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Speaker 2: This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along
Speaker 2: with Lisa Bromwitz and Amrie Hordert. Join us each day
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Speaker 2: with stocks on the brink of all time highs, with
Speaker 2: a sort of data on deck. Marvin Low of State Street, right,
Speaker 2: and the following we still find the current environment remaining
Speaker 2: conducive for risk. Rotate America, not South America, which puts
Speaker 2: treasuries and the dollar most at risk. Marvin joins us.
Speaker 2: Now for one Marvin, good morning. Fifteen percent for the
Speaker 2: year ahead. No, you're pushing back. I don't know what
Speaker 2: accounting he's using.
Speaker 3: What a kind of genip figure is even the team looking.
Speaker 4: Well, yeah, exactly exactly.
Speaker 5: I mean trend growth is two percent, right, We're above
Speaker 5: trend growth for the last several quarters. We have a
Speaker 5: tendency to underestimate the strength of the US economy, but
Speaker 5: double digits.
Speaker 2: You know why people are bullish, though maybe not that bullish,
Speaker 2: but bullish, And it's because we've already had write cups
Speaker 2: from the Federal Reserve. Sure, there's tanks free funds to
Speaker 2: come through the next several months. And we're looking at
Speaker 2: just four companies with campex intentions of six hundred and
Speaker 2: fifty billion dollars, and when they come to the debt market,
Speaker 2: the market's taking it down really really well.
Speaker 3: Is it hard to find that story?
Speaker 4: I think it is hard to fade the story.
Speaker 5: You know, it might be hard to you know, plow
Speaker 5: more into it at this point, but I don't think
Speaker 5: you're fading that story. And ultimately, we are seeing the
Speaker 5: rotation that seems to be getting a lot of attention
Speaker 5: over the last couple of weeks as a healthy rationalization
Speaker 5: of where you're supposed to put your money into the markets.
Speaker 1: I'm stuck on the fifteen percent and this idea that
Speaker 1: potentially not necessarily we're going to at fifteen percent, but
Speaker 1: it indicates the way that President Trump is some of
Speaker 1: the advices are thinking about the United States, which is
Speaker 1: in some ways an emerging economy. In some ways, this
Speaker 1: is a not developed market that sort of has a
Speaker 1: staid growth rate. And I just wonder if there are
Speaker 1: broader implications of that kind of lofty goal for the
Speaker 1: way that US assets are treated, given some of the
Speaker 1: volatility and the fact that people have increasingly looked at
Speaker 1: some of the budget as well as the potential coordination
Speaker 1: between the Treasure and FED as emerging market behavior not
Speaker 1: necessarily a developed market.
Speaker 6: One.
Speaker 5: Yeah, I mean, that's a great analogy, and it certainly
Speaker 5: is a conversation that I think everyone's had over the
Speaker 5: last year, where you know, the developed markets have become
Speaker 5: the emerging markets in a lot of ways. The restraint
Speaker 5: that we see out of the emerging markets are making
Speaker 5: them the better behave children in the room if you will.
Speaker 5: You know, it does speak to the risk parameters that
Speaker 5: you demand on assets in a market that is talking
Speaker 5: that way and administrations that ultimately want to try to
Speaker 5: push that type of agenda.
Speaker 4: For sure, there is a cost for that volatility.
Speaker 1: Not seeing it in terms of the bond auctions that
Speaker 1: we're getting. We're getting some treasury auctions this week We've
Speaker 1: got a lot of US companies that are raising debt overseas.
Speaker 1: It doesn't seem like that premium is getting baked in
Speaker 1: any mature way.
Speaker 6: Is that going to shift?
Speaker 4: Yeah? You know what, I do think that.
Speaker 5: The dollar is weaker than one would normally expect with
Speaker 5: the type of growth environment that we're talking about, and
Speaker 5: long yields are higher than one would expect during a
Speaker 5: cutting cycle. You know, the fact that we're looking at
Speaker 5: ten year yields, particularly from a curve perspective, widening out
Speaker 5: into this cutting cycle is somewhat unique. But regime change
Speaker 5: wise takes time, and I think that you have the
Speaker 5: factors that might be driving it, but the catalysts have
Speaker 5: yet to materialize. We're all watching it and we're waiting
Speaker 5: for whether or not we're really dealing with a new regime.
Speaker 5: But for the moment, you have to give the FED,
Speaker 5: the whole financial system the benefit of the doubt that
Speaker 5: you can't really avoid these asset classes.
Speaker 7: Well, the President weighed in on Kevin Moosh last night
Speaker 7: that it was his runner up in the first time,
Speaker 7: and then when asked about what's going on with the
Speaker 7: DOJ investigation and whether it was worth it to have
Speaker 7: this investigation, it means it's holding up the nominations. He
Speaker 7: basically was like, nonchalant.
Speaker 6: If it happens, it happens.
Speaker 7: How are you thinking about a future Kevin warsh led
Speaker 7: Federal Reserve? Do you think he's going to come in
Speaker 7: and be dubvish?
Speaker 4: You know what?
Speaker 5: Everything That's pretty much the conversation that everyone's been having
Speaker 5: for the last couple of weeks.
Speaker 4: His history is the.
Speaker 5: Exact opposite the way I see it, whether it's the
Speaker 5: fact that policy setting occurs within the committee and he's
Speaker 5: one vote, and the balance sheet discussions and ultimately, you know,
Speaker 5: a Fed Treasury type of a cur accord where we
Speaker 5: talk about potentially less Fed buying at the long end,
Speaker 5: all of that is a higher yield. So you know,
Speaker 5: for me, it still is a duration neutral and potentially
Speaker 5: steeper curve type of discussion that comes out of all
Speaker 5: of this.
Speaker 7: The President was also saying how he's been fighting with
Speaker 7: Senator Tom Tillis for a while, which is why he's retiring.
Speaker 7: Do you have any concern about independence of the Fed?
Speaker 5: You know what, Yes, we always have concern, you know,
Speaker 5: having said that the Federal Reserve Act has what stood
Speaker 5: the test of time. You know, I do think that
Speaker 5: the market will quickly punish absolutely bad policy.
Speaker 4: There's a difference in credibility.
Speaker 5: If they're cutting by twenty five basis points, you know,
Speaker 5: and there's disagreement around it, that's not that's not necessarily independence.
Speaker 5: If you're actually saying that you're going to go to
Speaker 5: the zero lower bound while inflation is three to four
Speaker 5: percent and accelerating, that's bad policy. It gets punished, and
Speaker 5: it immediately makes its way into the financial market.
Speaker 2: Sa'ce vess tens right now to seventy banksis points. There's
Speaker 2: some statements then not that state, what come, nun have
Speaker 2: you got in mind?
Speaker 5: You know, I've got, I've got and I've had then
Speaker 5: this program in particular for for quite some time, somewhere
Speaker 5: around the one twenty range. Historically, that is not overly steep.
Speaker 5: And when we talk about regime changes, we really do
Speaker 5: need to think through several cycles, including before the GFC,
Speaker 5: when the carver was more naturally steep.
Speaker 3: Is that driven by the front end or alone ent It's.
Speaker 5: Driven by a bit of both, So a bear Stephen
Speaker 5: or a bear twist.
Speaker 1: As part of that discussion, how quickly can you actually
Speaker 1: start seeing that come to fruition. So we hear this
Speaker 1: from a lot of different people. The yield curve should
Speaker 1: be steeper, you should have an extra yield premium on
Speaker 1: the long end. We haven't really seen it come to pass,
Speaker 1: especially when you see sort of how immune long end
Speaker 1: yield curve has been to even some of the volatility
Speaker 1: we're seeing in Japan. So what sort of your explanation
Speaker 1: of what hope people are holding on too before that
Speaker 1: starts to really materialized.
Speaker 5: I mean, I mean, treasuries are this incredibly interesting asset
Speaker 5: class within the world, and it's not as if anybody
Speaker 5: is incentive to sell aggressively around it. It's really a
Speaker 5: function of when they buy less. And I think we're
Speaker 5: starting to see those types of conversations emerge. Do we
Speaker 5: continue to see less foreign interest in the US markets
Speaker 5: because there are one hundred year bonds, I thinkuld buy elsewhere?
Speaker 5: That is kind of the iterative process around how we
Speaker 5: get there. But it really does make it difficult if
Speaker 5: you're playing a trade and you expect a duration our
Speaker 5: performance because the FED is cutting we haven't had it
Speaker 5: and I wouldn't expect it.
Speaker 3: Do you think alphabet exists in one hundred.
Speaker 5: Years, the history of one hundred year bonds, and I
Speaker 5: haven't been around for all of them, but is not
Speaker 5: necessarily great.
Speaker 3: Stay with us. More Bloomberg surveillance coming up after this.
Speaker 2: The issue is for the president for the White House
Speaker 2: is that many of these issues built coming out of
Speaker 2: the pandemic. The problem they've got when you sit in
Speaker 2: the White House, you own it going into the midterms, and.
Speaker 6: He's owning it now.
Speaker 1: He's trying to sell it in the same way that
Speaker 1: they've sold it in the past, which is this is
Speaker 1: really great, this is excellent, and will it translate to
Speaker 1: how people feel about it?
Speaker 2: John Labor, if your range A group has this to say,
Speaker 2: the primary season will be more unpredictable than usual. The
Speaker 2: national and environment for twenty twenty six looks very positive
Speaker 2: for Democrats. John joins us now for more, John welcome,
Speaker 2: there's the president of the Republicans have to runway the
Speaker 2: time to turn this around.
Speaker 6: Probably not.
Speaker 8: I mean, I think there's a world where there's a
Speaker 8: booming economy between now and November and that helps them
Speaker 8: save some of these marginal seats. But you know, Americans
Speaker 8: have to feel it, and they have to be convinced
Speaker 8: that it's the Trump administration's actions that are driving it.
Speaker 8: So you want to see lower unemployment, which is very
Speaker 8: difficult given how low it is already. You want to
Speaker 8: see the presidents and poll numbers improving. And he's underwater
Speaker 8: on all the top issues the economy, inflation, immigration, and
Speaker 8: he's got to really change the narrative there. And I
Speaker 8: think importantly, you need Americans to feel like they can
Speaker 8: afford what they want. And I think that's the biggest
Speaker 8: challenge that face Biden. It's the biggest challenge that face Trump.
Speaker 8: You're not going to turn around the price of housing
Speaker 8: between now and November. Maybe you can make a difference
Speaker 8: on groceries or some of the other things that people
Speaker 8: feel are too high priced energy, Perhaps college affordability is
Speaker 8: not going anywhere. These fundamental things that make most American
Speaker 8: voters unheal just aren't going to turn around. And like
Speaker 8: you said, John, you own it when you're the president.
Speaker 8: So if people don't like the direction of the country,
Speaker 8: they blame you. Trump is personally unpopular and just hasn't
Speaker 8: proven the ability to expand his appeal really throughout the
Speaker 8: course of his political career. So it would really surprise
Speaker 8: me if the Democrats didn't take the House and potentially
Speaker 8: the Senate, although that's a lot less likely.
Speaker 6: So for the remain of the.
Speaker 7: Year, what can we see the White House do to
Speaker 7: try to turn this around. We saw a beef directive
Speaker 7: overnight looking at Bangladesh social media. They say that tariff
Speaker 7: rates are going to be cut. Are we going to
Speaker 7: see the President actually reverse some of his signature policies.
Speaker 8: Yeah, I think tariffs are likely to come down between
Speaker 8: now and the end of the year. That's probably because
Speaker 8: of this court case and also because of the cost
Speaker 8: of living concerns. They're going to continue to push these
Speaker 8: stimulus checks. You know, they've got a number of other
Speaker 8: ideas about ways that they can lower the cost of living,
Speaker 8: But I think a lot of it's just going to
Speaker 8: be window dressing because the actual levers the White House
Speaker 8: has to pull aren't that great. Look, the Biden administration
Speaker 8: looked at all these options, and it's not like there's
Speaker 8: a big ideological gap between what the Trump team is
Speaker 8: willing to do and what the Biden team is willing
Speaker 8: to do. In fact, Trump is embracing policies that even
Speaker 8: the Biden administration said, we're two interventionists for the government
Speaker 8: to think about capping interest rate fees and stuff like that.
Speaker 8: So all of these things have been looked at and rejected.
Speaker 8: If the White House could do something about the cost
Speaker 8: of living, they would have done it by now. They
Speaker 8: can goose the economy. They're going to run it hot,
Speaker 8: and you heard Trump talk about that just now. But
Speaker 8: I don't think that helps address the fundamental concerns that
Speaker 8: are a wait for President Trump right now, John.
Speaker 7: When it comes to the midterms, how bad do you
Speaker 7: think it is going to be Republicans? I know we
Speaker 7: had that state Senate seat in Texas that was a
Speaker 7: plus seventeen Trump district, But also over the weekend another
Speaker 7: unique election in Louisiana a House seat. This was another
Speaker 7: Trump district that a Democrat won. How bad is it
Speaker 7: going to be for Republicans?
Speaker 8: Yeah, the Republicans have a structural issue, which is that
Speaker 8: the coalition that's formed over the coalition that they put
Speaker 8: together over the last ten years is a Trump coalition,
Speaker 8: and that means that a lot of those voters only
Speaker 8: show up to vote when Trump's at the top of
Speaker 8: the ticket. Twenty twenty was close. He won in twenty four,
Speaker 8: twenty sixteen, he was close. He almost won the popular vote,
Speaker 8: but in the off cycle elections they just aren't doing
Speaker 8: that well, and it's because their voters don't show up.
Speaker 8: And I probably anticipate that this time around. So you're
Speaker 8: looking at you know, if you look at previous wave
Speaker 8: elections in the US. In twenty twelve, the Democrats picked
Speaker 8: up about sixty seats, and twenty eighteen, the Democrats picked
Speaker 8: up sorry, the Republicans picked up about sixty seats. In
Speaker 8: twenty eighteen, the Democrats picked up about forty. And I
Speaker 8: think because of redistricting and jerrymandering and the way they're
Speaker 8: able to draw districts, even a wave election this cycle,
Speaker 8: where let's say the Democrats are ahead by three to
Speaker 8: five points in the national popular vote, which would be huge,
Speaker 8: I think there's a kind of a ceiling as to
Speaker 8: how far they can go because these districts have drawn
Speaker 8: to be so friendly to Republican incumbents. So I would
Speaker 8: be looking for a twenty to twenty five seat shift.
Speaker 8: Anything less than that, of it's in the ten into
Speaker 8: fifteen range, is probably a good night for the Republicans.
Speaker 8: Anything more than that would be a real. I think
Speaker 8: massive wave for the.
Speaker 1: Democrats House Republicans who are up for a re election.
Speaker 1: How much are they closely aligning themselves with President Trump
Speaker 1: and his agenda right now versus trying to distance themselves.
Speaker 8: I think you align yourself with the president through the
Speaker 8: primary and you want to look like you're a problem
Speaker 8: solving guy or woman that gets things done, and aligning
Speaker 8: yourself with the president in the general could be helpful
Speaker 8: with that. Again, a lot of these districts are very,
Speaker 8: very safe, so you know, most members of Congress are
Speaker 8: going to say, hey, I'm a Trump Republican. I want
Speaker 8: to get this done for President Trump. You know there
Speaker 8: will be a few who are in these more marginal seats,
Speaker 8: people like Mike Lawler in New York. You know Susan
Speaker 8: Collins in Maine who's not running. But you know they've
Speaker 8: got these people who are in these more moderate seats
Speaker 8: who are going to be looking to make distance from
Speaker 8: the president. But it's not going to be I don't think.
Speaker 8: I don't expect a jail break for Republicans between now
Speaker 8: and November.
Speaker 2: Stay with us Multilinpex dividance coming up off to this
Speaker 2: Hi Rose tomorrow morning about twenty four an a thirty
Speaker 2: east in time. If you're just joined, I guess welcome
Speaker 2: a bit soften I'm expected. On retail sales, we were
Speaker 2: looking for positive zero point four and we got zero
Speaker 2: point zero. Greig dak e y John to snap them all,
Speaker 2: Greg and Mornic, good morning. What do you make of
Speaker 2: that downside surprise? How much wight would you put on it?
Speaker 9: I think what's very interesting is that over the course
Speaker 9: of the past few months, we were trying to explain
Speaker 9: where the strength and consumer spending was coming from, and.
Speaker 6: We were talking a lot about polarization.
Speaker 9: We were talking about the wealthy doing more of their
Speaker 9: fair share of spending. We were talking about credit growth,
Speaker 9: we were talking about a savings dip, all of which
Speaker 9: are real. But the reality is that the averages are
Speaker 9: softer than we had anticipated. So what this tells us
Speaker 9: is that even with a savings dip and the saving
Speaker 9: rate having fallen two percentage point since April, even with
Speaker 9: credit growth being quite strong in December, and even with
Speaker 9: affluent consumers still doing more than their fair shit or
Speaker 9: spending spending, momentum is softening. Why because the labor market
Speaker 9: is softening. This is the key pillar to income growth
Speaker 9: and in turn to consumer spending activity, and we are
Speaker 9: seeing that labor pillar start to slow and show slower
Speaker 9: income growth.
Speaker 2: It sounds like you don't think tax refunds are going
Speaker 2: to send this story around.
Speaker 9: Well, there was this proposition that tax refunds were essentially
Speaker 9: spent ahead of time, that people were banking on these
Speaker 9: tax refunds to spend. That's rarely the case, and even
Speaker 9: if they had done so, there was this question as
Speaker 9: to how much more fuel these could bring in the
Speaker 9: early part of twenty twenty six, with these tax refunds
Speaker 9: either being spent or used to reimburse credit or to
Speaker 9: replenish savings.
Speaker 6: I think that story is one that we're going to.
Speaker 9: Have to pay very close attention to, because yes, there
Speaker 9: will be larger tax refunds.
Speaker 6: But who gets these tax refunds and how.
Speaker 9: Are they being put to use in an environment where
Speaker 9: the labor market is in a deep freeze and where
Speaker 9: job opportunities are not as widely available as they once were,
Speaker 9: and where income growth is slowing. Real disposable income growth
Speaker 9: over the course of November and into December one percent
Speaker 9: consumer spending in November two and a half percent, and
Speaker 9: we're seeing as of today with the retail sales data
Speaker 9: that that momentum is slowing going.
Speaker 6: Into twenty six.
Speaker 1: We spent more than two hours on this program talking
Speaker 1: about the boom of the US economy and how we're
Speaker 1: going to see a run a hot type of environment
Speaker 1: right now with all of this hyperscaler spending, and then
Speaker 1: we see spending by the average consumer that comes in
Speaker 1: extremely disappointing and points to a completely different pricture.
Speaker 6: If you watch what.
Speaker 1: They do, not necessarily what they say. How do these
Speaker 1: two stories get reconciled.
Speaker 6: Who benefits from the growth? That is the key question.
Speaker 9: We are in an environment where not everybody is benefiting
Speaker 9: from growth.
Speaker 6: We are seeing an environment where when you look.
Speaker 9: At productivity growth, it's quite strong, and I think it's real.
Speaker 6: It's not AI driven.
Speaker 9: It's driven by businesses trying to do more in a
Speaker 9: high cost and life viarnment, So that is real. We're
Speaker 9: seeing the gains, however, benefit a few. It's a winner's
Speaker 9: takes all type of environment. It's an environment where a
Speaker 9: lot of the gains are accruing to capital.
Speaker 6: And not labor. If you look at real wage growth.
Speaker 9: Right now, and we're seeing with the employment costs in
Speaker 9: next that adjusted for inflation, we're very close to zero.
Speaker 9: It's an indication not that the economy is not benefiting
Speaker 9: from stronger productivity growth, but.
Speaker 6: Instead that the gains are not split equally.
Speaker 9: They're going to profit margins, they're not going to real
Speaker 9: wage growth, and that means that income is under pressure
Speaker 9: and that we have this fragile foundation to growth when
Speaker 9: it comes to consumer spending activity.
Speaker 6: Is there a breaking point for this?
Speaker 1: And I'm talking about in economic breaking point, not necessarily
Speaker 1: a political breaking point. We talk a lot about potential
Speaker 1: policies that are populists that come and redistribute the wealth,
Speaker 1: et cetera that could stem from this type of dynamic.
Speaker 1: But is there a market equalizing factor that comes from
Speaker 1: people not able to spend maybe on some of the
Speaker 1: goods that might be enabled by artificial intelligence. I mean,
Speaker 1: when does that sort of bridge gets broken through.
Speaker 9: I don't know that there is one point at which
Speaker 9: something breaks, but the reality is that a narrow foundation
Speaker 9: to growth is less stable in terms of economic momentum.
Speaker 9: If you have more weight that is put towards higher
Speaker 9: income individuals that are doing more than their fair share
Speaker 9: of spending then as a result of that, any type
Speaker 9: of uncertainty on the financial market front can lead to
Speaker 9: a pullback in spending from those individuals. And if the
Speaker 9: foundations in terms of income growth for the masses, in
Speaker 9: terms of consumers are softer than that means that they
Speaker 9: are more susceptible to pulling back and being more judicious
Speaker 9: when it comes to outlays.
Speaker 6: Same thing is valid on the business front.
Speaker 9: We often talk about a ca shaped economy on the
Speaker 9: consumer front, It's the same on the business front. A
Speaker 9: few businesses are driving business investment. It's not all businesses
Speaker 9: that are investing. And that means that when you look
Speaker 9: at profit margins on average, they're still very healthy and
Speaker 9: they are a good sign and a reassuring sign.
Speaker 6: But look at small businesses.
Speaker 9: They're struggling in the face of a number of these
Speaker 9: headwinds and they're not driving growth as strongly as the
Speaker 9: larger businesses.
Speaker 7: Is it too soon to extrapolate, maybe potentially what also
Speaker 7: is going on here?
Speaker 6: Are prices too high?
Speaker 7: Are we seeing that people are just buying less or
Speaker 7: as we see in some of the consumer confidence reports
Speaker 7: and sentiment data, people are concerned about the job prospects, upcoming,
Speaker 7: so maybe.
Speaker 4: They're not spending as much.
Speaker 7: What do you make of actually what is going on
Speaker 7: in the psychosis of the American consumer.
Speaker 6: I think the.
Speaker 9: Split between labor and capital is really an example of
Speaker 9: how businesses and consumers are feeling this economy.
Speaker 6: Anybody that benefits from strong income.
Speaker 9: Growth, whether it's via the stock market or via wage growth,
Speaker 9: is going.
Speaker 6: To feel relatively well.
Speaker 9: But the masses that are not benefiting from these types
Speaker 9: of rapid wage growth and these types of strong job
Speaker 9: growth environments, they are the ones that are struggling. They
Speaker 9: are the ones that are being more judicious as to
Speaker 9: how they spend.
Speaker 6: From a business standpoint, they.
Speaker 9: Are the ones being more judicious as to who they hire,
Speaker 9: what skills they look for, what salaries they offer as
Speaker 9: entry wages, and how much growth they tolerate. And that
Speaker 9: is really the narrow foundation to growth that we're currently seeing,
Speaker 9: and that is why most people do not feel happy
Speaker 9: about the current economic environment. Yet average growth figures are
Speaker 9: still relatively healthy.
Speaker 7: What are you expecting them for tomorrow when it comes
Speaker 7: to the first clean reate in a while for payrolls.
Speaker 9: I don't know that we're going to get clean data
Speaker 9: for a few months in terms of CPI in terms
Speaker 9: of employment.
Speaker 6: But what I do expect tomorrow cleaner is.
Speaker 9: An environment where we see almost no job growth after
Speaker 9: revisions in twenty twenty five. Why because we're going to
Speaker 9: get the quarterly census of employment and wages that will
Speaker 9: show a strong negative revision to job growth through March
Speaker 9: of twenty twenty five, and the birth death model that
Speaker 9: is being used to forecast job growth over the rest
Speaker 9: of twenty twenty five will lead to job growth being
Speaker 9: very close to zero in twenty twenty five. Yes, that
Speaker 9: may not matter because we can argue that there has
Speaker 9: been a significant negative shock from labor supply and reduced immigration.
Speaker 9: But it does matter for everybody that is looking for
Speaker 9: a job and that is reliant on income.
Speaker 6: As a source of spending.
Speaker 9: That weakness is something that we have to be very
Speaker 9: cautious of. The income story is going to be the
Speaker 9: key story in twenty twenty.
Speaker 2: Why are some FAT officials less concerned about that than others?
Speaker 9: I think it depends on what the weight is that
Speaker 9: you put on the employment side of the mandate versus
Speaker 9: the inflation side of the mandate. If you put more
Speaker 9: weight on the inflation side, of the mandate, which is.
Speaker 6: What a lot of policymakers are doing right now.
Speaker 9: You're seeing an environment where essentially inflation is still above
Speaker 9: the target around three percent when you look at the
Speaker 9: PC gauge. That is a concern because they do not
Speaker 9: want inflation to become un anchored to the upside and
Speaker 9: not come back down to the target. If you focus
Speaker 9: more as Governor Waller has been focusing on the labor
Speaker 9: side of the mandate, then you're more focused about a
Speaker 9: potential downside risk to labor market activity. And when you
Speaker 9: look at a broad range of labor market indicators, they're
Speaker 9: not as reassuring as we may observe in some of.
Speaker 6: The other data.
Speaker 9: If you look at how people are feeling about their
Speaker 9: job prospects, if you look at the hiring rate, if
Speaker 9: you look at wage growth, which I find to be
Speaker 9: the best indicator of underlying labor market demand, it's softening,
Speaker 9: it's not accelerating, and real wage growth.
Speaker 6: Is very close to zero.
Speaker 9: Those are signs that the labor market is softer than
Speaker 9: what might have appeared up till now in terms of
Speaker 9: payroll growth and the unemployment rate.
Speaker 2: It's hard to wake against that. That's the government want
Speaker 2: of camp as well. This is the Bloomberg Seventans podcast,
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