1 00:00:00,200 --> 00:00:04,160 Speaker 1: America's GDP is growing at an amazing three percent. Unemployment 2 00:00:04,240 --> 00:00:06,960 Speaker 1: is at the lowest level in sixteen years. The stock 3 00:00:07,000 --> 00:00:10,400 Speaker 1: market is reaching a new record high every day. The 4 00:00:10,480 --> 00:00:13,680 Speaker 1: U s economy is just going to keep on booming, right, Well, 5 00:00:13,760 --> 00:00:18,640 Speaker 1: not so fast. Stocks might be surging, but investors trading 6 00:00:18,680 --> 00:00:23,480 Speaker 1: in the sixteen trillion market for US treasury securities are 7 00:00:23,520 --> 00:00:26,479 Speaker 1: taking a more nuanced view. If you look at what 8 00:00:26,560 --> 00:00:30,680 Speaker 1: the bond market is signaling, not only is there not 9 00:00:30,800 --> 00:00:34,040 Speaker 1: going to be a huge surge in growth, but things 10 00:00:34,040 --> 00:00:38,519 Speaker 1: could conceivably slow down. At the very least, there's skepticism 11 00:00:38,560 --> 00:00:51,040 Speaker 1: that inflation will ever become a problem. Welcome to Benchmark. 12 00:00:51,159 --> 00:00:54,800 Speaker 1: I'm Scott Landman, an economics editor with Bloomberg News in Washington, 13 00:00:55,120 --> 00:00:58,680 Speaker 1: and I'm Daniel Moss, economics writer and editor at Bloomberg 14 00:00:58,800 --> 00:01:01,960 Speaker 1: View in New York. So, Dan, every time I opened 15 00:01:01,960 --> 00:01:04,479 Speaker 1: my Twitter feed, it looks like President Trump is talking 16 00:01:04,480 --> 00:01:07,880 Speaker 1: about how the economy is going gangbusters, the market is 17 00:01:07,920 --> 00:01:10,800 Speaker 1: always at a record high. But I never see him 18 00:01:10,800 --> 00:01:14,039 Speaker 1: talking about the bond market. Well, the stock market is 19 00:01:14,080 --> 00:01:18,000 Speaker 1: easy for Twitter, good economic or financial news. The market 20 00:01:18,040 --> 00:01:21,639 Speaker 1: goes up with the bond market. It's more complicated strong 21 00:01:21,720 --> 00:01:24,880 Speaker 1: economic news is often greeted with a decline in the 22 00:01:24,920 --> 00:01:29,440 Speaker 1: bond market, and the inverse is also true. All right, well, 23 00:01:29,480 --> 00:01:32,279 Speaker 1: let's bring in our guest for some more insight. David 24 00:01:32,319 --> 00:01:35,880 Speaker 1: Aider has been following the bond market for thirty years. 25 00:01:35,920 --> 00:01:40,520 Speaker 1: He's currently the chief macro strategist at Informa Financial Intelligence, 26 00:01:40,840 --> 00:01:43,199 Speaker 1: and he's been the number one ranked US government bond 27 00:01:43,240 --> 00:01:47,200 Speaker 1: strategist by Institutional Investor magazine for more than a decade. 28 00:01:47,440 --> 00:01:50,640 Speaker 1: He joins us on the phone from Connecticut. David, thanks 29 00:01:50,640 --> 00:01:54,840 Speaker 1: for being with us on Benchmark. Good to be here. So, David, 30 00:01:55,280 --> 00:01:58,280 Speaker 1: ask most people to talk about the markets and they'll 31 00:01:58,360 --> 00:02:01,040 Speaker 1: start talking about the stock market it. But why should 32 00:02:01,080 --> 00:02:05,920 Speaker 1: people care more about the bond market instead. Well, because 33 00:02:06,000 --> 00:02:10,680 Speaker 1: people borrow money, Corporations borrow money. The government borrows a 34 00:02:10,760 --> 00:02:13,840 Speaker 1: lot of money, not just this government, but governments around 35 00:02:13,840 --> 00:02:17,800 Speaker 1: the world, and the bond market determines the cost of 36 00:02:17,880 --> 00:02:20,400 Speaker 1: that money. So if you were to see the bond market, 37 00:02:20,400 --> 00:02:24,800 Speaker 1: if you were interesting, interest rates rise, for example, presumably 38 00:02:24,840 --> 00:02:27,320 Speaker 1: people will borrow less and that can have a slowing 39 00:02:27,400 --> 00:02:32,600 Speaker 1: impact on economic growth, certainly on inflation. So it impacts 40 00:02:32,639 --> 00:02:35,200 Speaker 1: us in a big, big way. So when people talk 41 00:02:35,240 --> 00:02:38,760 Speaker 1: about government borrowing. They're not talking about the U. S. 42 00:02:38,880 --> 00:02:43,200 Speaker 1: Treasury or the British Treasury walking down to city bank 43 00:02:43,240 --> 00:02:45,640 Speaker 1: and saying, hey, can I have a loan? They're talking 44 00:02:45,680 --> 00:02:52,280 Speaker 1: about these securitized lending facilities. So when when the government, 45 00:02:52,280 --> 00:02:55,960 Speaker 1: when the U. S. Treasury borrows money, now, it doesn't 46 00:02:56,280 --> 00:02:58,119 Speaker 1: go down to a bank and ask for a loan 47 00:02:58,160 --> 00:03:01,160 Speaker 1: and fill out an application. It goes to the markets. 48 00:03:01,600 --> 00:03:05,920 Speaker 1: And the markets do include banks, um, they include central banks, 49 00:03:06,520 --> 00:03:10,120 Speaker 1: and they have an auction process which determines what the 50 00:03:10,160 --> 00:03:12,720 Speaker 1: interest rate is going to be. So there's a demand 51 00:03:12,840 --> 00:03:17,280 Speaker 1: factor that plays a huge amount um into how much 52 00:03:17,600 --> 00:03:20,600 Speaker 1: how much it's going to cost the government to borrow money. 53 00:03:20,639 --> 00:03:23,000 Speaker 1: So it's not quite like you or I going down 54 00:03:23,000 --> 00:03:25,560 Speaker 1: to a bank, but still there is a market rate 55 00:03:25,600 --> 00:03:30,480 Speaker 1: that is determined now, the market rate for borrowing. It's 56 00:03:30,560 --> 00:03:33,639 Speaker 1: more it tells a broader story than just how much 57 00:03:33,680 --> 00:03:37,440 Speaker 1: the government has to pay to borrow money. Uh. You know, 58 00:03:37,520 --> 00:03:40,920 Speaker 1: one of the widely followed benchmarks, just like people follow 59 00:03:41,000 --> 00:03:44,680 Speaker 1: the SMP five D for stocks, you have the treasury 60 00:03:44,720 --> 00:03:48,480 Speaker 1: security maturing in ten years. You know, people just refer 61 00:03:48,560 --> 00:03:51,120 Speaker 1: to it as the tenure. It's a pretty common benchmark 62 00:03:51,280 --> 00:03:55,600 Speaker 1: and those are currently yielding somewhere around two point four. 63 00:03:56,680 --> 00:03:58,960 Speaker 1: What does that mean? What? What does that tell? What? 64 00:03:58,960 --> 00:04:02,440 Speaker 1: What kind of story does that? Well? You you you 65 00:04:02,480 --> 00:04:05,320 Speaker 1: can look at the tenure, which indeed is the benchmark, 66 00:04:05,920 --> 00:04:10,760 Speaker 1: but the treasury market, the the the runs the gamut 67 00:04:10,920 --> 00:04:14,960 Speaker 1: from you know, short term bills sometimes a matter of 68 00:04:15,000 --> 00:04:18,599 Speaker 1: weeks to thirty year paper, so that's known as the 69 00:04:18,680 --> 00:04:21,880 Speaker 1: yield curve. The tenure is merely a point on the 70 00:04:21,960 --> 00:04:26,360 Speaker 1: yield curve, which has become popular because you know, corporations 71 00:04:26,440 --> 00:04:28,599 Speaker 1: tend to borrow in the tenure sector and the rest 72 00:04:28,600 --> 00:04:31,400 Speaker 1: of the world um tends to borrow in the ten 73 00:04:31,480 --> 00:04:35,800 Speaker 1: year sector. So two point four is only one um 74 00:04:35,960 --> 00:04:38,240 Speaker 1: one spot on the curve. You could go down to 75 00:04:38,279 --> 00:04:41,239 Speaker 1: look at the two year note, for example, which would 76 00:04:41,240 --> 00:04:44,359 Speaker 1: be something on the order of about one eighty, or 77 00:04:44,480 --> 00:04:46,360 Speaker 1: go out to the end of the curve to take 78 00:04:46,400 --> 00:04:50,040 Speaker 1: a look at the thirty year which would be considerably higher, 79 00:04:50,400 --> 00:04:52,520 Speaker 1: considerably higher, So you have what is known as the 80 00:04:52,640 --> 00:04:55,920 Speaker 1: steep yield curve. The interest rate from the short term 81 00:04:56,200 --> 00:05:00,520 Speaker 1: to the long term has has a spread, but actually 82 00:05:00,720 --> 00:05:04,440 Speaker 1: not that steep right now, you know, when we're getting 83 00:05:04,480 --> 00:05:06,760 Speaker 1: into a little bit of the market jargon. Now, but 84 00:05:07,400 --> 00:05:11,039 Speaker 1: you hear a lot about the yield curve flattening, and 85 00:05:11,240 --> 00:05:13,840 Speaker 1: people seem to think that that might not be such 86 00:05:13,880 --> 00:05:17,320 Speaker 1: a great development. What is happening there? How would you? 87 00:05:17,360 --> 00:05:19,960 Speaker 1: How do you explain it? I'll put my economists head 88 00:05:20,000 --> 00:05:24,520 Speaker 1: on and offer that it depends. But but what's going 89 00:05:24,560 --> 00:05:29,039 Speaker 1: on is this? When when the yield curve is steepening, 90 00:05:29,080 --> 00:05:32,599 Speaker 1: meaning one the spread between the very short terms borrowing 91 00:05:32,680 --> 00:05:37,480 Speaker 1: to the long term is wide, it usually tells you, 92 00:05:38,400 --> 00:05:43,000 Speaker 1: historically that we have a lot of growth in the economy. 93 00:05:43,279 --> 00:05:47,960 Speaker 1: The set is is is allowing I guess you would say, 94 00:05:48,560 --> 00:05:52,160 Speaker 1: um for some inflation concerns. The steep deeal curve tells 95 00:05:52,200 --> 00:05:55,280 Speaker 1: you that the market is concerned about growth and inflation 96 00:05:55,720 --> 00:05:58,280 Speaker 1: as a as an anecdote or a derivative of growth. 97 00:05:58,680 --> 00:06:01,240 Speaker 1: The fact that there are two things going on. Not 98 00:06:01,320 --> 00:06:04,720 Speaker 1: only has the yield curve been flattening, but it's been 99 00:06:04,760 --> 00:06:09,440 Speaker 1: flattening only because short term rates arising. Long term rates 100 00:06:09,480 --> 00:06:13,600 Speaker 1: aren't doing anything, and that is the concern, because that 101 00:06:13,800 --> 00:06:18,960 Speaker 1: suggests that growth is slowing or will slow at least. 102 00:06:18,960 --> 00:06:23,279 Speaker 1: The Marcus perception that inflation is going to remain low 103 00:06:24,360 --> 00:06:27,240 Speaker 1: and that the said might be making a mistake. They 104 00:06:27,320 --> 00:06:32,040 Speaker 1: might be hiking raising short rates too aggressively. Now let 105 00:06:32,040 --> 00:06:34,880 Speaker 1: me just challenge you on that point. The lack of 106 00:06:34,960 --> 00:06:39,440 Speaker 1: inflation has been a defining characteristic arguably of say the 107 00:06:39,520 --> 00:06:44,080 Speaker 1: last twenty yes, certainly in the post financial crisis here, 108 00:06:44,720 --> 00:06:49,400 Speaker 1: and yet economic growth has been solid, if unspectacular. There's 109 00:06:49,440 --> 00:06:52,320 Speaker 1: been all sorts of warnings since the economy began growing 110 00:06:52,320 --> 00:06:54,480 Speaker 1: in two thousand and nine that we're on the verge 111 00:06:54,520 --> 00:06:58,760 Speaker 1: of a double dip, etcetera. Hasn't happened. You short signaling 112 00:06:58,760 --> 00:07:03,360 Speaker 1: a slowdown? Am I sure signalians slow down? You know, 113 00:07:04,760 --> 00:07:09,320 Speaker 1: this time might be different. The The difference might be 114 00:07:10,320 --> 00:07:14,120 Speaker 1: that that we are facing an era. The next ten years, 115 00:07:14,160 --> 00:07:18,640 Speaker 1: we're going to see UM a lot more treasury bond issues, 116 00:07:18,640 --> 00:07:21,520 Speaker 1: a lot more treasury market issuance because the deficits rising, 117 00:07:22,160 --> 00:07:25,480 Speaker 1: and if this new tax plan goes through, and it 118 00:07:25,720 --> 00:07:30,360 Speaker 1: likely will, we'll see the deficit rise even more so. 119 00:07:31,680 --> 00:07:35,080 Speaker 1: The treasury, our government has said that they are going 120 00:07:35,120 --> 00:07:38,680 Speaker 1: to increase issuance UM at the shorter end of the 121 00:07:38,760 --> 00:07:42,280 Speaker 1: yield curve. So you have the Fed hiking, you have 122 00:07:42,440 --> 00:07:46,080 Speaker 1: more issuance at least in the near term at the 123 00:07:46,120 --> 00:07:48,440 Speaker 1: short end of the yield curve, So it could be 124 00:07:48,480 --> 00:07:53,480 Speaker 1: a concern about um simply supply and what the Fed 125 00:07:53,600 --> 00:07:59,920 Speaker 1: is doing. However, historically speaking, the yield curve has been 126 00:08:00,120 --> 00:08:06,560 Speaker 1: a very good um predictor or prognosticator of of economic activity. 127 00:08:06,680 --> 00:08:10,480 Speaker 1: And while it is true we've had unspectacular that's how 128 00:08:10,520 --> 00:08:13,760 Speaker 1: I would say it GDP growth, but we continue to 129 00:08:13,800 --> 00:08:19,080 Speaker 1: have very, very very subdued inflation. And I think that 130 00:08:19,160 --> 00:08:22,520 Speaker 1: the yield curve is giving us some warning that the 131 00:08:22,560 --> 00:08:26,760 Speaker 1: Feds hiking in here when inflation is low. This is 132 00:08:26,800 --> 00:08:29,560 Speaker 1: you know, we're nine years into this expansion and we 133 00:08:29,600 --> 00:08:32,160 Speaker 1: still haven't seen inflation. We haven't seen it on the 134 00:08:32,200 --> 00:08:35,600 Speaker 1: income or the wage front, and it we're getting kind 135 00:08:35,640 --> 00:08:39,080 Speaker 1: of late in the cycle um to see that develop. 136 00:08:39,120 --> 00:08:41,199 Speaker 1: And I think that's what the bond market is telling us. 137 00:08:41,720 --> 00:08:45,000 Speaker 1: So are the bond market and the stock market telling 138 00:08:45,240 --> 00:08:49,240 Speaker 1: two different stories about the economy, two stories that cannot 139 00:08:49,240 --> 00:08:52,640 Speaker 1: be reconciled? Are they just telling two sides of the 140 00:08:52,720 --> 00:08:56,000 Speaker 1: same story. Maybe that the stock market is showing that 141 00:08:56,160 --> 00:08:59,400 Speaker 1: corporate profits are expected to keep increasing, yet the bond 142 00:08:59,440 --> 00:09:03,280 Speaker 1: market set well, maybe just not at a spectacular pace. 143 00:09:04,160 --> 00:09:06,440 Speaker 1: So you know, you're dealing with a bond guy, and 144 00:09:06,480 --> 00:09:10,800 Speaker 1: as you said earlier, when the economy is doing poorly, 145 00:09:11,480 --> 00:09:14,160 Speaker 1: me as a bond guy, I'm in my I'm in 146 00:09:14,200 --> 00:09:16,520 Speaker 1: my my zone that I like to see that. So 147 00:09:16,640 --> 00:09:19,800 Speaker 1: I would say that they are telling you two different stories. 148 00:09:20,040 --> 00:09:21,920 Speaker 1: And one of the stories that's been going on with 149 00:09:21,960 --> 00:09:24,840 Speaker 1: the stock market. Obviously we have we do have a 150 00:09:24,920 --> 00:09:29,800 Speaker 1: recovery steady issue, if not spectacular, so we go that. 151 00:09:30,520 --> 00:09:33,440 Speaker 1: But one of the things that has helped um In fact, 152 00:09:33,480 --> 00:09:36,880 Speaker 1: maybe the thing that has helped the stock market over 153 00:09:36,920 --> 00:09:40,280 Speaker 1: these last few years is low interest rates. Why because 154 00:09:40,360 --> 00:09:44,440 Speaker 1: corporations have been borrowing a huge amount of money, tremendous 155 00:09:44,480 --> 00:09:47,920 Speaker 1: amount um. They issue bonds like the government, and what 156 00:09:47,960 --> 00:09:49,880 Speaker 1: are they doing with that cash. What are they doing 157 00:09:49,920 --> 00:09:53,600 Speaker 1: with the bonds that raise money for them? They're buying 158 00:09:53,640 --> 00:09:57,520 Speaker 1: back their own stock. So you've seen you there is 159 00:09:57,679 --> 00:10:02,760 Speaker 1: less stock out there today then there was five ten 160 00:10:03,040 --> 00:10:06,480 Speaker 1: years ago, the buy back situation, and so that has 161 00:10:06,520 --> 00:10:09,520 Speaker 1: been one of the things that has helped prop up 162 00:10:09,640 --> 00:10:11,920 Speaker 1: the stock market, the fact that they've been using so 163 00:10:12,000 --> 00:10:15,440 Speaker 1: much cash to buy back their their own stocks. They're 164 00:10:15,480 --> 00:10:18,480 Speaker 1: the biggest buyer of the stock market, and that happens 165 00:10:18,559 --> 00:10:21,719 Speaker 1: when interest rates are low, and the this spread with 166 00:10:21,840 --> 00:10:25,760 Speaker 1: the corporate bond spread between you know, treasuries and corporate 167 00:10:25,840 --> 00:10:28,640 Speaker 1: bonds is also very tight. So it makes a lot 168 00:10:28,679 --> 00:10:31,319 Speaker 1: of sense, but they're not investing, and I think that 169 00:10:31,320 --> 00:10:33,480 Speaker 1: that will prove a problem. That's why I think the 170 00:10:33,480 --> 00:10:38,040 Speaker 1: bond market is more right or more correct than the 171 00:10:38,080 --> 00:10:41,319 Speaker 1: stock market, because if we do see interest rates rise, 172 00:10:42,480 --> 00:10:44,840 Speaker 1: or if we were to go into an extended period 173 00:10:44,880 --> 00:10:48,280 Speaker 1: of the slowdown, I think all that corporate barring could 174 00:10:48,280 --> 00:10:52,320 Speaker 1: prove to be a problem. Now we've often heard not 175 00:10:52,480 --> 00:10:56,240 Speaker 1: just from government officials, but from investors as well, this mantra, 176 00:10:56,760 --> 00:11:00,600 Speaker 1: the U s Treasury market is the largest, most liquid, 177 00:11:01,040 --> 00:11:07,240 Speaker 1: most secure asset class in the world. Does what's going 178 00:11:07,280 --> 00:11:11,240 Speaker 1: on in the US treasury market now reflect things that 179 00:11:11,280 --> 00:11:14,360 Speaker 1: are going on outside the United States as well as 180 00:11:14,480 --> 00:11:20,520 Speaker 1: issues like Treasury Department sales, tax plan FED Well, it 181 00:11:20,640 --> 00:11:24,520 Speaker 1: certainly does. You know, the bond market is I mean 182 00:11:24,640 --> 00:11:28,960 Speaker 1: our bond market. All bond markets are are international. The 183 00:11:28,960 --> 00:11:32,880 Speaker 1: the largest holders of US treasuries are overseas, and one 184 00:11:32,920 --> 00:11:36,360 Speaker 1: of the largest holders are foreign central banks. Well, when 185 00:11:36,679 --> 00:11:40,120 Speaker 1: they they have had their about of what is known 186 00:11:40,160 --> 00:11:44,280 Speaker 1: as quantitative easing meeting. Central banks have been buying bonds 187 00:11:45,040 --> 00:11:48,400 Speaker 1: to keep interest rates low. They have negative yields in Europe, 188 00:11:48,480 --> 00:11:53,680 Speaker 1: for example, and so we have we have positive yields. 189 00:11:53,760 --> 00:11:57,080 Speaker 1: I mean we don't. You don't have to pay the 190 00:11:57,160 --> 00:11:59,559 Speaker 1: government when you buy a bond. So the point is 191 00:11:59,600 --> 00:12:02,640 Speaker 1: the point is that the demand for U. S. Treasuries 192 00:12:02,760 --> 00:12:07,320 Speaker 1: is very much influenced by activity overseas where there is 193 00:12:07,360 --> 00:12:10,320 Speaker 1: some growth going on. Absolutely, but there are not a 194 00:12:10,320 --> 00:12:13,200 Speaker 1: lot of bonds around because other central banks have bought them, 195 00:12:13,360 --> 00:12:17,199 Speaker 1: and the yields and bonds overseas in many cases are negative. 196 00:12:17,240 --> 00:12:19,840 Speaker 1: There's something on the order of ten trillion dollars worth 197 00:12:19,880 --> 00:12:23,160 Speaker 1: of bonds overseas and have a negative yield. Well, if 198 00:12:23,160 --> 00:12:25,160 Speaker 1: you want a positive yield, come to the US are 199 00:12:25,240 --> 00:12:28,600 Speaker 1: yields might be low or appears to be low, but 200 00:12:28,600 --> 00:12:31,559 Speaker 1: at least there's a yield, right, But does that necessarily 201 00:12:31,640 --> 00:12:33,400 Speaker 1: mean there's going to be a slowdown? I guess what 202 00:12:33,440 --> 00:12:37,839 Speaker 1: I'm saying is we've heard this idea multiple times since 203 00:12:37,920 --> 00:12:40,280 Speaker 1: two thousand and nine, that the economy is headed for 204 00:12:40,280 --> 00:12:44,760 Speaker 1: a double dip. Hasn't happened. I'm just wondering whether this 205 00:12:44,880 --> 00:12:49,680 Speaker 1: reflects the relative attractiveness of the US versus others. The 206 00:12:49,720 --> 00:12:53,640 Speaker 1: other economy that the US is often compared with is China, 207 00:12:53,760 --> 00:12:57,800 Speaker 1: and yet their bond market very different and much more 208 00:12:57,840 --> 00:13:02,520 Speaker 1: difficult for foreign investors to access. So, I mean, it 209 00:13:03,120 --> 00:13:05,760 Speaker 1: is a good question. And of course, at any given 210 00:13:05,840 --> 00:13:08,120 Speaker 1: moment in time, you know, we try to make it simple. 211 00:13:08,200 --> 00:13:11,520 Speaker 1: The yield curve says this UM, and there are these 212 00:13:11,559 --> 00:13:15,760 Speaker 1: other influences we've We've not experienced, you know, in in 213 00:13:15,960 --> 00:13:18,839 Speaker 1: my thirty years a lot of time when there's ever 214 00:13:18,920 --> 00:13:22,240 Speaker 1: been negative yields. So certainly there's a component to that. 215 00:13:22,280 --> 00:13:25,720 Speaker 1: There's certainly a component to it. But I do think 216 00:13:25,760 --> 00:13:30,960 Speaker 1: that we can't dismiss the yield curves shape, or or 217 00:13:31,280 --> 00:13:35,640 Speaker 1: the low yields that we're having UM as simply a 218 00:13:35,679 --> 00:13:39,559 Speaker 1: matter of you know, there's there's a strong demand from overseas, 219 00:13:39,600 --> 00:13:42,200 Speaker 1: you know, because of these negative yields. The fact of 220 00:13:42,240 --> 00:13:46,160 Speaker 1: the matter is here we are nine years into a recovery. 221 00:13:46,200 --> 00:13:49,559 Speaker 1: That's a very long time. That's a very long time. 222 00:13:49,640 --> 00:13:52,240 Speaker 1: So when I say we're late cycle, you know, we're 223 00:13:52,280 --> 00:13:55,560 Speaker 1: closer to the next recession than we were now. The 224 00:13:55,640 --> 00:13:58,960 Speaker 1: yield curve may be hinting at that UM not yet, 225 00:13:59,000 --> 00:14:02,440 Speaker 1: but maybe on on the radar. But the other thing 226 00:14:03,120 --> 00:14:06,920 Speaker 1: is inflation, so we're dealing with like we saw today 227 00:14:06,960 --> 00:14:10,800 Speaker 1: with the with the core CPI number very low, came 228 00:14:10,800 --> 00:14:13,440 Speaker 1: in a little bit lower than expectations. We look at 229 00:14:13,480 --> 00:14:18,200 Speaker 1: the other measures of inflation also very very low one 230 00:14:18,200 --> 00:14:21,520 Speaker 1: point three percent, one point five when we're looking at 231 00:14:21,520 --> 00:14:26,040 Speaker 1: the Fed's preferred measures, so low interest rates, particularly at 232 00:14:26,040 --> 00:14:29,960 Speaker 1: the long end of the Yelk curve. The longer maturities 233 00:14:30,400 --> 00:14:37,760 Speaker 1: are always a reflection of both current inflation and inflation expectations, 234 00:14:38,160 --> 00:14:42,360 Speaker 1: whether it's the surveys that come out or other uh known, 235 00:14:42,720 --> 00:14:45,880 Speaker 1: what the said would call market measures of inflation. Those 236 00:14:45,920 --> 00:14:49,480 Speaker 1: two are pointing to very low inflation um in the 237 00:14:49,520 --> 00:14:52,120 Speaker 1: coming months, in the coming year. David will have to 238 00:14:52,160 --> 00:14:55,200 Speaker 1: wrap it up there. Thanks for explaining that story. It's 239 00:14:55,200 --> 00:14:58,600 Speaker 1: definitely not something that we normally hear out of President 240 00:14:58,640 --> 00:15:01,080 Speaker 1: Trump's Twitter feed at eight. Are great to have you 241 00:15:01,120 --> 00:15:05,640 Speaker 1: on today. Benchmark will be back next week with our 242 00:15:05,720 --> 00:15:08,960 Speaker 1: two part year and special. In the meantime, you can 243 00:15:09,000 --> 00:15:11,760 Speaker 1: find us on the Bloomberg terminal, Bloomberg dot com, our 244 00:15:11,800 --> 00:15:15,120 Speaker 1: Bloomberg app, as well as on Apple Podcasts, pocket Cast, 245 00:15:15,200 --> 00:15:17,680 Speaker 1: and Stitcher. While you're there, take a minute to rate 246 00:15:17,720 --> 00:15:20,120 Speaker 1: and review the show so more listeners can find us 247 00:15:20,400 --> 00:15:21,880 Speaker 1: and let us know what you thought of the show. 248 00:15:22,160 --> 00:15:25,840 Speaker 1: You can follow me on Twitter at at scott Landman Dan, 249 00:15:26,040 --> 00:15:30,640 Speaker 1: you are at Moss Underscore Eco and our guest David 250 00:15:30,760 --> 00:15:33,080 Speaker 1: isn't on Twitter, but you can find insights from his 251 00:15:33,200 --> 00:15:37,680 Speaker 1: firm at at I f I Underscore. Financial Benchmark is 252 00:15:37,680 --> 00:15:41,120 Speaker 1: produced by Topor Foreheads and Magnus Hendrickson. The Head of 253 00:15:41,120 --> 00:15:44,760 Speaker 1: Bloomberg Podcasts is Francesca Levy. Thanks for listening, See you 254 00:15:44,840 --> 00:15:45,280 Speaker 1: next time.