 5: Over you Q three, Q.
Speaker 1: Four, every Congressman and every congressman basically becomes king or
Speaker 1: Queen of the Hill in essence. I think of one
Speaker 1: person in particular, Congressman Lawler of New York, who basically
Speaker 1: is saying, I'm not going to vote for anything unless
Speaker 1: salts included because he also wants to run for governor
Speaker 1: of New York. I think, wink wink. I think he
Speaker 1: pretty much said that in his Christmas Hanukkah message. So,
Speaker 1: when you have individuals that are so tethered to specific issues,
Speaker 1: is there in your mind five issues that must be
Speaker 1: included in TCJA in order for it to meet the
Speaker 1: demands of all these different vying factions.
Speaker 7: Well, I think when push comes to shove, the worst
Speaker 7: case for Republicans is we will see a clean TCJA extension.
Speaker 7: So if we get to Q four and there hasn't
Speaker 7: been an agreement reach in base case, base case, we
Speaker 7: get TCJA extension, clean skinny. I mean that's essentially what
Speaker 7: just happened with that the budget negotiations end, you know
Speaker 7: last week, is that there was all of this discussion
Speaker 7: of you know, riders and add ons and this kind
Speaker 7: of major Christmas tree bill with a bunch of stuff,
Speaker 7: you know, individuals, preferences and priorities.
Speaker 5: None of that was in the final bill.
Speaker 7: There was some farm et cetera extension of the Farm bill,
Speaker 7: but mostly it's like the lowest common denominator is the
Speaker 7: clean skinny package. And given that TCJA for individuals ends
Speaker 7: end of twenty twenty five. I think that the absolute
Speaker 7: necessity in our base cases, the Republicans will pass an extension.
Speaker 7: Now the question is what in addition do they pass.
Speaker 7: Is that no tax on tips, no tax on overtime,
Speaker 7: the salt you know, extension or relief. I think all
Speaker 7: of that will be part of the broader negotiation, but
Speaker 7: much harder to get done.
Speaker 8: With the same commerce for the same reason as we
Speaker 8: just discussed. I don't know how you do any of
Speaker 8: the other things. There's no built in constituency in Congress.
Speaker 8: It's not as if we've spent years building up an
Speaker 8: argument for no tax on tips or whatever it might be.
Speaker 8: So to your point about the TCGA clean extension being
Speaker 8: the base case, I think that's almost your only outcome.
Speaker 8: It's your bear, it's your base, and you it's your
Speaker 8: bull outcome, because I just don't see how when you
Speaker 8: have two Republicans that want one thing and four Republicans
Speaker 8: that are against that but for something else. I just
Speaker 8: don't know how you come to any sort of an
Speaker 8: agreement on anything, especially if you're going to try to
Speaker 8: get two reconciliation bills in this year. So I think
Speaker 8: that's your base, your bull and your bare outcome. I
Speaker 8: don't think there's any conversation at all.
Speaker 7: Yeah, I totally agree. Congressman Lawler and others will certainly
Speaker 7: be talking about salt, and I think that there's a
Speaker 7: small chance we could see a doubling of the saltcat
Speaker 7: from ten.
Speaker 5: To twenty thousand.
Speaker 8: Sure, the marriage penalty, but other.
Speaker 7: Than that, I think it is fair to say that
Speaker 7: is the skinny bill. You know, this simple answer is
Speaker 7: probably going to be the most likely answer throughout this
Speaker 7: next Congress, because the bottom line.
Speaker 5: Is I totally agree. Once you, you know, try and
Speaker 5: bring a few folks.
Speaker 7: On one side, you're going to lose folks on the
Speaker 7: other side, and so it winds up just being again
Speaker 7: the art of the possible. What can Mike Johnson convince
Speaker 7: President Elect Donald Trump is good enough, is enough of
Speaker 7: his agenda to get through? And what can he convinces
Speaker 7: caucus to vote for.
Speaker 1: Okay, I want to talk to you about the fight
Speaker 1: that was looming yesterday on Twitter. I'm not sure if
Speaker 1: you saw it.
Speaker 5: It was between Laura.
Speaker 1: Lumers, actually a ton of other people. I know Dan
Speaker 1: you also saw it. So basically Mosk and the far
Speaker 1: right at the end of the day are arguing over
Speaker 1: immigration and H one B VISs. Where do you think
Speaker 1: Trump comes down on this issue?
Speaker 7: Well, I think Trump his focus first and foremost is
Speaker 7: on the border. So it's not say he hasn't thought
Speaker 7: about the H one B question that you know, skilled
Speaker 7: immigrants coming question. It is not his first priority, right
Speaker 7: he wants to secure the southern border if he.
Speaker 1: Wants, not his but the priority of many people he's
Speaker 1: putting in the administration.
Speaker 7: Yeah, exactly, I totally agree, and frankly the priority of
Speaker 7: you know, his base that got him elected not once
Speaker 7: but twice. And so you know, I don't think he
Speaker 7: has on the H one B question.
Speaker 5: It's not going to be his priority.
Speaker 7: It's clear that it's you know, Ramaswamian and Musk want
Speaker 7: to talk about it. And it is again another example
Speaker 7: of a rift we're seeing in this kind of bigger
Speaker 7: tent Republican party.
Speaker 8: So for the viewers that made be as online as
Speaker 8: we are, just to clarify, there is this debate going
Speaker 8: on among what we call the right right that wants
Speaker 8: to restrict immigration in a broad sense, and what has
Speaker 8: been known now is the tech right, the elon Musk
Speaker 8: world that agrees in general with the idea of restricting
Speaker 8: immigration large but also wants to increase the availability of
Speaker 8: these h one bvss that provide for the quote unquote
Speaker 8: skilled immigration, and those two worlds are clashing. For some reason,
Speaker 8: it happened over the weekend. I guess the vek Ramaswami
Speaker 8: got involved. I would agree that I don't know that
Speaker 8: the President Electroump has spent too much time thinking about
Speaker 8: the nuances of this, but he has spoken in the
Speaker 8: past about the need for skilled immigration. He wants to
Speaker 8: make it possible for those people to come here. I
Speaker 8: think while this is a fun online conversation, I think
Speaker 8: the skilled immigration argument is going to win out because
Speaker 8: you do have Musk sitting in such an important position
Speaker 8: next to the president. You have had the President discussing
Speaker 8: the need for skilled immigration, and it does provide for
Speaker 8: the masses something of a buifer case. So you don't
Speaker 8: look as restrictive by saying, listen, we just want to
Speaker 8: close the border to your point, but we also want
Speaker 8: the skilled people to come here. Is that not where
Speaker 8: this settles out?
Speaker 5: Well.
Speaker 7: I think it is probably the hope for Donald Trump
Speaker 7: and an Elon muskets that's right, that's kind of your
Speaker 7: perfect miss, it's your best. We're going to close the border,
Speaker 7: but we're also going to allow the best and the
Speaker 7: brightest into the country to propel our economy forward. The
Speaker 7: issue is that's just not how the far right sees it, right,
Speaker 7: and so I actually think that changes to the H
Speaker 7: and B programmer are going to be harder or I
Speaker 7: should say, easier said than done. Right, it makes sense
Speaker 7: to many of us, it makes sense in the context
Speaker 7: of the economy as it sits today. Certainly you can
Speaker 7: have both, right, you can close the border, you can
Speaker 7: also allow that the most skilled in that there's no
Speaker 7: sort of internal disagreement there. But the issue is, I
Speaker 7: think MAGA Republicans it's not what they want, right. And
Speaker 7: while Trump doesn't have to get re elected in four years,
Speaker 7: you can't get re elected in four years. House Republicans
Speaker 7: have to get relected in two years. Center replt have
Speaker 7: to get relected two, four and six years from now,
Speaker 7: so they have to answer to the MAGA device.
Speaker 1: And you made a great point. Musk is definitely not
Speaker 1: in this far right Laura Lumer camp. He's battling them
Speaker 1: for those that maybe are just kicking up online on
Speaker 1: exactly what happened overnight. So let's talk about January. We
Speaker 1: have sixty seconds sequencing immigration, tax policy, tariffs one two three.
Speaker 7: I think, so we'll get the first reconcilation package will
Speaker 7: be immigration and energy. I think the second sort of
Speaker 7: big conversational that we're already having it now here is tariffs.
Speaker 5: It's probably Europe.
Speaker 7: Early, China, I mean early, but most importantly backloaded and
Speaker 7: very high on and targeted on specific sectors. And then
Speaker 7: the tax question is going to be two h And
Speaker 7: the bottom line is it's because that Republicans don't have
Speaker 7: the package around which they can form a majority.
Speaker 1: Today, Bobcasey, thank you so much for joining us this morning,
Speaker 1: and happy holidays and happy twenty twenty five. Rob Casey
Speaker 1: of Signum Global Advisors. Chuck Lieberman of Advisor's Capital Management,
Speaker 1: writing this, the economic environment should be slightly positive for
Speaker 1: socks and slightly negative for long term bonds. Inflation prospects
Speaker 1: could easily worsen between tariffs and immigration policy, which would
Speaker 1: freeze monetary policy for some period, but longer term rates
Speaker 1: would increase. We're hearing a lot of this, Chuck, and
Speaker 1: he joins us. Now, Chuck, thank you for spending your
Speaker 1: Friday morning with you. Happy holidays and New Year to you.
Speaker 1: So how are you thinking about the start of twenty
Speaker 1: twenty five, especially when policy things like tariffs immigration are
Speaker 1: going to be so important to how the bond market trades.
Speaker 6: Absolutely right, Emory, I agree with you. Happy holidays to
Speaker 6: you as well. In my judgment, there are things to
Speaker 6: be nervous about. The possibility of tariffs will obviously increase
Speaker 6: prices for domestic consumers, potentially a really big negative when
Speaker 6: the Fed is trying very hard to bring inflation back
Speaker 6: to two percent. We also have concerns about the labor market.
Speaker 6: Job growth has been pretty good, but if immigration policy
Speaker 6: changes and President Trump actually removes people from the US
Speaker 6: who came in illegally but nonetheless are working, that's going
Speaker 6: to reduce our labor supply, which will drive up labor
Speaker 6: costs and also inflation. So there are reasons to be
Speaker 6: concerned about the prospects for inflation when it.
Speaker 1: Comes to inflation and tariffs. Do you think this is
Speaker 1: a one off hit or could this be more pervasive?
Speaker 6: Well, it initially is largely one off, but it then
Speaker 6: tends to spread through the system. When you have a
Speaker 6: single autocontract, for example, that's negotiated between the UAW and
Speaker 6: the auto companies, it's a one off thing and it
Speaker 6: pertains just to that industry, but nonetheless everyone else is watching.
Speaker 6: Everyone else is looking, and many other workers labor unions
Speaker 6: get ideas that they can also push for ten percent
Speaker 6: increases for four years in a row. That's a large increase,
Speaker 6: and so it does tend to transmit through the system.
Speaker 1: So what do you make in terms of FED policy
Speaker 1: with this kind of fiscal environment.
Speaker 6: Well, I think the FED wanted to get rates down
Speaker 6: while they could, and so they sort of rushed. They
Speaker 6: did fifty and then twenty five and then twenty five,
Speaker 6: so they reduced rates by four hundred basis points. But
Speaker 6: the market is looking at the economy, and the market
Speaker 6: is seeing that the economy is not weak. If you
Speaker 6: recall a year ago, a lot of people were forecasting recession.
Speaker 6: Obviously that didn't happen. In fact, growth is well above potential,
Speaker 6: and it becomes even further above potential if we have
Speaker 6: fewer workers because we are getting illegal immigrants to leave
Speaker 6: the country. So no matter how you slice it, I
Speaker 6: think we've got inflation risk out there, the economy will
Speaker 6: probably grow more slowly. If you can't hire, you can't
Speaker 6: expand the economy as quickly, So we could have a
Speaker 6: very unusual combination of moderation and growth, yet upward pressure
Speaker 6: on inflation.
Speaker 1: Doing the set at the moment is restrictive.
Speaker 6: No, very Simply what I look at is not overnight money,
Speaker 6: because if you look at overnight money relative to inflation,
Speaker 6: you can make a case that the funds rate is
Speaker 6: roughly on average where it belongs historically. You have a
Speaker 6: much much tougher case when you look at the ten
Speaker 6: year at a four to sixty yield, with inflation in
Speaker 6: the ballpark of let's say two sixty. I'm being a
Speaker 6: little bit generous here. You have the two hundred basis
Speaker 6: points over inflation. Historically it's been more like two point fifty.
Speaker 6: So in my judgment, interest rates are not a bar
Speaker 6: to investment to spending, and we see very strong corporate
Speaker 6: issuance of debt in the marketplace because corporations see prevailing
Speaker 6: interest rates is attractive.
Speaker 1: So when you put all of this together, potentially inflationary policies,
Speaker 1: you don't think the FED is restrictive. Do you think
Speaker 1: we could see a twenty twenty five when the Fed
Speaker 1: is actually not just on pause but maybe raising interest rates.
Speaker 6: Yes, but not in the early part of the year.
Speaker 6: In the early part of the year, the Fed is
Speaker 6: going to wait to see what happens with policy, with tariffs,
Speaker 6: with immigration policy. They'll look at the growth rate of
Speaker 6: the economy, and they will wait. They can afford to wait.
Speaker 6: There's no reason for them to rush ahead to lower
Speaker 6: rates anymore, and they have good reason to regret, shall
Speaker 6: we say, having lowered rates as much as they have.
Speaker 6: But I expect them to be on pause for a while,
Speaker 6: and then it depends very much on how things play out.
Speaker 1: Chuck, thank you so much for your time this morning.
Speaker 1: Happy and healthy twenty twenty five to you, Chuck Lieberman
Speaker 1: of Advisor's Capital Management.
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Speaker 2: nine am Eastern. Subscribe to the podcast on Apple, Spotify
Speaker 2: or anywhere else you listen, and as always on the
Speaker 2: Bloomberg Terminal and the Bloomberg Business app.