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Speaker 1: Bloomberg Audio Studios, Podcasts, radio News.

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Speaker 2: This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along

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Speaker 2: with Lisa Bromwitz and Amrie Hordert. Join us each day

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Speaker 2: for insight from the best in markets, economics, and geopolitics

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Speaker 2: from our global headquarters in New York City. We are

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Speaker 2: live on Bloomberg Television weekday mornings from six to nine

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Speaker 2: am Eastern. Subscribe to the podcast on Apple, Spotify or

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Speaker 2: anywhere else you listen, and as always on the Bloomberg

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Speaker 2: Terminal and the Bloomberg Business app. We begin this out

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Speaker 2: with stocks on the brink of all time highs, with

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Speaker 2: a sort of data on deck. Marvin Low of State Street, right,

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Speaker 2: and the following we still find the current environment remaining

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Speaker 2: conducive for risk. Rotate America, not South America, which puts

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Speaker 2: treasuries and the dollar most at risk. Marvin joins us.

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Speaker 2: Now for one Marvin, good morning. Fifteen percent for the

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Speaker 2: year ahead. No, you're pushing back. I don't know what

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Speaker 2: accounting he's using.

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Speaker 3: What a kind of genip figure is even the team looking.

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Speaker 4: Well, yeah, exactly exactly.

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Speaker 5: I mean trend growth is two percent, right, We're above

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Speaker 5: trend growth for the last several quarters. We have a

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Speaker 5: tendency to underestimate the strength of the US economy, but

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Speaker 5: double digits.

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Speaker 2: You know why people are bullish, though maybe not that bullish,

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Speaker 2: but bullish, And it's because we've already had write cups

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Speaker 2: from the Federal Reserve. Sure, there's tanks free funds to

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Speaker 2: come through the next several months. And we're looking at

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Speaker 2: just four companies with campex intentions of six hundred and

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Speaker 2: fifty billion dollars, and when they come to the debt market,

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Speaker 2: the market's taking it down really really well.

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Speaker 3: Is it hard to find that story?

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Speaker 4: I think it is hard to fade the story.

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Speaker 5: You know, it might be hard to you know, plow

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Speaker 5: more into it at this point, but I don't think

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Speaker 5: you're fading that story. And ultimately, we are seeing the

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Speaker 5: rotation that seems to be getting a lot of attention

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Speaker 5: over the last couple of weeks as a healthy rationalization

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Speaker 5: of where you're supposed to put your money into the markets.

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Speaker 1: I'm stuck on the fifteen percent and this idea that

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Speaker 1: potentially not necessarily we're going to at fifteen percent, but

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Speaker 1: it indicates the way that President Trump is some of

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Speaker 1: the advices are thinking about the United States, which is

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Speaker 1: in some ways an emerging economy. In some ways, this

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Speaker 1: is a not developed market that sort of has a

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Speaker 1: staid growth rate. And I just wonder if there are

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Speaker 1: broader implications of that kind of lofty goal for the

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Speaker 1: way that US assets are treated, given some of the

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Speaker 1: volatility and the fact that people have increasingly looked at

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Speaker 1: some of the budget as well as the potential coordination

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Speaker 1: between the Treasure and FED as emerging market behavior not

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Speaker 1: necessarily a developed market.

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Speaker 6: One.

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Speaker 5: Yeah, I mean, that's a great analogy, and it certainly

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Speaker 5: is a conversation that I think everyone's had over the

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Speaker 5: last year, where you know, the developed markets have become

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Speaker 5: the emerging markets in a lot of ways. The restraint

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Speaker 5: that we see out of the emerging markets are making

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Speaker 5: them the better behave children in the room if you will.

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Speaker 5: You know, it does speak to the risk parameters that

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Speaker 5: you demand on assets in a market that is talking

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Speaker 5: that way and administrations that ultimately want to try to

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Speaker 5: push that type of agenda.

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Speaker 4: For sure, there is a cost for that volatility.

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Speaker 1: Not seeing it in terms of the bond auctions that

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Speaker 1: we're getting. We're getting some treasury auctions this week We've

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Speaker 1: got a lot of US companies that are raising debt overseas.

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Speaker 1: It doesn't seem like that premium is getting baked in

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Speaker 1: any mature way.

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Speaker 6: Is that going to shift?

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Speaker 4: Yeah? You know what, I do think that.

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Speaker 5: The dollar is weaker than one would normally expect with

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Speaker 5: the type of growth environment that we're talking about, and

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Speaker 5: long yields are higher than one would expect during a

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Speaker 5: cutting cycle. You know, the fact that we're looking at

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Speaker 5: ten year yields, particularly from a curve perspective, widening out

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Speaker 5: into this cutting cycle is somewhat unique. But regime change

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Speaker 5: wise takes time, and I think that you have the

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Speaker 5: factors that might be driving it, but the catalysts have

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Speaker 5: yet to materialize. We're all watching it and we're waiting

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Speaker 5: for whether or not we're really dealing with a new regime.

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Speaker 5: But for the moment, you have to give the FED,

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Speaker 5: the whole financial system the benefit of the doubt that

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Speaker 5: you can't really avoid these asset classes.

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Speaker 7: Well, the President weighed in on Kevin Moosh last night

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Speaker 7: that it was his runner up in the first time,

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Speaker 7: and then when asked about what's going on with the

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Speaker 7: DOJ investigation and whether it was worth it to have

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Speaker 7: this investigation, it means it's holding up the nominations. He

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Speaker 7: basically was like, nonchalant.

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Speaker 6: If it happens, it happens.

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Speaker 7: How are you thinking about a future Kevin warsh led

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Speaker 7: Federal Reserve? Do you think he's going to come in

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Speaker 7: and be dubvish?

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Speaker 4: You know what?

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Speaker 5: Everything That's pretty much the conversation that everyone's been having

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Speaker 5: for the last couple of weeks.

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Speaker 4: His history is the.

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Speaker 5: Exact opposite the way I see it, whether it's the

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Speaker 5: fact that policy setting occurs within the committee and he's

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Speaker 5: one vote, and the balance sheet discussions and ultimately, you know,

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Speaker 5: a Fed Treasury type of a cur accord where we

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Speaker 5: talk about potentially less Fed buying at the long end,

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Speaker 5: all of that is a higher yield. So you know,

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Speaker 5: for me, it still is a duration neutral and potentially

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Speaker 5: steeper curve type of discussion that comes out of all

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Speaker 5: of this.

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Speaker 7: The President was also saying how he's been fighting with

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Speaker 7: Senator Tom Tillis for a while, which is why he's retiring.

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Speaker 7: Do you have any concern about independence of the Fed?

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Speaker 5: You know what, Yes, we always have concern, you know,

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Speaker 5: having said that the Federal Reserve Act has what stood

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Speaker 5: the test of time. You know, I do think that

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Speaker 5: the market will quickly punish absolutely bad policy.

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Speaker 4: There's a difference in credibility.

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Speaker 5: If they're cutting by twenty five basis points, you know,

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Speaker 5: and there's disagreement around it, that's not that's not necessarily independence.

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Speaker 5: If you're actually saying that you're going to go to

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Speaker 5: the zero lower bound while inflation is three to four

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Speaker 5: percent and accelerating, that's bad policy. It gets punished, and

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Speaker 5: it immediately makes its way into the financial market.

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Speaker 2: Sa'ce vess tens right now to seventy banksis points. There's

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Speaker 2: some statements then not that state, what come, nun have

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Speaker 2: you got in mind?

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Speaker 5: You know, I've got, I've got and I've had then

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Speaker 5: this program in particular for for quite some time, somewhere

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Speaker 5: around the one twenty range. Historically, that is not overly steep.

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Speaker 5: And when we talk about regime changes, we really do

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Speaker 5: need to think through several cycles, including before the GFC,

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Speaker 5: when the carver was more naturally steep.

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Speaker 3: Is that driven by the front end or alone ent It's.

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Speaker 5: Driven by a bit of both, So a bear Stephen

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Speaker 5: or a bear twist.

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Speaker 1: As part of that discussion, how quickly can you actually

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Speaker 1: start seeing that come to fruition. So we hear this

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Speaker 1: from a lot of different people. The yield curve should

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Speaker 1: be steeper, you should have an extra yield premium on

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Speaker 1: the long end. We haven't really seen it come to pass,

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Speaker 1: especially when you see sort of how immune long end

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Speaker 1: yield curve has been to even some of the volatility

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Speaker 1: we're seeing in Japan. So what sort of your explanation

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Speaker 1: of what hope people are holding on too before that

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Speaker 1: starts to really materialized.

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Speaker 5: I mean, I mean, treasuries are this incredibly interesting asset

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Speaker 5: class within the world, and it's not as if anybody

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Speaker 5: is incentive to sell aggressively around it. It's really a

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Speaker 5: function of when they buy less. And I think we're

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Speaker 5: starting to see those types of conversations emerge. Do we

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Speaker 5: continue to see less foreign interest in the US markets

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Speaker 5: because there are one hundred year bonds, I thinkuld buy elsewhere?

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Speaker 5: That is kind of the iterative process around how we

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Speaker 5: get there. But it really does make it difficult if

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Speaker 5: you're playing a trade and you expect a duration our

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Speaker 5: performance because the FED is cutting we haven't had it

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Speaker 5: and I wouldn't expect it.

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Speaker 3: Do you think alphabet exists in one hundred.

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Speaker 5: Years, the history of one hundred year bonds, and I

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Speaker 5: haven't been around for all of them, but is not

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Speaker 5: necessarily great.

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Speaker 3: Stay with us. More Bloomberg surveillance coming up after this.

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Speaker 2: The issue is for the president for the White House

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Speaker 2: is that many of these issues built coming out of

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Speaker 2: the pandemic. The problem they've got when you sit in

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Speaker 2: the White House, you own it going into the midterms, and.

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Speaker 6: He's owning it now.

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Speaker 1: He's trying to sell it in the same way that

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Speaker 1: they've sold it in the past, which is this is

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Speaker 1: really great, this is excellent, and will it translate to

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Speaker 1: how people feel about it?

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Speaker 2: John Labor, if your range A group has this to say,

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Speaker 2: the primary season will be more unpredictable than usual. The

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Speaker 2: national and environment for twenty twenty six looks very positive

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Speaker 2: for Democrats. John joins us now for more, John welcome,

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Speaker 2: there's the president of the Republicans have to runway the

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Speaker 2: time to turn this around.

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Speaker 6: Probably not.

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Speaker 8: I mean, I think there's a world where there's a

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Speaker 8: booming economy between now and November and that helps them

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Speaker 8: save some of these marginal seats. But you know, Americans

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Speaker 8: have to feel it, and they have to be convinced

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Speaker 8: that it's the Trump administration's actions that are driving it.

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Speaker 8: So you want to see lower unemployment, which is very

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Speaker 8: difficult given how low it is already. You want to

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Speaker 8: see the presidents and poll numbers improving. And he's underwater

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Speaker 8: on all the top issues the economy, inflation, immigration, and

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Speaker 8: he's got to really change the narrative there. And I

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Speaker 8: think importantly, you need Americans to feel like they can

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Speaker 8: afford what they want. And I think that's the biggest

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Speaker 8: challenge that face Biden. It's the biggest challenge that face Trump.

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Speaker 8: You're not going to turn around the price of housing

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Speaker 8: between now and November. Maybe you can make a difference

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Speaker 8: on groceries or some of the other things that people

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Speaker 8: feel are too high priced energy, Perhaps college affordability is

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Speaker 8: not going anywhere. These fundamental things that make most American

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Speaker 8: voters unheal just aren't going to turn around. And like

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Speaker 8: you said, John, you own it when you're the president.

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Speaker 8: So if people don't like the direction of the country,

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Speaker 8: they blame you. Trump is personally unpopular and just hasn't

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Speaker 8: proven the ability to expand his appeal really throughout the

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Speaker 8: course of his political career. So it would really surprise

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Speaker 8: me if the Democrats didn't take the House and potentially

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Speaker 8: the Senate, although that's a lot less likely.

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Speaker 6: So for the remain of the.

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Speaker 7: Year, what can we see the White House do to

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Speaker 7: try to turn this around. We saw a beef directive

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Speaker 7: overnight looking at Bangladesh social media. They say that tariff

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Speaker 7: rates are going to be cut. Are we going to

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Speaker 7: see the President actually reverse some of his signature policies.

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Speaker 8: Yeah, I think tariffs are likely to come down between

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Speaker 8: now and the end of the year. That's probably because

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Speaker 8: of this court case and also because of the cost

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Speaker 8: of living concerns. They're going to continue to push these

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Speaker 8: stimulus checks. You know, they've got a number of other

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Speaker 8: ideas about ways that they can lower the cost of living,

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Speaker 8: But I think a lot of it's just going to

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Speaker 8: be window dressing because the actual levers the White House

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Speaker 8: has to pull aren't that great. Look, the Biden administration

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Speaker 8: looked at all these options, and it's not like there's

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Speaker 8: a big ideological gap between what the Trump team is

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Speaker 8: willing to do and what the Biden team is willing

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Speaker 8: to do. In fact, Trump is embracing policies that even

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Speaker 8: the Biden administration said, we're two interventionists for the government

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Speaker 8: to think about capping interest rate fees and stuff like that.

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Speaker 8: So all of these things have been looked at and rejected.

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Speaker 8: If the White House could do something about the cost

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Speaker 8: of living, they would have done it by now. They

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Speaker 8: can goose the economy. They're going to run it hot,

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Speaker 8: and you heard Trump talk about that just now. But

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Speaker 8: I don't think that helps address the fundamental concerns that

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Speaker 8: are a wait for President Trump right now, John.

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Speaker 7: When it comes to the midterms, how bad do you

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Speaker 7: think it is going to be Republicans? I know we

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Speaker 7: had that state Senate seat in Texas that was a

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Speaker 7: plus seventeen Trump district, But also over the weekend another

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Speaker 7: unique election in Louisiana a House seat. This was another

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Speaker 7: Trump district that a Democrat won. How bad is it

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Speaker 7: going to be for Republicans?

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Speaker 8: Yeah, the Republicans have a structural issue, which is that

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Speaker 8: the coalition that's formed over the coalition that they put

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Speaker 8: together over the last ten years is a Trump coalition,

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Speaker 8: and that means that a lot of those voters only

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Speaker 8: show up to vote when Trump's at the top of

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Speaker 8: the ticket. Twenty twenty was close. He won in twenty four,

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Speaker 8: twenty sixteen, he was close. He almost won the popular vote,

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Speaker 8: but in the off cycle elections they just aren't doing

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Speaker 8: that well, and it's because their voters don't show up.

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Speaker 8: And I probably anticipate that this time around. So you're

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Speaker 8: looking at you know, if you look at previous wave

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Speaker 8: elections in the US. In twenty twelve, the Democrats picked

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Speaker 8: up about sixty seats, and twenty eighteen, the Democrats picked

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Speaker 8: up sorry, the Republicans picked up about sixty seats. In

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Speaker 8: twenty eighteen, the Democrats picked up about forty. And I

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Speaker 8: think because of redistricting and jerrymandering and the way they're

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Speaker 8: able to draw districts, even a wave election this cycle,

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Speaker 8: where let's say the Democrats are ahead by three to

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Speaker 8: five points in the national popular vote, which would be huge,

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Speaker 8: I think there's a kind of a ceiling as to

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Speaker 8: how far they can go because these districts have drawn

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Speaker 8: to be so friendly to Republican incumbents. So I would

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Speaker 8: be looking for a twenty to twenty five seat shift.

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Speaker 8: Anything less than that, of it's in the ten into

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Speaker 8: fifteen range, is probably a good night for the Republicans.

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Speaker 8: Anything more than that would be a real. I think

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Speaker 8: massive wave for the.

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Speaker 1: Democrats House Republicans who are up for a re election.

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Speaker 1: How much are they closely aligning themselves with President Trump

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Speaker 1: and his agenda right now versus trying to distance themselves.

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Speaker 8: I think you align yourself with the president through the

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Speaker 8: primary and you want to look like you're a problem

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Speaker 8: solving guy or woman that gets things done, and aligning

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Speaker 8: yourself with the president in the general could be helpful

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Speaker 8: with that. Again, a lot of these districts are very,

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Speaker 8: very safe, so you know, most members of Congress are

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Speaker 8: going to say, hey, I'm a Trump Republican. I want

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Speaker 8: to get this done for President Trump. You know there

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Speaker 8: will be a few who are in these more marginal seats,

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Speaker 8: people like Mike Lawler in New York. You know Susan

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Speaker 8: Collins in Maine who's not running. But you know they've

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Speaker 8: got these people who are in these more moderate seats

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Speaker 8: who are going to be looking to make distance from

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Speaker 8: the president. But it's not going to be I don't think.

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Speaker 8: I don't expect a jail break for Republicans between now

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Speaker 8: and November.

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Speaker 2: Stay with us Multilinpex dividance coming up off to this

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Speaker 2: Hi Rose tomorrow morning about twenty four an a thirty

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Speaker 2: east in time. If you're just joined, I guess welcome

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Speaker 2: a bit soften I'm expected. On retail sales, we were

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Speaker 2: looking for positive zero point four and we got zero

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Speaker 2: point zero. Greig dak e y John to snap them all,

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Speaker 2: Greg and Mornic, good morning. What do you make of

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Speaker 2: that downside surprise? How much wight would you put on it?

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Speaker 9: I think what's very interesting is that over the course

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Speaker 9: of the past few months, we were trying to explain

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Speaker 9: where the strength and consumer spending was coming from, and.

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Speaker 6: We were talking a lot about polarization.

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Speaker 9: We were talking about the wealthy doing more of their

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Speaker 9: fair share of spending. We were talking about credit growth,

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Speaker 9: we were talking about a savings dip, all of which

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Speaker 9: are real. But the reality is that the averages are

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Speaker 9: softer than we had anticipated. So what this tells us

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Speaker 9: is that even with a savings dip and the saving

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Speaker 9: rate having fallen two percentage point since April, even with

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Speaker 9: credit growth being quite strong in December, and even with

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Speaker 9: affluent consumers still doing more than their fair shit or

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Speaker 9: spending spending, momentum is softening. Why because the labor market

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Speaker 9: is softening. This is the key pillar to income growth

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Speaker 9: and in turn to consumer spending activity, and we are

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Speaker 9: seeing that labor pillar start to slow and show slower

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Speaker 9: income growth.

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Speaker 2: It sounds like you don't think tax refunds are going

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Speaker 2: to send this story around.

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Speaker 9: Well, there was this proposition that tax refunds were essentially

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Speaker 9: spent ahead of time, that people were banking on these

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Speaker 9: tax refunds to spend. That's rarely the case, and even

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Speaker 9: if they had done so, there was this question as

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Speaker 9: to how much more fuel these could bring in the

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Speaker 9: early part of twenty twenty six, with these tax refunds

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Speaker 9: either being spent or used to reimburse credit or to

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Speaker 9: replenish savings.

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Speaker 6: I think that story is one that we're going to.

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Speaker 9: Have to pay very close attention to, because yes, there

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Speaker 9: will be larger tax refunds.

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Speaker 6: But who gets these tax refunds and how.

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Speaker 9: Are they being put to use in an environment where

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Speaker 9: the labor market is in a deep freeze and where

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Speaker 9: job opportunities are not as widely available as they once were,

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Speaker 9: and where income growth is slowing. Real disposable income growth

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Speaker 9: over the course of November and into December one percent

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Speaker 9: consumer spending in November two and a half percent, and

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Speaker 9: we're seeing as of today with the retail sales data

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Speaker 9: that that momentum is slowing going.

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Speaker 6: Into twenty six.

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Speaker 1: We spent more than two hours on this program talking

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Speaker 1: about the boom of the US economy and how we're

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Speaker 1: going to see a run a hot type of environment

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Speaker 1: right now with all of this hyperscaler spending, and then

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Speaker 1: we see spending by the average consumer that comes in

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Speaker 1: extremely disappointing and points to a completely different pricture.

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Speaker 6: If you watch what.

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Speaker 1: They do, not necessarily what they say. How do these

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Speaker 1: two stories get reconciled.

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Speaker 6: Who benefits from the growth? That is the key question.

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Speaker 9: We are in an environment where not everybody is benefiting

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Speaker 9: from growth.

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Speaker 6: We are seeing an environment where when you look.

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Speaker 9: At productivity growth, it's quite strong, and I think it's real.

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Speaker 6: It's not AI driven.

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Speaker 9: It's driven by businesses trying to do more in a

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Speaker 9: high cost and life viarnment, So that is real. We're

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Speaker 9: seeing the gains, however, benefit a few. It's a winner's

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Speaker 9: takes all type of environment. It's an environment where a

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Speaker 9: lot of the gains are accruing to capital.

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Speaker 6: And not labor. If you look at real wage growth.

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Speaker 9: Right now, and we're seeing with the employment costs in

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Speaker 9: next that adjusted for inflation, we're very close to zero.

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Speaker 9: It's an indication not that the economy is not benefiting

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Speaker 9: from stronger productivity growth, but.

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Speaker 6: Instead that the gains are not split equally.

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Speaker 9: They're going to profit margins, they're not going to real

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Speaker 9: wage growth, and that means that income is under pressure

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Speaker 9: and that we have this fragile foundation to growth when

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Speaker 9: it comes to consumer spending activity.

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Speaker 6: Is there a breaking point for this?

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Speaker 1: And I'm talking about in economic breaking point, not necessarily

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Speaker 1: a political breaking point. We talk a lot about potential

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Speaker 1: policies that are populists that come and redistribute the wealth,

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Speaker 1: et cetera that could stem from this type of dynamic.

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Speaker 1: But is there a market equalizing factor that comes from

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Speaker 1: people not able to spend maybe on some of the

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Speaker 1: goods that might be enabled by artificial intelligence. I mean,

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Speaker 1: when does that sort of bridge gets broken through.

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Speaker 9: I don't know that there is one point at which

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Speaker 9: something breaks, but the reality is that a narrow foundation

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Speaker 9: to growth is less stable in terms of economic momentum.

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Speaker 9: If you have more weight that is put towards higher

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Speaker 9: income individuals that are doing more than their fair share

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Speaker 9: of spending then as a result of that, any type

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Speaker 9: of uncertainty on the financial market front can lead to

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Speaker 9: a pullback in spending from those individuals. And if the

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Speaker 9: foundations in terms of income growth for the masses, in

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Speaker 9: terms of consumers are softer than that means that they

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Speaker 9: are more susceptible to pulling back and being more judicious

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Speaker 9: when it comes to outlays.

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Speaker 6: Same thing is valid on the business front.

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Speaker 9: We often talk about a ca shaped economy on the

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Speaker 9: consumer front, It's the same on the business front. A

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Speaker 9: few businesses are driving business investment. It's not all businesses

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Speaker 9: that are investing. And that means that when you look

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Speaker 9: at profit margins on average, they're still very healthy and

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Speaker 9: they are a good sign and a reassuring sign.

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Speaker 6: But look at small businesses.

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Speaker 9: They're struggling in the face of a number of these

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Speaker 9: headwinds and they're not driving growth as strongly as the

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Speaker 9: larger businesses.

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Speaker 7: Is it too soon to extrapolate, maybe potentially what also

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Speaker 7: is going on here?

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Speaker 6: Are prices too high?

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Speaker 7: Are we seeing that people are just buying less or

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Speaker 7: as we see in some of the consumer confidence reports

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Speaker 7: and sentiment data, people are concerned about the job prospects, upcoming,

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Speaker 7: so maybe.

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Speaker 4: They're not spending as much.

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Speaker 7: What do you make of actually what is going on

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Speaker 7: in the psychosis of the American consumer.

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Speaker 6: I think the.

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Speaker 9: Split between labor and capital is really an example of

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Speaker 9: how businesses and consumers are feeling this economy.

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Speaker 6: Anybody that benefits from strong income.

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Speaker 9: Growth, whether it's via the stock market or via wage growth,

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Speaker 9: is going.

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Speaker 6: To feel relatively well.

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Speaker 9: But the masses that are not benefiting from these types

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Speaker 9: of rapid wage growth and these types of strong job

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Speaker 9: growth environments, they are the ones that are struggling. They

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Speaker 9: are the ones that are being more judicious as to

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Speaker 9: how they spend.

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Speaker 6: From a business standpoint, they.

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Speaker 9: Are the ones being more judicious as to who they hire,

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Speaker 9: what skills they look for, what salaries they offer as

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Speaker 9: entry wages, and how much growth they tolerate. And that

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Speaker 9: is really the narrow foundation to growth that we're currently seeing,

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Speaker 9: and that is why most people do not feel happy

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Speaker 9: about the current economic environment. Yet average growth figures are

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Speaker 9: still relatively healthy.

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Speaker 7: What are you expecting them for tomorrow when it comes

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Speaker 7: to the first clean reate in a while for payrolls.

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Speaker 9: I don't know that we're going to get clean data

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Speaker 9: for a few months in terms of CPI in terms

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Speaker 9: of employment.

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Speaker 6: But what I do expect tomorrow cleaner is.

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Speaker 9: An environment where we see almost no job growth after

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Speaker 9: revisions in twenty twenty five. Why because we're going to

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Speaker 9: get the quarterly census of employment and wages that will

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Speaker 9: show a strong negative revision to job growth through March

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Speaker 9: of twenty twenty five, and the birth death model that

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Speaker 9: is being used to forecast job growth over the rest

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Speaker 9: of twenty twenty five will lead to job growth being

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Speaker 9: very close to zero in twenty twenty five. Yes, that

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Speaker 9: may not matter because we can argue that there has

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Speaker 9: been a significant negative shock from labor supply and reduced immigration.

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Speaker 9: But it does matter for everybody that is looking for

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Speaker 9: a job and that is reliant on income.

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Speaker 6: As a source of spending.

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Speaker 9: That weakness is something that we have to be very

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Speaker 9: cautious of. The income story is going to be the

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Speaker 9: key story in twenty twenty.

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Speaker 2: Why are some FAT officials less concerned about that than others?

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Speaker 9: I think it depends on what the weight is that

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Speaker 9: you put on the employment side of the mandate versus

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Speaker 9: the inflation side of the mandate. If you put more

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Speaker 9: weight on the inflation side, of the mandate, which is.

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Speaker 6: What a lot of policymakers are doing right now.

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Speaker 9: You're seeing an environment where essentially inflation is still above

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Speaker 9: the target around three percent when you look at the

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Speaker 9: PC gauge. That is a concern because they do not

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Speaker 9: want inflation to become un anchored to the upside and

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Speaker 9: not come back down to the target. If you focus

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Speaker 9: more as Governor Waller has been focusing on the labor

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Speaker 9: side of the mandate, then you're more focused about a

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Speaker 9: potential downside risk to labor market activity. And when you

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Speaker 9: look at a broad range of labor market indicators, they're

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Speaker 9: not as reassuring as we may observe in some of.

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Speaker 6: The other data.

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Speaker 9: If you look at how people are feeling about their

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Speaker 9: job prospects, if you look at the hiring rate, if

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Speaker 9: you look at wage growth, which I find to be

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Speaker 9: the best indicator of underlying labor market demand, it's softening,

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Speaker 9: it's not accelerating, and real wage growth.

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Speaker 6: Is very close to zero.

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Speaker 9: Those are signs that the labor market is softer than

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Speaker 9: what might have appeared up till now in terms of

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Speaker 9: payroll growth and the unemployment rate.

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Speaker 2: It's hard to wake against that. That's the government want

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Speaker 2: of camp as well. This is the Bloomberg Seventans podcast,

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Speaker 2: bringing you the best in markets, economics, anngient politics. You

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Speaker 2: podcast on Apple, Spotify or anywhere else you listen, and

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