WEBVTT - Core US Inflation Picks Up, Presidential Debate 0:00:02.400 --> 0:00:09.119 Bloomberg Audio Studios, podcasts, radio news. You're listening to the 0:00:09.119 --> 0:00:13.320 Bloomberg Intelligence Podcast. Catch US Live weekdays at ten am 0:00:13.360 --> 0:00:15.800 Eastern on Effle car Playing and Broid Auto with the 0:00:15.800 --> 0:00:19.720 Bloomberg Business App. Listen on demand wherever you get your podcasts, 0:00:19.920 --> 0:00:22.280 or watch US live on YouTube. 0:00:23.239 --> 0:00:24.720 All right, let's get back to the market's here. So 0:00:24.760 --> 0:00:28.479 equities continue to roll over. Bond market quite interesting. You 0:00:28.640 --> 0:00:31.200 had a sell off right when those CPI numbers hit. 0:00:31.240 --> 0:00:33.040 You had a spike in the two year yield, and 0:00:33.040 --> 0:00:35.040 then once the cash market opened for the equity market, 0:00:35.200 --> 0:00:39.040 bonds continued to really roll over, with yields moving significantly lower. Now, 0:00:39.680 --> 0:00:43.200 Ira Jersey, Bloomberg Intelligence Chief US interest rate strategist, it joins, 0:00:43.280 --> 0:00:45.360 us I shouldn't say significantly lower, but compared to where 0:00:45.360 --> 0:00:47.640 they were, it was quite a move. What are we 0:00:47.720 --> 0:00:48.840 making of the move today? 0:00:50.240 --> 0:00:53.000 Yeah, so, you know, after the CPI report came out, 0:00:53.440 --> 0:00:55.960 the market was thinking, oh, well, maybe the Fed is 0:00:56.040 --> 0:00:58.320 less likely to do a fifty basis point rate cut 0:00:58.480 --> 0:01:01.120 next week, and so we're going to readjust that front 0:01:01.200 --> 0:01:04.679 end yield. Once the you know, equity started to roll over, 0:01:04.760 --> 0:01:08.200 you also have seen a pretty big rally in European 0:01:08.280 --> 0:01:11.039 rates this morning our time, in the afternoon their time. 0:01:11.640 --> 0:01:14.400 And I think that that treasuries of have you know, one, 0:01:14.760 --> 0:01:16.840 have a flight to quality bid from the risk off 0:01:16.880 --> 0:01:19.680 in the US markets, but also are being pulled down 0:01:19.720 --> 0:01:21.960 a little bit by the global rate environment as well. 0:01:22.040 --> 0:01:25.400 So again, not huge moves on a day on day basis, 0:01:25.480 --> 0:01:28.160 but like you said, Alex, you know the fact that 0:01:28.200 --> 0:01:30.560 we were off by six basis points in two year 0:01:30.600 --> 0:01:33.360 yields and then you know, now we're essentially unchanged. You know, 0:01:33.400 --> 0:01:37.119 I think that's meaningful enough that the market is, you know, 0:01:37.200 --> 0:01:39.760 not one hundred percent sure right now and certainly has 0:01:39.760 --> 0:01:42.880 certainly been not priced for, you know, just the twenty 0:01:42.880 --> 0:01:45.480 five basis point cut next week. 0:01:46.040 --> 0:01:48.760 So how do you think our friends at the Federal 0:01:48.760 --> 0:01:53.320 Reserve will read this inflation data today? 0:01:53.560 --> 0:01:56.720 Yeah, So our view is is that this solidified the 0:01:56.720 --> 0:01:59.000 idea that a twenty five basis point rate cut is 0:01:59.000 --> 0:02:02.640 in the cards. You know, again, fifty is not impossible, 0:02:02.680 --> 0:02:06.160 and certainly the market doesn't think so either. But at 0:02:06.160 --> 0:02:09.840 the same time, you know, point two in point two 0:02:09.840 --> 0:02:13.760 percent inflation print is still above the Fed's target. So 0:02:13.880 --> 0:02:16.360 even though they want to cut interest rates because they're 0:02:16.400 --> 0:02:19.360 worried that the economy is starting to slip, and you know, 0:02:19.440 --> 0:02:22.200 certainly they've been focused more on employment than inflation in 0:02:22.280 --> 0:02:27.080 recent months, that they can start a slow rate cut cycle. 0:02:27.480 --> 0:02:30.000 I know some some houses on the street think that 0:02:30.040 --> 0:02:32.639 they could go twenty five and then fifty basis points 0:02:33.240 --> 0:02:35.440 for a couple of meetings there after, I suspect at 0:02:35.440 --> 0:02:36.920 the end of the day they're going to go twenty 0:02:36.960 --> 0:02:39.600 five basis points at every meeting. So the market maybe 0:02:39.639 --> 0:02:41.480 has gotten a little bit ahead of itself when you 0:02:41.560 --> 0:02:45.600 look at pricing for say January FED funds futures, or 0:02:45.600 --> 0:02:47.000 even two year yields for that matter. 0:02:47.160 --> 0:02:49.360 Yeah, So it seemed like what happened is once they 0:02:49.400 --> 0:02:52.000 got the print that that fifty bases point potential cut 0:02:52.040 --> 0:02:54.720 moved more to December. Rather than pricing it out, it 0:02:54.840 --> 0:02:57.000 just kind of pushed it off a little bit. Does 0:02:57.000 --> 0:02:59.680 that need to be pushed out even more and or 0:02:59.760 --> 0:03:01.080 is it taken out all together? 0:03:02.320 --> 0:03:02.519 Well? 0:03:02.560 --> 0:03:03.960 I think as a base case in the way that 0:03:04.000 --> 0:03:06.760 I'm thinking about how the economy might develop, and then 0:03:06.760 --> 0:03:09.919 what the FED reaction function and therefore the jusuring markets 0:03:09.960 --> 0:03:13.200 reaction function to that new economic news is that the 0:03:13.240 --> 0:03:16.280 economy is going to continue to slow, but not very quickly. 0:03:16.360 --> 0:03:18.480 So therefore the Federal Reserve will be able to be 0:03:18.560 --> 0:03:21.960 patient and go in twenty five basis point increments and 0:03:22.000 --> 0:03:24.320 then maybe at some point it might do a fifty, 0:03:24.680 --> 0:03:27.040 but I don't think that the Fed necessarily wants to 0:03:27.080 --> 0:03:29.080 because and certainly as a first and we've been saying 0:03:29.120 --> 0:03:31.680 this for months now, is that if the Federal Reserve 0:03:31.720 --> 0:03:33.840 were to start with a fifty basis point in rate cut, 0:03:34.639 --> 0:03:36.320 you know, that would be like a shock and awe 0:03:36.400 --> 0:03:41.920 kind of event. And I think that would show, you know, 0:03:42.160 --> 0:03:46.720 the market and maybe just that you know, main street 0:03:47.480 --> 0:03:50.600 main street businesses and households, that the fedce panicked and 0:03:50.680 --> 0:03:53.840 they see something maybe that's much weaker than most of 0:03:53.840 --> 0:03:57.560 the economic data that's coming in suggests. So I think 0:03:57.560 --> 0:03:59.600 that that would show some panic. And that's another reason 0:03:59.640 --> 0:04:02.720 to think, hey, they'll go twenty five's unless and until 0:04:03.000 --> 0:04:05.280 you wind up having you know, negative payroll print or 0:04:05.840 --> 0:04:10.200 even fifty thousand person payroll print. What would be enough 0:04:10.360 --> 0:04:12.760 for them to say, hey, the economy's you know, not 0:04:12.840 --> 0:04:15.040 growing anywhere near potential, so we really have to cut 0:04:15.120 --> 0:04:18.000 interest rates significantly. But until we get to that point 0:04:18.080 --> 0:04:20.440 in the data, I think that the Fed's going to 0:04:20.480 --> 0:04:22.840 go twenty five basis points. And you know, look, this 0:04:22.920 --> 0:04:26.479 is all like short term interest rate trader minutia quite frankly, 0:04:26.800 --> 0:04:28.640 and for the I think for the broader markets, you 0:04:28.640 --> 0:04:30.640 have to say, Okay, the Fed's an easing mode. The 0:04:30.760 --> 0:04:33.960 question is how fast and how far not necessarily are 0:04:33.960 --> 0:04:35.000 they going to be cutting rates? 0:04:36.240 --> 0:04:39.000 A right about thirty seconds left here the election. 0:04:40.400 --> 0:04:42.240 The treasury market, I don't think I heard the yield 0:04:42.240 --> 0:04:44.480 curve mentioned last night at the debate. But how do 0:04:44.600 --> 0:04:47.479 you guys frame out kind of the political risks here? 0:04:48.200 --> 0:04:50.440 Yeah, so we put out our We put out a 0:04:50.440 --> 0:04:53.880 note on what we thought the big impactful things for 0:04:53.920 --> 0:04:56.359 the treasury market will be based on the election. Most 0:04:56.360 --> 0:05:00.520 of those are not expecting a big reaction on election 0:05:00.640 --> 0:05:03.240 day one way or the other, but nuanced things like 0:05:03.279 --> 0:05:05.240 who's the next FED share going to be that's going 0:05:05.320 --> 0:05:09.320 to matter if President Trump wins election again, it won't 0:05:09.360 --> 0:05:12.440 be Powell. Maybe for Kamila Harris it will be Powell, 0:05:12.440 --> 0:05:15.159 and if not, or probably someone else, and who was 0:05:15.200 --> 0:05:18.160 maybe a Biden appointee to the Fed. So those are 0:05:18.160 --> 0:05:19.760 the types of things that matter. And then of course, 0:05:19.839 --> 0:05:23.920 things like budget deficits. Neither of these candidates is likely 0:05:24.000 --> 0:05:26.680 to be a deficit hawk, so therefore you're likely to 0:05:26.720 --> 0:05:30.560 continue with relatively large budget deficits, and that obviously has 0:05:30.600 --> 0:05:33.040 an effect on pricing in the treasury market. 0:05:33.480 --> 0:05:35.880 Airah, Always a pleasure, Always great to catch up with you. 0:05:36.000 --> 0:05:39.080 Ira Jersey joining us. He is Bloomberg Intelligence, a senior 0:05:39.200 --> 0:05:42.160 US interest rate strategy. 0:05:42.440 --> 0:05:46.320 You're listening to the Bloomberg Intelligence Podcast. Catch us live 0:05:46.400 --> 0:05:49.920 weekdays at ten am Eastern on applecar Play and Android 0:05:49.960 --> 0:05:52.719 Auto with the Bloomberg Business Act. You can also listen 0:05:52.839 --> 0:05:55.960 live on Amazon Alexa from our flagship New York station. 0:05:56.320 --> 0:06:00.120 Just say Alexa play Bloomberg eleven thirty. 0:06:00.920 --> 0:06:02.840 So we got through the risk events, we got through 0:06:02.839 --> 0:06:05.719 the debate, we got through CPI, We were headed towards 0:06:05.720 --> 0:06:07.400 the FED. It looks like markets are now pricing in 0:06:07.400 --> 0:06:09.960 that twenty five basis points in September. So what do 0:06:10.000 --> 0:06:12.640 you do in that scenario? Nicole Webb Senior vice president, 0:06:12.680 --> 0:06:16.680 Financial advisor at Wealth Enhancement Group, and she joins us. Now, Nicole, 0:06:16.720 --> 0:06:19.320 does this take fifty off the table or does it 0:06:19.360 --> 0:06:22.920 push the fifty out to like a November or December. 0:06:23.640 --> 0:06:25.880 You know, we were of the camp that the FED 0:06:26.000 --> 0:06:29.960 probably wasn't going to step into this cutting cycle with 0:06:30.240 --> 0:06:33.359 fifty basis point cut, and so for us, the CPI 0:06:33.400 --> 0:06:38.400 today was largely in line with expectations obviously across the board, 0:06:38.839 --> 0:06:41.520 and for us it just didn't bear terribly much weight 0:06:41.720 --> 0:06:43.200 in the short term. 0:06:43.839 --> 0:06:46.279 So what are the key drivers here then, do you 0:06:46.279 --> 0:06:48.520 think of these markets going forward? Again, as Alex was 0:06:48.560 --> 0:06:51.839 just mentioned, we've gotten through a number of kind of 0:06:52.000 --> 0:06:54.600 external events here. What do you look to be kind 0:06:54.640 --> 0:06:57.080 of a driver for markets going forward? 0:06:58.040 --> 0:07:01.400 Yeah, Paul, I think you know, the market response over 0:07:00.960 --> 0:07:04.440 the last couple of weeks has really been and I 0:07:04.480 --> 0:07:06.320 would say even maybe this is some of what you're 0:07:06.360 --> 0:07:09.440 seeing this morning after the CPI, which, as I just mentioned, was. 0:07:09.480 --> 0:07:10.240 Largely in line. 0:07:10.280 --> 0:07:13.320 But it's this need for all of the fundamentals to 0:07:13.440 --> 0:07:16.840 hold up in support of equities. And so when you 0:07:16.880 --> 0:07:19.520 think of part of that being the disinflation story, part 0:07:19.560 --> 0:07:21.600 of that being the release of the pressure valve on 0:07:21.680 --> 0:07:24.480 the consumer, and then also you layer in the need 0:07:24.520 --> 0:07:27.640 for policy to go the right direction, corporate earnings, you know, 0:07:27.760 --> 0:07:32.240 to continue to perform. It really just puts a lot 0:07:32.280 --> 0:07:36.720 of weight on the market where you have valuations, high consensus, 0:07:36.840 --> 0:07:40.840 long equity, and then you also have a cooling economy, 0:07:40.920 --> 0:07:43.800 not just here but also globally, and so it's just 0:07:43.840 --> 0:07:46.960 going to be a lot of digestion we expect over 0:07:47.000 --> 0:07:49.120 the next couple of weeks, if not months. 0:07:49.240 --> 0:07:51.120 Yeah, talking about globally. I was talking to an oil 0:07:51.200 --> 0:07:53.960 trader today and he was at a conference over in Singapore. Yeah, no, 0:07:54.000 --> 0:07:56.880 it's a shocker, and he was saying that everyone used 0:07:56.920 --> 0:07:58.760 to think that China was just going to be a 0:07:58.800 --> 0:08:01.840 property issue, and now everyone, even the Chinese, are like, 0:08:01.920 --> 0:08:04.840 oh no, no, this is a real broader economic problem 0:08:04.840 --> 0:08:07.880 in China, just to talk about the weaknesses there. So 0:08:07.960 --> 0:08:09.000 what's the playbook, Nicole. 0:08:10.080 --> 0:08:13.640 Yeah, I think when you have a market that's digesting, 0:08:13.640 --> 0:08:17.240 to your point, Alex, the why it begs a question 0:08:17.400 --> 0:08:18.520 why are we slowing? 0:08:18.560 --> 0:08:22.320 And then does it change? And China's not a. 0:08:22.280 --> 0:08:24.960 Quick reversal, so that likely isn't changing in the short term, 0:08:24.960 --> 0:08:27.280 and we know that they're greater than fifteen percent of 0:08:27.320 --> 0:08:28.080 global GDP. 0:08:28.560 --> 0:08:29.880 That has a big ripple effect. 0:08:29.960 --> 0:08:32.559 And then you think of the restrictive policy landscape in 0:08:32.600 --> 0:08:35.880 the US, even a normalization of rates. To your point 0:08:35.920 --> 0:08:39.160 about not knowing exactly what that neutral rate is, it's 0:08:39.160 --> 0:08:40.200 going to take some time. 0:08:40.760 --> 0:08:42.880 And then you have excess savings declining. 0:08:42.880 --> 0:08:45.320 And so the last leg of that then being my 0:08:45.400 --> 0:08:48.480 fourth point, which is all doesn't sound overly optimistic, but 0:08:48.760 --> 0:08:51.960 you have the acceleration of earnings from the mega technology 0:08:52.040 --> 0:08:55.240 companies as they continue to increase that cap spent. And 0:08:55.320 --> 0:08:59.040 so when you think then about where we're going to 0:08:59.120 --> 0:09:03.079 invest money, still under this long bold thesis, we really 0:09:03.120 --> 0:09:07.360 are looking for places where you can expect earnings acceleration 0:09:08.120 --> 0:09:11.480 forward looking, where it's an environment that isn't necessarily in 0:09:11.600 --> 0:09:17.400 demand of global growth accelerating, but instead, if we normalize 0:09:17.520 --> 0:09:20.600 or we're okay with on trend, what are those pockets? 0:09:20.640 --> 0:09:23.240 And so you're already hearing this a lot that healthcare pocket, 0:09:23.559 --> 0:09:28.080 utilities pocket, the rep pocket, all of that votes favorably 0:09:28.320 --> 0:09:31.480 in the forward looking landscape over the next six months. 0:09:31.880 --> 0:09:34.280 You know, yesterday we had some big moves into the 0:09:34.320 --> 0:09:37.640 downside for some banking stocks led by JP Morgan and 0:09:37.679 --> 0:09:38.680 JP Morgan's. 0:09:38.360 --> 0:09:39.079 Week again today. 0:09:39.440 --> 0:09:41.559 So I guess calling into question a lot of industry 0:09:41.640 --> 0:09:44.000 leaders at a recent conference about the profitability for the 0:09:44.040 --> 0:09:46.120 upcoming quarter for the banks, how do you think about 0:09:46.360 --> 0:09:47.800 the financials as a whole. 0:09:47.600 --> 0:09:51.319 Here, Yeah, I think first when we think about the banks, 0:09:51.320 --> 0:09:53.559 we have to remember that it was only a couple 0:09:53.600 --> 0:09:56.120 of weeks ago that we were at fresh fifty two 0:09:56.200 --> 0:09:58.640 week high on bank stocks, and so. 0:10:00.080 --> 0:10:02.800 Know that in and of itself, again going back to kind. 0:10:02.640 --> 0:10:06.720 Of where we are from evaluation and consensus perspective, the 0:10:06.760 --> 0:10:11.880 conversation around ANII, you know, it's expected to deteriorate. So 0:10:12.080 --> 0:10:15.640 the response there to some of the comments yesterday was, 0:10:16.120 --> 0:10:19.280 you know, again kind of to be expected and perhaps 0:10:19.320 --> 0:10:19.920 shouldn't have. 0:10:19.880 --> 0:10:20.640 Been new news. 0:10:21.640 --> 0:10:24.840 And then again curiosity around even though we were talking 0:10:24.880 --> 0:10:29.280 about delinquencies, there has been a consistent flatlining to delinquencies. 0:10:29.280 --> 0:10:32.120 We're not seeing an acceleration and growth and delinquency. And 0:10:32.160 --> 0:10:34.760 so again I think this goes back to where I 0:10:34.840 --> 0:10:37.680 kicked things off today, which is that we need a 0:10:37.679 --> 0:10:40.280 lot of fundamentals to stay in support of equities, and 0:10:40.360 --> 0:10:43.680 anything that looks like it's a deterioration of any of 0:10:43.720 --> 0:10:46.920 those fundamentals when you do have valuations as high as 0:10:46.960 --> 0:10:50.200 they are is going to put pressure both on sectors 0:10:50.200 --> 0:10:51.439 and on the index as a whole. 0:10:52.160 --> 0:10:55.680 Was really that decline yep, that's been in that decline 0:10:55.720 --> 0:10:58.240 was really confusing, Like we knew we knew it was 0:10:58.280 --> 0:11:00.360 going to be happening with rates, which was so odd. 0:11:01.360 --> 0:11:04.199 Tech last two days has been the quote unquote outperformer. 0:11:04.320 --> 0:11:06.240 That's safety trade, if I can say that right, you 0:11:06.240 --> 0:11:08.200 had the bit into bonds yesterday, you had the dollar 0:11:08.240 --> 0:11:11.000 moving hire as well, and you had that bit into tech. 0:11:11.400 --> 0:11:14.840 Is tech going to be that safety rotation trade? 0:11:16.880 --> 0:11:21.600 It's hard when you see pullbacks in the tech area 0:11:21.800 --> 0:11:23.600 where I mean we've been talking now for a few 0:11:23.640 --> 0:11:26.480 weeks that they were no longer the leader for calendar 0:11:26.559 --> 0:11:29.920 year twenty twenty four. That does look like an opportunity 0:11:30.040 --> 0:11:31.439 to be a buyer. 0:11:31.120 --> 0:11:31.920 In that space. 0:11:32.520 --> 0:11:35.440 Yes, we don't know in the short term what that 0:11:35.559 --> 0:11:39.439 return on invested capital is or how quickly we start 0:11:39.480 --> 0:11:42.079 to see those earning surprises to the upside on that 0:11:42.160 --> 0:11:45.280 investment made. But if you have a long thesis, if 0:11:45.320 --> 0:11:48.400 you are a long term investor, not a trader, these 0:11:48.440 --> 0:11:51.480 pullbacks do look like a time to deploy fresh money 0:11:51.480 --> 0:11:52.360 into that sector. 0:11:53.440 --> 0:11:56.760 Fixed income here we've had yields pulling pretty dramatically just 0:11:56.800 --> 0:11:58.800 on the tenure. We've gone from five percent to now 0:11:59.000 --> 0:12:01.640 today around three points six percent. Here, what are you 0:12:01.720 --> 0:12:04.120 doing in fixed income space? Are you taking credit risk? 0:12:05.720 --> 0:12:06.560 Yeah? 0:12:06.720 --> 0:12:08.480 You know, when it comes to fixed income, I think 0:12:08.480 --> 0:12:11.240 the probably the thing that we have spent the most 0:12:11.280 --> 0:12:16.480 time on recently is just are you almost better off 0:12:16.520 --> 0:12:19.240 on a one year staying in a money market? So 0:12:19.280 --> 0:12:22.840 if you don't believe there's going to be an acceleration 0:12:22.960 --> 0:12:25.440 to cooling and that the FED doesn't necessarily have to 0:12:25.440 --> 0:12:27.960 go into a rate cutting cycle as we think of 0:12:28.000 --> 0:12:31.400 it traditionally, but more into kind of this shaving rates 0:12:31.440 --> 0:12:34.600 down as we normalize the interest rate environment on a 0:12:34.800 --> 0:12:38.360 twelve year or a twelve year twelve month forward, you know, 0:12:38.679 --> 0:12:41.839 could you actually outperform a one year treasury sitting in 0:12:42.280 --> 0:12:45.679 a money market? And so there's kind of some of 0:12:45.679 --> 0:12:48.920 this playing around. But fixed income, we do think is 0:12:48.920 --> 0:12:51.440 going to continue to be a really valuable part of 0:12:51.480 --> 0:12:54.160 the portfolio, and we also expect to see a lot 0:12:54.240 --> 0:12:56.680 of flows into that sector. When you think just about 0:12:56.679 --> 0:13:00.040 where the concentration of wealth is in this country and 0:13:00.080 --> 0:13:03.840 the ages, it seems like a period in time in 0:13:03.840 --> 0:13:06.400 which you're going to see flows start to move away 0:13:06.520 --> 0:13:10.240 from some of that shorter duration investment into some of 0:13:10.280 --> 0:13:14.880 these longer including credit exposure areas of fixed income, and 0:13:14.960 --> 0:13:17.160 so from a flows perspective also, we think that will 0:13:17.160 --> 0:13:17.920 be favorable. 0:13:18.200 --> 0:13:22.200 It's interesting. Paul JP Morgan talked about how you won't 0:13:22.200 --> 0:13:24.560 see the money move from money market fens until the 0:13:24.559 --> 0:13:27.719 FED starts cutting more aggressively, like until they're deeper into 0:13:27.760 --> 0:13:29.840 the rate cutting cycle. So we're all like waiting for 0:13:29.920 --> 0:13:31.719 that rush. We might have to wait a little bit 0:13:32.120 --> 0:13:35.319 until that happens. For you, what's the next catalyst? Is 0:13:35.360 --> 0:13:36.800 it just gonna be the FED meeting or is there 0:13:36.800 --> 0:13:38.680 something else that you're looking at? 0:13:40.640 --> 0:13:45.880 Yeah, I mean to us, the first catalyst, Alex to 0:13:45.920 --> 0:13:48.360 your point would be, you know, post FED meeting, and 0:13:49.240 --> 0:13:52.920 is the dot plot? So what do we see, you 0:13:52.920 --> 0:13:57.360 know from members in terms of the trajectory of the 0:13:57.440 --> 0:13:59.679 rate cutting cycle we're entering. So if it is our 0:13:59.720 --> 0:14:02.560 first cut, what does that look like, you know, on 0:14:02.640 --> 0:14:03.559 the next twelve months? 0:14:03.600 --> 0:14:06.160 And I think even more importantly. 0:14:06.040 --> 0:14:09.840 Is how the FED speaks about the economy following the meeting. 0:14:10.120 --> 0:14:11.800 And what I mean by that is there's so much 0:14:12.240 --> 0:14:14.880 weight right now on is it twenty five, is it fifty? 0:14:15.040 --> 0:14:19.520 Is the second cut fifty basis points? And a lot 0:14:19.520 --> 0:14:22.560 of that has to come from how they talk about 0:14:22.760 --> 0:14:26.200 the setup of the economy beneath these cuts, and I 0:14:26.200 --> 0:14:29.560 think there will be a big fear response if you know, 0:14:29.600 --> 0:14:33.160 they aggressively start cutting, which really does signal that we 0:14:33.240 --> 0:14:38.160 are far too restrictive and the economy requires stimulation versus 0:14:38.480 --> 0:14:42.720 we're we're on a trajectory of normalization. And so you 0:14:42.720 --> 0:14:45.480 know that piece of it. And then the response from 0:14:45.520 --> 0:14:48.760 the housing sector in accordance to how the cuts go. 0:14:49.200 --> 0:14:52.560 We know we're under supply and housing. That's a huge 0:14:52.600 --> 0:14:55.560 catalyst for expansion in the markets if we do start 0:14:55.600 --> 0:14:59.880 to see a drive towards equilibrium in supply versus on 0:15:00.120 --> 0:15:01.360 going demand for housing. 0:15:01.400 --> 0:15:02.680 And so those. 0:15:02.920 --> 0:15:07.280 Two things have a pretty high correlation, we expect, and 0:15:07.440 --> 0:15:10.920 kind of we'll kind of handle the sentiment of investors 0:15:11.040 --> 0:15:11.960 as we enter the end. 0:15:11.920 --> 0:15:12.320 Of the year. 0:15:13.200 --> 0:15:15.320 Very good, Nicole web Thank you so much for joining us. 0:15:15.360 --> 0:15:18.960 Nicole Webb, senior vice president, financial advisor with Wealth Enhancement Group, 0:15:19.040 --> 0:15:20.760 joining us from New York via zoom. 0:15:20.800 --> 0:15:26.040 Here you're listening to the Bloomberg Intelligence Podcast. Catch us 0:15:26.080 --> 0:15:28.960 live weekdays at ten am Eastern on Apple, car Play 0:15:29.000 --> 0:15:31.720 and Android Otto with the Bloomberg Business app. Listen on 0:15:31.800 --> 0:15:35.040 demand wherever you get your podcasts or watch us live 0:15:35.160 --> 0:15:37.000 on YouTube. 0:15:37.800 --> 0:15:40.160 Joining us now is Henry Detris, a managing partner and 0:15:40.200 --> 0:15:42.800 director of Economic policy at Beta Partners. She's joining us. 0:15:42.840 --> 0:15:45.400 She's in New Orleans. Actually, so hey, just real quick, 0:15:46.040 --> 0:15:48.480 are you safe? Is it okay? Is the storm coming? 0:15:48.560 --> 0:15:48.640 Like? 0:15:48.680 --> 0:15:49.640 Are you bracing for it? 0:15:51.280 --> 0:15:53.520 Probably right when I get off here, it'll come just 0:15:53.600 --> 0:15:56.840 at the end of this interview. It's expected to hit tonight, 0:15:56.840 --> 0:15:58.280 but it won't be too much of a big deal. 0:15:58.320 --> 0:16:00.880 So I'm not surprised that oil stocks aren't moving too much. 0:16:01.320 --> 0:16:03.560 We're used to this. This is what we prepare for. 0:16:03.720 --> 0:16:06.560 Okay, fair enough, all right, so we got that part done. Clearly. 0:16:06.560 --> 0:16:08.360 You were up late watching the debate with the spin 0:16:08.520 --> 0:16:12.480 and all the like, what's your pitch? What's your two minute, 0:16:12.840 --> 0:16:15.400 two minute, one minute, two sentence takeaway? 0:16:17.600 --> 0:16:20.440 I think that Harris clearly ran away with the debate. 0:16:20.600 --> 0:16:23.720 Trump missed a number of opportunities to stick to a 0:16:23.760 --> 0:16:27.160 script and stick to policy, and I think that was 0:16:27.160 --> 0:16:29.440 a mistake for him, and he could potentially have to 0:16:29.440 --> 0:16:32.000 correct it with the second debate. I doubt one will 0:16:32.040 --> 0:16:35.560 take place, but if the polling data starts to turn 0:16:35.640 --> 0:16:39.160 against him, as Kamala Harris's sort of appeals to moderate 0:16:39.200 --> 0:16:42.200 voters last night, should that work, he may have to 0:16:42.200 --> 0:16:43.240 commit to another debate. 0:16:44.080 --> 0:16:46.520 Henry, I'm just reading through your notes here, and you 0:16:46.560 --> 0:16:49.280 make a point here about ninety five percent of the 0:16:49.320 --> 0:16:53.400 electorate has already decided how they'll vote in November. 0:16:53.480 --> 0:16:56.760 Did I read that right? And if so, is that 0:16:56.920 --> 0:16:58.640 normal or is that crazy? 0:17:00.120 --> 0:17:00.320 Yeah? 0:17:00.480 --> 0:17:03.520 No, almost everybody has decided how they're going to vote. 0:17:03.520 --> 0:17:06.040 There's only about five percent of the electorate that's undecided 0:17:06.119 --> 0:17:10.600 right now. They're not you know, they're actively trying to 0:17:10.600 --> 0:17:13.480 ignore politics, but they're going to engage post debate. They're 0:17:13.480 --> 0:17:15.320 going to see clips from last night and start to 0:17:15.359 --> 0:17:19.760 make a call. There was, interestingly, fourteen percent of viewers 0:17:19.840 --> 0:17:24.200 last night thought that they maybe questioned their prior, their priors, 0:17:24.240 --> 0:17:26.800 They thought they might, you know, be willing to change, 0:17:26.880 --> 0:17:28.919 but then ultimately only four percent of them did. So 0:17:28.960 --> 0:17:32.240 we have a really sticky, very partisan America and that's 0:17:32.240 --> 0:17:34.000 going to make this election close until. 0:17:33.760 --> 0:17:34.239 The very end. 0:17:35.280 --> 0:17:37.479 What do you think can move the needle now? I mean, 0:17:37.480 --> 0:17:40.159 in some ways, this was the public's first introduction to 0:17:40.240 --> 0:17:45.280 Vice President Kamala Harris. President Trump is still unknown. Quantity. 0:17:45.640 --> 0:17:48.840 But nonetheless, how do they then further this if there's 0:17:48.920 --> 0:17:49.879 no second debate? 0:17:51.080 --> 0:17:53.960 Right twenty three percent of Americans are still looking to 0:17:54.040 --> 0:17:58.199 learn more about Kamala Harris's policies. Most of Americans already 0:17:58.200 --> 0:18:01.280 know all of Donald Trump's policies. The real uphill battle 0:18:01.320 --> 0:18:04.840 is on Kamala Harris's side right now. As my adds suggests, 0:18:04.840 --> 0:18:07.720 Trump is winning this race. The electoral College favors him 0:18:08.080 --> 0:18:10.359 in most swing states and within the margin of error 0:18:10.400 --> 0:18:12.800 in every single swing state. So it's really up to 0:18:12.840 --> 0:18:15.399 Harris to convey her home buyer tax credit and her 0:18:15.400 --> 0:18:19.200 position on abortion, her thoughts on capital gains rates, corporate 0:18:19.240 --> 0:18:21.600 tax rates, and sell that message to the American public. 0:18:21.800 --> 0:18:23.400 And I would suggest that the onus is on her 0:18:23.440 --> 0:18:24.400 to get that done. 0:18:24.760 --> 0:18:27.879 Just on Bloomberg Radio on television, Henriette, just before we 0:18:27.920 --> 0:18:31.000 came to you, we were listening to Canter Fitzgerald CEO 0:18:31.040 --> 0:18:34.520 Howard Lutnick, who is a strong Trump supporter, make the 0:18:34.560 --> 0:18:36.880 point that we've heard from a lot of folks that 0:18:37.520 --> 0:18:41.920 VP Harris should be more accessible to the media, should 0:18:41.960 --> 0:18:46.680 do interviews, should do town halls, press conferences. 0:18:46.920 --> 0:18:47.840 What do you think about that? 0:18:49.119 --> 0:18:51.440 I'm sure that she will as we go forward. 0:18:51.520 --> 0:18:55.000 The next major event is not until October first, with 0:18:55.080 --> 0:18:56.280 the vice presidential debate. 0:18:56.520 --> 0:18:58.040 I think there's twenty. 0:18:57.800 --> 0:19:00.359 Some odd days between now and then for the Hires 0:19:00.440 --> 0:19:04.920 campaign to take a sit down with a major editorial 0:19:04.960 --> 0:19:09.439 board and do more live town halls. What I think 0:19:09.760 --> 0:19:12.719 Republicans want to see is her stand alone as opposed 0:19:12.760 --> 0:19:14.480 to with Tim Wallas, which is of course what the 0:19:14.520 --> 0:19:17.480 interview with Dada Bash on CNN was a few weeks back. 0:19:17.560 --> 0:19:19.560 So I expect that she'll get out there, and the 0:19:19.560 --> 0:19:21.439 fact that American voters want to know more about her 0:19:21.440 --> 0:19:23.840 policies means that it is in her best interest to 0:19:23.880 --> 0:19:24.480 do that as well. 0:19:24.640 --> 0:19:26.399 What I also was noticing when I was reading a 0:19:26.400 --> 0:19:29.439 lot of takes on independence who just weren't clear, is 0:19:29.480 --> 0:19:31.439 that a lot of them are the people who go 0:19:31.520 --> 0:19:35.000 to the store, buy stuff, come home and like it's 0:19:35.119 --> 0:19:38.119 rough and economically it's really hard, and that the debate 0:19:38.200 --> 0:19:40.800 last night didn't speak to that didn't speak to that 0:19:40.840 --> 0:19:43.320 inflation or the economics. And you take a look at 0:19:43.359 --> 0:19:46.000